The End of a World: The Crisis of Liberalism and the Disorientation of the West

The End of a World: The Crisis of Liberalism and the Disorientation of the West

By Paolo Falconio

Member of the Honorary Governing Council and Lecturer at the Society of International Studies (SEI)

The dissolution of the Union of Soviet Socialist Republics (USSR) in 1991 marked a watershed moment in contemporary history. The end of the bipolar confrontation between the United States and the Soviet Union, which had structured global politics for over forty years, was interpreted in the West as the definitive triumph of the liberal and capitalist model. In this context, authors such as Francis Fukuyama (1992) even hypothesized “the end of history,” that is, the advent of an ideologically stable phase grounded in liberal democracy and market economy.

However, subsequent geopolitical and economic developments have revealed the excessive optimism of such an interpretation. Far from consolidating itself, the West has, since the 1990s, experienced a gradual erosion of its foundational principles: liberty, the balance of powers, and social justice. This essay seeks to analyze how the artificial overlap between liberalism and capitalism has led to a moral, political, and identity crisis in the West—one that now threatens the very resilience of its democratic institutions.

The end of the Cold War entailed not only the collapse of the USSR but also the disintegration of the alternative model of planned economy. The West, led by the United States, was thus able to assert the supremacy of the capitalist system and market principles. Yet this assertion produced a paradoxical phenomenon: political liberalism—originally conceived as a doctrine of liberty and the limitation of power—was gradually subsumed by economic capitalism, which is instead governed by the logic of accumulation and the concentration of wealth.

As early as the 1830s, Alexis de Tocqueville (1835–1840), in his study of American democracy, had warned that the formation of large economic concentrations was incompatible with the spirit of liberty. Similarly, Polanyi (1944) observed that a fully self-regulating market inevitably tends to destroy the social foundations that make its existence possible, generating instability and inequality.

During the Cold War, the presence of an external “ideological enemy” had compelled Western democracies to impose a form of self-restraint on capitalism, expressed through the welfare state, social rights, and redistributive systems (Esping-Andersen, 1990). Once that equilibrium disappeared, capitalism transformed from a productive model into a totalizing system, in which the economic dimension prevails over the political and cultural spheres.

The process of economic and financial globalization, which accelerated in the 1990s, marked the phase in which capitalism, freed from national constraints, expanded on a planetary scale. According to Hobsbawm (1994), this shift signaled the end of the “short twentieth century” and the beginning of a new era dominated by transnational capital.

Large multinational corporations, driven by the pursuit of lower production costs, relocated their operations to Asia, transferring not only industrial production but also a significant share of global wealth. This process, as Piketty (2014) has shown, led to an exponential increase in economic inequality and a weakening of the middle class—the cornerstone of Western democracies.

China’s rise represents a paradigmatic case. It has demonstrated that economic development and democracy are not necessarily correlated: an authoritarian regime can ensure efficiency and long-term strategic planning more effectively than parliamentary democracies, which are often hampered by decision-making fragmentation and short electoral cycles. In its pursuit of profit maximization, the West has thus outsourced not only production but also its historical and political centrality, ceding control of the new global value chains to other actors.

The internal consequences of this transformation have been profound. The impoverishment of working and middle classes has generated a widespread sense of economic and cultural insecurity, fueling forms of sovereigntism and anti-system protest. As Bauman (2000) notes, “liquid modernity” dissolves social bonds and deprives individuals of stable reference points, fostering reactions of identity-based closure.

Phenomena such as the rise of Donald Trump in the United States, Marine Le Pen in France, and nationalist movements in Germany and the United Kingdom are expressions of this systemic crisis. Politics, emptied of its mediating role and subordinated to global finance, has lost legitimacy and the capacity to act (Streeck, 2014). As a result, citizens increasingly perceive the state as powerless and democracy as ineffective, paving the way for new forms of elective authoritarianism.

The West, though victorious in the ideological war of the twentieth century, has lost the battle for its own soul. Liberty has been reduced to consumer freedom, democracy to mere procedure, and politics to a technical instrument of economic management. Robespierre warned that “if the aristocracy of birth were to be replaced by that of money, the latter would be far worse than the former”: today, that prophecy appears fully realized.

What emerges is a moral and cultural crisis, even more than an economic one. Globalization, far from being an inescapable destiny, has proven to be a historical process shaped by specific political and financial choices made by short-sighted decision-makers lacking basic cultural tools. The West can still reverse course only by rediscovering the foundations of ethical liberalism—the kind that recognizes the economy as a means, not an end. That is, by returning to its true historical matrix, which places human dignity, social well-being, and liberty at the center, In conjunction with the respect for national identities and traditions. —not the logic of profit. Failing to do so means opening the door to specters we believed consigned to the past, but whose embers have never ceased to smolder beneath the European soil. Unfortunately, rather than rethinking our model, it seems we are seeking shortcuts in a logic of shortsighted preservation, resorting to old tactics such as inventing external enemies and spreading fears of escalating current conflicts. Yet none of this will stop the tide, for the levees have already given way.

“The end of a world” does not coincide with the end of Western civilization, but with the end of one of its illusions: that liberalism and capitalism could be fused into a single coherent system. The historical experience of the past thirty years demonstrates that political freedom and social justice cannot survive in a context dominated by deregulated economies and stateless finance.

Only through a renewed reflection on the values of classical liberalism—individual responsibility, civic participation, limitation of power, and social protections—will it be possible to reestablish a balance between economy and politics. Without such a recomposition, the West risks turning its historical victory into an irreversible defeat—not only economically, but also morally and culturally.

Bibliography

Bauman, Z. (2000). Liquid Modernity. Cambridge: Polity Press.

Esping-Andersen, G. (1990). The Three Worlds of Welfare Capitalism. Princeton: Princeton University Press.

Fukuyama, F. (1992). The End of History and the Last Man. New York: Free Press.

Hobsbawm, E. (1994). The Age of Extremes: The Short Twentieth Century, 1914–1991. London: Michael Joseph.

Piketty, T. (2014). Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press.

Polanyi, K. (1944). The Great Transformation: The Political and Economic Origins of Our Time. New York: Rinehart.

Streeck, W. (2014). Buying Time: The Delayed Crisis of Democratic Capitalism. London: Verso.

Tocqueville, A. de. (1835–1840). De la démocratie en Amérique. Paris: Gosselin.

Paolo Falconio

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