Call it the age of optimism. Twenty five years ago, when this column first appeared, the world belonged to liberalism. Soviet communism had collapsed, the US claimed a unipolar moment, and China had joined the market economy. European integration had banished the demons of nationalism. The UK would soon be dubbed “Cool Britannia”.
You did not have to think the wheels of history had stopped turning to judge that the 21st century would be fashioned in the image of advancing democracy and a liberal economic order.
Today’s policymakers grapple with a world shaped by an expected collision between the US and China, by a contest between democracy and authoritarianism and by the clash between globalisation and nationalism. Britain is again the sick man of Europe. If this sounds insufficiently bleak, you can add the existential threat of man-made global warming.
The easy explanation is that the west fell prey during the 1990s to hopeless naivete. Victory in the cold war went to its head. Living standards were on the up. It was still possible, pre-Facebook, to imagine the internet as a global community for good. In any event, it is the human instinct to project the present into the future. Doesn’t history travel in straight lines?
Europe was no innocent in this respect. The continent’s liberal internationalists made common cause with US neoconservatives in promoting a great democratising mission. America had guns but the EU had its own “normative” power. Large swaths of the world were set to become, well, European.
The great unwinding since has seen the US-led post-cold war order give way to the return of great power rivalry, populists of far right and far left raising the standard of nationalism against European integration, and a mercantilist scramble for national economic sovereignty. In an era of authoritarian “strongmen”, headed by China’s Xi Jinping and Russia’s Vladimir Putin, democracy is in a defensive crouch.
And now western policymakers risk another big mistake by identifying China as the most pressing challenge to the ancien regime. The US and its allies, we are told, must concentrate their energies on gathering their resources to see off the threat. What we need is more submarines in the South China Sea.
Given Beijing’s belligerence, the argument is beguiling. It is also displacement activity, an excuse not to admit what has really happened since the 1990s. Yes, China has grown at a much faster pace than almost anyone imagined. But the explanation for the weakening of western democracies lies largely in the west.
America’s wars of choice in Afghanistan and Iraq are part of the story. They were intended as a salutary demonstration of US power. Instead these vastly costly and unpopular conflicts served to delineate the limits of the Pax Americana. The sole superpower promised to remake the Middle East. Instead, as we saw last month in the fall of Kabul, Washington has been forced to cut and run. The rest of the world notices these things.
The failure in the Middle East, however, pales into insignificance against the damage inflicted by the 2008 global financial crash. Historians will record the crash as a momentous geopolitical as much as an economic event — the moment western democracies suffered a potentially lethal blow.
The failure of laissez-faire economics was visible before the collapse of Lehman brothers. The incomes of the not-so-well off had long been stagnating under the pressure of technological advance and open markets. It was obvious too that the rewards of globalisation were being reaped by the rich and super-rich. The crash, though, crystallised what had become, in effect, an elaborate shakedown.
Those looking for an explanation for Donald Trump’s presidential victory, for the UK Brexit vote, or for populist insurgencies across Europe need reach no further. The excesses of the financial services industry and the decision of governments to heap the costs of the crisis on to the working and lower middle classes have struck at the very heart of democratic legitimacy.
What Trump understood, as did populists elsewhere, is that the voters’ respect for established politics is rooted in a bargain. Public faith in democracy — in the rule of law and the institutions of the state — rests on a perception that the system at least nods towards fairness. There have been reforms to that end since the crash, but little to suggest they are enough.
There was nothing wrong with the ambition of the post cold war optimists. It remains hard to see how the world can work without liberal democracy and a rules-based international system. What the optimists missed then, and the China watchers overlook now, is the hollowing out of trust in democracy at home. Of course, China is a potential threat. A second presidential term for Trump would be a much more dangerous one.
It may be that history will conclude that the excessive optimism of the 1990s is being mirrored today by too much pessimism. That’s a judgment I intend to leave to others. For a political commentator, 25 years in the same slot is long enough. So this is my last column. I will continue to write from time to time as an FT contributing editor, but otherwise intend to go in search of a better understanding of, well, history.
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