The fall of the Berlin Wall—a triumph for capitalism?

The Berlin Wall fell 25 years ago; hence we are now hearing a good deal about it. We are not, however, hearing much about the adverse impact this has been having on so many lives ever since. While the collapse of the wall freed the East Berliners of the shackles of communism, vast numbers of people around the world have since been shackled by another dogma, thanks to a misunderstanding of what brought that wall down.

The fall of the Berlin Wall, November 1989
Gerard Malie | AFP | Getty Images
The fall of the Berlin Wall, November 1989

Pundits in the West concluded that capitalism had triumphed. They were dead wrong. Balance had triumphed. While the communist regimes of Eastern Europe were severely out of balance, with so much power concentrated in their public sectors, the successful countries of the West maintained sufficient balance across their public and private sectors, as well as another sector that might be called plural.

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Arguably, the greatest period of development of any country ever — socially and politically as well as economically — came in the United States during the decades leading up to this event 1989, during which it was far better balanced than it is today. But the belief that capitalism had triumphed in 1989 has been throwing many countries — with the U.S. in the lead — out of balance ever since, on the side of their private sectors.

A healthy society achieves balance across a public sector of respected governments, to ensure certain basic protections (for example, in the form of policing and regulating); a private sector of responsible businesses, to supply many of our basic goods and services; and a plural sector of robust communities, wherein we find many of our social affiliations. Allowing any sector to dominate drives a society toward some form of totalitarianism.

Capitalism in its present form has been undermining the authority of governments, especially in the United States where a series of rulings by the Supreme Court has opened the floodgates to the private funding of public elections. And across the world, economic globalization has been diminishing the autonomy of many governments and the robustness of many communities. As Putnam put it about the latter, Americans are now inclined to bowl alone.

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As a consequence, we have been experiencing the denigration of our environments, the demise of our democracies, and the denigration of ourselves. As corporations have become "persons" in the law, persons have become "resources" in the corporations, with fewer and fewer protections. Are you a human resource? I am a human being.

How can we release the shackles into which we have put ourselves? We cannot wait for governments to take the lead: too many have become overwhelmed by private sector forces. Nor will the private sector come to our rescue. Its role is to provide us with goods and services, not substitute for government. Corporate social responsibility should certainly be welcomed, but anyone who believes that it will compensate for corporate social irresponsibly is not reading today's newspapers. In this climate, there will be no win-win wonderland of corporations doing well by doing good.

This leaves but one sector, the plural. I favor this label for it, instead of third sector or civil society, to help it take its place alongside those called public and private, while acknowledging its wide variety of associations — co-operatives, NGOs, and not-for-profits, as well as social movements to protest problematic practices and social initiatives to develop better ones. Community groups in this sector often have the inclination and independence to tackle difficult problems head on.

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"What now?" asked former U.N. Secretary General Kofi Annan in 2013, about the repeated failures of talks on global warming. His answer: "If governments are unwilling to lead when leadership is required, people must. We need a global grassroots movement that tackles climate change and its fallout." With some rebalancing of this kind, we may be able to count on more serious reforms from our major institutions, in both government and business.

Is this realistic? Perhaps the better question to ask is: Do we have any other choice? In 1776 Tom Paine wrote to the American people in his pamphlet Common Sense that "We have it in our power to begin the world over again." Paine was right in 1776. Can we be right again now? With the survival of our planet and our progeny at stake, can we afford not to be?

Commentary by Henry Mintzberg, Cleghorn professor of Management Studies at McGill University. He is also the author of the forthcoming book, "Rebalancing Society … radical renewal beyond left, right, and center." Follow him on Twitter @mintzberg141.