Long ago read a book by name “The End of History and the Last Man” by Francis Fukuyama. The book was a detailed version of an article, which he had written earlier. The article became controversial and he became popular overnight. People reacted as they felt amused by the title as one knows History cannot end, unless human race perishes or people stop recording events happening in the world.

Now when I go over the topics of Global Economics, I recollect the powerful ideas that the book had proposed. The ideas are simple yet profound. He says that the ideals on which human race progresses will evolve only until such point as to reach a combination of “Liberalism, Democracy, and Capitalism”. He further says that the US has reached this stage, not necessarily smoothly or perfectly by design. By reading the history of the US, one can know what will happen in other parts of the world – repetition of the US history to the extent that all countries would like to approximate to this ideal combination of the principles.

At the beginning, each country had equal opportunity to grow. In fact, about 1900s, many countries had much greater advantage than the US. The economic philosophy adopted by the countries made huge difference in where the countries went. Democracy is another great institution in the US. The economic feat achieved could have been perhaps impossible without the democratic political framework. But above all is the idea of ‘Liberalism’. Each individual has right to talk, write and think what he wants to. The best way to bring the creative elements in people and thus bring out the collective good is to let people do what they want, let them think what they want and let them say what they want.

Why is this combination so good? I will add my own thoughts. Liberalism given an individual incentives enough to think, dream big and innovative. More times than not, only good things happen because of liberalism. The fundamental thinking behind democracy and capitalism (read markets which are nothing but people) is that collective judgment of people is far superior to the collective judgment of a few individual, which is the case in a dictatorship or socialistic economy.

I am quite sure, though it will take a few years or even decades, China will move away from the present political form. To the extent that all other countries are only trying to reach this ideal combination, history will repeat itself and has thus ended.

Post Scriptum: Here, I cannot resist talking about John Mills’ On Liberty – a masterpiece on liberalism. The US follows the principles stated in this book. I, for one, was not more influenced by any other book than this.