The Year That Changed The World
If you think you're sometimes spoiled for choice, consider the lot of a news editor on the first weekend of June 1989. On the afternoon of Saturday, June 3, the condition of Ayatullah Ruhollah Khomeini, the Supreme Leader of Iran, began to rapidly deteriorate. Just before midnight, Khomeini, 86, died, his death announced on the radio a few hours later. Tehran is 31/2 hours behind Beijing, so at just the time the crowds in Iran were taking to the streets in extraordinary expressions of grief, the people of Beijing, no less in shock, were coming to terms with what had happened in the early hours of that Sunday morning. Troops of the People's Liberation Army had cleared the remnants of student protests in Tiananmen Square, shooting into the crowds as they did so.
But that was not all. As grief and horror respectively gripped Tehran and Beijing, Poles were awakening to a day of hope. In the spring, Poland's ruling Communist Party had been compelled to open roundtable talks with the opposition, including representatives of Solidarity, the civic and trade-union group that had survived the imposition of martial law in 1981. In Hungary in 1956, and again in Czechoslovakia in 1968, Soviet tanks had crushed popular reform movements. By 1989, however, the winds of change in Eastern Europe had reached gale force. In the Soviet Union itself, the General Secretary of the Communist Party, Mikhail Gorbachev, was discarding old habits like a teenager throwing out last year's fashions. The Soviet leadership no longer had the stony heart or iron fist to impose its rule by force of arms. And so on June 4, Poland was to hold an election, albeit one in which the Communist Party's position was protected. When the two rounds of votes were counted, Solidarity had won virtually every seat in the Sejm, Poland's parliament, that it could contest. The division that had scarred Europe since the end of World War II was coming to end. The rivets in the Iron Curtain were beginning to pop.
Historians, picking over what has gone before, revising past judgments, will tell you that our understanding of the past is never final. What were thought to be world-changing events dim into topics of an obscure Ph.D. thesis; what seemed to be small stories turn out to be the ones that shaped the future. All is relative.
Yet 1989 truly was one of those years that the world shifted on its pivot. Some things did change, and changed utterly; we are living with their consequences still. Some things ended, too not just communism as a state practice, for example, but also the idea that the international system is driven solely by state action. In a way that was only dimly perceived 20 years ago, elements such as multinational business, technological innovation and personal faith now shape our world just as states do.
Whatever the importance of events after 1989, the year itself is one for the ages. That was understood at the time. In the most famous contemporary analysis of current events, Francis Fukuyama, a brilliant American scholar who was then serving on the policy-planning staff of the U.S. State Department, published an essay in the journal the National Interest entitled "The End of History." The statement of his central thesis was unequivocal: "What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of postwar history, but the end of history as such: that is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government." (Fukuyama turned the article into a book, and over the years, in a spirit of generous intellectual openness, defended and refined his thesis in the light of the many attacks on it.)
In history's hourglass, 20 years amounts to just a dribble of sand. It is still too early to know if Fukuyama's claims will be fully borne out. As I write this, the world is transfixed by the events in Iran, a state that hardly rated a glancing reference in Fukuyama's original article. But one aspect of Fukuyama's thesis has been proven right in spades. Notwithstanding the fact that the world economy is in the midst of the most severe contraction since the 1930s, there really has been "an unabashed victory of economic liberalism" over a competing economic system that of a centrally planned economy which once appeared to offer an alternative to free markets.
By 1989, all but the most calcified leaders in the communist world knew that at the most practical level providing a decent standard of living to their people their god had failed. The bluster of Soviet leaders who had once seemed to believe that the planned economies would bury the West had disappeared. A senior West German official once told me that the moment of maximum danger in the contest between communism and capitalism had come in the early 1970s, when the most efficient parts of the Eastern bloc were within sight of the worst-performing Western economies. But then in the U.S., Western Europe and Japan, the revolution in information and communication technology kicked into high gear, fueled by the sort of innovation, risk-taking and access to capital that the planned economies could never match. That gave a huge advantage to Western businesses over their Eastern counterparts. Surveying the pinched, stunted lives their people lived and the stores filled (and hardly that) with shoddy goods, Soviet leaders such as Gorbachev and Aleksandr Yakovlev, who had spent 10 years in Canada, knew that capitalism had won.
A Chinese Ricardo
It was not just European communists who had come to that conclusion. Fukuyama noted that "anyone familiar with the outlook and behavior of the new technocratic élite now governing China knows that Marxism and ideological principle have become virtually irrelevant as guides to policy, and that bourgeois consumerism has a real meaning in that country for the first time since the revolution." In the newly released journals of Zhao Ziyang, an economic reformer who rose to become General Secretary of the Chinese Communist Party before being ousted just before the Tiananmen massacre, there is a marvelous passage on the wonders of free trade. Zhao lamented that in Mao Zedong's China, "self-reliance" was "an absolute virtue. It became an ideological pursuit and was politicized." Only after reform, he continued, "could we take advantage of what we had, and trade for what we needed. Each place and each society has it strengths; even poor regions have their advantages." David Ricardo could not have put it better.
The broad consensus that free markets and free trade are the surest route to dispersed prosperity has survived the many modern crises of capitalism. The Asian financial meltdown of 1997 did not lead to autarky and dirigisme, but to an examination of the crony capitalism that had curdled the efficient working of markets. After the Internet bubble burst in 2000, investors in Western economies did not hide their savings under the mattress but ventured them in property and financial derivatives until the market popped again.
Not even the great recession of today has persuaded people to throw over the market system and choose state planning as an alternative. In the recent elections for the European Parliament and Europe is supposed to be the part of the developed world that is least intellectually enamored of market capitalism right-of-center parties did well. To be sure, from the U.S. to China, policy responses to the economic crisis have contemplated an increased role for the state. But there is an intellectual chasm between Keynesian stimulus packages and the temporary public ownership of bank stocks, on the one hand, and the assumption that the state can and should plan the economy on the other. Those who doubt it, and who think that the world (including the U.S.!) is going socialist, are too young to remember the sheer audacity of those who once thought that economies could be planned, or the miserable consequences of their belief.
Europe's Glory Lost
One consequence of the common policy response to the economic crisis has been the realization that, as UCLA history professor Peter Baldwin put it recently in Prospect magazine, the Atlantic is narrower than many have assumed. There are of course differences in European and American views of the world, especially in their attitudes to the use of force as a policy tool. For many Americans, the historian Tony Judt has written, "the message of the last century is that war works." With memories of their bloodstained recent past still fresh, few Europeans think that. George W. Bush, with a Texan swagger and the conviction of the born-again that God was on his and his nation's side, was distinctly unappealing to many Europeans. But Bush is no longer President; Barack Obama is, and anyone who can get 200,000 cheering Germans into the streets is someone to whom Europeans are happy to see their future linked with.
It's worth remembering: both Europe and the U.S. are democratic, capitalist and open societies. Contrary to the European idea that the U.S. is a place where the devil takes the hindmost, nations on both sides of the Atlantic value substantial social safety nets. "The American welfare state is more extensive than is often realized," writes Baldwin. "The total social policy effort in the U.S. falls precisely at the center of the European scale."
Hard though some of them might find it to credit that claim, many Europeans have rejoiced in the policies that the Obama Administration has taken since the financial crisis broke. In its determination to control the excesses of financial markets, the U.S. can now seem almost Scandinavian in its commitment to a sort of duvet capitalism, warm and fuzzy. It's enough to make Europeans think as some have insisted since 1989 that when it comes to the power of example in the world, it is Europe, with its combination of free markets and social protection, rather than the U.S., that will lead the way.
It is a comforting thought, but it cuts no ice. Paradoxically, 1989, that year when Europe gloriously saw its divisions wither, also marked the end of its centrality in international affairs. For 200 years, European ideas, European wars, European ideologies and technologies that had their roots in European science together shaped the modern world. That lasted right up until 1989. The Cold War, certainly, was not solely fought in Europe; some of its most dangerous incidents took place in developing nations such as Cuba. But domination of Europe political and ideological, as much as military was its prize.
Twenty years after its annus mirabilis, Europe matters less than it did. This is not to say that it is a failure. Far from it; the two decades since 1989 have been a golden age in Europe, which has become the most extensive space of peace and widely shared prosperity in the world. As Europeans have become used to the gentlemanly negotiations and compromises that typify life in the European Union now with 27 members, when it had just 12 in 1989 so the old nationalism, which twice in the last century dragged the whole world into Europe's arguments, has died away. In its place has come what might be called "football nationalism" the waving of national flags and full-throated singing of national anthems done not to send young men off to war, but to cheer them in sports stadiums. In many ways, Europe today represents a wonderful passage in human development. But it is not one that gives Europe much influence elsewhere.
Especially not in Asia. As the Asian economy continues to grow and Asian political power with it so it becomes clear that it is Europe whose relative standing will suffer, not the U.S. Some European economies Italy, for example, or the nations of the old communist bloc are threatened by the growth of low-cost, high-quality manufacturing in Asia. Politically, Europe is a minnow in Asia (arguably, it has been since the 1940s and '50s, when colonial powers were thrashed everywhere from Singapore to Dien Bien Phu) but the U.S. is not. In a region where rivalries of the old sort between India and Pakistan, say, or China and Japan might yet kindle into flame, the power of the U.S. acts as a vital balancing mechanism. The U.S. has been a force in the Pacific for more than a hundred years; its role there will continue to bolster Washington's strategic significance in the new century.
Beyond the Reach of the State
The cold war was many things an ideological contest, a military and political one but it was identifiably a war between states and their allies. Since its end, however, three factors outside the direct control of states have shaped the international system.
The first of these is globalization, or the growing integration of national economies and businesses. Globalization has been at the heart of the most profound development in the world since 1989: the continued economic rise of Asia. Globalization has not simply improved the life chances of more people in a shorter period of time than has ever been seen before, nor just turned international businesses into significant players; it has presented the world with new strategic possibilities.
The origins of the Asian miracle lay in outward-oriented policies that encouraged integration of local manufacturing capacity with global supply chains, providing jobs for millions. China, above all, benefited from globalization, in more ways than one. After the Tiananmen disaster, China's leadership was lost and confused. It was not until Deng Xiaoping took his famous southern tour in 1992 that the policies of reform and opening up, which he had encouraged since 1978, got back on track.
That saved Communist Party authority. By providing a safety valve for discontent, China's boom helped sustain internal political stability. More than that: by linking the Chinese economy to that of the U.S., globalization contributed to global security, too. In classic models of international relations, it is easy to see how China and the U.S. might be rivals one established power, one rising one, both with high degrees of national cohesion and purpose. But with every passing week, as another meeting between American and Chinese officials takes place, as more Chinese students study in the U.S. and more American businessmen travel to the Pearl River Delta, so the network of contacts between China and the U.S. grows in strength. These are societies that are coming to know each other well, and knowledge is the essential foundation for mutual trust and respect.
The second nonstate factor that has shaped the world since 1989 is the rise of religious extremism. This did not come out of the blue; Khomeini had taken power in Iran in 1979, while it was more than 20 years since the Six-Day War had both fueled a revival of political Judaism and led Arabs, dismayed by the failure of secular nationalism, to turn to Islam for succor. Still, most observers missed the significance of radical Islam in 1989. That was an avoidable mistake. Bedraggled Soviet troops had finally left Afghanistan in February, defeated not just by guns and Stinger missiles, but by a conviction on the part of those fighting them that they were engaged in a holy war against an infidel invader. With the benefit of hindsight, it was worth asking: What will those fighters do now? The answer would come soon enough, as radical Islam spilt out of its heartland and took the shape of international terrorism. The long and unfinished fight against terror since 2001 is abundant proof of how hard state powers have found it to confront those who are motivated by millennial religiosity, fighting asymmetric wars.
Third and it goes without saying technology has changed the world. By 1989, personal computers were commonplace in the West, while mobile phones, though they were as big and heavy as a brick, were becoming a status symbol. But in March, unnoticed by all but a handful of enthusiasts, Tim Berners-Lee, a British computer scientist working at the CERN laboratory in Geneva, sketched out the building blocks that enabled the Internet to become a ubiquitous tool of communication and information.
Increased computing power and the Internet have been the essential underpinning of globalization; without them, the logistics firms in Hong Kong who manage global supply chains would not be able to do their job. But more than that, they have shaken the power of the state in ways that traditional theories of international relations could not comprehend. At a time when China's online community rallied to defend a woman charged with killing a man she said was trying to rape her, and in which protesters on the streets of Iran used Twitter to get their message to the outside world, the disruptive, revolutionary power of technology in even the most autocratic societies has rarely been so evident. It will continue to grow.
We did not quite see that in 1989. But that's forgivable. As a news editor could have told you, in that extraordinary year there was a lot going on.