Topic: General

Thatcher: Anecdotes From a Biographer

Her greatness as a political leader aside, and her penetrating moral critique of socialism and communism (so closely intertwined with that greatness) also aside, Margaret Thatcher was almost infinitely quotable.  On the economic folly she fought so tenaciously: “The problem with socialism is that you eventually run out of other people’s money.”  On popularity: “If you just set out to be liked, you would be prepared to compromise on anything at any time, and you would achieve nothing.” On productiveness and the charitable instinct: “No one would remember the Good Samaritan if he’d only had good intentions; he had money as well.” On the hostile press: “If my critics saw me walking over the Thames they would say it was because I couldn’t swim.” And many others, some of the best collected at the U.K. Spectator

If you have time to read only one longer Thatcher article today, you could do worse than this terrific, anecdote-filled 2011 Vanity Fair piece by her biographer Charles Moore. Like so many others, Moore is fascinated by Thatcher’s force of personality, which so often drew adjectives like “steely” and “indomitable.” Thatcher, like Ronald Reagan, was entirely willing to reinvent herself on a personal level more than once, in the “self-made” manner that is often seen as particularly American. Thus as she approached the world stage, she studied how to dress and speak the part, taking lessons (at the suggestion of Sir Laurence Olivier) from the speech coach at the National Theater. 

Pro-intellectual, Thatcher was one of the first to spot the potential of think tanks: 

Her greatest political mentor, Sir Keith Joseph, was almost perfect in her eyes, being intellectual, good-looking, Jewish, and upper-class [four categories she approved of]. … He diagnosed — and blamed himself for — a British postwar disease of socialism, state intervention, debauched currency, weakened incentives, and overly powerful trade unions. The Tories, he declared, had been complicit in all of this… They must devise a new strategy, he said, and he set up a think tank, called the Centre for Policy Studies, to do so. Margaret Thatcher became its vice chairman and his disciple.

Thatcher made many mistakes, but often learned from them and eventually revised her views, as when she concluded that she had been too enthusiastic about the project of European integration: “We have not successfully rolled back the frontiers of the state in Britain only to see them re-imposed at a European level, with a European super-state exercising a new dominance from Brussels.”

“I am extraordinarily patient, provided I get my own way in the end,” Thatcher memorably remarked. And mostly she did, to the benefit of Britain and the world.

Margaret Thatcher: A Brief Personal Recollection

For many people, Margaret Thatcher’s resignation (and now her death) will be one of those moments that they will never forget. Like the Kennedy assassination for the previous generation, many will always remember what they were doing when they heard the sad news.  

It was November 22, 1990 and I was about to leave my parents’ apartment in Zilina, Czechoslovakia, to meet a friend. Walking out of the door, I heard the radio announce the shocking news - Margaret Thatcher has resigned. How could it be? Wasn’t she a great success at home and a titan on the world stage? To us – the people of Eastern Europe who were enjoying their first year of freedom – she was much more than the first female British Prime Minister.  

She was an outspoken voice against communist oppression and a fearless promoter of the free markets. The communist media in Eastern Europe (and socialist media in Britain, one might add) spewed poison against her with obsessive regularity. For us that was very reassuring: if they hated her, she must have been good.  

Growing up behind the Iron Curtain, I never thought I would leave my hometown, let alone travel abroad and meet her. But meet her I did. It was October 5, 2002 and I was on a layover in London. Next day, I would board a plane for Washington and begin my work at the Cato Institute.  

My friends - Roger Bate, now at the AEI, and Richard Tren, now at the Searle Foundation – invited me to a dinner celebrating the launch of the Frederic Bastiat prize for free market journalism. One of the winners, coincidentally, was Amity Shlaes, whom I will have the pleasure of introducing at a Cato event this Thursday.   As Margaret Thatcher arrived – descending the stairs together with Denis - there was a sudden hush followed by great applause. By that time, she no longer made speeches and her public appearances were increasingly rare. Still, her presence added gravitas to the proceedings and launched a great prize that continues to this day.  

My friend Veronique De Rugy sat next to Mrs. Thatcher throughout the dinner and so, at some point, I walked over to say hello. Thatcher shook my hand and asked where I was from. When I said that I came from Czechoslovakia, she seemed genuinely delighted. I reminded her that people of Eastern Europe had a genuine affection for her and were grateful for what she did to bring about the end of communism. “You know,” I said, “the communists really hated you.” “Good, good,” she laughed, “I’m glad they did.” Then she gave me one of her piercing looks and said, “We won in the end.”

Yes you did, Margaret.

Spinning the News

A headline in Roll Call, the newspaper and website that has been “the source for news on Capitol Hill since 1955,” over an article by long-time journalist and editor David Hawkings, reads

D.C. Could Take Lessons From Hartford on Gun Control Deal

What’s the lesson? That when legislators buckle down and work hard, they can pass “the strongest gun control law in the nation.”

This reflects two articles of faith that seem to be devoutly held by mainstream journalists:

1. Passing laws is good. Passing more laws is better. The purpose of a legislative body is to pass laws.

2. Gun control is good.

On the first point, just consider the large number of stories, especially this past December and January, on “the least productive Congress in history.” The assumption is that “productivity” for Congress is passing laws—laws that in most cases will raise taxes, raise spending, increase regulation, and/or intrude the federal government into more aspects of our lives. 

As for gun control, the enthusiasm of the national media for such measures is pretty obvious. I was struck by NPR’s hourly news roundup last week, which began: 

More than 100 days after the shootings in Newtown, Connnecticut, that killed a total of 28 people including 20 elementary school students, Congress has still not passed new gun registration legislation.

“What are they waiting for?” the news anchor implies. I suppose the news report could have begun:

Just five years after the Supreme Court ruled that the Second Amendment protects the individual’s right to bear arms, members of Congress are seeking to pass gun control legislation.

But I’m not holding my breath. It’s just a reminder that the language used even in straight news stories can frame the issue in the minds of readers and listeners.

Cato Weighs In With the Court – Cert.-Stage Amicus Edition

Adam Chandler, a Yale Law grad who recently completed a clerkship with Judge Patrick E. Higginbotham on the U.S. Court of Appeals for the Fifth Circuit, posted a SCOTUSblog piece this afternoon entitled “Cert.-stage amicus All-Stars: Where are they now?” Guess what? Cato’s number 4 on the list, right behind the U.S. Chamber of Commerce, the National Association of Criminal Defense Lawyers, and our friends out at the Pacific Legal Foundation – with a very respectable success rate of 22.2 percent.

Five years ago, when Chandler last did these rankings, Cato wasn’t even on the chart. That’s when Ilya Shapiro joined us. Say no more. But I will. He’s done a bang-up job with Cato’s amicus program.

The importance of filing Supreme Court briefs at the cert stage cannot be overstated. That’s the time when the Court makes its up-or-down decision about whether even to take a case, and hence the time at which arguments can be made about the importance of the issues at stake and the broader implications. We at the Center for Constitutional Studies have always taken the long view, grounded in the Constitution’s First Principles, especially as they underpin the limited constitutional government the Framers envisioned.

Commenting on the ideological aspects of these developments (where “conservative” and “libertarian” are largely interchangeable), Chandler writes:

Overall, the ideological cast of the new entrants is more conservative, anti-regulatory, and pro-business than that of those they replaced. To varying degrees, all seven of the new entrants have conservative profiles, whereas several of those left off the list this year, like the Society of Professional Journalists and the National League of Cities, have no obvious ideological bent. Five years ago, I wrote that “the list of top amici is dominated by pro-business and anti-regulatory groups—such groups hold over half the slots in the top sixteen.” Now they hold over three-quarters.

And he adds: “While the conservative groups have stepped up their game, the liberals are still nowhere to be found.” Part of the reason for this trend is of course the ideological cast of the Court itself. But that’s not the whole story – after all, it takes only four votes for certiorari to be granted, and for the most part there are four reliably liberal votes on the Court. Just as important is a change in the constitutional debate. And we’ve played our part in bringing that change about. In fact, in another month or so you’ll find a symposium in the Chapman Law Review on the origins and character of the modern libertarian legal movement. Stay tuned for more on that.

Hogberg: How ObamaCare Is Disrupting the Coverage & Care of One D.C. Woman

David Hogberg reports on “Natalie,” a Washington, D.C., resident who may lose her current coverage when ObamaCare forces her into one of its health insurance “exchanges”:

Natalie increasingly thinks that she’ll have the surgery. However, she notes that if she could keep her insurance and her medical team indefinitely, she’d have the luxury of waiting a year or two to see if she could get the pain under control (or at least live with the pain she has) and avoid an operation. Now, she may have to decide on an operation within a few months so that her current physicians can treat her…

At times, Natalie feels her trust in progressive leadership was betrayed.

“I voted for Obama in 2008 because I couldn’t stand McCain,” she said.

During the debate over Obamacare, President Obama assured the American people, “No matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”

Natalie may lose both.

“I can’t say how disappointed I am because I believed him,” laments Natalie.

Was William Shakespeare the First Libertarian?

I’ve never been a big Shakespeare fan, but that may need to change. It seems the Bard of Avon may be the world’s first libertarian.

Some of you are probably shaking your heads and saying that this is wrong, that Thomas Jefferson or Adam Smith are more deserving of this honor.

Others would argue we should go back earlier in time and give that title to John Locke.

But based on some new research reported in Tax-news.com, we need to travel back to the days of Shakespeare:

Uncertainty over the likely future success of his plays led William Shakespeare to do “all he could to avoid taxes,” new research by scholars at Aberystwyth University has claimed. The collaborative paper: “Reading with the Grain: Sustainability and the Literary Imagination,”…alleges that, in his “other” life as a major landowner, Shakespeare avoided paying his taxes, illegally hoarded food and sidelined in money lending. …According to Dr Jayne Archer, lead author and a lecturer in Renaissance literature at Aberystwyth: “There was another side to Shakespeare besides the brilliant playwright - a ruthless businessman who did all he could to avoid taxes, maximize profits at others’ expense and exploit the vulnerable - while also writing plays.”

In that short excerpt, we find three strong indications of Shakespeare’s libertarianism.

  1. What does it mean that Shakespeare did everything he could to avoid taxes? His actions obviously would have upset the United Kingdom’s current political elite, which views tax maximization as a religious sacrament, but it shows that Shakespeare believed in the right of private property. Check one box for libertarianism.
  2. What does it mean that the Bard “illegally hoarded food”? Well, such a law probably existed because government was interfering with the free market with something like price controls. Or there was a misguided hostility by the government against “speculation,” similar to what you would find from the deadbeats in today’s Occupy movement. In either event, Shakespeare was standing up for the principle of freedom of contract. Check another box for libertarianism.
  3. Last but not least, what does it mean that Shakespeare “sidelined in money lending”? Nations used to have statist “usury laws” that interfered with the ability to charge interest when lending money. Shakespeare apparently didn’t think “usury” was a bad thing, so he was standing up for the liberty of consenting adults to engage in voluntary exchange. Check another box for libertarianism.

Question of the Week: What’s the Right Point on the Laffer Curve?

Back in 2010, I wrote a post entitled “What’s the Ideal Point on the Laffer Curve?

Except I didn’t answer my own question. I simply pointed out that revenue maximization was not the ideal outcome.

I explained that policy makers instead should seek to maximize prosperity, and that this implied a much lower tax rate.

But what is that tax rate, several people have inquired?

The simple answer is that the tax rate should be set to finance the legitimate functions of government.

But that leads to an obvious follow-up question. What are those legitimate functions?

According to my anarcho-capitalist friends, there’s no need for any public sector. Even national defense and courts can be shifted to the private sector.

In that case, the “right” tax rate obviously is zero.

But what if you’re a squishy, middle-of-the-road moderate like me, and you’re willing to go along with the limited central government envisioned by America’s Founding Fathers?

That system operated very well for about 150 years and the federal government consumed, on average, only about 3 percent of economic output. And even if you include state and local governments, overall government spending was still less than 10 percent of GDP.

Moreover, for much of that time, America prospered with no income tax.

But this doesn’t mean there was no tax burden. There were federal excise taxes and import taxes, so if the horizontal axis of the Laffer Curve measured “Taxes as a Share of GDP,” then you would be above zero.

Or you could envision a world where those taxes were eliminated and replaced by a flat tax or national sales tax with a very low rate. Perhaps about 5 percent.

So I’m going to pick that number as my “ideal” tax rate, even though I know that 5 percent is just a rough guess.

For more information about the growth-maximizing size of government, watch this video on the Rahn Curve.

There are two key things to understand about my discussion of the Rahn Curve.

First, I assume in the video that the private sector can’t provide core public goods, so the discussion beginning about 0:33 will irk the anarcho-capitalists. I realize I’m making a blunt assumption, but I try to keep my videos from getting too long and I didn’t want to distract people by getting into issues such as whether things like national defense can be privatized.

Second, you’ll notice around 3:20 of the video that I explain why I think the academic research overstates the growth-maximizing size of government. Practically speaking, this seems irrelevant since the burden of government spending in almost all nations is well above 20 percent-25 percent of GDP.

But I hold out hope that we’ll be able to reform entitlements and take other steps to reduce the size and scope of government. And if that means total government spending drops to 20 percent-25 percent of GDP, I don’t want that to be the stopping point.

At the very least, we should shrink the size of the state back to 10 percent of economic output.

And if we ever get that low, then we can have a fun discussion with the anarcho-capitalists on what else we can privatize.

P.S. If a nation obeys Mitchell’s Golden Rule for a long enough period of time, government spending as a share of GDP asymptotically will approach zero. So perhaps there comes a time where my rule can be relaxed and replaced with something akin to the Swiss debt brake, which allows for the possibility of government growing at the same rate as GDP.