9 November 2019

Thirty years after the fall of the Berlin Wall, it’s time for a rethink

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With the support of the Atlas Network, CapX is publishing a new series of essays on the theme of Illiberalism in Europe, looking at the different threats to liberal economies and societies across the continent, from populism to protectionism and corruption.

Thirty years ago, on November 9, 1989, the Berlin Wall fell. The Soviet Empire had been on the wane for many years by that point. In Russia, Mikhail Gorbachev instituted first (quasi-)liberalisation efforts through the twin concepts of glasnost and perestroika. In Poland, Karol Wojtyla, elected as Pope John Paul II in 1978, initiated a “revolution of conscience”, a mantle taken up by the Solidarnosc movement. When Ronald Reagan enjoined Gorbachev to “tear down this wall”, it was as much a command as a statement of the inevitable.

Even decades from the collapse of the USSR, what happened behind the Iron Curtain still has the power to shock. A rough estimate is that Communism led to about one hundred million deaths in the twentieth century, the bulk of which were in Maoist China and the Soviet Union. Of course, the mass murder had begun decades before the Berlin Wall itself was built in 1961. The Holodomor, Stalin’s deliberate starving of the Ukrainian peasantry in the 1930s, is estimated to have to led to as many as 4 million deaths. Then there are the many millions who died in the Gulags, the horrors of which were so courageously described by Aleksandr Solzhenitsyn.

But the death toll alone does not capture the full depravity of the Soviet system. As well as abject poverty and constant food shortages, essential freedoms, such as choice of employment, freedom of speech, faith and movement were heavily constrained, if not non-existent. Pope John Paul II put it aptly when he hoped for a Europe in which both lungs could finally breath again. But the Wall prevented that, separating the continent, and damning one lung to despotism.

The atmosphere after the Wall’s fall was naturally euphoric. Families and friends, separated for decades, finally came together again. But even more so, a much grander family – Europe and Western Civilization at large – was re-united. Socialism in Europe had been emphatically defeated – or so it appeared at the time Francis Fukuyama’s often misunderstood claim that this was the “end of history” became a leitmotif for the last decade of the century. The world was ready for an age where liberal democracy would become the norm and freedom had conquered totalitarianism.

What followed in the 1990s and early 2000s seemed to justify that rush of enthusiasm. Many Eastern European countries instituted reforms embraced liberal democracy and market economics. The newly liberated people east of the fallen Iron Curtain enjoyed their new freedoms – and the fruits of spectacular economic growth. Poland, the Czech Republic, Hungary and others quickly became poster boys of liberalism. With a fully liberal, capitalist Europe in sight, some even turned their eyes to new regions in the world to “spread liberalism” there as well. Indeed, even Communist China seemed to be becoming ever more open. Pundits talked airily of a new Chinese middle class that would surely demand democratic reforms in the near future.

In many regards, everything changed with the Great Financial Crisis of 2008. The age of endless economic prosperity seemed over, as many claimed the market had failed (though it central banks and government interventionism certainly bear a huge share of the responsibility). Since then there have been a litany of crises: the Euro crisis, the near collapse of the Greek economy, mass unemployment in Southern Europe and a surge of refugees entering the content from Africa and the Middle East.

Today, the euphoria of 1989 seems the most distant of memories. Governments in Hungary, Poland, Romania and other Eastern European countries have relentlessly attacked and subverted the rule of law, freedom of the press, free speech, freedom of association, and many other foundational liberal principles – that’s to say nothing of the steady slide toward authoritarianism in Russia and, more recently, Turkey.

Indeed, in countries like Poland a clear disillusionment with the liberal project seems to have taken hold. As recently as October 13, the Polish people handed the illiberal Law & Justice Party an absolute majority. One should also not forget the same phenomenon in Eastern Germany, now long unified with the West and yet still clamouring for a rose-tinted version of the socialist past most were so glad to escape on November 9, 1989.

It’s not just Eastern Europe where there is cause for concern. Free-market capitalism and certain purportedly liberal principles have experienced a significant drop in popularity in the West too. Since Trump’s election what now passes for the American right has embraced the economic illiteracy of protectionism. The UK’s decision to leave the EU is more nuanced – though the liberal vision of a free-trading “Global Britain” certainly was an important to some Eurosceptics, a significant amount of Brexiteers also voted against openness, especially in the form of free movement, and are not particularly keen on free trade. In France and Germany, “populist” parties skeptical of liberalism have made inroads, while in Italy they even succeeded in forming a government, at least for a while.

And lest we forget, socialism is hardly gone. In both the US and the UK, far-left voices have captured the previously mainstream Democratic and Labour parties. Even worse, the world might be watching a successor of the Soviets arise in the far East. China has been steadily desceding into a police state reminiscent of Orwell’s nightmareish 1984, with millions locked up in so-called ‘re-education’ camps. That’s to say nothing of the clampdown on protests in Hong Kong.

Thirty years after the fall of the Iron Curtain, the decisive question is why so many people, especially in the supposedly liberal and capitalist West, seem to have turned against liberalism and the market? Why are they so disillusioned? Why are people all around Europe and North America voting for illiberal parties of all stripes? And why, in the case of countries such as Hungary and Poland, are they returning to power politicians who have launched a systematic assault on the institutions of a free society?

It ought not to be a question of prosperity. Since the demise of communism Eastern Europe has for the most part seen massive economic growth – and continues to. Granted, the last decade in both the U.S. and Western Europe has seen wages stagnated – or at least risen far less quickly than previously, particularly for those lower down the income ladder. But the main headline remains: people are massively better off both under liberal capitalism than they were under communism.

So why do many people seemingly want to get rid of the very system that has benefited them so immensely?

Stephen Davies of the Institute of Economic Affairs puts it down to a “Great Realignment” in Western societies, where people now care more about cultural and social topics than economic ones.  They care about the cultural effects of globalisation and have little time for the idea of a “Global Citizenry”, but care deeply about their own neighbourhood. They care about the destruction of communities and families, about how many of them are being left behind – effects that are due in part to government interventionism, but certainly also to the disruptive effects of globalisation. As countless reports show, an unusually large number of people today feel both isolated and alienated.

And so far many of the answers to these problems have been found wanting. Liberals, i.e. those who by and large believe in the market economy, free trade, free immigration and an open, globalised world, have perhaps not been sufficiently concerned about these social issues.

There are times when ignorance has drifted into callousness towards those for whom the promise of liberalism has been a disappointment. To the blase liberal, there is little need to listen to the “deplorables” of America’s flyover country, or Poles and Hungarians for whom the changes of the last few decades have been a mixed blessing. People in rural areas without a job or a healthy community are blithely told to abandon their homes and move to a city.

Rather than facing these issues head-on, too many supporters of the liberal order have decided to double down, hammering home how this is clearly the best time ever to be alive – a recycled variation of Whig history that must sound ridiculous to people whose lives no longer seem particularly rich or fulfilling.

Today, we need answers to a whole new set of questions. For instance: How can we, in a globalised world, solve the innate human need for rootedness and belonging, the need to find a place that we can genuinely call “home?” How can liberalism solve problems of loneliness, drug and suicide epidemics? How can local communities, families, and intermediary institutions be revitalised? How can we prevent a societal split between urban and rural populations, between the “somewheres” and “anywheres?”

And let’s be clear – it is not that liberalism has no answers to these crises. Rather the problem has been that liberals have not busied themselves sufficiently with them, putting too much stock in the idea that the world is inexorably getting better, when for many that is simply not the case.

This is an important year to commemorate the end of the Soviet Union and the freedoms that it gave millions of people. It is an important year to remind us of the immense advantages that economic liberalism has brought about – and can continue to bring us if we hold on to principles of free trade, individual liberty, and decentralised communities. And yet, it is important not to let liberalism assume some of the worst faults of socialism: an ideology that cares more about its own precepts than flesh-and-blood human beings.

My proposition for the anniversary is this: let the 30th year after the fall of the Berlin Wall also be the year in which we move on and propose free-market, liberal, communitarian solutions to today’s challenges, not to those that existed thirty years ago. Let’s make the moral, ethical, and cultural case for a free world. A liberalism which refuses to do so will eventually fall into irrelevance. Otherwise, in the worst case scenario, the strong gods of authoritarianism could return – and all because we didn’t listen.

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Kai Weiss is a Research Fellow at the Austrian Economics Center and a board member of the Friedrich A. von Hayek Institute.