Fukuyama's Post-Historical Model Got Politics Wrong and Economics Right

Vladislav Inozemtsev

Security, Asia

The 1989 economic revolution that left the United States at the top of the global economic hierarchy didn’t provoke any political quarrels—to the contrary, it caused a short post-historical era in world politics.

Thirty years have passed since Francis Fukuyama published his famous essay on the end of history. I don’t want to go into the details of his argument, but his major idea was that, since the authoritarian communist regimes and the planned economies were crumbling around the world, liberal democracy and mar­ket economy will prevail in a manner which excludes the major conflicts common for centuries—and therefore the traditional “history” terminates. In the years that passed since the essay went out, dozens of scholars have dedicated their time and efforts in denouncing Fukuyama’s thesis by arguing that history is alive and well, while those who think another way are simply “dreamers.”

Of course, there is some evidence these days that not every trend supports the idea that history has ended—but I would say that outside of the political dimension, there was another one which firmly stood for quite a long time behind Fukuyama’s propo­sition. If one looks on the global economy, then one should admit it has changed from 1989 to 2019 much more than global politics has. While the political rivalry actually never disappeared entirely, and nations like Russia never became liberal democracies, the “end of economic history” could be easily recorded. 1989 was not only the year when the Central European nations revol­ted against com­munism, but it was the year when Japan suffered its biggest ever financial debacle and the Soviet Union started its economic decline; both de­velopments deprived the world of two economic powerhouses the United States was aware of for several decades. The scenarios of Japan becoming number one were forgotten and gave way to the idea that the United States entered the era of “unlimited wealth.”

The major difference between the post-historical economy that emerged in the 1990s compared with the traditional industrial economies of the nineteenth and twentieth centuries was the new type of cooperation between major economic areas. Previously the nations that tried to “catch up” actually used the same technologies as the others, but in a more effective way; this explains why their economic rivalry on­ly reinforced the political one. The fight for the markets excluded compromises simply because the entire game was a zero-sum one: if someone’s share rose, the other’s lebensraum decreased.