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The Fall of the Berlin Wall and Social Democracy

The fall of the Berlin Wall heralded not only the collapse of communism in Europe, but also the destruction of a broader – and far more constructive – social-democratic compact. To prevent a return to extremism and instability, that compact must be refashioned for the twenty-first century.

CAMBRIDGE – It was already clear 30 years ago that the fall of the Berlin Wall would change everything. But precisely what that change will mean for world politics in the twenty-first century still remains to be seen.

By 1989, the Soviet Union, and communism generally, had condemned tens of millions of people to poverty, and had clearly failed to compete with the Western economic model. Over four decades, the Cold War had taken millions of lives in various theaters around the world (where the conflict was much hotter than its name suggests), and created a pretext for repression and elite dominance in dozens of countries across Latin America, Africa, and Asia.

Yet for all its positive implications, the post-Cold War era also upended the Western social-democratic compact: the system of safety nets, regulations, universal public services, redistributive tax policies, and labor-market institutions that had long protected workers and the less fortunate. According to the political scientist Ralf Dahrendorf (as quoted by the late Tony Judt), that policy consensus had signified “the greatest progress which history has seen so far.” Not only had it limited and then reduced inequality in most advanced economies; it also contributed to decades of sustained growth.