The lessons of 1989 have still not been learnt
The air is filled with noisy outrage about the moral emergency of the day. We are, according to the leaders of every major political party, in the midst of a crisis of capitalism. However bountiful the free market system may have been at its best, it is now in such deep disrepute that any politician who wishes to remain credible must join in the general vilification.
Even in this storm of condemnation, everyone has to admit that there is actually no alternative to free market economics or to the private banking system. So the competition is strictly between adjectives: “responsible” or sometimes “socially responsible” banking are great favourites, but now Ed Miliband has produced something called a “national banking system”, which is presumably not to be confused with a nationalised banking system. The Miliband neologism is intended to suggest banking that takes the concerns of the nation (or the population?) as its own. Whether he sees this role as voluntary or enforced was unclear from his speech last week.
But in spite of the official agreement that there is no other way to organise the economic life of a free society than the present one (with a few tweaks), there are an awful lot of people implicitly behaving as if there were. Several political armies seem to be running on the assumption that there is still a viable contest between capitalism and Something Else.
If this were just the hard Left within a few trade unions and a fringe collection of Socialist Workers Party headbangers, it would not much matter. But the truth is that a good proportion of the population harbours a vague notion that there exists a whole other way of doing things that is inherently more benign and “fair” – in which nobody is hurt or disadvantaged – available for the choosing, if only politicians had the will or the generosity to embrace it.
Why do they believe this? Because the lesson that should have been absorbed at the tumultuous end of the last century never found its way into popular thinking – or even into the canon of educated political debate.
Can I suggest that you try the following experiment? Gather up a group of bright, reasonably welleducated 18-year-olds and ask them what world event occurred in 1945. They will, almost certainly, be able to give you an informed account of how the Second World War ended, and at least a generally accurate picture of its aftermath. Now try asking them what historical milestone came to pass in 1989. I am willing to bet that this question will produce mute, blank looks.
The fall of the Berlin Wall and the collapse of communism that followed it are hugely important to any proper understanding of the present world and of the contemporary political economy. Why is it that they have failed to be addressed with anything like their appropriate awesome significance, let alone found their place in the sixth-form curriculum?
The failure of communism should have been, after all, not just a turning point in geopolitical power – the ending of the Cold War and the breakup of the Warsaw Pact – but in modern thinking about the state and its relationship to the economy, about collectivism vs individualism, and about public vs private power. Where was the discussion, the trenchant analysis, or the fundamental debate about how and why the collectivist solutions failed, which should have been so pervasive that it would have percolated down from the educated classes to the bright 18-year-olds? Fascism is so thoroughly (and, of course, rightly) repudiated that even the use of the word as a casual slur is considered slanderous, while communism, which enslaved more people for longer (and also committed mass murder), is regarded with almost sentimental condescension.
Is this because it was originally thought to be idealistic and wellintentioned? If so, then that in itself is a reason for examining its failure very closely. We need to know why a system that began with the desire to free people from their chains ended by imprisoning them behind a wall. Certainly we have had some great works of investigation into the Soviet gulags and the practices of the East German Stasi, but judging by our present political discourse, I think it is safe to say that the basic fallacies of the state socialist system have not really permeated through to public consciousness.
It would, if one were so inclined, be fairly easy to assume that the grotesque activities of the Stasi, or the Soviet labour camps, were aberrations or betrayals of the true communist philosophy – and a great many people (even within the mainstream Labour Party) did believe precisely that for decades. When the entire edifice simply dissolved with an almost bloodless whimper and its masses were free to tell their stories of what life had actually been like under the great alternative to capitalism, that was the end of self-delusion – and it should have been the beginning of the serious discussion.
But in our everyday politics, we still seem to be unable to make up our minds about the moral superiority of the free market. We are still ambivalent about the value of competition, which remains a dirty
word when applied, for example, to health care. We continue to long for some utopian formula that will rule out the possibility of inequalities of wealth, or even of social advantages such as intelligence and personal confidence.
The idea that no system – not even a totalitarian one – could ensure such a total eradication of “unfairness” without eliminating the distinguishing traits of individual human beings was one of the lessons learnt by the Soviet experiment. The attempt to abolish unfairness based on class was replaced by corruption and a new hierarchy based on party status.
If the European intellectual elite had not been so compromised by its own broad acceptance of collectivist beliefs, maybe we would have had a genuine, far-reaching reappraisal of the entire ideological framework. And that might have led to a more honest political dialogue in which everybody might now be talking sensibly about capitalism and how it needs to be managed. It is people – not markets – that are moral or immoral.
Communism’s fatal error was in thinking that morality resided in the mechanisms of an economic system rather than in the people who operated them. There is no way of avoiding the need for individual responsibility, which lies with citizens, not governments – or with bankers as people, not with the “banking system”. Some political leader (David Cameron?) needs to have the nerve to say this or we shall be talking nonsense forever.