Norman Stone - The Atlantic and Its Enemies

However, as the money poured into government coffers, what next? It mattered that Margaret Thatcher was now a world figure. As with an American presidency, the possibility always existed that a British Prime Minister would escape into foreign affairs. To begin with, she had been rather contemptuous of these international gatherings — what had begun as a decent enough idea for small, informal gatherings soon degenerated into a media circus, and at meetings of the G7 the final communiqués would be drafted before the people had even met. Photographs and television images with foreign leaders were thought (mysteriously) to win votes. Besides, abroad there was sometimes adulation — none of the abuse shouted back home. Patriotism could be on display, without any sniggering. It also mattered that NATO had come under considerable pressure. In 1982 there was a great fight over the placing of intermediate-range ultra-modern missiles on European soil, and vital countries, Germany, especially, saw enormous demonstrations against this, a matter in part of KGB manipulation which Bukovsky, from Politburo documents, was able to demonstrate. In this atmosphere of the ‘Second Cold War’, as commentators called it, the transatlantic link became all-important. Margaret Thatcher took her eye off the domestic ball, and moved on to what appeared to be a much larger one, foreign affairs. Instinctively, she did not like the Foreign Office: it was too ‘European’, talking platitudes, and inclined not to be as fervently Atlantic as she was. If the Americans took a hand in anti-terrorist action, as they did in the spring of 1986 against Gaddafi in Libya, then Mrs Thatcher could follow her instincts and offer support. There had been an outburst of terrorist killings, organized from Iran or Libya or elsewhere, and at Christmas 1985 nineteen people had been killed at Vienna and Rome airports. Three British hostages were taken in the Lebanon and killed, and her view of such things was that proper retaliation should be made. It duly was, and the problem greatly lessened, though she was regarded as reckless in the usual quarters. In general, she remained forthright in her opposition to the humbug of Third World goody-goodies, Scandinavian ladies, lecturing and the like, and at the waste-of-time ‘summits’ which now proliferated she was at ‘new levels of manifest arrogance’.

Such bluntness went down well, domestically, and it was no doubt utterly deserved: the British had given away too much for membership of the Common Market and the cant of ‘North’ and ‘South’ needed to be dismissed. But there was similar and greater cant at home, and here the lady was being sidetracked. More and more, foreign affairs took over: the endless grind of domestic reform was too exhausting, and the divisions on the Right too difficult to bridge. Increasingly, too, matters European came centre-stage, generally in a cantankerous way. For a good generation the Common Market had been bumbling along, but in 1985 Margaret Thatcher herself had promoted the ‘Single European Act’, which was supposed to simplify things. It would end the hidden protection devices and stop the endless haggling over uniform standards that got in the way of trade. But, unnoticed at the time, that same Act allowed the larger countries, and of course Germany especially, to override opposition provided they could take on a lesser ally or two. This meant that in matters of some importance the British might be outvoted and yet compelled by the Europeans to go ahead. ‘Europe’ took attention that diverted and exhausted; it was also in the end destructive of constitutional ways. The British Parliament soon found itself nodding through great heaps of small-print legislation in obedience to European directives, and since Parliament had absolute power, the police were soon prosecuting people who illegally killed bats in their attics, and the absurd persecution of smokers got under way.

Deregulation, privatization, the existence of powerful computers that could be programmed to buy and sell at an advanced level, with endless manipulations of complicated IOUs (‘swaps’, ‘options’, ‘warranties’): much of it came down to mortgages on bricks and mortar, whether the Colombian embassy in Tokyo being sold to pay off the national debt, or a broom cupboard near Harrods in London being sold for £35,000. As ever in such a world (after Louis Napoleon’s Eighteenth Brumaire there was a similar bonanza with property in Paris, and even a form of unit trust) there were figures, part child, part ogre, who understood the system, made vast sums of money mainly by borrowing from people who did not, and discredited the system as a whole. There had been Armand Hammer, who had managed to make money in Stalin’s Russia, with a monopoly for the sale of pencils made on a German model, just as every child in the USSR needed a pencil for the expansion of schooling — Stalin ended this in 1929, but Hammer was allowed, in compensation, to take two waggon-loads of icons and art, confiscated from the original owners, out of the country; he set up shop in Park Avenue, used the profits to buy oil in the early 1930s, when its price was very low, and then boomed: at the end of his life, while watching cricket at Lord’s with the Prince of Wales, he was harassing his sister-in-law for the $15,000 that he had lent to his much less successful brother for a life-saving operation which had failed. There was Robert Maxwell, fraud to the core, claiming to be a Czech, but in effect Hungarian (he had been born in what had been north-eastern Hungary, and cut his teeth, financially, on cross-border smuggling). He survived by doing his own people out of their retirement fund, and died by drowning, probably suicide, in circumstances that were never cleared up. In the USA ‘junk bonds’ created fortunes and led to discredit of the whole system. These involved a real risk, being bonds raised against the possibility of taking over, via the stock exchange, some firm or other, allegedly badly managed and overextended. In 1980 such bonds raised $5bn, but by 1986 almost $50bn, falling back to around $35bn thereafter. Their chief architect, Michael Milken, made himself vastly unpopular and eventually was imprisoned (though on a lesser offence). He financed Turner Broadcasting and many other well-known, now well-established, concerns, and two thirds of the ‘junk bond’ money went quite productively into such corporate growth, not into the spectacular takeovers. It was all, in the end, brought about as a consequence of the seventies inflation, and the distortion that that had produced, but there was a great deal of head-shaking. Economists stuck in the Left could be waved aside. Those on the Right, with views as to probity, not so, and the best were worried. In the mid-1980s Tim Congdon wrote in warning against what was happening, and was followed a decade later by Peter Warburton. They were proven right, but only a decade later, in 2008, when the bubble appeared to collapse, and trillions disappeared, the exports of Japan (at this moment of writing) dropping a quarter in a month (January 2009). But such works appeared in the 1980s to be wolf-crying. Michael Milken might be led off, to boos, in handcuffs. But a far greater drama was going ahead elsewhere: Moscow and Peking had noticed what was happening.

Moscow and Peking had supposed that the Third World would rescue them. In the Russian Revolution, the Bolsheviks had really won because they had recruited the earliest version of it: you could tell assorted downtrodden Eastern peoples that colonialism was the enemy, that Marxism was the friend. After they had won the civil war, in September 1920, the Bolsheviks had staged a congress of ‘the toiling peoples of the East’ at Baku on the Caspian; 2,000 attended, some taking time off for their prayers, others trading, and had been addressed first of all by Grigory Zinoviev, the head of the Comintern, screeching his Moscow-Jewish German, and then by the Turkish Enver Pasha, nephew-in-law of the Sultan, former commander of the Turkish army, who addressed them as ‘comrades’, and flounced out when he was told he could only have five minutes (he responded by circulating his vast address). The enemy was imperialism. There was obvious sense in this strategy, as was later displayed in China in 1949, and Vietnam in 1975. The Russians had accordingly gone into the Middle East and Africa, a process culminating in the invasion of Afghanistan. On America’s door-step, they had taken up alliance with the revolutionaries of Nicaragua, who agreed — as had happened with Republican Spain in the civil war — to pretend to establish a popular front rather than a people’s democracy, so as to rope in Western allies who would not have liked an outright Communist takeover. But in 1983 the Third World was not working out as intended. Iran had gone very badly wrong. So had the invasion of Afghanistan. And two very vulnerable places, Chile and Turkey, had shown that the Soviet formula was quite misplaced. The eighties economy was defeating not just Marx, but Lenin and Mao Tse-tung as well.