You have asked me to speak about Thatcherism.
And that is a great honour.
But it has to be said that large numbers of less desirable ‘isms’ have come and gone — Fascism and Communism among them: they will not be missed.
And if Socialism and European Federalism joined them soon I would be even more pleased. There is only one other ‘ism’ attached to a personal name for which I have much affection — Gaullism.
Though General de Gaulle and I would, I think, have had our differences he was a great man with large ideas, a leader and a patriot who revived his country's morale as well as defended her interests.
If I were to be remembered in the same way I would be pleased.
Yet, with all respect to the General, I would claim that ‘Thatcherism’ goes even further to the heart of what politics and economics are — or ought to be — about.
This is because I didn't invent it: I and my colleagues rediscovered it.
The values, ideas and beliefs which I was privileged to be able to put into effect in Britain in the eleven and a half years of my Prime Ministership were rooted in the experience of the past and reinforced by events in my lifetime.
My ideals, like those of most people, were first shaped by my family — a Christian family believing in the sanctity of the individual and that each of us is responsible and accountable for his own actions.
The only life worth living, we were taught, was a life of effort.
We were instilled with the belief that it was not right merely to protest about what was wrong but we must do something about it ourselves.
Old fashioned as it sounds in much of the West today, perhaps — though not I think here in South Korea — we had a sense of duty.
But my outlook was also shaped by my country itself and its history — above all its political history.
How could it not be?
For I was always fascinated by politics.
For me the name of Britain was synonymous with freedom, justice and democracy.
We were specially proud of our system of common law based on fairness and equity and developed through the ages by wise decisions by great judges who bowed to no-one.
And when I became a barrister I became even more convinced that liberty, prosperity, in fact all good things, were impossible without a rule of law.
The main reason for describing these matters to you is to show that I and most of my generation were equipped with a compass of values by which to steer our lives.
They were values which were generally accepted as right — morally right — by the great majority of our people.
Of course, there is always a risk of hypocrisy if you make no secret that principles guide your actions.
And none of us — not even saints — fully live up to principles.
But let me just say that the British culture in which I was raised avoided one thing worse, more corrosive and destructive than hypocrisy — it avoided cynicism.
And in politics cynicism — the feeling that nothing really matters — is the cause of most of what has ever gone wrong in Western politics: for when principles don't matter, human life itself is devalued.
It is one of the great paradoxes of history that Socialism, which has done so much harm — was born of a great humanitarian urge — the desire to give people dignity and security.
The trouble is that too much security removes a man's dignity by attenuating his freedom.
The possibilities for disintegration and decline when the State becomes more powerful and the individual less responsible are truly legion. And so it proved in Britain.
No-one could say we were not warned.
The great philosopher economist Friedrich Hayek had written of Socialism that it was “The Road to Serfdom” — the serfdom from which only a few decades before, the Russian people thought they had escaped.
Karl Popper wrote The Open Society conveying the message that while in the short run dictatorships could produce industrial goods more efficiently — they would soon fall behind the free enterprise world, because they suppressed the very freedom of speech and discussion which produced the innovations and technological breakthroughs that have prompted Western progress.
It was suggested that the collectivist approach was “inevitable” , forgetting that it denies the human spirit and substitutes “state” judgment for personal responsibility.
Perhaps the most significant political fact about Hayek's Road to Serfdom, which I have mentioned, was that it was dedicated to “the Socialists of all parties” .
It was a numerous group.
By the time the Conservatives left office in February 1974 it was clear that there was a lot which was fundamentally wrong in Britain.
The policies our party had followed had contributed to those problems rather than solved them.
We Conservatives had been guilty of upholding Socialist consensus politics when we should have been challenging it. That had retarded economic growth, undermined the management and competitiveness of industry and failed to bring out all that was best in the character of our people.
So later in 1974 Keith Joseph and I founded a new think tank called ‘The Centre for Policy Studies’ which started the testing process of re-thinking Conservative policy from the stance of the free market, limited government and the rule of law. And then in 1975 I became leader of my party.
The philosophy of Thatcherism, then, was born of all this personal and collective experience.
And it was almost as much a matter of the heart as of the intellect.
For we believed passionately that decline and surrender were just not good enough for Britain. We were confident that the values of the British people, their work ethic, their love of freedom and sense of natural justice could once more be harnessed to promote liberty and make Britain more prosperous and more influential.
By 1979 when we won the election, the new Conservative Government were ready with principles, policies and resolve to roll back the frontiers of Socialism and advance the frontiers of freedom, the first nation to attempt the task.
If we succeeded, others would follow.
We did succeed.
Others did follow.
And they are still following.
BRITAIN IN 1979
From 1979, Britain was to become the testing ground of a wholly different approach to Government and to the economy.
Of course, when people spoke about the “Thatcher experiment” they missed one very important point.
I am a trained research chemist. I know what experiments are. And I never confused my country with a bacterial culture.
The proof that the theory worked was, I knew, already to be found in the economic progress of the West — a progress which has now become even faster and more dramatic in your country and your neighbours'.
The secret of that success could be summed up in just one word — enterprise.
The states and empires of bygone eras did not lack natural resources.
They lacked the capacity to put them to good use.
So too, may I add, the successful economies of the world today are not only those distinguished by possession of great mineral wealth or by their favourable geographical location.
Russia is perhaps the most resource-rich state in the world: yet her economy produces only a poor standard of living.
By contrast, here in the Asian Pacific region small states with few resources are achieving rates of economic growth which no-one else can match.
But to turn back to Britain in the 1980s once more, in all this, we could rely on something still more important than the lessons of history.
We were able to take the British people along with us because of their character.
Throughout our history, we have been firmly opposed to any sort of tyranny.
Even those 17th Century governments whose incompetence and muddle more than matched their autocratic inclinations were promptly despatched by an enraged populace when they flouted the “laws of England” .
And Monarchs had to accept the supremacy of Parliament.
So it was that nearly three centuries later Socialism, which requires the state to assume far reaching powers at the expense of individual freedom, was always fundamentally inimical to the British character.
Our people would always in the end have found it out.
All they needed was a little help from us.
And we gave it, and won the 1979 election.
In Britain in the 1980s we put enterprise to work.
It was not easy.
And among other things it required becoming very unpopular with a lot of powerful interest groups.
I had to begin by giving that best and least popular monosyllabic reply ever invented, “no” .
“No” to printing money as a way of cushioning business from the impact of excessive wage awards.
“No” to demands to intervene to stop uncompetitive firms and factories closing.
“No” to calls for ever higher public spending and borrowing on any number of excellent causes.
We set limits to government — but we sought to ensure that government performed effectively those functions which are Government's alone.
PRINCIPLES, PRACTICE AND POLICIES
It is a well-known fact that restoring values or institutions which are weakened or entirely lost requires a very different approach from just conserving or strengthening them.
In a world, or a country, in which Socialism has not yet done its destructive worst you may be able to get away with mere pragmatism.
But when the storm has wreaked havoc, uprooting social structures and distorting economic impulses, a more fundamental reconstruction is called for.
That in turn requires the formulation, exposition and implementation of principles.
As a Conservative revolutionary, by temperament as much as by necessity, I relished doing this when weaker hearts did not.
The principles and policies were all part of a total — but anti-totalitarian — vision.
And that vision began with certain truths about the nature and aspiration of man and his relations with the world around him.
First, at the root of my beliefs is the conviction that liberty is a moral quality.
Each person has innate talents and abilities and is responsible for their use.
It is the task of the State, in so far as is possible in any given set of circumstances, to enable those talents and abilities to be fulfilled.
This makes as much sense for society as it does for the individual.
For that desire to do better for one's family is the great dynamo of progress.
Most people work, save, invest, invent, adapt and trade for this one reason, which goes to the root of their very being.
The fruits of liberty are so rich and varied, because liberty is creative.
And that in turn is why wealth is not generated by Government; it is as Adam Smith observed the enterprise of individual men and women which creates the “Wealth of Nations” .
Second there was my belief that since Government alone can ensure sound money, this it must do, while limiting expenditure and borrowing.
So we controlled public spending strictly, determined our priorities and got into the habit of saying no to requests for more money for particular programmes.
We also set out a Medium Term Financial Strategy to squeeze inflation out of the economy by controlling monetary growth, while steadily reducing government borrowing, so leaving room for investment in wealth creating industry.
But in the words of my friend and colleague, Keith Joseph, contained in a seminal pamphlet at that time, we believed that “monetarism is not enough” — though it was certainly a start. So on the basis of that third insight, we set ourselves to create a framework favourable to enterprise.
That meant cutting penal rates of income tax, cutting the tax on companies and abolishing some taxes altogether.
It meant ensuring the right legal framework for competition.
It meant slashing burdensome regulations and controls to encourage small businesses, the seedcorn of economic growth.
And, most controversially, it meant cutting back the trade union privileges, which had effectively placed union leaders above the law.
This had multiplied strikes and restrictive practises in our labour market.
Those in turn, had put up industrial costs and so increased unemployment.
So they had to be changed.
Fourth, I believed that private property should be spread as widely as possible, as a bulwark for the liberty and independence of the people and to enhance a sense of responsibility to future generations.
So we rolled back the frontiers of state ownership.
Our programme of privatisation helped treble the number of individual shareholders in Britain.
At the same time, by liberating badly run businesses starved of capital for investment, it transformed the prospects of crucial sectors of British industry.
Indeed, privatisation has become one of Britain's most successful exports.
Fifth there was the belief that freedom must not become anarchy.
Freedom is the creature of law or it is a wild beast.
We increased the police force, improved the administration of justice, increased sentences for violent crimes and revised our laws to maintain people's confidence in the criminal justice system.
Sixth there was the belief that peace is never guaranteed, that new tyrants will continue to arise and that they must never be appeased but always be defeated.
This led us to strengthen our conventional forces and update our nuclear defences and to give staunch backing to NATO.
We also supported the United States in its SDI programme, knowing that possession of the latest technology is in itself a deterrent to an aggressor.
We always recognised how vital US leadership is to the free world.
Seventh there was the belief that the Constitution of our country must be upheld.
The sovereignty of Britain has served us and the rest of Europe well.
Encroachments upon it must be resisted.
Its principles can apply to other countries as well.
It was, to quote Winston Churchill that, “people of any country have the right, and should have the power by constitutional action, by free unfettered elections, with secret ballot, to choose or change the character of the form of government under which they dwell; that freedom of speech and thought should reign; that courts of justice, independent of the executive, unbiassed by any party, should administer laws which have received the broad assent of large majorities or are consecrated by time or customs.”
“Here” — as Winston Churchill said — “are the title deeds of freedom” .
And it is still true.
The economic results of these policies took a little time to come through.
The severe international recession of 1979-80, the inherited weakness of the British economy, the continuing abuse of trade union power and the size of the US deficit — all these made things difficult.
But when we look back on the 1980s in Britain the message is clear and unmistakable.
The performance of the British economy was transformed.
Whereas Britain lagged behind other European Community countries in the 1960s and 1970s, in the 1980s our economy grew faster than all of them, except Spain.
Whereas most European economies in the 1980s grew more slowly than they had in the previous decade, the British economy grew faster.
Britian's record on investment was equally outstanding: in the 1980s British business investment grew faster than that in any other major industrial country, except Japan.
So our growth was soundly based.
No less important was the rapid increase in our productivity: the improvement in our manufacturing industry's productivity in the 1980s was greater than of any other major industrial economy.
And in spite of having to face down a year-long coal strike in 1984 the total number of strikes fell sharply.
Not surprisingly, there were large increases in the numbers of small businesses starting up.
Three and a quarter million jobs were created between March 1983 and March 1991 — a bigger increase than in any other European Community country. And living standards grew to record levels: not just for the rich or even the not so rich but for those on average earnings and indeed on half average earnings.
Of course, there was another side to the record: after bringing inflation right down, we allowed it to rise again.
This occurred partly because, like other countries, we kept interest rates down too low for too long so as to avoid the recession which we all thought would follow the 1987 Stock Market crash.
A further reason for our failure to keep control of inflation was that we shadowed the Deutschemark, pursuing exchange rate stability at the expense of monetary discipline.
When we abandoned that policy the damage to our inflation prospects had been done. Interest rates had to be raised in order to encourage saving and discourage borrowing.
And, particularly in its effects on home buyers with large mortgages and on small businesses, this policy was painful and unpopular.
However, real as the difficulties caused by our deep recession are — and they are increased by the valuation of Sterling within the ERM — the great gains which were made in the 1980s will not be lost.
Britain now has a soundly based free enterprise economy with lower overheads than many of our competitors.
Our industries have been restructured.
Compared with the socialist seventies, attitudes among managers and workers have been transformed.
Once interest rates are allowed to fall, Britain will again stand out as having one of the world's best climates for investment.
THE RESULTS: PRIVATISATION
I know that you are particularly interested in our experience of privatisation.
This too was an astonishing success — whose extent and pace astonished us almost as much as it did our critics.
In Britain we had learned from years of experience that the State is not good at running business.
The State's job is to provide a proper framework of laws within which private enterprise can flourish, not to extend its powers by owning business.
So we privatised a freight company, bus companies, Cable and Wireless and later British Telecommunications.
We privatised local government services like refuse collection.
We privatised technology companies, steel, shipbuilding and eventually gas and electricity.
When water was privatised some faint hearts said “look she's even privatising the rain which falls from the heavens” .
I had to retort that the rain may come from God but he didn't send the pipes, plumbing and the engineering with it!
Privatisation put a stop to the idea that inefficient management would always be subsidised by the taxpayers.
Once in the private sector business had to lower its costs to keep their customers. Henceforth shareholders provided the capital for investment that had hitherto been financed by the taxpayer. So the money raised by taxes was free to be spent on schools, roads and hospitals.
THE RESULTS: THE DEFEAT OF COMMUNISM
As in the economic sphere, the Defence policies of Britain in the 1980s provided an international example which others followed. In the Falklands war, we showed that aggression would not be allowed to succeed.
Dictators must be defeated. This sent a message across every continent.
But our main task was to back the courageous and inspiring leadership given by President Reagan, to whom freedom lovers everywhere owe so much.
If anyone can claim the credit for winning the Cold War, he can. And that victory has made possible the benefits — accompanied admittedly by problems — which we see in the former Communist world today.
And let me say at this point how conscious I am that the Cold War was not fought out in Europe alone but also in Africa and Asia.
In a sense it has been a bloodless victory, certainly an easier one than many of us feared.
But no-one who rejoices in the fall of that “Evil Empire” of captive nations — for so it was — can forget how much blood was spilt to contain Communism in Korea and Vietnam before its final defeat.
Nor should the world forget how the fiercely anti-Communist government of South Korea kept its nerve and its defences strong to ensure that it keeps its own way of life.
For years the West, having formed the most effective defensive military alliance in NATO, pursued a doctrine of containing Communism.
But for President Reagan and me this wasn't enough.
The defence of freedom and democracy required combat and victories on the battlefield of ideas.
We were both determined to make it clear to the Communists that they would never win by military might.
So both the United States and Great Britain increased expenditure on defence.
When President Reagan decided to embark on SDI — an excellent decision too little applauded at the time — the Soviets knew they could never compete.
Stationing the new Cruise missiles — naturally Britain was the first country to do so in November 1983 — underlined our resolve.
President Reagan and I got our message through to the Soviet people by every means possible. And we were of course helped by those brave citizens who, at great risk to themselves, got messages out to the West and information in.
The Sakharovs, Solzhenitsyn and the Bukovskys we know but there were many others besides.
Truth is what Communists have feared the most.
THE WORLD TODAY
As we look about us and the world which has emerged from the Cold War years of hostility and suspicion, there are two extremes to be avoided.
We must not assume that the fall of Communism from most — though not all — of the globe has changed the basic realities of economics and politics.
Yet neither must we be overwhelmed by the huge economic and environmental problems nor the political strains which characterise much of the post-Communist world.
The fact is that our principles of liberty prevailed because they were right and because we gave them the chance to prevail.
They will be a good guide to the future: for human nature — for better and worse — does not change, however much ideologies do so.
The principles of what I have defined as “Thatcherism” apply to both the economic and the security questions which we face today — precisely because they are in tune with both moral truth and human aspirations and because they reach out beyond ideology.
Let me take the economy first.
THE ECONOMY: FINANCIAL ORTHODOXY
As we all should have learned from expeirence, the one fundamental way in which we weaken the free market economy is by turning aside, for whatever reason, from basic financial and economic orthodoxy.
If governments fail to keep a close control on monetary growth;
if they allow public spending over a period of years to increase as a share of their national income;
if they continue to borrow to finance expenditure and so build up a huge burden of debt;
if they do these things, they cannot reasonably complain if the world economy weakens. And if by artificially controlling the exchange rates between countries you try to buck the market, you will soon find that the market bucks you — and hard.
We must never forget that truth which housewives have always known but economists are inclined to forget: the total saved equals the total available to be invested.
At a time when there are huge demands for capital to invest in rebuilding the former Communist countries, spendthrift policies in the West are worse than self-destructive — they are destroying the prospects of millions struggling to have a better life in freedom.
Today's international recession was not oil-price induced. Governments are again trying to do too much.
We need an international campaign to cut their involvement back.
Next, let me mention something which is very close to my heart: the pride we all feel in our own nations.
You will be especially conscious of this in South Korea, having recovered your independence in 1945.
As I have said, Britain fought the Falklands War in 1982 to uphold the rule of international law, to ensure that aggression did not pay, and to protect our own people from the dictator.
But our soldiers died and our people wept for them and worked to win because their loyalty to their country was, at such a time, a crucial element in their lives.
National pride in a free country is something good.
Without it people will not make sacrifices.
Without it the tyrant would prevail.
Of course there are good nationalisms and bad ones.
And nationalism is always bad when dictators manage to exploit it for their own ends.
But one of the main lessons of our times is that artificially created states — like Yugoslavia — or empires held together by Communism — like the former Soviet Union — fall apart sometimes violently.
And an attempt to create a European super-state out of the present nation states of the European Community would fuel nationalism and risk conflict.
True internationalism consists of co-operation between nations: the false internationalism, of which we see too many signs today, attempts to multiply international bureaucracies while paralysing international action. The basic reality of nationhood was always the foundation of my policies.
As long as human rights are upheld as they can and must be, nationhood remains the foundation of a just and stable international order — not a “new world order” but an “old” — and better — one.
Finally, we need to hold on to the same principles in dealing with the residue of Communism in its varied forms as we did in overcoming that system in its prime.
Both the long slow death of Communism, and the subsequent struggle which countries of the former Soviet bloc are having to build capitalist economies, prove the inexorable problems of a command economy.
Business should not be just one lever of power for the State; it should be the engine of economic growth.
This growth will be faster and better without the state usurping the role of the markets.
That is why removing communism is only the start. The mixed economy may seem benign, but it must be regarded as only a staging post to a proper free-enterprise economy.
And, of course, in the former Soviet Union there is worse.
In the absence of a Western system of justice, the strong prey on the weak who have as yet no satisfactory redress, and commercial contracts are difficult to enforce.
Free elections have not yet produced effective political parties to fight the old socialist system, so that it is difficult to pass a vital law through Parliament to sell land and give a valid title to enterprising purchasers.
These things should not surprise us — after so many years of tyranny, democracy is bound to be slow to take root.
For democracy is not just a system under which regular elections more or less freely conducted occur: it is a system which limits the powers and duties of government, freeing up most areas of life for people to take their own decisions.
And the habit of over-government — among governors and government alike — is insidiously difficult to break.
For the most part, Communism has been beaten in Eastern Europe and the former Soviet Union.
But all too often the Communists themselves are still there.
And in some cases they have been staging something of a revival in nationalist clothes. From the positions they retain in the bureaucracy, security apparatus and the armed forces, from their places in state-owned firms, they are able to do huge damage.
Moreover, the systems of proportional representation which so many of these countries have adopted have allowed these tactics to succeed all the more, leading to weak governments and a bewildering multiplicity of parties.
This risks bringing democracy into discredit which, of course, is what many of the crypto-Communists want.
Russia has had special problems in passing laws through its Parliaments about things we take for granted.
As far as land is concerned, there is no law which enables it to be sold with freehold title — only leasehold.
After great effort President Yeltsin has secured the passage of a privatisation law (excluding oil, water, gas, transport and telecommunications) which enables larger companies to be privatised through vouchers allocated to each person and smaller companies to be auctioned.
This will show more quickly than anything else the difference between the Communist State which denies all ownership to individuals and the democratic society which encourages it. This is a real dispersal of power.
It takes strong leaders to inspire the faith that all will ultimately be well.
They must do what weak rulers fear to do — demonstrate the failures of central planning and detailed control.
I remember well the day when one Russian ex-Communist musing aloud said to me “Perhaps it would have been better if like China we had started on economic liberty first.
The people would have seen the material benefits before political liberty followed” .
I could understand his thinking, though I disagreed with it.
I would never have people live a day more in the prison house which was communism, however economically disconcerting the first glimpse of freedom may be.
Though the Russian people have little experience of enterprise, the Chinese are born traders wherever in the world they go. South Korea, Taiwan, Hong Kong, Singapore, San Francisco, Kuala Lumpur, London — the story is the same.
It is in the character of the people and therefore will play a part in shaping the way of the future.
Encouraged by Deng Xiaoping, and investment from Hong Kong and South Korea, I have no doubt that the People's Republic of China will make rapid progress, and that later political liberty will follow.
I am as passionately committed to the human rights of people from this Continent as I am to those of my own.
Communism is wrong, wherever it is practised.
And in the end the people will defeat it.
I believe that this part of the world is now ripe for economic and political liberty in full measure and may indeed practise its virtues a good deal more effectively than the nations of Europe — where state control is creeping back again through the activities of the bureaucracy of the European Commission in Brussels.
And it is particularly disappointing for me to find that the same nations which sought to establish a common market and free trade by joining the European Economic Community are pursuing policies which are now holding up the completion of the GATT round.
This will only induce the formation of further trade blocs around the world.
Let's not forget that free trade is perhaps the single most effective form of international co-operation enabling people in five continents from large and small countries alike to participate freely in the manufacturing and distribution of goods world-wide. The freer the flows of international trade the less the reason for regional trade blocs and the greater the benefit to all countries in the world.
My final point today concerns defence.
I have already described how the West's defence build up of the 1980s allowed us to face down the Soviets and to pave the way for victory in the Cold War.
But the need for strong defence did not end with the crumbling of the Berlin Wall.
You in South Korea know how vital it is for a country to be prepared — and be known to be prepared — to invest sufficient resources in its defence if it is to retain its liberty.
Defence is the ultimate test of any government.
One lesson from this century's wars cannot be misunderstood: it is that credible deterrence works to keep the peace — and that it is weakness, not strength, which tempts the aggressor.
Liberal democracies are inclined to relax and cut back defence expenditure when yesterday's threat recedes, without paying due heed to tomorrow's.
And that particularly applies in times like ours.
It is right to reduce spending on defence, but only when that is prudent.
And I tell you frankly that I am concerned that we in the West may be cutting back defence too far.
Certainly, we must not let go of the nuclear deterrent which has kept our peace; and we must not let slip the lead in technology which allows us to deter conventional war and defeat aggressors.
That technological lead was vital in dealing with Saddam Hussein and it may be again.
It is also possible — in my view desirable — that it should be used to blunt the Serb attacks in Bosnia.
And the one thing to remember about defence technology is that the lead times are long: you cannot make up at the last moment for failing to keep up the research in previous years.
When we look back over the recorded history of the world we are inclined to be dazzled and appalled.
Dazzled by so much beauty; appalled by so much suffering. Countries and empires rise and disintegrate, re-form and are then turned (by some secret life-giving principle, for which the historian will seek in vain) into something new.
In the West we might place a higher importance on the contribution of particular individuals to the historical process: it has even been said by one of our historians that “the history of the world is but the biography of great men” .
In those days they didn't think about women.
In this part of the world I believe that your instincts would be to take a longer view in which it is the collective contribution of the passing generations which weighs more heavily.
But on this point we ought all to be able to agree — the importance of ideas.
Time and again, our own century has seen victory go, not so much to the most powerful or most wealthy player in the great political game, as to the side which believes in its cause and seeks converts to that belief. When the historians come to write the definitive history of Communism's fall, it will not be with the succession of Mr Gorbachev, nor with the drawing back of the Iron Curtain, nor with the break-up of the Soviet Union that the story's climax will be reached.
The crucial point will be seen to be that obscure moment — perhaps in the 1960s, perhaps earlier — when Soviet Communists turned from being zealous revolutionaries into corrupt and comfortable bureaucrats.
There is a lesson for us too in this: we shall only live in peace and freedom if we believe in our cause, nourish that belief in others — and defend it whenever it is challenged.
For the battle of ideas must be fought and refought every day. In South Korea you know this. So do I.
Let us remind the world of it.