There is No Alternative (2 page)

Given the eerie similarity between the mood in America now and the mood in Britain at the time Margaret Thatcher came to power, perhaps there will now be a wider curiosity about who she really was and what she really achieved.

I have heard countless times since this book was published that America “needs a Margaret Thatcher.” I am often asked if an American politician—so long as he is a Republican or he is a she—is “the next Thatcher,” and I am told just as often that Thatcherism has been discredited by the world's recent economic travails. It is quite rare, however, that I meet anyone who knows all that much about her beyond having a strong feeling of some kind. That is a source of some frustration to me. In pessimistic moments, I worry that the lack of eagerness to explore her real record in depth might be evidence that slogans and entertainment have not merely supplemented but replaced all political thought, and that this might be, inevitably, the fate of all free societies. In more optimistic moments, I notice that, for slogans and entertainment, America is absolutely unrivalled—and for sure, no one
else
in the world is thinking more deeply about anything.

But there is no hope of defending—or criticizing—Thatcher's record in a serious way, or learning anything from her story that might truly be useful, if one is defending or criticizing a mythical caricature. When I am breezily assured by Americans that feral youths and rioters would not have
dared
to torch a British city had Thatcher been in power, I can only say that they're entitled to their own opinions, but not their own facts. To adopt Thatcher as a heroine without realizing that her first years in power were disastrous, that city after city went up in flames, that only extraordinary luck kept her in office at all, suggests a worrying indifference to history and to truth. It hints, too, at a longing for authoritarianism rather than for principled—or pragmatic—conservative leadership. That political discourse should often be about images and slogans are perfectly normal. When
only
empty images and slogans are on offer, I just have to hope that those offering them are secretly smarter than they sound.

Among the more muddled ideas now in vogue about Thatcher is that “Thatcherism” led to the financial crisis. The suggestion reflects significant confusion about what Thatcher stood for and what she actually did.

It is true that Thatcher promoted “deregulation,” and that “failure of regulation” appears to have been a significant factor in the financial collapse. But to say this is almost meaningless. The deregulation she promoted had nothing to do with the regulations or lack of regulations variously mooted as the trigger of the meltdown on Wall Street. It is simply untrue that she favored free markets with no regulation at all. Quite the contrary. She was a strong proponent, indeed a passionate proponent, of proper regulation—the kind of regulation that makes free markets function properly. She was emphatically not an anarchist—and she certainly did not advance the notion that the best state is one without rules or their enforcement.

You will note that those who say “Thatcherite deregulation” is to blame never seem to point to a specific deregulatory failure connected to Thatcher. The laws and regulations she favored were generally good ones and remain good. Only someone who is really not thinking could blame shoddy subprime mortgages and complex credit derivatives on Thatcher: When she came to power, the financial instruments in question had not been invented.

What kind of deregulation did Thatcher promote? She eliminated the foreign exchange controls that had been in place in Britain since the Second World War. She opened the stock market to foreign and domestic traders. This was the essence of “Thatcherite deregulation” in the financial sector. No one in his or her right mind is seriously suggesting, now, that these reforms were a mistake, and no one is seriously proposing to reverse them. No one ever points to a specific Thatcherite regulatory reform that can be connected to the current crisis, because there wasn't one. “She promoted greed” is not an intellectually serious argument. Greed has been with us since the Garden of Eden.

A key point, painfully overlooked: Thatcher was in fact a proponent of quite stringent bank regulation. The evidence for this is the 1986 Financial Services Act, which closed loopholes in the coverage of investor protection laws and established a more comprehensive regulatory structure to enhance enforcement powers. It applied the same investor protection standards to a broad range of securities and investment activities. I can say with confidence that the unregulated explosion of leverage in Western economies that followed her time in power was
not
what she stood for.

The economic policies for which Thatcher is best known—and which for a time wrenched Britain from a trajectory of decline—have not been discredited by this crisis. Britain was essentially a socialist state before Thatcher and the second-poorest country in Europe. She is known for denationalizing failing British industries; taking on and weakening Britain's overweeningly powerful trade unions; curtailing government spending, advocating sound money, and promoting a business-friendly tax environment. She is also
known for the skepticism she showed later in her time in power—now vindicated—about the project of European financial and political integration. Her reforms led to the longest sustained period of British economic expansion of the postwar era. Nothing in the recent crisis detracts from this or suggests that these reforms were misguided—or that their lessons are no longer relevant.

And nothing, surely, detracts from her insight that the sovereign nation-state is the only entity that has thus far in history proved capable of acting effectively to secure its citizens' interests. This point, as much as the arguments she made about free markets, needs deep consideration.

Yet the past several years have compelled me, at least, to meditate upon Thatcher's failures, as I submit they would to anyone more interested in reality than defending a thesis. The great unanswered question, to my mind, is whether she permanently succeeded in reversing Britain's decline. I believed when I wrote this book that she had probably succeeded, but I am not as persuaded now—for obvious reasons. If she failed, that lesson too is relevant. The current recession in Britain has been the longest since the First World War. (The second-longest, not incidentally, lasted from 1979 to1983—and took place under Margaret Thatcher.) Britain's underclass is as degraded as it ever was; it is feral, as they say, and there is no doubt that crime is rising steadily.

In reviewing the first edition of this book, Theodore Dalrymple suggested a criticism that I thought excessively pessimistic at the time, but I fear now may be correct:

I am not as dour by nature as Dr. Dalrymple, but I am open to the possibility that he's right. If so, it suggests to me a terrible question: Is this the inevitable trajectory of open societies and market economies?

There is some evidence that it is: Every time I return to America, the culture seems to me more childish and self-absorbed. But then again, every time I return, I'm older. Honestly, I do not know, and neither does anyone: The future is hard to predict.

But America's inability to produce politicians who both speak to the electorate
and
speak like adults, particularly about foreign policy, is an alarming sign. In that regard, the difference between Thatcher and any politician now alive seems quite stark. By now many politicians are willing to make one of Thatcher's key arguments: nothing is possible without economic growth; absent a vibrant economy, there can be no effective foreign policy. Nor, for that matter, can social welfare programs be preserved. But Thatcher never pretended to the electorate that one might just ignore the rest of the world without consequence. The retreat of the United States into an isolationism characterized by indifference certainly cannot be justified by anything Thatcher said, did, or believed.

The isolationism is as profound among those who claim to reject it as it is among those who endorse it. It is illustrated by the lack of serious discussion about foreign and defense policy even among those who claim to be robust proponents of American leadership abroad. The first Republican candidate debate at Ames lasted for two hours. Of these, eight minutes—at the end of the
debate—concerned foreign policy; not one serious argument was made about it.

To read an American newspaper is to feel that most of the world has dropped off the map. Serious coverage of the Middle East—the most unstable region of the world—has been ceded to Al Jazeera; the mainstream American press contains almost no foreign news. If the media no longer concerns itself seriously with the rest of the world, they cannot entirely be faulted for it: You can't sell a product for which there is no demand.

The depth and severity of the economic crisis in the West and the exposure of the real level of corruption, the crony capitalism, and the sheer incompetence of its leadership have tested my confidence. I have no doubt that free markets, sovereign states, limited government, and constitutional democracy have produced the most creative, free, and just societies ever known. But can states thus constituted stay that way? If the high point of Western power, competence, and confidence has passed, I suppose the answer is “no.”

Thatcher's hatred of socialism was ideological, as I wrote, but it was also personal: It was
her
country in decline. When I note that the United States is economically stagnant, debt-bound, heavily regulated, bureaucratic, less self-governing, less free, shallow, childish, incurious, self-indulgent, self-absorbed, illiterate, obese, and moribund, I am hardly able to be dispassionate about this. When I note as well that pockets of great entrepreneurial dynamism and talent remain, that my country has a proven history of self-renewal, that nothing is written, and that the world is apt to be a very dark place without it, I am not saying this out of mere academic curiosity.

It is hard now to look at the West with perfect optimism and confidence. But we must, for as Dr. Johnson remarked, reformation is necessary, and despair is criminal. Margaret Thatcher was never tempted by despair. I doubt that she would be now, either.