2010 could have been a banner year for the federal NDP. The Liberals remained dogged by internal divisions, poor leadership and historically low poll numbers, while Prime Minister Stephen Harper has irretrievably defined himself as a grim right-wing ideologue.

Hence a vast swath of the electorate has been wide open for the taking, including what pollster Frank Graves calls “a large group of restless women and under-40 voters who are casting about for anyone but the Conservatives.”

Yet the NDP remains stuck in its traditional spot well behind the two leading parties. Its poll numbers are trapped in the teens, and it suffered a surprise defeat in the Winnipeg-North byelection in November. The looming spring election promises little more than a return to Parliament as the fourth party, well behind even the Bloc Québécois.

It would be unfair to pin all of the blame for these shortcomings on weak leadership. Federal leader Jack Layton continues to earn relatively strong approval ratings, and his caucus’s effectiveness in Parliament is often praised by pundits across the spectrum. Layton and his lieutenants also deserve much credit for minimizing the impact of his recent illness.

Still, the NDP’s top leaders need to confront the party’s deeper problem, namely its fundamental cautiousness and passivity in recent years. The main hope of the party has been that if the Liberals faltered, and particularly if they alienated progressive, anti-Tory voters, the NDP would reap a political windfall. The party has, therefore, tended to play it safe — to avoid sticking its neck out on controversial issues that could lead to New Democrats being dismissed as crackpots or radicals — and wait for the Liberals to bleed support.

The disappointments of 2010 should provide final proof that this strategy is not going to work. Indeed, the Liberal slump has deepened, but the NDP’s political windfall has not materialized. In fact, the main result of the NDP’s muted approach is that voters are simply tuning the party out.

If the NDP is to break out of its rut, some kind of bold action is required. The party could make a dramatic shift to the right, overhauling the platform and trying to appeal to more centrist voters. But such a move would lead to massive upheaval within the party and, in particular, marginalization of the party’s base, as occurred during Tony Blair’s creation of New Labour in Britain.

More important, at a time when public mistrust of politicians is hitting unprecedented levels, it is hardly clear that abandoning long-held party principles in a quest for power will make a positive impression on voters.

A much better option is for the NDP to get over its aversion to risk and recognize that as a longtime third (or fourth) party, it will need some controversial stands on key issues in order to have real impact. This does not necessitate, as many of the party’s leaders seem to believe, embracing radical positions. On the contrary, the party simply needs to get bolder and more confident in pushing its long-held beliefs onto the agenda.

This is most evident on what is by far the most important issue of the day: the economy. Indeed, perhaps the most frustrating aspect of the NDP’s recent performance has been its leaders’ continued determination to soft-pedal its core social democratic, active-government policies precisely at the moment when the financial crisis and the Great Recession are proving them right. The current political discourse is calling out for someone to get the public to step back and assess the damage of free-trade policies, tax-cutting, deregulation and the slashing of social programs. The free-market, fiscally conservative policies that have prevailed at least since the election of Brian Mulroney have never been more vulnerable to wide-ranging attack.

If New Democrats fear becoming isolated on the Canadian political scene by adopting this position, they can point to the broader global economic landscape and find plenty of support — indeed, taking a global, big-picture approach has not been this potentially advantageous for the left in a long time.

Countries that have embraced right-wing economic policies, led of course by the United States, are generally the ones in the biggest trouble. Ireland, to cite another case, used to be the darling of free-marketeers everywhere, including Tory Finance Minister Jim Flaherty; it now stands as an example of not only the catastrophic results of unrestrained financial recklessness, but also the failure of austerity measures to reassure financial markets.

Countries that have followed the social democratic models favoured by the NDP have fared much better. Northern Europe and especially Germany have proven more stable — and crucially, their people have felt a lot less pain. What’s stopping the NDP from making a simple, compelling comparison: Germany or the U.S., which model seems to be working?

To be fair to the NDP, it is hardly the only left-leaning party to produce an underwhelming response to the Great Recession. As Nobel Prize-winning economist Paul Krugman has observed, the last two years may well be remembered globally for “the strange triumph of failed ideas. Free-market fundamentalists have been wrong about everything — yet they now dominate the political scene more thoroughly than ever.”

But as Krugman also argues, a major reason for right-wingers’ recent successes has been their opponents’ failure to knock down conservative free-market fundamentalism, even as the economic crisis has rendered it mishmash of “zombie ideas.”

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The fact is, social democratic parties like the NDP still have a great opportunity staring them right in the face — all they need is faith in their principles and, above all, the political will to seize the moment.

David Goutor is a Canadian historian and assistant professor of labour studies at McMaster University. He is author of Guarding the Gates: The Canadian Labour Movement and Immigration, 1872-1934.