Have you ever seen the black-and-white footage of
school children being drilled to take cover under their desks in the event of nuclear attack? It always reminds me that my generation had no nuclear war drills. Not because we no longer feared nuclear war, but because we no longer believed we could survive. What kept the peace in the final years of the Cold War was mutually assured destruction (MAD), the certainty of complete annihilation kept both sides from initiating nuclear conflict. Other than anti-communism in popular culture (Wolverines!), that's pretty much the sum total of my experience with the Cold War - I spent my childhood all too aware that a massive arsenal of ICBMs, enough to destroy the world many times over, was aimed at my country.
Then, the year I turned 18, the Berlin Wall fell and two years later, the Soviet Union disintegrated. Very suddenly and much earlier than anyone expected, the Cold War was over and communism was defeated. It was touted as the penultimate triumph of free-market liberal democracy. It was, as Francis Fukuyama famously declared, the "end of history."
The official story was that capitalism had triumphed - not through force, but through superiority. Communism had collapsed under its own dead weight. This wasn't entirely true - it's too one-dimensional to be true - but it wasn't entirely false either: There was a stark, visible difference between those living in Western democracies and those living in the Eastern Bloc.
The political atmosphere was triumphant. Bleeding-heart, tax-and-spend liberals were out and Third-Way, DLC Democrats were in. Democrats were no longer soft on crime, they were willing to "reform" social services and they were pro-business in a way they had never been before. In light of this capitulation, it's hardly a wonder that capitalism ran riot. Radical laissez-faire ideologies gained increasing influence and markets were heralded as the solution to almost every problem.
I certainly had doubts along the way and, in fact, those doubts were mounting. Increasing inequality, decades-long stagnation of wages, decimation of manufacturing at home, sweatshops abroad, an inability to protect the environment, a failed
health care system - the idea that markets were the great panacea was becoming less and less believable.
For me these doubts were reaching a critical mass when, in 2008, the market failed. The first-world economy crashed and has yet to recover. In a defining moment, Alan Greenspan appeared before Congress and admitted his Randian ideology had a "flaw":
REP. HENRY WAXMAN: The question I have for you is, you had an ideology, you had a belief that free, competitive -- and this is your statement -- "I do have an ideology. My judgment is that free, competitive markets are by far the unrivaled way to organize economies. We've tried regulation. None meaningfully worked." That was your quote.
You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price.Do you feel that your ideology pushed you to make decisions that you wish you had not made?ALAN GREENSPAN: Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to -- to exist, you need an ideology. The question is whether it is accurate or not.And what I'm saying to you is, yes, I found a flaw. I don't know how significant or permanent it is, but I've been very distressed by that fact.REP. HENRY WAXMAN: You found a flaw in the reality...ALAN GREENSPAN: Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.
It was a stunning admission really. And my instinct is that it's true (he has since equivocated, but that doesn't make it less true). I say instinct because I have not yet fully come to terms with its meaning. What precisely is the flaw?