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.
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.
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.)
Update: from my comment to Ralph Raico’s post about his experience at Checkpoint Charlie:
Wonderful recollection. I went thru Checkpoint Charlie just after the fall of the wall, in 1990–as shown in some pictures in my post Hoppe on East vs. West Germany and the Fall of the Wall, I and two buddies chipped off pieces of the wall. We went a few miles down from checkpoint charlie where the wall was still up, but softer, and used large rocks to knock pieces off. We carried them in our backpacks till we returned home and gave some of them out as gifts. Like idiots we hopped over the gate into East Germany, and when an East German patrol came by we scurried and hid behind an abandoned gate tower–three moron law students looking for trouble. [Update: I spoke recently (Aug. 2012) to my two friends—Paul Comeaux and Tony Tramontana—about this, and neither one remembers the patrol coming by, so my memory may be psl on me.]
Eventually we went into East Berlin and stayed the night in some hotel that used to be nice. I remember they could not take credit card since they were not set up for that. The city was grimy and depressing. It looked like a war zone.
[Mises blog cross-post]