Francis Fukuyama Is Right: Socialism Is the Only Alternative to Liberalism

In Liberalism and Its Discontents, Francis Fukuyama diagnoses the political and psychological malaise caused by capitalism. His analysis makes one thing clear: liberalism is incapable of addressing the social, economic, and ecological crises it faces.

Political scientist Francis Fukuyama, author of the often misunderstood The End of History and the Last Man, has published a new book on liberal democracy and human nature. (Leonardo Cendamo / Getty Images)

In a CNN interview, after another round of the US government’s sanctions on Russia, the following exchange took place between the show’s host and President Joe Biden’s economic adviser Brian Deese:

CNN: What do you say to those families that say, “Listen, we can’t afford to pay $4.85 a gallon for months if not years, this is just not sustainable”?

Deese: Well, what you heard from the president today was a clear articulation of the stakes. . . . This is about the future of the liberal world order and we have to stand firm.

The events of the past two years, from the start of the global pandemic to the war in Ukraine, and now the global food shortage, are clear signs that liberalism, as a global economic and political system, is in crisis. For now, following the latest bout of ill-health, no plausible challengers have been able to put liberal capitalism out of its misery.

No one has done more to support the idea of liberalism’s resilience and universality than Francis Fukuyama. Fukuyama gained a level of international fame in the 1990s as a policy planner at the State Department when he wrote, first, in 1989, a journal article for The National Interest titled “The End of History?” and then, in 1992, an extended treatise, The End of History and the Last Man. His most recent offering, Liberalism and Its Discontents, released in May of this year, reprises the themes of his previous works.

Intellectual Origins

The publication of The End of History and the Last Man coincided with the sudden collapse of the Soviet Union, the reunification of Germany, and the independence of various Soviet satellite states like Poland and Lithuania. Initially, all these post-Soviet states adopted liberal, democratic, and capitalist models of governance. Accordingly, Fukuyama became a both famous and somewhat misunderstood figure in academia — a prophet of the triumph of liberal democracy and the material inevitability of capitalism.

In the press, he was written about as a reverse Karl Marx. For those who had not read his book, the lesson to be taken from it was that history was over because American capitalism had won against the Soviet Union. Indeed, in the aftermath of 9/11, journalists, who had misunderstood the book, attempted to contact Fukuyama to ask if history had started again.

However, Fukuyama is distinct from the political-economic partisans of free trade and laissez-faire capitalism like Friedrich Hayek, Ludwig von Mises, and Milton Friedman — men who defended the price mechanism as a more rational means of distributing and allocating resources. Instead, Fukuyama is a writer and political scientist deeply concerned with how humans, and their supposed transcendent psyches, operate within specific historical political, economic, and cultural systems.

Although he no longer identifies as a neoconservative, like many of that coterie, Fukuyama is deeply concerned with transhistorical and universal ideals. The failure of the Iraq War, a major neoconservative project that Fukuyama initially supported, seems to have pushed him away from the view that liberalism, democracy, and capitalism occur naturally if the ground is cleared by “well-intentioned” interventions.

Yet his political idealism still runs deep. Born in Chicago in 1952, Fukuyama’s family moved east to Manhattan. His family background contains academic, religious, and mercantile strains. Fukuyama’s paternal first-generation Japanese immigrant grandfather ran a hardware store on the West Coast, while his maternal grandfather was a prominent academic economist and university administrator at Kyoto University. His father was an academic sociologist and minister in the Congregational Church — a bastion of bourgeois liberal and puritan religious idealism. The emphasis Fukuyama places on democratic self-management, political-moral predestination, and individual autonomy within a liberal “priesthood of all believers” seems to be a secularized holdover of his Calvinism.

In 1970, Fukuyama started his undergraduate career at Cornell in classics: he is in many ways a classical political thinker. One can see the influence of ancient Greek political theory everywhere. For instance, Fukuyama takes an interest in the basic Aristotelian units of politics (monarchy, aristocracy, and democracy) and their relation to liberal modernity, and continues to use the Platonic theory of the soul (divided between reason (logos), spirit (thymos), and appetite (eros) to describe eternal human nature and its need for recognition. During his time at Cornell, Fukuyama fell in with the philosopher and classicist professor Allan Bloom, best known for his 1987 book The Closing of the American Mind, which criticized the practice of moral relativism and historical contextualism at American universities.

Bloom, who was taught by the philosophers Leo Strauss and Alexandre Kojève, introduced Fukuyama to an idealist intellectual tradition stretching back to Hegel. Strauss influenced the conservative academy with his Natural Right and History (1953), which argued for a transcendent and transhistorical set of naturally occurring rights that might provide politics with a moral compass.

Strauss’s followers in America developed an approach to interpreting political texts that emphasized perennial problems and the power of the authored text to independently generate meaning. Kojève was an unorthodox Marxist thinker, French economic administrator in the European Common Market, and neo-Hegelian who reintegrated the German philosopher’s thinking on history into contemporary politics. His 1946 Introduction to the Reading of Hegel proposed an earlier theory of the “end of history” that influenced Fukuyama’s own thesis. Kojève suggested that the rational Napoleonic Empire’s victory over the absolutist Prussian state at Jena in 1806 represented the apex of human political possibility: the parameters of all future political action were drawn by Napoleon at Jena.

After Cornell, Fukuyama spent time in a comparative literature program at Yale and studied under the post-structuralists Roland Barthes and Jacques Derrida in Paris, before switching to political science at Harvard. While Fukuyama would become engaged with the empirical quantitative and qualitative study of hard-nosed foreign policy and international relations, he retained a deep interest in the text and human ideals, which he carried to the RAND Corporation, the State Department, and advisory roles under Ronald Reagan and George W. Bush.

The success of his 1989 National Interest Article “The End of History?” resulted in a $600,000 advance to write a follow-up — The End of History and the Last Man. This pushed Fukuyama back into writing and academia, where he popularized the idealism of his intellectual precursors.

The End of History — From Nietzsche to Freud

In The End of History, Fukuyama argued that, over the long term, the whole world will converge on variations of the liberal democratic capitalist model. This was because there were, in his mind, no other existing models that could rationally organize modern societies. Rivals, such as Islamic and Christian theocracy, were culturally and geographically restricted — only liberalism, after the end of socialism, could bestride the world as a global system.

In his first book, Fukuyama was keen to stress the fact that history’s ending would not occur synchronously across geographical regions; instead, active outliers in the Global South would eventually catch up after a century or so. The enclaves of non-liberalism that existed in the developing world were not models for an alternative world order. Writing in The End of History, he could proclaim that “it matters very little what strange thoughts occur to people in Albania or Burkina Faso.” For Fukuyama, liberalism would win out, not because it was historically inevitable but because it represented an ideal form of rational social organization that, when compared to its competitors, had the fewest internal contradictions.

Yet the little-remembered last chapter of Fukuyama’s The End of History — “The Last Man” — takes its name from Nietzsche’s letztermensch, the passive, secure, and materialistic opposite of the übermensch (superman). Fukuyama uses the image of the Last Man to acknowledge the contradictions inherent in the liberal democratic system and the frustration felt by affluent liberal democratic subjects. As he wrote in 1992, “The passion for equal recognition — isothymia — does not necessarily diminish with the achievement of greater de facto equality and material abundance, but may actually be stimulated by it.”

Fukuyama understood, in 1992, that liberal democracy would be in the most danger not from competing outside forces but from boredom and its effects on a restless population willing to experiment and reach for Platonic thymos, or spirited recognition. In The End of History, Fukuyama, influenced by Kojève’s readings of Hegel and Leo Strauss’s close analysis of Platonic conceptions of the human psyche in The Republic, argued that perennial aspects of human nature like thymos would endanger the coldly rational and technocratic world of advanced liberal democracy. Yet, at the same time, liberal democracy in The End of History is understood to be the only system with the potential to provide adequate recognition to humanity’s thymos.

While the clashes between human nature and the liberal democratic system were an important postscript to The End of History, they have moved center stage in Liberalism and Its Discontents. What remains constant is Fukuyama’s reliance on transhistorical psychological models of immutable human nature, rather than an analysis of material and economic relations, to explain the current fragility of liberal democracy.

His latest publication moves from the metaphysical frameworks of Plato and Nietzsche to the psychological perspective of Sigmund Freud — Liberalism and Its Discontents echoes the title of the Austrian psychoanalyst’s 1930 Civilization and Its Discontents. A deep-seated pessimism about modernity runs through much of Freud’s work. But Civilization and Its Discontents is not simply a rejection of rational society. Freud ironically points out that civilization is the cause of, and balm for, human misery.

Our civilization is largely responsible for our misery . . . we should be much happier if we gave it up and returned to primitive conditions. . . . In whatever way we may define the concept of civilization, it is a certain fact, that all the things with which we seek to protect ourselves against the threats that emanate from the sources of suffering are part of that very civilization.

Freud’s theories about the relationship of humans to civilization — that discontent with civilization is generated within the system and used against it — are, to Fukuyama, equally applicable to liberal democracy.

Liberalism in Peril

Indeed, Liberalism and Its Discontents, much like its Freudian forebear, argues that liberal democracy’s two adversaries, “populist conservatism” and “progressivism,” are not outside threats but outgrowths of the liberal tradition itself. As Fukuyama states in his first chapter, “What is Classical Liberalism” — the threat comes from internal economic and social corruptions within liberalism rather than from outside competing models or inherent material contradictions.

On the right, autonomy meant primarily the right to buy and sell freely, without interference from the state. Pushing this notion to extremes, economic liberalism turned into “neoliberalism” and led to grotesque inequalities. On the left, autonomy meant personal autonomy with regard to lifestyle choices, and resistance to the social norms imposed by the society. Pushed down this road, liberalism began to erode its own premise of tolerance as it evolved into modern identity politics. These extreme versions of liberalism then generated a backlash, which is the source of the right-wing populist and left-wing progressive movements that threaten liberalism today.

His solution to these threats is to return to an imagined status quo ante — an uncorrupted, renewed, reformed, and robust historical liberalism that recognizes itself as such. Liberalism and Its Discontents uses the term “classical liberalism” to describe this program, whose capaciousness Fukuyama welcomes. “Classical liberalism is a big tent that encompasses a range of political views that nonetheless agree on the foundational importance of equal individual rights, law, and freedom.”

In his last chapter, “Principles for a Liberal Society,” Fukuyama claims that classical liberalism “may be understood as a means of governing over diversity.” But this diverse political pluralism requires a strong and trusted state. The failing of liberalism since the start of the neoliberal era, he argues, is that it failed to recognize the central role the state must play in managing this diversity.

Throughout the remaining chapters of Liberalism and Its Discontents, Fukuyama identifies the forces that have damaged public trust in liberal democratic governments and the solutions that classical liberalism can supposedly employ. First, in “From Liberalism to Neoliberalism,” he sees neoliberalism as a dangerous outgrowth of economic liberalism that promotes extreme inequality and threatens the body politic.

While Fukuyama does not abandon a commitment to the capitalist market, he avers that, under neoliberalism, the “valid insight into the superior efficiency of markets evolved into something of a religion, in which state intervention was opposed as a matter of principle.”

His second chapter, “The Selfish Individual,” contends with the personal and social effects of neoliberalism. There Fukuyama argues that the economic model of individual rational actors looking to maximize utility has been corrosive to a balanced market that respects competing values like the dignity of labor, family, tradition, and collective altruism. “The individualistic premise on which liberal theory is based is therefore not wrong, but rather incomplete.” Cautiously, Liberalism and Its Discontents suggests that a society that focused on production rather than consumption might help to redress the pathologies of contemporary capitalism. Long gone is the triumphalism of thirty years prior, in its place is a Freudian analysis of the troubled liberal consciousness, which leads Fukuyama to ask, “Would people be willing to sacrifice a bit of consumer welfare in order to maintain the dignity of labor and livelihoods at home?”

In other chapters that seek to address noneconomic issues of identity — and their innate exclusiveness, which clashes with liberalism’s supposed universalism — Fukuyama argues for a move back to a capacious set of civic nationalisms and identities. Following the sociologist Max Weber, he insists that liberal rights are meaningless without the enforcement of the state. Indeed, Fukuyama correctly identifies a strong set of problems with liberal democracy, but his solution — a return to the problem’s root cause: historical classical liberalism — is ultimately at odds with his commitment to a group of values that transcend the particular liberal capitalist system in which they operate. Indeed, the threats to liberal democracy Fukuyama finds in neoliberalism (massive inequality, consumerism, lack of state capacity) were initially the values of early nineteenth-century free-trade classical liberals — ideas neoliberal thinkers like Milton Friedman wanted to resuscitate for the late twentieth century.

But What Is Classical Liberalism?

Fukuyama admits that what he calls classical liberalism has historically specific connotations, yet still decides to use it to attempt to describe an ideal liberalism untainted by recent transformations. This is an odd position for a Hegelian to take. The German philosopher famously insisted that the specific form that society took should not be understood as an aberration or deviation from an ideal; ideals that could not be actualized were instead untimely. As Hegel states in his Elements of the Philosophy of Right (1820), “What is rational is actual; and what is actual is rational.”

Absent in the theories of contemporary defenders of liberalism is Hegel’s cold but clear-eyed realism. Defenders of classical liberalism often attempt to anachronistically draw a lineage between their ideas and the supposedly timeless views of a handful of European thinkers like Thomas Hobbes, John Locke, and Jean-Jacques Rousseau. These theorists did not understand themselves as liberals, being far more concerned with classical political forms and the constitutional squabbles of their day. When we refer to classical liberalism in the present day, we rarely actually mention those who would have recognized the term — mostly individuals who offered a specific set of short-lived free-trade policies connected to a critique of aristocratic landed interests and mercantilism in early nineteenth-century Europe.

Throughout much of the book, Fukuyama jumps between two notions, liberal democracy and liberalism. The former denotes a specific configuration that took shape across much of the Western world after the end of World War II and the latter describes a transhistorical ideal stretching back to the English Civil War and the American Revolution. These two concepts serve to paper over each other’s limitations. Liberalism as an ideal can be marshaled as a critique of the deficits of actually existing liberalism, and actually existing liberalism can be drawn on to reject socialism and other political projects that have not succeeded in becoming hegemonic.

In reality, liberalism, much like conservatism, is simply a set of political moves and cultural associations determined by historical, sociological, and political positioning among factions in particular systems. Witness the relativity generated by comparing the huge differences between Australian, European, and Japanese liberals and their American counterparts. Fukuyama could have headed these criticisms off by clearly defining a narrow set of values for his definition of classical liberalism. Alternatively, he might have coined a new term to describe the actual and more capacious set of values he cares about. What Fukuyama advocates instead is not classical liberalism but a form of humanistic social democracy.

Indeed, what is odd about Liberalism and Its Discontents is that, when Fukuyama sets out to describe the values he cares about without using the term classical liberalism, he often sounds like a socialist or Marxist of the secular, humanist, universalistic, and democratic mold.

In a recent interview with Novara Media’s Aaron Bastani, Fukuyama surprisingly agreed with a large amount of the current populist social democratic program recently proposed by Bernie Sanders and Jeremy Corbyn. For instance, in Liberalism and Its Discontents, he argues that economic class, rather than social identities, should be the basis for the subjectivity of political actors: “Social policies should seek to equalize outcomes across the whole society, but they should be directed at fluid categories like class rather than fixed ones like race or ethnicity.”

He goes on to argue that collective conceptions of the common good have been replaced by an overemphasis on personal autonomy, self-actualization, and choice: “Over time in liberal societies, there has been a growing reluctance to posit substantive human ends that have priority over other ends; rather, it is the act of choice itself that has the highest priority.”

Ironically, the “liberal” values Fukuyama cares most about — freedom of speech, institutions of accountability, human rights, mechanisms of personal autonomy, and a conception of the common good beyond identity politics — are eroded by the capitalist dynamics built into the liberal framework. Within a democratic system, liberal freedoms actually exist in spite of capitalism, not because of it. Outside of America, which has a historically underdeveloped left, liberal traditions were won by social democrats and socialists, for whom rights to organize and speak were essential.

Indeed, the dividing lines between Fukuyama’s “populism” and “progressivism” do not map consistently onto other political systems. The discontents generated by liberal democracy have varied from nation to nation. For instance, a particular republican left liberalism in France has rejected what they have understood as American notions about personal autonomy with regard to lifestyle choices and values, and instead insists on a common-good civic nationalism emphasizing universal French values such as strict laïcité, which has, in practice, served to marginalize Muslims and other minorities.

In Peru, the socialist Pedro Castillo, influenced by Catholic liberation theology, won his election by attacking both economic inequality, neoliberalism, and, to an extent, social liberalism. Consequently, the dynamic map of discontent Fukuyama proposes is specifically an American one — the constellation of attitudes and policy positions that make up American populism and progressivism are not universally fungible.

Fukuyama’s admirable desire for universalistic and humanistic politics frustratingly leads him back to an exhausted nineteenth-century ideology. Instead, we should look at the actual state of modernity in its specificity. China has demonstrated that capitalism can succeed without an accompanying democratic appendage. Its mirror image, an effectively democratic noncapitalist state, has yet to explicitly emerge. In a world defined by political crises and climate breakdown, perhaps the best way to defend the values Fukuyama cares about would be through an imaginative political order. This political order would recognize how capitalism causes destabilizing social consequences such as inequality, and drives the economic causes of nationalism and war — all of which are bad for democracy.

The aim of this political project would be to replace the unconstrained authority of the market with democratic accountability, held together by the lynchpin of organized labor. This has always been the project of myriad socialist traditions — and especially the democratic one. Their institutions were wounded at the end of the last century. This defeat was, however, not total. In almost every country across the developed world, there exist left-wing and socialist forces, some of which have grown their bases. They can fulfil the liberal democratic promise that capitalism is incapable of realizing, but they can only do this if they replace democratic capitalism with democratic socialism. What Fukuyama has made blindingly clear is that, left to its own devices, liberalism will do nothing to alleviate the crises it has caused.