Monthly Archives: May, 2009

If you believe President Barack Obama, he’s working overtime to save American capitalism.

"I strongly believe in a free-market system," he told reporters in London, "and...in America, at least, people don’t resent the rich; they want to be rich. And that’s good." The market, he declared, "is the most effective mechanism for creating wealth...that history has ever known."

Unfortunately, it’s no slouch at destroying wealth, either. Sometimes "it goes off the rail," he noted, and without some "thoughtful frameworks to channel the creative energy of the market...it can end up in a very bad place." Abroad and at home, Obama’s pleas for "commonsense" economic reform sound almost sensible, especially in light of his reassuring statements that he is no friend of bigger government and doesn’t support politicians’ "micromanaging" business.

Yet it’s indisputable that the president’s recovery plans and proposed new programs would leave government permanently bigger, more costly, and more intrusive, which in turn would sap the foundations of personal freedom and responsibility. These facts have led Republicans to whisper, and conservatives on radio to shout, that the president is a socialist. If so, he is not a very honest or obliging one. Socialism used to mean public ownership of the means of production or at least of the major industries. That’s always been a tough sell in America, and remains so. Accordingly, the Obama Administration is bending over backwards not to "nationalize" major banks or auto manufacturers, and refuses to recognize its ownership stakes in AIG, the auto companies, and other drooping businesses as anything but temporary.

Obama prefers to call himself progressive and pragmatic, terms that rule socialism neither in nor out and that recall his predecessor and model, Franklin D. Roosevelt. FDR wanted to save capitalism from itself, and he exploited so masterfully all the ambiguities in that objective that thoughtful people can be found, even today, who think he succeeded. They tend to forget that he changed not only capitalism but constitutionalism, and the latter unambiguously for the worse. They tend to overlook, too, that the relatively benign reform era they like to celebrate, the New Deal of public works projects and Social Security, is the New Deal stripped of its more corporatist, or to put it less kindly, fascist elements like the National Industrial Recovery Act. It was the unreformed Supreme Court’s "horse-and-buggy" constitutionalism that saved the country from that ugly experiment, and thus allowed future generations to praise FDR’s moderation.

Until the economic downturn got going in earnest last fall, however, Obama’s mission was to save not capitalism but the welfare state. He trusted the market more than FDR did, because it had proved over many decades its ability to generate a surplus that could be redistributed to the poor (a relative term, of course), and because it had made many Democrats with educations and careers like his quite rich. But Obama realized that the entitlement state’s spiraling costs would eventually prove unsustainable. Audaciously, he decided to double down: to declare health care a right and move toward universal coverage under an increasingly nationalized system. He bet that this will force higher taxes and, at the same time, give him and his successors greater control over costs.

* * *

In the meantime, we’re supposed to get with the program. the satirical newspaper The Onion nicely captured this expectation in its headline not long after Obama’s inauguration: "Nation Instinctively Forms Breadlines." To the Democrats it’s always 1932. They think Americans should believe in a depression even when they don’t see one. The paralysis of the financial markets and the plummet in stocks were real enough, to be sure, but Obama’s agenda for nationalized health care, draconian environmental taxation and regulation, and the steady expansion of government (except for national defense) was already in place long before the economy tanked. It was in the Democratic Party platform, under H for Hope. Now it’s marketed under F for Fear—without these urgent new initiatives, we are warned, the American economy will never recover.

The claim is absurd, but it gives you an idea of Obama’s own underlying fear. If he wastes this crisis, his best chance of securing Big Government by making it bigger will have slipped away.

The economy, and economics, are in crisis. A severe recession is upon us, and the Obama Administration, although stuffed full of leading economists, has only the vaguest idea of how to fix it. The bursting of the housing bubble cast in doubt the reigning orthodoxy that financial markets can govern Wall Street. The institutions that fund housing over-extended themselves, granting mortgages to many home buyers who could not afford them. Banks woke up last fall to realize that many of the loans they held were worthless. Some banks failed; others were bailed out by the government. Further lending dried up, and growth reversed. The vast stimulus bill passed by Congress in February is a desperate attempt to restart the economy with a flood of cash. No one is at all sure it will work because panic reigns, an emotion that lies entirely outside conventional economics.

In economic theory, the markets should have refused credit to the insolvent or charged them higher interest to cover the risks of default. But this assumes greater powers to calculate risk than buyers and sellers had. Mortgages today are packaged as securities that have become too complex for analysts to appraise. So everyone went on selling, confident that the prices were real. Suddenly it became plain that they were not. On a Wall Street stocked with MBAs, how could this happen?

Economics has traditionally ignored psychology. In Nudge, Richard Thaler and Cass Sunstein take a step toward greater realism about it. Thaler teaches economics at the University of Chicago and was an unofficial advisor to the Obama campaign. Sunstein is a law professor at Harvard and now the head of the Office of Information and Regulatory Affairs in the Obama Administration. The authors start off by differentiating "Econs" from "Humans." The former are the efficient calculators imagined in economic theory, able to weigh multiple options, forecast all the consequences of each, and choose rationally. The latter are ordinary people, who, like the analysts on Wall Street, fall well short of homo economicus. Humans operate by rules of thumb that often lead them astray. They are too prone to generalize, biased in favor of the status quo, more concerned to avoid loss than make gains, among other shortcomings. So they often fail to manage their personal affairs to the best advantage.

Thaler and Sunstein think that ordinary folk should be "nudged" to decide more rationally. A "nudge," as they conceive it, means some change in the "choice architecture" surrounding personal decisions that will cause Humans to choose differently and better, even though an Econ would be unswayed. Often that means changing the default option—the choice made for people if they do not choose. For example, many employees save too little for their retirement because they fail to sign up for 401(k) plans offered by their employers. The authors would change the default from opt-out to opt-in-employees would be enrolled in pension plans unless they said otherwise. Workers would also be encouraged to commit now to pay higher pension contributions in future, if not today. Both steps would raise savings substantially. Another nudge would be to establish better defaults for allocating pension contributions among different investments. Also, many people say they are willing to donate their organs for transplants when they die, yet fail to sign up. Again, the authors would change the default from opt-out to opt-in-people would be presumed willing to donate unless they declined.

The authors say that for Econs, the more choices the better, but Humans should not face too many options, lest they be overwhelmed. Sweden erred in reforming its pension system so that people had to choose among myriad retirement plans on their own, something many did poorly. The authors criticize Medicare for forcing seniors to choose among multiple private plans to get prescription drug coverage. Subscribers should face only a few options based on their prior drug history.

The usual objections to such paternalism are that it is coercive and that those making choices for people can’t be trusted. Thaler and Sunstein say that their paternalism is "libertarian": their nudges would allow people to deviate from recommended choices without significant cost. The authors also trust that nudging could and would be publicly justified, not secretive.

* * *

Nudge draws on behavioral economics, a branch of economics that studies the limits of rationality. Daniel Kahneman and Amos Tversky first developed the field in the 1970s and ’80s, and Thaler was one of their collaborators. But although Kahneman won the Nobel Prize in 2002, behavioralism is still a marginal field in economics. That is because looking too closely at people’s actual psychology would constrain the ambitions of the dismal science too much.

Mostly, economists imagine how people would behave in some situation if they were Econs. Individuals, they believe, will act so as to maximize their utility, usually meaning material rewards in some form. That is, they will respond to incentives. Whether they consciously do so or not is ignored. Most economists long ago accepted Milton Friedman’s argument that economic theory need not be realistic, only predictive. For mainstream economics, it is enough that people act as if they economized, whatever their actual psychology. It is enough that they do so in the aggregate and long-term, if not in every case. The predictions are then tested against actual behavior using data usually gathered by others. Economists construct elaborate statistical models to show that the incentives tested do sway actions in the expected direction, controlling for other factors.

Economists have boldly extended this approach to behavior well beyond the economy—everything from marriage to international relations. The beauty of "rational choice" is that it can "explain" virtually anything, without close inquiry into people’s actual attitudes or other grubby details. Provided only that data is available, expected outcomes can be posited and confirmed entirely from behind one’s computer. One can turn out articles at high speed, which serves academic incentives to publish and not perish. The appeal of these methods is considerable. Rational choice has expanded beyond economics to take over much of sociology and political science, provoking intense resistance from scholars wedded to more eclectic or less mathematical methods.

What economists mainly study in graduate school is not the economy but the mathematical methods required to frame and confirm rational choice hypotheses. They then apply this "tool kit" promiscuously to all manner of questions. Pride in their quantitative skills makes leading economists among the most cocksure figures in academia. In Freakonomics (2005), for instance, Steven D. Levitt and Stephen J. Dubner showed how economic methods can explain numerous puzzles in social behavior. The results are intriquing but also superficial.

For example, Levitt and Dubner show why teachers in public schools have incentives to help their students cheat on achievement tests—to make themselves look better. But they cannot explain why the teachers would violate their professional ethics to do this. Similarly, they show why low-level drug dealers have an incentive to work for low wages—to become drug bosses and make much more. But they cannot explain the climate of failure that causes poor youth to go into the drug trade in the first place. To explain behavior more fully would require the authors to undertake a deeper, more humble inquiry, involving more information sources and more hands-on contact with the phenomena under study. That sort of labor generates few academic plaudits today, and most economists avoid it.

Thaler and Sunstein are not immune to cocksure pronouncements themselves. Although they advise us to expect less from popular rationality, they recommend expanding choice in schooling and in credit markets, mainly by forcing plainer disclosure of what each option might mean. They would allow patients to give up the right to sue doctors for malpractice in return for lower fees. They would even privatize marriage, taking government out of the business of policing intimate relationships. These ideas are less well supported than the "nudges." They appeal precisely to the Econ personality that the authors otherwise question. In these chapters we still sense the facile pretensions of economics to be a universal science.

* * *

The authors dig more deeply into reality than most economists, yet their empiricism is still limited. They find the public lacking in rationality, but they never discuss the more serious dysfunctions of the underclass. Perhaps the middle class under-saves, but the poor often fail to work at all, generate female-headed families, and succumb to drug addiction or crime. To counter those patterns, social policy has lately become far more paternalist than anything Thaler and Sunstein have in mind. Welfare recipients must work to get aid, the homeless must obey rules to get shelter, and students must pass tests to be promoted in school. Those demands are not libertarian. They are presented as obligations, not choices.

Even among the mainstream population, behavioralism covers only a small part of economic behavior. Its findings come largely from closely controlled experiments in which only certain variables are manipulated. The results hardly apply to a crisis like the present, in which the whole economic system seems in question. To understand what is happening and how to change it requires a broader, less rigorous grasp of the economy than today’s mathematical economics can provide. Insight is more likely to come from public figures who are only notionally economists but have long experience of government with its many inputs—such as former Federal Reserve chairmen Paul Volcker and Alan Greenspan. The current chairman, Ben Bernanke, is an academic economist who has seemed out of his depth, although he is learning fast.

The market’s "invisible hand" forces buyers and sellers to serve others as they serve themselves, but it must be undergirded by rules of legality and fair play that do not always serve individual self-interest. Morals, not just calculation, have broken down in today’s crisis. Borrowers and lenders no longer trust each other enough to do business. To establish or restore trust requires civic virtue, something which today’s economics, based as it is on egoistic calculation, cannot explain or produce.

Today’s economists are unlikely to perceive, let alone solve, a moral crisis because, as Nudge admits, they are "pretty unsociable creatures." They seek mainly their own advantage, and they expect others to do the same. The authors discuss Humans’ tendency to care about the views of others only as a violation of rationality, not a virtue. Yet without it, who would make deals with strangers? A lack of trust and civility is one reason markets fail to make societies rich in the less developed world. The ethos of modern economics is at war with the moral basis of capitalism.

It was not always thus. The father of economics treated human nature as the foundation of the marketplace. Adam Smith produced an entire treatise on popular psychology—The Theory of Moral Sentiments—before he ventured to write The Wealth of Nations, with its paeans to economic freedom. People may appear selfish, he argued, but in fact they sympathize with the pains and pleasures of others. That virtue is essential to a successful society. Thaler and Sunstein observe it in Humans, and they display it themselves by seeking to nudge others toward rationality. Today’s economics, however, marginalizes such thoughts, and can offer little guidance in our current predicament.

None of George W. Bush’s alleged treacheries more riles leftists than that, on the international stage, he was one of them. For his dreamy Wilsonian trouble, he was savaged mercilessly, the Left having ceased to see the wisdom in democracy evangelism, military adventures, and edgy security tactics once the Clinton Administration closed shop.

Bush’s exodus was marked by historically low approval ratings, his party ejected from power after successive electoral routs. Yet, as the heat of campaign cant gave way to the cold reality of governing, President Barack Obama retained his predecessor’s defense secretary while filling other top posts with Iraq invasion supporters and democratization devotees. "Progressives" are painting new lipstick on the enlightened interventionism they’ve spent the last several years deriding as a pig. And so the rush is on to reclaim Woodrow Wilson from the Bush legacy. The problem, it turns out, was not the ambitious project to remake the Muslim Middle East. It’s just that the noble effort was horribly implemented by incompetent, moralistic dullards who never really believed in it and who, in their arrogant disregard for the rule of law, came to mirror the terrorists they were fighting.

That is the collective story of three new books addressing post-Bush Middle East policy. Of these, the most comprehensive is Brookings Institution scholar Kenneth Pollack’s A Path Out of the Desert—an ironic title given the author’s plea that Americans take up permanent residency in the desert...and bring along their wallets.

For years, Pollack was a Persian Gulf analyst at the CIA and the Clinton-era National Security Council. His oeuvre includes The Threatening Storm (2002), which meticulously laid out the case for regime change and democracy promotion in Iraq. The ensuing misadventure has not changed his mind. But as a thoughtful, self-described "liberal internationalist," he appreciates the deep economic, political, and social dysfunction of the Middle East. He admits his new "grand strategy," called "enabling reform," will be the work of decades. His great regret is that Bush’s missteps have sapped the national will required for so daunting a commitment.

He is right to worry. For all the considerable energy he expends cataloguing small distinctions, Pollack’s enabling reform is not all that different from Bush’s democratization gambit. Like Bush, Pollack strains to absolve Islam from any relation to terrorism—though he admits the threat has an Islamic "flavor," inasmuch as it is driven primarily by Salafi "Islamists" who "create a superficial impression" of a connection to Islam. He recommends that terrorism and the sometimes related (and sometimes not) Islamism be addressed by better governance in authoritarian states. So, the thinking goes, security in America hinges on democratic reform in the Middle East. Because the unpopularity of Bush initiatives predicated on just these assumptions is so palpable, Pollack is at pains to distance his "reform." Alternately, he denies the "myth" that democracy promotion played "a dominant role in Bush policy," and then disparages the former president’s "forward strategy of freedom" as though it were central to the whole mess.

Bush, who campaigned against Clintonian nation-building in 2000, is described as having reluctantly hijacked the strategy under duress. Democratization, Pollack recounts, was really the brain-child of Clinton "neoliberals." Though it inspired a few well-meaning Bush "moderates," the administration’s real insiders—the "radical Right"—were not brought around until weapons of mass destruction failed to materialize in Iraq and they found themselves in need of a justification for the mounting casualties. At sea with a good idea they didn’t really grasp, Bush operatives blew it—failing to live up to the second inaugural’s "magnificent" rhetoric of reform, rushing elections prematurely to the advantage of terrorist groups like Hamas (in the Palestinian territories) and Hezbollah (in Lebanon), and so forth.

One would never know it was Pollack’s old boss who midwifed the first Palestinian elections, turning Clinton White House fixture Yasser Arafat into a "democrat" just in time for the second intifada. Pollack is right that democracy promotion assumed greater urgency when the principal rationale for invading Iraq cratered. But as those of us who never bought the strategy can attest (and as Norman Podhoretz, a strong proponent, has documented in the pages of Commentary), democratization was an arrow in the post-9/11 quiver from the start: a core component, albeit not the top goal, of the plans in both Afghanistan and (over a year later) Iraq.

* * *

Quibbles about the depth of bush’s conviction aside, Pollack’s main complaint is that the policy was pursued incompetently and "on the cheap." This, too, rings hollow after years of relentless Democratic caterwauling about Iraq’s exorbitant costs: over $700 billion in direct expenditures (recently estimated by another former Clinton adviser, Joseph Stiglitz, to top $3 trillion in real costs). Obama spent the 2008 campaign wailing that this spending should have gone to education, health care, New Orleans, and countless other higher priorities. Even if the author is right that Bush was ham-handed, and some profligacy is thus chalked off to erratic implementation, one shudders at what Pollack must think funding levels ought to be.

And make no mistake, Pollack is talking about an enormous financial commitment. His strategy would invest government’s full run of resources—including the armed forces if necessary—in the hope of very gradual transformation in the Mideast. The plan would provide financial aid to create diverse markets and entrepreneurship, and it envisions a dramatic overhaul of the region’s woeful education systems. It calls for increased foreign aid to places like Egypt, where our $2 billion annual ante has not been upped in 20 years. (Even as he recommends more funding for Hosni Mubarak’s dictatorship, Pollack suggests withholding a slice to create human-rights pressure—but such sticks, as the Bush Administration learned, turn brittle the second we need the Egyptians to do something, which is often.)

Pollack forthrightly asks, "Is all of this really necessary?" His argument presumes that the Muslim Middle East is amenable to real democratization and that such reform there would translate into security here. On these points he is unconvincing. He is adamant that "Islamists," the "political Islam" they purvey, and the terrorists with whom many of them make common cause must be distinguished from "Islam," the belief system of the world’s 1.2 billion Muslims. Fair enough. But he ignores reality in portraying Islam as an exclusively positive force, fully compatible with democracy.

Along the way, he indulges multiple misconceptions. Contrasting America’s government with Japan’s (among others), he deduces that because democracy comes in many forms its fundamentals must be endlessly malleable. He then lists those fundamentals—"speech and assembly, representative government, transparency, accountability, rule of law, checks and balances within government, and limits on governmental power...." Noticeably absent are freedom of conscience and legal equality between sexes and between sects. As our own national experience shows, these principles are a sine qua non of real democracy, and they run decidedly against the grain of Islamic culture. On this Pollack is silent, or he falls back on the familiar cop-out that because most Muslims are moderate, Islam must also be. He clings to the fallacy that because millions of Muslims live in democracies, Islam must be democracy-friendly—even though it has no democratic tradition, Muslims are minorities in most democracies he mentions, and where they are the majority (in Indonesia and Turkey) freedom is currently under assault.

This cheery view leads the author to the still more tenuous claim that Islamists are largely benign and should be drawn into the electoral process despite what he admits is the danger that, once in power, they might well undermine the political reforms that got them there. Pollack certainly does his credibility no favor by his astounding reliance on condemnations of the 9/11 attacks by such Islamic authorities as Muslim Brotherhood mouthpiece Sheikh Yussef al-Qaradawi ("one of the most well-known religious scholars in the Arab world"). Pollack airbrushes from his portrait Qaradawi’s fatwas approving the murder of Americans in Iraq and suicide bombings in Israel, as well as his role as chief agitator in the notorious global rioting over Danish cartoons depicting Mohammed.

* * *

In The Politics of Chaos in the Middle East, renowned French scholar Olivier Roy provides a more detached critique of the Bush policy. A short volume, it is long on hyperbole—e.g., that Iraq is a hopeless, neoconservative—driven catastrophe that has left American counterterrorism in tatters. The argument seems more ill-considered with the passage of time: quite apart from the fact that many highly knowledgeable, non-neocon experts (like Kenneth Pollack) supported removing Saddam Hussein, Iraq has receded from controversy precisely because al-Qaeda has been thoroughly routed there and Baghdad’s fledgling government is ambling, fitfully, toward stability (though obviously one can debate whether the final product will justify the cost).

Roy diagnoses what he regards as the fatal flaws of neoconservatism: it is "universalist, Wilsonian and anti-culturalist." He infers that neocons perforce reject Samuel Huntington’s clash-of-civilizations theory. Though they surely do, his premises are counterfactual as applied to Iraq and Afghanistan. So sensitive to Iraqi culture was the State Department’s democracy-promotion effort that the new Iraqi constitutions were permitted to establish Islam as the state religion and enshrine sharia as a principal source of law—and were adopted only after the ardently sought approbation of religious authorities (such as Ayatollah Ali Sistani). The author has a point, though, when he argues that such cultural solicitude remains at a competitive disadvantage against Islamists and "neofundamentalists" (Roy’s term, comprising the Taliban and Somalia’s Islamic Courts Union). These groups are rooted in the local culture, address tribal conflicts by appealing to sharia, have a better reputation for fighting corruption than do more secular factions, and appeal to the locals’ virulent anti-Americanism (which Roy, correctly, sees as a major neocon blind spot).

Like Pollack, Roy has a nuanced view of Islamists. Islamism, he pronounces, is merely the "political ideologisation of Islam...which has nothing to do with terrorism." Thus he construes Islamist Hamas and Hezbollah, despite their mass-murder tactics, as regional, political movements—as distinguished from the "pure" terrorism of al-Qaeda, which by his lights is essentially anarchist: targeting the "system" but bereft of "concrete objectives."

But Roy’s analysis is blind to al-Qaeda’s jihadist doctrine, which has very concrete objectives (viz., to end American hegemony and establish a regional, expanding, and ultimately global caliphate), and the charters and rhetoric of Hamas and Hezbollah, who self-identify with global jihadism and whose designs transcend Lebanon and "Palestine." Only by downplaying their resort to terror can he rationalize negotiating with Hamas and Hezbollah (we need their help against al-Qaeda, he says), and chastise Americans for childishly "moralizing" counterterrorism, allegedly at the expense of strategic thinking.

* * *

Finally, Beyond Terror and Martyrdom is a time-warped contrivance of the French Arabist Gilles Kepel. His overarching concept is that Bush’s quest for "universal democracy" was a "transformative fiction" mirroring al-Qaeda’s dream of a "universal Islamist state." The two sides have even pursued their respective utopias through violent force, all the while betraying their core principles—al-Qaeda traducing the true Islam, Bush shredding American values.

Here the reader finds the angry Left’s Bush mythology in full, beginning with the "original sin" of Guantanamo Bay, the legal black-hole where innocents are consigned without due process. In actuality, obsessed with keeping life-saving intelligence under wraps, the Bush Administration failed, to its great disadvantage, to highlight Gitmo’s positive security contribution. In the void, human-rights activists dictated the narrative and the public was left in the dark about the jihadist training and connections of the detained combatants (until the diligent work of journalists Thomas Joscelyn and Benjamin Wittes brought the information to light). Yet in Kepel’s fevered imagination, Gitmo was deliberately designed for a very public role: "to symbolize the defeat of terrorists worldwide." Kepel doesn’t let the facts interfere with a good story.

Like Roy’s readers, Kepel’s will be left clueless about the turnaround in Iraq over the last two years. Stuck in 2006, the author is still pining about Bush’s rejection of the ballyhooed Iraq Study Group report, which proposed negotiations with Iran and pressure on Israel as keys to success—and was rendered instantly irrelevant by the successful "surge" in combat forces. (The name David Petraeus does not appear in Kepel’s opus.)

More edifying is the author’s commentary on the European scene. He offers an interesting analysis of the controversy over Pope Benedict’s 2006 speech at Regensburg. In urging the galvanizing role of reason in faith, the pontiff cited a 14th-century Byzantine emperor’s castigation of Mohammed, the warrior prophet, for having spread Islam by the sword. Kepel uses the incident to sketch, with cautious optimism, a current in moderate Islamic thought: 38 ulema who undertook to rebut the Holy Father in a congenial reply that assumed shared principles and was expressed logically.

Kepel is effective, moreover, in deconstructing multiculturalism and the social "pillarization" to which it leads. He contends that France has been successful in assimilating Europe’s largest immigrant Muslim population, while Britain, Spain, and the Netherlands have lagged behind in integrating their Muslims, who are therefore prone to support terrorism. To carry this argument, Kepel must go to great lengths to interpret rioting by Muslims in the French banlieues as an exclusively economic, rather than even partially religio-cultural, phenomenon.

He has convinced himself, at any rate, that Islam will go Europe, not the other way around. For Kepel, the combination of human capital drawn from across the Mediterranean and European expertise is driving "an ever changing process of fascination and rejection, where friendship and enmity mingle in the register of intimacy." His prediction is that this emerging economic dynamo will be the "alternative to the failed narratives of jihad and the war on terror." It’s a happy ending, but is it true?

Some of the greatest historians have eulogized, even rhapsodized, the reign of Louis XIV (1638-1715), placing it among the jeweled epochs of human achievement. Thomas Babington Macaulay, for instance, bows graciously if reluctantly before a France supreme both in military might and in peaceable virtues, possessing "over the surrounding countries at once the ascendancy which Rome had over Greece and the ascendancy which Greece had over Rome." That said, Macaulay makes the French despot the villain of his History of England (1849-1861).

Winston Churchill in Marlborough: His Life and Times (1933-1938), the biography of Churchill’s distinguished ancestor, the general who brought Louis XIV’s armies to their knees, likewise honors the martial and cultural superiority of Louis’s France—superior for as long as such things last, which in this case was until Marlborough was through with them.

In The Age of Louis XIV (1751), Voltaire numbers four regimes down the millennia under which the excellence of thought and taste flourished as nowhere else: the Greece of Pericles, Plato, and Alexander; Augustan Rome; Renaissance Florence under the Medici; and the France of Louis XIV, "perhaps of the four the one which most nearly approaches perfection." Other propitious times and places appear merely gilded beside this one of solid gold. "There will never again be such an era in which a Duke de La Rochefoucauld, the author of the Maxims, after discoursing with a Pascal and an Arnauld, goes to the theatre to witness a play of Corneille."

Of course, Voltaire is not known for truckling to royal power. In 1718 the premiere of his play Oedipus scandalized the Court with the line "Tremble, unfortunate Kings, for your reign is past." An even more notorious zinger suggests how he really felt about the matter: he longed for the day, he said, when the last king is strangled to death with the bowels of the last priest.

* * *

The Duc de Saint-Simon (1675-1755), like Voltaire, was a courtier at Louis XIV’s Versailles, and his memoirs, which took him a dozen years to complete and were not published until 1788, over 30 years after his death, are the most famous memoirs ever written. They are also among the most voluminous, at 13,536 pages in the eight-volume Pléiade edition, admirably condensed to some 1,500 pages in this new edition of Lucy Norton’s fine translation.

Like Voltaire, Saint-Simon saw the end of France’s immemorial glory approaching, though he viewed that end from a sharply different angle. In his memoirs, the Duc treats Voltaire like a scurrilous upstart and dismantles any claim he might have to literary eminence. Voltaire, whose real name was Arouet, was the son of a notary who had served as the Duc’s lawyer, and was therefore a lowborn fellow. He was exiled, wrote the Duc,

for writing monstrously satirical, monstrously impudent verses. I should not waste time over such trifles, had not this Arouet, now a famous poet and academician under the pseudonym Voltaire, also become, after many disastrous adventures, something of a personage in the world of letters, even winning a kind of reputation among certain sorts of people.

In Saint-Simon’s estimation, the most celebrated writer of his time is transformed into a jumped-up homunculus, a guttersnipe whom no person of true distinction would regard with anything but contempt.

Saint-Simon was accustomed to delivering such pronouncements from on high. Although he was barely five feet tall and had a voice like a squeeze-toy, no one was more ferociously punctilious about matters of honor and ceremony. He was a traditionalist hothead who rubbed a lot of people the wrong way, including the king. Protective of the privileges of his dukedom as a mother dog is of her newborn litter, he was adept in the scrimmages for status that occupied a good deal of most courtiers’ time and energy. As the dukedom had been quite recently bestowed—on Saint-Simon’s father by Louis XIII, whom the grateful son venerated above Louis XIV—a certain insecurity colored the Duc’s passion for his rightful place. His dignity, which he wore like a long and splendid train, was continually getting stepped on by those following too closely or attempting to overtake him. He was the court’s self-appointed guardian of the proprieties, and in that role proved both hard-nosed and feckless.

* * *

Sensitive as a spider-web, registering the subtlest tremor of offense against his dignity, Saint-Simon is the aristocrat par excellence, as described by Montesquieu, Tolstoy, and Churchill—the man for whom honor is his raison d’être. Honor can be a force of moral beauty, but it can also be the justification for ugliness of various stripes. Saint-Simon was not above defending his own dubious behavior in honor’s name, thus seeming peevish and self-absorbed rather than noble. If honor is to enjoy pride of place in the hearts of a nation’s aristocracy, it needs to serve something higher than the grasping self.

Saint-Simon saw others grasping everywhere he looked, and professed to look upon the dismal spectacle with disinterestedness. On the death in 1711 of the dauphin, the king’s son and presumptive heir, the pleasures of observing and understanding the reactions of the Court overcame any emotion he might have felt at the loss. Of course, as Saint-Simon had always regarded the dauphin as fundamentally inert, with all the rare distinction of an undercooked pudding, he was not inclined to go into deep mourning.

...[S]ince the King was at Marly, I felt unconstrained and could study the crowd at my ease, allowing my eyes to dwell on those who from various motives were much or little affected. Thus I followed the movements of certain personages and endeavored stealthily to penetrate their inmost thoughts; for indeed, to one who knows the inner life of a Court, these first moments after some tremendous event are intensely gratifying. Each face reminds one of the cares and intrigues, the laborious efforts to advance a private fortune or form and strengthen a cabal, the cunning devices designed and executed for such purposes, the attachments at varying degrees of intimacy, the estrangements, dislikes, and hatreds, the unkind turns played and the favours granted, the tricks, petty shifts, and baseness of some individuals, the dashing of the hopes of some in mid-career, the stupefaction of others at the summit who had thought their ambitions fulfilled.

To engage in such watchfulness and to penetrate into the closely guarded chambers of character offer perhaps the supreme pleasures that being a courtier holds for a man such as Saint-Simon. He just happens to be one of those who need to get to the bottom of things. Clear-sightedness ranks perhaps at the top of his list of virtues, and curiosity about other persons’ nature and behavior keeps his mind perennially occupied. This is not to say he had the makings of a political philosopher; abstraction and high speculation were not his strengths. The strengths he did possess were those of the ideal historian of his own time and place. He was a master of the character sketch, with the gift for seeing all round—and through—a person, a fondness for the telling anecdote, an eye for the killing detail. In undertaking his memoirs, he knew he was devoting himself to a serious literary enterprise.

* * *

His truest insight, evident on nearly every page, is that the history of his time is principally the story of great men, and of the great women who influenced them; his is the history of an aristocratic society, and he shows both its grandeur and its flaws. Above all, he reveals the private caprices of high society that infect great politics: who’s in and who’s out, who likes or dislikes whom—the ever shifting values of the court determine the course the nation takes. Michel Chamillart, for instance, rose from obscurity to become intendant of finances and then controller-general because he wielded a mean billiard cue and billiards was the king’s favorite game.

Louis had been fighting somewhere or other in Europe for 40 years, but in 1708 France was fighting for her life. Monsieur de Vendôme, the general in command of the campaign, appointed his personal enemy Monseigneur le Duc de Bourgogne to relieve the besieged city of Lille, with the nefarious intention "to make the prince fail in this vital enterprise, cast all the blame upon him, and thus bring him to complete and utter ruin." Rumor mongering about Bourgogne’s excess of Christian piety, which was said to undo him as a soldier, cost him the confidence of his grandfather the king and the court.

Thus the cabal triumphed; not only did they carry with them the masses of all conditions, the smart set and Society, but even sensible people were influenced, with the result that in an incredibly short space of time it became dangerous to praise Mgr le Duc de Bourgogne in the slightest degree, while those who extolled M. de Vendôme at his expense might be sure of pleasing the King and Monseigneur [the Dauphin].

That matters of the utmost gravity should be commandeered by rogues and poltroons disgusts Saint-Simon. He provides a scathing backstage account of the war and demonstrates the monstrosity of the blood-letting that served the whims and ambitions of loathsome self-serving types.

During the 1708 campaign the war struck home as never before. Paris itself seemed in peril.

At Versailles one was constantly aware of the danger to loved ones and friends, and the best established families felt insecure of the future. Forty-hour services were held in the churches. Mme la Duchesse de Bourgogne spent hours in the chapel when she was supposed to be in bed and asleep, and exhausted her ladies by her vigils. Following her example, wives with husbands in the army scarcely left the churches. Gambling and even conversation had entirely ceased. Fear showed on every face and in people’s remarks to a shocking extent. The sound of a horse trotting set everyone running to no known purpose.

The subsequent winter was the hardest anyone could remember. The wheat crop was ruined, and the police for a time forbade prudent farmers from re-sowing their fields with the sturdier barley. Poverty deepened as prices soared, although there should have been enough wheat in storage to feed the nation for two years, even without a harvest. The king’s surgeon informed Louis that market regulators were keeping the price of wheat artificially high. Louis expressed his regrets but did nothing. Speculators made their fortunes while the poor died. Saint-Simon’s pity for the suffering and his outcry against the predators show him at his most decent: he is "generously angry," to borrow a phrase from Orwell on Dickens.

* * *

More often than not, however, when Saint-Simon gets angry, it is a stingy anger, over some slight to his rank: the judicial body known as the Parlement showing insufficient respect to dukes and peers, the king’s legitimizing his several bastards. There are times when, indulging his vehement rage over some trifle, Saint-Simon makes one long for the bourgeois good sense of Moliere or La Bruyère, who also knew the mores of the court, though from a humbler vantage. In Moliere’s The Misanthrope (1666), the beautiful and witty Célimène has written a letter describing why her various suitors don’t suit her: "ever since the day I watched...[the viscount] spend three-quarters of an hour spitting into a well, so as to make circles in the water, I have been unable to think highly of him." And La Bruyère, whose Characters (1688) Saint-Simon considered a work of genius, eviscerates the very class to which Saint-Simon belongs:

A comparison between the two opposite extremes of the social scale, between great nobles and the common people, shows that the latter are content with the necessaries of life, while the former, who enjoy its superfluities, feel dissatisfied and deprived.... The one ingenuously displays a rude but honest nature; the other hides a corrupt and vicious spirit under a rind of politeness. The people have no wit, and the nobility have no soul; the former are basically good, and lack veneer; the latter have veneer, and nothing underneath it. Am I to choose? I’ll not hesitate; I’ll belong to the common people.

La Bruyère’s sentiment is one that Saint-Simon could not begin to share, though he was able to understand it. For Saint-Simon’s memoirs are full of highborn fools and miscreants, who have done nothing to deserve their golden fortune, and a great deal to deserve the contempt of good men. Although very much a creature of his time and place who stirs up the ambivalence of the modern reader, Saint-Simon was a good man who wrote an even better book. His memoirs do not make one regret the passing of the age of great kings; but they do make one wish for a similar chronicler of our own democratic age—wise, vital, witty, and knowing everything that goes on among those in power.

Is history the story of great men? This was a question faced by Claire Berlinski in one of her examination papers when she studied for a Ph.D in Oxford, and any Marxist could effortlessly write many pages refuting the idea. Currently the British government has decreed, in accordance with that rather Marxist paradigm, that history taught in British schools will be "themed." It will be about abstractions such as slavery, medicine, and war. The fact is, however, that the very beginning of historical understanding is chronology and contingency—dates and details. "Theming" the past turns it into bad sociology. And it happens that Berlinski’s new book, "There Is No Alternative": Why Margaret Thatcher Matters, concerns a passage of international events that can hardly be understood except in "great man" terms—at least if we can ignore the fussing feminist who may object to our treating "man" here as generic rather than specific.

In the 1980s, a remarkable conjunction of events changed the then dominant international relations of the Cold War. A number of leaders came into office who happened to be quite different both from their predecessors and their successors. John O’Sullivan’s The President, the Pope, and the Prime Minister (2006) has brilliantly argued one version of this thesis, in which the personalities were Ronald Reagan, Pope John Paul II, and Margaret Thatcher. Mikhail Gorbachev always threatened to ruin the symmetry of O’Sullivan’s argument because he was clearly a pivotal player in the process. In Berlinski’s Thatcher-centered version, the pope drops out and Gorbachev comes in.

Berlinski’s book is part narrative history, part conversation with the people who could throw light on Margaret Thatcher—people such as Thatcher’s press secretary Sir Bernard Ingham, advisers such as Charles Powell, and opponents such as Neil Kinnock, who faced her for many years over the dispatch box at Question Time in the Commons. The book begins with some of the clichés of current journalism—a woman in a man’s world, the grocer’s daughter from a nowhere place called Grantham, the English class system. None of them bothered Thatcher: rather, they tempered the Iron Lady’s mettle. Berlinski’s book improves as it goes along, and becomes a story of the battles Thatcher fought to change the decadent Britain of the 1970s.

* * *

Berlinksi, who has written insightfully about the threat of Islamic fundamentalism in her previous book, Menace in Europe (2006), shows now how capable statesmanship can redirect history’s seemingly irreversible tide. Her central thesis is that Britain in the 1970s was in serious decline, and that Thatcher turned the country around. A whole style of consensual politics had enfeebled society and left financially profligate governments at the mercy of trade union barons. The result was, among other things, increased public debt and rampant inflation. Ever since 1945 when Clement Attlee’s government had nationalized industries and established the welfare state, the Conservative Party had accepted the socialist mixed economy. Everybody knew that rising welfare costs and union power were electorally untouchable. Well, almost everybody.

In Britain at that time, the more enterprising people despaired of its future. Britain was retreating from empire, and industrial managers no longer had the power to manage. This feebleness was not just a British disease. It was widespread throughout the Western world. John Hoskyns, one of Thatcher’s advisers, observes that Thatcher was in part a trail blazer for Ronald Reagan, because under President Jimmy Carter, "America was suffering, in a less extreme form, from the same fashionable left-of-center waffle that we [in Britain] had been doing in spades, for years." One can only say (and as Berlinski recognizes) that the "waffle" still hasn’t gone away. It survives in universities, bureaucracies, and large areas of the judiciary. In Britain it may currently be identified with the causes favored by the late Princess Diana.

It was Thatcher who rejected this feebleness, and her triumphant government from 1979 to 1990 was a succession of battles against what often seemed at the time like a classical hydra. Along with her Conservative colleague Keith Joseph, Thatcher espoused a Hayekian version of the free market. The result was not merely a changed policy but something like a moral revolution. She denounced socialism as an immoral system that enfeebled those who lived under it (much as Ronald Reagan declared the Soviet Union an evil empire), leading to the same sniffy disapproval in Britain that Reagan inspired in American liberals.

In late 1978, the evils of British welfarism spectacularly dramatized themselves in a succession of strikes that left rubbish piling up in the streets, and even in some cases the dead unburied. This was known as "the winter of discontent" and was the perfect prelude to Thatcher’s electoral campaign calling the country back to reality after decades of socialist illusion. Her slogan "there is no alternative" is the title of Berlinski’s book.

The internationalist version of this debilitating "waffle" rose to a crescendo when in 1982 Argentinean troops seized the Falkland Islands in the south Atlantic. Thatcher ignored the clamor that arose for arbitration, compromise, and a United Nations solution. Although some institutions in Britain were corrupt and enfeebled, she believed the armed services were not among them. She chose the risky option of sending military forces 7,500 miles to take the islands back. On a cost-benefit analysis such a move was absurd: the Falklands’ 1,800 British inhabitants could have been re-housed in Britain and given abundant cash assistance for what the war cost. But international relations are not accountancy, and this heroic enterprise transformed British morale. It also helped Thatcher to win the 1983 election. It is a rather thrilling story and Berlinski tells it well.

She recognizes that dealing with such people as Reagan and Mikhail Gorbachev was far from being the only piece of luck in Thatcher’s successful career. From the moment she challenged Ted Heath for leadership of the Conservative Party, her story is a succession of gambles that all paid off, until her passion for a tax plan to restore democratic accountability to local government led to such unpopularity that her colleagues decided she had to go.

* * *

She had abundant luck, but it was her personal qualities that largely accounted for her success. She was unmistakably smart, and it is in trying to pin down what allowed her to dominate the country that Berlinski’s book contributes to our understanding. The author is herself slightly shocked at the ferocity of Thatcher’s moral disapproval of socialism. I have no doubt, however, that her moral profile was central to her success. It is remarkable how little most politicians stand for, but Thatcher stood for moral independence and a contempt for dependence. She not only admired courage, but had plenty of it herself. She regarded socialism as a school for self-pity and mediocrity. She did not speak with forked tongue, and many people admired exactly that stimulating directness.

Defending her as genuinely conservative, Shirley Letwin argued, in The Anatomy of Thatcherism (1993), that her basic aim was not to transform Britain but to restore to its historic place in British culture the vigorous virtues that had been so lost in all the waffle about tolerance, compromise, and compassion. Thatcher hated thinking of the British as a bunch of vulnerable victims needing government handouts.

Another element in her success has been a sense of humor, so that while she could indeed be intense, relentless, and argumentative, she could also detach herself and be amused. The idea that people with strong opinions are less quarrelsome than people who talk endlessly about being open-minded is, of course, profoundly wrong, and Thatcher and Reagan alike illustrate this. They had no trouble negotiating with those whose opinions they disliked. A sense of humor is an important component of intelligence. Those who thought that Thatcher was no intellectual were certainly right, but only at the cost of not recognizing that her political intelligence was remarkable. Her profound political and moral love of freedom gave her an unusual angle on most political questions. It also helped her choose the right moment for combat; she generally held fire until she thought she could win.

She certainly brought something unique to all the battles in which she engaged. No man could have exhibited her stamina in dealing with the Brussels bureaucracy, about whom she had long been ambivalent. She never ceased to insist, to the point where her fellow heads of state were asleep or grinding their teeth, that Britain subsidizing inefficient French farming in the CAP was unfair and intolerable. She had the courage to stand out against the oligarchic clubbability of the European Council in which benefits are bartered to the detriment of national interests. The simple reiterated demand, "we want our money back," could drive strong men to drink, and did drive French president Jacques Chirac to remarkable prodigies of sexist abuse, decorously quoted only in the French by Berlinski.

"There Is No Alternative" is then a version of the great man view of history, and rightly so. The individual, of course, must be recognized as a focus for a vast social and moral context. Thatcher "stood for" or embodied one powerful strain of moral virtue in British life, and "stood against" another moral fashion that thought those traditional virtues "outmoded." But what you "stand for" never decides the actual policy you adopt in all its detail.

The respect for Thatcher shown by both Tony Blair and Gordon Brown testifies to a growing recognition that she did what had to be done. Let us hope that Berlinski’s book continues this overdue reassessment of a remarkable statesman who still has much to teach us.