The Future of Liberal Democracy

Americans enjoy the economic prosperity and freedoms of its liberal democracy. But our elevated stature is threatened. As the U.S. recoils from the world, the era of U.S. dominance might be ending.

That is an essential takeaway from Richard Haass’ modestly titled new book, The World: A Brief Introduction. If investors and their advisors, or ordinary citizens, want to understand the modern world, they should start in 1648. That’s what Haass, a richly credentialed diplomat and foreign policy scholar, would have us do.1

Haass starts from the premise that most Americans, having received a pitifully inadequate education, don’t know enough about the world to understand the debates and conflicts about international affairs that determine their fates. Having watched the random interviews where strangers are queried about the meaning of July 4 or the role of Abraham Lincoln in American history, he’s right. Yet somehow a large fraction of these clueless citizens manage to make it to the voting booth.

Sophisticated readers may be disappointed in the elementary level of the first sections of the book on world history and geography. Those sections of The World are a recitation of facts – who, what, where, when – although they are elegantly written and the facts are embellished with a great deal of erudition and nuance, providing a glimpse (but not much more than a glimpse) of Haass’s fertile mind. He could have well afforded to provide more analysis and critical thinking in these introductory chapters, but for those wanting a refresher in one of the most important topics imaginable, they are a valuable and accessible resource.

The later sections of the book, on globalization and the political system, are much better. Like most authors, Haass shines most when he is writing about his field of greatest expertise.

What happened in 1648?

In 1648, the architecture of the modern world of nation-states took shape in Europe. An agreement called the Peace of Westphalia ended the catastrophic Thirty Years’ War, a religious and political conflict that cost Germany one-third of its population (possibly a record) and drew in much of the rest of the continent. About this war, the art historian and celebrated author Ernest Gombrich, in a 1936 book called A Little History of the World and directed at older children, wrote:

Whole villages were burned, towns plundered, women and children murdered, robbed and abducted… The soldiers seized the peasants’ livestock and trampled their crops. Famine, disease and roaming packs of wolves made wastelands of great stretches of Germany. And after all these years of appalling suffering, the envoys of the various rulers finally met in 1648 and…agreed on a peace which left things more or less as they had been in the first place…What had been Protestant would remain Protestant. The lands the [Habsburg] emperor controlled – Austria, Hungary, and Bohemia – would remain Catholic.2

Peace of Westphalia or Peace of Exhaustion
Artist unknown; Source

If this sounds a little like World War I, the war in Vietnam, or the never-ending Middle East conflict, it is. Human beings have made great progress in most areas since 1648, but we have not ended meaningless war.

The Peace of Westphalia established the most basic principle of international law, still in force today, although often violated. In Haass’ words, it is that “sovereign countries [must] accept…one another’s independence and respect…the boundaries separating them.”

This peace agreement has done more good than harm. Yet, in modern times, there are hundreds of millions of people living in what the investment manager and my frequent co-author Stephen Sexauer calls a “Peace of Westphalia prison.” With Sexauer’s input, I wrote in my book, Fewer, Richer, Greener:

This precedent, which still holds and is the basis for much of international law, is the reason Venezuela is…ruled by a butcher who starves his people, while its neighbors, Colombia and Brazil, mostly prosper. Venezuela poses no military threat to any country, so no one can invade it and end the humanitarian catastrophe… The Rwandan genocide of 1994, not so much a civil war as a local hemoclysm, could have easily been stopped…but was not, because it was regarded as a domestic matter… The Chinese could end the misery of North Korea almost instantly.

This can be changed… International agreements [can be] modified to allow policing by organizations with earned legitimacy… No one should live in a Peace of Westphalia prison.

In the context of describing the world as it evolved after 1648 and as it exists today, Haass spends the next 300 pages explaining how this history, unknown to most people, still haunts us. One of Haass’ themes is that little-remembered events of the distant past have left footprints all over our lives, this being but one example.