First published in November 2009 on the occasion of the 20th anniversary of the fall of the Berlin Wall, and even more appropriate in 2014, the 25th anniversary and also the 100th anniversary of the start of the First World War.
It wasn’t just the Berlin Wall that fell in 1989, 25 years ago this week. It was also the inner-German border, with its barbed wire, electric fences, no-man’s land, trip wires, floodlights, minefields, watchtowers, razor wire fencing, patrols, dogs and self-shooting guns; it was also the other less well guarded but nevertheless fortified east-west borders along the Iron Curtain from the Arctic to the Black Sea.
There was a human cost to the Berlin Wall and the inner-German border. You weren’t allowed out, but that didn’t stop people trying. Some made it, many not.
Real estate investing is about finance and economics, about deals, but it’s politics that makes it happen; it was certainly politics that brought down the Berlin Wall and it was politics that brought about the rebirth and renewal of central and eastern Europe.
Václav Havel, president first of Czechoslovakia from 1989 to 1992 and then of the Czech Republic from 1993 to 2003 following the country’s split with Slovakia, was a dissident in the 1970s and 1980s and a thorn in the side of Czechoslovakia’s communist rulers. With others, Havel did much to help bring about the terminal decline in the communist system that ultimately led to the fall of the Berlin Wall and his country’s rejection of communism.
In The Lost World of Communism, a BBC TV documentary series, Havel made a telling comment about the legacy of the communist way of life, the impact that it had on society and people — “Two more generations will have to grow up,” he said, “before communism is forgotten.”
Berlin celebrated the 10th anniversary of the fall of the Wall in 1999 and the 20th anniversary in 2009. But it is Havel’s comment about the generations that strikes a chord. It takes 25 years to grow a generation, and that is why this year’s celebrations may have a deeper meaning for many, a resonant reminder of how things were and will not be again. There are now very few people alive who experienced the horrors of the First World War, the numbers who remember the Second World War are diminishing rapidly, and one day there will be no one left to remember communism and the Berlin Wall.
Communism is not forgotten. Those who lived under its harsh yoke will never forget it. But the passage of time means that the number of people who know what it was like is reducing all the time; “as we that are left grow old,” to quote Laurence Binyon. The crowds gathered in Berlin on 9 November and they celebrated, young and old.
But it is undeniable that those under age 25 today — the new generation — will not really know or understand what they are celebrating, just as many of those who are under age 70 today do not really know what it is like to suffer war, loss and deprivation.
The military activities, with significant losses, that NATO troops have been involved in around the world, notably in Iraq and Afghanistan, are a continuing reminder of the human cost of war but these activities are not part of total war on the European doorstep. Perhaps that’s part of the problem; if that fighting had been closer to home and more threatening to civilian populations, maybe governments would have taken more account of the negative public opinion.
Most people never got near the Cold War, never suffered its depredations. But the Berlin Wall was synonymous with the Cold War, a war that was fought largely in oppression, fear and secrecy. Binyon’s famous war memorial poem is apposite, even for the end of the Cold War that the fall of the Berlin Wall in effect represents.
Part of the Berlin celebrations — just two days before Armistice Day, the annual celebration of the coming into effect of the Armistice Treaty that marked the end of the First World War, on the eleventh hour of the eleventh day of the eleventh month — was devoted to remembrance services in commemoration of those 1,200 or so citizens of the German Democratic Republic (sadly, the exact number is not known as the GDR government was icily assiduous in not keeping such records) who lost their lives trying to cross the Berlin Wall or the inner-German border in search of freedom and a better life:
They shall grow not old,
as we that are left grow old.
Age shall not weary them,
nor the years condemn.
At the going down of the sun
and in the morning
We will remember them.
Commercial real estate is part of the fabric of modern society. Real estate investing doesn’t get more important than being part of the modern, multi-asset approach to asset management and wealth generation, even if we know that this asset management — whether undertaken by us as individuals or on our behalf by investment managers — isn’t at present providing the kind of positive returns that we need for a prosperous future.
This is also a reminder that what the real estate investment industry does in generating wealth, development and transaction activity isn’t just for itself, it is for the people who invest in the industry. Despite the recovery of world markets since the Lehman Bros collapse and the global financial crisis, maybe the future won’t be as prosperous as we would wish; are you prepared for that?
For the many millions of individuals across Europe, east and west, who are members of pension plans and insurance schemes, real estate investing is part of their efforts — whether they know it or not — to ensure financial security, part of their retirement income aspirations. Some people didn’t get to aspire to financial security or retirement income. They are the ones, two World Wars and a Cold War later, whom we now remember.
Richard Fleming is editor of The Institutional Real Estate Letter – Europe.
