The Never-Ending History
What Comes After Capitalism and Liberal Democracy
Foreword: The following essay is based on notes I’ve prepared for a popular talk that I will be giving later today. The material will be familiar to regular readers but hopefully, the way it is presented makes it interesting even for them.
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The word “history” can mean many different things. For historians, history is foremost “a chronological record of significant events (such as those affecting a nation or institution) often including an explanation of their causes” (Merriam-Webster). In this sense, history is nothing but a succession of past events that some observers view as being causally related to each other. Philosophers, at least some of them, are however more interested in History (note the capital “H”). History in this sense refers to a global, coherent, and unique evolutionary process that displays a “meaning” that can be uncovered by reason. The thesis of the so-called “end of History” claims that this process will come to an end, implying that human societies will necessarily achieve a state of development characterized by institutions and practices that will no longer significantly evolve. A modern version of this thesis is defended by Francis Fukuyama in his book The End of History and the Last Man.[1]
Written after the fall of Berlin’s Wall and the demise of communist regimes in Europe, Fukuyama prophesied that capitalism and liberal democracy would emerge as the only viable, and ultimately the only prevailing, economic and political systems grounding the organization of human societies. More than thirty years later, there are obvious reasons to question the relevance of Fukuyama’s claim. Many historical events that have been observed since then reveal historical trends that seem to contradict the idea that History is coming to an end. Many regional wars and global terrorism indicate that the Western-type model of society is not unanimously accepted. Even in the Western world, the institutions of liberal democracy are under pressure with strong discontent coming from within societies, and sometimes are even retreating. While capitalism is still the only serious player in town as far as the economic organization of production and exchanges is concerned, there are signs that the free-market/trade view is no longer dominant. More concerning maybe, an alternative model of capitalism, sometimes called “political capitalism,”[2] is out-competing the liberal-democratic capitalism that dominates in North America and Europe. As it happens, History may not be ending. Quite the contrary, it may be repeating a similar pattern to the one leading to the rise of totalitarian states a century ago.
In what follows, I will explore this possibility, using Fukuyama’s thesis as a framework. Contrary to what is often claimed, while it is highly unlikely that History will end in Fukuyama’s sense, he nonetheless identifies mechanisms that are relevant to explain why History may tend or not toward its final capitalist and democratic state.
The Idea of “Philosophy of History”
To understand the “End of History” thesis, we have to return to the more general and fundamental idea of “philosophy of history.” What is called philosophy of history is a general reflection on the nature of historical knowledge, in particular on the possibility of acquiring an objective knowledge of history. Behind the thesis that History has an end, lies two key postulates that correspond to a particular conception of the philosophy of history. First, History has a direction or a telos. History marches toward an end state such that it is possible to identify stages through which human societies must pass. Second, History has a meaning. The telos of history reflects an evolutionary process that itself emanates from a fundamental mechanism tied to Human nature. This meaning can be discovered through the exercise of reason, thus implying that the direction of History can also be uncovered and become part of our objective knowledge.[3]
Philosophy of history is not a modern invention, but the idea became widespread among philosophers and social scientists in the 18th and 19th centuries. Authors as diverse as Marx, Hegel, Mill, Comte, Kant, or Spencer have developed a particular account of it. The interest in finding a direction and a meaning to history is related to several features of this period. In particular, the development of natural sciences and the successful search for natural laws clearly inspired the endeavor to find equivalent “laws of historical development.” Moreover, Enlightenment philosophers promoted the idea that such kinds of laws can be found by the exercise of reason and are thus accessible to the Human understanding. Finally, the history of the 18th and 19th centuries, marked in particular by revolutions and massive political and social changes, contributed to the view that Man is not only part of History but also that they can make it in such a way that the latter is not purely erratic.
Nowadays, the idea of philosophy of history is largely associated with Historicism, a mostly German school of thought that dominated German universities in the 19th century. Historicists argued – sometimes falling prey to inconsistency – at the same time for the specificity of “historical” or “cultural” sciences and for the existence of laws of historical development. Historicism has been accused by influential intellectuals such as Karl Popper or Friedrich Hayek of having paved the way for totalitarianism, on top of defending implausible scientific methodologies and theories. Whether or not this is the case, it remains that the idea of philosophy of history is not tied to historicism and can be approached from a less radical and more scientifically-relevant standpoint.[4]
The End of History Thesis
Fukuyama’s thesis can be summarized as follows: it is possible to identify transhistorical mechanisms “pushing” History toward capitalism and liberal democracy. More specifically, two such mechanisms are identified. First, the accumulation of knowledge permitted the development of natural science. Second, the general need among Humans for recognition and self-esteem that Fukuyama captures by the Greek word thymos. Fukuyama’s general endeavor and the specific mechanisms he identifies largely draw on Marx and more fundamentally on the writings of Hegel and 20th-century French-Russian philosopher Alexandre Kojève. The results emerging however are radically “non-Marxists.” Fukuyama does not obviously predict the fall of capitalism and the emergence of the communist society, he also refrains from committing to a fully deterministic theory. For sure, he claims that the two mechanisms he identifies must logically culminate in the emergence of the “last man” (more on that below) but he makes it that this is not a historical necessity. Not only there can be historical events that temporarily pull a society out-of-the-path of History. Fukuyama more fundamentally identifies an inner contradiction in History that casts doubt on the stability of its end state.
Regarding the first mechanism (that Fukuyama weirdly calls “the Mechanism”), the growth of scientific knowledge largely explains why capitalist economic institutions should ultimately prevail. In essence, the growth of scientific knowledge has two implications for the internal organization of human societies and the relation between them. First, the growth of knowledge leads to technological improvements that confer a decisive advantage in military competition to societies that enjoy them. Societies that are efficiently organized to favor the growth of scientific knowledge will militarily outcompete societies that are unable to foster technological progress. Second, scientific knowledge permits the growing satisfaction of insatiable human desires, notably for material wealth.
The growth of scientific knowledge is tied to the overall “rationalization” of human societies. It has provided the material and cultural background against which the organization of the state based on impersonal and formal rules (what Weber called the “bureaucracy”) and the emergence of more efficient organization of labor through industrialization processes have developed. In return, bureaucratic and industrial organizations have proved successful in promoting further growth in scientific knowledge. In a way, communism and capitalism are the two general schemes of economic institutions that have evolved from the rationalization process of human societies permitted by the growth of scientific knowledge.[5] However, while the planning systems of communist economies have been unable to cope with the Hayekian problem of the dispersion of knowledge, the market-price system of capitalist economies has permitted an efficient allocation of resources and sustained economic growth.
Despite its obvious importance, the growth of scientific knowledge is however ultimately secondary. Thymos, that is, the need for recognition and self-esteem, is decisive to understanding why human societies necessarily tend toward democratic equality. Here, Fukuyama largely borrows from Hegel’s dialectic between masters and slaves. At the beginning of History, the need for recognition led some individuals (the first men) to assert their authority and domination over others. Thus was established the masters-slaves relation. However, the relationship was obviously going against the need for slaves to be recognized. Moreover, the masters themselves realized that domination over unequal beings could not allow for the full achievement of recognition as they would not be recognized by slaves, only eventually by other masters. Universal recognition is only achieved when the master-slave relation vanishes and when each is recognized by everyone else as equals.
Fukuyama argues that the need for recognition fueled conflicts and social revendications throughout history and culminated in the universalism of Enlightenment. Though only approximated, this ideal is realized in the principles and institutions of liberal democratic societies. Democratic equality, that is the fact that individuals are equal before the law and live under similar material conditions is the state where everyone is recognized by others as equal. Nonetheless, Fukuyama warns that the same pathological form of the need for recognition through domination that drove the first man (megalothymia) can still be at play. Liberal democracies, endowed with a constitutional-pluralist regime promoting the plurality of views while establishing checks and balances to prevent one view or one group of persons from shutting others, have been designed to regulate the expression of thymos.
At the End of History, the last man should prevail. The last man’s need for recognition is fully and eternally satisfied; their life being driven toward the satisfaction of their desires. However, as I indicated above, the emergence of the last man is not really of prophecy. Fukuyama notes that contingent events can slow down or even deviate societies from their march toward the End of History. More fundamentally, the End of History betrays a paradox. The last man is not the “man in history.” If History stops, that means that the actors of history are no longer the same – their essence has been changed. Why should we believe that this should be the case or even possible? Fukuyama gives indeed indications that the end of History may not be stable. The desire for domination (megalothymia) but also the need to strive for more equality (isothymia) are both pathological manifestations of the need for recognition that can destabilize democratic equality. Moreover, they can be triggered by the very conditions favored by liberal and democratic principles.
The Never-Ending History
Many stylized facts indicate that the direction of History is not the end state predicted by Fukuyama’s thesis. Two empirical considerations in particular are relevant. On the one hand, there are indications that constitutional democracy as well as political and civil freedoms are retreating worldwide. According to the Democracy Index of the Economist Intelligence Unit, the number of “full democracies” from 28 in 2006 to 25 in 2022.[6] The decline has been especially marked over the last 10 years, even when we abstract for the COVID pandemic period. The data reflects a number of observations of democracies in which basic civil liberties like the freedom of the press have receded and where the fairness of elections has been cast into doubt. On the other hand, there is no indication that economic freedom has similarly declined, at least up to the 2020 pandemic. For instance, the average score of the Index of Economic Freedom has increased by 10% between 1995 and 2020.[7]
Democracy in 2023 (source: OurWorldInData.org/democracy).
Average score in the Index of Economic Freedom from 1995 to 2023 (source: Heritage Foundation, Index of Economic Freedom 2023).
Though this should be counterbalanced by the fact the Index did indeed sharply decrease during the pandemic and by the general multiplication of restrictions on free trade, data thus tend to indicate that decoupling between the economic system and the political and constitutional framework is underway. Capitalism continues to be the dominant economic system and there is virtually no alternative that is emerging. Though the concept itself refers to a great variety of sets of institutions, virtually all economies in the world (with few exceptions) are organized based on the same principles: a logic of accumulation where a significant part of wealth is saved and is financing further investments, capital is mostly privately owned, and exchanges are largely made based on market prices. The fate of the liberal-democratic political framework is different. As data indicate, not only there are relatively few liberal democracies in the world, but their number also tends to decrease. The populist wave in Western countries betrays a weakening of liberal values and the growing acceptance of soft forms of authoritarianism.
A materialization of this trend is the emergence and consolidation of “political capitalism,” especially in Asian countries like China, Singapore, and Vietnam. Political capitalism refers to authoritarian regimes combining a mix of corporatism and a free market economy with reduced levels of political and civil freedoms.[8] Tellingly, the economic performances are relatively high (as predicted by the correlation between economic freedom and economic performance) but that did not lead to a democratic convergence. Quite the contrary, political officials in those countries but also, in some cases, foreign experts, link the ability to implement performing state-guided market institutions to the authoritarian nature of the political regime. However, far from being planning economies, the state-dominated economies of political capitalism are relying on the price system to allocate most of their resources. In this sense, political capitalism has nothing with the kind of socialist or communist economies of the 20th century.
Populism and political capitalism are two different manifestations of the continuing and maybe increasing manifestation of megalothymia. Authoritarianism, whether “soft” or not, builds on the charismatic form of legitimacy identified by Max Weber and which corresponds to the figure of the “strong man.” Rules and principles are not justified because they result from publicly justified principles that everyone has a decisive reason to endorse. They are rather grounded in the authority of a person or group of persons who successfully pursue the domination of individuals that they do not see as their equals.
Megalothymia in action.
On the other hand, the increasing importance taken by “identity politics” in liberal democracies reflects another pathology of the need for recognition. Identity politics can indeed be interpreted as an extreme form of isothymia where identity recognition transcends individuality and becomes collective. This leads to a reinterpretation of democratic equality that justifies the unequal treatment of persons by the law on the grounds of past injustices and also legitimates the infringement of basic personal liberties such as freedom of speech. In a way, while economic collectivism was the target of liberal authors in the 20th, “political collectivism” is today more relevant as a threat to liberal democracies. In the meantime, isothymia fuels also the protest against the increase of economic inequalities that largely supports the populist wave in Western countries.
The contemporary expression of pathological forms has been largely anticipated by Alexis de Tocqueville. Tocqueville was convinced that democracy was the unavoidable direction of History. But he also famously warned about the tendency of democratic equality to degenerate into a form of political apathy conducive to a weakening of associative life. By their political indifference, the last man creates a space for the expression of megalothymia that may easily result in tyranny by a charismatic leader in the name of the many and against general passivity. Contemporary identity politics corresponds to a renewal of associative life in which individuals find new ways to express their demand for recognition and to form communities.
Conclusion: The Return of Ideologies
The confrontation between Fukuyama’s account of the end of History and the historical events of the last two decades suggests that the “last man” may actually be an ontological impossibility. Historical trends indicate that identity-based ideas and practices, embedded either in variants of nationalism or in the “cancel culture,” are not made to disappear. The very same mechanisms that pushed History toward democratic equality prevent it from definitely stabilizing in this state. To this metaphysical impossibility of reaching the end of History, we must moreover consider the fact that capitalism might not be sustainable, both environmentally and socially, due to ecological pressures and technological innovations (i.e., AI). In light of this evidence, few today still believe that History has an end. But if History doesn’t end, that also means its open-ended nature makes it necessary to search for possible new directions. Ultimately, this is the meaning of History that is still to be found. To provide meaning to our lives, individual and collective, is the role of ideologies. So, if we can’t be at the end of History, what we can prophesy is the return of ideologies.
[1] Francis Fukuyama, The End of History and the Last Man (Penguin Books, Limited, 1992 [2012]).
[2] Branko Milanovic, Capitalism, Alone: The Future of the System That Rules the World (Cambridge, Massachusetts London, England: Belknap Press: An Imprint of Harvard University Press, 2019). Vikash Yadav, Liberalism’s Last Man: Hayek in the Age of Political Capitalism, First Edition (Chicago London: University of Chicago Press, 2023).
[3] In French, these two postulates can be elegantly summarized by the claim that “l’histoire a un sens,” playing on the polysemy of the word “sens” which in French can be synonymous with “direction” and with “signification.”
[4] For an early contribution to such an approach to philosophy of history, see Raymond Aron, Introduction à la philosophie de l’histoire: Essai sur les limites de l’objectivité historique (Paris: Gallimard, 1937 [1991]).
[5] In several contributions made in the 1960s, Raymond Aron that both communism and capitalism were specific cases of the “industrial society” that achieved dominance in the 20th century. Contrary to a widespread misunderstanding, while emphasizing some similarities related to these shared roots, Aron was not arguing that both economic systems would ultimately converge.
[6] See data at https://ourworldindata.org/grapher/democracy-index-eiu?tab=table&time=2006..latest. The Democracy Index measures the quality of democracies according to 60 indicators grouped into five categories: pluralism, civil liberties, democratic political culture, political participation, and the functioning of the government. Countries are noted on a scale from 0 to 10. “Full democracies” are noted between 8 and 10, “flawed democracies” between 6 and 8, “hybrid regimes” between 4 and 6, and “authoritarian regimes” between 0 and 4.
[7] The Index of Economic Freedom is an indicator of the Heritage Foundation. It identifies four broad categories of economic freedoms: the rule of law, government size, regulatory efficiency, and open markets. Data are available at https://www.heritage.org/index/.
[8] Thus, according to the Economic Freedom Index, Singapore is the economically freest country while an “hybrid regime” according to the Democracy index. Vietnam is ranked 72nd and qualified as “moderately free” (as well as France, Italy, or Spain) by the Economic Freedom Index and an “authoritarian regime” by the Democracy Index. However, China is still ranked as a “repressed” economy (154th) and authoritarian.