The Rise of China is the Real End of History

War makes rattling good history; but Peace is poor reading.
                                                                         Thomas Hardy, The Dynasts 

Reprising Hegel’s view that the Battle of Jena in 1806 represented the “end of history”, Francis Fukuyama described the 1989 fall of communism in similar terms. Fukuyama was heavily criticised at the time and so, no doubt, was Hegel, but both dates saw dramatic changes in politics and international relations.

As a turning point 1806 culminated a thousand years of warfare where princes, whose authority was derived from God, gave orders and common men followed. From then onwards kings and other statesmen would govern by consent, slavery would become unconscionable (a notion first widely promoted in The Saxon’s Looking Glass, published in northern Germany in 1250) and national self-determination would become paramount. Liberty and equality (communism gave a second wind to the third arm, fraternity) became the tenets of acceptable government or at least its slogans.

The overthrow of communism in the Soviet Union between 1989 and 1991 represented the end of a very short history, really only confined to the Cold War of the previous forty-five years and, at a stretch, the period from the 1917 Bolshevik coup. The Soviet Union sought to redefine political interaction by specifying class rather than state interests as the criteria for friendships. The Soviet system was based on a belief that it would outperform market capitalism. Its failure to do so led to its collapse but for much of the period from 1920 it used Russian resources to undermine foreign regimes in a far more systematic way than had previous states in pursuit of their policies.

Bonaparte used the slogans of the French Revolution to support his attempts to conquer the world and was thwarted by English wealth and the opposition of the Continental nationalistic forces he stirred. But as the nineteenth century progressed, balance-of-power considerations remained dominant in a world where there remained a potential and a will on the part of powerful nations to use war to obtain territory and other gains. France felt threatened by its Carolingian co-successor, Germany, which was out-birthing and out-growing it. When Prussia seized tutelage over Germany from Austria, France was crushed in the subsequent Franco-Prussian war of 1870 and paid a massive indemnity of 5 billion gold francs (fully 40 per cent of the Versailles imposition on Germany).

Among the dominant Western powers in the 1815–1914 era, wars were confined to colonial land grabs including rivalry for the lands in the decaying Ottoman empire. Disputes within Europe were mainly settled amicably, sometimes as in the border between France and the new Italy, through plebiscites. There were some potential conflicts, as with the 1911 Algeciras crisis over rival French and German rights to Moroccan resources, but perhaps for the first time in history, the world’s greatest power, Great Britain, did not seek any new territories other than in areas then considered to be unoccupied. It was joined in this pacific policy by the United States, its rapidly growing former colony, which Britain took considerable steps to avoid antagonising.

As events unfolded, the pacific Anglosphere was to be engulfed in the Continental crisis. Even so, on the eve of the 1914 conflagration it was no longer considered legitimate for a nation to seize the territory of any other country, still less to liquidate or enserf an existing population of a state that was an accepted member of the international comity of nations. This comprised Europe, North America and latterly Japan. Nor was it acceptable to invade another country for plunder.

But as 1914 was to prove, these forces had not consolidated. While property rights had become accepted as more-or-less inviolate, political control continued to be contested. French fears about its increasingly powerful neighbour were joined by Russian fears over German intentions regarding its Polish possessions. Germany considered itself hemmed in by France and Russia which, as the nineteenth century was ending, was experiencing the fastest economic growth in the world. The other European player, Austria, was increasingly seen and recognised to be an archaic anomaly. Its dominant German and Hungarian elites controlled dissident Czechs, Slavs and others who wanted out. Hence it had insecure credentials as an enduring political entity and was vulnerable to internal fracture and became the touchstone for the 1914 conflict. 

The new world hegemonic ideology in communism was one enduring outcome of the 1914 conflagration. This dramatically punctured the previously established inviolability of private property. But even the communist ideology operated ostensibly within the Wilsonian Fourteen Points, which re-asserted the central notion that government by consent was the only legitimate form of government.

In this respect, the rampant nationalism that emerged in the 1930s in Germany, Italy and Japan was a throwback to a former brutal imperialism that reached back further to a xenophobic form of tribalism. Hitler sought to seize the territory of those who would be reluctant citizens. For over a century no other government had aspired to do this to countries under a recognised form of government. Hitler also restored a notion, antiquated for 800 years, of displacing or enserfing pre-existing people to provide lebensraum for Germans.

His Axis partners were more interested in seizing wealth and access to resources but resettlement territory was also a consideration.

The defeat of the Axis powers was a confirmation of Hegel’s End of History and Wilson’s Fourteen Points. The redrawn territorial boundaries that accompanied it were confined to shifting Poland west at the expense of Germany (and expelling Germans from other eastern European countries). The Soviet victors, however, pursued the seizure of private property with little pretence of compensation. But this was not, beyond the first few years, as war booty—indeed, after the mid-1950s Russia was a net subsidiser of the Eastern Bloc countries, many of which enjoyed greater prosperity. And its excursions beyond the heartland in Cuba and Africa were even more economically draining. Russian support of client communist movements in Korea then Vietnam (in both of which China was a reluctant associate) was a means of amassing more territory to the faith. But there was no conceivable means, or intent, of making economic gain from arming the insurgents/communist state aggressors in those two wars and other “national liberation” movements.

The seizure and nationalisation of private property was central to the communist creed but had been abandoned by all other political movements in the modern world in the aftermath of the French Revolution. Even in newly colonised Third World areas, as in India, prior property rights were respected.

With the Axis powers’ nationalistic fuelled interlude repulsed, the communist crusade for dominance became the sole agitational force for governmental change. Communism’s dead end was formalised in 1990 when its claims of its economic system to greater efficiency combined with a new universal brotherhood finally crumpled. 

So we entered a new End of History. This contained two dimensions. The first was an affirmation of the principle of government legitimacy dependent upon consent of the ruled. The second was a re-affirmation of the principle of inviolability of individual property rights. The potency of this owed much to the developments that paralleled the collapse of communism, which demonstrated practical means of national enrichment in the rise of the “Asian Tigers” (Singapore, Hong Kong, Taiwan and South Korea).

War always entails a negative-sum outcome. But during the over 150 years prior to 1990, forced land seizures and colonisations became accepted to be negative-sum games to both victor and defeated (perhaps the sole exception was Prussia’s defeat of and reparations from France). The Asian Tigers showed a better way forward. By the mid-1970s these four states were showing a new path to enrichment through trade, something Japan had previously achieved before embarking on imperialistic adventures.

This success undermined popular notions that the Third World was destined to remain poor in relation to the existing pantheon of wealthy developed countries. By the 1990s China and the last great nationalist freedom-fighting nation, Vietnam, had decided to emulate this success by liberalising their economies, strengthening individual property rights and embracing trade. They were accompanied by additional private-enterprise-based economies—India, Indonesia, Thailand and others—which deregulated crucial economic controls.

Any policy involving colonisation of lands from which previous inhabitants were expelled (or worse) made even less sense from the 1990s onwards as population growth was ceasing across all nations. The changed international ethics preventing political seizure of territory was, in any case, reinforced by lebensraum becoming unnecessary. Lands for agricultural settlement were no longer needed due to rising agricultural productivity, and the nightmare of an overpopulated world was transposed into the need for coping with diminishing and ageing populations.

From the last decade of the twentieth century, warlike statements and posturing were confined to marginalised, impoverished nations like Iran. Iran and other Islamicists might aspire to greatness militarily but still remain economically puny and easy meat even for their tiny proclaimed foe, Israel. The Islamicists might strike terror in the peoples they oppose but they are economically weak even with their oil riches.

The End of History, Fukuyama-style, meant market competition triumphing over socialist planning. But its more lasting effect was the re-enthronement of property rights that must be respected, not usurped; this process and the overthrow of communism itself owe much to the demonstrable superiority of alternative economic-political systems. The superiority of an approach that respects property rights rather than, Proudhon-style, considering them to be theft was reinforced through the mutual gain that is trade. 

The upshot is that if China takes world economic leadership from the USA it will not steal the resources of others any more than US companies seize foreign assets. Chinese companies, increasingly in alliance with others, will buy, not seize, what they wish to obtain.

China may, like Japan before it, fail to reach dominance in the twenty-first century. The USA, if it can rediscover the elixir that enabled it to recover from the Nixon–Carter years, may retain its leading role. But if not its replacement in China and India is by powers that simply want to trade and have no significant territorial aspirations in Europe, Asia or elsewhere.

Certainly, if the replacement of US hegemony is by China then the outcome will be inferior to a USA that is self-consciously in favour of liberty. But any future hegemony is almost certain to be based on mutual gain that stems from trade and respect for property. It is no longer legitimate or profitable for a nation to forcefully seize land, people or resources. Formerly Third World nations have achieved the fastest rates of economic growth mankind has ever experienced without contemplating the need to obtain political control over markets or sources of raw materials. All that is needed can be bought. In no case has success been achieved with warfare. This demonstration effect indicates that any change in political control of territory is in the future most unlikely to mean the seizure of private property. 

This atrophying of the concept of warfare to exploit a neighbour’s wealth is the real End of History. Economic growth and the discovery of its secret is a clear game-changer. It has already brought a prolonged period of relative peace—perhaps the longest such period ever. It has, we may hope, eliminated the traditional long-standing cause of conflict. While it may be over-optimistic to see this as a new era when conflict and war cease, in the future conflict will be in pursuit of other than economic benefits. And the aggressors’ focus on protecting and promoting belief systems (the most obvious being religious beliefs) rather than on internally generated economic wealth leaves them weaker than their victims in this highly important element of successful aggression. 

Alan Moran is the Director of the Deregulation Unit at the Institute of Public Affairs. Among his books is The Tragedy of Planning: Losing the Great Australian Dream, published by the IPA.

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