1979 and all that

Global politics are still shaped by five seismic events in a single year
July 18, 2013

L-R: Margaret Thatcher came to power in the UK; Pope John Paul II visited Poland; Iran’s Ayatollah Ruhollah Khomeini and the mujahedin; Deng Xiaoping revolutionised China’s economy; Soviet troops intervened in Afghanistan

In May 1979, a budding American businessman named Tom Gorman arrived at the Canton Trade Fair, communist China’s biannual exhibition for foreign investors. Gorman was one of a small handful of westerners who had been trying for years to do business with the government in far-away Beijing, and like the others he had little to show so far for his efforts. This was, after all, just three years after Mao Zedong’s death and the end of the hysterical xenophobia of the Cultural Revolution. Even the tiny group of Chinese authorised to make deals with overseas companies were so apprehensive about dealing with foreigners that they didn’t even print business cards. Finding the right partner usually required considerable detective work beforehand.

Gorman and the other Americans attending the trade fair that spring were correspondingly shocked when, for the first time anyone could remember, the Chinese came to them. A group of Chinese officials informed the astonished visitors that a wonderful investment opportunity was in the offing—would they like to have a look? The Americans accepted, and soon found themselves bumping down back roads to their destination deep in the countryside. Upon arrival, the Chinese led their visitors to the top of a dike that afforded a panoramic view of a typical south China landscape: rice paddies, duck ponds, and water buffalo, all tended by hardworking peasants in straw hats. This, the Chinese told their guests, was the Baoan Foreign Trade Base, future home of world-class factories and hotels. It was going to be amazing: the visitors should know a good thing when they saw it. But all the Americans could see was an agricultural backwater, bereft of infrastructure or resources. Gorman and his colleagues exchanged glances. They thought the Chinese were crazy.

Gorman didn’t put any money into the zone and neither, probably, did any of the others on the trip. They had ample cause to regret it later. The spot they visited on that day 34 years ago now lies beneath the factories and skyscrapers of Shenzhen, the core city of the Pearl River Delta, a region often described as “the workshop of the world.” At 10m, Shenzhen’s current population is bigger than New York’s (though the market capitalisation of its stock exchange, at a respectable $1tn, is somewhat less than that of the New York Stock Exchange). If you own an iPhone or other high-tech device, chances are good that some of its innards were made in a Shenzhen factory. Not bad for a city that barely existed three decades ago.

The creation of the Shenzhen investment zone was just part of a much larger package of market-orientated economic reforms launched in that same year of 1979 by newly anointed Chinese leader Deng Xiaoping. Given the extent to which that reform programme has subsequently transformed not only China but the world, this alone would surely be enough to qualify 1979 for the title of a watershed year in 20th-century history. Yet there was far more to it than that.

This was also the year of the Islamic Revolution in Iran, which established the first self-styled “Islamic state” in the Middle East, galvanizing hundreds of millions of Muslims around the world and irrevocably changing the regional balance of power. True, the overwhelming majority of the world’s Muslims were Sunnis, while most Iranians were (and remain) Shia, a fact that made the revolution in Iran somewhat unique. Yet it occurred at the same moment that Sunnis in neighbouring Afghanistan were embarking on a holy war against the communist government that had seized power in Kabul in April 1978. Many of the Afghan mujahedin—a word that was a novelty to western audiences at the time —sought not to restore the pre-communist republic but rather to replace it with an entirely unprecedented “Islamic state,” an idea that shared some of the same intellectual roots as Ayatollah Ruhollah Khomeini’s theory of clerical rule. At the end of 1979, the Soviet Union responded to the turmoil in Afghanistan by launching a full-blown military intervention that lasted for the next ten years. The Russians’ departure in 1989 was followed by a civil war among the mujahedin that lasted until 2001, when a fresh intervention—this time by the United States—altered the nature of the conflict once again. In that respect, the war launched by the Russians in 1979 has yet to end.

The events in Afghanistan and Iran were not the only reasons why 1979 marked a critical juncture in the Cold War. It was in June of that same year that John Paul II, elected to the papacy the previous fall, returned to his Polish homeland for a nine-day visit that had unforeseen effects. Poland, of course, had been a Soviet satellite for decades, but the Pope’s visit gave his long-demoralised compatriots fresh impetus to resist Moscow’s control. As in Afghanistan, religion and nationalism made for a potent combination, but the Poles, in contrast to their central Asian counterparts, had no intention of using violence to undermine communism. John Paul’s visit paved the way for the rise of the independent Solidarity trade union in 1980, a development that played a crucial role in the demolition of Soviet rule in eastern Europe nine years later.

Finally, 1979 was the also the moment that marked the debut in power of Margaret Thatcher. Her general election victory in May launched her 11-year stint as Prime Minister. Her term in office transformed Britain beyond all recognition, but it also ignited a new phase in the global “market revolution” that had already been signalled by the Nobel prizes in economics awarded to Friedrich Hayek (1974) and Milton Friedman (1976). Thatcher, whose thinking was strongly influenced by both men, believed that Britain’s struggling economy could only be brought back on track by revising the social-democratic consensus established by the Labour Party after its landslide election in 1945. Labour had used its mandate to nationalise major industries, create a cradle-to-grave welfare state, enshrine far-reaching economic regulations and controls and give the trade unions a prominent role in economic policy-making. Thatcher believed that the postwar consensus was responsible for sapping Britons’ entrepreneurial initiative and sense of self-reliance, shortcomings she was determined to correct.

The events that year in those five countries—Afghanistan, Britain, China, Iran, and Poland—might seem wildly disparate at first. Upon closer examination, though, it becomes clear that they actually had a great deal in common. All were powered by fundamental shifts in the world of ideas, and it’s precisely because these ideas have shaped our world so profoundly that we now find it hard to remember just how outré they were at the time. Religion, in particular, had long been discounted as a serious force in politics. The byword for much of 20th-century politics was “modernisation” and religion was seen by many would-be modernisers as mere obscurantism or superstition, a backward-looking force that was doomed to wither away under the onslaught of technological progress. For Hannah Arendt, modern revolutions were, by definition, secular; the notion of an “Islamic revolution,” which she did not live to witness, would have struck her as oxymoronic. Josef Stalin’s sarcastic comment was more Machiavellian: “The Pope? How many divisions does he have?”

Such views tended to overlook the power that religion could still wield. Afghanistan, Iran and Poland all showed this to remarkable effect over the course of 1979. During the Pope’s visit, Poland’s special relationship with the Catholic Church—long regarded by many Poles as a vital ingredient of their distinctive national identity—demonstrated its ability to mobilise vast swathes of society: some 11m Poles, a third of the population, turned out to witness the Pope’s visit. This was not merely a manifestation of nationalist discontent. John Paul II’s emphasis on the defence of human rights and his stubborn insistence on non-violent civic engagement decisively shaped the future form of Polish resistance to the Stalinist state. In this respect, the Pope’s intervention in his home country’s politics was as “modern” as it was religious.

In the Muslim world, the 1970s witnessed an extraordinary revival of religious sentiment so palpable that it was referred to in some countries as the “sahwa” or “awakening.” For many young radicals, the rediscovery of traditional faith entailed a rather untraditional turn to political activism. For years, theoreticians of the Islamic state such as the Pakistani Abul Ala Mawdudi and the Egyptian Sayyid Qutb had been forging strategies for political action that often borrowed from the repertoire of secular radicals. Mawdudi marshalled his fellow Islamists into a mass political movement that crafted programmes and fought elections, while Qutb pressed for the creation of an Islamist avant-garde that looked strikingly like Lenin’s Bolshevik party. The Shia cleric Khomeini, who spent most of the decade in exile in the Iraqi holy city of Najaf, incorporated some of their views into his own plans for a future Iranian theocracy. Such theories circulated for many years throughout the ummah, the global community of the faithful, but met little notice among non-Muslim elites in the rest of the world, who remained fixated on Cold War divisions between left and right. It was the revolution in Iran that finally gave the world notice that this new phenomenon, known as “political Islam,” was a force to be reckoned with.

Today that force has become such an integral part of global politics that we tend to forget how recent an invention it actually is. The term “Islamism” was barely used before the events of 1979. The fusion of Islam and revolution was so unfamiliar that countless commentators had trouble figuring it out; some even compared Khomeini with Mahatma Gandhi (after all, wasn’t Gandhi another religious leader who had led a revolutionary struggle?). The tactic of suicide bombing, now regarded as a trademark of jihadi insurgency, has a similarly shallow pedigree. Pioneered by secular nationalists and leftists during Lebanon’s civil war in the 1970s, it spread among various Iranian extremist groups during the revolution. The devastating suicide attacks against US Marines and French forces stationed in Beirut in 1983 were conducted by an Iranian-sponsored group.

Many of the early rebels against communist rule in Afghanistan came from the traditional tribal and religious establishment —but they were soon supplanted by the young Turks of the new Islamist parties that had found favour with sponsors across the border in Pakistan. More often than not, these younger leaders—people such as the brilliant guerrilla leader Ahmad Shah Massoud and the fanatical intriguer Gulbuddin Hekmatyar—regarded the old school mullahs and Sufi notables as hopelessly corrupted by their dealings with the old regime. This kind of generation gap was only natural, considering that Massoud and Hekmatyar had both received their educations at universities in Kabul rather than the rural Koran schools that tended to turn out leaders of the religious establishment. The crucible of the Afghan war thus spawned a distinctly contemporary Islamic radicalism.

Thatcher and Deng Xiaoping, by contrast, both put economics at the centre of their respective reform programmes. And even though the contexts in which they both began were dramatically different, they ended up moving toward strikingly similar solutions. Thatcher believed that the way to revive Britain’s economic fortunes was by cutting away the deadweight of onerous regulation, reducing the role of the state and inspiring ordinary Britons to compete and invest. The outlines of this programme were already visible in the first measures she took soon after her election, when she moved to cut income tax and eliminated capital controls. It would take another few years for her to move on to the epic work of taming the unions and getting the government out of the business of directly owning and managing key industries. (“Privatisation” was another coinage that had seen little use before the end of the 1970s. Thatcher actually didn’t like the word at first, preferring “denationalisation” instead.)

Deng, of course, was a lifelong communist, ostensibly the very antithesis of what Thatcher stood for. Yet in his reaction to the excesses of Maoism, Deng ended up favouring remedies that Thatcher would have found hard to reject. In private conferences with his aides in late 1978, as he was presiding over the change of course that would steer China away from the radical collectivism of the Mao era, Deng spoke glowingly of the capitalist incentive systems for ordinary workers—such as cash bonuses for those who produced more than others—that he had seen during his recent visits to Japan and Singapore. Dramatically dismissing a Maoist taboo, he explicitly embraced inequality: “Some people will get rich faster than others,” he declared. And some regions would, too—like the “special economic zones” for foreign investors he set up in Shenzhen and other choice spots along the coast. In the mid-1980s, as China’s economy began to take off, Deng declared that “to get rich is glorious”—a sentiment that must have warmed Thatcher’s heart when she heard it. And it’s worth noting that, for all their differences, both Thatcher and Deng sought the advice of Milton Friedman, free marketeer par excellence.

With the possible exception of Ronald Reagan, no other politicians did more to fuel the rise of market economics during the 1980s than Thatcher and Deng. By giving ordinary Chinese the space to follow their business instincts, Deng enabled China to achieve dizzying rates of growth in the countryside as well as the cities —just about the best advertisement for capitalism that anyone could have come up with. The rest of the developing world sat up and took notice.

But Thatcher’s contribution was no less notable. Many Britons still have a strikingly parochial attitude towards their former Prime Minister; they tend to ignore the extent to which she, too, acquired genuinely global stature as she launched her defence of private enterprise. The Britain she encountered in 1979—racked by lagging productivity, soaring inflation, and state ownership of industry—bore more than a passing resemblance to the malfunctioning economies of eastern Europe or Latin America in the 1990s. For elites in such places, the Thatcherite approach represented an entirely logical response to their own problems. She was remarkably good at articulating her vision, and her acolytes in the burgeoning world of conservative British think tanks were assiduous in spreading the word around the globe. All this made her a more persuasive international advocate for markets than Reagan, who presided over a country that had never really lost its taste for capitalism to begin with.

These five 1979 stories—those of Afghanistan, Britain, China, Iran and Poland—are dramatic in their own right. But surely, one might object, they were all entirely different? What could they possibly have had in common? Quite a lot, really. The protagonists of 1979 were, in their own ways, participants in what some have called “the Great Backlash,” a broad conservative reaction against the progressive vision of 20th-century modernisation—a vision that, at its best, created much-needed welfare states and social protections, but also, at its worst, yielded brutal schemes of social engineering schemes that ran roughshod over basic freedoms. As believers in collective ownership and the virtues of planning, socialists and communists tended to view markets with suspicion; as secularists, they often regarded religion as a realm of backwardness and obscurantism.

Thatcher, who aimed to roll back the social-democratic consensus that had taken hold in Britain after the Second World War, faced a relatively mild version of “evolutionary socialism” (though there were, of course, a certain number of Labourites who regarded Marx as a prophet and expressed admiration for Stalin or Mao). Khomeini’s blueprint for an Islamic state was shaped by his violent repudiation of the Marxist ideas that dominated Iran’s powerful leftist opposition movements as well as Shah Mohammad Reza Pahlavi’s state-led modernisation programme (the so-called “White Revolution”), which borrowed many of its ideas (such as land reform, literacy classes and nationalisation) from the left. The Shah, indeed, denounced the Shia clerics as “reactionaries.” Deng rejected the excesses of Mao’s Cultural Revolution in favour of pragmatic economic development—a move that, despite Deng’s disclaimers, entailed a gradual restoration of capitalist institutions. Afghanistan’s Islamic insurgents took up arms against the Kremlin-sponsored government in Kabul and later against the troops of the Red army itself. John Paul II used his authority to unleash a moral crusade against the godless materialism of the Soviet system.

At the same time, it was easy to underestimate just how much these leaders had actually absorbed from their opponents. A conservative can be defined as someone who wants to defend or restore the old order; a counter-revolutionary, by contrast, is a conservative who has learned from the revolution. Thatcher offers a good example. She displayed a most un-conservative penchant for crusading rhetoric, ideological aggression and programmatic litmus tests. It was precisely for this reason that many of the Conservative Party colleagues who accompanied her into government in 1979 questioned just how “conservative” she really was. (And for all her radicalism, she never really attempted to demolish the more popular aspects of Labour’s social welfare state, such as the National Health Service.)

It was entirely in keeping with this spirit that Thatcher proudly reported to a Conservative Party rally in April 1979 that her political opponents had dubbed her a reactionary. “Well,” she declared, “there’s a lot to react against!” It was, indeed, precisely this peculiar spirit of defiance that gave the year its transformative power. The decisions of these leaders decisively defined the world in which we live—one in which communist and socialist thought has faded, markets dominate economic thinking and politicised religion looms large. Like it or not, we still live in the shadow of 1979.

It’s entirely appropriate to ask whether that shadow is beginning to fade. There are many indications that the cycle that began that year is beginning to exhaust itself. It roughly marked the end of the first full generation after the Second World War, a period the French refer to as “les trente glorieuses,” “the 30 glorious years” of prosperity that followed the end of the conflict. It was in the middle of the 1970s, in Europe and the US, that the postwar economic model began to lose steam as energy crises, stagflation and rising global competition undercut the conditions that made it possible. In China, the death of Mao in 1976 and the end of the Cultural Revolution enabled the realisation that the Communist Revolution of 1949 had failed to fulfill its promise of prosperity and peace for all Chinese. And in many parts of the developing world, the heady struggles for decolonisation and national independence had given way, by the end of the 1970s, to a morass of corruption and dictatorship. Nowhere was this truer than in the Arab world, where the dreams of revolutionary nationalists such as Egypt’s Gamal Abdel Nasser had foundered, opening the way for the coming generation of Islamists.

We have now reached a point at which we’re just as far away from 1979 as it was from the end of the war. Does that mean that the world bequeathed to us then has already reached its due date? The answer is complicated. What’s clear is that the orthodoxy established by the great counter-revolutions of that eventful year is no longer as fresh as it once seemed. Despite the critics of the “neo-liberal” order, the faith in untrammeled capitalism has undergone significant evolution over the past few years. The crash of 2008 and the “Great Recession” that followed prompted President Barack Obama to intervene in the automobile industry and to resort to Keynesian-style stimulus, even as he’s tried at the same time to rein in the debt. The International Monetary Fund, once the draconian defender of the “Washington consensus,” now concedes that capital controls might sometimes serve a useful purpose and that flexibility while combating inflation is more important than wiping it out at all costs. Revision of the free market ethos probably would have gone much further if the forces of the left had managed to come up with a coherent alternative ideological programme. So far, however, they haven’t. Indeed, many ex-socialists around the world seem content to tinker with policies designed to make capitalism more socially conscious. But do free marketeers really have all the answers when it comes to sharply rising inequality or fraying social services?

As for Islamism, the Muslim Brotherhood’s strength in Egypt shows that the dream of an Islamic state remains alive for many in the Muslim world. Yet the recent wave of demonstrations against Mohamed Morsi’s presidency, and the military coup that followed, demonstrate that many interest groups are determined to oppose full-scale Islamisation—precisely because there is today an existing example of an Islamic revolution, and it’s not a terribly appealing picture. Iran is an economic basket case and a human rights catastrophe. Its leaders are ostentatiously corrupt and clerical rule has actually succeeded in discrediting religion in the eyes of many members of the younger generation, who often see Islam as degraded by its close association with the powers-that-be.

This is a major reason why the Arab Spring has not in fact given way to an “Islamist winter” as unambiguously as some feared. In Libya, voters in the first free parliamentary election gave a clear preference to secular parties. In Tunisia, the Islamist Ennahda party won a plurality of the vote in the first post-revolutionary elections—and then proceeded to form governments and draft constitutions in coalitions with secular parties. When I interviewed Ennahda leader Rached Ghannouchi a few weeks ago, he told me that, as a young Islamist in the late 1970s, the success of the Iranian Revolution had filled him with “enthusiasm”. But the bloodletting in the years that followed Khomeini’s takeover had convinced him and other members of his movement that they were better off pursuing non-violent change. Tunisia’s story is a long way from over, and it remains to be seen whether Ghannouchi’s party lives up to the high standards it has set itself. Nevertheless, it is clear that the intervening decades have not been a good advertisement for the Iranian model.

Contrary to popular belief, you cannot predict events to come merely by citing the “lessons of history”. The past never fully determines the future: life is too messy for that. But if there is a single moment in the 20th century that can be said to have left its imprint on today, it is surely this one. The shadow of 1979 remains stronger than you might think.