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The December of 1989 marked the end of one of the most extraordinary six months of the century. Over that short period of time all of the communist-run dictatorships in Eastern Europe collapsed as the people of those countries sought freedom. The execution of the Romanian tyrant Nicolae Ceau?escu on Christmas Day of that year brought the revolutions to an end with a bang.
An ideologically and economically exhausted Soviet Union stood by and did not do what it had done so many times in the past: send in tanks to crush these rebellions. That country’s Communist Party boss, Mikhail Gorbachev, was trying to stave off the collapse of his own regime through policies of glasnost (openness) and perestroika (economic and political reform). In the end, communism in Russia and its empire would fall as well.
In December 1989 a delegation from the Heritage Foundation, of which I was a part, was able to hold the first conference on free market reforms behind the then-crumbling Iron Curtain. We were invited to hold the event in Estonia. That country had been conquered by and incorporated into the Soviet Union in World War II but, encouraged by the events in Eastern Europe, it was now seeking its own independence.
Academics and others in Moscow told us that they had heard the words of Ronald Reagan and Margaret Thatcher.
On the way to the Estonian capital of Tallinn, a colleague and I stopped in Moscow to meet with academics and others who were promoting reform. They told us that they had heard the words of Ronald Reagan and Margaret Thatcher, who didn’t worry about offending Soviet leaders but, rather, described the communist regimes as evil and offered hope to the peoples under Red repression that one day they might be free. Ironically, dissident scientist Andrei Sakharov died while we were in Moscow, awakening in those who favored freedom a renewed commitment to the vision of liberty he had championed.
We also found the economy in shambles. The stores were virtually empty, worse than the not-very-good conditions I had found on a visit in 1981. Flying into Tallinn, we noticed a half-dozen passenger aircraft (roughly the size of Boeing 727s) sitting out in the open, beside the airport runways, covered with snow. Western airlines generally fly their planes for twelve to eighteen hours a day and do maintenance at night. Yet here were pieces of capital equipment worth tens of millions of dollars, unused except perhaps as sources for spare parts. It was a metaphor for the economy.
In Estonia the economic situation was the same as in Russia. An interesting incident highlighted the nature of the Soviet system. In conversation, one of our hosts mentioned the problem with flammable water. “Water? Are you using the right English word?” He explained that pilots at the Soviet air bases in the region would get their bonuses based on flying all their training missions. One way inspectors determined whether they had done so was by seeing whether the fuel tanks were empty. Thus for decades military personnel would simply dump excess fuel into the ground—and thus into the water table—in order to ensure they received maximum pay. We explained that when no one can own property, there is no one responsible who has an incentive to protect it, backed by the power of law.
At the conference most of the talk was about how to change from socialism to a free market economy. But some of us also explained that free markets require a moral foundation, a belief in the rights of individuals to their own lives, liberty, and pursuit of happiness. It was the collectivist premise at the basis of socialism that ultimately needed to be vanquished.
In a central square in Tallinn we also saw something that had not been seen there for decades: a Christmas tree. Encouraged by the events in the rest of Eastern Europe, the people of Estonia were exercising their freedom and expressing their hope for a freer and better future.
In the two decades since the fall of communism, some countries—the now independent Estonia, the Czech Republic—have done relatively well while others have had a more difficult time implementing free market systems. This is because the success of markets is based on a widespread acceptance of the underlying morality of individualism.
It is ironic that this morality has been eroding in the West and in America, resulting in moves in the direction of the systems that ended up on the ash-heap of history in Eastern Europe. Thus, as the people of Eastern Europe reflect on their progress and future two decades after they gained their freedom, we should reflect as well, lest we give away ours.
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