For a quarter of a century, the Berlin Wall symbolised the difference between the free markets of the West and the socialist economies of the East. On 12 June 1987, speaking at the Brandenburg Gate to commemorate the 750th anniversary of Berlin, US President Ronald Reagan issued a challenge to Mikhail Gorbachev, the general secretary of the Communist Party of the Soviet Union: ‘Tear down this wall!’ On 9 November 1989 the Berlin Wall came down.

At the fall of the Wall, when asked ‘Who won?’, Western political scientists cited the triumph of capitalism over socialism. The economists’ response was ‘Chicago’. The University of Chicago radically ...

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