16 May 2016

Britain must learn from the new “conservative revolution”


I am not British. But I wish I were because now and in the foreseeable future Britain has a unique role to play in the world. And if I were British, I would think about Britain’s future in the following way.

Between the late 1970s and the early 1980s, both the United Kingdom and the United States saw the birth of the so-called conservative revolution.

The term is an oxymoron (how can a revolution be conservative?) but it symbolizes the extraordinary contribution of the administrations of Margaret Thatcher in London and Ronald Reagan in Washington. Both revived the innovative forces of liberalism that had kindled the Industrial Revolution and the great wave of global modernization in the 19th century.

They reined in the interventionist forces of the state, which were shackling the economy and society, and restored the role of the state as the ultimate referee, not as a player; they incentivized in all possible ways private enterprise and repaired its role as the dynamo of change and innovation; they put a check on trade unions, which had morphed into feudal guilds keen on protecting the privileges of their few members against the interests of society, progress, and the many. They trusted the abilities of individuals who understand about their life and business more than any state official. This trust in individual knowledge, countering the concentration of power and information into any Leviathan, is the basis of freedom and progress.

They understood that this driving force of modernization was giving everyone a fair chance to strike it rich or to own a business, so as to improve the wellbeing of all. They also attacked monopolies, seeing that monopolies kill competition, crucial for progress in a free market. None of this was a new invention but simply the rediscovery of the lessons of Adam Smith and David Ricardo, who provided the pillars of thought shaping our times.

Thatcher and Reagan changed the West. With their success, they ultimately triumphed over communism. But what followed in the 1990s was a false sense of total victory. Some intelligent people truly believed that it was the end of history and that the world was flat because we could now trade freely, unrestricted by ideological blocs. Some thought that having everything at our fingertips because of the speed of Internet and new mobile devices meant that anybody would be magically transformed into one of us.

But the best students of Mrs Thatcher and Mr Reagan were the Chinese. They unleashed a series of extremely bold reforms that in just 30 years pushed their country and the rest of world into a new economic era and brought about a geopolitical transformation. With the development of China came that of the rest of Asia, some 60% of the global population. The adoption of Thatcherite and Reaganite policies has lifted billions out of poverty in the East and has created the largest middle class in history. Latin America and Africa will be next.

So the world has changed. But the West seems to have forgotten the simple lessons of Thatcher and Reagan. And, if it has, how can it relearn them in the present historical circumstances?

This entrepreneurial and liberalising drive has to be brought back to the UK and to Europe. To boost its strength, its companies must engage more deeply with China, India, Indonesia. It needs to put a stop to trusts and monopolies and boost the creative forces of small enterprises, which have to be free to grow bigger and more international. Only in this way can it survive in the era of fiercer and wider global competition. Bit-coin, 3D printers, Hi-tech medicine, green energy all promise revolutions in our lives, and here the size of the market can be crucial to boost or kill these technologies.

Francesco Sisci is a Senior Research Associate of China Renmin University. The author of Asia Times’ Sinograph column, he was also Asia Editor for the Italian daily La Stampa and Beijing correspondent for Il Sole di 24 Ore, and has written for numerous Italian and international publications.