Title: The Ideas That Conquered the World: Peace, Democracy and Free Markets in the Twenty-First Century
Author: Michael Mandelbaum
Scope: 3.5 stars
Readability: 4 stars
My personal rating: 5 stars
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Topic of Book
Mandelbaum argues that Woodrow Wilson’s dream of a world dominated by free markets, democratic governance and peaceful conflict-resolution largely came into being after the end of the Cold War.
Key Take-aways
- In 1918 U.S. President Woodrow Wilson presented to the world a radical vision of a world dominated by free markets, democratic governance and peaceful conflict-resolution.
- While it seemed utopian, was hugely controversial and appeared to fail miserably at the time, they are now the global norm. These principles have become so widespread that, we take them for granted. Even nations that violate these norms, pretend to do otherwise.
- Germany, Japan, Russia and China each tried to follow a different illiberal path, but ultimately they failed in World War II and the Cold War. Germany and Japan are now key nations in the liberal order, while Russia and China no longer offer an ideological alternative to that order.
- Allied victories in World War I, World War II and the Cold War were critical to this outcome.
- Europe, who had been at war for centuries, created a common security arrangement based upon weak offensive capabilities, strong defensive capabilities and transparency. Asia so far has failed to achieve that.
- Today even authoritarian regimes must generate economic growth to maintain their political legitimacy. Only market-based economies can achieve this. This is radically different from the past, when states relied on inherited titles, military power and religion to confer legitimacy.
- There has not been a war between the major powers since 1945, an astounding achievement.
- While there has clearly been a trend away from democracy since this book was published, even authoritarian regime need to pretend to be democratic and respectful of rights. This helps to moderate their behavior.
Important Quotes from Book
“In their aftermath, September 11 was widely said to have been an historical watershed, a moment when the assumptions that had governed the way the world conducted its affairs were abruptly swept away.
In fact, the attacks did not usher in a new world. Instead, they illuminated the main features of the world that already existed, a world that had emerged in its full form a decade earlier but had been two centuries in the making. It is a world dominated by three major ideas: peace as the preferred basis for relations among countries; democracy as the optimal way to organize political life within them; and the free market as the indispensable vehicle for producing wealth.”
“The attacks thus illustrated another defining feature of the world of the twenty-first century: the transformation, or at least the dramatic devaluation, of war—the age-old practice that, for the first two centuries of the modern age, did more to shape international relations than any other.
There was no possibility that the September 11 attacks would touch off a conflict anything like the great wars of the modern era, and the reason for this pointed to a third signal feature of the world of the twenty-first century. In the past, a blow to the international system’s strongest power would have been welcomed by its rivals. In the wake of September 11, however, every significant government in the world declared its support for the United States.
For this there was an obvious reason: Every major government in the world supported the market-dominated world order that had come under attack and of which the United States served as the linchpin.”
“The market-centered international order of the twenty-first century commanded almost universal allegiance not only because every country saw potential benefit in it but also because there was no viable alternative. In the past, those who had challenged the existing order of things had equipped themselves with alternative programs for the organization of political and economic life. ”
“Chapter 1 begins in the middle of the story, with the ideas presented as the basis of a new and better international order by the American president Woodrow Wilson in the wake of World War I. Eight decades later this set of ideas—peace, democracy, and free markets—had come to dominate international affairs, not in the sense that each was enthusiastically embraced and faithfully practiced everywhere but rather in the sense that they had no fully articulated and politically potent rivals. After Wilson first offered them to the world, victory in two subsequent conflicts was required for his “Wilsonian triad” to gain global ascendancy. One of them, World War II, was the bloodiest conflict in human history. The other, longer conflict ended with the triumph of the liberal, Wilsonian formulas for organizing political and economic life and remaining secure in a world of sovereign states. This second conflict, the Cold War, is the subject of Chapter 2, ”
“The foremost member of the world’s core at the outset of the twenty-first century, however, remains the United States. America stands at the core of the core.”
“To this post-Cold War rule there are, however, three conspicuous exceptions. One is a region, the Middle East. The other two are major countries, Russia and China, which are part of the periphery in economic terms but for the purposes of security are countries of the core. Along with the policies of the United States, the national futures of Russia and China will have a greater impact on the world of the twenty-first century than any others.”
“They had been the bearers of a political creed different from, and opposed to, Woodrow Wilson’s liberal values and practices. Their illiberal ideology failed and Russia and China abandoned it. But in discarding orthodox Communism, neither fully embraced the Wilsonian triad. Each pursued a foreign policy that was not entirely peaceful, conducted its domestic politics in a way at best partly democratic, and operated an economic system that was only incompletely marketized. Because Russia and China could shake the reigning international order if they placed themselves in determined opposition to it, as the terrorists of September 11 could not, the future of each is a major theme of The Ideas That Conquered the World, and in particular of Part Two, which concerns war and peace.”
“In the world of the twenty-first century, great war is the non-barking dog. ”
“The minimal likelihood of such a conflict in the wake of the Cold War sets the twenty-first century dramatically apart from the two preceding eras.
The devaluation of war is as important a feature of the world of the twenty-first century as the rise of the market. The two are in fact closely connected: When the main business of governments ceased to be the defense of their sovereign borders, the way was cleared for the promotion and maintenance of smoothly functioning free markets to become their most important responsibility. ”
“What are the prospects for Europe and East Asia to remain peaceful, and the world’s periphery, especially the Middle East, to become peaceful in the course of the twenty-first century? They depend, according to a set of ideas widely held if not systematically articulated within the countries of the core, especially the United States, upon the progress of the other two parts of the Wilsonian triad—democratic government and free market economics. ”
“The understanding of the world of the twenty-first century that prevails in the core countries—the “liberal theory of history”—consists of two propositions. One is that democracies tend to conduct peaceful foreign policies. The other is that where free markets are established, their working, over time, tends to promote democracy. Chapter 8 examines both propositions and finds them, with important qualifications, to have substantial validity.”
“At the outset of the twenty-first century, two important things were true about the status of the free market. One was that, as a method of economic organization, it held a commanding position in the world. It was as close to a universally accepted institution as had ever existed in human history. Chapter 9 describes and explains the market’s rise to global dominance. The other was that the construction and maintenance of a free market had proved to be far more difficult than had been imagined for most of the modern era. ”
“The economic history of the twentieth century teaches the lesson that national economies thrive to the extent that they have access to a global market.”
“For a brief moment in the winter of 1918–19, Woodrow Wilson, the twenty-eighth American president, bestrode the world like a colossus… he commanded wider attention and generated higher hopes than any American before or since. ”
“Wilson’s ideas did not take hold, another terrible war erupted two decades later, and his career came to be regarded as a failure, its details forgotten by all but historians. At the outset of the twenty-first century, however, these ideas had come to dominate the world.”
“The aftermath of the Cold War was the last stage in a recurring historical pattern.
In the Cold War, for the fourth time in the course of two centuries a great power had made a bid for political and military dominance on the continent of Europe and beyond.⁴ Each bid called into being an opposing coalition. On each occasion, after a bitter and prolonged conflict that included initial gains by the would-be master of Europe, the resisting coalition prevailed. On each occasion, the war destroyed the old political and economic order, creating the need to build a new one.
The French Revolution triggered the first of these cycles”
“A century later imperial Germany sought the mastery of Europe.”
“Two decades later, Germany, governed by the Nazi party and Adolf Hitler, again sought dominance in Europe… In the Asia-Pacific region, Japan took the role of Germany, the power bent on conquest and domination, and was defeated largely by the efforts of the United States.
The fourth great conflict followed almost immediately. The Cold War conformed to the familiar pattern… The collapse of Communism, and of the Soviet Union itself, brought the world, for the fourth time in modern history, to the final stage of the cycle.”
“[In 1917} the American entry had tipped the military balance against Germany. Alone among the leaders at Paris, Wilson insisted that his country would have no part of the claims of territory and economic compensation over which the European powers were fighting. His country, he emphasized, stood for new principles of international order that, once put into practice, would prevent a repetition of the ghastly conflict into which Europe had fallen in August 1914… With his lofty ambitions and soaring rhetoric, Wilson seemed a political messiah who could spare the peoples of Europe another journey through the hell into which they had stumbled.
Wilson failed. At the heart of his program was the establishment of an international organization, the League of Nations, that was to play a central role in keeping the peace… and in the end it turned out not to be effective in keeping the peace.”
“The Wilsonian vision had three other components, each of which, the American president believed, would contribute to a more peaceful world: restraints on armaments, popular government, and the unimpeded flow of commerce across national borders. These other pillars of his program—this “Wilsonian triad”
“Wilson’s ideas are familiar. They reappeared in the statements of American aims in the next war by President Franklin D. Roosevelt, initially in the declaration of the Atlantic Charter that he issued with British Prime Minister Winston Churchill, in August 1941, four months before the United States entered the war. They entrenched themselves thereafter in the political rhetoric of the Western democracies.¹⁹ They are staples of speeches by Western—especially American—political leaders on world politics and foreign policy. The Wilsonian ideas are so familiar that they have become the political equivalent of Muzak, scarcely registering on an audience whenever they are proclaimed… Wilson’s three precepts have become, over the course of the twentieth century, clichés.
“But this was not always so. In the decades after Wilson unveiled his vision of international order, the means he had advocated were bitterly contested.”
“The importance of the industrial and the French revolutions can scarcely be overstated. The first, which began in Great Britain in the middle of the eighteenth century, involved the substitution of inanimate for animate sources of power, the concomitant substitution of machines for human labor, and the use of new and more abundant (and ultimately man-made) materials. It led to the greatest change in human existence since the domestication of agriculture in the Neolithic age. The second, which substituted the popular will for dynastic inheritance as the basis for political legitimacy, was the most important event in Europe since the fall of the Roman Empire. The two revolutions formed the context for all that followed… Together they changed human life on Earth—decisively, irreversibly, and rapidly.”
“Wilson accepted the goals of the modern world but his vision of them was distinctive in two enduringly important ways. First, he offered a particular set of means to these ends. Wilsonianism provided a series of specific formulas for achieving peace, popular rule, and prosperity. Second, he asserted that the goals of liberty and prosperity also conduced to peace.”
“Wilsonianism was and is the spirit of liberalism applied to international relations.
While in the nineteenth century the principal political divisions in Europe were within European countries, between the forces of liberalism and those of tradition, after World War I the great conflict pitted sovereign states, some of them liberal and others neither liberal nor traditional, against one another. The term often applied to liberalism’s adversaries in World War II and the Cold War was “totalitarian.” In the Cold War, the liberal bloc came to be known as the free world.
Liberalism’s nineteenth century adversary could legitimately be called “conservatism… Liberalism’s twentieth century global adversaries, fascism and Communism, were not conservative at all but radical in pursuit of their ideological agendas.”
“The Wilsonian triad was liberal in the original and fundamental sense. Each of its component parts—democracy, free trade, and controls on armaments—involved restraints on the exercise of power by governments.”
“The three parts of Wilsonianism are liberal as well in that they establish explicit, impersonal, universal rules to govern politics, economics, and security. ”
“Although Wilson did not put it in these terms, the political forces that had caused the war were the same ones that the Parisians who pulled down the Bastille in 1789 had been attacking: World War I had been caused by the persistence of the old regime.”
“Fascism and Communism accepted two of the goals of modernity—popular sovereignty and economic growth—but prescribed radically illiberal means for achieving them. The contest for global primacy between the two of them and liberalism—two forms of modernity—would dominate the twentieth century.
The contest between international liberalism and fascist and Communist totalitarianism was over whether the popular will was properly expressed through the institutions and procedures of liberal democracy or through self-selected elite political parties presiding over extreme forms of state domination. It was also a contest over whether the wealth that the industrial revolution had made possible could be better achieved through the free market of the Anglo-American world or through much greater (in the case of fascism) or total (in the Communist case) control by the government of the basic economic tasks: investment, production, and distribution.”
“For as the twentieth century ended, what had been a dream for Woodrow Wilson had, to all appearances, come true. The new geopolitical landscape corresponded to the world Wilson had imagined, hoped for, and prophesied. A world dominated by the East-West conflict had given way to one in which liberal principles were unchallenged.”
“As for democracy, it was rare in Wilson’s era. World War I was won by a coalition of countries—the United States, Great Britain, France, and the British dominions of Canada, Australia, and New Zealand—that virtually exhausted the list of the world’s functioning democracies, ”
“The third Wilsonian precept, international commerce, was also a notable feature of the post-Cold War world. Between 1950 and 1996, the world’s exports increased by volume sixteen times over. (Total economic output increased sixfold.) In most countries merchandise exports³³ as a percentage of the Gross Domestic Product were considerably higher in the wake of the Cold War than they had been on the eve of World War I”
“The past, the history of the modern era through the Cold War, divided into two parts. The struggle between the world’s centuries-old political and economic practices, institutions, and assumptions and the forces that created the modern world dominated the “long nineteenth century,”⁴¹ from the French Revolution to World War I. This struggle pitted free markets, free elections, and a predilection for peaceful international conduct against more regulated and controlled economic activity, monarchical rule, and the acceptance of war as a normal instrument of statecraft. At the end of World War I the old regime lay in ruins.”
“In the “short twentieth century,” from World War I to the end of the Cold War, two versions of modernity clashed. Instead of liberal practices and institutions the illiberal version favored smothering control of economic activity, the repression of independent politics, and the active promotion of warfare. In World War II the liberal world made common cause with one branch of illiberalism, Soviet Communism, against two others—Nazi Germany and Imperial Japan. The Cold War matched the two victors of World War II. Liberalism prevailed and emerged without the mortal challenge it had faced in the nineteenth and twentieth centuries.”
“And yet the Cold War also differed from the others, with two specific differences having particular importance: its legacy, and the manner in which it ended.”
“It was only after the Cold War that the principles to which Woodrow Wilson had given voice achieved unchallenged status.”
“the Cold War was more explicitly a contest of systems than any of its predecessors.”
“The outcome of the contest of systems was decisive not only in what might be called the margin of victory—that is, in how far the liberal order outperformed the Communist one—but also in its geographic breadth. Economically, Communism failed everywhere: in Europe, in Asia, in Latin America, and in Africa. Its failure was indisputable and freely acknowledged.”
“Liberalism triumphed decisively for another reason. The winning coalition was united, and united in favor of liberal principles. This had not been so in the past.”
“the liberal system survived the Cold War not because it conquered the illiberal one but because its features proved to be better adapted to their common environment.”
“Those moments were decisive for the fate of Communism but what decided its fate was not the irresistible power of the crowds: It was the decision of the Communist authorities not to fire on them. The authorities certainly could have dispersed the crowds forcibly, as the Chinese regime did in June 1989 in Tiananmen Square in Beijing. Had they done so, European history would have followed a different course.”
“Belief in Marxism-Leninism had become so weak that it could not underwrite the dispatch of the hundreds of people whose deaths would likely have caused active opposition to evaporate or go underground.”
“The history of civilization is the history of the creation and the spread of culture. Culture spreads by contacts among different societies.”
“The theme of the history of the last five hundred years was born: the rise of the West.”
“Within the core, the French and industrial revolutions created the “long nineteenth century” (1789–1914), when the forces of tradition and liberal modernity clashed mainly within sovereign states, and then the “short twentieth century” (1914–1991), when, traditional institutions and values having been vanquished, the forces of liberalism battled against those of illiberalism.
The diffusion of the fruits of the two revolutions from core to periphery followed a different pattern than its course within the core. Chronologically it is more convenient to divide the modern age in the periphery into two uneven parts: the hundred years from the middle of the nineteenth century to the middle of the twentieth, and then the fifty years from the mid-twentieth century to its end. The initial period was an age of empire; the second the post-imperial, or post-colonial, age”
“In historical perspective latter-day imperialism may be seen as a method both for imposing foreign rule on, and for spreading the techniques of modernity to, the world’s periphery. It thus carried within itself the seeds of its own destruction.
With formal independence came the right to choose between liberal and illiberal principles of political and economic organization. The many countries of the periphery chose between them in different combinations, but their choices exhibited, at mid-century, a certain bias in favor of the institutions and practices of the Communist bloc, which had several attractions.”
“But over the course of the second half of the twentieth century the countries of the periphery gravitated increasingly toward the liberalism that Woodrow Wilson had unveiled in Paris, and for the same reason that the countries once ruled by Communism adopted it: its success.
Another reason for the drift toward liberal practices in the countries of the periphery is worth noting: the end of empire itself. ”
“The end of direct Western control made its liberal principles more attractive because they were no longer seen as part of an assault on the rest of the world.”
“What the West did during the Cold War was to protect the liberal world against the forces of illiberalism, the announced goal of which was to destroy them; what happened was that liberal ideas and institutions took root where they had been planted and then spread elsewhere. ”
“Great Britain and France invented the modern world. From France came popular sovereignty, the prevailing principle of political legitimacy. The idea, born in the French Revolution, that the people rather than a monarch should rule formed the basis for popular sovereignty and nationalism. From Britain came almost everything else. From within its borders emerged the idea that limits should be placed on governmental power through the rule of law, which is, along with popular sovereignty, the essence of political liberalism. ¹¹ The market economy first developed fully and was noted, codified, and supported in the British Isles. Great Britain is the country that first embraced the international implications of the liberal approach to economics, free trade. And it is there that the conviction that war is unnatural and avoidable first took hold.”
“After suffering defeat Germany and Japan blazed another trail that many others sought to follow. They successfully converted to liberal values, practices, and institutions. ”
“For both Nazi Germany and Imperial Japan, the organization of politics at home and of economics abroad were designed to serve the regime’s supreme goal: military conquest. ”
“The totality of their defeat was crucial for the course of the Cold War and ultimately for the character of the post-Cold War era. It paved the way for their conversion, in the postwar period, to liberal politics and economics. Germany and Japan became key components of the liberal core, having taken to liberalism with the zeal of the convert.”
“The national histories of Germany and Japan in the second half of the nineteenth century demonstrated the possibility of doing what all societies in the modern era ultimately attempted to do. The two countries caught up with the international leaders, climbing to the upper tier of the international system. Their parallel histories in the second half of the twentieth century also showed the possibility of doing what most countries were at least rhetorically committed to doing as the twenty-first century began: adopting liberal politics, economics, and security policies. And their experiences demonstrated the benefits of conversion.”
“The cultural gradient in Europe ran, as it had since before the beginning of the modern period, from northwest to southeast.²² Liberal ideas and institutions were carried from north to south in the Americas: Latin America was heavily influenced by the United States and Canada.”
“Responding to the challenge that the French and industrial revolutions posed to all traditional societies, Russia and China followed parallel courses. Both autocracies tried to modernize to defend and preserve themselves. Both failed, although the patterns of their failures differed. The traditional Chinese regime disintegrated steadily from the first part of the nineteenth century, when the Europeans established enclaves on its coast ”
“In both cases the Communist brand of illiberalism filled the political vacuum created by the demise of the traditional autocracy.”
“By some standards, and for some time, Communism in Russia and China achieved success. Communist parties seized and held power. With that power they destroyed all vestiges of the old order. By means of persecution and execution they suppressed dissent, driving into exile actual or potential opponents. They implemented the heart of the Communist economic program, the abolition of private property. They built what they took to be both the essence of economic modernity and the sinews of military strength: an economy emphasizing heavy industry.
All this came at a staggering cost to the Russian and Chinese societies.”
“Over the long term, however, the Communist approach to economic management failed. It could match the liberal core in guns but not in butter.”
“The liberal theory of history posits yet a third connection between liberal economics and peace, an indirect one via liberal politics: The market leads to democracy, and democracy leads to peace.”
“Historically, a market economy is a necessary but not a sufficient condition for democratic politics.”
“But politics and economics are more than closely connected. They overlap in a crucial way. A market economy is the basis for one of the main features of modern liberal political systems—civil society. Civil society consists of the independent social organizations—religious and professional groups, labor unions, civic associations—that stand between society’s basic unit, the family, and the state.⁷⁵ Countries under the sway of illiberal rule lacked all of them. It was the aim of the Nazi and Soviet states to eliminate all social groupings that the ruling party did not control. Civil society contributes to both parts of liberal politics. It gives weight to constitutional restrictions by providing a counterbalancing force to the state.”
“Market economics and democratic political systems merge in yet another and even more consequential way. They have a common underpinning, one so important that it is often regarded as an integral part of the liberal political system itself: the rule of law.”
“Historically, the three parts of what the twenty-first century has defined as liberal politics were established in a particular order: first the rule of law in the economy (property rights); next the rule of law in the public sphere (constitutionalism); and finally the extension of the franchise to all adult citizens.”
“By the middle of the twentieth century it was a settled task of government everywhere to achieve, or at least not to inhibit the achievement of, the universally desired goal of material well-being. The great question at the heart of twentieth century economic history was which formula for prosperity, the liberal or the illiberal one, was the more effective. And to that question, by the dawn of the twenty-first century, the answer was clear.”
“The industrial revolution did create, and in remarkable profusion, more things for people to purchase¹ and in so doing became the most influential development in human history since the invention of agriculture ten thousand years earlier.
This set the stage for the twentieth-century competition to determine the most appropriate political framework for industrial economies, which pitted the centralized planned system of the Communist world against the decentralized free markets of the West.
Its outcome was decisive. Of all the legacies of the twentieth century, this sweeping triumph of the free market is the one most widely accepted, and therefore most important, for the world of the twenty-first century.”
“The first phase of the industrial revolution made traditional society obsolete because it was incompatible with the basic requirements of an industrial economy. Among these requirements was the commercialization of agriculture. Land had to be treated as a commodity that could be bought and sold in order to produce enough food to feed a growing urban population and to make some rural labor redundant so that people would move to the cities to work in the new factories. Traditional societies varied widely across the globe but everywhere they were based on the land and nowhere was land simply a commodity. ”
“Unlike the world of tradition, for this first phase the Communist system proved adequate. Indeed, for a time it seemed optimal. The command economy could not have produced the machines on which the first stage of the industrial revolution depended. Once they had been invented, however, and the initial pattern of industrialization established, the command system proved serviceable. The enormous power of the state gave the government the means to squeeze savings out of the agrarian sector and to direct it to industry on a large scale. Communist countries typically had higher rates of investment than countries with market economies, and the governments of Third World countries attempting state-led industrialization also devoted themselves to mobilizing and directing investment. ”
“In fact, the Communist command system, first developed by the Soviet Union in the 1920s, was simply the most extreme version of a common pattern of industrialization in which the later the industrial revolution came to a country, the more extensive the role of the government in promoting it was likely to be, above all in mobilizing capital for investment.²³ To be sure, the guiding hand of the state was not necessarily superior to the invisible hand of the market in promoting the initial stage of the industrial revolution. In retrospect, it is not clear that Russian economic growth even accelerated under the system the Bolsheviks put in place.”
“The next stage brought to human life something that Marx and Engels did not live to see: the age of mass consumption. ”
“As important as it was in economic terms, in the twentieth century mass consumption turned out to be just as significant politically. It was something in which everyone, everywhere, wished to participate.”
“Mass consumption was another innovation of the Western core. Here the pioneer was the United States and it was a significant American contribution to human civilization.”
“For most of the modern age the test of political legitimacy was the capacity to protect sovereign borders. By the end of the twentieth century another test had equal, if not greater, importance: the capacity to “deliver the goods.” This was a test on which the state-led industrializers of the periphery did badly and on which the command economic systems of the Communist world did even worse. ”
“Communism proved to be a way station between the peasant societies in which it took power and the mass-consumption society that only the liberal approach to economic management could provide.”
“At the outset of the twenty-first century, therefore, Russia and China and many of the countries in the world’s periphery had once again become vast construction sites, but what was under construction was invisible, not tangible: the institutions of a market economy, which were everywhere considered the indispensable vehicle for achieving wealth.”
“One of the most striking properties of the liberal theory of history, and one it shared with Marxism, is inevitability. ”
“Governments will strive to build market economies because such economies, and they alone, make possible prosperity; prosperity is the post-Cold War condition for political legitimacy; legitimacy is necessary for survival; and every government, like every species in the scheme of natural evolution, seeks to survive. Liberal economic practices contribute to, in some ways require, liberal political ones. The market begets—and is begotten by—democracy. ”
“All governments might wish to build market economies, and might try to build them, but most, even with the best will in the world, faced formidable difficulties in doing so. A major resource for overcoming them was the liberal international economic order; and it was here that the burden of sustaining the global liberal agenda fell on the countries of the core. For the international economic order was the creation, and maintaining it was the responsibility, of the liberal, prosperous, powerful countries of the core, in particular the most powerful of them, the United States.”
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