Thursday, 6 November 2014

Goodbye to Berlin

Original photo published under this Creative Commons license by Morriswa.
As I was leaving Berlin less than a week before the 25th anniversary of the fall of the Wall, and as celebrations there were going strong, I decided to look at the balance sheet of transition countries (even if the term is no longer fully adequate) over the past quarter century...
...So, what is the balance-sheet of transition? Only three or at most five or six countries could be said to be on the road to becoming a part of the rich and (relatively) stable capitalist world. Many are falling behind, and some are so far behind that they cannot aspire to go back to the point where they were when the Wall fell for several decades. Despite philosophers of “universal harmonies” such as Francis Fukuyama, Timothy Garton Ash, Vaclav Havel, Bernard Henry Lévy, and scores of international “economic advisors” to Boris Yeltsin, who all phantasized about democracy and prosperity, neither really arrived for most people in eastern Europe and the former Soviet Union. The Wall fell only for some.
From Branko Milanovic's analysis of what happened to the former Eastern Bloc in the quarter century after the Wall fell.

If true, this comes as a bit of a shock* to me, as I'd assumed that a good proportion of former Eastern Bloc countries had enjoyed rising prosperity (with a side-order of rising inequality) since the Wall came down. I was brought up with the idea that the people behind the Iron Curtain were almost as keen to escape from shortages of food and consumer goods, along with multi-year-waits for terrible cars and general economic stagnation as they were from the authoritarian control symbolised by the Wall itself.

If Milanovic is right and few of the transition countries are succeeding, while many are failing, or struggling to improve much on a system with such obvious, systemic failings, why has nobody noticed (except, perhaps, when it comes to the dying Russians)?

Are the shiny shop-fronts of the Western store chains and the roads full of Fords and VWs where there were once just a few tired Trabants and Moscovitchs, just a new facade on a structurally unsound building? Were we dazzled by the atypical example of Germany itself - that '1.5 to 2 trillion euros'** thrown at re-unification must have gone a long way to make the former DDR look good, even though unemployment remains nearly double that of the west and economists think it will still take years for the Ossis to catch up with the Wessis?

I don't know, but perhaps a few unquestioned assumptions need re-visiting.

The only bit that wouldn't surprise me is that, if he's right, Milanovic just banged the final nail into the coffin of  Fukuyama's "end of history" shtick - that whole dodgy big concept always sounded equivocal enough to "work" in the same way as those astrological personality summaries and predictions that sound spookily accurate if you ignore the fact that the wording is so non-specific that it could apply equally well to a huge, random chunk of the population, regardless of star sign.


*Of course, other conclusions are available - there are some counter-arguments in the comments to the post itself, as well as those of the MetaFilter poster who aggregated it and Branko addresses some critics in a later post here.

**In these days of bank bailouts, what's half a trillion between friends?