In 1992, I heard an unforgettable presentation at an Aspen retreat from Baron William Rees-Mogg, a distinguished British journalist and one-time editor of the Times of London. He recalled his own boyhood in the depression when the mass of Britons lived lives only marginally more secure and varied than the struggling polar bears. He estimated the ratio as 80/20 between those who worried and toiled for daily bread while accumulating no wealth and few dreams, and the privileged fifth in the middle class and above with the ability to move up the comfort ladder and provide more for their children. Amazingly, after sixty years, the Baron estimated that in the United Kingdom the ratio had flipped – with 80% now enjoying bourgeois pleasures and opportunities, and only 20% still desperate and destitute.

He argued that the business system of the west could lead the world to a similar transition, altering the mathematics in which the majority of human beings on the planet still battled for life’s basics in 1992.

Amazingly, the last decade and a half brought the realization of his vision, with the overwhelming majority of human-kind now beyond the reach of starvation and avoiding that ferocious, animalistic focus on the next meal. That progress came from capitalist economies, or from socialist nations borrowing and adapting the key capitalist tools.

The frustrations and suffering of the last few months must not bring about a total loss of perspective on our situation. The reverses associated with the financial crisis can’t overwhelm the obvious fact that we enjoy pleasures and privileges and choices all-but-unimaginable to our own grandparents. Capitalism made that possible, and the proposed dismantling of the business system would threaten to send untold millions back to the sustenance struggles of hungry bears and birds.

CHANCES FOR HOPE AND CHANGE

In the last analysis, the prevalent predictions about the free market’s destruction and the coming of a new socialist order amount to a simplistic, childish, ill-informed distortion with unlikely origins in the bad old days of the Cold War.

During the years of “long, twilight struggle” (in JFK’s haunting phrase) serious people divided the developed portions of the planet into “Iron Curtain” vs. “Free World,” communist dictatorships vs. lands of liberty, them vs. us. Some nations insisted on “non-aligned” status (like the maddening Indians with their pacifist and neutralist traditions) but even those bastions of indecision ran the horrible risk of “going communist.”

According to the understanding of the time, when any nation “went communist” and installed puppets of the Soviet Union to positions of real power, the alteration in status became permanent. The Communist agents or dupes might come to power through elections and the manipulation of Democratic institutions, but in many countries that meant “one man, one vote, one time” – with a quick brutal crackdown on all opposition and the rapid establishment of the mechanics of dictatorship.

Future U.N. Ambassador Jeane Kirkpatrick became famous through an article (“Dictatorships and Double Standards,” November, 1979) that talked about the long-term results of Communist takeover. In making the case for the uneasy U.S. alliance with various non-democratic regimes, she emphasized the distinction between “authoritarian” and “totalitarian” dictatorships. In authoritarian nations (like Batista’s Cuba) the government never took full control of all institutions and allowed rival sources of power, thereby admitting possibilities for change. In totalitarian regimes (like Castro’s Cuba) the ruling elite attempted to dominate all political, economic and cultural institutions, allowing no challenge to its all-inclusive power and providing virtually no chance for change.

According to the conventional wisdom of the time, no totalitarian regime had ever released its oppressed populace or evolved toward enlightenment; such nation-states could only be transformed (as with Nazi Germany and Imperial Japan) through the overwhelming application of military force. This meant that once a society “went communist” there was no chance to turn back, and you could count on that nation to work against American interests, follow the Soviet lead, and shun all ideals of liberty and decency.

Such thinking contributed powerfully to the decision to fight both the Korean and the Vietnam Wars, and also impacts the current debate about “our socialist future” and the demise of the free market system. For many worried conservatives, the possibility that the Obama administration will impose a vast expansion of the federal government amounts to the chance that America would “go socialist” – moving definitively and permanently from column A to column B. According to this argument, once the majority of voters grow accustomed to a cornucopia of governmental goodies, it will be impossible to break their addiction, and the irresponsible spending will bring about either the bankruptcy of the federal government or (far more likely) vastly increased and punishing taxes on society’s most productive citizens.

The problem with this line of reasoning is that there is no defined or obvious tipping point in which a nation moves clearly from the sunlight of liberty into the shadows of statist tyranny. There’s also little historical evidence that even the most radical sorts of bureaucratic expansion amount to irreversible change.

Consider the mother country, our friends across the pond in the British Isles. In the 34 years from the end of World War II until the arrival of Margaret Thatcher at 10 Downing Street, the officially socialist Labour Party controlled the government almost precisely half the time. They succeeded in instituting the National Health Service (socialized medicine) and vastly increased spending for public housing and other welfare programs. Did this mean that the United Kingdom had “gone socialist” and couldn’t return to a dynamic market economy?

Fortunately, Mrs. Thatcher didn’t believe in the inevitable loss of British initiative, and in 1979 she set about transforming her country for the better. She didn’t immediately re-establish capitalism any more than her Labour predecessors had firmly established socialism. She did, however, change a mixed economy in a free market direction, in much the same way that Barack Obama means to alter the American economy in a big government, “spread the wealth,” socialist agenda.

All western nations operate with mixed economies, and the mix is different from place to place and from time to time. Switzerland shares a border with Germany, but the two nations offer vastly different economic systems (so that any true lover of liberty will prefer Swiss chocolate to German beer). Ronald Reagan took over the White House directly from Jimmy Carter but he brought vastly different ideas to the table on how to run the nation’s bureaucracy and economy (Reagan believed the economy should, ultimately, run itself). Naturally, it makes a difference when a president attempts to lead the nation in a new direction, but the chief impact of his efforts will be to alter the balance (probably only slightly) between the private and public sectors.

The notion that Europe has become a socialist wasteland with no entrepreneurial energy and no possibility of redemption distorts the continent’s complicated realities. Russell Shorto, an American writer living in Amsterdam, provided a fascinating account of life in the supposedly “socialist” Netherlands for the New York Times Magazine. “It is and has long been a highly capitalistic country,” he writes. “The Dutch pioneered the multinational corporation and advanced the concept of shares of stock and last year the country was the third-largest investor in U.S. businesses—and yet it has what I had been led to believe was a vast, socialistic welfare state.”

Even the top Dutch tax rate of 52% misleads people about one of the Old World’s more prosperous enclaves. Noting that the top federal tax rate in the United States now stands at 35%, Shorto quotes Konstanze Woelfle, an American accountant working in Amsterdam. “People coming from the U.S. to the Netherlands focus on that difference, on that 52%,” she said. “But consider that the Dutch rate includes social security, which in the U.S. is an additional 6.2%. Then in the U.S. you have state and local taxes, and much higher real estate taxes. If you were to add all those up, you could get close to 52%”

And, of course, President Obama may well succeed in raising that figure beyond the Dutch level, but even if he does, the chances for future cuts and reforms remain vibrant. The top tax rate has fluctuated wildly over the years in response to both economic and political pressures --- from 73% under Woodrow Wilson to 24% under Calvin Coolidge, to 92% under Harry Truman, to 70% under John Kennedy, to 28% under Reagan, and then back to 39.6% under Bill Clinton. Though all Americans would benefit from more predictability, rationality and simplicity in the tax code, there’s no reason to assume that the forthcoming rate increases under Barack Obama will be any more permanent than previous alterations.

In any event, we can only damage our effectiveness by misrepresenting the nature of the battles that surely lie ahead. We are fighting against a bone-headed and unaffordable expansion of government by well-meaning but misguided bureaucrats, not the imposition of socialist tyranny by jack-booted thugs. We’re struggling to protect our free market system from damaging intrusion by Washington, D.C., not to defend it against definitive obliteration. If President Obama pushes the system the wrong way (and he will) then it is up to conservatives to push back, rather than wringing hands over the system’s total destruction.

In fighting for smaller government, we fight for more liberty--- not the survival of liberty itself. Yes, that struggle amounts to a “fine old conflict” (which we can ultimately win), but it is by no means The Final Conflict of communist fantasies and conservative nightmares.