The Berlin Wall fell twenty-five years ago this month. As one would expect, there are competing stories about how it happened. There is the tale of Reagan the Stalwart, which bloomed in the early triumphal years after 1989 but has since ebbed. There are the feather-haired East German masses in the Monday Demonstrations pushing their state into a corner. And there is the tragic figure of Gorbachev, who so loved communism that he killed it to keep it pure.
The story rarely includes an epilogue, however. What happened after the people rushed out, capital and goods rushed in, and new perils flooded in alongside new opportunities? On this anniversary year, we should think not only of the Cold War world that ended, but also what followed—the coronation of “the world economy.”
After 1989, “the world economy” was presented as the acid bath that would dissolve all political differences, a planetary panacea producing universal prosperity. But terms that claim no politics are the most political of all. Even as the world economy was offered in as a horn of plenty in the East, it was also wielded as a bludgeon in the West—swung at the kneecaps of the welfare state.
The virtuoso of the world economy reference was Bill Clinton, who used the term in public more than any president before or since, and who added the word “globalization” to the White House vocabulary (a term that would reign supreme by the new millennium). For Kennedy and Johnson, the talk had been of a “growing world economy,” and for Nixon, shy of global growth talk in the era of inflation, it was a “strong world economy.” Ford and Carter cherry-picked from social science and ecology with the notions of the “interdependent” and “healthy world economy.” For Clinton, the world economy was both a challenge and a threat. It invaded American life and required its reorganization. At the World Economic Forum at Davos in 1995, Clinton observed that “24-hour markets can respond with blinding speed and sometimes ruthlessness.” He rewrote the slogan of the Prague Spring in his 1999 State of the Union address, the year of the WTO protests, saying, “We have got to put a human face on the global economy.”
If Prague’s socialism with a human face meant free expression and more democracy, Clinton’s world economy with a human face meant free trade and dismantlement of the domestic welfare system. The cue was taken by Clinton wannabes across the Atlantic, including Tony Blair’s New Labor party (would “Neolabor” have been better?) and German chancellor Gerhard Schröder’s revamped social democracy. Pointing a baleful finger at the “storms of globalization” in 2003, Schröder announced an overhaul of the German welfare system. The social market economy, he said, had to “modernize or it would be modernized by the untamped forces of the market.” For Schröder, like Clinton, the world economy was weird weather—a natural power beyond the control of any one country or person. The horn of plenty had become an air raid siren: rescue what you can, take only what you need.
The Monday Demonstrations returned to German streets in 2004. Unemployment was running around 20 percent in the former East where industries that had survived on state subsidies had been sold off, gutted and shuttered. The new target was Schröder’s welfare reform, which followed Clinton in moving toward a “workfare” model that included “one euro jobs” named for the paltry remuneration received for obligatory labor and recalled the logic of the Victorian workhouse. One Monday demonstrator, deep in the West where the demonstrations had spread, named their enemy “the inhumane world economy.” After the evil empire, it seemed the world economy itself had become the adversary, or the new deity. Priestly politicians foretold punishment for demanding too much.
The Wall is gone, and we should all rejoice. It was a horrible thing. But it also had the perverse advantage of being a thing—visible and tangible. Freedom was a place, so many East Germans believed—the place beyond the Wall. A quarter century later, the world economy is everywhere and nowhere, harder to locate and harder to counter. The Invisible Hand giveth one minute and smacketh down the next.
For the moment, a different Berlin wall still has the last word. On the side of a building in former East Berlin (pictured above), squatters once spray-painted a slogan in meter-high letters: “The border doesn’t run between peoples but between those on the top and those on the bottom.”