When Ronald Reagan famously challenged Mikhail Gorbachev, in June 1987 at Berlin, to “tear this wall down”, just about nobody could have guessed that the wall that separated two armies, two cultures and, more tragically, one people would indeed be brought down very soon, on 9 November 1989.
The world changed irrevocably since the fall of the Berlin Wall that day. Communism collapsed, the Soviet empire imploded and what Friedrich von Hayek so aptly called the fatal conceit was in retreat.
The first response was premature American triumphalism that was most famously expressed in hopes about the end of history: “The end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government,” as Francis Fukuyama predicted in a 1989 essay. That was a little more than a decade before Islamic terrorists with contempt for Western liberal democracy attacked the heart of America on 11 September 2001. A bewildered US could only ask: Why do they hate us?
The more lasting impact of the fall of communism was perhaps not ideological, but economic. East Europe’s velvet revolutions were followed by a wave of economic reforms in countries that till then trusted governments more than markets to deliver prosperity.
Market reforms in countries such as India and China helped lift hundreds of millions out of poverty. Equally significantly, the entry of two billion Indians, Chinese and Russians into the global market pushed down the cost of goods and labour around the world. This was as much a factor in what has come to be known as the great moderation—a golden age of robust growth and low inflation—as were the policies of central banks.
Communism was the Great Idea that was eventually exposed as the Great Lie, which meant a tired contract between a deceitful elite and a cynical populace. It was good that this deal fell apart without bloodshed and war, though it left behind a legacy of economic ruin, environmental stress and human pain, not to mention the millions left dead in the Gulag and concentration camps.
What is the significance of the Berlin Wall, 20 years after it collapsed? Tell us at email@example.com