Who is most open to privatizing Lenin's mummy? You might think that it would be people to suffered under Communism, and want to turn their backs on anything tainted by it. But "Goodbye Lenin (or not?)" a fascinating paper by Alberto Alesina and Nicola Fuchs-Schündeln, suggests that exactly the opposite is true. Despite their negative first-hand experiences, people who grew up under socialism are more anti-market than people who did not. As Alesina and Fuchs-Schündeln explain:
If political regimes had no effect on individual preferences, one should not observe any systematic differences between East and West Germans after reunification. If Communism had an effect, in principle one could think of two possible reactions to 45 years of Communist dictatorship. One is that people turn strongly against the “state” and switch to preferences in the opposite direction, namely in favor of libertarian free markets, as a reaction to an all intrusive state. The opposite hypothesis is that 45 years of heavy state intervention and indoctrination instill in people the view that the state is essential for individual well being. As we shall see, we quickly and soundly reject the first hypothesis in favor of the second. In fact, we find that the effects of Communism are large and long lasting. It will take about one to two generations for former East and West Germans to look alike in terms of preferences and attitudes about fundamental questions regarding the role of the government in society.
A lot of economists would assume that East Germans are less pro-market than West Germans because they are poorer. But Alesina and Fuchs-Schündeln show that large differences persist controlling for income. And while there are several ways to interpret this result, I think the simplest is also the most plausible: Brainwashing works to a fair extent. The East German government failed to make its citizens love the Berlin Wall, but the quality of its mind-numbing propaganda was a modest triumph of socialist production.