Abraham Lincoln had warned political leaders, “You can fool some of the people all the time, all the people some of the time, but you cannot fool all the people all the time.” When the Soviet Union collapsed in 1991, Francis Fukuyama declared the end of history, prematurely as it turns out, His claim was that ideological wars had ended. The Western concept of democratic governance, with political parties contesting elections to form governments, had defeated single party governance systems. Also, the US version of free market capitalism in which government is a nuisance, rather than a guidance for progress had finally defeated socialism in which governments put the needs of workers and peasants, and the destitute and poor, above the interests of wealthier people.
When the Second World War ended, the US emerged as the beacon of hope for a ravaged world. It led the formation of new institutions for global governance—the United Nations, the World Bank and IMF, and GATT. The only fly in the ointment for US hegemony was its concession to include Russia and China—two anti-capitalist countries—in the Security Council with veto powers, alongside it, over the democratic UN General Assembly. Russia had emerged as a competitor to the US’ technological hegemony. It also developed nuclear weapons and beat the US in the race to put man into space. China, then, was the world’s poorest large country, even poorer than India. When the Soviet Union collapsed in 1991 and liberated its economy with a ‘big bang’ under pressure from US economists, China was still very poor. (Therefore, Fukuyama assumed there was no further threat to the US control of globalisation governed with US’ economic rules.) China did not succumb to the US and its economy grew very fast, becoming the factory for the world, and the second largest economy, with technological capabilities close to the US’.
The short history of the ‘end of history’ has ended. On 2nd April 2025, Trump announced Liberation Day for the US. He ended the façade of democratic global governance, already fatally injured by US support for Israel’s blatant violations of UN resolutions, by announcing that global trade would be run the way he wanted.
All countries are scrambling to avoid harm to their citizens. China, the US’ principal target, is firm. It will not be bullied. India is caught between the US and China. India has a long-simmering dispute with China along its Northern borders. China is also India’s largest trading partner. China has become a great power. Trump wants to make America great again. India cannot afford to annoy China by taking the US’s side against its mighty neighbour.
Philosopher George Santayana said in The Life of Reason: The Phases of Human Progress, “Those who forget history are doomed to repeat it”. India has fallen way behind China, and even Vietnam which was much poorer than India in 1990. (See table).
INDIA CHINA VIETNAM
GDP 1990/Now $320b/$3.7tr $398b/$18.5tr $6.5b/$450b
GDP increase 1000% 4500% 6800%
GDP per capita 1990/now $370/$2500 $318/$12600 $130/$4500
Increase in per capita GDP 7.3 41.8 48
(Number of times)
Currency devaluation 404% 52% 266%
(Since 1990)
(N.B. Indian rupee was devalued by 19% in 1991 changing INR/USD from 17.9 to 23. Post-liberalization rupee has devalued from 23 to 85.6 i.e., 272%)
Per capita GDP is what matters to citizens. The value of the currency indicates the overall strength of a country’s economy compared to others. Incomes have grown much faster in China and Vietnam, and their currencies have remained stronger—China’s much stronger. They did not succumb to US pressures to give up their socialist moorings and their policies to build domestic industries when they joined global trade. History suggests that India gave up too soon on industrial policy and moved too fast to liberalize trade by American rules.
India has a long way yet to go to reach the ‘tryst with destiny’ its’ citizens were promised on 15th August !947, when all citizens would have ‘poorna swaraj’—equal political, social, and economic freedom. India’s leaders must rethink India’s economic strategy to make India great. Whatever the Indian government chooses to do must suit the needs of its own poorer citizens, not US interests. It is time to put more socialism into India’s capitalism. (https://www.tribuneindia.com/news/comment/indias-strategy-to-win-the-trade-war/)