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solana109_robert wallisCorbis via Getty Images_manhittingberlinwall Robert Wallis/Corbis via Getty Images

The Partial Triumph of 1989

The fall of the Berlin Wall in November 1989 marked the end not of a historical chapter, but of a paragraph. Although capitalism currently has no rival, it has proven its compatibility with illiberal forces.

MADRID – November 9, 1989, is a date my generation will never forget, and one that will forever be inscribed in human history. On that day nearly 30 years ago, the Berlin Wall fell. The break-up of the Soviet bloc showed that communism was to become the second great ideological failure of the twentieth century, following the demise of fascism a few decades earlier. Liberal capitalism and its main exponent, the United States, reigned supreme, seemingly destined to enjoy a long, unchallenged hegemony.

Many countries flourished in the new environment. Poland, for example, installed a non-communist-led government shortly before the Berlin Wall fell, and, after overcoming some early transition problems, moved smoothly toward NATO and the European Union. The Polish economy last experienced a full-year contraction in 1991. And in 2009, when every other EU member state’s GDP shrank, Poland’s grew by almost 3%.

Today, however, we know that 1989 marked the end not of history as such, but of a specific chapter in history. Western liberal democracy, which Francis Fukuyama predicted would enjoy eternal supremacy after 1989, now faces an increasingly serious challenge from illiberal forces.

America’s period of dominance also turned out to be short-lived. The September 11, 2001, terrorist attacks against the US showed how vulnerable a great power could be to emerging non-state actors. In addition, China’s accession to the World Trade Organization the same year gave further impetus to that country’s spectacular rise. American hegemony crumbled, and the world gradually got used to speaking the language of multipolarity.

The rise of China has shattered many previous assumptions. Back in November 1989, the Communist Party of China (CPC) seemed extremely vulnerable. The other spearhead of communism – the Soviet Union – was facing an increasingly evident crisis, while China was still licking its wounds in the aftermath of the Tiananmen Square protests.

The CPC reacted to these two episodes by closing all doors to political liberalization. In the end, contrary to many predictions, the collapse of the Soviet Union did not lead to the downfall of the CPC in China. Nor has China’s economic development undermined its autocratic model, at least up to now. On the contrary, the CPC is reinforcing its primacy under the leadership of President Xi Jinping, and some governments have even begun to look to China’s authoritarian development model as a source of inspiration.

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But the Chinese authorities’ alternative narrative has some blind spots. The People’s Republic of China recently celebrated its 70th anniversary, thus outliving the Soviet Union. But communist China is not 70 years old: despite the official rhetoric, China’s economic takeoff was mainly the result of Deng Xiaoping’s liberalizing 1978 reforms, and the country’s leaders no longer harbor communist ambitions. As the economist Branko Milanović argues in his new book Capitalism, Alone, today’s Chinese model represents a different kind of capitalism, not a different economic system altogether. In this sense, Fukuyama’s predictions are yet to be proven wrong, as capitalism still has no rival worldwide.

The fact that nominally communist China is among globalization’s staunchest defenders is one of the great paradoxes of our time. In reality, China’s openness to the outside world is still relatively limited. But its government is nonetheless assuming a leading role in certain economic forums, mostly because others will not. The two major powers that previously did the most to promote free commerce – the US and the United Kingdom – are now in full retreat. These days, globalization is more popular in Asia than in the West.

Many in the US and Europe believe that globalization’s so-called losers have helped to bring illiberal figures such as US President Donald Trump to power. But economics provides only a partial explanation for this trend.

Consider Poland again. Despite becoming a poster child of a successful transition from socialism to liberal capitalism, and despite sidestepping the Great Recession, the country has embraced illiberalism in the form of the Law and Justice (PiS) party, which recently won its second consecutive parliamentary election. Although PiS has capitalized on economic discontent among some parts of the population, it has also tapped into deeper and more widespread concerns about Polish national identity. It is important to recall the extent to which Poland’s autonomy has been constrained in the last century – either involuntarily (by foreign powers’ occupation or control) or voluntarily (by joining the European Union). This record has led many Poles to distrust internationalist and cosmopolitan ideals.

Far from being antithetical, therefore, capitalism and illiberalism are now advancing in tandem and consolidating globally. And the progress of information technology could strengthen each of them simultaneously.

Since the invention of the World Wide Web (as it happens, in 1989), its impact has been more ambivalent than expected. In a sense, the Internet has helped to unite people, but it has also divided societies into echo chambers. Moreover, some governments are exploring the potential of the Internet – and related resources such as big data – as a tool for social control. The obvious example is the CPC, which wants to avoid any and all potential disruptions to its plans to reach “full development” in 2049, the centenary of the People’s Republic.

In his book 21 Lessons for the 21st Century, Yuval Noah Harari writes that, “If somebody describes to you the world of the mid-21st century and it sounds like science fiction, it is probably false.” But, he adds, “if somebody describes to you the world of the mid-21st century and it doesn’t sound like science fiction – it is certainly false.” In other words, the only certainty is unforeseeable change.

Because our predictions almost always miss the mark, it is best to avoid both fatalism and euphoria when looking toward the future. Thirty years from now, we could be living in a world where illiberal powers constantly collide. Or it could be a world in which values such as democracy and multilateralism have staged a comeback. The lesson from 1989 is that we should be modest. But that does not mean that we should become passive: what we choose to do today will unquestionably leave a mark on the world of tomorrow.

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