There are people – and a disproportionate number are found in academia and the media – who were secretly devastated when the Berlin Wall fell and free markets were seen as triumphant. These people could barely disguise their glee at the 2008 bank crash: they dusted off their old predictions of the inevitable end of capitalism and spread over the airwaves like a rash.
They have been proved wrong – again. The global economy did not collapse and is now recovering, albeit slowly. The recovery is strongest where free market policies are being followed; the remaining basket cases, like Greece, are the countries where state regulation continues to restrict growth.
This has been reflected in the way elections since 2008 all over the world have tended to favour parties that are seen as more committed to free markets policies than their rivals. The strength of democracy lies in the fact that “ordinary” voters often have a reserve of common sense that is lacking in self-styled “experts”.
The strength of the free market system is clear not only in the resilience of existing capitalist economies but in the way capitalism is making progress even in countries with anti-capitalist ideology at the very time it was supposed to be in meltdown.
Most nominally anti-capitalist states adopted free-market reforms long ago, like China and Vietnam. Only two unreconstructed Marxist economies remain, largely cut off from the rest of the world: North Korea and Cuba.
Those two may soon be reduced to one. Cuba’s regime is granting a quarter of a million of its subjects licences to set up their own businesses. The idea that a citizen even needs a licence to exercise economic freedom is itself obnoxious – and the Cuban government is acting less out of kindness than desperation, since the Cuban state has just been forced to confront reality to the extent of laying off a million public sector workers.
Nevertheless it is still a move in the right direction – and it could be towards something spectacular. Before the Castro regime came to power, Cuba was “America’s Playground”. A corrupt and incompetent government deprived the Cuban people of the benefits of that huge source of income – which was why Castro was able to seize power – but it demonstrates how Cuba has a huge economic potential that has been left untapped for more than half a century. That potential could be unlocked if strong, honest government could be combined with real free market reforms. If that in turn encouraged entrepreneurial Cuban exiles to return, Cuba’s future could be very bright indeed.