For his lonely stand against the forces of barbarism, I rate Winston Churchill the greatest statesman of the 20th century. Ronald Reagan, though, arguably was the greater commander in chief. Decisiveness (translating Clausewitz’s term Entschlossenheit) depends in turn upon strategic vision. But a commander requires not only vision, but also the intestinal fortitude to endure uncertainty, and the will to force the burden of uncertainty onto his opponent. Borrowing from the language of economics, one might call this a predilection for creative destruction.

Whatever his other faults, Reagan possessed the great attributes of command. Bush’s war cabinet is of a lesser ilk. Consider their CIA chiefs: the oily George Tenet and the gruff William Casey, who personally planted a listening device in office of a Middle Eastern leader during a courtesy call. Tenet is a flatterer and politician; Casey was a warrior and adventurer.

To a generation that has come of age after the fall of the Soviet Empire, it is hard to imagine that the smart money in Europe wagered on Russian dominance when Ronald Reagan took office in 1981. I can attest that the closest advisors of French President Francois Mitterrand and German Chancellor Helmut Schmidt thought NATO would lose the Cold War. So humiliating was the later collapse of the communist regimes that the pundits could argue credibly that it had fallen of its own weight. No such thing happened. Reagan took office at a dark hour for the West, and did things that the elite of Europe had deemed impossible.

Russia had invaded Afghanistan a year earlier and its ultimate failure was by no means assured. Iran had shamed the United States by sequestering its embassy staff for months, and an abortive rescue attempt showed up the shabby condition of the American military. America had entered the third year of an economic decline with unemployment and inflation both at unprecedented levels, and Europeans took for granted that Washington could not afford to rebuild its armed forces. In October 1979, Federal Reserve Chairman Paul Volcker returned from the annual meeting of the International Monetary Fund in Belgrade, and forced American interest rates to the highest levels in history. A month before Reagan took office, the lending rate American banks charged their most credit-worthy customers stood above 20%. An economic chasm gaped in front of the United States, the dollar’s status as a global reserve currency stood in jeopardy, and enlightened opinion believed that America’s world role would shrivel in keeping with her reduced circumstances.

At no time in the postwar period was the Soviet Union more confident of success, or more credible among its erstwhile enemies. France and Germany looked eastwards for trade, and the “Ostpolitiker” clique around Helmut Schmidt prepared for life under Soviet suzerainty. For a generation, “containment” of communism had been America’s watchword, under the “realistic” assumption that a thriving Soviet Union and her satellites would remain a force to be reckoned with indefinitely. When Reagan made clear his intention to bury the “evil empire” (as he characterized it before the Commons in 1982), a wave of shock and indignation spread among the Atlantic elite unimaginable to those who where not there at the time. Europe’s disgust at George W. Bush is a gentle June shower compared to the tempests of 1982. Whereas Europe thinks that the younger Bush is crude and ideological, it thought Reagan barking mad. Only seven years later the Berlin Wall came down, and not of its own weight. As it turned out, America’s economy could pay for both guns and butter while wringing out inflation and strengthening the dollar. Responsible opinion in the academic and financial community demanded urgent attention to America’s budget deficit, that is, a cut in spending and an increase in taxes. Only on the fringes of the economics profession could one find support for what Reagan in fact did, namely to reduce tax rates while launching a military buildup. Without exception, the sages of the City and Wall Street foretold disaster.

Reagan possessed the strategic vision to brush aside the objections and plunge ahead. His economic policies embodied “creative destruction,” the chaotic emergence of new firms and methods to challenge the old. Conventional economics thinking restricted its attention to large corporations that depend on the debt markets. Under Reagan, employment at the 500 largest US corporations shrank, but the explosion of small businesses more than made up for it. After the first round of Reagan tax cuts, which nearly halved the top tax rate, the value of the American stock market doubled in 1984. Creative destruction transformed the landscape of the American economy. The microchip transformed domestic life as well as warfare, and America regained a dominant position in the global economy. Reagan’s strategic policy stemmed from a similar kind of creative destruction. Under the old containment doctrine, the United States sought to maintain stability while the Soviets stirred the pot. As I wrote some years ago, “The elder Bush and advisers such as James Baker and Brent Scowcroft, schooled in the Cold War, flinched at the thought of instability. Any regime, no matter how corrupt and oppressive, merited American backing, as long it was ‘our bastard’, as Franklin Roosevelt qualified Nicaragua’s strongman of the 1930s. It is a stretch to accuse such men of having a philosophy. Their strategic reflex came from the simple fact that the Soviet Union stood to gain from any instability outside its immediate sphere of influence. The more chaos, the more options open to the Kremlin. A coup in Western Asia, a civil war somewhere in the Pacific Rim, a war between India and Pakistan, an insurgency in Latin America gave Russia a chance to get involved. Russia had unlimited upside and little downside (Geopolitics in the light of Option Theory, Jan 26, 2002).”

Reagan and his band of wild-eyed radicals put the burden of uncertainty onto the Russians. The sclerotic Soviet Union, they believed, could not match America’s pace of technological innovation in armaments. Not only the “Star Wars” anti-missile project, but avionics, smart weapons, and a host of other improvements convinced the Russian military that it could not win a war against the United States.

Reagan’s predecessors in the Ford and Carter presidencies, as well as his successor, George H W Bush, fretted over the collapse of the security arrangements of the Cold War: the arms control agreements, the fine lines in the sand demarcating spheres of influence, the instabilities of the Middle East and Asia. In other words, they were fearful and timid commanders, unsuited for decisive action. Reagan’s team marched into Washington in January 1981 with as much contrarian spirit as Fidel Castro’s 1958 entry into Havana.

“Plans are all right sometimes … And sometimes just stirring things up is all right – if you’re tough enough to survive, and keep your eyes open so you’ll see what you want when it comes to the top,” said Dashiell Hammett’s Continental Op. Reagan’s people knew that their policies implied a chaotic breakdown of the existing world order, and they set out to do just this with malice aforethought. Russia’s death rate rose by 30% between the fall of the Berlin Wall and 1994 largely due to alcoholism, tuberculosis and venereal disease.

After the Iran-Contra scandal, the composition of the second Reagan administration shifted away from radicals and towards traditional managers, but by then it was too late. The process of creative destruction had broken down the marrow of the Soviet system and its collapse could not be postponed, to the chagrin of the “realists” who advised Reagan’s successor, the father of the sitting president.

President George W. Bush takes Reagan as an exemplar rather than his father. He is “not yet the man to catch hold of the Devil,” as Mephisto said to Faust. He kept a CIA director whose concern was to determine whether the available intelligence justified a war. The late Bill Casey understood that if you want intelligence, first you start a war – but that is a long story. For now it is enough to say that Ronald Reagan goes to his rest with the gratitude of free people everywhere.

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