Fiscal conservatism

The term has its origins in the era of the American New Deal during the 1930s as a result of the policies initiated by modern liberals, when many classical liberals started calling themselves conservatives as they did not wish to be identified with what was passing for liberalism in the United States.^[6] In the United States, the term liberalism has become associated with the welfare state and expanded regulatory policies created as a result of the New Deal and its offshoots from the 1930s onwards.^[7]


Fiscal conservatives form one of the three legs of the traditional American conservative movement that emerged during the 1950s together with social conservatism and national defense conservatism.^[8] Many Americans who are classical liberals also tend to identify as libertarian,^[9] holding more cultural liberal views and advocating a non-interventionist foreign policy while supporting lower taxes and less government spending.^[8] As of 2020, 39% of Americans polled considered themselves "economically conservative".^[10]


Because of its close proximity to the United States, the term has entered the lexicon in Canada.^[11] In many other countries, economic liberalism or simply liberalism is used to describe what Americans call fiscal conservatism.^[12][13]

Rest of the world[edit]

As a result of the expansion of the welfare state and increased regulatory policies by the Roosevelt administration beginning in the 1930s, in the United States the term liberalism has today become associated with modern rather than classical liberalism.^[7] In Western Europe, the expanded welfare states created after World War II were created by socialist or social-democratic parties such as the British Labour Party rather than liberal parties.^[7] Many liberal parties in Western Europe tend to adhere to classical liberalism, with the Free Democratic Party in Germany being one example.^[7] The Liberal Democrats in the United Kingdom have a classical liberal and a social liberal wing of the party. In many countries, liberalism or economic liberalism is used to describe what Americans call fiscal conservatism.^[12][7][49]


Fiscal conservatism in the United Kingdom was arguably most popular during the premiership of Conservative Margaret Thatcher. After a number of years of deficit spending under the previous Labour government, Thatcher advocated spending cuts and selective tax increases to balance the budget. As a result of the deterioration in the United Kingdom's public finances—according to fiscal conservatives caused by another spate of deficit spending under the previous Labour government, the late-2000s recession and by the European sovereign debt crisis—the Cameron–Clegg coalition (Conservative–Liberal Democrats) embarked on an austerity programme featuring a combination of spending cuts and tax rises in an attempt to halve the deficit and eliminate the structural deficit over the five-year parliament.^[50]


In Canada, the rise of the socialist Co-operative Commonwealth Federation pushed the Liberal Party to create and expand the welfare state before and after World War II.^[7] Fiscal conservatism in Canada is generally referred to as blue Toryism when it is present within the Conservative Party of Canada.^[51] In Alberta, fiscal conservatism is represented by the United Conservative Party.^[52] In Ontario, fiscal conservatism is represented by the Progressive Conservative Party of Ontario.^[51]


The term is sometimes used in South Korea, where left-liberal Democratic Party of Korea (DPK) and conservative People Power Party (PPP) are the two main parties.^[53] Fiscal conservatism is mainly represented by PPP.^[54] South Korea's current president, Yoon Suk-yeol, is known as a "fiscal conservative".^[55]