Did Modi learn from the fall of the Berlin Wall?

The Berlin Wall fell 25 years ago. An entire generation has come up since, barely aware of the Wall’s history. Its lessons must never be forgotten.

World War II ended with East Germany occupied by the USSR and West Germany by the US and its allies. East Germany by the US and its allies. East Germany became a communist state, West Germany a liberal democracy. Berlin was deep inside the East, but the Allies held its western part. So, West Berlin was a small democratic enclave inside East Germany .

The war wrecked both parts of Germany. But Marshall Aid, plus a liberalizing finance minister, Erhardt, produced the West German miracle -its economy boomed in the1950s.

East Germany’s dubious statistics claimed that it also boomed, almost as fast as West Germany. It had zero unemployment — the government gave everybody a job. But citizens couldn’t choose jobs, and could not work for themselves or anybody save the government. East Germany was egalitarian; nobody was rich, and all got free welfare — education, healthcare, care of the aged, sick and handicapped. This was the Marxist dream — equality and the meeting of all basic needs, eschewing the vulgar consumerism and inequality of the West.

But East Germans hated it. The widows and pensioners were not unhappy. But youngsters knew through radio and TV what was available in West Germany, and voted for that with their feet. Lakhs every year crossed into West Germany or Austria. They wanted the economic opportunity and freedom of the West, not the equality of the East. The exodus obliged East Germany in 1954 to close all borders to stop the flow. Those wanting to flee adopted a new strategy: first go to East Berlin, and then cross into West Berlin.

Creating a Berlin Wall to stop this posed problems: East Germany’s major railway lines ran through both parts of the city. Diversionary rail lines were built to bypass West Berlin. Then, in 1961, the Berlin Wall was erected, complete with floodlights and machine guns. Over 5,000 tried to scale or tunnel under the Wall, and many died.

In all, 3.5 million people left East Germany, one-fifth of its post-war population. These included the most talented, educated youngsters. East Germany denounced them as unpatriotic, immoral and greedy. But no matter how hard East Germany boasted about equality and welfarism, citizens kept fleeing to the inegalitarian West.

This pattern was repeated globally. Millions fled from egalitarian North Korea to inegalitarian South Korea. None fled northward. Again, thousands swam across shark-infested waters from Mao’s egalitarian China to Hong Kong, the most unequal place in the world, with virtually no taxes on the rich. None swam in the opposite direction. Note: neither South Korea nor Hong Kong was a democracy, so the main motive for migrants was economic, not democratic freedom.

In 1989, Chinese students rebelled at Tiananmen Square. All communist regimes in Eastern Europe were uneasy, and East Germany asked Gorbachev for an assurance of Soviet troops if required. No, said Gorbachev, those days are over.That opened the floodgates of protest. Within three months the Wall had fallen, as had every communist regime across East Europe. The USSR, which had spouted anti-imperialist rhetoric for decades, stood exposed as a cruel imperialist itself, whose colonies had thrown off their red yoke.

What are the main lessons? An important one is that economic opportunity is a fundamental human desire, and wishing to be rich is perfectly moral even if it leads to inequality .This was accepted by Deng Xiaoping in China: he maintained communist political control, but shifted to private enterprise and economic freedoms, declaring “to get rich is glorious“.Getting rich through crookedness is wrong in all societies.But getting rich through innovation, enterprise and hard work should be a mark of honour, not one of exploitation.

India has never been communist. But its socialist politicians have always emphasized equality over economic freedom. But people have voted against that with their feet. Urban areas are more unequal than rural ones, yet Indians migrate from egalitarian villages to inegalitarian cities. The most egalitarian parts of India (measured by the Gini coefficient) are rural Bihar and Assam. These are not paradises of equality, they are sloughs of despond that lack opportunity .

The UPA government inherited a booming, liberalized economy in 2004. It decided to create more equality through a rights-based approach. Alas, in doing so it created ever more rules and regulations that strangled opportunity (such as the land acquisition act). Indian businessmen fled abroad for greater opportunity , just as East Germans had in another context. The economy slumped, and aspirations went unfulfilled. Narendra Modi saw that Indians wanted more opportunity, and promised to provide it. He duly won the next election. Consciously or otherwise, he had absorbed the lesson of the Berlin Wall.

9 thoughts on “Did Modi learn from the fall of the Berlin Wall?

  • 2015.Jan.01 at 02:26
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    In our search for the path towards ‘inclusive growth’, what we have been able to achieve is ‘inclusive poverty’. Perfect equality is not just impossible but also immoral and unjust. I hope India doesn’t get cold feet and leave the reform “process” mid-way by electing a populist government that penalises talent for creating inequality.

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  • 2014.Dec.17 at 23:41
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    Economic equality is a Robbin Hood approach but at the end of the day it makes the lazy people more lazy.

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  • 2014.Dec.09 at 07:52
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    A great piece, as always. Some corrections need to be done in the 2nd paragraph though.

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  • 2014.Dec.03 at 19:43
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    Excellent. Good Understanding of reality.

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  • 2014.Dec.01 at 16:51
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    It is true but when you compare , a nation having some million of moderate population and one which have more than billion (maximum are below poverty line), how can you give example of south Korea or Germany? it is also true, public want development but it does not mean , to provide land on no price like Mr. son in law,so, first we need to change status of The poor from bpl to middle class,then only we can better leverage liberalization.

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  • 2014.Nov.24 at 00:50
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    Sir, your blog is simply awesome. I wish it get updated as and when these articles get published in TOI/ET. Right now there is always a time lag of about a week.

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  • 2014.Nov.22 at 19:53
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    Great Article, Swami. On the 25th Anniversary of the fall of Berlin Wall.
    Natural Inequality is 100 times better than forced Equality.
    An environment of Freedom (both- Social and Economic) is the first step towards Happiness.
    The founder of Socialism has erred in his hypothesis of human nature.

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  • 2014.Nov.19 at 09:43
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    West Germany must indeed be the country India can learn the most from, as after world war — around the same time colonial rule here ended — Germany has picked up from ruins. And West Germany has also remained committed to democracy since.

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  • 2014.Nov.12 at 11:25
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    Brilliant!! I hope this shakes us enough to awaken us from the slumber.

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