BIG CRISES CAN CHANGE ALOT OF FIXED THINGS

THE NEW VISION
KAMPALA, UGANDA
March 1, 2009
By Gwynne Dyer

Big crises like the current recession change a lot of things that once seemed to be a permanent part of the landscape. In Japan the Liberal Democratic Party (LDP), which has governed the country for all but nine months of the past half-century, is about to go over a cliff.

Prime Minister Taro Aso’s approval rating has fallen to single digits, but having changed leader three times in the past three years, the LDP cannot decently do it again without calling an election. The election must be held by October in any case — and it is hard to believe that the LDP can win it.

For over half a century, Japan has effectively been run by the “iron triangle” of conservative LDP politicians, bureaucrats who had spent their entire careers under LDP governments, and the big industrial companies. It was very successful in fostering rapid economic growth between 1955 and 1990, so much so that by the late 1980s the US was rife with paranoid fantasies in which the Japanese took over the world economy.

The “lost decade” of the 1990s, in which Japan's economy barely grew at all, put paid to that notion, and the last decade has not been a lot better. The LDP’s highly effective patronage machine postponed the day of reckoning, but the biggest opposition party, the Democratic Party of Japan (DPJ) won control of the House of Councillors (the upper house of parliament) in July, 2007 — and the recession virtually guarantees that it will also win control of the more powerful lower house later this year.

At that point, Japan's post-war history finally changes course. The DPJ’s secretary-general, Yukio Hatoyama, says bluntly that as soon as his party takes power, it will fire any bureaucrat who does not whole-heartedly support its policies. That’s not a normal way to treat public servants when a government changes in a democracy, but this is a democracy where all the civil servants have served only one party all of their lives.

What is bringing fundamental change to Japan is the recession, of which it is the foremost victim: in the last quarter of 2008, the Japanese economy shrank at an annual rate of 12.7%. The LDP is finally losing power because the underlying weakness of the Japanese economy that made it so vulnerable in a recession cannot be blamed on anybody else.

Blame is what is driving things in Britain, too, although the Labour Party has only been in power for twelve years, not fifty-four.

Before Gordon Brown became prime minister less than two years ago, he was the Chancellor of the Exchequer, with overall responsibility for the British economy, for ten years. The British economy, though not falling as fast as the Japanese, is not doing well, and everybody knows who’s to blame. So the main opposition party, the Conservatives, are certain to win the next election, which must be held within fourteen months. But that’s not the point.

The point is that Labour might not even come second, for there is a Liberal Democratic Party in Britain too. It is the heir to the historic Liberal Party, which under that name or in its previous guise as the Whigs was one of the two great political parties in Britain for several centuries. But in the early 20th century it was overtaken by the new Labour Party and reduced to third-party status.

Two-party systems of the sort that predominate in the English-speaking countries are very unforgiving to third parties, and since the First World War the Liberals and their Liberal Democratic successors have never won an election or formed a government in Britain. Sometimes their policies had quite broad support , but too many people always calculated in the end that a vote for a third party was a wasted vote.

Until, perhaps, now. Britain’s Lib Dems have had a good crisis so far, with their economic spokesman, Vince Cable, consistently demonstrating a firmer grasp of the situation than either the floundering Labour government or the Conservative opposition. The opinion polls still show Labour safely in second place, although far behind the Conservatives. But with at least a year to run until the election, and every month bringing more bad economic news that will be blamed on Labour, those numbers are going to move.

The main movement will be of Labour voters, who are far likelier to move to the Lib Dems. If enough of them move, then the seemingly impossible could actually happen: an election result that put the Lib Dems, however narrowly, ahead of Labour. The Conservatives would still be the government, of course, but the Lib Dems would become the official opposition.

The psychological impact would be huge. Suddenly, for the first time in almost a hundred years, the Liberal Democrats would be seen as the alternative government. And what happened to the Liberals almost a century ago would happen to Labour instead.

Is this probable? No. Is it possible? Yes. If the recession is big and bad enough to drive the Japanese Liberal Democrats from power at last, almost anything is possible. Although it is a hell of a price to pay.