Immediately after historic events, there is an information vacuum. The events are too old to be considered news, and it is too soon for scholarly historians to do thoughtful analysis. Into this vacuum in the aftermath of the collapse of the Soviet Union, the right wing propaganda machine created a myth, that has become conventional wisdom.
This myth is that the cold war between the Soviet Union and the United States was a conflict between socialism and capitalism. According to the script, the collapse of the Soviet Union demostrates a triumph of free market capitalism vs Maxism. This has been stated so many times that I think the average person almost believes this. But nothing could really be farther from the truth.
It is true that the fall of the Soviet Empire was a consequence of the failure of a completely state controled system. But it is just as true that Capitalism failed in 1929! More than 60 years before the fall of the Berlin Wall. What saved our form of government was the New Deal. That is, introducing the concepts of a social safety net, and government regulated markets. This is the model, a mix of regulated markets and public investments. From a strictly pragmatic non-ideological perspective, this is what has proven to work. Not Lazze-fare capitalism, not completely state controled economies but rather a prudent mixture of both.
The cold war was a contest between these mixed, market/socialist governments, and a repressive government with total state control. What prevailed was the hybrid market/socialist model. All of our politics is really an argument about the mix. What should be in the private sector, What level of regulation is appropriate for given markets and what are legitimate public functions. What is frightening about the current crowd in Washington is that they don't accept the New Deal! They really would like to turn to clock back to pre-1929! Which means that they've learned nothing from history.
We as democrats need to attack the myth of the conventional wisdom, that the Reagan years represent the triump of free market capitalism vs communism. This myth is the underpinning of the attempts to roll back the social safety net that we have inherited from the New Deal. We need to intellectually make the argument that this debate is over. We been there done that. It is a need for education.
There is nothing inherently evil in certain function being appropriately apportioned to the public sector. We need to make the case regulation is not a dirty word, regulation is what has prevent a second 1929!