The road to the end of history runs through Asia
The re-emergence of the two Asian giants, China and India, is in fact a return to the historical norm
In 1989, Francis Fukuyama published his widely cited paper “The End of History?” Fukuyama argued that the disintegration of the Soviet Union was a victory of liberal democracy over authoritarianism and the end of (ideological) history. The rest of the world would inevitably follow the only path left: Western liberal democracy.
From a Western, 1990s perspective, Fukuyama’s argument made sense, and we can only wonder why the West didn’t quit when it was ahead. It could have let illiberal regimes disintegrate by themselves. Instead, the West expanded the North Atlantic Treaty Organization toward the Russian border, waged wars of choice in the Islamic world, and undermined the spirit of the one-China policy by continuing to sell weapons to Taiwan.
In economic terms alone, the Western political establishment picked the wrong fight. Russia is one of the world’s largest producers of commodities, and China is the largest industrial producer and the largest creditor in the world. The beneficiaries of boycotting Russia and antagonizing China are few and far between and limited mostly to the producers of weaponry.
Rather than advancing the cause of liberal democracy, the West achieved the opposite. It strengthened the position of Russia in the Global South, led to the redirection of cheap Russian energy to China and India, gave the Organization of the Petroleum Exporting Countries (OPEC) an opportunity to move to a petro-yuan.
All this could lead to a partial de-industrialization of Europe, not to mention social and political instability. A mere 25 years ago, this scenario would have been unthinkable.
Post-industrial society and re-shoring
Fukuyama was not alone in getting ahead of history. Daniel Bell, the author of the landmark book The Coming of Post-Industrial Society (1976), predicted a society that will rely on the “economics of information” rather than the “economics of goods.” Bell anticipated the “services economy,” but he could not have foreseen a new phenomenon: re-shoring.
Bell argued in his book that post-industrial society would see the spread of a “knowledge class.” Knowledge workers would depend on the expansion of services in the economic sector and to “a society increasingly dependent on science as the means of innovating and organizing technological change.”
Again, from a 1970s perspective, Bell’s argument made sense. Power tools relieved us of most physical labor, and information technology (IT) reduced the need for mental labor. People would be more productive, generate more wealth, and have more leisure time, which would fuel the services industry.
With the benefit of hindsight, the transition to a services and information economy was only part of the story. In a service economy, people still need cars, clothes, TVs, computers, mobile phones, solar panels, and a host of other products.
The answer was globalization. North American and European companies, accountable only to their shareholders, moved the production of thousands of products to Asia to reduce costs. Trillions of dollars flowed to Asia, leading to ever-growing trade deficits while hollowing out the industrial base of the West.
At the height of the globalization wave, some 80% of all products sold by retailers like Amazon and Walmart were made in Asia, the bulk of it in China.
The trend may now be reversing. The West has identified China as a strategic rival, and the mantra of globalization is being replaced by re-shoring and “decoupling,” part of an emerging economic and ideological battle between East and West.
Beyond a Western-centric world
The American futurist Lawrence Taub, the author of The Spiritual Imperative (2002), claimed to have identified the cultural fault lines that can explain the conflict playing out between East and West.
Taub developed a macro-history based on Varna, the world’s oldest form of “psychological profiling,” developed in India some 3,000 years ago. The idea of Varna is part of an ancient prophecy described in the Veda classics. (Varna is often blamed for the caste system, which is a later corruption of a philosophical concept. Blaming Varna for the caste system is like blaming Albert Einstein for the atomic bomb.)
Varna identifies four human archetypes with distinct worldviews, social ideals, and qualities. The merchant mindset excels in efficiency, organization, and individual ingenuity, but tends to put profits before people. The worker excels in teamwork and values solidarity but tends to be conformist and shies away from taking initiative.
In Taub’s macro-history, the merchant archetype was dominant in Western society from the 17th to the 20th century. It enabled trade and industry to flourish. The ruling elite of the merchants (the “plutocrats”) are the top capitalists, financiers, and industrialists.
During the 20th century, workers asserted their rights. The ruling elite of the workers comprises the labor organizations, technocrats, and bureaucrats. They demanded more equitable treatment from their merchant employers and succeed to a large degree. But they were unable to break the merchant’s grip on political and economic power.
Taub argues that the political establishment is still captive of the merchants — the financiers and large industrial and technological conglomerates. The politicians, in turn, keep voters captive by aligning themselves with worker values like equality, human rights, and ecological causes, even while advancing the merchant agenda that widens the gap between rich and poor.
Seen in the context of Taub’s model, the West’s confrontation with Russia and China is part of an attempt to prolong the power of the merchants. That makes East Asia a natural rival.
China, like Japan and Korea, is a worker nation. It has worker values and excels in teamwork, a key attribute of the worker mindset. China benefited enormously from the globalization promoted by the merchants, but it keeps the merchants, both domestic and foreign, in check. The governments control the merchants, not the other way around.
Return to historical norm
Barring unforeseen calamities, China with its teamwork capitalism will be the world’s pre-eminent economy by 2030. India is close behind. It is industrializing rapidly by adopting teamwork capitalism in its own way. In the first two decades of this century, India’s growth outpaced that of China.
By the mid-century, China and India will be roughly on an equal footing once again. For most of recorded history, the two countries were the world’s largest economies, overtaken by the US only in the late 19th century. The re-emergence of the two Asian giants is in fact a return to the historical norm.
Having targeted China as a strategic rival, the West will go out of its way to avoid antagonizing India, the only country able to provide a counterweight to China’s global influence. India will become a vital powerbroker between East and West. It will be the indispensable nation of the 21st century, and in more ways than one.
As Taub argues, when the material needs of most of humanity have been met, India will help the world get out of the “materialistic” merchant and worker mindset. India has a deep reservoir of “spiritual” knowledge. That explains the global appeal of practices like yoga and meditation. By the end of the century, if not sooner, the world will have moved beyond materialism and beyond ideology, if not quite beyond history.