What Russians can learn from Ronald Reagan

It is right that Globalist should notice the death of Ronald Reagan last weekend. For Reagan, together with Gorbachev and Margaret Thatcher, was the architect of globalization.

In its broadest sense, globalization means a growing consciousness of the world as a single unit. This has both an economic and a political aspect. The economist Jagdish Bhagwati defines economic globalization as ‘the integration of national economies into the international economy through trade, direct foreign investment…short-term capital flows, international flows of workers and humanity generally, and flows of technology’.* In political terms, globalization means a world in which war and the threat of war are no longer the governing factors in interstate relations. Both aspects are interdependent, in the sense that economic integration cannot go very far if war is a constant possibility and war becomes less likely the further economic integration proceeds. But economic and political dynamics can diverge, and this makes it very difficult to predict how far globalization will go.

Ronald Reagan’s contribution to economic globalisation lay as much in his rhetoric as in his actions. He restored faith in free markets at home, and made the building of free markets abroad a crusading aim of US foreign policy. ‘Government is not the solution; government is the problem’ he famously proclaimed. His belief in the superiority of free markets and free enterprise was echoed and reinforced by Britain’s Margaret Thatcher, and had a strong influence on the first generation of post-communist reformers like Yegor Gaidar in Russia, Vaclav Klaus in Czechoslovakia and Leszek Balcerowicz in Poland. Nor would China and India and most Latin American countries have opened up their economies to foreign trade and capital without the Reaganite impulse from the United States.

Practical achievement necessarily fell short of aspiration. But the Reagan-Thatcher policies of shrinking the state and liberating markets have become the economic orthodoxies of our era. Without them, globalization could never have proceeded as far as it did.

Reagan’s greatest political achievement was helping to end the Cold War. In this outcome, the role played by Mikhail Gorbachev was also crucial. Reagan started as a Cold War warrior. In one of his first speeches as President he denounced the Soviet Union as the ‘evil empire’. But in that very same speech he predicted that this empire was approaching its end. To what extent his own uncompromising rhetoric, belief in Star Wars and aggressive military spending contributed to the demise of communism, by setting Russia’s sclerotic economy a challenge it could not meet, will long be debated by historians. But the final result of the process was to end the division of the world into two ideologically hostile armed camps. The presence, for the first time, of the Russian President (as well as the German Chancellor) at the 60th anniversary celebrations of the D-Day landings in Normandy symbolises the way the world has come together politically.

There is an important lesson in all this. Individuals make a difference. Ronald Reagan, Margaret Thatcher and Mikhail Gorbachev broke the mould of their time. So did Deng Tsiao-Ping, Nelson Mandela, and others. No doubt the mould was waiting to be broken. But it need not have been, or might have been shattered in many different ways. Try replaying the 1980s with Yuri Andropov as Soviet leader. Does anyone believe the result would have been the same?

Russia’s politicians have still to learn this lesson. The first generation of liberal reformers were paralysed by their Marxist presuppositions. The ‘objective social conditions’ they used to tell me when I first came to Russia ten years ago were not ripe for Western-style politics. The result was that there are no genuine political parties and no front-line political leader was prepared to stand against Putin in March. So the next generation of political leaders should draw inspiration from those who, by standing out against the prevailing wisdom, changed the course of history.

* Jagdish Bhagwati, In Defence of Globalization, Oxford University Press, 2004