The Free Market (and all that) did not bring down the Berlin Wall

There are certain narratives which are never questioned. One such narrative is rise of free market thinking in the last 30 years or so. Now, this itself was not new as before great depression we had similar thinking. But then you know our memories are short and most of us are ignorant of history.

After fall of Berlin Wall (stunning picture here) we are lectured through numerous articles and books that how that phase signalled the end of communism and rise of American brand of capitalism.In 25 years of celebrating Berlin Wall we continue to do the same. Some experts by force point whether certain leaders have learnt the free market lessons from the fall, least bothered whether  the leader knows anything about the event. They actually even add that yes these lessons have been learnt!

The reality seems to be lot different. This FP piece explains what really happened. What was just a mere effect is now touted as cause:

In her new book The Collapse, historian Mary Sarotte details the roles of ordinary individuals and the accidents that led to the fall of the Berlin Wall: Party leaders knew they had to draft new travel rules to defuse the crisis at home and deflect growing pressure from their comrades in Prague, Budapest, and Moscow. But they did not want to throw open the borders. They did not intend to allow East Germans to leave without seeking permission.

For the most part, journalists sat bored at the one-hour press conference. Schabowski gave rambling, convoluted answers to a variety of questions. As 7 p.m. approached, he was asked about the new travel rules. Shuffling his papers, he again spoke aimlessly, then said that “as far as I know … it will be possible for every citizen to emigrate.” Journalists fired questions at him, but he could not clarify the new regulations. Distracted by the commotion his words had just caused, eager to leave, and clearly ill-informed, he cryptically noted that the new rules would go into effect “right away” — even in Berlin. 

Television journalists instantly reported that the borders had been opened. East Berliners flocked to checkpoints along the wall that had divided their city since 1961. Facing chaos, the guards didn’t know what to do. Should they shoot? Should they try to explain that the travel restrictions had not, in fact, been relaxed?

The crowds kept growing. Fearing violence and not knowing what to do, the guards opened the gates. Joyous citizens sundered the Wall and then tore it down.

This weekend marks a quarter century since the Wall came down. Germans will commemorate it at the Brandenburg Gate with a celebratory speech from Chancellor Angela Merkel, a concert by Peter Gabriel, and a show of 8,000 glowing lanters. Governments around the world will issue statements of remembrance and homage. But what precisely should the world be celebrating? How should future generations think about this event? What lessons might be drawn? 

We Americans like to think that the dismantling of the Wall confirmed the redemptive role of United States, the correctness of containment, the efficacy of the arms buildup initiated by President Ronald Reagan, and the universal appeal of freedom. The Wall’s fall reified Americans’ exceptionalist view of themselves. This triumphalism was shared by a group as diverse as George H. W. Bush, the Clintons, Donald Rumsfeld and Dick Cheney, Paul Wolfowitz and Douglas Feith.

But the triumphalism wasn’t immediate. When President Bush first heard news of developments in Berlin, he was cautious. He welcomed the growing freedom of East Germans, but he was determined to avoid rhetoric that might precipitate a Soviet crackdown. “Some have wanted me to jump on top of the Berlin Wall,” he told journalists at the time. “Well, I never heard such a stupid idea.” The president remembered events in Budapest in 1956 and Prague in 1968, and could not ignore the recent violent crackdown by the Chinese communist regime at Tiananmen Square.

Infact this very belief in so called free markets turned things upside down in US:

Yet when Germany re-unified, the Cold War ended, and the Soviet Union dissolved, the president could not resist taking credit for events: “We brought about the fall of the Iron Curtain and the death of imperial communism,” he told supporters at a rally in Ohio in May 1992. A few months later, the Republican Party’s official electoral platform went further: “The fall of the Berlin Wall marks an epochal change in the way people live…. We Republicans saw clearly the dangers of collectivism, not only the military threat, but the deeper threat to the soul of people bound in dependence.” Appearing at the 1992 Republican convention for his last public speech before Alzheimer’s took its toll, Reagan assured his listeners that this was true: “We Americans should never forget that we were the moral force that defeated communism.”

Democrats, too, misread the fall of the Berlin Wall. They agreed that the collapse of communism in Eastern Europe and the Soviet Union discredited the role of government and demonstrated the superiority of free markets. They embraced open trade and globalization, the North American Free Trade Act and the World Trade Organization.

They repealed the Depression-era firewall between commercial and investment banking and failed to regulate the expanding sectors of the financial economy, like derivative trading and the securitization of mortgages. They forced other governments to deregulate financial controls as a condition for free trade pacts or for securing financial assistance during the Asian financial crisis. “The trend toward democracy and free markets throughout the world,” Bill Clinton said, “advances American interests.” The end of the Wall, the collapse of the Russian economy, and the dissolution of the Soviet Union finalized the embrace of neoliberal economic policies by both sides of American politics.

The real lessons are a lot different:

These extrapolations are not just misguided, they are wrong. With what we now know about the history of the Wall coming down — the contingency of the event and the agency of ordinary people — we should draw different lessons, ones that are not about the universal appeal of freedom or the munificence of free markets or the efficacy of strength, power, and containment.

We need, first, to acknowledge the role of the human rights revolution and the agency of non-governmental organizations (NGOs), like Helsinki Watch, the Workers Defense Committee (KOR) in Poland, and Charter 77 in Czechoslovakia, and many others. These groups, though diverse in ideology and tactics, all clamored for change, openness, free expression, individual opportunity, religious liberty, and human dignity. 

Historians are now coming to appreciate the energy and agency of these NGOs in the fall of communism. These groups championed the Helsinki Agreements of 1975, the accords signed by 35 European countries — communist, non-communist, and neutral, as well as the United States and Canada — that outlined the principles to guide East-West relations, including economic, scientific, cultural, and technological cooperation. They inscribed the obligation of all the signatories to respect fundamental rights such as freedom of thought, religion, and conscience. 

NGOs arose throughout Europe, east and west, to champion the right to travel, to promote cultural exchanges, to support family reunification, and, most of all, to hold governments accountable for imprisoning dissenters, discriminating against minorities, stifling civil society, thwarting the rights of workers to organize, or infringing on the freedom of religion or the press. These NGOs worked tirelessly to shame transgressors. They nurtured transnational contacts, and their mutual support sustained dissidents throughout Eastern Europe and the Soviet Union. As much as anything, this led to the downfall of the repressive communist regimes.       

When we think about the collapse of communism, we should emphasize and celebrate the attractiveness of a social market economy — not free enterprise. Indeed, it was the principles of the social market, regulated competition and a commitment to social equality and a safety net, that were incorporated into the law establishing the economic and monetary union of West and East Germany. In the ideological competition between free enterprise and communism, the social market won the Cold War. Notwithstanding the Reagan-Thatcher assault on government and regulation, social safety nets did not erode in the 1980s, not even in the United States and Great Britain. And throughout the European Union, social protection as a percentage of GDP actually reached its peak in 1993.

🙂

Wrong knowledge of history is hugely problematic:

Non-governmental institutions, monetary unions, and botched press conferences might not make for the dramatic, triumphalist narratives that make Americans feel good about themselves and their government. But we must reject simple explanations of events. A history that misconstrues what happened leads to ideological hubris and wrongheaded lessons for the future, from disastrous financial de-regulation to overconfidence in the capacity of American military power to transform other societies.   

But even as we acknowledge limits and complexity, we should be able to agree on the 25th anniversary of the dismantling of the Wall that there remains much to celebrate. In an editorial on Nov. 11, 1989, the New York Times put events in proper perspective: “Crowds of young Germans danced on top of the hated Berlin Wall Thursday night. They danced for joy; they danced for history. They danced because the tragic cycle of catastrophe that first convulsed Europe 75 years ago, embracing two world wars, a holocaust, and a cold war, seemed at long last to be nearing an end.”

We, too, can still rejoice, even as we know that turmoil, conflict, and suffering never really end.

But who cares really? I doubt whether this alternative will ever be told leave being entertained. The American version of history  will continue to rule. Do as they say..

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One Response to “The Free Market (and all that) did not bring down the Berlin Wall”

  1. Marcus Ampe Says:

    Reblogged this on Marcus Ampe's Space.

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