Ronald Reagan's death gives us cause to reflect. The abiding question in the Reagan story is whether Reaganism, and especially Reagan's economic principles, can survive the man. The answer is Yes - but only if those who value Reaganomics keep in mind its tenets, and consider where they have veered from them and where they have stayed true.

Reagan's economic goal was clear: maximise growth. To do that you had to focus on economic policy persistently; you could not waste much time on, say, responding to the partisan assaults of your opponent. You stuck to your course, though results might come after your own career ended.

Reagan showed he was serious early on, in his bold 1981 confrontation with Patco, the union of the air traffic controllers, who were government employees. The controllers were under oath not to strike; still they struck. They believed firing them would be unthinkable - who but they could ensure the safety of the skies? Still, Reagan did fire them. He deprived more than 11,000 people of a trade, but he also drove home a point: the national well-being, and the economy, mattered more than any vested interest.

Reagan next shifted the economic focus. From the second world war on, most university economics departments and western governments, including the US government, followed the theories of either John Maynard Keynes or monetarists. They worked in terms of macro policy and aggregates: things were managed from the top down, whether it was money supply, employment, a federal deficit or, most crucial to Keynesians, domestic demand.

Reagan was old enough to have learnt economics before "top down" became the rule. He and his advisers worked in the tradition of Jean-Baptiste Say, the French economist of the late 18th and early 19th century, who highlighted the individual and the entrepreneur. This was the famous "supply side" economics. Reagan did not care so much when deficits grew. He was even willing to allow government to grow if he could help entrepreneurs, for he believed that an economy where entrepreneurs thrived would eventually outgrow the federal government. Margaret Thatcher never liked the phrase "supply side", and told Americans so when given half a chance. But she was like Reagan in that both looked at life through the panes of a shopkeeper's window.

The greatest expression of Reagan's philosophy was his tax policy. Reagan rejected the redistribution inherent in a progressive tax system. He sought to push the country towards a low, flat rate. Also important was to stop changing the tax code: the voter needed a tax policy that was "efficient, dependable, with no abrupt changes", as Reagan's campaign staff wrote in a 1979 memo. In 1986 Reagan joined with Democrats to pass a reform with a historically low top rate of 28 per cent.

Foreign policy had different precepts, yet in an odd way it was related to Reaganomics. Reagan did not believe the US would conquer the Soviet Union in war. Rather, as he put it in 1981, "it will transcend it". Rather than vanquishing your enemy you outlasted him, both by staying strong and by growing. Many Americans believed the Soviet Union would be there forever. Reagan believed things would change, but only if the US stayed powerful and persistently went "to the mat", to use an expression from wrestling - by which he meant engaging, rather than shying away.

Yet after Reagan Republicans moved away from these tenets. Their first mis-step involved taxes. President George H.W. Bush knocked down the tax structure it had taken Reagan five years to put in place by raising rates in the early 1990s. The Bush tax increase told voters that the goal of being dependable was lost and that taxes were again just a tool in the macroeconomic game. It also told them that Mr Bush, a good man and a master of foreign policy, did not understand economic growth in the visceral fashion that Reagan did.

In the presidential election of 1992 Ross Perot represented pre-Reagan protectionist Republicanism, while Mr Bush represented Reaganism without really believing in it. Small wonder Mr Clinton won.

Yet another mis-step was the Republican assault on the presidency and on Mr Clinton himself. Reagan knew that one of the tricks of getting back into office was to act as though you deserved that office. In the 1990s his own party forgot this and began, in schoolboy fashion, to assail both Clinton the man and the institution of the executive. The party's advocacy of special investigations and independent counsels in the 1990s made its members look like hypocrites, for they had opposed these same devices when their party held the Oval Office. Worst of all, six years of fights about scandal meant six years of neglected policy. Republicans largely forewent the chance to review foreign policy (including the threat from al-Qaeda) or lay plans to privatise Social Security - a project of the sort Reagan might have tackled. All this, for a revenge Reagan himself would never have sought.

George W. Bush's presidency is a recognition of these transgressions. Mr Bush is a Reaganite. He sticks to policy. He has cut taxes three times, and has been rewarded for it with the current strong growth. The Reagan legacy is also clear on the foreign policy front. Mr Bush also focuses on outlasting the enemy. After all, though Mr Bush's decisions in Iraq may displease or outrage, no one can deny they represent a willingness to "go to the mat". Reagan would have approved.

© Copyright 2004 Financial Times