ECONOMIC VIEWPOINT

Compassionate Conservatism: Look beyond the Label
By ROBERT J. BARRO


Milton Friedman began his classic book, Capitalism and Freedom, by
citing the famous words from President John F. Kennedy's inaugural
address: ''Ask not what your country can do for you--ask what you can
do for your country.'' Friedman complained that people spent too much
time inquiring into the origin of the famous phrase and not enough on
its substance. He then argued that neither half of the statement
expressed a worthy relation between the state and its citizens. He said
that the first part suggested that the government was the patron and
the citizen the ward, whereas the second implied that the government
was the master and the citizen the servant.

When I heard George W. Bush's less elegant expression, ''compassionate
conservatism,'' I also focused initially on questions of origin. Many
politicians in other countries had used similar terms, for example,
''capitalism with a human face'' in Chile, ''social market economy'' in
Germany, ''productive welfare'' in South Korea, and ''the third way''
in Great Britain. All represent an attempt to mix market-oriented ideas
with political correctness. For some reason, politicians fear embracing
without apology concepts such as capitalism, free enterprise, and
conservatism.

IRRITATING. I should have learned from Friedman's discussion of Kennedy
that it would be better to concentrate on the substance of Bush's
expression. Unfortunately, the substance is quite irritating,
especially the word ''compassionate.'' The obvious implication is that
ordinary conservatism is not compassionate and that modifications are
therefore necessary. This is surely odd if one identifies conservatism
with such basic principles as free markets, property rights, and
limited government. As we have known since Adam Smith, the maintenance
of these principles is the main reason that Western countries are
successful. The most important determinant in reducing poverty is
raising the average income of a country, not reducing the degree of
inequality. If one genuinely cares about the poor, then how can one not
support the basic principles that create a nation's wealth?

Although most of my unhappiness is with the word compassionate, I also
do not care very much for the other word, ''conservative.'' This
concept suggests maintenance of the status quo, even when that might
involve an array of unfortunate rules and overly activist government
programs. It could also encompass forms of social conservatism that I
find unattractive--for example, restrictions on abortion rights,
enforcement of strict drug laws, curbs on immigration, and restraints
on international trade. I much prefer the words ''libertarian'' and
''classical liberal''--regrettably, the word ''liberal'' has been
cleverly appropriated by the left in the U.S.

WORRIED. Aside from labels, one has to look at the specifics of
policies. I am particularly worried that the junior Bush would support
legislation that resembles the senior Bush's great intervention, the
Americans with Disabilities Act. This law epitomizes government
policies that, although well-meaning, tend to destroy incentives, harm
businesses, and encourage wasteful litigation. This kind of
intervention typifies the activist policies that were common in Western
Europe in the 1960s and 1970s and that led to many years of economic
stagnation. In the Netherlands, for example, overly generous disability
policies led to almost 15% of the working-age population being
classified by the end of the 1980s as state-supported disabled persons.
Therefore, I would like to know whether a compassionate conservative
would favor the ADA or favor its repeal. In a similar vein of
well-intentioned but counter-productive policies, I would like to know
whether a compassionate conservative favors the kinds of
affirmative-action programs that Colin Powell advocated at the
Republican convention.

To be fair, George W. Bush has promoted a number of winning ideas that
would appeal to classical liberals. One of these is personalized
accounts for Social Security: The best line of Bush's acceptance speech
was: ''When this money is in your name, in your account, it's not just
a program, it's your property.'' Also attractive are proposals to
abolish the death tax, cut income-tax rates, and eliminate the
marriage-tax penalty.

I think that Bush will strongly support school-choice proposals. This
idea uses solid classical liberal principles to design a program that
will be of immense long-term benefit to the nation's poor. Less
attractive are Bush's proposals about health care--these talk about
markets and incentives but seem to accept the Democrats' idea that
government involvement should expand.

Of course, all of this has to make classical liberals nostalgic about
Ronald Reagan and Margaret Thatcher in the 1980s. On the one hand, one
has to be concerned that these giants were followed by a succession of
Bushes, Majors, Clintons, and Blairs. On the other hand, one has to be
happy that the Reagan-Thatcher legacy was strong enough so that we
could continue to prosper even under leadership that was merely
compassionately conservative.

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