Nearly 20 years after the fall of the Berlin Wall, we are witnessing the fall of Wall Street.
After the Berlin Wall fell, the world was never the same again. The Soviet Union and its empire collapsed. The triumph of global capitalism was announced. The left and the intellectual, social and political forces of organised labour became disoriented and withdrew timidly, accepting to promote social justice within the severe constraints imposed by global capitalism.
Now another wall has collapsed – Wall Street. It does not mean the disintegration of the United States or the end of capitalism. But even commentators sympathetic to capitalism are saying that it does mean the end of capitalism as we got to know it through the economic model of Wall Street.
Before the present financial crisis it seemed that Reagan and Thatcher had succeeded in spreading around most of our planet an economic system based on their gospel of the magic of the market: unregulated globalisation, the rolling back of the welfare state, the spread of laissez-faire ideology, the privatisation of the public sector of the economy, the defeat of trade unions and a culture based on individual self-fulfilment and a consumer and credit culture giving people the illusion that they could live for ever beyond their means.
Even the end of history and the death of clashing ideologies were proclaimed. The spread of “people’s capitalism” meant that although the rich were getting richer, ordinary people were not doing badly either. Those who were left behind were considered too few in terms of electoral arithmetic to count, when it came to Labour and Social Democratic Parties positioning themselves towards the centre of the electorate to stand a chance of governing.
It is now clear that this ‘casino’ capitalism, based on financial innovations such as securitisation that hold in contempt manufacturing and other wealth generating enterprises, had become unsustainable, as they could never recover the money they lent and traded irresponsibly, free from any regulations and oversight. While main global companies spent billions of dollars buying back their own shares and trading them, they spent less and less on research and development. Their chief executives considered themselves high priests of the new economy, and even a few days ago, while thousands of their employees were losing their jobs, they were pocketing salaries of $70 million a year and giving themselves $240 million each in terminal benefits.
Where do we go from here? For the left, and political parties committed to Social Democracy, this crisis offers a valuable opportunity to reinvent themselves and shake off the inferiority complex that has gripped them for the last 30 years. They can work hard to offer an alternative political, economic and social system that regains a sense of public purpose and fairness that moves away from ‘casino` capitalism to productive enterprise, providing a long term commitment to building businesses and supporting investment and innovation and establishing a new fair deal with workers.
It should also combine economic development with a much stronger environmental commitment, so that our children and grandchildren will have a more liveable planet in future.
This political alternative has to engage actively with civil society and provide new spaces for active citizenship where politics is done in a more open way, through networking with the grass roots rather than through bottom down initiatives to mobilize the troops.
A system we had become familiar with, and to which resigned ourselves, is dying. A new one is being born. If we do not participate actively in shaping the new world, with alternative policies and projects based on social justice, fairness, prosperity, enterprise, innovation, environmental promotion, the celebration of diverse identities and cultures, the spread of civil liberties… it will be a world shaped against us.

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