1989 and all that...

Living in cosmopolitan East London as I do, it's hard to ignore the Babel-esque atmosphere. The plethora of languages and peoples now residing in this part of town would have been unthinkable a generation ago but is a consequence of the tumultuous events of the late 80s and early 90s and is one of many we are only just coming to appreciate.

Let's go back just twenty years or so. In 1987, Margaret Thatcher was Prime Minister, Ronald Reagan was President and the Cold War was still in full swing although there were signs that the new Soviet leader, Mikhail Gorbachev, might be a reformer. He used words like "perestroika" but no one seriously doubted the political supremacy of the Communist Party either in Russia or in the states of the Warsaw Pact. There were two German states back then and states like Poland, Romania and Bulgaria were Marxist dictatorships whose people were trapped.

As we know, in late 1989 and in no small way thanks to Gorbachev, the Warsaw Pact collapsed and Communist rule ended in central and eastern Europe. This occurred not through conventional conflict or violent revolution but remarkably peacefully with very few deaths except in Romania and few probably shed any tears over the fate of Nicolae and Elena Ceaucescu. In 1990, Saddam Hussein massively misread the zeitgeist and invaded Kuwait. He faced universal condemnation and an unprecedented coalition which drove his forces out and restored the Emir. It was the highwater mark for the new world order.

I remember the mood of disbelief as Communism fell and the Berlin Wall was dismantled. Politicians spoke of a "new world order" and a "peace dividend". All that seems a world away now.

So what went wrong ? Conservatives, liberals and socialists all got it wrong in 1989 and afterward. No one was prepared to look at and understand the lessons of history. In 1918, as the German, Austro-Hungarian and Russian Empires collapsed or were ousted in the grisly conclusion to World War I, a new collection of states were formed or re-emerged out of the wreckage. Poland re-emerged after a long period of subjugation by Germany and Russia. The emasculation of Austria and Hungary allowed Czechoslovakia and Yogoslavia to come into being. All were products of the Wilsonian ethic of "self-determination" and all started with democratic ideas and intentions.

Within a generation, all bar Czechoslovakia were authoritarian dictatorships. Most were coming under the influence of a resurgent Germany. The fact was that these new states were only able to prosper as a result of the weakness of both Germany and Russia after 1917-18. As Soviet Russia became stronger and Germany grew more aggressive in the 1930s, these states were forced into nationalist anti-Bolshevik authoritarianism. By mid-1941, Poland, Czechoslovakia and Yugoslavia were conquered by Germany, Albania by Italy while Hungary, Romania and Bulgaria were more or less willing allies of Berlin.

Small wonder that in 1945 Stalin saw little need to resurrect these states as independent entities and behind the tanks and guns of the Red Army came the Communist emigres to ensure these states survived only as pro-Moscow puppets with even democratic Czechoslovakia succumbing in 1948. Only Tito's Yugoslavia enjoyed a measure of independence and had to walk a very fine line.

The economies of these countries were distorted by the demands of COMECON which subjugated all to Moscow's theories leaving these states to soon fall far behind western Europe. Outbreaks of dissent such as Hungary in 1956 or Czechoslovakia were brutally suppressed while Moscow encouraged the Polish military to crush Solidarity in 1981 and recognised the eccentric brutality of Ceaucescus only as it posed no threat to Communist supremacy.

Suddenly, in 1989, all that was gone. The states which emerged from the wreckage of two generations of Communist rule were welcomed back into "Europe" by the west but these were not the same states of either 1918 or 1945. Too late, the west realised these were societies and economies and cultures very different to western Europe.

To her credit, though probably not for the right reasons, Margaret Thatcher saw the dangers of precipitent German reunification but the momentum was too strong and Helmut Kohl welcomed the new Germany in October 1990. However, it soon became clear that the eastern states would not easily be integrated into the prosperous west and so it has proved. Once the economic powerhouse of Europe, Germany has become bogged down in the bottomless pit that is the east. Even now, unemployment and social deprivation are endemic in the eastern states. The former Communists, now known as the PDS, regularly get a quarter of the vote and the astonishing phenomenon of female economic mass migration has left a sullen male-dominated population at the apparent mercy of the siren calls of the far Right.

Czechoslovakia is gone and the two successor states have fared very differently. The Czech Republic, incorporating Bohemia and Moravia, has been successful both economically and politically but Slovakia struggles and the former Communists remain a potent force.

Poland also struggles with outward migration to western Europe and an influx of westerners buying property across the country triggering further migration as the young are priced out of jobs and housing. Politically, Poland struggles for stability too.

Hungary did well initially and continues to do better than its neighbours but Romania is still run by the ex-Communists and Bulgaria is best known for the property being devoured by Germans, French, British and Scandinavians.

Over all of this hangs the shadow of EU membership and migration. Hundreds of thousands of Poles, Romanians, Bulgarians and others have come to western Europe looking for work and housing. They act to suppress the wages for the lowest-paid and stimulate the housing market in areas like London.

What should we have done ? Thoughful politicians could and should have invested the "peace dividend" not in tax cuts but in investment in the eastern economies. Thoughtful politicians could and should have been far more active in promoting economic, political and social reform across eastern Europe and EU/NATO membership should have been deferred until a number of key economic targets and criteria had been met. The distortions of the Communist period were clear and any reasoned economist would have told our leaders that it would take years of investment and management to undo the damage of the Soviet era and bring these economies anywhere near the levels of the west.

The impact of the poor decision-making of the 1990s has been to stall European integration and encourage mass migration making a fertile breeding-ground for the extreme Right such as the BNP. Local economies and communities have been forced to deal with massive changes in populations and needs as new people have arrived. Indigenous populations have seen their wages suppressed by the pool of cheap labour arriving while the housing market, especially in the rental sector, has been kept buoyant by the new arrivals.

It is far from being a one-way street, however. British investors have, like a plague of locusts, have descended on Poland, Romania, Bulgaria and Croatia and bought properties cheaply but this has only marginalised the local population and forced them into migration.

Capitalism may be about the free movement of capital and labour and that's all well and good but an understanding of the social, political and cultural consequences of such movements is needed. I fear that for many the events of 1989 did little more than to create a new pool of cheap labour to be exploited at home and new areas to be exploited abroad. After languishing for 40 years behind the Iron Curtain, I think the populations of Poland, Hungary, Romania and the other countries deserved better from us.

The other "consequence" of 1989 was the collapse of the post-war political concensus in Britain and elsewhere. The Conservatives were no longer able to raise the sceptre of a Soviet-dominated Labour Party while Labour too hads to adjust to the end of Soviet state socialism. As is often the case in conflict, it was the victors who adapted least well to their own victory. Labour, already in a process of internal reform, was able, with reduced military spending and the end of the Soviet threat, to promise strong domestic spending. Tony Blair was, by 1997, able to convince millions of British voters that Labour was now a non-socialist party of the centre-left.

For the Conservatives, learning the lessons of 1989 took far longer and was far more painful. Arguably, it has only been with the emergence of David Cameron that a new conservatism has begun to form with an emphasis on environmentalism and social renewal. This may yet prove to be the dominant ideology of the early 21st century.

Of course, with the events of September 2001 and subsequent, there is once again a "threat" which Governments can use. However, this is not the threat of the hundred armoured division invasion of Germany. This is something far different and arguably more insidious. The response, in terms of draconian legislation restricting civil liberties, has been far harsher than anything from the Cold War period. Perhaps, back then, the rules were simpler. If the Warsaw Pact had ever crossed into West Germany, it's far from fanciful to suppose that within days we would be looking at the incineration of our civilisation.

It's also far from fanciful that many now look back on the certainties of 1945-89 with more than a hint of regret.