As we approach the 35th anniversary of Francis Fukuyama’s landmark work, The End Of History & The Last Man, the central challenge facing liberalism is whether liberal democracies can still produce the kind of disciplined, forward-looking economic governance that extends beyond short-term electoral incentives.
About a month ago I caught a vlog from Nobel Laureate and former NYT columnist Paul Krugman where he reflected on a September 28th Wall Street Journal Op-Ed by JP Morgan CEO Jaime Dimon titled, “A Plan for the Western World’s Revival“. As a multi-billionaire with deep ties to the US Democratic Party, Dimon embodies the liberal centrist status quo in American politics—a status quo that has seen a sharp decline in public favor. His “revival” language seems to echo sentiments shared by figures like Ray Dalio—that “the West” as a whole is experiencing a relative decline across one or more dimensions compared to “the East,” which is generally understood to mean Asia, and specifically China. Krugman agrees with Dimon that free trade has its problems, but it fostered alliances in a stabilizing economic order that promoted liberal values and relative prosperity throughout the world. It’s probably not a coincidence that Dimon’s article was published on the heels of Chinese president Xi Jinping’s envoy to Washington D.C. The question remains: Is this decline economic, industrial, financial, political, reputational, cultural, or some combination of these factors? He doesn’t specify. Given his role as CEO of JPMorgan Chase, one might assume the focus is primarily financial. However, it’s reasonable to interpret his remarks as reflecting a broader concern among sociopolitical thinkers: Is liberalism itself in crisis?
Before diving into a multitude of rational abstractions and “isms,” we should consider the practical implications of recent financial history. The total estimated global spending on pandemic measures from 2020 to 2023 was approximately $25–35 trillion USD, which surpassed the inflation-adjusted debt spending during World War II. However, unlike the post-WWII era, the US government did not raise taxes (it cut them by 9.5% to 11%), which offset the Federal Reserve’s attempts at aggressive tightening via high overnight bank lending rates and quantitative tightening. Instead, this extraordinary monetary expansion led to a predictable secondary phase of loose private capital allocation and asset price inflation while sovereign debts soared.
The miraculous post-pandemic “soft landing” may well go down in economic history as what could have been the most consequential real-world test of Keynesian theory ever conducted. At its core, post-Keynesian economics argues that governments should run deficits during economic downturns to stimulate demand, then reverse course during recoveries by raising taxes and paying down debt — not because a sovereign needs money it can print, but as the most effective method to reduce distortions in capital markets and smooth out capital market cycles. Yet what we witnessed instead was a historic inversion of this principle: massive fiscal stimulus during the pandemic’s darkest hours was followed not by prudent consolidation during the recovery, but by continued expansionary policies that kept the monetary spigots open long after the emergency had passed.
The central challenge facing liberal democracies today isn’t whether liberalism itself is in crisis, but whether these systems can still produce the kind of disciplined, forward-looking economic governance that extends beyond short-term electoral incentives. The pandemic-era spending spree—while necessary in the moment—has left a legacy of unsustainable debt, distorted capital markets, and inflationary pressures that demand structural solutions rather than political expediency. The real test of liberalism’s resilience may lie in its ability to resist the siren call of fiscal policies that offer immediate relief at the cost of long-term stability.
Indeed. France is currently grappling with escalating unrest amid growing concerns over its fiscal stability, as rising debt levels—now exceeding 110% of GDP—and high borrowing costs have fueled fears of a debt crisis similar to those faced by Greece or Italy following the 2008 financial crisis. France’s debt management is constrained by the Eurozone’s shared monetary system, where the ECB must balance 20+ countries, leading to fragmentation risk and political constraints. Protests have erupted over President Emmanuel Macron’s austerity measures, including pension reforms and spending cuts, which critics argue disproportionately burden the working class while failing to address structural economic weaknesses, such as sluggish growth and high unemployment. The political fallout has deepened divisions, with left-wing factions demanding tax hikes on the wealthy and right-wing groups pushing for stricter fiscal austerity, while centrists struggle to balance reform with social stability. The people want bread. Meanwhile, global economic pressures like higher interest rates and energy costs have intensified the strain, raising questions about France’s ability to service its debt without triggering austerity backlash or market panic.
Critics ranging from Yascha Mounk to Nancy Fraser to Michael Sandel have suggested that this reflects a deeper challenge: liberalism’s inability to reconcile its ideals of freedom and equality with the structural inequalities exacerbated by late-stage capitalism, leaving societies vulnerable to polarization and illiberal alternatives. Whether liberalism can adapt through renewed social democracy, participatory reforms, or pragmatic centrism remains an open question.
How shall we define liberalism? Broadly, it’s a political and philosophical tradition that prioritizes individual liberty, equality under the law, and limited government intervention in personal and economic affairs. It emerged during the Enlightenment as a challenge to absolutist rule and traditional hierarchies, advocating for constitutional government, free markets, property rights and civil rights. Over time, liberalism has split into various strands: classical liberalism (emphasizing minimal state interference), social liberalism (supporting welfare and regulation), and neoliberalism (favoring market-driven solutions). However, all share a core commitment to individual freedom and rational governance.
Dimon’s “western world” is a coded reference to that specific sociopolitical and historical trajectory, generally understood as an established set of values, economic policies and political systems. If you’ve lived in the US, Canada, or Europe, liberal democracy and globalization are the core attributes of this “western world” you know and grew up with. This is the political reality that many of our grandparents and great grandparents fought and even died for. They’ve been the predominant trend for 250 years, reaching an apex in the post-war US hegemony around the turn of the century. By 1990, after the fall of the USSR, they were so successful that renowned political economist Francis Fukuyama argued in the bestseller, The End of History and the Last Man (1992), that the worldwide spread of liberal democracies and free-market capitalism may represent the final step in humanity’s sociocultural evolution and political struggle and the final form of human government, which was widely interpreted as a direct reference to a Marxian conception of history, and at the time it was fiercely disputed by a dwindling faction of socialist intellectuals in the U.S.
Much has changed since 1992, when “the West” had finally defeated its ideological nemesis and assumed that the great battle of sociopolitical ideas—one that had defined much of the 20th century—had reached a resolution. What followed was an era of flourishing — spread of constitutional democracy, unprecedented globalization, privitization, and the dismantling of trade barriers — a period some have labeled neoliberalism. Today, not only has an economy governed by a single-party socialist government clearly challenged Western economic dominance, but after a period that some critics call hyperliberalism, marked by extreme individualism and identity politics, a democratic socialist party has surged in unprecedented popularity in the very heart of liberal capitalism—the United States.
Recent political commentators like Thomas Frank, Naomi Klein, Chris Hedges, Matt Taibbi, Branko Marcetic, and Meagan Day have argued that the Democratic Socialists of America’s rise reflects widespread disillusionment with corporate-aligned liberalism, which has prioritized market-friendly policies over economic justice, thereby radicalizing voters toward socialist alternatives. As mainstream liberalism shifted toward neoliberal policies, a significant portion of the electorate—particularly younger voters and working-class communities—sought alternatives that prioritized economic justice, wealth redistribution, and grassroots democracy. The DSA, with its explicit socialist platform and emphasis on labor rights, universal healthcare, and anti-capitalist reforms, emerged as a compelling counterpoint to what critics viewed as a compromised and ineffective liberal establishment. This shift reflected broader disillusionment with establishment politics, fueling the DSA’s rapid growth as a viable political force.
Here, we should thread the needle of the subtle distinction between progressive liberalism and democratic socialism. Survey data indicates that only about 20% to 35% of U.S. voters accurately distinguish socialism, communism, and liberalism, with the vast majority conflating them as broader partisan labels or general government spending. People tend to conflate them for good reason, as the practical outcomes are often identical depending on the broader political context. Progressive New Deal liberalism in the 20th century sought to mitigate capitalism’s excesses through regulatory reforms, Keynesian fiscal policies, and social welfare programs—like Social Security, Medicare, Medicaid and the GI Bill—while preserving private enterprise and market mechanisms. Democratic socialism, by contrast, advocates for worker ownership, substantial state intervention (or outright state ownership of key industries), and a more fundamental challenge to capitalist property relations, as seen in the DSA’s support for Medicare for All, free college, and public banking. The tension lies in whether liberalism’s incremental, market-compatible approach can ever fully align with socialism’s structural critiques of capitalism, particularly in the U.S., where public skepticism of state ownership remains high and the DSA’s platform—despite its electoral successes—often faces misinterpretation as mere “progressive” policy rather than a systemic alternative. Whether the public grasps the DSA’s commitment to democratic control of entire economic sectors, rather than just expanded welfare, remains an open question, especially in a political culture where “socialism” is frequently conflated with Leninism or liberal technocracy. The policy outcomes of a democratic socialist party operating in a plurality of parties in a liberal democracy are usually indistinguishable from those of progressive liberalism.
The rising tides of democratic socialism and techno-libertarianism popular among the Silicon Valley elites represent diametrically opposed visions of economic governance. Both represent outliers to the prevailing liberal-centrist consensus. Techno-libertarianism diverges in the opposite direction of democratic socialism, rejecting both state intervention and redistributive policies in favor of unregulated innovation, privatized solutions, decentralized finance and the belief that technological progress can resolve social and economic disparities. Both positions critique the liberal establishment’s incrementalism, but from fundamentally different angles: one seeks to expand public control, while the other seeks to minimize it in favor of private-sector dynamism. The question remains whether either can meaningfully reshape the status quo, or if they will remain fringe alternatives in a political landscape still dominated by liberal centrism.
In defense of incremental centrist liberalism—or what I’d describe as 20th-century Mid-Atlantic conservatism, as articulated by pundits like the late William F. Buckley—we can turn to the ideas of 18th-century English politician Edmund Burke. In his seminal critique of the French Revolution, Burke argued that radical upheaval—no matter how well-intentioned—inevitably leads to chaos and tyranny by severing the organic, gradual evolution of institutions, traditions, and social hierarchies. Burke, often regarded as the father of modern conservatism, contended that political and social change should proceed through cautious, incremental reforms that respect historical continuity, inherited wisdom, and the delicate balance of rights and obligations within a society. His skepticism toward abstract rationalism and his emphasis on the organic development of institutions resonated with later liberal thinkers who sought to reconcile progress with stability, particularly in the face of revolutionary fervor.
This is all pretext to Fukuyama. It’s been at least 25 years since I read his “End of History” but it left a lasting impression. It was in the greatest hits playlist of economic ideas vigorously debated in various papers and popular policy articles as I developed an interest in macroeconomic policy in the 90s. At 73, he’s still going strong. He recently appeared on Ezra Klein’s podcast, where they discussed how his ideas have evolved. It was a productive discussion between Klein, a left of center political pundit, and Fukuyama, a once leading Republican conservative intellectual who famously broke ranks with and became a critic of the neoconservative faction that was engaged in “nation building” during the George W. Bush administration.
Fukuyama’s post-neoconservative evolution has been striking. He shifted from celebrating the global triumph of liberal democracy toward analyzing its institutional decay and vulnerability to political polarization. Following his opposition to the Iraq War, his work focused on the historical origins and long-term development of state capacity, the rule of law, and accountable governance. He argued that modern liberal democracies require not just market economies and elections, but robust institutions capable of resisting clientelism and identity-based factionalism. His later research addressed the modern resurgence of nationalist populism and the challenges posed by political decay in both the United States and global democracies. In a 2026 interview with Jacobin magazine, he said that he considered himself a “classic social democrat”, which indicates a pivot from his his earlier positions in the 90s.
In his discussion with Klein, Fukuyama clarifies that his concept of “the end of history” was derived from Hegel and refers not to the end of events, but to the end of the ideological evolution regarding how societies should be organized. He argues that liberal democracy emerged as the most viable path. He says that his reference to the “last man” was based on Nietzsche’s idea of the same name that has cast a long shadow over western liberal thought:
“So the last man is the creature that Friedrich Nietzsche — the other great German philosopher of the 19th century — identified as the product of the end of history: a person that was satisfied with the things that liberalism provides — basically peace and prosperity — but had no further aspirations or desires for a better vision of the world — nothing that they would risk their lives on behalf of. And for Nietzsche, it was really that extraordinary ambition that made a human being a human being. And instead, in a liberal society, you got this very flat world where everybody has to tolerate everybody else and nobody wants to think of themselves as better.”
He goes on to elaborate that this “flattening” has historical origins in Western political theology and has always presented a dialectical tension in Liberalism:
“Universal equality historically derives from a certain Christian interpretation that human beings are fundamentally equal. There’s a passage in Galatians that says there’s neither Jew nor Gentile, master nor slave, male nor female, but all are equal in Jesus Christ. That fundamental insight has a real meaning. There’s something in one of my books I labeled factor X that makes every single human being recognizably human. I think that there is something really genuinely to be protected in this idea that every one of us has a certain moral core that is of great value and needs to be protected by the system. It’s also true that it leads to a flattening of our societies because liberalism is necessarily pluralistic. It’s a recognition of the fact that different people pursue different ends that they have different visions of the good life.”
Fukuyama is condensing a lot of complexity for the sake of brevity, arguing that liberalism and humanism are related. Historians and political theorists have long debated the extent to which Christian theological traditions contributed to the Enlightenment movement in 18th-century. The Enlightenment is more often characterized as a secular break with the religious orthodoxy that underpinned feudal and monarchic societies, while later revisions in scholarship emphasize how Protestant and Catholic theological shifts laid foundational concepts for individual rights, constitutionalism, and toleration. Fukuyama goes on to argue that liberalism arose to peacefully reconcile the challenges of governing a pluralistic free society:
“The reason you created liberalism in the first place in the 17th century was the wars of religion in which people killed themselves over theological differences where there was a deliberate lowering of the human horizon to mean survival — that the right to life is superior to the right to the good life, but this does take away something from people who want to live the good life and have higher aspirations. If you look at modern America, we don’t ask that much of citizens. You obey the law, you pay your taxes, and that’s fine. You don’t have to sacrifice. You don’t have to take any grave risks on behalf of the society as a whole. And I think that there is a part of the human psyche that actually wants that kind of life. That feels flattened if they don’t have the ability to, as the declaration (of Independence) says, risk their lives, their fortunes, and their sacred honor. I think that you have that striving for that degree of sacrifice and it doesn’t exist in our society and so people invent a cause.”
Liberalism and free trade was so dominant in economic and political thinking by the close of the 20th century that Fukuyama’s ideas were interpreted by many as a triumphal heralding of the permanent victory of liberal democracy at the end of the Cold War. In hindsight, its clear that the broad arc of liberalization and globalization remains a complex phenomenon, intertwined with colonialism, extractative economic exploitation and inequality. Economists, including free-trade champions like Krugman, now generally agree that they underestimated the impacts of free trade and globalization on labor and inequality. That economic displacement contributed to the rise of the anti-globalization movement in the late 90s and early 2000s, the Occupy Wall Street movement following the 2008 Global Financial Crisis, the Tea Party movement and more recently, it has been a key touchpoint in the rise of populist movements throughout the world.
While free trade has harmed some industries, communities, and some workers, economists and policy wonks like Paul Krugman now grapple with the fine nuances of free trade or protectionism. They now admit that the pendulum had swung too far in the direction of what critics of neoliberalism called “a race to the bottom.” Traditional liberal economists would say that the US too was once an export-driven trade surplus country just like China and Vietnam are today, and the position of the US following the destruction of the rest of the world’s industrial infrastructure in the second world war was a historic aberration. Traditional economics argues that there’s an inevitable transition for trade surplus countries where their domestic market matures and demand for prosperity cannot be suppressed. Trade wars are equivalently negative for the nations involved, even while it may benefit some individuals or industries within each nation.
Fukiyama’s reference to “history” was loaded with an implicit reference to Marxism and the Cold War context of its era, when Leninism was a common justification of authoritarian regimes. The Marxian conception of history is linear and progressive, positing that socialism is the inevitable evolution of capitalism. With the benefit of hindsight, we know that the collapse of Leninism and the Soviet economic system in Moscow led to a major shift in most of the world toward free-market thinking but certainly did not mark the end of history. While China pursued highly successful free market reforms and even internally debated possible paths to liberalization, by the time Xi Jinping ascended to the presidency in 2012, it was clear that China’s highly proficient technocrats would not risk repeating the failures of Gorbachev’s Glasnost and Perestroika, and would instead double down on a Leninist unitary party technological socialism with a distinctly Chinese flavor rooted in centuries of pragmatic Confucian culture. From the perspective of the CCP, liberalism is viewed through the lens of historical materialism—the Marxist theory that economic and material conditions drive society and history. From their perspective, China’s rise and the ultimate victory of socialism are objective and unavoidable laws of history.
This is why Fukuyama’s question and Dimon’s reference to the “Western World” remains so relevant. While capitalism is an economic system, liberalism is a political ideology that is incompatible with the CCP’s constitution. While external observers classify the system as an authoritarian one-party state centered on autocratic control, the Chinese Communist Party views it as an inclusive “whole-process people’s democracy” rooted in continuous consultation and consensus-building. However, the term “dictorship” is in article one of their constitution and ultimate political power rests entirely within the institutional structures and leadership of the Chinese Communist Party. Voters directly elect representatives to local people’s congresses at county and township levels; higher-level congresses, including the National People’s Congress, are elected indirectly by the congresses below them. The Communist Party of China controls candidate selection and dominates political life, so national leadership is not chosen through open, competitive multiparty elections.
In China, the party controls everything. Are many if not most Chinese citizens reasonably satisfied with their government? Absolutely.
Dimon’s pragmatism accepts this inherent imperfection, judging political and economic systems by their practical outcomes rather than unattainable ideals. He notes in his op ed that strong trade ties would be a “game changer” for the U.S., Mexico, Canada, the E.U., Japan, South Korea and Australia allowing them to “set the global rules on trade” and establish a collective front “in the face of autocratic pressure.”
Dimon is tactfully critiquing the current US and European policies. He’s simultaneously speaking to at least four audiences: business leaders, financiers, centrist politicians and the economic policy think tank elite. Despite the broad strokes, his audience knows precisely what he means by “Western World”, and in the context of his traditional framing, he reminds the reader that its a system of values that has successfully spread through the world for 250 years. He concludes with, “A renewed commitment to American values and alliances coupled with bold reforms by Europe would be a geopolitical and economic home run, guaranteeing the Western world’s strength for the next 250 years…”
While a “guarantee” may be overly optimistic, the European Union may finally be growing more amenable to overhauling the regulatory and tax frameworks that have long constrained corporate growth. This shift aligns closely with Mario Draghi’s comprehensive strategy to reverse Europe’s lagging productivity and economic stagnation relative to the United States and China. His framework centers on closing the region’s massive innovation gap, streamlining cumbersome bureaucratic mandates, and integrating fragmented capital markets to unlock vital private investment. These proposals argue that structural reform and coordinated industrial policy are essential to prevent a long-term decline in living standards. Skeptics suggest this will never work, because unlike the U.S. federal system, the Eurozone lacks a centralized fiscal authority with the power to tax and spend across all member states. This means individual countries must manage their own budgets, leading to disparities in economic performance and fiscal capacity.
More broadly speaking, what does Dimon mean by “American Values”? Again, I have to assume that he’s referencing that same general consensus view of rights-based liberalism. Writing in 1993, American philosopher Ian Adams summed it up succinctly, noting that all major U.S. parties up to that point were “liberal and always have been. Essentially they espouse classical liberalism, that is a form of democratized Whig constitutionalism plus the free market. The point of difference comes with the influence of social liberalism.”
Classical liberalism is thus as “American as apple pie” — practically synonymous with the American experiment itself — advocating free markets, civil rights under the rule of law, individual autonomy, economic freedom, religious freedom, political freedom and freedom of speech. These remain fundamentally centrist viewpoints in the “Western world”. Economic liberals oppose government intervention when it inhibits free trade and competition, but tend to support it where it protects property rights, opens new markets or funds market growth, and resolves market failures. Historically, economic liberalization also opposed cartels, monopolies, financialization of the economy, rent-seeking behavior and unproductive classes reliant on rent, assets or state-granted privileges. This makes more sense when we consider that liberalism emerged out of what Thomas Piketty calls “ternary societies” — pre-modern social structures organized into three distinct legal classes—traditionally clergy, nobility, and commoners, with royalty ruling above or within the nobility—to maintain social order and structural inequality through interdependent functional roles. Before the Reagan era, anti-monopoly policies in Western liberal economic thought aimed to prevent society from regressing into an oligarchic plutocracy resembling feudalism, which was considered incompatible with a prosperous, pluralistic democracy.
Beyond Dimon’s pragmatic prescription for a more stable and productive set of trade relations with long-standing allies, the allusion to western liberal values belies significant headwinds to the traditional centrist position, which has seen an identity crisis over the past decades with the gradual erosion of antitrust regulations, lower tax rates on wealth and the rise of populist nationalist politics. The left of center Brookings Institute has critiqued this shift, noting in a February 2026 policy paper that the current administration is disrupting the delicate post-war order that allowed for one of the greatest eras of relative peace and prosperity in human history.
Brookings fellow Melanie W. Sisson states it succinctly:
“The post-World War II international order the current administration derides as a fatuous abstraction was created because almost 100 million people—one of every 23 humans on Earth at the time—died during the 20th century’s two world wars. The purpose of the order was to prevent such incomprehensible devastation from happening again. This meant agreeing to minimize the use of economic tools—like tariffs—that helped one’s own nation by harming others. It also meant not allowing militarily strong states to believe they could attack militarily weaker ones without fear of a collective response. These principles were put into practice through free-trade arrangements, widespread membership in the United Nations, and defensive military alliances like NATO.”
This sociopolitical amnesia occurs for many reasons, but it is primarily the consequence of time. The generations who lived through the devastation of the Great Depression and the collapse of the international order are aging out of society, and no book, video, or film can convey to their descendants the lived trauma of how fragile it truly is. As Fukuyama notes in his conversation with Klein, a boredom or malaise often arises after a long period of prosperity and stability, similar to the hedonic treadmill, which is the tendency of humans to quickly return to a baseline of satisfaction despite major positive or negative life events or shifts in wealth and prosperity. He articulates these cyclical, inter-generational challenges in maintaining strong liberal democratic institutions:
“…if you’re living in a society that is peaceful and democratic because of struggles of an earlier generation that were successful, then you’re going to struggle against peace and democracy because what you want to do is struggle for struggle’s sake, and I think it’s that impulse that drives a lot of extremist politics and disturbs the stability of a liberal society. It’s also a generational thing. It’s clear that the people that want most desperately to live in a liberal society are people that live in dictatorships. There was genuine joy when communism fell in Eastern Europe and the Soviet Union in the late 1980s. You can see this in all the people that get on boats desperate to get to out of a poor corrupt destitute country and to get to America or to Europe. There is uh a real enthusiasm for liberalism on the part of people that don’t have it. And I think that we go in these generational cycles where, once you have it, you take it for granted and increasingly you look for something further. And so you’re not living in a dictatorship any longer… so there there may be a rise and fall in the support for liberalism. But in the end, it’s going to be the most stable outcome that a human society can achieve.”.