2066 history exam: The great powers sabotaged global prosperity

The worst folly was committed by the American people, writes Thomas Wright

This essay was written in response to Gideon Rachman’s invitation to readers to sit his ‘2066 history exam’. Of 170 entries, the FT is publishing the best five (see panel for the others). This piece addresses the question: Why did the “end of history” only last for 20 years?

The most powerful foreign policy instrument of the 1990s and 2000s was not a weapon or a diplomatic alliance. It was an idea. Like all powerful ideas, this one was simple: to achieve economic success, nations would liberalise and become more responsible members of an international community. And it came to pass. For 20 years, the world converged on a single model of liberal order with unprecedented prosperity and great power co-operation.

The great historical puzzle of the 21st century is why the world’s great powers simultaneously, and almost gleefully, tore this order apart and ushered in a new age of rivalry, protectionism and limited war, in which they were all much worse off. Why did the end of history — as Francis Fukuyama, then a 37-year-old researcher at Rand Corporation, termed it — come to an end?

The answer can be found hiding in plain sight in the prescient final chapter of Fukuyama’s book The End of History and The Last Man. Mankind, he wrote, was destined to struggle. If men “could not struggle on behalf of a just cause because it was victorious in a previous generation, then they will struggle against the just cause”. They would rebel against “peace and prosperity, and against democracy”.

And this is indeed what happened. The major powers all benefited from the age of convergence. Yet they deliberately brought it to an end.

Consider China. Its gross domestic product grew from $413bn in 1991 to $7.5tn in 2011, by which time it was the world’s second-strongest power. China could have co-operated with the US to stabilise its western flank. But instead, chairman Xi Jinping chose to conquer the South China Sea. He gained many uninhabited rocks but began a regional cold war that ushered in two decades of deglobalisation, stagnation and ultimately revolution.

Russia was also well positioned in 2011. Tsar Vladimir Putin had retreated into the shadows of the prime minister’s office and was considering retirement. Russia’s leader, Dmitry Medvedev, was acutely aware of the need for far-reaching economic reform. Russia had good relations with the US and even supported an American military intervention in Libya. It was not yet bogged down in its 20-year military campaign in Syria and the three-day tactical nuclear exchange with the US over the Baltics was still eight years away.

Mr Putin returned to power in 2012 and feared economic reform and political liberalisation would weaken his hold on power. He rallied the Russian people to struggle against the US-led order and accept the price of economic hardship. Russia was rarely out of the news in the 2010s and 2020s but its decline was inexorable, which made its dismemberment inevitable.

The east’s sabotage of the age of convergence may be understandable. Russia and China were always outsiders. But the real mystery is what happened in the west. It should have been its finest hour. Working with China, the US and Europe avoided a Great Depression after the financial crisis of 2008, which initially surpassed 1929 in its severity. The recession was milder than that of the 1930s and within a few years, growth returned and employment began to rise. In one of history’s great ironies, politics took a toxic turn even as the recovery took hold.

The EU failed to introduce adequate fiscal and financial reforms, leaving it defenceless when the next economic crisis arrived like clockwork in 2018 (following the east Asian crisis of 1997 and the financial crisis of 2008). Britain voted to exit the EU in 2016 with no clear plan as to its future global role. The negotiations dragged on for more than a decade, during which London’s financial sector was hollowed out and the UK economy declined in absolute terms.

No folly was as great, though, as that committed by the people of the US. No nation in history enjoyed such power, prosperity and influence. Yet Americans convinced themselves that they were being ripped off by the rest of the world so they began to withdraw. The first inklings of retrenchment occurred in the Middle East after the failed popular revolution — the “Arab Spring” — of 2011. Donald Trump was elected president on a wave of nationalist sentiment and he quickly suspended all US security guarantees in Europe and east Asia. By the time he was impeached 200 days later (one day for each $1m of his net worth), the US-led order lay in ruins. President Mike Pence cobbled together a new version of Nato but this collapsed after Russia tested it in 2019.

In the 1990s and 2000s, the world benefited from the positive network effects of integration. Progress on one front (economic prosperity) led to progress in another (co-operation of the great powers). The unravelling put these into reverse with terrifying negative synergies between disorder in the Middle East, Russian aggression, anti-globalisation sentiment and American nationalism.

The underlying cause was banal and inherently human. Some people grew bored of the status quo and enough went along because they could not comprehend a worse alternative. Passions overcame interests. And not for the first time. Approximately a century before, European nations celebrated the end of a century of peace and marched enthusiastically off to what was then the most devastating war in history. Folly may just be a part of who we are.

The writer is a fellow at the Brookings Institution

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