by Norman Stone
Far from collapsing, as these academic economists warned, the economy began to move up, headed by the Stock Exchange, in spring 1981. As 1982 began, exports recovered, and retail sales rose. Investment returned, and property prices moved up again. At least the government’s determination to deal with inflation was not, now, doubted, and that had its own effect, for confidence returned. The very clever Nigel Lawson was now at Energy, with a brief to prepare for trouble with the miners. He had devised the Medium-Term Financial Strategy, which laid out plans for budgets and monetary growth in a credible way, a more sophisticated method of presenting monetarism. It was the start of the ‘Golden Eighties’, and any economist with a sense of history ought to have known that its verities were being reasserted. There were blocks — ‘rigidities’, they had once been called — to the proper exploitation of this in an England so strongly marked by the recent past. In America, Donald Regan was saying in public that Margaret Thatcher had failed for not being radical enough, but, as she replied, in England ‘socialism’ had just made more inroads than in the USA. She had indeed had a very difficult time, but her success made the enemies more devious, and there were even modest gifts in the following budget, as the Medium-Term Financial Strategy — the money supply — was revised, to make life easier. The criticism of this was that the lady was reverting to old practices — not carrying out the serious cuts, the change in the way of life that the original Thatcherites had wanted. They began to drop away, or to lose their sense of fight. But they had had a good moment.
22. Reagan
As happened with Margaret Thatcher, one immediately interesting thing about Ronald Reagan was his enemies. They wrote him off as a lightweight, a product of the Californian television world. The intelligentsia had of course been very strongly on the side of Roosevelt, and had again been very strongly — gushingly so — on the side of Kennedy. Reagan could hardly have been more different. He was sixty-nine when he took the presidential election in 1980, and showed not much evidence of serious education — nothing remotely comparable with Kennedy’s grooming at Harvard and the London embassy. He also offered simplistic answers that the professionals regarded with derision and disbelief. ‘Virtually brain-dead’, said the New Republic; ‘a seven-minute attention span’, said the New York Times; ‘amiable dunce’, said Clark Clifford, grand old man of Cold War affairs. Word went round that he had more horses than books. He also went in for presidential fol-de-rols that struck the great and good as kitsch. His predecessor, the worthy Carter, had sold off Richard Nixon’s operetta guard uniforms, but Reagan had near replicas made for his own, and pranced happily around as the band played ‘Hail to the Chief’. Besides, Reagan’s answers to economic or national problems struck most professional commentators as absurdly simple-minded. His relations with academe went from bad to worse, and Harvard shuffled rather clumsily out of giving him an honorary degree, which was awarded instead, for some reason, to Lord Carrington. But Reagan was much loved outside such circles. The apparent nonentity won by a landslide because he could talk to voters worried about taxes and government inefficiency, and he could do so with humour and style — not for him the upraised-finger repetitive moralizing that came naturally to so many of his allies. Of the federal government, he remarked, ‘If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it’: a neat enough way of expressing the irritation felt by so many businessmen and property owners at government doings in the age of Johnson’s Great Society. On the whole, businessmen do not make good politicians, and Ronald Reagan was useful to them.
His period as Governor had not been particularly successful. He had a Democrat legislature, and although relations with it were surprisingly good, he was in no position to put through what would soon be called a ‘conservative’ programme. Taxes did not go down, and government spending went up; however, Reagan did gain an important bridgehead in what would soon be called the culture wars. In the later sixties, there were endless problems with academe, particularly Berkeley. Not long before, it had stood out as a successful state — as distinct from private — university, and the central European émigrés to California had clustered there. Franz Werfel had made a great deal of money out of a book, turned into a film, about Lourdes (the nuns of which had saved his Mahler manuscripts from the Nazis) and he was very generous in supporting other exiles, such as Schoenberg, who lived in straitened circumstances. Thomas Mann was less generous. A curious link between Reagan’s Hollywood period and his time in office occurred with the Communist element. At Hollywood, film music had been composed by central Europeans, such as Erich Korngold or Max Steiner (who composed the music for Gone With the Wind — as it turned out, Hitler’s favourite film). There was Hanns Eisler, whose brother Gerhart was not just Communist, but chief link with the Chinese Party (and who broke with his sister, Ruth Fischer, when her Communism turned dissident) — the very type of astute Communist who knew how to stage-manage front organizations. At Berkeley, philosophers came, of whom the last, Herbert Marcuse, taught heady stuff as to liberation. Berkeley set itself up as a rival to nearby Stanford, which was privately funded and dominated by a business school. Here, two Americas confronted each other: the one anarchic and on-the-road, the other briefcase-wielding and be-suited before its time. The Berkeley anarchists of course behaved absurdly, and Ronald Reagan could make some political capital out of them (‘a haircut like Tarzan, walked like Jane and smelled like Cheetah’). The president of the University of California system, Clark Kerr, refused to discipline students who were wrecking classes and taking over buildings; like many, many others, he shrank from appearing oppressive. On the whole, the natural scientists also wanted to get on with their hard work, and frequently regarded their colleagues in the Humanities as offering only ‘recreational subjects’ which did not matter very much. They therefore tended to vote ‘soft’. Universities everywhere in the USA were set on a path leading towards ‘Black Studies’ and the rest, and the great outside public shook its head. Reagan helped the regents to get rid of Clark Kerr, and there were confrontations with students, where, again, Reagan’s allies were generally helpless — either blundering or expostulating. Reagan found ways of disarming the demonstrators. They were generally fairly shallow and they handed tricks to the quick-witted Reagan: when they said they were the new generation, that in his youth he knew nothing of aircraft, television, etc., he had the good answer that this was true but that his generation had invented them all. Besides, he knew perfectly well that, on television, the rebarbative, shouting demonstrators would only make for sympathetic viewers and votes. He had a presence of mind and a light touch that set him quite apart from the preachy, humourless figures mostly to be found in his own political camp, the money-mad doctors with rimless spectacles from Pasadena, the evangelical versions of Dickens’s Reverend Melchidesech Howler of the Ranting Persuasion, and the rest. Whatever his shortcomings as Governor, he had one sure way of uniting his camp: he became somehow the chief figure of a general movement against the sixties. As such, he entered a sort of political subconscious, symbolizing something greater than himself.
After 1974, when he had to retire as Governor, Reagan faced some wilderness years. But events in the later 1970s went his way, as they did Margaret Thatcher’s. The National Review had been set up by William Buckley in 1955 as a sort of épater les bourgeois venture, to spit in the progressive winds of the age. In 1964 Barry Goldwater had forlornly stood as Republican candidate against these winds, and had got nowhere — he had even made the cause ridiculous, as it seemed to be associated with grasping and very provincial people from Arizona, a state quite fraudulently claiming to be rugged and individualistic, which would hardly have existed at all had it not been for the enormous amounts of money poured by the government into making the desert green. Goldwater had taken the Republican nomination by surprise, for it would normally have gone to an East Coast figure, in this case Nelson Rockefeller: but his divorce alienated proper-minded supporters. There was o
f course more to it. The Republicans were beginning, even then, to establish themselves in the South, because the Democrats had started advancing the cause of black rights, at the expense of state rights, and a great shift of the parties was under way. The Democrats under Johnson became the sixties party, and collected votes from, for instance, great numbers of women who now, for the first time, were in employment and, at that, often public employment, of course dependent upon taxes. The Republican vote — or at any rate support, since Democrats in the South did not always change party allegiance — grew in Democrat areas, such as Texas or California. In California, in 1978, there was a remarkable straw in the wind, Proposition 13. There was a property tax, which was sometimes cruelly high — for instance, affecting elderly homeowners who did not have much income. With inflation, as house prices rose, so did the tax assessments, and the money was not even spent locally: it was redistributed, following Federal prescriptions for the equalization of school funds and the like. The state constitution allowed referenda, and there was a great taxpayers’ revolt, despite an alignment of almost the entire Californian establishment against the Proposition, which passed by a large majority. It was a sign of things to come. With the inflation of the 1970s, many none-too-well-off people were paying more tax than before, simply because the levels at which higher tax was paid were not shifted upwards to take account of the lower value of money (‘bracket creep’). A programme of tax reduction therefore made sense, though of course it was also a direct attack on government employment.
‘Conservatives’ in the American case needs inverted commas. In England, to which the word properly belonged, the Conservative Party was indissolubly associated with Church and State; its leaders spoke with a different accent, ate at different times, and had institutions to defend that had no equivalent in the United States. If anything, the Conservative Party was by far the earliest and most successful version of continental-European Christian Democracy, but since this closely involved the Catholic Church, there was a huge difference. In economic matters, the Christian Democrats were not necessarily free-marketeering at all, and the British Conservatives had operated a Welfare State, with a great deal of nationalization, without demur until Margaret Thatcher’s ascent in 1975. The American ‘conservatives’ were unavoidably different: far more inclined towards the free market, hostile to big government, generally keen on decentralization to the level of the American states, and radically opposed to the welfare system that had developed since Johnson’s ‘Great Society’. In the 1980s, they had their hour: they had the presidency, controlled the Supreme Court and the Senate, and were close to control of Congress generally. But as events were to show, the American Right was very divided. Tax-cutting and limited government were one cause; so was monetarism, the campaign to stop inflation; but so too was moral resentment, a feeling that the country was disintegrating; and there was also an element that disliked the moralizers, whereas, on the question of free-marketing or abandonment of regulation, it agreed with them. Keeping this coalition together was very difficult and in the 1990s it fell apart.
Reagan somehow kept it together. He had simple answers, in what was known as ‘The Speech’. It was easy enough to show example after example of government wastefulness and inefficiency, or Communist wickedness, and in 1980 ‘the little man’ generally felt that he was being penalized whereas he was working normally to bring up his family decently. This was also a moment when the Right recovered its intellectual energy: no longer was it the apologizing me-too Republicanism of the Eisenhower era. In the sixties, there had been powerful books of the J. K. Galbraith type, on the evils of unregulated capitalism and the virtues of Keynesianism. Now, there were powerful books on the other side. Richard Perle and Jeane Kirkpatrick had been firm Democrats, consulted by Carter. After seeing how he ran his administration, they went over to Reagan’s side, and so did a further cohort of New York Jews, originally of the Left. In 1980 that side was winning the arguments. Keynesianism as understood in the sixties had produced ‘stagflation’, and an alarming fall in American productivity (as Joseph Stiglitz concedes in the preface to his Roaring Nineties of 2003). There was more than room for a return to older economics, for which Milton Friedman was the chief spokesman. The Wall Street Journal under Robert Bartley displayed panache in this cause. Later on, in 1996, he produced The Seven Fat Years, a sparklingly written account of this time. In the later seventies, he commissioned economists — and considerable ones — to write in derision of the Carter era. The school became known as ‘supply-side’, useful shorthand but no more than that: the ‘supply-siders’ were arguing perfectly seriously that taxes were too high, and were having perverse effects; that if they were lowered, the government would in fact get more money, because taxpayers would not refuse work or avoid tax in complicated, expensive accounting devices. They might even use the money for productive investment. Stiglitz and many others now dismiss these ideas, but in the short term they proved, as Bartley shows, quite right. Then there was the extraordinary deterioration of the conditions in which big-city Americans lived: squalid housing, grotesque crime rates. Myron Magnet, a scholar of English literature who knew his nineteenth century, wrote (in 1993) The Dream and the Nightmare and it was easy for him to catalogue the failures of the ‘Great Society’: as Reagan said, ‘We declared war on poverty, and we lost.’ There was also a failure, though a more complicated one, as regards America’s racial problem. ‘School bussing, more public housing projects, affirmative action, job-training programs, drug treatment projects… multi-cultural curricula, new textbooks, all-black college dorms, sensitivity courses, minority set-asides, Martin Luther King Day, and the political correctness movement at colleges’ had only led, all in all, to rather greater apartheid than before. Magnet went too far in ascribing all of this to the culture of the sixties: it all followed in a pattern of social engineering that had longer origins. However, his facts were incontrovertible: something had gone very badly wrong, and the bleakness could easily be extended as far as education was concerned. Here again, progressive ideas obviously failed. Charles Murray (Losing Ground) spelled it all out, tellingly and uncomfortably. In 1965 Daniel Patrick Moynihan had foreseen the problem; and twenty years later, three of five babies born in central Harlem were illegitimate. Welfare payments made this possible, and girls became pregnant while men refused to marry. The wisdom of the ages knew perfectly well what the family was for; there was a more complicated wisdom, developed in medieval Christianity, that considered the harm that charity might do. ‘Blessed are the poor’ was one line; but clergymen who considered the matter knew how charity could be abused and become counter-productive. At any rate, by 1980 it was clear enough that the ‘Great Society’ had gone badly off the rails. The same considerations were of course well-known in Britain, but not to nearly the same extent, and, there, the immediate problems confronting Margaret Thatcher were to do with the trade unions. At any rate, by 1979 the pendulum had swung firmly towards the Right, and the interesting books reflected this.
