WITH NO COMPETITION:

I argued that History (in the grand philosophical sense) was turning out very differently from what thinkers on the left had imagined. The process of economic and political modernization was leading not to communism, as the Marxists had asserted and the Soviet Union had avowed, but to some form of liberal democracy and a market economy. History, I wrote, appeared to culminate in liberty: elected governments, individual rights, an economic system in which capital and labor circulated with relatively modest state oversight. [...]

Twenty-five years later, the most serious threat to the end-of-history hypothesis isn't that there is a higher, better model out there that will someday supersede liberal democracy; neither Islamist theocracy nor Chinese capitalism cuts it. Once societies get on the up escalator of industrialization, their social structure begins to change in ways that increase demands for political participation. If political elites accommodate these demands, we arrive at some version of democracy.

The question is whether all countries will inevitably get on that escalator. The problem is the intertwining of politics and economics. Economic growth requires certain minimal institutions such as enforceable contracts and reliable public services before it will take off, but those basic institutions are hard to create in situations of extreme poverty and political division. Historically, societies broke out of this "trap" through accidents of history, in which bad things (like war) often created good things (like modern governments). It is not clear, however, that the stars will necessarily align for everyone.

A second problem that I did not address 25 years ago is that of political decay, which constitutes a down escalator. All institutions can decay over the long run. They are often rigid and conservative; rules responding to the needs of one historical period aren't necessarily the right ones when external conditions change.

Moreover, modern institutions designed to be impersonal are often captured by powerful political actors over time. The natural human tendency to reward family and friends operates in all political systems, causing liberties to deteriorate into privileges. This is no less true in a democracy (look at the current U.S. tax code) than in an authoritarian system. In these circumstances, the rich tend to get richer not just because of higher returns to capital, as the French economist Thomas Piketty has argued, but because they have superior access to the political system and can use their connections to promote their interests.

As for technological progress, it is fickle in distributing its benefits. Innovations such as information technology spread power because they make information cheap and accessible, but they also undermine low-skill jobs and threaten the existence of a broad middle class.

No one living in an established democracy should be complacent about its survival. But despite the short-term ebb and flow of world politics, the power of the democratic ideal remains immense. 

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