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The task of politics today is to scare the capitalists as much as communism did

As the big day dawned last weekend, Berliners held a huge street party, with more than 100,000 revellers gathering in the cold to ooh and aah over an epic display of fireworks. Elsewhere, celebrants of the 30th anniversary of the fall of the Wall followed their own time-honoured traditions. TV producers ran that grainy archive of burly Germans smashing sledgehammers into brickwork, while posh newspapers rolled out their grandest pen-suckers to pronounce on The Future of the Continent. Thus, a historic event that changed the world is stripped of some of its most troubling questions and tidied away into a neat little period piece, a Now That’s What I Call Perestroika! compilation album.

Let us try to change that today, for I come not to bury communism but to praise it – or rather, one aspect of it that gets next to no recognition. On its own terms, “really existing socialism” was a miserable failure: brutally repressive to its own peoples and ultimately unable to compete with capitalist economies. Yet it achieved something else that its own politburos and planners never intended - an achievement that represents one of our era’s greatest paradoxes. Communism didn’t topple capitalism, but kept it honest – and so saved it from itself.
The very presence of a powerful rival ideology frightened capitalists into sharing their returns with workers and the rest of the society, in higher wages, more welfare spending and greater public investment. By sending tanks into Prague in 1968, Leonid Brezhnev may have crushed the dream of “socialism with a human face”; but he and other Soviet general secretaries forced capitalism to become less inhumane. Conversely, the collapse of communism between 1989 and 1991 has left capitalism unchallenged and untempered – and increasingly unviable. The challenge of our time, whether in the UK’s general election or next year’s US presidential contest, is to build a political movement that can restrain a system spinning madly out of control.

You’re not meant to think of it this way. From the very outset, November 1989 was framed as the moment when capitalism could stop battling for survival and finally renew itself. The Guardian’s own leading article, published even as the Trabants queued by the mile to get into the west, summed up liberal hopes: “The wealth is at last available not only to tackle long-neglected evils at home, but to pay for a genuine fight against poverty, injustices and ecological disaster in the rest of the world.”
I trust I’m not giving away too much of the plot by observing it hasn’t panned out like that. Indeed, for most of the past three decades, the political classes – whether Tony Blair or David Cameron, George W Bush or Barack Obama – have accepted vast gulfs between rich and poor as just one of those sad facts of life. With tiny shrugs, they put it down to globalisation or the shifting job market – and deploy the work of top economists such as Harvard’s Lawrence Katz and David Autor who argue that income inequality has been a natural byproduct of technological innovation...