The conservative vision for Americans died in Houston last August, during the Republican convention. Unable to run on their economic record, they turned instead to claims of having some monopoly on "family values" - ineffectual politics, but an effective admission that conservative economic ideology, which for a generation had been on the march through America and the world, was exhausted. Conservatives may still be able to win elections, but their slogans are empty at best.

I was a student of economics in the 1970s, when many erstwhile liberals had turned into neo-conservatives. I never went that far, but there was no mistaking the fact then that many of the most challenging social ideas were on the right. By the late 1970s, liberalism (in its American sense of the power of government activism, not the European sense of a belief in leaving things alone) had clearly lost its way. The right was the party of ideas, many of which turned out to be wrong, but liberalism was intellectually exhausted, and worse, unable to face facts.

That was a long time ago. Today it is conservatives who have lost their intellectual energy. Over a dozen years of stunning political successes, they have had an opportunity to put many of their ideas into practice - and see them fail.

The promise that, with a hands-off monetary policy markets would stabilise themselves (remember monetarism?), turned out to be false. The promise that lower taxes would lead to an explosion of investment and growth were equally false. The promise that deregulation would free markets and help consumers was only partially kept in some industries; the ideology of deregulation helped produce spectacular disaster in the US financial sector, and the myths of privatisation have done no better in the UK. Above all, the conservative promise that government could be made smaller and more efficient turned out to be a mirage.

Why did conservatism fail? Some American liberals, including economists with influence on Bill Clinton, believe conservatives failed because they had an undue faith in free markets. They think Mr Clinton can succeed where Mr Bush failed by sharply increasing the role of the state in labour markets, in investment, and - most immediately - in international trade. As Lester Thurow said, "The sound you hear is the door closing on laissez-faire". They claim interventionist policies can do better than free-market policies at making the economy grow.

Liberals who promise they can deliver faster economic growth are, however, probably heading for a fall. If there is one lesson from the conservative era, it is the remarkable insensitivity of economic growth to government policy.

In the US, the average rate of growth of labour productivity, whose sluggish performance is at the heart of the American economic malaise, was almost exactly the same in the 10 years after Ronald Reagan took office as in the 10 years before. In Europe, the inexorable upward trend in unemployment, Eurosclerosis, is common to all of the big nations, regardless of their ideological complexion. Maybe some of Clinton's advisers think getting tough with Japan will somehow transform the Western world's economic performance, but neither logic nor history is on their side.

The roots of poor performance in the US economy, and indeed of all Western economies, lie beyond the reach of any likely policy changes. The failure of conservative growth policies was relative to their extravagant promises, not to what some more liberal programme might have achieved.

But would the US economy have grown significantly faster if people I like had been in power? Could a less Thatcherite government have kept Britain's unemployment in single digits? I doubt it.

This is not to deny that there were some unforgivable policy errors. Ronald Reagan, in particular, allowed US policy to be based on the irresponsible doctrines of supply-side economics, and thereby saddled the US economy with a persistent federal deficit. This deficit has without doubt been a drag on economic growth. Most estimates of the net effects of the deficit are, however, surprisingly small: at maximum, US real income would be about 3 per cent higher if the budget had been balanced throughout the 1980s. That's not an insignificant number, but it hardly represents a catastrophe.

I do not think Bill Clinton will do much better. Indeed, his obsession with Japan-bashing will be the moral equivalent of Reagan's deficit, creating an era of trade conflict that will prove as hard to end as the deficit era that began in 1981.

So why am I a liberal? Because economic policy is not simply about growth, it is also about distribution. In America, at least, anyone who cares about the poor has cause to celebrate at the end of the conservative era.

The simplistic story about Ronald Reagan is that he cut taxes on the rich and benefits for the poor, presiding over an era of simultaneous growth in wealth and poverty, ignoring the misery his policies caused by fatuously claiming that growth would solve all problems. Guess what? That simplistic story is basically true. Admittedly, the growth in income inequality in the US was not for the most part caused by Reagan's policies. But Reaganomics made things worse, pushing millions of people, a disproportionate number of them children, over the poverty line.

The real failure of conservatism in America, then, was not so much economic as social. Conservatives in power made America a harsher, meaner place in the name of growth - and then failed even to deliver the growth. It was time for them to go.

Originally published, 8.23.93