Lecture 6: 1980s Reagan, Revival of Conservative. Values, and the Fall of Communism

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Alfred Palmer
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1 Lecture 6: 1980s Reagan, Revival of Conservative I. Introduction Values, and the Fall of Communism The 1980s began with an important election between Jimmy Carter (D) and Ronald Reagan (R). Carter had dedicated himself to resolving the Iranian hostage problem at the American Embassy in Iran and had seldom left the White House, thus making the crisis seem much bigger than perhaps it was to ordinary Americans. His policy of dropping support for the Shah of Iran had led to an abdication of the Shah and a takeover of the country by Shiite clergy. An Islamic Republic had been declared and the American embassy was soon overrun by militants who took the staff hostage. Adding to this foreign trouble was a terrible inflation in the US that had reached as high as 13% per annum and had driven the prime rate of interest to over 20%. Much of this was in fact an adjustment in prices due to the second oil crisis in But, the public saw this as mismanagement of the economy, in addition to the general incompetence in foreign affairs due to Iran. America was thought to be declining in power and Japan and Germany were thought to be in an ascendancy, much like the Soviet Union had been seen in the 1950s. Under this malaise, a term Carter chose to describe the situation in America, the optimistic Ronald Reagan was swept into office taking every state except one. Reagan not only appealed to traditional business oriented conservatives in the Republican Party, he was also able to gain the support of so-called Reagan Democrats (i.e. working class, socially conservative Democrats). He immediately set his goals of expanding defense spending, reducing taxes, reducing social welfare spending, and tackling inflation. With help from the Federal Reserve and Congress, he was able to do all of these with varying degrees of success, but not without generating the worst recession since 1933 and the biggest deficits as a percentage of GDP since World War II (see Figure 6.1 below). Reagan was the first president in modern history to make being a conservative acceptable and even popular. In defining conservatism, Reagan said "The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is." Reagan's views on government were influenced by Thomas Jefferson, especially his hostility to strong central governments. In 1987 Jefferson declared "We're still Jefferson's children. Freedom is not created by Government, nor is it a gift from those in political power. It is, in

2 fact, secured, more than anything else, by limitations placed on those in Government". Figure 6.1 The US Federal Fiscal Deficit A famous quote of Reagan s often retold to many Americans is the following and provides insight into his belief that we have a duty to those who come later to cherish and to pass on the freedoms we hold so dearly today. It goes as follows Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children's children what it was once like in the United States where men were free. The point is well taken that citizens must never assume that their individual freedoms are guaranteed, since there are many ways in which such freedoms can be taken away. And, once gone, it is a real struggle to get them back. Regan believed that individuals must be allowed to have liberty of action, so long as these actions do not manifestly infringe on

self-interest. He was very much a first in US politics, since the original founders, who held truly libertarian views and was able to succeed.

3 other peoples rights. He did not feel it was right to use the power of government to shape an America to some elitist view, but that people should collectively determine the nature of the country by pursuing their own self-interest. He was very much a first in US politics, since the original founders, who held truly libertarian views and was able to succeed. Reagan was not alone in the world to hold these views though. Figure 6.3 Reagan and Thatcher Mirroring the Reagan Revolution in the US was the Thatcher Revolution in the UK. Indeed, the relationship between Reagan and Thatcher became characterized as one between Maggie and Ronnie. The two leaders saw virtually eye to eye on every aspect of governance and foreign policy. The success and popularity of each led to a natural reciprocal buttressing and support within their respective countries. But, conservatism in general did not catch on in the UK like it did in America. Reagan was deeply hated by liberals in the US, especially by youth, Hollywood, and the academic community. However, the success of the Federal Reserve in dropping inflation from 13% to 3% and the strong growth that occurred during the latter part of the 1980s caused conservative economic ideas to become much more respectable. Stanford, Chicago, Virginia, and UCLA became bastions of conservative economic thinking and led a challenge to the very liberal Ivy League universities. A new branch of macroeconomics called supply side economics arose, which discussed the importance of taxes on work effort, regulations on productivity, and policy uncertainty on investment planning by companies. Policies of the older liberal variety were increasing thought to be undependable and ineffectual since the public were known to be forward looking, would anticipate policies, and would adapt their behavior in such a way as to render publically stated policies ineffective. The only way that policy could be effective would be for it to be implemented in a surprise fashion, and even this would only be effective in the short run since people obviously learned from their mistakes. A stable policy that followed a rule (instead of discretion) would at least contribute to stability of the economy, even though it would not affect the economy too much.

4 Just as there was a return to conservative politics and economics, leading to much more freedom and less government intrusion, people turned towards religion especially evangelical movements with large modern churches and congregations that numbered in the tens of thousands. Televangelism became popular with millions of people turning on the television to worship. Cable television produced an explosion in choice making it possible for one house to be watching Jerry Falwell preaching Christianity while at the same time, next door, the neighbor might be watching MTV or the Playboy Channel. Lifestyles were becoming separated and therefore polarized. This was to set the stage for complete separation and polarization once the internet was fully constructed. The idea that democracy would flourish in a well-informed society was apparently founded on the premise that everyone would hear everything and the best ideas would filter to the top from such interactions. Cable TV and the internet instead let one style one s information stream to suit one s particular political view, crowding out good ideas with a constant stream of bias from both the right and the left. Most people saw this lack of interaction between opposing views as good. The specialization of information flows fulfilled a natural need for countervailing power over information. Most of all, in the late 1980s and early 1990s, Americans saw the collapse of the communist giant, the Soviet Union, as a closing of a chapter on fear and trepidation. It was as if a cancer had suddenly gone into complete remission and one had a new lease on life. No longer would missiles be pointing at each other. No longer would there be intractable conflicts in international bodies like the United Nations. The Eastern bloc countries would become independent and Americans would at last be able to travel to places like East Germany, Hungary, Poland, and Romania. The fall of the Soviet empire would bring about a new dawn in US and Russian relations. Communism would be completely rejected and free market capitalism would prevail. The hope was expounded on by Francis Fukuyama in his book The End of History and the Last Man published in 1992, but based on an earlier 1989 article. As he wrote in his book What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such: that is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government. (My emphasis) Fukuyama was not without his critics. In particular, his ideas were supplanted by Samuel Huntington in his 1993 essay A Clash of Civilizations later published as a book in Samuel P. Huntington wrote a 1993 essay, "The Clash of Civilizations", in direct response to The End of History; he then expanded the essay into a 1996 book, The Clash of Civilizations and the Remaking of World Order. In the essay and book, Huntington argued that the temporary conflict between ideologies is being replaced by the ancient conflict between civilizations. The dominant civilization decides the form of human government, and these will not be constant. He especially singled out Islam, which he described as having "bloody borders".

Both Fukuyama and Huntington believed in a fundamental change in the world that was due to the end to the tremendously destructive fight between liberal democracy and communism.

ideology was not going to be a source of conflict in the future.

5 Both Fukuyama and Huntington believed in a fundamental change in the world that was due to the end to the tremendously destructive fight between liberal democracy and communism. The old fear of communism, state planning, and atheism, which defined the rise of communism in Russia and China had fallen away by the late 1980s and early 1990s. ideology was not going to be a source of conflict in the future. Only hardline communist dictatorships like North Korea and Cuba would continue to fight on and would become gradually less and less a model for other counties to follow. But, conflict throughput the world would continue to exist powered by deeper fundamental factors going under the broad banner of culture. Culture would be the new dividing line and it would provide an enormous and intractable barrier between countries, just as it had centuries ago. Race and religion would be the new dividing line. The US would be more and more drawn into a whirlwind of hatred and antagonism where race and religion collided the Middle East. Figure 6.2 Francis Fukuyama and Samuel Huntington The period of the Reagan years was the first real push back on the values of the 1960s and 1970s - where a free lifestyle, rejection of conservative Christian values, and relaxed view of drugs had eviscerated much of traditional American culture. The 1980s was a period where it was acceptable and even commendable to be conservative. The decay and eventual fall of the old Soviet system was to be replaced by one dedicated to fast changing markets and a commitment to technology and innovation. The economy grew quickly through the last half of the 1980s. It was only in 1990 that a recession occurred and gave a reason to turn against conservative values. But, even then the country would choose a centrist candidate from the Democratic Party Bill Clinton.

Foreign Policy Changes

Carter Presidency Foreign Policy Changes Containment & Brinkmanship Cold War Detente Crusader & Conciliator Truman, Eisenhower & Kennedy Contain, Coercion, M.A.D., Arm and Space race Nixon & Carter manage