The Best Prediction of the Past 20 Years?

Before answering this question, let’s first examine what has happened over the past 20 years.

1. The world has gotten much more peaceful. I recall reading that the last couple years were the most peaceful in all of human history (and pre-history for that matter.) Perhaps someone can find the article.

2. The world has gotten much more democratic. The number of democratic countries has soared at the fastest rate in history, by far.

3. The world has gotten much more market-oriented. There has been a huge wave of privatization and deregulation of prices and market access. And this trend extends far beyond the formerly communist countries.

So the obvious choice for most successful prediction is Francis Fukuyama’s 1989 claim that “history was ending,” that the great ideological battle between democratic capitalism and other isms was essentially over, and that henceforth the world would become gradually more democratic, peaceful, and market-oriented.

So you would think that intellectuals would treat Fukuyama as a hero, that he would be figuratively hoisted on our shoulders and paraded around as the prophet of the new age. Just the reverse. I must have seen his name mentioned dozens of times in intellectual outlets like the New York Review of Books. And every single time, without exception, the reference has been derisive, mocking, a sort of rolling of the eyes in wonder than anyone could have believed anything so foolish. So what gives?

1. One possibility is that intellectuals are as impatient as little kids; and when the world didn’t reach nirvana almost immediately after his essay was published intellectuals assumed he was wrong.

2. Another possibility is that he was too optimistic. To be intellectually respectable one must sound pessimistic, otherwise you seems like a fool who just doesn’t realize all the “serious problems out there.”

3. Another possibility is that the thesis was too simple, and intellectuals love to talk about how complicated things are.

4. Or perhaps it was too triumphalist, suggesting that right-winders like Reagan were correct. Recall that most intellectuals lean to the left.

5. Maybe one needs to see the world though the lens of statistics, and most (non-autistic) intellectuals perceive reality as a series of stories presented by the media.

For whatever reason, the most impressive prediction of the past 20 has been met with almost universal derision. I should mention that one can find partial exceptions, people who acknowledge at least one of the three trends discussed above. For instance Stephen Pinker and Gregg Easterbrook have discussed the decline in violence, but more as a very long run trend. And of course there was Julian Simon. Many economists are aware of the neoliberal revolution, but I am also struck by how many I meet that are unaware of this trend, especially for the non-communist countries. But despite these partial exceptions, I don’t recall many people coming right out and saying; “Fukuyama was right!”

Now for the hard cases, the places where history still hasn’t quite ended. What do the following groups have in common?

1. The Christians of Lebanon

2. The rich of Venezuela

3. The Tutsis of Rwanda

4. The Sunni Arabs of Iraq

5. The whites of Bolivia

6. The residents of Bangkok, Thailand

7. The Serbs of Yugoslavia

8. The whites of South Africa

Each is a minority group that considers (or recently considered) itself the “natural rulers” of their country. And in the age of democracy that is a recipe for instability. (The Lebanese case even gives us a bit of time series evidence, as the troubles began about the time the Christians slipped into the minority.)

BTW, the reason for each group’s traditional dominance varies; it could be wealth, education, or an aristocratic tradition of military skills. I didn’t think the Iraq War would lead to a civil war, but that’s because I didn’t know the Sunni’s viewed themselves as the natural rulers of Iraq. Those who did, correctly saw that a US invasion could lead to a very unstable situation. Had Iraq been 70% Sunni Arab, then the US invasion might have gone smoothly. But perhaps there would have been other problems that I still don’t see. (No, I’m not suggesting that we look for majority Sunni countries to invade.)

I get very annoyed when I see people say “the Chinese case proves that economic development doesn’t inevitably lead to political liberalization.” There are so many problems with this sort of statement that one hardly knows were to begin. China has seen incredible political liberalization since 1978, indeed even some progress since 1998. But what about western-style democracy? To answer that question, consider the list above. I would argue that China most resembles Thailand. Both have similar per capita GDPs, both have a huge split between the urban elite and the rural poor. My hunch is that consciously or subconsciously, the urban residents of China are not thrilled by the idea of a pure democracy that would effectively turn the country over to the rural poor. But wait a few decades, when China goes from being 60%-70% rural, to 60%-70% urban, and from mostly poor to mostly middle-income, and from mostly undereducated to mostly educated. Then let’s see how Fukuyama’s thesis holds up.

History is still ending. Or maybe I should say “his story” is ending, the story of war, revolution and voyages of discovery. The Illiad and the Odyssey. And “her story” is beginning. A world focused on improving education, health care, cuisine, leisure time, the arts, communication, animal rights, the environment, etc.

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