Did Ronald Reagan destroy the middle class

The Great Wall of China is also crumbling: Why the one-party state of the Middle Kingdom has no future

The fall of the Berlin Wall ushered in a new era of freedom in Europe as the rulers of China created an economic powerhouse built on oppression. But the events of 1989 in particular show that the one-party state is doomed to failure.

30 years after the fall of the Berlin Wall, it can be stated that in 1989 we were childishly wrong.

We believed that free markets and free citizens marched hand in hand. When Ronald Reagan called out to his Russian colleague: "Mr Gorbachev, tear down this wall", we had cheered. And only two years after that speech we felt confirmed. Yet while we happily celebrated the collapse of communism in Central and Eastern Europe, we completely underestimated the importance of its survival in China.

In the meantime, the enlargement of the EU and that of NATO - even the collapse of the Soviet Union in 1991 - seem to be of far less historical significance than China's spectacular rise after 1989. As a reminder, in 1989 China's gross domestic product was 8.2 percent of American GDP. Today, according to the International Monetary Fund, it is 66 percent.

Adjusted for purchasing power, China's economy is actually larger than that of the USA - and has been since 2014. The Soviet Union never came close to such a level. At the height of the Cold War in the mid-1970s, their economic output was 44 percent of America's GDP.

For years we told ourselves that China would eventually succumb to the embrace of the West. The internet, we dreamed, would make the difference. If China were to try to regulate it, the effort would be akin to trying (borrowing from Bill Clinton's famous saying) "nailing a pudding on the wall." That has been proven absolutely wrong.

The seven lessons

But I just don't believe the people who tell us today that China is using big data, facial recognition technology and artificial intelligence (AI) to revive totalitarianism, let alone a planned economy. This view certainly fails to recognize the seven central lessons of 1989.

1. The Soviet empire was invulnerable as long as it was able to grow. When stagnation set in with falling productivity in the 1970s, the system began to deteriorate. Between 1973 and 1990 growth per capita was negative. If China slows down, which inevitably has to occur in accordance with the demographic and financial headwinds, the population will also become disillusioned - just like in the Eastern Bloc at that time.

2. Growth usually produces a middle class, and that middle class wants more than empty phrases - even if they don't expect democracy. Apart from a few workers - most obviously Lech Walesa - the dissidents who led what Timothy Garton Ash described as "refolution" (a mixture of revolution and reform) were bourgeois intellectuals: for example Vaclav Havel in Czechoslovakia or Bronislaw Geremek in Poland. There are people like this in China today too - just think of the artist Ai Weiwei - and their deep dissatisfaction with the one-party state is essentially identical to that of their Central European predecessors.

3. Corruption, inefficiency and environmental degradation are central features of a one-party state without the rule of law. In a fundamentally corrupt system with no real accountability, even an anti-corruption campaign becomes corrupt. What the Harvard economist Andrei Shleifer called a “grabbing hand” will always grab her. If the party is above the law, it will tend towards lawlessness.

4. A state that has lost its legitimacy will not be kept alive, no matter how extensive surveillance. The Stasi did not need AI to know pretty much everything that was going on in the GDR: There they relied on an extensive network of part-time spies and snoopers who, with a truly Orwellian euphemism, were referred to as "unofficial employees". But knowing what people were thinking in the supposed privacy of their homes could not save the system. On the contrary.

5. Everyone in a surveillance state gets used to lying. But if everyone lies, there will be catastrophes like that of Chernobyl on April 26, 1986 - the death knell for the Soviet system - or the public relations fiasco that led to the fall of the Berlin Wall: a bungling press conference by Politburo member Günter Schabowski, who vaguely indicated that trips abroad were "possible for all citizens", which would come into effect "immediately, immediately".

The historian Mary Elise Sarotte has pointed out an important point in her brilliant book "The Collapse: The Accidental Opening of the Berlin Wall": The lack of trust within the party elite and the security apparatus prevented an effective withdrawal of this fatal order. And it prompted Harald Jäger, a high-ranking Stasi officer, to open the decisive border control point rather than let fire at the crowd that had gathered after Schabowski's testimony became known.

6. First of all, the Soviet power fell apart on the periphery. So Hong Kong, Xinjiang and Taiwan are the crucial regions to watch out for, not Beijing. The Berlin Wall fell in a chain reaction that started in Poland in the summer of 1988 and then continued to Hungary and Leipzig (the central location that could have become Germany's Tiananmen Square) before reaching Berlin. And after Berlin it spread even further: to Sofia, Prague, Timisoara, Bucharest and on to Vilnius, where Lithuania's independence was proclaimed in March 1990, and finally to Moscow in 1991. A similar process will ultimately bring down the “Great Firewall” in China.

7. But there is one more point to consider. According to the scientific community (which Ronald Reagan was never particularly fond of), the Berlin Wall fell as a result of internal rather than external pressure. For example, the East German dissident Marianne Birthler said that they first fought for their freedom and that is why the wall then fell .

Better than the Soviet Union

As a lesson from 1989, one should certainly not bet on a regime that is essentially still based on Lenin and Stalin's one-party state. Well - 70 years after its founding, the People's Republic is undoubtedly in better shape than the Soviet Union 70 years after the Bolshevik Revolution. In addition, its leaders are determined not to repeat the mistakes of the Soviet Union. Therefore, there will be no political transparency ("glasnost") in China - not even in Hong Kong, and accordingly in the not too distant future in Taiwan either.

Nonetheless, I would like to close with another prediction. I currently spend more time in Beijing than in Berlin, and here is what I foresee: The social credit system, with its 24/7 surveillance, will not prevent China from collapsing over the next 10 or 20 years - due to the combination of a slowing economy, a growing and demanding middle class, a chronically corrupt political system, a corrosive culture of hypocrisy and fragmentation that has already begun on the periphery.

The “Great Firewall” of China is crumbling. And as in Berlin 30 years ago, the process will be accelerated by external pressure.

Niall Ferguson is a Senior Fellow at the Center for European Studies at Harvard and is currently a Milbank Family Senior Fellow at the Hoover Institution in Stanford, California. The above essay is a column that Ferguson wrote for the British “Sunday Times” - it appears here exclusively in the German-speaking area. We are grateful to the Sunday Times for the possibility of reprinting. - Translated from English by Helmut Reuter.