Fiscal Conservatism Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

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Fiscal conservatism is an ideological perspective on what constitutes the appropriate approach to economic matters within modern capitalist states; it is a term more commonly used in the United States, Canada, and Australia, but the perspective can be found throughout Europe as well. The fundamentals of the approach favored by this perspective include limited government spending, low tax rates, free trade agreements with other nations, only modest amounts of business regulation, a strong respect for individual property rights, and balanced budgets. Sometimes referred to as “traditional economic conservatism” or “classical liberal economics,” this perspective grounds itself in what its advocates see as the laissez-faire tradition of economic thought, beginning with Adam Smith and David Ricardo, and continuing on through contemporary economists such as Milton Friedman and George Stigler. As such, it is a perspective that either completely rejects or greatly qualifies the economic arguments advanced by contemporary liberal thinkers such as John Maynard Keynes, agrarian or protectionist political leaders such as John Taylor or Henry Clay, and socialist thinkers such as Karl Marx.

Fiscal conservatism does not carry with it any necessary connection with traditionalism or conservatism on social or moral matters. In fact, it is not uncommon to find fiscal conservatism pared with social libertarianism, assuming that a leave-it-alone approach to matters of individual wealth and economic growth ought to be paralleled with a similar hands-off attitude toward matters of lifestyle and culture. Many fiscal conservatives, while not embracing a fully libertarian attitude with regard to social issues, will nonetheless often emphasize their identity as economic conservatives as opposed to people whose conservative beliefs are focused more on social or moral matters and are rooted in religious or traditionalist beliefs. At the same time, some fiscal conservatives embrace some form of social conservatism as a necessary supplement to their own fiscal preferences, arguing that a virtuous culture is the most likely foundation for the trust that capitalist economies require. This intersection of contrasting conservative priorities has often been the cause of deep disputes among those political parties that have most strongly adopted fiscal conservatism as part of their platform.

Fiscal conservatism’s use as a descriptive label was greatly shaped by the historical contest between collectivist economic theories and capitalist ones throughout the twentieth century in the United States and Europe. For example, the growth of government spending, federal regulations, and tax rates in the United States, particularly through and following the Great Depression of 1929 and World War II (1939–1945), led many to believe that local and free enterprise economic principles were being consciously undermined by opponents of economic freedom. Through the 1960s and 1970s, the notion of fiscal responsibility was put forward by many conservative thinkers and activists in the United States in contrast to what they perceived as the socialist-influenced profligacy and bureaucratic entanglements that resulted from postwar economic planning. This movement was paralleled by similar efforts during the same time period to reform the economic restrictions that had been put in place by social democratic governments in many western European nations following the war. With the election of Margaret Thatcher as prime minister in Great Britain in 1979, Ronald Reagan to the American presidency in 1980, and Helmut Kohl as prime minister of West Germany in 1982, the fiscal conservative reaction attained significant power, and the economic deregulation, reduction, or simplification of tax rates; privatization of industries; cutting of government social services; and other moves in the direction of less intervention in the operations of the free market during the 1980s are often looked on by fiscal conservatives as a high-water mark for the ideology.

Fiscal conservatism does not necessarily mandate an opposition to all government spending, regulation, or taxation, particularly if the policies in question are tied to matters of national defense, which is generally recognized by voters and parties alike to not be a matter particularly governed by economic realities. In regard to government spending or regulation on public interest matters such as health, education, or environmental protection, rather than rejecting such responsibilities entirely, often fiscal conservative thinkers will suggest making use of market-like incentives to harness the self-interest of individual economic actors to accomplish public ends. It is believed that a reliance on vouchers, tax breaks, and other similar policies will provide the public goods that society needs without top-down, command-and-control policies that, fiscal conservatism argues, distort the innovation and opportunities that markets provide.

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