The Fall of the Other Berlin Wall

By Fabio Rafael Fiallo
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The Berlin Wall collapsed only after the communist regimes of Eastern Europe had run out of options. From Stalin's gulag and forced labor, to the New Economic Mechanism of Janos Kadar in Hungary, and the "Socialism with a Human Face" of Alexander Dubcek in Czechoslovakia, up to the Perestroika of Mikhail Gorbachev in the Soviet Union, everything was tested, in vain, to salvage communism.

In the same fashion, the democratic variant of the left has today no further alternative at its disposal. In Europe, bailouts to Greece follow one another without removing the specter of default, while other countries gearing towards a debt crash (Spain, Italy) are too big to be helped. In the U.S., after the failure of an $800bn stimulus package and two rounds of quantitative easing, the mere fact that President Obama is announcing measures, such as, an "infrastructure bank" - the impact of which would be trivial at best - is clear proof that the point of policy exhaustion has already been attained.

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The time has thus come to cross the ruins of the conventional wisdom shaped by the democratic left and emigrate to the side of the market-friendly policy vision that proved its efficacy at the times of Paul Volcker, Ronald Reagan and Margaret Thatcher. Then the wall may truly be said to have fallen.

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Fabio Rafael Fiallo is a Dominican-born economist and writer and retired official of the United Nations Conference on Trade and Development (UNCTAD). He writes on issues related to the world economy and international relations and has contributed to The Wall Street Journal, Le Monde, The Jerusalem Post and Le Temps.

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