All Commentary
Wednesday, May 1, 1991

Germany: The Promise of Freedom

Don Boudreaux and Thomas K. Plofchan, Jr., are studying law at the University of Virginia. Mr. Plofchan is also a Ph.D. candidate, in the Government Department at the University of Virginia and is the U.S. Director of the Multiplikatoren Seminar.

In September 1990, less than a year after the Berlin Wall came crashing down but before the official reunification of Germany, we visited both West and East Germany as participants in the eighth annual Multiplikatoren Seminar. This seminar, which is sponsored by the West German government, brings together young American and German professionals in order to create personal, cultural, business, and intellectual ties between the United States and Germany. Of course, the fall of Communism and the reunification of Germany dominated the discussions of the 1990 seminar.

Visiting Bonn and Berlin during this very exciting time in Europe’s history provided unique insight into the events of the past year in Germany and in those nations that just recently escaped the totalitarian stranglehold of Communist rulers. This essay identifies lessons culled from our visit to Germany—lessons applicable both to emerging and to established democracies.

Lesson 1: Communism failed miserably.

Communism’s failures are evident everywhere. The most memorable moments of our visit occurred in Berlin where, because West Berlin’s hotels were still filled to capacity with refugees who had fled Communist rule, our German hosts put ns up in East Berling Hotel Unter den Linden. This hotel is said to be among East Berlin’s finest, and indeed, East Germany’s premier rock star was a guest while we were there. Upon arrival at the Hotel Unter den Linden we saw firsthand the glories of Communism.

The rooms in this hotel are about the size of a large walk-in closet. We do not exaggerate. A bed here is nothing more than an elevated piece of plywood with an aged and thin pad laid across the top. The linen is threadbare and stained, as are the towels in the bathroom. Whenever a light is turned on, dozens of cockroaches can be seen scampering across the furniture and the floor. In one of our rooms, the window could not be closed, much less locked. Hot showers had to be taken no later than 6:45 A.M. because by 7:00 all the hot water is gone until mid-afternoon. Of course, less-than-luxurious hotels can be found in capitalist societies as well, but such hotels are never billed as being among the finest accommodations available.

Other aspects of our visit provide a more telling contrast between capitalist and Communist soci-eries. Perhaps the greatest testament to Communist “efficiency” is the lack of technical services that citizens of capitalist nations take for granted. When one of us attempted to place a wake-up call to the other, whose room was two floors up, this proved to be impossible. Forget about direct room-to-room dialing; it doesnt exist. So the caller tried to place the call through the hotel operator (who, thankfully, spoke reasonably good English). The caller asked the operator to ring room 602. After several minutes of clicking and clanging, the operator apologized for not being able to complete the call. The operator calmly explained that the “sixes” in the hotel’s telephone switching system weren’t working that day!

The lack of modern telecommunications was also apparent when trying to call outside the hotel. One member of our party, dialing direct from West Berlin, made a three-minute call to the United States. The price was $6.50. At the same time on the following night, this person placed the same three-minute call from our hotel in East Berlin. But because there is no direct dialing from East Germany to the U.S., the call was placed through the hotel operator. The price was $28!

Despite our hotel’s shortcomings, it had the virtue of being located less than a mile from where the Berlin Wall once stood. (Incidentally, the official East German name for the Berlin Wall was “the anti-fascist wall of protection.” The idea was that the Wall was protecting the citizens of East Germany from the capitalist hordes of the West.) Within minutes we were able to walk from ugly and poor East Berlin into attractive and prosperous West Berlin where even the third-class hotels appear to be immensely more comfortable and convenient than East Berlin’s finest.

We spent a good deal of time walking between East and West Berlin. It did our bourgeois hearts good to stroll freely through Checkpoint Charlie—now nothing more than abandoned and dilapidated buildings. These buildings; however, still echo their horrible past when Communist border guards barked out commands and stood ready to shoot any East German for the crime of seeking to live as a free man or woman. These same border guards also caused Western visitors to East Berlin to undergo agonizing minutes (and sometimes hours) of interrogation and intimidation before being allowed access into the supposed workers’ paradise of Communist East Germany.

But now, standing silent, the buildings at Checkpoint Charlie no longer house impediments to the movement of people and goods. The first time we crossed this former border we were overcome with elation at Communism’s recent demise. Millions of people once held hostage in their own land are now free to go where they please, think as they please, work as they please, play as they please, and to own private property and contract freely with others. This thought was inspiring. However, the second time we walked through Checkpoint Charlie anger tempered our elation-anger at the thought of the atrocities committed by the border guards who not so long ago occupied these crumbling buildings, and even more anger at the thought of the despots who gave authority to these guards.

Lesson 2: People who have experienced Communism prefer capitalism.

Of course, Checkpoint Charlie is not the only part of the Berlin Wall to have crumbled. The entire Wall is now all but completely down. In one of history’s great ironies, the Wall is now being sold in pieces to Western tourists by Germans from the east, Poles, and Turks who operate uuregulated stalls along its former path. In addition to selling pieces of the Wall, these upstart entrepreneurs are also quite happy to sell to the highest bidder genuine East German and Soviet army uniforms.

An anecdote aptly illustrates the new-found entrepreneurial spirit that for so long was suppressed by Communist government. As may not be known in the U.S., the western side of the Berlin Wall was covered with graffiti while the eastern side was bare. Since the revolution of November 1989, however, the market has revealed a greater demand for colored pieces of the Wall chipped from the western side than for bare pieces chipped from the eastern side. We witnessed entrepreneurs from the eastern section of Berlin approaching the eastern side of the Wall, spraying it with paint, and then chipping off pieces in order to better meet the demands of tourists. Innate entrepreneurial abilities are awakening at great speed in the formerly Communist section of Germany. It is significant that not only is Communist rule dead in Germany, but its symbols are being sold for Western currency in a very free and competitive market.

The overthrow of the Communist regime in East Germany allowed liberty and the free market to gain a toe-hold in East Berlin even before reunification had been officially achieved on October 3, 1990. In East Berlin, just a few yards from Checkpoint Charlie, a new Chinese restaurant recently opened. This restaurant looks like many of the Oriental eateries that are found in West Berlin and all over the free world. Its name is written in bright and bold neon; its interior decor is quite elegant; and its front door sports signs that proudly announce the restaurant’s policy of accepting Visa, MasterCard, American Express, and Diners’ Club credit cards.

In addition, just across the street from this restaurant is a newly opened travel agency. Displayed in its window was a poster of a beautiful woman lying on the sands of a tropical beach. The poster advertises TWA flights to Hawaii. The travel agency also accepts all major credit cards. The new Chinese restaurant and the travel agency are solid evidence that capitalism has begun to creep into the eastern part of Berlin. It is only a matter of time before capitalism’s creep will turn into a surge bringing greater prosperity and liberty to all the citizens of what used to be called the “German Democratic Republic.”

Lesson 3: Rejuvenation cannot happen overnight.

Regardless of how bright East Germany’s economic future may be, signs of its horrible centrally planned past remain evident For example, under Communism’s iron fist, only 7 percent of East German households had telephones. Though this no doubt will improve in the future, it currently is still quite difficult (as described earlier) to make a phone call from anywhere in East Germany. Another example of socialism’s utter inability to provide for its citizens is seen in the bullet holes that today still mark many of East Berlin’s buildings. These bullet holes—hundreds of them in each building—were put there by the invading Soviet army in 1945. Most of these buildings haven’t been repaired, renovated, or even painted since World War II. The amount of capital required to bring this former “Communist jewel” up to minimum Western standards is awesome.

The East German automobile is evidence enough of Communism’s grotesque inefficiencies, as well as of the effort required to establish a productive economy in eastern Germany. Called the Trabant, this car was nearly the only personal automobile found on East German roads during the three decades preceding the 1989 revolution. The Trabant looks like an early 1960s economy car. Trouble is, it is far from economical. Its selling price was equal to the average yearly wage for an East German worker. And the waiting list for a Trabant was approximately 10 years for citizens of East Berlin and 15 years for citizens of other parts of East Germany.

Once an East German finally acquired a Trabant, he needed more than 30 seconds to accelerate from zero to 60 miles per hour. According to Car and Driver magazine, this acceleration rate is “slower than anything not rolling on eighteen wheels.” A healthy Trabant’s maximum speed is a measly 66 miles per hour. Also, in addition to being a pollution machine, the Trabant is dangerously unsafe. A West German reported to us that, not long after the fall of the Wall, he was driving on a West German autobahn at night when he saw a flickering light just ahead. He slammed on his brakes. Moments later he realized that the flickering light he stopped to avoid was a lone candle in the rear window of a slowly moving Trabant. The candle was serving as the Trabant’s taillight! The Trabant undoubtedly makes even the worst American or Japanese car built in the past half-century look like an auto connoisseur’s dream.

With production facilities capable of producing only the level of “quality” evidenced by the Trabant, much time, money, and effort must be expended before the eastern part of Germany will be able to compete with the West. Nevertheless, it is promising that eastern Germans now have the opportunity to compete without the heavy shackles of Communism weighing them down.

Lesson 4: A reunified Germany poses no threat to world peace.

Although there are obstacles to overcome, the Germans want the citizens of other democratic countries to look favorably upon their reunified nation. They want non-Germans to understand that there is little threat of the rise of a militaristic German state. America and the rest of the world’s democracies can trust a unified Germany because of two fundamental differences between today’s Germany and the Germany of the pre-World War eras.

First, postwar Germany has joined the ranks of the world’s most prosperous nations, and is integrated into the world economic order in a way that wasn’t true during the first half of this century. Germany is a major exporter. Its economic prosperity is protected and furthered by production and trade with peoples of other nations. As long as Volkswa-gens and Braun coffee makers are crossing Get-man borders into other countries, there is little threat that Germany will send missiles and bombs across these same borders. No economically prosperous nation increases its wealth by bombing its trading partners.

Second, today’s Germany is a constitutional democracy in which the military is solidly under civilian control, and a system of checks and balances characterizes the German federal government. Democratic nations with such constitutional safeguards are not likely to be militarily aggressive.

Because of these characteristics, which differentiate present-day Germany from its past, Germans realize that military aggression is unproductive and would only lessen the world economic influence that their post-World War II leaders have worked so hard to acquire. The not-uncommon suggestion that Germans are especially disposed to sacrifice their wealth and position in the world economic order because of some expansionist forces inherent in German blood is nothing more than a reflection of naive racism.

Conclusion: Germany’s future is bright for Germans and for all free people.

Of course, the most direct beneficiaries of the death of Soviet-dominated Communism in Europe will be the people who were prisoners of those totalitarian regimes. But people from every nation that trades with Germany and other former Communist countries will have their lives improved by the burial of Communism. Eastern Germany’s future promises hard work, to be sure, but it also promises freedom and prosperity for a people who have long been thirsting for both. In their attempts to quench their thirst, former captives of the Communist regime in eastern Germany will create wealth and prosperity which, through their trading practices with other nations, will be shared with the entire free world. 

1.   Car and Driver, December 1990, pp. 89-97. The quotation in the text is found on page 94. This article also reports the result of their Trabant road test. Not surprisingly, the car received an incredibly low score.

  • Donald J. Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, and a professor of economics and former economics-department chair at George Mason University.