Strange Rebels: 1979 and the Birth of the 21st Century (2 page)

She was, at the time, just possibly the last person in British politics that anyone would have tapped to become the most influential premier of the twentieth century since Winston Churchill. But it is hard to blame those who did not guess what was to come. In 1979 Thatcher herself did not yet dare to use the word
privatization
, a recent coinage that just a few years later would figure prominently in the global market revolution that she helped to unleash.

Markets also played a prominent role in a less conspicuous shift that was under way at the same time in the world’s most populous country. At the end of 1978, the septuagenarian Chinese Communist Party leader Deng Xiaoping heaved himself into the top job, and in the months that followed he and his comrades introduced a series of economic reforms that ultimately changed the country beyond all recognition. Emulating other East Asian success stories like Singapore, Hong Kong, and Taiwan, party leaders laid the groundwork for “Special Economic Zones” that would invite in foreign capital and technology. They allowed private entrepreneurs to found small companies and opened up the country to an influx of information from the outside world. And in the all-important countryside, where
the overwhelming majority of Chinese still lived, Deng and his colleagues began to allow the dissolution of the collective farms set up by Mao Zedong and permitted the peasantry to return to their old system of family farming.

No one really grasped the full magnitude of what Deng had in mind. No Communist regime, after all, had ever succeeded in reforming itself. The incomprehension had much to do with the fact that Deng, who carefully deployed Maoist slogans in support of his restructuring program, remained a sincere believer in the primacy of Communist Party rule. In the spring of 1979, he even moved to quash a nascent prodemocracy movement that he had initially used to outmaneuver his political rivals. All this obscured the details of a grand political and economic experiment that has left a profound mark on both China and the world.

Today, without thinking much about it, we tend to measure China’s success against the leading industrialized countries of the West. As the reforms began to get off the ground in 1979, however, the comparisons that most observers drew were with Yugoslavia, Hungary, or even East Germany (the latter still considered a paragon of socialist productivity). During an official visit to Tokyo in 1978, Deng bewildered his Japanese hosts with an offhand remark about a territorial dispute the two sides had agreed to shelve: “And beyond ten or twenty years, who knows what kind of system China will have?” The Japanese thought that he must be joking. Today we know that he wasn’t.
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These five stories—rich in event and grand personalities—would be worth telling in themselves. But do they really have that much to do with each other? Surely, Britain’s first female prime minister has nothing in common with Iranian Shiism’s leading militant cleric. And what could possibly unite the bishop of Rome, the budding Islamists of Afghanistan, and the leader of the Chinese Communist Party? The fact that they lived through the same historical inflection point, one might argue, does not mean that their stories are linked. Coincidence is not correlation.

In fact, though, they have much more in common than at first meets the eye. The forces unleashed in 1979 marked the beginning of the end of the great socialist utopias that had dominated so much of the twentieth century. These five stories—the Iranian Revolution, the start of the Afghan jihad, Thatcher’s election victory, the pope’s first Polish pilgrimage, and the launch of China’s economic reforms—deflected the course of history in a radically new direction. It was in 1979 that the twin forces of markets and religion, discounted for so long, came back with a vengeance.

Not all of the historical figures whose fates converged that year necessarily thought of themselves as conservatives, and none of them tried to turn back the clock to some hallowed status quo ante. This is precisely because they were all
reacting, in their own ways, to a long period of revolutionary fervor that expressed itself in movements ranging from social democracy to Maoism—and it is striking that they were all variously denounced by their enemies on the Left as “reactionaries,” “obscurantists,” “feudalists,” “counterrevolutionaries,” or “capitalist roaders” who aimed above all to defy the march of progress.

There was a grain of truth to these accusations. The protagonists of 1979 were, in their own ways, participants in a great backlash against revolutionary overreach. Deng Xiaoping rejected the excesses of Mao’s Cultural Revolution in favor of pragmatic economic development—a move that, despite Deng’s disclaimers, entailed a gradual restoration of capitalist institutions. Khomeini’s vision of an Islamic state was fueled by his violent repudiation of the shah’s state-led modernization program (known as the “White Revolution”) as well as the Marxist ideas that dominated Iran’s powerful leftist opposition movements. (The shah, indeed, denounced the Shiite clerics as the “black reaction” in contrast to the “red reaction” of the Marxists.) Afghanistan’s Islamic insurgents took up arms against the Moscow-sponsored government in Kabul. John Paul II used Christian faith as the basis for a moral crusade against the godless materialism of the Soviet system. And Margaret Thatcher aimed to roll back the social democratic consensus that had taken hold in Great Britain after World War II.

At the same time, it was easy to underestimate just how much these leaders had actually absorbed from their opponents on the utopian Left. A conservative can be defined as someone who wants to defend or restore the old order; a counterrevolutionary, by contrast, is a conservative who has learned from the revolution. John Paul II, who had spent most of his adult life under the Communist system, knew the Marxist classics intimately and devoted considerable intellectual and pastoral effort to countering their arguments—knowledge that helped him to shape his program of moral and cultural resistance. (It also left him with an intense interest in the politics of the working class that informed his patronage of the Solidarity movement—as well as feeding a deep skepticism about Western-style capitalism.) Khomeini and his clerical allies appropriated Marxist rhetoric and ideas wherever they could, forging a new brand of religious militancy that railed against colonialism and inequality; socialist notions of nationalization and state management later played a large role in the Islamist government’s postrevolutionary economic policy. (One historian describes the resulting synthesis as “revolutionary traditionalism.”)
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Afghanistan’s jihadists borrowed from the Communist playbook by building revolutionary political parties and comprehensive ideological systems to go with them. Margaret Thatcher, who studied at Oxford when Marxism was the reigning political fashion,
fused her conservative instincts with a most unconservative penchant for crusading rhetoric, ideological aggression, and programmatic litmus tests. It was precisely for this reason that many of the Conservative Party comrades-in-arms who accompanied her into government in 1979 questioned just how “conservative” she really was. As for Deng Xiaoping, he insisted on maintaining the institutional supremacy of the Communist Party even as he charted a course away from central planning and toward state capitalism. Cold War historian Odd Arne Westad describes Deng’s reform program as “a counterrevolution in economics and political orientation the likes of which the world had never seen.”
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It was entirely in keeping with this spirit that Thatcher proudly reported to a Conservative Party rally in April 1979 that her political opponents had dubbed her a reactionary. “Well,” she declared, “there’s a lot to react against!”
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It was, indeed, precisely this peculiar spirit of defiance that gave the year its transformative power. The decisions of these leaders decisively defined the world in which we live—one in which communist and socialist thought has faded, markets dominate economic thinking, and politicized religion looms large. Like it or not, we of the twenty-first century still live in the shadow of 1979.

T
he 1970s have long been overshadowed by the decade that came before them. For the countries of the West, the 1960s were a period of intense social change and grand political theater, of revolutions practiced and proclaimed. By comparison, the years that followed looked—at least superficially—more like an era of transition, a muddled in-between time of dead ends and thwarted utopias, of disillusionment and drift. (One of the first histories of the 1970s, published just two years after the end of the decade, was appropriately entitled
It Seemed Like Nothing Happened
.) For Americans, the 1970s evoke the scandal of Watergate and the defeat in Vietnam. For Western Europeans, the period conjures up an ebbing of ideological passions that saw so many disappointed sixties radicals turn their backs on revolutionary politics, while a far smaller minority embraced the quixotic life of “urban guerrillas” (as the left-wing terrorists in Germany or Italy were sometimes called).

With the passage of time, though, the 1970s begin to appear less like a sideshow and more like the main event. In the United States, a recent surge of interest in the period has brought a fundamental reappraisal of its impact. In one (conservative) view, it was only in the 1970s that the radical notions advanced by the 1960s cultural and political elites translated into a broad social upheaval. The antiauthoritarianism of the sixties activists translated into a pervasive loss of faith in leaders, institutions, and ideals across classes. Watergate and the lost war in Vietnam fueled an unprecedented political cynicism. Drug use proliferated, crime rates soared, and racial
tensions intensified. The lofty aspirations of John Kennedy’s Camelot and Lyndon Johnson’s Great Society gave way to a debilitating sense of chaos and disorder.
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Other students of the period focus on the collapse of economic expectations. For much of the West, the 1970s marked the end of a long period of extraordinary economic growth. Virtually all the countries of Western Europe as well as the United States experienced an enormous surge in prosperity for the first thirty years after the end of World War II. (The French, indeed, refer to this period as
les trente glorieuses
, “the glorious three decades.”) Americans, in particular, watched productivity increase steadily from year to year, as did wages and consumption. Everyone benefited: factory workers saw their standard of living rise just as precipitously as that of their bosses. For the first time, even manual laborers could afford washing machines, vacations to faraway places, or college educations for their kids. This upward trajectory of wealth and opportunity continued through the 1960s and just beyond. It was in the seventies that this “Age of Compression”—so named for the steady increase in income equality that was one of its features—finally ground to a halt.
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There was one particular event that contributed to this revision of economic expectations. In 1973 the Arab-dominated Organization of Petroleum Exporting Countries (OPEC) responded to Washington’s decision to supply the Israeli forces in the Yom Kippur war by cutting off oil exports to the United States and other Western countries viewed as supporters of the Jewish state; the resulting surge in prices affected even the countries that were not directly targeted by the embargo. The result was the deepest economic slump since the Great Depression. Long lines formed at gasoline stations throughout the developed world. Officials in the United States beseeched consumers to go without Christmas lights over the holiday season; gas rationing was introduced. Suddenly, those optimistic assumptions about enduring growth no longer seemed to apply.

The energy crisis had a devastating economic effect, but perhaps its most enduring impact was psychological. Macroeconomic orthodoxy held that inflation tended to stimulate economic activity, so slow growth and high unemployment were assumed to be at odds with high price levels. Central banks in the United States, Europe, and Japan jointly cut interest rates, desperately hoping to stimulate a recovery. But nothing happened. Investment and employment failed to respond—yet inflation, already high before the “oil shock,” now began to climb. “Stagflation,” as this new phenomenon was called, defied all expert prognoses. The experts in Washington, and in the other capitals of the Western world, no longer appeared as the guarantors of prosperity.

In some ways, the first energy crisis merely exacerbated shifts that were already under way. The impact of the Arab oil embargo on the economies of the West was so devastating in part because the rules that had governed the postwar order were already in flux. At the end of World War II, the Americans and their allies had collaborated to create the Bretton Woods system, which laid out a framework for the global economy in the form of a system of loosely fixed exchange rates. Bretton Woods remained in place for thirty-six years. It established the US dollar as the pole around which everything revolved. By 1971, however, the United States faced a looming balance-of-payments crisis brought on by the costs of the Vietnam War and by its growing trade deficits with rising economic powerhouses like West Germany and Japan. The Nixon administration attacked the problem by announcing that the dollar would no longer be directly convertible to gold. The system of stable exchange rates was over, and the world economy would never be quite so predictable again. It is no coincidence that the seventies became the moment for the first anguished ruminations on what was then called “interdependence.” (The word
globalization
, which soon replaced it, earned its first mention in an article in the
New York Times
in 1974.)
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Other less visible forces were pushing the world toward interconnectedness. The Americans and the Western Europeans had long benefited from their privileged positions as the pioneers of advanced technological know-how and management; throughout the twentieth century, steady industrialization offered big productivity gains as labor shifted from agriculture to factories. But by the 1970s, these advantages were gradually eroded by the spread of manufacturing expertise around the world.
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It was in the seventies, arguably, that the West first began to realize that it had no monopoly on the fruits of development. The astonishing postwar success of Japan set the path for the newly industrializing “tigers” of East Asia (Taiwan, Singapore, South Korea, and Hong Kong). The two biggest Latin American economies, Brazil and Mexico, posted tigerlike annual growth rates of 7·5 percent during the 1970s. Growth in all of these countries built on their success as exporters, especially in manufacturing. By 1979, these six countries—the four East Asians plus the two Latin American giants—were supplying 40 percent of the West’s clothing imports; some of them were already moving into consumer electronics and shipbuilding. All this demonstrated that new players were perfectly capable of challenging the economic primacy of the established capitalist countries.
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