IN the decades following World War II, US and European policymakers came to believe in the modernisation theory that held that the march of progress was unilinear and irreversible for all societies. In a sense, history only traversed in one direction, from the past to the future. What this meant was that, eventually, all recently-decolonised African and Asian nations would become Western-style liberal democracies. In order to assist with this transformation, the US and its European allies put together a liberal international order comprising a set of international development institutions in order to promote capitalism and liberal democracy. This order is now under severe stress as the world is now re-entering a Hobbesian — chaotic and violent — phase.
The architects of the modernisation theory, like W.W. Rostow, believed that assisting new nations with economic development would speed up their movement towards becoming Western-style liberal democracies. Where some intellectuals genuinely wanted to assist poor nations, a significant portion of the modernisation project was part of the larger strategy to counter the spread of communism around the world. It was believed that if poor nations could be helped with economic development, the communist message focusing on redistribution would lose its mass appeal. These varied objectives provided the foundation for setting up the Peace Corps and the USAID.
The world seems to be re-entering a Hobbesian phase — complex, chaotic and violent.
The implosion of the once-mighty Soviet Union proved to be massive shot in the arm for the US and for the proponents of the modernisation theory, some of whom now worked at the IMF and the World Bank. Almost immediately, these proponents unleashed the Washington Consensus — a set of economic policies focusing on privatisation and deregulation, among others — on Russia and on the poor nations of the global south. Modernisation theorists were ecstatic as liberal democracy and capitalism seemed to have emerged victorious, at last. Triumphalism propelled Francis Fukuyama, an American intellectual, to declare capitalism and liberal democracy as the final stage in the human race’s social and political evolution. Fukuyama aptly titled his book The End of History and the Last Man. These celebrations turned out to be very short-lived, alas!
After reaching a peak in 2012, democracy has been retreating everywhere since. Only 13 per cent of the global population residing in just 34 countries has been classified as living under liberal democracies according to V-Dem, a nonprofit that studies governments. Storming of the US Capitol in 2021 shows that democracy is under pressure even in established democracies that have had a long tradition of efficient democratic institutions. Nativist populist political forces have posed serious challenges in different European nations as well, like Austria, Hungary, Italy and France. In the case of non-European nations, democratic nations are fast becoming what Fareed Zakaria labelled “illiberal democracies”, countries where despite elections citizens lack civil liberties like freedom of religion, expression and assembly. In other words, instead of spreading, democracies are deconsolidating.
Capitalism has not fared any better. The severity of the 2008 financial crisis and its malign consequences showed that markets are not always efficient. This fact led some to openly wonder what a post-American world would look like. The fact that capitalism was not working for a majority of the people was brought into stark relief by Thomas Piketty who lucidly showed that inequality in the US had reached levels last seen during the Gilded Age. Additionally, a robust response to Covid-19 and the stellar economic performance of China has now convinced a lot of people, even in the Western world, about the significant role that states need to play in formulating economic policies, the very point that was vehemently eschewed by the Washington Consensus.
On top of all this, Vladimir Putin’s recent aggressive actions have left this liberal order reeling. What this also points out is that history seldom travels in a straight line. Rather, history moves in cycles or as Karl Marx put it, “history repeats itself”. When it comes to social and political events, people and structural drivers, written off by most, continually regroup and resurface to challenge and change established orders. US and IMF economists overseeing hasty economic reforms in 1990s could have never imagined that the same Russia undergoing “shock therapy” would one day challenge the established liberal order.
Some intellectuals have welcomed the return of the state in economic policymaking as evidenced by the liberal use of fiscal policy as a much-needed corrective for hyper-capitalism. Some even welcome the purported end of unipolarity in international relations whereby only one country had a disproportionate amount of power. Still, the fact that democracies are now under attack everywhere does not bode well for the future as the world now seems to be re-entering a Hobbesian phase — complex, chaotic and violent. In other words, the present events are a far cry from what Fukuyama triumphantly claimed at the end of the Cold War.
The modernisation theory-inspired liberal order now stands almost dismantled. The impending chaos and the fact that history does not travel in straight lines offers some important lessons for policymakers in the Global South. As hyper-capitalism forces Western nations to ravage through their natural resources, these nations are going to run out of their natural resources sooner rather than later. In a Hobbesian world withoutorder what is going to stop Western nations from reclaiming and returning to their former ‘colonies’? The Global South’s policymakers would be well advised to move quickly towards peacefully settling their differences so as to present a united front against the West’s insatiable appetite for surplus and natural resources in what Thomas Hobbes described as a “war of all against all”.
The writer completed his doctorate in economics on a Fulbright scholarship.
Published in Dawn, March 28th, 2022