It is no longer left versus right but centrists versus populists

The conversation has changed from one of growth to one of power

- Allison Schrager

America's political realignment has come for economics. At least since the days of Hayek and Keynes in the last century, the global divide in economic thinking roughly corresponded to political split. In the mainstream US, everyone was a capitalist and saw some role for government. The right-versus-left divide was mostly over the size of that role.

Now, in economics as in politics, it is no longer left versus right; it is moderates versus populists. The question isn't so much the optimal size of government in a market-based economy, it is whether the economy is positive or zero-sum and how it entrenches power.

The result is unlikely allies and enemies. The horseshoe theory of politics holds that extreme left and right partisans agree more with each other than they do with the centrists in their party. That theory now also applies to economics. A decade-and-a-half ago, economists and policy wonks were divided on things that in retrospect seem quite small. Lately, I struggle to find disagreement with centre-left economics pundits who used to make me shake my head.

It could be we are all moderating with age. But I don't think so. It's that the conversation has changed. The debate is increasingly about questions we moderates have long seen as resolved, such as whether price controls work (no), globalization is a good thing (yes) or growth should be the primary objective (of course).