Order, Decay, and Competition

History was never over.

Berlin wall, November 1989. Source: Department of Defense

In early 1989 Francis Fukuyama gave a talk and wrote a paper with the provocative title, “The End of History.” In this seminal paper he argues that with the collapse of Soviet-style communism, liberal democratic capitalism had no meaningful ideological competitor on the world stage. Smaller countries like North Korea or Vietnam might call themselves communist, but the internal contradictions of a centrally planned economy were fatal to its long-term viability.

A few months after Fukuyama published his paper, the Berlin Wall fell. History seemed to validate his thesis. The liberal democratic order might be suspended in a few thugocracies led by despotic rulers and their toadies, but the dynamics of a competitive economy, accountable politics, and stable political order seemed to be the best – and only – combination that could provide broadly distributed, sustainable prosperity.

But 12 years later came 9/11.

Photo: Michael Foran. Source: Wikimedia

Folks realized that material prosperity isn’t the only goal. People want meaning in their lives. Islamic fundamentalism appeared to provide that meaning, or at least enough meaning for young men to engage in suicidal jihadist strikes against western targets. The airliner attacks in New York and Washington were followed by train bombings in Madrid, subway bombings in London, truck attacks in Nice, and commando-style raids in Paris. While the organized centers of Islamic fascism could be defeated militarily, its spiritual core remains: the need for purpose, for a cause bigger than ourselves.

Today, Fukuyama wants to update his thesis, without going back to the prior notion of a continual clash of civilizations. He attempts to account for our need for recognition in his new book, “Identity.” In this monograph Fukuyama tries to understand recent exceptions to the modern liberal order: Osama bin Laden, Vladimir Putin, Xi Jinping, ISIS, Brexit, anti-immigrant politics, celebrity politics, and so on. He claims that our core need for identity can also explain the French and Russian Revolutions, the Reformation, the women’s, civil, and gay rights movements, #BlackLivesMatter, and #MeToo.

He tries to do too much. Our need for identity, for appreciation and honor, is important. But it’s not a philosopher’s stone that can explain every new idea and transmute lead into gold. The world is a complicated place, and people are complex creatures, with multiple, competing needs: security, prosperity, community, justice, meaning, and love, among others. We can’t be reduced to just a couple factors. His earlier work on political order and political decay was more effective.

“Desolation” by Thomas Cole, 1836. Source: Wikimedia

Political institutions rise and fall based on how well they serve our manifold needs. The materialistic order of western democracy has some major competition, but it’s not the dissolution and anomie of identity politics. That’s a by-product of our system, not a rival to it. Our principal ideological competitor is the state-sponsored enterprise of China and other Asian countries, where modern finance is blended with party politics and nationalistic zeal.

History was never over, it merely went on pause for a few years.

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2018-08-30T12:11:01+00:00August 30th, 2018|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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