One great strength of the American political system – and one that no doubt baffles foreigners – is the way it brings people who are enemies one day together as allies the next. Just recently we saw Phil Gramm, Lamar Alexander and Steve Forbes attacking Bob Dole in Iowa and New Hampshire. But just a few weeks later, Gramm, Alexander and Forbes all dropped out of the race and endorsed him.
The flip side of this phenomenon is that Dole has suddenly found merit in ideas put forward by his previous opponents. Just a few short weeks ago, on March 4, Dole had nothing good to say about the Forbes flat tax. While campaigning in New York in advance of that state's primary, Dole strenuously attacked the flat tax for eliminating deductions for mortgage interest and charitable deductions, and for increasing the deficit. But now, Dole has apparently decided that the flat tax is not a bad idea after all. As the New York Times put it, "Mr. Dole is now talking about a flat tax proposal of his own, something his aides hint he would have announced sooner if Mr. Forbes had not grabbed the issue first."
While to some, such behavior may prove the fecklessness of American politicians, in truth it is an essential strength of our system. Good ideas are not banished from the political process just because they had the bad luck to be promoted by a losing candidate. On the contrary, like flowers in the desert, they bloom again and again. In fact, competition for ideas generally works the same way as competition for goods in the marketplace. The best tend to prevail despite adversity.
The fact is that ideas often win by losing. Norman Thomas, the Socialist candidate for president in the 1930s, was one of the most unsuccessful candidates in history, yet virtually all of his proposals – higher taxes, old age pensions, public power and flood control, and unemployment insurance – were ultimately adopted by the Democratic Party and enacted into law. On the conservative side, Barry Goldwater's losing campaign in 1964 was equally "successful", although not until his ideas were adopted after the election of Ronald Reagan 16 years later.
My own experience in the 1988 campaign proves the point. My proposal for school choice, opposed by Bush, Dole, Kemp and, of course, all the Democrats, is now Republican policy, and is even being enacted in some communities and states across the country. Similarly, a market-based alternative to Social Security, ridiculed as a "nutty" idea, has, thanks to Steve Forbes, become a mainstream economic issue.
Steve Forbes will find similar vindication. Although widely dismissed as an iconoclastic, unimportant candidate, many of his ideas – like the flat tax that Bob Dole is already moving toward endorsing – will be around for a long time to come.
Although the flat tax was Forbes' most visible idea, it was not his only idea. He also spoke eloquently about the need to make the dollar as good as gold, about ending political careerism with term limits, and about privatizing Social Security. Indeed, the very fact that he was not vilified for suggesting the latter idea, as Barry Goldwater was, may be the most important development of the 1996 campaign. As Sherlock Holmes once observed, the significant event was the dog that didn't bark.
Social Security has long been known as the "third rail" of American politics because every politician who ever suggested privatization suffered the same fate as those who touch the electrified third rail of a subway. But times are changing. Because of demographics there are fewer people every year who get a good deal out of Social Security and more who have little expectation of receiving anything. As a result, even the American Association of Retired Persons is said to be sympathetic to some option that would allow younger workers to set aside some of their payroll taxes in a private savings account. The Social Security Advisory Council is expected to make a similar recommendation in a few weeks.
Steve Forbes may never run for president again and his run this year may never warrant more than a footnote in history, but if Bob Dole – or even Bill Clinton – proposes a flat tax next year, or if Congress moves toward some kind of private alternative to Social Security, Forbes will deserve some of the credit. For if nothing else, his was a campaign about ideas.
And as Ronald Reagan reminded us, ideas have consequences.