The Lasting Legacy of the Reagan Revolution

Former President Ronald Reagan passed away June 5 at the age of 93. Both while he was in office, from 1981 to 1989, and in the years since, Reagan has been loved and adored by many on “the right” and hated and ridiculed by most on “the left.” During his years as president he represented a new beginning for advocates of individual freedom and limited government, while those who cherish and worship paternalistic government viewed him as an ignorant and dangerous buffoon, a has-been actor who “played” at being president.

As recent books have shown, Reagan was far from the uninformed dunce that many modern-day liberals considered him to be. He was thoughtful, well-informed, and knowledgeable about the core principles of free-market economics. Among his favorite economists were the nineteenth-century French classical liberal Frédéric Bastiat and twentieth-century “Austrian” economists Ludwig von Mises and Henry Hazlitt. For many years he was a regular reader of The Freeman.

In fact, Reagan’s acquaintance with the Foundation for Economic Education dates back to the late 1940s and early 1950s. He attended a lecture delivered by the late Leonard E. Read, the founder of FEE, asking some pointed questions about the freedom philosophy and its application to the problems of America. He soon was regularly reading FEE’s material to develop his own understanding of the case for liberty and the free market.

As a result, Reagan was not fooled or taken in by the emotional and illogical rationales for government regulation and socialist central planning. When in the 1980s he called the former Soviet Union an “evil empire,” he understood the nature of that communist regime far better than the vast majority of the left-of-center academics of the time. Many Soviet dissidents cheered when a Western leader finally “told it like it was.” Some of his advisers and handlers did not want him to declare, on a trip to Berlin, “Mr. Gorbachev, tear down this wall.” But he did it anyway.

Early in his administration, he also showed political principle and courage when he faced down the air-traffic controllers who had gone on strike in violation of federal law. When they wouldn’t return to work, Reagan fired them. Replacements were soon trained and hired, with no danger to the safety of the skies. After decades of trade-union power and intimidation throughout the American economy, a U.S. president had stood up to the labor unions and not blinked. Union power and disruption were never the same again.

Unfortunately, much of the domestic agenda that Reagan had articulated in the presidential campaign against Jimmy Carter in 1980 and in the first months of his administration was either abandoned or modified as the years went by. In fact, in the April 1981 issue of the Cato Institute’s Policy Report, I critically evaluated the backpedaling and policy reversals that were already occurring after just a handful of weeks in office. I bemoaned the Reagan administration’s failure to eliminate federal departments, cut spending across the board, or reduce the degree to which government pervaded the private sector.

I concluded my analysis by despairing: “By following the course he seems to have marked out for his administration, President Reagan has assured that long after he’s gone the corrupting hand of the Interventionist State will still be with us.” And, unfortunately, when Reagan left office the size of the federal government was not much different from when he came in, and it has continued to grow ever since.

Watershed in America

Nonetheless, Ronald Reagan’s years in office represented a watershed in post-World War II American history. Nineteen-seventies America under Jimmy Carter was suffering from what was widely thought of as a “malaise.” The U.S. economy was experiencing the supposedly strange phenomena of “stagflation”: higher and higher price inflation matched by economic stagnation symbolized by relatively high unemployment. The standard Keynesian quack medicines of bigger budget deficits and monetary expansion with artificially low interest rates offered no remedy for the country’s ills.

At the same time, the apparent growth of Soviet influence around the world challenged the idea of freedom’s superiority over collectivist tyranny. A French conservative social critic, Jean-François Revel, even penned a book titled How Democracies Perish, suggesting the imminent demise of free government and the open society around the world, including in the West.

Ronald Reagan refused to capitulate to the intellectual and psychological trends of the time. He had unswerving confidence in the power of ideas in the cause of freedom. He insisted that government was the problem, not the solution. He spoke with ease and persuasiveness about the creative energy of free men in free markets. He argued that government taxing and spending were sapping the strength of the American people and their ability to find private-sector solutions to the supposed array of “social problems.” He reveled in the conception of the free and responsible individual.

Month after month, year after year, in spite of the practical compromises he made in the everyday politics of Washington policymaking, he continued to exude a firm and confident belief in the original founding ideas of the American Republic. Through his rhetoric and easy-going style of speaking to the American people, he slowly helped to make the conservative/classical-liberal/libertarian worldview legitimate and respectable again in public debate, and even in intellectual and academic discourse.

Under Ronald Reagan’s stewardship, the dark spell of collectivism, interventionism, and welfare statism that had dominated the ideological and political landscape of America since FDR’s New Deal days was finally broken. No one could any longer say that well-intentioned government could be trusted with unlimited and discretionary power to cure the problems of society.

Herein lies the profoundly important and lasting legacy of the Reagan Revolution. It may not have succeeded in dramatically changing the immediate course of American economic policy, but it assisted in the radical transformation of the political, philosophic, and economic terms of the debate about man, society, and the role of government.

This, in my estimation, is what makes Ronald Reagan the most important president in United States history during the last 60 years. His joyful confidence in human freedom and the free market created the climate that may yet enable liberty to once again triumph in America and around the world. The spirit of his words once more has shown that, indeed, ideas have consequences.