The End of the 'Age of Optimism?'

In an excellent piece in The Financial Times Weekend Edition, foreign affairs columnist Gideon Rachman queries whether the world has exited what he terms the 'Age of Optimism', a period which began around the beginning of the 1990's. This puts its commencement around the time of several notable events which marked the expansion of democracy, including the fall of the Berlin wall and the break-up of the Soviet Union. In Rachman's words, it was marked by five specific elements:

1. A faith in the onward march of democracy

2. A faith in the triumph of markets over the state

3. A belief in the transforming power of technology

4. A theory of “democratic peace,” or the belief that in a world in which democracy and capitalism were on the rise, the risk of conflict inevitably diminished

5. A faith that in the last resort the US military could defeat any power on earth.

 

So, what happened in 2008? According to Rachman:

'By the time Barack Obama took office, each of the five ideas that had underpinned American self-confidence during the Age of Optimism had taken a battering. The faith in the onward march of freedom had been shaken by the difficulties of exporting democracy to Iraq and Afghanistan...The belief in the power of free markets took a terrible blow with the economic and financial crisis of 2008. The technological revolution no longer seemed the magical cure-all that it had promised to be... The theory of the “democratic peace” looked less persuasive....Finally, the belief in the unstoppable nature of American power looked much shakier with US troops bogged down in Afghanistan and Iraq...'

Very interesting, if dismal food for thought. Then again, economics is not known as the optimistic science. However, Rachman positively ends with the following:

'The world does look unusually bleak in the aftermath of the global economic crisis. But the past century has proved the resilience and creativity of liberal democracy and free-market economics. I suspect the next century will do the same.'