Strengthening Constitutional Self-Government

Margaret Thatcher

Transcript of Remarks at the 10th Annual John M. Ashbrook Memorial Dinner

Ashland University – September 17, 1993

[Offers thanks for the introduction] “May I point out, that every year is the year of the woman? And also, that the eighth year of the last decade, we were very lucky, in that those were the years of Ronald Reagan who did such great things for the cause in which we believe. His message as always was marvelous. He is a real pro when it comes to delivery these superb speeches of philosophy and inspiring to all. Now today, as it has been pointed out to me, is Constitution day. It is the birthday of the American Constitution. And it has been suggested to me that I say three things to you this evening, at this truly wonderful Center to which I am so delighted to be invited. First, some reflections on the Constitution and it relevance to modern times. Second, the way in which Ronald Reagan and I worked together, to achieve rather a lot of things. And thirdly, a walk around the world, if I can complete that agenda I will do so.

I am a devoted admirer, first, of the American Constitution. And am particularly fortunate to have been given one of the bicentennial keepsake editions, actually signed by all members of the Supreme Court. I regard it as a particularly valuable document. Valuable in itself and valuable because of those signatures given to me by Sandra Day O’Conner, when the American bar and judges were on a visit to Britain and we were, of course, comparing our great heritage of the legal system and the great heritage of justice. This, as Winston Churchill always said is the greatest expression of liberty in the English language and it is absolutely marvelous both for the principles for which it stands and the way in which they are drafted. What always struck me reading it, was how very different it was, although the results were the same, from the great charter, the great Magna Carta, which is your heritage, as much as mine. When the barons in the 14th century lined up to  the king and said, “now look we are not going to support you, unless you ensure that our old Anglo-Saxon traditions, particularly of justice, can and will be prevailed.” The King was wise enough that time to say yes, of course they could. And so in theory, that was the king granting powers to the then electorate. Mind you, he had little choice at the time. But that was the theory that the king was granting powers to the electorate. Not so, the American Constitution, which starts, the only constitution in the world which starts, “We the People.” The American Constitution, is the people granting powers to the government for a limited period of time. It is the only Constitution in the world which does that,  it says that and makes it absolutely clear that the task of government is not to dominate, but it is to serve the people of the country. It is quite a remarkable beginning of a Constitution. Jefferson, who as you know wrote it, was a genius with the written word. He was a genius in many ways, a very unhappy life he had, but he was a genius with the written word. When he came to draft this Constitution, he believed very much that we should have a regard to history. He was a passionate believer in the young people and perhaps the older ones as well, to be taught the history of the past. They should be taught, because as he said, by apprising them of the past, it would enable them to judge the future. It would avail them of the experience of other times and other nations. It would qualify them as judges of the actions and designs of men. It was also Edmund Burke who said if you do not learn from the mistakes of history, you will be condemned to repeat them. Both men, great philosophers, great writers, had precisely the same idea. Yet it was interesting he never recommended that new generations follow that Constitution or the history slavishly. As far as the history was concerned that it served to keep all the actions of the future in perspective and to keep the main principles before future generations.

May I give my version of what is very important for us today in that Constitution? Important when we remember that the whole rival political system, rivaled to the free society, ours is a free society. The rival political system never paid much attention or indeed any to the dignities or the rights of the individual. The rival political system annunciated by Marx and Lenin, took away all the freedoms of the individual and said in future, you will obey the dictate of a few people at the top who will plan everything. They not only took away all liberties, they took away all property, they not only took away all property, they took away all jobs, so that a people became totally and utterly dependent on the government, the very opposite of your own Constitution. People, individuals, their sanctity didn’t matter. Of course their sanctity didn’t matter, they were denied freedom of worship, there wasn’t the communist created nothing to worship but the government. And so you have the two extremes. It is also very ironic sometimes when some from the left criticized the system which we believe and say its materialist, its profit motive, and so on.  Let me tell you how I see it, which I believe is the correct way, of course I would. But the thing is this, freedom is a moral quality. It’s not just a civic quality; it’s not just a national quality, it is a moral quality. It is the quality which enables us to exercise our God-given talents and abilities. That is a right which no government should ever be able to take away. [Applause from the crowd] It matters and our contribution matters because with nearly six billion people in the world now, each and every one is unique. No two or are alike. A miracle in itself. And therefore, everyone has some contribution to make and the task of government is to see that you have a framework of law within which they can make that contribution and develop their talents and their abilities. And so you get the second principle, that there is no such freedom, there is no freedom without a rule of law. Otherwise it would be sometimes be freedom of the strong to oppress the weak. And so the rule of law is the other great principle of a free society. And the rule of law does not mean merely the dictate of government of the day, but the law passed by the elected representatives of the people. That is the principle of consent. And so we have the freedom and the justice. And you cannot have freedom, therefore, except in a civil society which honors the rule of law.

Please don’t think that this sounds like a rather philosophical lecture. I have very much in mind as I am saying it, that we take all of these things for granted. When I first visited Russia, or the Soviet Union as it then was in the East European countries, one of the first things you notice is that they do not have a rule of justice. They have only the dictates of the Communist party. There is no place they can go to get justice. And we have all of these things and we take them totally for granted. But it also has an economic effect as well. Because nations are rich, not according to their natural resources only. If that were so, then the two richest countries in the world now would be Russia. Russia alone, the biggest country in the former Soviet Union, has the biggest natural resources in the whole world and also Brazil. They are not the richest countries. How come? How come? Because their systems of government have snuffed out the essential enterprise, have indeed snuffed out the most valuable resource of all, which of course is the human resource. And until the ingenuity of man can in fact see a use for those materials and find out a way to use them and put them to advantage, until that time, you will not in fact find them turned to use and to raise the quality of life. And so what this is all about is the creative capacity of man, which is a noble quality, to be respected, and encouraged, and used. I was very very interested, I might tell you I’m not a Roman-Catholic, but I was very very interested in the Pope’s encyclical, which I think for the first time recognized the system of enterprise, recognized its morality, recognized the need to invest, recognized the need for man’s creative ability, recognized how much it acted by getting people together in order to produce and therefore had a sense of community and recognizing that it produced things that people wanted and also had a sense of community and this is what he said: “in short, besides the Earth, man’s principle resource is man himself. His intelligence enables him to discover the Earth’s productive potential and the many different ways in which human nature needs can be satisfied. Perhaps we in business have been too slow to point out that capitalism is therefore not only about material things, it is about the human spirit and its creativity.” Now that is the moral case for capitalism that is now at last been put, much more cogently in schools like this and in people like Michael Novak. The moral case, it is the only way in which man’s talent and ability can be used. It is the only way which creates the wealth and in creating the wealth that is not materialistic of itself and the country, most of us want to give young people a better chance and a better quality of life than we had and it can’t be done and you can’t build universities like this without doing it.

Now, always remember, if I might quote the other end of the Christian Church, which was of course John Wesely, I was brought up as a Methodist, who said, do not criticize money, do not impute to money the faults of some of them that use it. In other words, if you use it well then there you are. Now that is, as I take it, part of the great morality of capitalism. The morality of freedom and the rule of law. And there is only one further point that I would like to say on this matter. It’s not only the principle of freedom and its use. It’s not only the rule of law. What makes a man, a family, or a community or a nation is the values by which they live. Of values not only inspire policies, they inspire people. And so all the best of the values which means so much to us, the ones which we try to apply in daily life, the hard work, the looking after one’s family, the obligation to one’s neighbor. It is not only the minimum which you have to do by law, it is what you do in addition to that as a matter of the social and moral authority of that nation which gives you the very high standard of living in a society. And I will usually say when I’m speaking to audiences in the previous Soviet Union, or elsewhere, the most generous society in the world is one which was founded by the Christian settlers who knew full well that they had an obligation to others and ever since then they have been fulfilling that obligation. I hope that it is clear to you that I believe in your Constitution and believe that not only what is written there, but what we have we must apply in daily life to stand and to value the foundation of democracy; otherwise democracy itself will disintegrate and decay.

Now, perhaps that is enough for the birthday of the Constitution. There’s one other moral point I would like to put to you and this one was enunciated by Winston Churchill. That Constitution we have been talking about is the Constitution of liberty; it is very much like our unwritten constitution. Now what about foreign affairs? For years people said foreign affairs should be run according to the interests of the nation. I always thought it a rather clinical phrase not used by diplomats, but then I was never a diplomat or very diplomatic. But just at a time of very great difficulty in this century, Winston Churchill came out with a very very different belief. In 1938, there were years of tyranny, we didn’t know the full extent of that tyranny. It was the year of Munich, and in eighteen months we were to be at war. And this is what Winston said, and this is what I believe has informed our policy for the greater part of the time since and yours too; “there must be a moral basis for foreign policy and if all our energy is to be concentrated on the essential task of increasing our strength and security, it can only be because of lofty and unselfish ideals which stir the pulses of the English speaking race in every quarter of the globe.” My friends, that is why a large part of the globe has been released from tyranny to enjoy freedom once again, because of lofty and unselfish ideals and because it was those which were the basis of our foreign policy and the greatest alliance for liberty the world has ever known which is the American-Anglo alliance. And so on both sides there is a great morality to the political creed which we espouse.

Now, may I come on to the second subject which you have given me to speak to. I’m always delighted to speak about President Reagan. There were only three prime ministers who were actually in office for the whole time of an American president and I was one. I got there just before President Reagan and I was Prime Minister the whole of his time and I stayed on a couple of years longer. So we had a rather interesting partnership. Not only partnership, you actually were tackling a similar sort of problem. We both came to power in our respective countries believing the same things; but we both saw, each of us, a nation not living up to the best of the talent that was within it. America was rather demoralized, you had the terrible incidents of the hostages in Iran, and America wasn’t living up to the best, her morale had gone and in Britain we had the Winter of Discontent, we had strikes, so we both faced how are we to take this country from pessimism to pride? How are we to get back the enterprise going? How are we to get it dynamic enthusiastic, serving both its own purposes and serving the world as well?  Ronald Reagan and I both followed to some extent similar policies, take away so many of the regulations, cut the taxes, have a framework for enterprise, raise the spirits and hopes of the people by reference to the great things they have done in the past so they will do great things in the future. In Britain, we had to do even more than that. We were even more regulated and had to take the regulations down. We were even more taxed and had to take the taxation down. We had a vast trade union law which was causing strikes all over the place and we had to alter the powers of the trade unions in relation to the employers and we had to alter the relationships of the trade union officials and their members. We did it all and we had also privatized many many of the nationalized industries because the state has no business to be in business. It doesn’t know how to run it.


Now, in both countries the morale of the people rose. We created wealth and business created the jobs. The number of people in employment went up enormously and in my country the number of strikes went down. But it’s interesting now that taxation is back now right in the news. Let me tell you what we both found when we took down the top rates of taxation. In Britain, when I came in the top rate of taxation was rather higher than it was in America 83% on earnings and 98% on savings. Ridiculous. We took it down immediately to 60% and picked it up on indirect tax, then took it down to 40%. The interesting thing with this, as we took the top rate of taxes down on the top 5% of incomes, the proportion of tax contributed to the whole revenue by that top 5% rose. Rose considerably. It was something like 23% to 28%. Everyone needs incentive. And the most creative people we need most of all so that they may in fact create both the wealth and the jobs. I thought that might be interesting to one or two people today.

Now, let’s have a look at the overseas policy because it was really here that enormous strides were made, which I think were largely responsible for what happened when Communism collapsed. Until Ronald Reagan and I both came in, the whole theory and doctrine of foreign policy with regards to Communism had been one of containment for quite a long time. It was this great monolithic system and it has an objective of  world communism at which it pursues either by military might or by subversion. We all had it or in fact having a military government as in Poland or in fact by proxy as it was with the Cubans and Angola. But here it is. It wants communism everywhere we can’t stop it from doing these things, but perhaps we can contain it. Now that wasn’t good enough for Ronald Reagan and I. We believed in liberty. Communism was a negation of liberty. There are many many people and by that time we knew the terrible things that Stalin had done, the terrible murders, the terrible massacres, the terrible gulags. No, we weren’t going to do containment. We were going to do two things. First, we were going to increase our defenses and get ahead in the latest technology, so that we could say to the Communist world “you will never gain your way by military might. Beacuese was whatever you do, we will have something better and we will have the latest technology and we will have the better quality. So you can drop that ambition.” And we both did it. And even at the time our restraint and cutting of public expenditure, I reordered our priorities so that we put more into defense and also more into law and order within the country. That eventually worked.

And then the other thing we said is we are going to put freedom on the offensive. That didn’t mean a military offensive, it meant talking about it. It meant talking about human rights. It meant tackling the communist countries on human rights and that we did every single time we met them. Why don’t you let your people out? People can leave our country at any time they wish. Our problem is to stop too many people coming in. Why don’t you let them go? And we tackled them again and again and again. I also did something else. I thought there must soon be a different generation of politicians in the Soviet Union. All the old boys weren’t going to last forever and I thought we should look for some younger ones and I got the foreign office to give me a little list and I looked down it and said there was one called Gorbachev there, try him. And he came over to see me at Chequers and you know the rest. He was of totally different caliber and kind of person from any other I had ever met in the Soviet Union and I had met a lot. This was the first one who was prepared to debate and discuss freely and easily. It was the first person who would admit that there were things wrong with the Soviet Union. In particular they had quite a good year of agriculture but thirty percent of the product never got to the market. Why? Well it disappeared on the railways or the railways weren’t good   or the lines weren’t there or they hadn’t in fact gotten a storage facility in the country. Why hadn’t they I said? Well Lenin decreed that there should not be in the towns and I said that was nearly seventy years ago, hasn’t it been changed? All of this we went through. And at the end I said to the press that this was a man I could do business with. Now very shortly he became, as you know, the Secretary General of the Soviet Union. Now the way in which he tackled the ending of Communism was quite different from the way in Deng Xiaoping in China tackled it. He looked around at what he saw in the free society. He saw a tremendous plenty that produced, all the shops were full of goods. And he decided that the best thing he could do was to give the people back what they should never had lost; their freedom of speech, their freedom of worship, their freedom of association, their freedom of discussion, their freedom to form different political parties, and the right to vote for their representatives in the Supreme Soviet and the Congress of the people. That was the most colossal advanced. You would never have thought of that and the atmosphere was changed immediately.

I think he felt that by discussion he would find the way forward to getting a prosperous society. I noticed the speeches he made. They started to be totally different. He said, “look, the Communist comrade must in fact in future exercise some sort of initiative.” Now that was a great shock. They had never been allowed to. They had been punished if they did. Exercise some initiative and accept some responsibility. But the fact was they hadn’t gotten the institutions of liberty. They hadn’t got a proper central bank, they hadn’t gotten the statistics to know, they didn’t even know what they were producing, let alone how it related to the money they were printing. They had no rule of contract, no commercial law, no independent courts of justice and no tradition of enterprise in the memory of anyone living. But the people hadn’t been given freedom. As I talked to them, they said, oh we are waiting for them to give us economic prosperity now. There’s no understanding of how it could come about. He had not dispersed power very much and by the time of the attempted coup, he was about to disperse it and change things and then not only did the coup fail, but the total unexpected thing happened, the Soviet Union fell apart. No one, none of us had ever thought that would ever happen. And instead of three votes in United Nations, because Stalin had always insisted on three for the Soviet Union, there then became fifteen. The number of nations in the United Nations went up to 184.

Now, you therefore have still and Mr. Yeltsin got elected as president of Russia, now when you go to Russia now, as some of you do and I do, I have been very recently, you will find that they have a basic problem, although Yeltsin is a real market man, he actually believes in the free market and is trying to privatize as much as he can, he always did, and knew that political liberty wouldn’t last unless you got economic liberty. He’s got a problem. They’re still on the 1978 Brezhnev Communist Constitution. He’s got a new one, but he can’t get the new one through the old Parliament because there are too many old communists in that. So they got a kind of crisis of authority. Until that Parliament is dissolved, the new one elected, which will of course accept the new constitution, a constitution of liberty. But what is happening is quite different outside Moscow from what is happening inside. And it is very interesting as I went outside, there you will have in some of the provinces, some young governors, who because of the liberty Gorbachev gave, they have had five or six years of freedom of discussion, they’re not really bothering very much about the old constitution. They are in fact busy selling land to the people, or busy buying it and growing things on it. The area I visited the governor had sold all of the shops to the people, he sold every single small business, he started to privatize the whole of the transport system, and he had privatized an ex-defense factory and turned it over to civilian production. This young man of thirty-two, and there things were going very well. And you find that happening in quite a number of areas. I then went to a shopping center outside of Moscow, on the outskirts. Very, very few things in the shops, but they’re not long queue as they used to be. And the people recognized me and gathered around eminently, “Now Mrs. Thatcher what is the difference between Mr. Gorbachev and Mr. Yeltsin. Now tell us honestly.” They are very articulate, very articulate, absolutely fascinating. And I simply said to them, “Mr. Gorbachev gave you personal and political liberty and brought about the collapse of communism, and it would never have happened without him. Mr. Yeltsin is trying to get you the market economy in an era of plenty, but you have to help him to get a new constitution.”

Now, these things are happening and I am absolutely certain that in Russia it will never go back to the old rigidity. There are problems of course with some of the other states because the whole trading systems has collapsed and they still have not yet got a law or a currency that is stable. And when you have a system where the govern of the Central bank suddenly cancels a currency when it’s more than a few months old without any reference to the finance minister, you know that all is not well. But nevertheless, they will not go back, I am certain, to the old system. They have gotten used to liberty, and they will find their way through and we must help them do it. Help them to build the institutions of liberty.

Can I just turn for the moment to China? China is completely different. It’s a country of 1.2 billion people. And I ask you just to consider for a moment, what the effect will be in the future in the Pacific, when this country breaks through to prosperity, as it will, as it will. The world has never known a country of 1.2 billion people prosperous and dominant in a particular area. Now the whole of the Asia Pacific, apart from Japan, in spite of the world recession is growing at a spectacular rate, about 8% per year. In China, the average is between 13-14% and much greater on the coast. That region has 1/3 of the world’s population, it has 1/3 of the world’s foreign currency reserves. The trade between countries of that region is about 50-60% of the total, and its growing fast. In 20 years, it will be perhaps the main financial center of the world or one of the main ones. And were going from a time when we had two big financial centers, two big industrial commercial centers, America and Europe. And now were going to have three, and Europe will be very much lesser than America or the Pacific.

Now, how’s it going to be done in China? I know Deng Xiaoping because I had to negotiate with him over Hong Kong. I knew his predecessor, Hua Guofeng, I mercifully never knew Mau Zedung, and I don’t think I would have cared to very much. But I had to negotiate with Deng Xiaoping, and there I met a man who was determined to keep communism in China, but knew that he really had to introduce enterprise if he was to get up the standard of living. And for 10 years, gradually, he has been doing it. First by saying to them “if you produce more than your allotted target in the factories, whatever extra you can produce, whether on the collective or the factories, I’ll give you a covered market in which to sell it.” They took to commerce just like ducks to water. The Chinese are born traders where ever they are in the world.

What is more, they had the example of Chinese outside china to see. They could see what they had done in Hong Kong under British administration with a British rule of law, totally non-corrupt. Hong Kong became the third financial center in the world, great production, enormous property value, enormous structure, new airports, new everything, every bold scheme they could undertake. Go further south, Sheng Kai Shek went to Taiwan when the communist took over in 1948. Taiwan the biggest foreign exchange reserves in the world, a very dynamic society. Always keeping its budget in surplus and building up the great reserves to which I have referred.

You go further south, Singapore, under Harry Lee Kuan Yew, marvelous man. Educated in Briton, got a first in law, new bridge administration, went back and build up Singapore on all the best principles that are second nature to you and me. Another great financial center. So the people in china could see that anyone Chinese had this great talent and ability. They also had the thing that no one has in Russia, Russia has no diaspora in the same way. There are not Russian places where they have that great prosperity as there are Chinese places. And Hong Kong and Taiwan and Singapore are investing heavily, very heavily in China and helping along the industrialization of the whole area.

Now, it is perfectly obvious what will happen, historically in the world as a whole, economic prosperity has preceded political liberty. But it’s quite impossible to think that the Chinese will be able to keep political control under communism when you have a prosperous society. When people have become richer, more educated, have traveled more, they will have to have a say in the making of the laws of the country. And that will almost certainly happen. They will go through difficult times in that period.

Now, may I just refer to one more thing in this walk around the world? Because in this last ten years, there have been years when the unexpected happened. Indeed there have been years where you and I would have said things could not happen which have happened. One of them is the change in the Middle East. Now the Iran politics, some problems which are insoluble, insoluble for a long time, there are all sorts of recurrent problems in the soviet union where Stalin change one hundred boundaries in the Soviet Union deliberately putting them across tribes of people and nations of people and has had many many problems. But then all of a sudden, circumstances change and an old problem becomes soluble. In the Middle East, what changed the situation were two things. First, the collapse of communism and the end of the cold war. That meant that Arafat and various other groups no longer had the support from Moscow that they had been accustomed to having in pursuing their objective, that was very important, they no longer had the training, the weapons, or anything. Second, the Gulf war. Arafat was on the wrong side, supported Saddam Husain, and therefore lost a lot of the financial support from the other Arab oil rich nations. So, he has two reasons for knowing that things had changed and he must negotiate. On the Israeli side, as you know, it was vital that they not come into the war. And we very successfully, between us, kept them out by paying a great deal of attention to their needs. But also that was the war in which all of the latest military missiles and technology was used on both sides. That was the war, in which the peoples of Israel learned that they could no longer protect their property from within. They discovered that missiles could be fired, not from adjacent territory, but from countries further away and still do immense damage. So it altered their whole military concept and strategy. So on their side, they knew, that safety for the future lay in getting a negotiated settlement. And that is the reason, as I watched, on television, that ceremony, at the White House, I must say to you, that I thought the speech of Prime Minister Rabin, a former soldier, who’d fought for the liberty of his country who lost many of his own solders, who’d lost the sons and daughters of his friends. I thought his speech not an emotional speech, but a speech in which he’d had to come to a decision and would carry it through. It was one of the great speeches of history, it really was something, again, that one could not have thought of.

And so, I think we have every right to be optimistic and expectant. The very conservative theory, that is the theory, the philosophy, the belief of liberty under a rule of law, under a civic society, and under democracy is extending the world over. Ronald Regan and I were right, containing communism was not enough, [applause] We put freedom on the offensive, we went to those countries, we let them see our system, we got them over to see our system, they saw that it worked and they knew that this century’s terrible creed of communism would die before the end of the century. It’s a pity it was ever born, because it was the latest form of tyranny. This century spawned the two worst tyrannies the world has ever known, Nazism (with fascism in Japan) and Communism. Our task, now that were getting more countries to democracy, and its sweeping through Latin America as well, is to see that that is extended into the next century. There is an extra reason why it should be, there is no recorded example in history of one established democracy fighting another. So it gives us very much greater security if we are able to get established democracy there.

And so, we can indeed be very proud, very proud of the Constitution and of the liberties which it enshrines. And we can say, very rarely do I quote from German poets, but I quote from Goethe something that is very right, “That which thy fathers bequeathed thee, earn it anew if thou wouldst possess it.” That is our task in this center, and one which we shall fulfill to the utmost.

Thank you.