Keeping Faith with Our Common Values
The 2008 Irving Kristol Lecture

Introductory remarks by Christopher DeMuth and James Q. Wilson

On March 5, 2008, former Australian prime minister John Howard gave the Irving Kristol Lecture at AEI's Annual Dinner. What follows are his remarks as prepared.

Former Australian prime minister John Howard delivers the 2008 Irving Kristol Lecture.
Former Australian prime minister John Howard delivers the 2008 Irving Kristol Lecture.

I thank you for the honor you have given me in asking me to deliver the 2008 Irving Kristol Lecture.

The American Enterprise Institute, over the years, has consistently defended fundamental freedoms, both personal and economic. It has stoically resisted the insidious tide of political correctness in so many facets of our daily lives.

It has frequently displayed great policy courage--often facing a chorus of ridicule and dissent. This was recently the case regarding the surge in Iraq, a subject to which I will return later.

Most prominently, though, this Institute has always understood the relentless force of ideas and values in shaping societies.

Written in 1973, Irving Kristol's words have a timeless relevance to all of us who strive in different ways to build better societies and nations. He said then,

I know that it will be hard for some to believe that ideas can be so important. This underestimation of ideas is a peculiarly bourgeois fallacy, especially powerful in the most bourgeois of nations, our own United States. For two centuries, the very important people who managed the affairs of this society could not believe in the importance of ideas--until one day they were shocked to discover that their children, having been captured and shaped by certain ideas, were either rebelling against their authority or seceding from their society. The truth is that ideas are all-important. The massive and seemingly-solid institutions of any society--the economic institutions, the political institutions, the religious institutions--are always at the mercy of the ideas in the heads of the people who populate these institutions.

To achieve success governments need a guiding philosophy; not a zealous ideology which is insensitive to political compromise, but a directional touchstone which provides overall consistency through the years. In other words, ultimately they must be ruled by values and ideas and not only by an instinct for political survival--necessary though that is.

It is good to be back in Washington--a city which I visited many times as Prime Minister of Australia.

I was here on that fateful September morning in 2001 having, only the previous day, met the President for the very first time.

To experience the shock and disbelief of a free and generous people being subjected to an unprovoked and evil attack left me with a feeling which I have retained to this day.

The long friendship between Australia and the United States has grown deeper and stronger as we have responded to the threats of these past years. It is a powerful testament in the modern world that the values which unite nations create the most enduring bonds of all.

Australia has been beside the United States in every military conflict of consequence in which your country has been involved since our soldiers first fought together at the Battle of Hamel, in France, on 4 July, 1918.

Important though that history of military cooperation may be, important though our political, economic and cultural ties might be, they are dwarfed by the commonality of the values that we share.

They are the values of personal liberty and individual freedom, the belief that decency and hard work define a person's worth, not class or race or social background, and the confidence that all of the peoples of the world will embrace democracy if they are given the opportunity to enjoy its benefits.

To make that friendship even stronger was a cornerstone of the foreign policy my government pursued.

I speak to you tonight as an unapologetic and continuing advocate of the broad conservative cause, restlessly conscious, as you are, that the battle of ideas is never completely won and must always command both our attention and our energy.

The former Australian government, which I led, was accused of many things, but never of betraying its essentially center-right credo. We pursued a blend of economic liberalism--in the classical sense of that term connoting as it does a faith in market forces--and social conservatism. So far from being in conflict the one reinforced the other.

Economic reform and change--inherent in globalisation--can involve dislocation for communities and individuals. The anxiety this brings cries aloud for consistency and reassurance in other aspects of people's lives, the sense that not everything is changing.

From our election in 1996 we pursued reform and further modernisation of our economy. On the social front we emphasised our nation's traditional values, sought to resurrect greater pride in her history and became assertive about the intrinsic worth of our national identity. In the process we ended the seemingly endless seminar about that identity which had been in progress for some years.

When we left office in November last year Australia was a stronger, prouder and more prosperous nation than it had been twelve years earlier.

Of particular note, economically, were our major reforms to the taxation system, the complete elimination of net federal government debt, and changes to our labour market laws which produced a freer and less union dominated system.

These last mentioned reforms, strongly supported by small business, not only boosted productivity but even more importantly they helped reduce unemployment to 4.2 percent, a thirty-three year low, when the government left office, compared with 8.5 percent in March 1996.

They included the abolition of unfair dismissal sanctions on smaller firms, which had been discouraging those enterprises from taking on more staff.

The new government in Australia is pledged to reverse those labour market changes.

That will be a mistake. It will be the first time in twenty-five years that a major economic reform in Australia has been reversed. In particular, bringing back the old unfair dismissal laws will stifle employment growth amongst small businesses.

Tonight I wish to touch on some of the values and responses which, in the world we now inhabit are important for today's conservatives.

Whilst the intrinsic worth of values never changes, their relative importance and the tenacity with which they are applied by societies will always be determined by contemporary threats and challenges.

Today's world remains confronted by the ongoing threat of Islamic fascism, a new and quite unfamiliar assault on our values and way of life.

It relies on indiscriminate terror without regard to the identity or faith of its victims.

It also calculates that it is the nature of western societies to grow weary of long struggles and protracted debates. They produce, over time, a growing pressure for resolution or accommodation.

The particular challenge posed by extremist Islam means therefore that more than ever before continued cultural self-belief is critical to national strength.

Ronald Reagan and that other great warrior in our cause, Margaret Thatcher, taught us many things.

One of them was to remain culturally assertive, to understand always the importance of self belief in the psyche of a nation; to be willing to stand against the fashion of the time.

In his book The President, the Pope, and the Prime Minister, John O'Sullivan wrote of Ronald Reagan, Pope John Paul II, and Margaret Thatcher: "all three were handicapped by being too sharp, clear and definite in an age of increasingly fluid identities and sophisticated doubts. Put simply that Wojtyla was too Catholic, Thatcher too conservative and Reagan too American."

O'Sullivan was speaking of a time when the views of all three were still largely unheeded.

Instead of bending they remained resolute and, as we gratefully know, their subsequent leadership permanently changed the world for the better.

When Ronald Reagan said "Mr. Gorbachev, tear down this wall," the left-liberals shuffled their feet, but as we know, he meant it.

His historic achievement, through a massive build up in United States' military strength (especially his persistent promotion of the Strategic Defence Initiative), in forcing the Soviets to confront their own internal weakness, thus leading to the implosion of their empire, delivered the most profound political development in my lifetime.

It was his unapologetic American character that really won me. In my years in politics I have seen or heard a no more evocative political slogan than that of "Morning in America" in 1984.

In a brilliant phrase it encapsulated simple patriotism, a confident but not arrogant assertion of the great values of American life and importantly told the American people that their country had emerged from the long post-Vietnam self-flagellation.

When Ronald Reagan died, Colin Powell reminded us that in the early 1980s, military personnel often went to work in civilian clothes, such was the mindset of the time.

That was just one element of the cultural trepidation that President Reagan confronted and overcame.

In the protracted struggle against Islamic extremism there will be no stronger weapon than the maintenance by western liberal democracies of a steadfast belief in the continuing worth of our own national value systems. And where necessary a soaring optimism about the future of freedom and democracy.

We should not think that by trading away some of the values which have made us who we are will buy us either immunity from terrorists or respect from noisy minorities.

If the butter of common national values is spread too thinly it will disappear altogether.

We should not forget that it is the values of our societies that terrorists despise most. That is why we should never compromise on them.

It is not only their intrinsic worth that should be staunchly defended. It is also because radical Islam senses--correctly--that there is a soft underbelly of cultural self-doubt in certain Western societies.

There are too many in our midst who think, deep down, that it is really "our fault" and if only we entered into some kind of federal cultural compact, with our critics, the challenges would disappear.

Perhaps it was this sentiment which led the archbishop of Canterbury to make the extraordinary comment several weeks ago, that in Britain some accommodation with aspects of sharia law was inevitable.

It is fundamental to the continued unity and purpose of a democratic nation state that there not only be respect for the rule of law but the state have but one body of law, to which all are accountable, and from which all are entitled to an equal dispensation of justice.

Economically, the world faces both some new challenges as well as the possible reemergence of some old foes.

The economic difficulties which have quickly become apparent in recent months will provoke intense debate about the right responses.

Competitive capitalism within free markets remains the most effective economic paradigm, both domestically and internationally.

Economic policy makers, both here in the United States and elsewhere face not only the ripple consequences of the subprime episode, but also a possible reemergence of that 1970s disease--stagflation.

If Japan's experience in the 1990s is any guide it will take more than a monetary policy response to purge the sub prime problem from the financial system.

There will be consequences outside of the United States, especially amongst British and Euro area banks whose off-balance sheet exposure to the securitisation of sub-prime loans is extensive.

The impact in Asia, not least because of the growth of resource hungry China will be less, but certainly not negligible.

In Australia thus far the impact has been limited to corporations and institutions who had a sub-prime exposure and increases in market interest rates due to credit tightening.

In my country at present interest rates are heading in the opposite direction from that in the United States. Sixteen years of unbroken economic growth plus increases in food and fuel prices have put some upward pressure on inflation with implications for interest rates.

The surging Chinese economy, with its voracious demand for our energy resources to fuel China's industrial expansion has been of great direct benefit to Australia.

In a few short years our resource exports to that country have grown exponentially.

But leaving aside any particular impact on Australia, China's growth is not only good for China, it is also good for the whole world.

Millions of people in China and in other parts of the Asia-Pacific region have been lifted from poverty.

The obverse side of the Chinese coin is that her strength and expansion is the cause of some of the inflationary pressures now being experienced by Western nations.

The past year has seen sharp increases in the price of food and energy. This has lifted the inflation rate around the world.

China has contributed very directly to these developments. The rapid middle classing of both the Chinese and Indian economies has radically altered their eating patterns and resulted in a big increase in the consumption of higher protein food which in turn has pushed up food prices around the world. Severe drought, including in Australia, has aggravated the problems.

China's rapidly growing energy demands have increased the price of crude oil, another prime cause of higher inflation. Separately, the flight to ethanol as an allegedly environmentally friendly substitute for oil has also played a part in adding to the pressure on grain prices.

These are not criticisms of China, rather a simple recognition of some of the consequences of the historic economic transformation of that nation.

For almost a quarter of a century now, the western world has enjoyed low inflation. The result has been stronger growth, lower unemployment (except in those nations that still persist with absurdly regulated labour markets), and the liberation of hundreds of millions from poverty.

We should be concerned if the world were re-entering a period of higher inflation. Those with vivid memories of the 1970s will know just how debilitating that era was.

As has been the case in the past, it will be the cumulative effects of domestic policy action by various nations which will determine how effectively the world responds to these economic developments.

The right responses will be grounded in free-market orthodoxies.

We should avoid resort to re-regulation. We should preserve the independence of central banks. We should maintain open and free labour markets. We should continue cutting taxes where possible and we should seek to increase savings.

If individuals won't save, then governments must add to public savings by running budget surpluses or significantly reducing budget deficits.

Above all there must be no return to protectionism. Freer world markets, particularly, but not only, in agriculture are essential. For certain poorer nations the dismantling of trade barriers by developed nations will be far more helpful than foreign aid.

The Doha round is faltering. The views of Australia, from both sides of politics, on this issue are well known. We hold that further movement, especially from the European Union, but also from Japan and the United States is crucial.

A conservative edifice must always have at its centre the role of the family and what Americans call faith based organisations in maintaining and strengthening social infrastructure.

Despite the repeated attempts of some social engineers to suggest that traditional family arrangements are no longer needed and that they are in any event headed for extinction, the field evidence suggests that united, functioning families remain not only the best emotional nursery for children but also the most efficient social welfare system that mankind has ever devised.

Holding families together in preference to picking up the pieces when they fall apart must always be the major driver of social welfare policy.

It remains a reality in Western societies that two of the greatest contributors to poverty are joblessness and family breakdown.

We should maintain a cultural bias in favour of traditional families. That doesn't mean discriminating against single parents but it does mean ceaselessly propounding the advantages for a child of being raised by both a mother and father.

Marriage is a bedrock social institution--with an unmistakable meaning and resonance. It should be kept as such.

Taxation laws should promote, not penalize, marriage. The taxation system should generously recognise the cost of raising children. This is not middle class welfare. It is merely a taxation system which with some semblance of social vision. The tax payment system must also support choice for parents about who cares for their children.

When a parent elects to withdraw from the workforce, either wholly or partly, to care for a child that decision must be supported by the taxation system.

What we sought to do in government was to promote the choice principle when it came to the caring arrangements parents made for their children and the attendant career decisions involved for those parents.

In Australia, at any rate, the late eighties and nineties was the heyday of the more zealous feminist view of these matters. According to this view women who elected to stay at home full time when their children were young were regarded as inferior and in some cases traitors to their gender.

Maintaining a cultural bias in favour of families also means that governments should reinforce the role of parents in choosing what form of education their children receive.

Australia has largely succeeded in maintaining a good quality publicly funded education system.

Parallel with that there has always been a robust non-government school sector. In the last dozen or so years in Australia there has been strong growth in that area. Now some 33 per cent of Australian school children are educated at independent or non-government schools, the great bulk of which have a religious affiliation.

There is no constitutional barrier in Australia to governments giving direct help to schools with a religious affiliation provided there is no discrimination between religions. The bulk of the schools receiving this help are Christian denominated schools. Jewish and Muslim schools receive similar help. All of these schools must adhere to curricula laid down by state education authorities.

The major growth sector amongst independent schools has been in the low fee independent Christian category. This is a direct result of more liberal funding arrangements initiated by my government. It is hard not to see this growth as other than a collective search by parents for a more values-based education experience for their children.

Our funding policies have, in practice, produced the same outcome as education vouchers by significantly expanding the choices available to parents of relatively modest means.

The former government in Australia gave faith-based groups direct involvement in policy making and execution, adding to their traditional roles of relieving distress and providing spiritual support.

Let me illustrate. Until 1996 unemployed Australians seeking work registered with a government agency which kept a list of available jobs given to it by employers seeking workers.

This system had essentially been in operation in that form for decades. It always received very mixed reviews.

In our first budget we privatized the employment service, ending the government monopoly and replacing it with a job network open to private providers.

The new job network attracted participation from the employment arms of some of the largest religious-based charities in Australia such as the Salvation Army and Wesley Missions.

This quite radical policy change has been a success. The significant involvement of faith-based organisations has been a major feature. Private enterprise providers have also been successfully involved.

I am not aware of any system quite like it elsewhere in the world. I am sure that the new job network has played some part in reducing Australia's unemployment rate.

I mention this example of the successful (to date) involvement of church-based organisations in the coal-face delivery of social services. Such groups bring two priceless assets to the delivery of human services. The first is genuine compassion. The other is a hard-headed approach to money. Hardened by years of ceaseless fundraising, most religiously based charities or organisations spend their money far more carefully than do bureaucrats.

We know from the experience of recent years that threats to our way of life, from terrorism or elsewhere, can only be dealt with effectively by like minded, free societies acting together to confront those threats. That faith in multilateral institutions to deal with such threats is misplaced.

Much to the surprise of many experts--and to the chagrin of many who are critical of America and of the Bush administration in particular--the surge strategy in Iraq is beginning to bear fruit.

Security has improved, casualties are down, there are signs of a return to more normal life in Baghdad and the Iraqi political system has finally made a start in addressing some of the nation's fundamental challenges.

But perhaps the most convincing sign of all that some progress has been made is the significant decline in media coverage of Iraq--noticeable both in the United States and Australia. The dominant left-liberal elements in the media in both our countries apparently cannot bring themselves to acknowledge good news stories coming out of Baghdad.

This, of course, is a profound failing. Irrespective of one's views of the original decision to take military action against Saddam Hussein, a decision from which I have never resiled, no one should doubt what is at stake in Iraq.

There is a view in some quarters that Afghanistan is the "good" war and Iraq somehow a distraction from winning the war on terror. While it may be politically convenient, this view is profoundly naïve and dangerous.

You only have to look at al Qaeda's own words and actions to know that Iraq is every bit as much a major front in the war on terror as Afghanistan.

We simply cannot afford to lose in either. And--despite all the reverses--I remain convinced we will prevail in both.

A stable as well as democratic Iraq can still become a reality. And, for all the detractors and relentless pessimists, that could still help to transform the Middle East.

What is critical now is that the surge is given time to work.

I am very aware of the massive sacrifices being made by the United States and its families. I am acutely conscious of the pain and loss felt in many American homes.

I am disappointed that Australia's battle group will be withdrawing from southern Iraq in June as one of the new Labor government's election commitments--rather than making a greater contribution to training the Iraqis to maintain their own security.

The Iraqi people desperately need the time and space created by the surge to sustain the tentative political progress we are seeing.

It would be a tragedy if those gains were surrendered now by premature drawdowns.

For us as conservatives, Iraq reminds us that cultures and institutions are entrenched and that bringing fundamental reforms to societies is difficult and painful and is often attended by unintended consequences.

Iraq is being transformed. But this is a process that began rather than ended with the fall of Saddam Hussein. There will be further setbacks and wrong turns. Gradually, however, as the path becomes clearer, the Iraqi people will gain in self-confidence and lean less on the international community.

But now is not the time to abandon them. I am more convinced than ever that Australia and the United States, as countries that have enjoyed the blessings of democracy for longer than most others, have a special responsibility to help others along that difficult pathway.

In the Asia Pacific, many countries have already traveled that pathway. This is one of the reasons I am a convinced optimist about Australia's future in our region.

As Senator John McCain has pointed out, more people live under democratic rule in Asia than in any other region of the world.

This development is one of the most profound in the history of the world. It owes a great deal to the fifty year resilience of Indian democracy.

It also owes much to the innate thirst of people everywhere to live in freedom. But it would not have been possible without the far-sightedness of the U.S. policymakers who oversaw Japan's transition from militarist autocracy to democracy and economic powerhouse.

Nor could it have happened without the security umbrella the United States continues to provide and without U.S. trade and investment.

As a result, global power is shifting east--from the Atlantic Ocean to the Indian and Pacific Oceans.

The growth of China has cast a long shadow. That growth has been at the heart of a process which has seen the historic emergence of a huge Asian middle class.

According to World Bank estimates more than 500 million people in the Asian Pacific region will have been added to the world's middle class by the year 2030. The economic and political implications of this are immense.

Not least are they immense for China herself. The more China approaches the epicenter of globalisation, the greater will become the tension between that country's increasing economic liberalisation and her continued political authoritarianism.

Much of the Chinese leadership pretends that no such tension exists. Yet we know that the opposite is the case and that at some point China will face an accounting with ideology.

Australia has built a valuable and very pragmatic partnership with China. There are mutual benefits which we both recognise and enjoy. There are, however, no illusions on our part that we don't still deal with an authoritarian nation with scant regard for the democratic values of our societies.

In the twelve years that I dealt with the Chinese leadership that intense pragmatism was always there. Where a direct Chinese national interest was involved there was a single minded pursuit of the optimum outcome for China.

If no particular national interest was at stake pragmatic accommodation was the order of the day.

Shared values and a common commitment to democracy make for open societies, a precondition for genuine understanding and trust. They provide strong glue for enduring alliances.

For this reason I like to say of Japan that Australia has no better friend in the region. My government was committed to strengthening our strategic relationship with Japan. I can see no reason why, in time, we should not seek to formalize that partnership.

It is also why I am excited about India's growing role. It seems to me natural and obvious that Australia, the United States, Japan and the other powers in the region sharing their values should work together closely to tackle shared problems.

This should not be seen as a threat or a challenge to China.

Despite being divided by ideology, Australia and the United States, each in different ways, enjoy excellent relationships with China.

Indeed, I do not think the Bush administration gets enough credit for the effectiveness of its Asia policy, which has rested on simultaneously strengthening relations with its maritime democratic Asian allies, Southeast Asian nations and India at the same time as it has developed a much more robust and pragmatic relationship with China.

Some in Australia like to see our alliance with the United States and our relationship with China as a zero-sum game. Some would have us position ourselves equidistant between the two--or even, naively, seek to mediate between Washington and Beijing.

The reality, however, is that we can never have the sort of intimate strategic relationship with China that we have with the United States because of the very different nature of the Chinese political system.

What we can do is to continue to build on our common interests with China while making clear that we will not compromise our values or our core strategic interests. This was the bedrock of my government's approach to China, and I commend it to our successors.

Nowhere is the democratic transformation of Asia more striking than in Indonesia.

As the most heavily populated Islamic nation in the world, Indonesia's embrace, with comparatively little bloodshed, of democracy ten years ago was a remarkable event, which to this day has enjoyed far less acknowledgement than it manifestly deserved.

Not only was the military dictatorship of the former Suharto regime removed but the peaceful transfer of power between a number of Presidents thereafter and ultimately the election by popular vote of President Susilo Bambang Yudhoyono was a huge achievement.

So much depends upon the continued strength of democracy in Indonesia. If it persists, that will frustrate the cause of radical extremist Islamic organizations who have a clear vested interest in the failure of democracy.

President Yudhoyono, a leader of great moderation and integrity, is crucial to perceptions within the Islamic world. If this pro-Western, democratic leader succeeds, that is a huge setback for extremists. If he doesn't, then the extremist cause will have been mightily advanced.

The reality that threats to our way of life can only be dealt with effectively by like-minded free societies acting together to confront them carries a warning for America's critics in the West. They should be careful of what they wish for.

They may not see the preservation of American power and prestige as a desirable end in itself but they should remember that we still live in a world of nation-states.

The past decade has seen clear examples of the incapacity of multilateral organizations to deal effectively with major security challenges.

Whether you call it collective action or a coalition of the willing or simply the determination of like minded allies to act in common to achieve a specific purpose, we still live in a world where real results can only be achieved by countries who share common values being determined to act in pursuit of those values.

As the most powerful force for good in the world community, the United States remains the ultimate guarantor of the way of life that most of us in the West wish to continue to enjoy.

Those who hold to conservative values continue to face a major ideological battle.

The left-liberal grip on educational institutions and large, though not all, sections of the media remains intense.

Global warming has become a new battleground. The same intellectual bullying and moralising, used in other debates, now dominates what passes for serious dialogue on this issue.

That having been said, the past twenty-five years have seen striking conservative gains. It was Ronald Reagan's strength and determination, nourished by his positive and optimistic view of freedom and American life, that brought down the evil empire.

The left-liberal view then was one of great power accommodation, tinged on occasions with moral equivalence.

Margaret Thatcher's transformation of Britain was, ironically enough, to be vindicated by Tony Blair's embrace of her changes to Britain's labor laws.

He confronted his nation's unions and his own party with the news that those changes had to stay. Britain then learnt that the old "beer and sandwiches at No. 10" approach to resolving industrial disputes, when union leaders and government ministers met to decide how many more hundreds of millions of pounds of taxpayers' money would be poured into the latest failing nationalized industry, had gone forever.

On a smaller scale, in my own country, a number of the more conservative social policies of my government have been endorsed by the new Australian government. The sincerity of its conversion will be tested by experience of office.

But our strongest grounds for optimism lie in something that Peggy Noonan drew attention to in her tribute to William Buckley in last Friday's Wall Street Journal.

She reminded us that the conservative values we hold to are grounded in the unshakeable realities of life--governments serve people, not the reverse, that freedom is good and must be defended against all assaults, whether from those of communism in earlier years or Islamic fascism today and that strong competitive markets produce the best economic results.

John Howard is the recipient of AEI's Irving Kristol Award for 2008.

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