26 years ago, after the fall of the Soviet Union, the defenders of capitalism were euphoric. They spoke of the death of socialism and communism. Liberalism had triumphed and therefore history had reached its final expression in the form of capitalism. That was the moment when Yoshihiro Francis Fukuyama uttered his famous (or notorious) prediction that history had ended. What he meant by this was as follows: now that socialism (in the form of the Soviet Union) had failed, the only possible socio-economic system was capitalism, or as he and others preferred to describe it: “the free market economy”.

The defenders of capitalism predicted that the victory of liberalism would open the door for a guaranteed future of peace and prosperity. The economists spoke of a peace dividend. Now that the Cold War with the Soviet Union had ended, the capitalist governments would be able to spend vast sums of money to build schools, hospitals, houses and all the other things that are the essential prerequisite for civilised existence. Deserts would bloom, production would soar and the human race – supposedly – would live happily ever after. Amen.

26 years may seem a long time in the life of a man or a woman. But in the scale of history, it is only a fleeting moment. And yet in that insignificant segment of human history, everything has changed, and, as Hegel famously predicted, things have changed into their opposite. Today, not one stone upon another remains of the confident predictions of those days.

26 years ago, after the fall of the Soviet Union, the defenders of capitalism were euphoric. Today, not one stone upon another remains of their confident predictions / Image: antaldaniel

Second thoughts

Unfortunately for Francis Fukuyama, history is not so easily disposed of. And it is now taking its revenge on him. In 1992, carried away by the general euphoria of the bourgeoisie, elated by the fall of the Soviet Union, this American political theorist published a book with the interesting name: The End of History and the Last Man.

In this book, we read the following statement:

“What we may be witnessing… is the end point of mankind’s ideological evolution and the universalisation of Western liberal democracy as the final form of human government.”

But in an article published in the New Statesman on 17 October this year, he is singing a rather different song:

“What I said back then [1992] is that one of the problems with modern democracy is that it provides peace and prosperity but people want more than that… liberal democracies don’t even try to define what a good life is, it’s left up to individuals, who feel alienated, without purpose, and that’s why joining these identity groups gives them some sense of community.”

His critics, he said, “probably didn’t read to the end of the actual book [The End of History], the Last Man part, which was really all about some of the potential threats to democracy.”

A government official during the Reagan-Bush years, Fukuyama was originally close to the neoconservative movement. This probably explains his enthusiasm for the market economy and liberalism. But harsh experience has led him to change his mind, at least some extent.

Fukuyama supported the Iraq War, but by 2003, he concluded that it was a defining error of American policy. He has also become a critic of financial deregulation / Image: US Defence Dept

Fukuyama supported the Iraq War, but by 2003, he concluded that it was a defining error of American policy. He has also become a critic of such neoliberal shibboleths as financial deregulation, which was partly responsible for the disastrous economic crash of 2008. He is also a critic of the euro, or at least of its “inept creation”:

“These are all elite-driven policies that turned out to be pretty disastrous, there’s some reason for ordinary people to be upset.”

Marx was right!

To illustrate Fukuyama’s dramatic change of heart, we republish some extracts from the New Statesman article:

“The End of History was a rebuke to Marxists who regarded communism as humanity’s final ideological stage. How, I asked Fukuyama, did he view the resurgence of the socialist left in the UK and the US? ‘It all depends on what you mean by socialism. Ownership of the means of production – except in areas where it’s clearly called for, like public utilities – I don’t think that’s going to work.

“‘If you mean redistributive programmes that try to redress this big imbalance in both incomes and wealth that has emerged then, yes, I think not only can it come back, it ought to come back. This extended period, which started with Reagan and Thatcher, in which a certain set of ideas about the benefits of unregulated markets took hold, in many ways it’s had a disastrous effect.

“‘In social equality, it’s led to a weakening of labour unions, of the bargaining power of ordinary workers, the rise of an oligarchic class almost everywhere that then exerts undue political power. In terms of the role of finance, if there’s anything we learned from the financial crisis it’s that you’ve got to regulate the sector like hell because they’ll make everyone else pay. That whole ideology became very deeply embedded within the Eurozone, the austerity that Germany imposed on southern Europe has been disastrous.’

“Fukuyama added, to my surprise: ‘At this juncture, it seems to me that certain things Karl Marx said are turning out to be true. He talked about the crisis of overproduction… that workers would be impoverished and there would be insufficient demand.’” (My emphasis, AW)

We leave to one side the fact that Fukuyama demonstrates his lack of understanding of Marxist economics by confusing overproduction with the Keynesian idea of under consumption. After so many years of brainwashing in the school of free-market economics, it was too much to ask for him to have understood Marx.

It is significant that such a prominent defender of capitalism and critic of socialism should now draw the conclusion that Marxist analysis of capitalist crisis was basically correct / Image: public domain

Nevertheless, it is significant that such a prominent defender of capitalism and critic of socialism should now draw the conclusion that Marxist analysis of capitalist crisis was basically correct, that the unrestrained pursuit of free-market economics has led to mass impoverishment on the one hand and the complete domination of the world by an irresponsible and obscenely rich capitalist oligarchy on the other.

And he is absolutely correct in saying that, if this is not rectified, this oligarchy (both in the USA and in Europe) “will make everybody pay”. In reality, they are already doing so.

Fukuyama offers no solution

It is, of course, a matter of considerable satisfaction to see that even this dyed-in-the-wool defender of capitalism has begun to understand its reactionary nature. However, Fukuyama behaves like a doctor who, after giving a very comprehensive list of the symptoms of his patient, fails to provide a prescription for a cure.

Fukuyama is aware of the terrible deprivations caused by the ravages of finance capital and the anarchy of the market system. He has come around to the view, shared by an ever-increasing number of people, that the economy must be controlled. But then he stops short of drawing the necessary conclusion, which is that the giant monopolies and banks that exercise a brutal dictatorship over the entire world must be taken out of private hands altogether.

On the one hand, he calls for a return to socialism. The problem is that he has no idea what socialism is. He says that “ownership of the means of production” (except in utilities) isn’t going to work. But Fukuyama himself has drawn the conclusion that it is private ownership of the means of production that is not working, or rather, that it is working to the detriment of economic and social advance and causing misery, poverty and distress for the great majority of humankind.

It is now clear even to the blindest of the blind that the unplanned, capitalist economy is a finished recipe for chaos, dislocation, waste, mismanagement and corruption on a vast scale. Worse still, the unrestrained greed for profit that is the sole motor force of this system is destroying the environment, poisoning the air we breathe, the food we eat, and the seas and forests that are the basis of all life on the planet.

Serious problems demand serious solutions. The Spanish socialist, Largo Caballero once said that you cannot cure cancer with an aspirin. Fukuyama advocates the nationalisation of public utilities because “it is clearly called for”. We completely agree with him. But why is it not called for in the case of the banks, for example, which have demonstrated a complete inability to administer and control vast amounts of people’s money in a responsible manner?

The monstrous speculation, corruption and ineptitude of the banks was the immediate cause of the financial crisis of 2008, the results of which we are still living with. In the end, these fervent advocates of the free market economy, who opposed any suggestion of state intervention in the economy, had to be rescued by the injection of vast amounts of public money.

The monstrous speculation, corruption and ineptitude of the banks was the immediate cause of the financial crisis of 2008 / Image: Lisa Norwood

Instead of going to jail, which they richly deserved, they were rewarded for their incompetence by eye-watering sums stolen from the public treasury. That is the reason why we have colossal public deficits today, which, we are told, must be paid. The poor subsidise the rich. This is Robin Hood in reverse.

At the same time, we are informed that there is no money to pay for unnecessary things like schools, hospitals, care for the aged, pensions, education, roads and sanitation – all of which are in a lamentable state in Britain and the richest countries in the world.

If ever there was a sector of the economy that is crying out for expropriation it is the big banks. Why does Mr Fukuyama wish to keep them in private hands? If we limit nationalisation to public utilities, the most important sectors of the economy will remain as they are – in the hands of that very oligarchy against which Fukuyama rails. This kind of ‘socialism’ would solve precisely nothing.

Clearly, the main problem here is that Fukuyama confuses socialism and state ownership with the bureaucratic and totalitarian regime that existed in the Soviet Union. That certainly failed, and it was bound to fail. Trotsky pointed out that the nationalised planned economy needs democracy, just as the human body needs oxygen.

There need be no contradiction between a nationalised, planned economy and the fullest democracy. Real socialism is based upon the most active participation of the workers, both in the drawing up of a plan of production and its implementation. By this we mean not only the industrial proletariat, but every productive group: scientists, economists, technicians, managers included.

Without workers’ control and management, the economy will inevitably seize up and grind to a halt, which is exactly what occurred in the Soviet Union. The Venezuelan experience provides us with an even more damning verdict on bureaucratic control of nationalised industries.

The Chinese road?

From the article it seems that Fukuyama thinks that the only plausible systemic rival to liberal democracy is not socialism but China’s state capitalist model:

“The Chinese are arguing openly that it is a superior one because they can guarantee stability and economic growth over the long run in a way that democracy can’t… if in another 30 years, they’re bigger than the US, Chinese people are richer and the country is still holding together, I would say they’ve got a real argument.”

But he cautioned that “the real test of the regime” would be how it fared in an economic crisis.

Fukuyama’s confusion is illustrated very well by these lines. He was an impressionistic empiricist 26 years ago when he had illusions in the market economy because it appeared to be advancing continuously. He remains an impressionistic empiricist today, except that his admiration for China has risen to the same degree that his admiration for Western capitalism (“liberalism”) has waned.

Fukuyama thinks that the only plausible rival to liberal democracy is not socialism but China’s state capitalist model / Image: kremlin.ru

It is true that, in the last few decades, the Chinese economy has advanced rapidly. But, having entered the world capitalist economy, it has inherited all the contradictions of capitalism. China is now suffering from overproduction, which has led to a falling rate of growth and increased unemployment.

China’s official rate of growth this year stands at 6.5 percent. But China needs at least a growth rate of 8 percent per annum just in order to absorb the growth of population. Moreover, as Fukuyama hints, the Chinese economy is vulnerable to economic shocks originating in the broader world economy, when it is finding increasing difficulty in selling its surplus production and is in an open trade war with America.

It is also ironical that a man who claims to stand for liberal democracy should look to China as an example, given the Chinese regime is not well-known for its respect for human rights and democracy. In fact, China combines some of the worst features of Stalinist totalitarianism with the most negative features of capitalism. Along that road, there is no hope for the workers of China or any other country.

Capitalism means war

The world has arguably never been in such an unstable position. As a matter of fact, as long as the USSR existed, there was a relative stability, reflecting the relative equilibrium of power between Russia and the USA. But the Old World Order has broken down, and there is nothing to take its place.

We have certainly come a long way since those rosy predictions of a world of peace and prosperity after the fall of the Berlin Wall. The real world today bears absolutely no relation to that perspective. On the contrary, there is war after war. Quite apart from the horrific conflicts that are tearing apart countries like Iraq, Syria and Yemen, there have been a series of monstrous wars in Africa.

The terrible civil war in the Congo led to the slaughter of at least 5 million men women and children. That did not even make the front pages of the newspapers. President Trump has torn up the deal with Iran that restrained that country from acquiring nuclear weapons. Now he announces his decision to tear up the deal signed by Regan and Gorbachev to restrict the nuclear programs of the USA and Russia.

Fukuyama is worried by the potential for a US-China war:

“I think people would be very foolish to rule that out, I can think of lots of scenarios by which such a war could start. I don’t think it would be a deliberate attack by one country on the other – like Germany invading Poland in 1939 – it’s more likely to come out of a local conflict over Taiwan, over North Korea, possibly a confrontation in the South China Sea that escalates.”

Certainly, the contradictions between America and China are very serious. They find their expression in the trade war declared unilaterally by Donald Trump, which can easily escalate into something far more serious that can threaten to bring down the whole world economy. Similarly, the advance of Chinese power in Asia, in particular, its attempt to dominate the seas in that region, is seen as a threat by the USA.

Instead of a major war between the US and China, we will have small wars all the time – “small” in the sense of the wars in Iraq and Syria / Image: Министерство обороны Российской Федерации

That does not mean, as some people believe, that a third world war is imminent. Under modern conditions, world war would have a devastating effect on all parties. And the capitalists do not wage war for fun, but for the conquest of markets, profits and spheres of influence. Therefore, though Mr. Trump blows fire and brimstone in all his speeches, a general conflagration is ruled out.

Nevertheless, we will have small wars all the time – “small” in the sense of the wars in Iraq and Syria, which, in the modern world, is a sufficiently horrific prospect. But wars are merely a reflection of the unbearable contradictions between countries that, on the basis of capitalism, must fight each other for markets like hungry dogs fighting over a piece of meat. Capitalism means war, and in order to avoid war, it is necessary to remove its root cause.

The wheel of history

When Hitler’s triumphant armies entered Paris in 1940, an interesting conversation took place between a German and French army officer. The German, puffed up with the arrogance of a conqueror, boasted that, finally, his nation had taken its revenge for its humiliating defeat in the First World War. The French officer turned to him and said: “yes, the wheel of history has turned. It will turn again.”

A few years later, his prediction was shown to be correct.

Since the fall of the Soviet Union, the wheel of history has once again turned full circle. In spite of the predictions of the strategists of capital, history has returned with a vengeance. Suddenly, the world seems to be afflicted by strange and unprecedented phenomena that defy all the attempts of the political experts to explain them.

The people of Britain voted in a referendum to leave the European Union – a result that nobody expected, which caused shockwaves on an international scale. But these were as nothing compared to the tsunami provoked by the result of the American presidential elections: another result that nobody expected, including the man who won.

The election of Donald Trump was yet another earthquake. These events are the dramatic confirmation of the instability that has afflicted the entire world. Overnight, the old certainties have disappeared. There is a general ferment in society and a sense of widespread uncertainty fills the ruling class and its ideologues with deep foreboding.

Political commentators speak with dread of the rise of something they call “populism”: a word that is as elastic as it is meaningless / Image: Gage Skidmore

Political commentators speak with dread of the rise of something they call “populism”: a word that is as elastic as it is meaningless. The use of such amorphous terminology merely signifies that those who use it have no idea what they’re talking about.

In strict, etymological terms, populism is merely a Latin translation of the Greek, “demagogy.” The term is applied with the same gusto that a bad painter plasters a wall with a thick coat of paint to cover up his mistakes. It is used to describe such a wide variety of political phenomena that it becomes entirely devoid of any real content.

The political and social ferment that is shaking the whole world to its foundations is only a symptom of a far deeper crisis: not the crisis of neoliberalism, which is only a particular form of capitalism, but a terminal crisis of the capitalist system itself.

This crisis is destined to last for quite some time. On the basis of capitalism, there is no solution to it. Governments will rise and fall and the pendulums will swing from left to right, and from right to left, reflecting an increasingly desperate search of the masses to find a way out of the crisis.

This former liberal has lost all faith in the future of capitalism, but cannot see any viable alternative to it. His theoretical hopelessness is the expression of the hopelessness of the system itself / Image: Fronteiras do Pensamento

The so-called ‘populism’ is merely a reflection of this fact. The masses learn from experience, and have no other way in which to learn. The experience will be a very hard school, and the lessons will be bitterly learned. But in the end, they will be learned.

One thing is very clear. The bourgeoisie has no idea how to get out of this crisis. Its political and economic representatives display all the features of confusion and disorientation characteristic of a class that has outlived its historical usefulness, a class that has no future, and is dimly aware of the fact.

The apologists of capitalist liberalism complain bitterly about the rise of politicians like Donald Trump, who represent the antithesis of what is known as “liberal values.” For such people, this seems like a nightmare. They are hoping that they will wake up and find that it was all a dream, that tomorrow will see a better day. But for bourgeois liberalism, there will be no reawakening and no tomorrow.

The declarations of Francis Fukuyama, from that point of view, have considerable symptomatic importance. This former liberal has lost all faith in the future of capitalism, but cannot see any viable alternative to it. Like all the strategists of capital, he sees the future “as through a glass, darkly”. His theoretical hopelessness is the expression of the hopelessness of the system itself.

The future belongs, not to the effete and bankrupt bourgeoisie, that can see no further than the end of its own nose, but to the only really progressive force in society, that force which alone produces all the wealth of society: the working class. Through its own experience, that class will come to understand that the only way forward is to take the road of genuine socialism and workers’ power.