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For a party that generally likes to bet on sure things, the Conservative Party has taken a gamble in electing Iain Duncan Smith. It gambled before on Margaret Thatcher, who was an outsider, and she gave the party a huge win. After all, the best part of 12 years in power and three election victories with powerful majorities are not to be sneered at.

Thatcher's successor, John Major, was a sure thing personified. Here was the man who could make up for all Thatcher's faults – or so her critics in the House of Commons believed; a man who could bring peace to a party on the brink of open hostilities. Of course, they were wrong. Major's stewardship of the party can only be considered an unmitigated disaster. This time, the favourite fell at the first fence. So, how will the party fare with Duncan Smith?

First, there can be little comparison between Duncan Smith and Thatcher, nor between their political, national or global challenges. Duncan Smith's party is in a far graver situation than ever before. The tension in the world today is equal to that before the two world wars, since a global conflict would be far more devastating than either.

So, let us consider the Conservative Party under Duncan Smith. Things do not look good. It is more divided than it has been since the Suez crisis nearly half a century ago. It is faced with a challenge from the ever-opportunistic Liberal Democrats, who, having failed to win a cabinet seat from Labour, are now seeking to share in the privileges of the opposition. (But the government is unlikely to open that Pandora's box, however attractive the opportunity of humiliating the Tories may seem.) "Our party," says Duncan Smith, "is not going to be endlessly talking about Europe now." He is right, of course. The best way to end an argument is to come down on one side or the other. His new shadow cabinet is overwhelmed by Eurosceptics, so there will be no argument there.

At least the key posts, such as party chairman, seem to be in good hands. David Davis' first job in that role is to reconstitute central office as a machine that can win an election. Talk of selling 32 Smith Square and finding premises more suitable to a modern political party seems highly sensible.

It is no surprise that there are none of the faces we love or hate from the past in this cabinet

Duncan Smith's success or failure will largely depend on Davis' cunning and wisdom. If the shadow chancellor, Michael Howard, is as right wing and unreasoning as he was when he was home secretary, he should give Gordon Brown a run for his money. As for the others, they all look young, amiable and able. After all, it is 26 years since Thatcher first led the Conservatives, so it is no surprise that none of the faces we love or hate from the past are in this shadow cabinet.

However, one face that is particularly welcome is that of Lord Cape, the opposition chief whip in the Lords and a man who will stiffen a deflected party in the midst of transition. In all, it is a shadow cabinet of Duncan Smith's colleagues – no ghosts from the past, no business tycoons for cosmetic purposes. It is an honest-to-God, right-wing Conservative shadow cabinet and I wish it well.

As for the world, the situation could not look gloomier. Stock markets falling, political confusion, war and peace hanging in the balance – we only need fire, flood and pestilence before such crises take on biblical proportions. For Duncan Smith, they present an opportunity. Anthony Steen MP's reproach that he has only ever been a soldier and an estate agent seems nothing short of a compliment. The one thing Britain needs as the world grows darker is a soldier, given the apparent lack of military expertise among the front benchers of the Labour government. As for being an estate agent, who better to discern whether a recession is approaching or retreating?