and women who were Christians and who were willing to practise and propagate that faith abroad’.
From the moment when ‘Thatcherism’ was first articulated as a distinctive brand of Conservatism, soon after she and her intellectual mentor Sir Keith Joseph established the Centre for Policy Studies in 1974, its disciples emphasised that this was not mere materialism but an entrepreneurial theology. Sir Keith’s famous Edgbaston speech of October 1974 caused a furore by proposing that low-income women should be discouraged from breeding, but its peroration (scarcely noticed at the time) was no less astonishing, and probably more significant. ‘Are we to move towards moral decline reflected and intensified by economic decline, by the corrosive effects of inflation?’ he asked, his face characteristically furrowed in anguish. ‘Or can we remoralise our national life, of which the economy is an integral part?’
Modern British politicians hadn’t previously used such language, but over the following two decades the evangelical message was heard again and again. ‘I am in politics because of the conflict between good and evil,’ Thatcher said, ‘and I believe that in the end good will triumph.’ Speaking to the Zurich Economic Society in 1977, she warned that:
we must not focus our attention exclusively on the material, because, though important, it is not the main issue. The main issues are moral … The economic success of the Western world is a product of its moral philosophy and practice. The economic results are better because the moral philosophy is superior. It is superior because it starts with the individual, with his uniqueness, his responsibility, and his capacity to choose … Choice is the essence of ethics: if there were no choice, there would be no ethics, no good, no evil; good and evil have meaning only insofar as man is free to choose.
She explicitly associated her belief in economic freedom of choice with the Christian doctrine of the same name, as a means of salvation. Self-reliance and property ownership were ‘part of the spiritual ballast which maintains responsible citizenship’. (Many Christians, of course, remained unpersuaded that the prime minister was doing God’s work. Anglican bishops such as David Jenkins and David Sheppard protested against the mass unemployment which she had created, and the 1985 report Faith in the City, commissioned by the Archbishop of Canterbury, blamed the Tories’ social Darwinism for the squalor, decay and alienation found in Britain’s inner cities. Thatcher reacted furiously to the criticisms, arguing that men of the cloth had no business commenting on her industrial and economic policies – apparently oblivious to the fact that her own metaphysical and religious justifications for the new ‘enterprise culture’ had legitimised these clerical ripostes.)
As the daughter of a man who had been both a preacher and a local councillor, Thatcher knew how usefully scriptural texts could be deployed to suggest divine sanction for political prejudice. Speaking to the general assembly of the Church of Scotland in 1988, she justified her blitz on benefit-claimants by quoting St Paul’s epistle to the Thessalonians: ‘If a man will not work he shall not eat.’ In another startling biblical exegesis, she said that ‘no one would remember the Good Samaritan if he’d only had good intentions. He had money as well.’ Like Reagan, Thatcher often implied that most public welfare provision was unnecessary: if the nation had enough millionaires, their natural benevolence and wealth-spreading talents would suffice. (Alas for the theory, charitable giving by Americans with annual salaries above $500,000 actually fell by 65 per cent between 1980 and 1988; the real Good Samaritans, who raised their donations by 62 per cent, turned out to be humbler souls earning between $25,000 and $30,000. Even more remarkably, the poorest in the land – those on $10,000 a year or less – gave 5.5 per cent of their income to charity, a higher share than anyone else.)
While affecting to admire Victorian philanthropy, Thatcher displayed a visceral contempt for the noblesse oblige of the wealthy paternalists in her own ranks –‘the wets’, as she called them, who ‘drivel and drool that they care’. Her real heroes were buccaneering entrepreneurs, and it sometimes seemed that no other way of life, including her own, was truly virtuous. (The political writer Hugo Young recalled one social encounter with Thatcher which ‘consisted of a harrying inquiry as to why I didn’t abandon journalism and start doing something really useful, like setting up a small business’.) ‘These people are wonderful,’ she raved. ‘We all rely upon them to create the industries of tomorrow, so you have to have incentives.’ Every obstacle to money-making – corporation taxes, antimonopoly rules, trade unions’ bargaining rights, laws protecting workers’ health and safety – had to be minimised or swept away altogether. No wonder the stock market on both sides of the Atlantic went wild in the 1980s. For all Thatcher’s pious injunctions about living within one’s income, this was a decade of borrowing and spending. Between 1895 and 1980 the United States had shown a trade surplus every year, but during the presidency of Ronald Reagan it was transformed from the world’s biggest creditor nation into the biggest debtor – and tripled its national debt for good measure.
Most people would regard it as suicidally irrational to embark on a credit-card splurge without giving a thought to how the bills can ever be paid. Yet when the denizens of Wall Street did just that in the 1980s, they were lionised. Gossip columnists and business reporters alike goggled in awe at the new financial titans – men such as Ivan Boesky, ‘the great white shark of Wall Street’, who was said to be worth $200 million by 1985, and Michael Milken, ‘the junk-bond king’, who earned $296 million in 1986 and $550 million in 1987. Boesky liked to describe himself as an ‘arbitrageur’ but the title of his 1985 book, Merger Mania, summarised the source of his wealth in plainer language. He had an enviable talent for buying stock in companies which, by happy coincidence, were targeted for takeover shortly afterwards, thus enabling him to sell at a profit. As it transpired, this owed less to the mysterious arts of ‘arbitrage’ than to old-fashioned insider-trading: Dennis Levine, a broker at the Wall Street firm Drexel Burnham Lambert, was tipping him off about imminent mergers or acquisitions in return for a percentage of Boesky’s spoils. Meanwhile Levine’s colleague Michael Milken was pioneering the use of high-risk, high-yield ‘junk bonds’ – essentially a means of converting equity into debt – to finance the merger mania. In May 1986 Boesky gave the commencement address at Milken’s alma mater, the Berkeley business school at the University of California, and won loud applause when he said: ‘Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.’ Six months later he was indicted for illegal stock manipulation and insider dealing, charges that eventually landed him in Southern California’s Lompoc federal prison. By 1991 Milken was also in a Californian jail, having incurred a ten-year sentence and a $600 million fine for fraud and racketeering.
As with ‘junk bonds’, almost all the macho financial neologisms of the 1980s were euphemisms for debt in one form or another. A ‘leveraged buyout’, for instance, involved purchasing a company with borrowed funds. More often than not, the security for these loans would be the target company itself, which would thus have to repay the debt from its own profits – or from the sale of assets – once the deal had gone through. Then there was ‘greenmail’, a technique pioneered by corporate raiders such as T. Boone Pickens and Sir James Goldsmith who would acquire a menacingly large stake in a company and then terrify the firm’s owners into buying it back at a premium in order to avoid a hostile takeover. This reaped huge rewards for the predators but left their victims fatally indebted or dismembered: when the Goodyear Tire and Rubber Company fell prey to Goldsmith and his associates, it had to spend $2.6 billion paying off the greenmailers.
Where once businesses made products, now they made deals. As more and more money was borrowed from abroad to cover the difference between what Americans produced and what they consumed, a few voices began to question how and when the IOUs for this bogus prosperity would be honoured. ‘This debt is essentially the cost of living beyond our means,’ the economist Lester C. Thurow warned in the late summer of 1987, when the US trade-account deficit reached $340 billion. ‘If the money we were borrowing from abroad all went into factories and robots, we wouldn’t have to worn’ because the debt would be self-liquidating. It’s the fact that we are using it entirely for consumption that makes it a serious problem.’
As any three-card-trick hustler knows, legerdemain depends for its success on fooling all the audience all the time: any members of the crowd