6 The triumph of market democracy

(1980–2007)

On November 8, 1989, a faltering East German government declared,
in a context of mass protests and massive departures through Hungary
and Czechoslovakia, that the Berlin Wall no longer stood as an obs-
tacle to the free movement of its citizens. Crowds coming from the
East and the West joined together in celebrations, and undertook to
demolish the most offensive symbol of the Cold War. Less than a year
later, the German Democratic Republic disappeared and Germany
was reunified. Throughout Eastern Europe, communist regimes col-
lapsed, and were replaced by electoral democracies committed to
re-establishing market rules. In December 1991, the Soviet Union itself
ceased to exist, to be replaced by a Commonwealth of Independent
States, engaged in a process of democratization and liberalization.^1
In China, the ruling Communist Party resisted such attempts at democ-
ratization, killing several hundred students to crush a protest in
Tiananmen Square. The regime nevertheless pursued a policy of eco-
nomic liberalization that reintroduced market mechanisms in the
world’s largest communist country. Except for a few marginal cases –
including North Korea, which became the first hereditary communist
dictatorship – “really existing socialism” as a project of totally state-
controlled, planned economy had ceased to exist.^2
In the South, the 1980s and 1990s were also a triumphant era for
both the market and liberal democracy. The turn to democracy started
in Southern Europe in the late 1970s and in Latin America in the
1980s. The process was then more one of “re-democratization,” most
of these countries having experienced democracy in the past.^3 With

(^1) Geoff Eley,Forging Democracy: The History of the Left in Europe, 1850–2000,
2 Oxford University Press, 2002, pp. 443–45.
Eric J. Hobsbawm,The Age of Extremes: The Short Twentieth Century,
1914–1991, London, Abacus, 1994, p. 497.
(^3) Ruth Berins Collier,Paths toward Democracy: The Working Class and Elites in
Western Europe and South America, Cambridge University Press, 1999, p. 13.
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