Hoppe on East vs. West Germany and the Fall of the Wall

Chipping off a piece of the wall, 1990

A lot of blogposts have been flying around the libertarian blogosphere about the fall of the Berlin Wall twenty years ago. Those looking for truly thoughtful commentary should read the article by Hans-Hermann Hoppe, “De-Socialization in a United Germany” Review of Austrian Economics, Vol. 5, No. 2 (1991). Hoppe applies his unparalleled abilities at libertarian and Austrian economic analysis, informed by his own experience in West Germany (including his own family’s victimization at the hands of East German communism), to provide a fantastic overview of recent German history, an Austrian-informed explanation of exactly how the East-West Germany “experiment” illustrates economic theory, a criticism of the disastrous way re-unification was to be implemented along with an explanation of the preferred alternative:

While the course has largely been set and German reunification has proceeded through the incorporation of East Germany into the West German welfare state, an alternative existed which would have spared the Germans the economic frustrations inevitably associated with the current planned course of reunification.

At the Walll, August 1990

Unfortunately, this radical alternative–the uncompromising privatization of East Germany, the adoption of a private-property constitution, and reunification through a policy of complete, unilateral free trade–has so far found practically no audience. Almost all alternatives proposed are variations of the same welfare-statist theme: either somewhat more drastic (i.e., more redistributionist), advocated mostly by Eastern economic “experts,” or somewhat more moderate, as advanced mostly by the economics establishment of West Germany.

My piece of the wall

Hoppe calls for the “complete abolition of socialism and the establishment of a pure private-property society–an anarchy of private-property owners, regulated exclusively by private-property law [, which] would be the quickest economic recovery of East Germany.”

(See also Hoppe’s discussion of East and West Germany in his A Theory of Capitalism and Socialism (1989), pp. 33-37.)

Checkpoint Charlie 1990

[Mises blog cross-post]

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