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When We Began

May 10, 2013 in Economics

By Dalibor Rohac

Dalibor Rohac

Strange Rebels. 1979 and the Birth of the 21st Century
By: Christian Caryl
New York: Basic Books, hardcover; $28.99, 432 pages

The 1970s were not a glamorous period of human history. From today’s perspective, they were a decade of questionable taste in clothing, hairstyles, music, and architecture. There was a general sense of economic and political unease in the West. But there are good reasons to study the 1970s, argues Christian Caryl in his latest book, Strange Rebels. Most importantly, it was a decade in which the overall malaise prompted cataclysmic events that have irrevocably shaped the world in which we live today.

Christian Caryl is a journalist of the old school. A senior fellow at the Legatum Institute (full disclosure: I worked as an economist there until February 2013) and a contributing editor at Foreign Policy magazine, his book demonstrates the breadth of his experience in journalism (he served as bureau chief for Newsweek and US News in Tokyo and Moscow, respectively). A riveting read, it is interspersed with gripping anecdotes and an admirable attention to detail. Its main thesis—that our current world would be unimaginable without the unique concatenation of world events that occurred in a very short period of time in 1979—is both novel and compelling.

Even in 2013, many people are still in need of a healthy dose of skepticism about the ability of big, unchecked governments to deliver good outcomes.”

What exactly happened in 1979? Well, for one, Margaret Thatcher won Britain’s general election in May, ending a decade of economic stagnation, rampant inflation and excessive unionism. In the years that followed, she and her colleagues would fix the British economy, and turn an overregulated state in decline into an economic powerhouse. More importantly, she would change the conversation about economic policy in the West. Government ownership of industry, unionism and naïve Keynesian stabilization policies, which formed the basis of the post-war economic consensus in Western Europe, would be intellectually discredited for the years to come—though they would unfortunately resurface in the aftermath of the financial crisis of 2008.

Although not discussed explicitly in the book, Thatcher’s example inspired pro-market reformers around the world, including those in Eastern Europe. In 1989, for transitional economies for Eastern Europe, a rapid return to free markets was the only credible option and alternative to pipedream fantasies of seeking a “third way” between capitalism and communism.

Speaking of Eastern Europe, in …read more

Source: OP-EDS

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