The Fall of Communism

Political cartoon showing the decline of communism around the world.
Political cartoon showing the decline of communism around the world.

Key Points:


  1. The events began in Poland in 1989 and continued in Hungary, East Germany, Bulgaria, Czechoslovakia and Romania.[1]
  2. The Tiananmen Square protests of 1989 failed to produce enough support to produce major political changes in China.
  3. The Soviet Union was completely dismantled by the end of 1991 which gave 14 countries their independence.
  4. After the dissolution, the adoption of varying forms of liberal (market) economy generally resulted at first in decreasing living standards in post-Communist States.
  5. This also resulted in disproportional social and economic development and rapid accumulation of wealth to a few business men.
  6. Only the over 60 year old people remembered how a market economy worked. It was not hard to imagine Central, South-East and Eastern Europe staying poor for decades.[2]
  7. Chinese economic liberalization which started in 1978 has helped lift the population out of poverty, bringing the poverty rate down from 53% of the population in the ‘Mao era’ to 12% in 1981. Deng Xiaoping’s economic reforms towards a market economy are still being followed by the CPC today and by 2001 the poverty rate became only 6% of the population.[3]

Relationship to Liberal Economics

The fall of communism around the world, mainly the dissolution of the Soviet Union sparked a major movement towards a market economy around the world. This even prompted Communist states to reform their economies into more liberal style economies. Thus it can be seen that it was during this period that liberal economics came to the forefront as the dominant economic model for most countries.

References:

[1]Christison, Fielding, Harding, Meston, Smith, Zook, (2009). Perspectives of Ideology (pp. 220) Canada, Ontario: Oxford University Press.
[2]"The world after 1989: Walls in the mind". The Economist. 5 November 2009. http://www.economist.com/displayStory.cfm?story_id=14793753.
[3]Fighting Poverty: Findings and Lessons from China’s Success (World Bank). Retrieved 10 August 2006.