The collapse of the Islamic Republic of Afghanistan on August 15 sent shockwaves around the world. After two decades of democratic traps, it has disappeared, along with the hopes of millions of men, women and children; even as we hope that the “new” Taliban have learned from their own recent history and are avoiding indiscriminate retaliation. For the few of us old enough to witness the fall of Saigon in 1975, it sounds like déjà vu. At that time, it was the socialist challenge that took over. But Uncle Ho turned out to be much wiser than the Khmer Rouge and ultimately led Vietnam to an economic miracle if it followed capitalist lines. But for now, J. Schumpeter’s categorical “no” to his own rhetorical question, “Can capitalism survive?” seemed premonitory.
The fall of the Berlin Wall and the collapse of socialist protest in 1989 put an end to all the lost ground of socialism. “Euphoric” barely described the growing mood among those gripped by the Western worldview and educated in fear of a socialist takeover. We knew that something fundamental was finished. The socialist challenge had not only stalled, it is dead!
For Francis Fukuyama (1992), what ended was “history”, understood as the shock of competing arrangements for society and the economy. When the smoke finally clears, he supposed, the last survivor will be liberal democracy! For every challenge to liberal democracy, there will always be a time to settle the Berlin Wall! Many of this persuasion believed that 1989 was as definitive as the mathematician’s CQD. Liberal democracy had become the anointed of history. Fukuyama professed his belief that history is an evolutionary process but made evolution strangely eschatological revealing its direction and terminal state. Still, the euphoric license is generous. The fact that evolution is a process of emergence with irreducible unpredictability in its DNA has been lost in exuberance. Among the cronies, liberal democracy has the character of an absorbing state in non-linear dynamics – once there, you’re stuck. Karl Marx did he not Das Capital make a similar mistake when he made classless society the eschatos of its evolving system? The “end of history” thesis has been strongly criticized as hopelessly naïve. Huntington (1993) has suggested that the “clash of civilizations” with an emphasis on the Islamic challenge will quickly replace the “clash of ideologies”. The August 2015 debacle in Afghanistan reiterates Huntington’s point of view; as did the much scorned Arab Spring which sank into chaos and dictatorships.
Illiberal democracy is even more of a challenge at the end of the story. Venezuela, Turkey, Poland, Hungary, Thailand, Myanmar and the Philippines have slipped into illiberal democracy. What was once the heart of liberal values, the United States, now seems hopelessly fractured along the post-truth fault line. Autocratic China and Russia, both determined to drive a wedge between capitalism and liberal democracy, are on the rise politically and economically. Hong Kong, caught in the crossfire, has been torn from the Liberal Democratic fold. Meanwhile, the EU, which must now take in even more migrants after the collapse of Kabul, will see a seemingly irreconcilable conflict of cultures intensify that could further lead to what D. Murray (2017) calls “the strange death of Europe ”. As the time of the Berlin Wall recedes farther and farther away, liberal democracy is proving less and less of its own excuse to be!
What seems obscured in this jumble of claims and counterclaims is another deeper division: the clash between the individual and the group. Faithful to Immanuel Kant, liberal democracy considers the group as accessory to the individual; for its rivals, the group seems essential. Part of this may be due to relative wealth and how it is achieved: the North is already enjoying what the South aspires to. The wealthy North spoils the individual primarily by giving increasingly greater latitude to political and social preferences (what economists have called “universal domain” which in social media jargon is “my truth is as good as your truth ”) and teaches the South to do the same. The South knows that the North has achieved its wealth not by pleasing the individual, but by carefully sparing the scarce economic capital of the group mainly through two avenues: the blind and ruthless discipline of laissez-faire and the restriction of social preferences. and politics among its people. Another of Ha-Joon Chang’s (2002) kicking scales, in a way.
The Golden Age of 1878-1900, when the United States caught up with and even passed Europe had an abundance of jobs and land, but not an abundance of workers and minority rights. It was an illiberal democracy that breathed. Freed slaves were locked away by Jim Crow laws. Until the 1930s, the Chinese, Filipinos and Mexicans in California were treated like dogs and, when they resisted, were hunted down like canines (Bulusan’s America is in the heart, 1946; or Steinbeck Grapes of Wrath, 1939). So when China restricts preferences among its minorities, Uyghurs and Tibetans, and among Han Chinese dissidents in Hong Kong, it’s just being a good history student. In the Confucianist tradition, the individual has little meaning outside the group which in China is predominantly made up of 90% Han Chinese.
The insistence on the priority of the individual over the group is painfully reflected in modern Western economic thought which has adopted the behavioral type homo economicus as the first principle. Homo economic, indeed, is the sociopath of other social sciences, an autism spectrum devoid of all respect for others although gifted in other ways. Western economics, under the spell of the envy of physics over the past three quarters of a century, has moved further and further away from the study of real humans. That every economic agent is a fallible member of a group and regards others as valuable now asks to be restored to the heart of the hopeful post-physical envy economy. Homo economic is now a trivial group member with exactly one member, himself. All the much vaunted theorems of neoclassical economics still hold true, but only for this special nested subspace of humans. The economy can only help itself by adopting the humans of Kahnemann-Tversky as a starting position and by completing the program started by G. Myrdal (An American Dilemma: The Negro Problem and Modern Democracy, 1944) and H. Simon (Male models, 1957). The birth and death of groups, the entry and exit of groups like Brexit, the decision to migrate or become a suicide bomber become treatable economic issues. Perhaps the economy will then be able to better engage in the great debates of our time.
Raul V. Fabella is Honorary Professor at the Asian Institute of Management (AIM), Member of the National Academy of Science and Technology (NAST) and retired Professor at the University of the Philippines. He gets his dose of dopamine by hitting tennis balls with his wife Teena and riding a bike.