The socialist welfare state without socialism

Following the election of Mikhail Gorbachev as general secretary of the Soviet Party of USSR in 1985, the process of liberalisation entered a new phase of political and economic renovation. The introduction of a new wave of reform policies led by perestroika (social, economic and political restructuring) and glasnost (introducing political discussion, bureaucratic transparency and freedom of expression) accelerated the ongoing process of de-Stalinisation and consequently led to democratisation in the whole communist region. Gorbachev's Sinatra Doctrine (satellite countries were free to ‘do it their way’) implicitly legitimised the political autonomy of Central Eastern Europe. One after another, the revolutions of 1989 and their peaceful transitions to non-communist governments brought the soviet system to a close.

On 9 November 1989 the most symbolic element of the Iron Curtain, the Berlin Wall, was literally destroyed by people from East Berlin. Besides being a milestone in world history, politics, economics and international relations, the destruction of the wall also represented a turning point in the lives of the millions of people in communist bloc countries who had been living behind it. The shift to democracy and to the market economy in CEE countries had a massive effect on the living conditions of their citizens. For the first time in many years and perhaps for the first time in their lives these people had free access the Western world and could see the differences between their living standards and those enjoyed a few metres away by people on the other side of the wall. Life for most of the former had been sustained by an economy of shortage consisting of goods or services that were either subsidised or rationed, sufficient most of the time but never of an excessively high quality. When it became visible from the other side of the blockade, Western society looked propitious to say the least.

The recurring image of East Berliners crossing the Berlin Wall in the aftermath of its fall and going shopping with the ‘welcome money’ (100 Deutschmarks donated by Western Germany both to celebrate the reunification of the city and to give East Berliners something with which to start out anew [Gleye, 1991]), exemplified, at least symbolically, the great enthusiasm that marked those days and the strong confidence in the redistributive mechanisms of the new market economy.