for a competitive, high-wage, knowledge economy. These differences
manifested themselves in the public policies of the period. Parties of
the left taxed more and more progressively than parties of the right,
and they used the additional revenues to invest in education and
training as well as in programs to sustain competitiveness. Conser-
vatives, on the other hand, lowered tax rates and labor costs, and
relied more on private investments.^57 Even though both sides were
influenced by neoliberalism and accepted austerity, only the left com-
bined welfare state retrenchment with public investments in new
programs favorable to equality.^58
The marginalization of the North–South debate
In world politics, the 1980s and 1990s also saw the triumph of con-
servative forces.^59 Communism was defeated and the East–West
division abolished. Only the North–South cleavage remained, but this
conflict was less and less defined by the demands of the South for
redistribution and global reforms. Actively promoted by the govern-
ments of the North, the major international economic agencies, and
the business community, a neoliberal view of development came to
prevail, to the point of becoming accepted by most as something like
“common sense.”^60
The historical backdrop to this evolution very much coincided with
the circumstances that led to the rise of the right in affluent democ-
racies. Indeed, the actors and events involved were largely the same
that brought about monetarism and welfare state retrenchment. It was
quite natural for leaders such as Margaret Thatcher and Ronald
Reagan to extend their political views to world affairs. As she wanted
to herald the beginning of a new era, Thatcher, for example, insisted
that the very idea of a North–South bipolarity had to be discarded:
“The term ‘North–South,’ implying as it does a simple division of
needs and interests,” contended the British prime minister, “is an
(^57) Boix,Political Parties, Growth and Equality, pp. 39 and 99–101.
(^58) Castles,The Future of the Welfare State, p. 109.
(^59) Robert Gilpin (with the assistance of Jean M. Gilpin),Global Political
Economy: Understanding the International Economic Order, Princeton
University Press, 2001, p. 309.
(^60) Jan Aart Scholte,Globalization: A Critical Introduction, second edition,
New York, Palgrave-Macmillan, 2005, p. 39.
152 Left and Right in Global Politics