In 1989, as communism was collapsing across Eastern Europe, Francis Fukuyama achieved intellectual celebrity—and notoriety—with a short essay, The End of History? “We may be witnessing,” he wrote, “the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government.” A quarter of a century later, he has not quite recanted. His latest work, Political Order and Political Decay: From the Industrial Revolution to the Globalisation of Democracy, elaborates a notion of “political development” that still presents liberal democracy as a culmination of human progress. But getting there requires “three sets of institutions in perfect balance: a competent state, strong rule of law and democratic accountability” . Developing these becomes “a universal requirement for all human societies over time” . But develop them out of sequence or balance and you can end up end up with militarism (Prussia, Japan); clientelism (Greece, Italy), or authoritarianism (China). And even if you get everything about right, the institutions may atrophy and decay—as in today´s U.S.A—because of state capture by powerful interest groups and a surfeit of checks and balances that make government action extremely difficult.
Fukuyama’s model of political development in fact turns out to be so demanding, and so contingently rooted in European history, that only relatively few states, mainly clustered in northern Europe and its former colonies, have so far achieved it to a satisfactory degree. For the rest of the world, the message appears to remain that there is no alternative, even though the model is very hard to replicate. So it is far from clear what kind of claim is being made here about the “Globalisation of Democracy.” Has it arrived already or is it still on the way? Is it destiny, or merely desirable? And what does it mean to talk about the development of liberal democratic institutions as a “universal requirement of all human societies?”
It starts with the state
Fukuyama’s point of departure (borrowing from Weber) is not democracy but the emergence of “modern” states from their patrimonial ancestors: replacing “governments that were staffed with the friends and family of the ruler [and other elites]” with “a state bureaucracy that is impersonal and universal” , meritocratic and effective. Sometimes, an evolutionary leap was prompted by war or the threat of war and the need to develop a military machine. This was pre-eminently the case in China when the lethally efficient Qin empire emerged from the ‘warring states’ period 2,500 years ago, but also in Prussia, starting in the 17th century and in Japan in the 19th century. (It is odd to hear China’s state formation, so long ago, described as “modern,” but Fukuyama explicitly embraces this anachronism, even claiming that “China invented the modern state” .)
China’s early success in creating an effective state was not balanced by any limit on the state’s power. Missing was the rule of law, understood as “a set of rules . . . binding on even the most powerful political actors” . Fukuyama sees the rule of law as historically rooted in religious institutions—in India, Israel, the Islamic world, but especially in Europe—that were “essentially legal bodies responsible for interpreting a set of sacred texts and giving them moral sanction over the rest of society” . In Europe the Catholic church “emerged as the guardian of a revived Roman law” . England benefitted in addition from common law, established after the Norman conquest to boost the legitimacy of the early monarchs. These institutions helped keep monarchy in check and shaped the nature of government as it became more representative. By contrast, “Because of its lack of a transcendental religion China never developed a body of law that stood outside the positive enactments of the emperor and had no legal hierarchy independent of executive power” .
Nor did Japan. Constitutional government and a highly efficient bureaucracy arrived during the Meiji restoration, but this was not so much a political settlement between local forces as the result of top down reform, in a quest to equal the West. As such, it failed to place adequate limits on the power of the emperor and elite, a part of which—the armed forces—seized control of the new bureaucratic machinery. Much the same was true of Prussia. It led a unifying Germany in the creation of a famously efficient state, with “regularity and transparency in the government’s behaviour” that facilitated growth and industrialisation, and that “over time evolved into a legal constraint on arbitrary despotism” . But this was not rule of law so much as “liberal autocracy,” a model for today’s Singapore. And the machinery of state was too autonomous: “a high-quality bureaucracy that could make decisions with virtually no accountability to democratic politicians” . This became a “state within a state” that was captured by an “absolutist coalition” of conservative and upper middle class forces .
“Peaceful political reform [through] social groups interested in having an efficient, uncorrupt government”  was another pathway to state modernisation. Here, Fukuyama gives top marks to the U.K., where an elite coalition responded to the administrative demands of industrialisation and empire with public sector reforms that largely swept away patronage in favour of meritocracy, and established a professional civil service. Fukuyama stresses that these reforms, initiated by the 1854 Trevelyan-Northcote Report, took place long before, and certainly not as a result of, universal suffrage. In fact, he notes, “countries that democratised early, before they established modern administrations, found themselves developing clientelistic public sectors” .
The U.S.A. “invented clientelism” . Most of its states gave the vote to all white men in the 1820s, but this heralded a long era of mass patronage, in which people expected political parties to reward supporters with jobs and favours. American mistrust of ‘big government’ meanwhile inhibited the development of a professional administration. Public sector reform began with the 1883 Pendleton Act but “The end of the patronage system at a federal level did not arrive until the middle of the twentieth century” .
In many other places, the patronage system has not ended yet. “Neither Greece nor Italy ever developed high-quality bureaucratic administrations; both remained mired in high degrees of clientelism and outright corruption” . Fukuyama discusses these states in some detail as exemplifying “modernisation without development,” but stresses that their political ills are by no means unusual. Patrimonial elites still cling to power in Latin America, and in many developing countries the state is capable of suppressing dissent but weak and ineffective in delivering public goods. The ballot box is no panacea, as even fairly elected governments struggle with the same incapacities; indeed, “Many of the failures that are attributed to democracy are in fact failures of state administrations that are unable to deliver” . “The central obstacle to development is lack of an effective state” .
This is especially and chronically so in sub-Saharan Africa, where colonialism “on the cheap”  laid no foundation for state building. In India, “the British . . . established an army, a national bureaucracy, an educated middle class, and a lingua franca (English) that could unite the subcontinent’s diverse ethnicities, religions and castes. . In East Asia, “Early state institutionalisation . . . made it easier to resist threats from the outside”  and enabled China, Vietnam and Korea to recover relatively fast from European and Japanese imperialist incursions in the 19th and 20th centuries. Whereas in Africa “the deadly legacy of European colonialism was . . . the profound absence of strong institutions” , and their absence is very often matched by the lack of shared, national identity. (“Nation building”—the welding of a common identity out of different regions, ethnicities and language groups—generally “runs parallel” to state building, according to Fukuyama.) Tanzania, he says, has done well in establishing a postcolonial, national identity, but is more the exception than the African rule: in Kenya, Nigeria and many other elsewheres, politics remains hostage to ethnic and ‘tribal’ divisions that were sharpened, or even invented, by colonial ‘indirect rule.’
For all its impressive breadth, Fukuyama’s story suffers from critical reductions and omissions. For example, Chinese cosmology and traditions of Buddhism and Daoism are boiled down to “lack of transcendental religion.” It´s a bit more complicated than that. On omissions, it is surprising to hear so little of France, given the immense impacts of its revolution and the Napoleonic wars. The Arab world is visited only fleetingly. Soviet Russia and its erstwhile satellites barely get a mention either: Fukuyama may consider them a historical cul de sac but, given his emphasis on state competence and capacity, it seems odd to altogether overlook socialist efforts at state building.
It is even odder to insist that the outcomes of highly particular historical experience must be universalised. Fukuyama frequently presents England (and later the United Kingdom) as a paragon of political development: bringing the necessary institutions together in good sequence and correct balance, and still managing to withstand the decay that now besets the hapless former colony of America. (This tribute would certainly bemuse many a Briton, and infuriate a good number in Scotland and Northern Ireland). Yet Fukuyama is clear that British political order resulted from a long process, encompassing the establishment of religious authority and, later, common law; the ‘glorious revolution’ of 1688; the industrial revolution’s unleashing of new social forces, and administrative reforms following the Northcote-Trevelyan report. Discussing the political alliance that promoted the latter, he notes that “this kind of reform could not have been possible except under the exclusive conditions of British upper-class life” . In short, Britain’s political development was essentially sui generis. Similarly, Fukuyama says of Costa Rica and Botswana, whose peaceful political development he hails (understandably enough) as well ahead of the trend on their respective continents, that in their cases “contemporary outcomes appear to be the product of a series of happy accidents” .
It is hard to see how democracy and political development can become “globalised” if they are the chance result of historical processes and happy accidents. Western governments and aid agencies clearly share Fukuyama’s belief in the virtues of effective and accountable states operating within the rule of law, but he offers no tips on exporting political development, or ways forward for poor and poorly governed counties. Copy Botswana and Costa Rica? Well, that’s a lot easier said than done for countries being pulled this way and that by the social and political forces that happened to emerge from their own geography and history. If anything, Fukuyama’s analysis of the way in which effective states develop (or, more often, don’t) makes it seem even less likely that much difference can be made by, say, having IMF consultants lecture civil servants on public financial management, or paying NGOs to hand out T-shirts complaining about corruption.
So in what sense can these hard-to-make pillars of political order be a “universal requirement?” They do not appear to be inevitable consequences of the march of history. Fukuyama perhaps means, rather, that decent societies cannot be achieved without these pillars—that the pillars are always and everywhere necessary, if not sufficient, for anything that might be called the good society. Yet at no point does he define the good society. (It would, of course, be merely circular to define it is as one with effective, democratically accountable government that is subject to the rule of law).
If prosperity is an important constituent of the good society, the argument for liberal democracy as a universal requirement seems less persuasive today than it was a generation ago. During the Cold War, average income and living standards rose steadily in the West, creating a new ‘consumer society,’ while Russia and Eastern Europe lagged behind in personal consumption as well as political liberties. This made it easy for Fukuyama to declare (in The End of History?) the “unabashed victory of economic and political liberalism.” But today some politically illiberal regimes—pre-eminently China—are delivering much better material standards of living for most of their citizens than in the past. In the West, meanwhile, incomes for most percentiles have declined or stagnated since the 1970s, unemployment is generally higher (and has seen some particularly sharp spikes), job security is generally lower, public services and social protection are in many cases weaker, and inequality in the distribution of income and wealth has risen very substantially nearly everywhere. It seems that liberal democracy does not necessarily deliver collective prosperity. Worse, it seems that it doesn’t necessarily deliver fairness either.
Rising inequality is incontrovertibly correlated with decades of neoliberal policies—privatisation, de-regulation, lower taxes and a general withdrawal of the state, leaving collective outcomes largely in the hands of market forces. Neoliberalism has been especially dominant in the English speaking world but has had global impact and major influence on the nature of current globalisation. John Lanchester has argued that Cold War ‘victory’ itself very probably emboldened neoliberal, market fundamentalism and unleashed new levels of ruthlessness and recklessness in the pursuit of profit: with socialism apparently down and out, capitalism could take the gloves off. But the most penetrating analysis of inequality has come from Thomas Piketty, who explores “the deep structures of capital and inequality” in a book published at the same time as Fukuyama’s, Capital in the Twenty First Century, and warns that “There is no natural, spontaneous process to prevent destabilising, inegalitarian forces from prevailing permanently” 
r > g = the rich get everything
Drawing on data as far back as the early 18th century, Piketty argues that the ongoing, steeply rising inequality in the U.S.A. and Europe (including the Scandinavian countries that are widely perceived as egalitarian) is a return to norms that prevailed before 1914. It was the two world wars of the 20th century, he claims, that disturbed these norms. The shocks of war dramatically reduced stocks of private capital (inherited wealth), while also prompting post-war governments to introduce progressive tax regimes and welfare programmes, at a time when reconstruction brought unparalleled rates of economic growth, especially in the three decades after World War II. A key indicator is the ratio of total private capital to gross national income. In France, this fell from 7:1 in 1910 to 3:1 in 1920 and 2:1 in 1950. It has since recuperated, to around 3:1 in 1990 and nearly 6:1 in 2010, and still rising. Measurements of wealth and income inequality over the same period follow very similar U curves.
Private capital, Piketty continues, now gets a return (r) on savings and investments that is well above rates of national economic growth (g). This was the case throughout the 19th century, when economies grew at no more than 0.5 or one cent per year, while capital earned a steady 5 per cent. Growth in the advanced economies is now flat-lining again at 19th century levels, while average returns on the re-accumulated stock of capital are at least 5 per cent. (The more you have, the more you make, as Piketty neatly illustrates with data from the endowment funds of American universities.) And if inherited wealth grows more than national income as a whole, the gap between those born rich and the rest can only widen. In short, “When the rate of return on capital exceeds the rate of growth of output and income as it did in the nineteenth century and seems likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.” 
If the distributional injustice of pre-democratic societies may indeed resurge under the aegis of liberal democracy, the latter´s “unabashed victory” seems much less worth celebrating. True, Fukyama does not in fact claim that liberal democracy is a universal panacea, sufficient to cure all ills. Extreme inequality, moreover, does feature as one aspect of his notion of political decay. (Which is reminiscent of the way that some true believers on the left used to say that Russia and its satellites weren’t ‘really’ socialist: anything that sullies the vision is dismissed as not the real thing.) Nevertheless, the question of whether liberal democracy will ultimately prevail everywhere is beginning to sound like a red herring: an odd fish, produced by the Cold War, that now seems largely beside the point--whereas the older question, of what is a fair and decent society, remains with us.
March 02, 2016, London
Political Order and Political Decay: From the Industrial Revolution to the Globalisation of Democracy, Profile, 2014, 658 pp
Capital in the Twenty-First Century (translated by Arthur Goldhammer), Belknap, 2014, 685 pp