Today’s apologists for socialism still won’t acknowledge the lessons of the Berlin Wall

The media has been awash over the past week with stories about the thirtieth anniversary of the fall of the Berlin Wall.

My favourite vignette concerns a couple living in East Berlin who were delighted to have a telephone installed in their apartment only weeks before the Wall came down. They had been on the waiting list for 19 years.

This captures the essence of socialism. The system could generate a tolerable standard of living for citizens, but it was grossly inefficient and run for the benefit of the producers rather than the consumers.

The old nationalised industries in Britain also offered us a glimpse of what life would be like under socialism. Under British Rail, new heating stoves really were installed in station waiting rooms on the very day that the line was closed to traffic for ever.

In the 1970s, people routinely waited at least six months for the nationalised telecoms company to install a domestic phone line.

This “producer-just” attitude persists. Today’s Labour leadership has, for example, defended firefighters in the face of the recent damning criticism of their performance in the Grenfell Tower tragedy. For Jeremy Corbyn and John McDonnell, the interests of the producers — the public sector workers, even the fire chief who could retire at 50 with a pension of £140,000 a year — come first.

Some will feel that this is unfair to socialism. Socialism in practice may have had its faults (such as the liquidation of nearly 100 million people by their own governments), but a better, different kind of socialism is apparently on offer in the future.

Remarkably, the leaders of the Communist Parties in Eastern Europe appear to have believed the same thing. The ideologists in their Politburos described countries such as East Germany as examples of “actually existing” socialism — in contrast to the nirvana which would exist at some unspecified time in the future.

But we can only judge a system by its performance in practice, not by some Platonic ideal of what true believers imagine it might do. Everywhere it has been tried, socialism has been a failure. This simple fact cannot be repeated too often, particularly to younger generations to whom 1989 may seem as remote as the days of the Roman Empire.

Modern history has provided us with a whole series of what are termed natural experiments.

We cannot set up (as in the natural sciences) a laboratory in which one society is started up on socialist lines and the other on capitalist ones, and then observe their performances over time.

But we can observe the United States and the Soviet Union, West and East Germany, South and North Korea, China when it was purely socialist and China when it subsequently embraced a market-oriented economy.

In every single case, capitalism has delivered better outcomes: higher living standards, longer life expectancy, more holidays, more provision of health and education — more of almost everything except slave labour and environmental pollution.

Capitalism can be criticised, but its faults are nothing compared to those of socialism.

Paul Ormerod
As published in City AM Wednesday 13th November 2019
Image: Berlin Wall by Ira Gorelick via Pixabay

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ELLIE EVANS

Partner

e: eevans@volterra.co.uk
t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.