What in the world happened?
In November 1989, the Berlin Wall was breached. Two years later, the Soviet Union collapsed.
During those heady years, the air was alive with talk of the “end of history”—the sense that Western democracies had now won a decisive victory over the communist system.
For a while, some U.S. politicians and pundits even speculated about a possible “peace dividend.” After all, they reasoned, the United States had assembled a gargantuan military during the Cold War, but maintaining such a large fighting force no longer seemed necessary. A sizable chunk of money might now be directed toward other societal ends.
A spirit of hope and optimism filled the air and the airwaves.
And then, somehow, that spirit waned.
In her most recent book, Autocracy, Inc., Anne Applebaum traces how the hopes of 1989 shape-shifted into our own troubled times.
For Applebaum, something that inadvertently helped to cause this shift was a belief that took root in parts of the West during the 1970s and 1980s. It was a conviction that the Eastern sector could, over time, be co-opted and even democratized by means of trade.
Instead of confronting the nations behind the Iron Curtain aggressively, those who espoused this view argued that the West should cultivate commercial ties with such nations. Inevitably, so the argument went, those countries would then become “Westernized,” both economically and politically.
It was an appealing proposition—and it seemed plausible, given the way that trade among nations in West Europe had led to greater prosperity after World War II.
Egon Bahr, who advised West German chancellor Willy Brandt, supported this approach. If his country’s leaders engaged with their East German counterparts and promoted trade rather than boycotts, he argued, a “loosening of the borders” could come about.
As time went on, the notion of peace through commerce found some prominent adherents.
Bill Clinton felt that countries like China would inevitably change their political systems as they became more involved in international trade. He argued that “in the knowledge economy…economic innovation and political empowerment go hand in hand.”
Gerhard Schröder, Germany’s chancellor from 1998 to 2005, expressed the same optimism that China could evolve into a democratic nation.
Even in the former Soviet Union, this viewpoint found a number of fans. Applebaum notes that reformers there “believed that deep and rapid engagement with the outside world would help them break up the old, dysfunctional system of central planning and create a new political order as well as a new economic order.”
And so, many came to assume that former communist nations would gradually morph into democracies.
They never seriously considered another possibility: that those countries would find ways to mold parts of the West to their own liking.
When Vladimir Putin became Russia’s head of state, he made it a point to play on these Western assumptions.
In an address in 2000, he contended that “only a democratic state is capable of ensuring a balance of interests of the individual and society, combining private initiatives with national goals.” Two years later, he spoke approvingly of the “rule of law, free elections and the priority of human rights.”
At the same time, though, he was laying the foundations of dictatorship behind the scenes.
Putin worked to preserve the appearance of democratic procedures—for example, elections that seemed fair but were anything but. Such a strategy aimed to impress foreign investors.
He couldn’t transform Russia into a dictatorial kleptocracy on his own, however. He found willing accomplices in the West: financial institutions and other companies that could launder money when the need arose. Over time, autocrats were able to place their ill-gotten gains in discreet Western locations, including Delaware, Nevada, South Dakota and Wyoming, which have all established financial tools that anonymous investors can use to conceal their assets.
Putin’s playbook became a blueprint that autocrats in other countries such as Venezuela and Zimbabwe could learn from and appropriate.
But how could they continue on this course over time? Certainly their citizens, as they grew aware of such financial and political malfeasance, might well rise up and demand meaningful reforms.
It became necessary, in the eyes of such rulers, to discredit the belief that popular uprisings could effect long-lasting political change. It became crucial not merely to crush domestic dissent, but also the very idea that such things were possible anywhere on the globe.
And so the West—with its ideals of transparency, human rights and democracy—became a thorn in their side, a barrier in the path they sought to follow long term.
Increasingly, propaganda efforts in these countries have depicted nations like the United States as unstable and their own regimes as sturdy. In addition, they contend that a new world order of multipolarity should replace the “repressive” U.S.-led hegemony that now, in their view, holds sway.
Another aspect of this post-1989 shift has been the way that illiberal states support one another despite their deep ideological differences.
Nowadays, should a member of “Autocracy, Inc.” become the target of sanctions, it’s better able to deal with that situation. “There are friends and trading partners to be found among other sanctioned states, and companies not just unbothered by corruption but happy to encourage it and to participate themselves.”
Venezuela provides just one example of this. After a number of North American firms left the country, some Russian companies stepped in and took their place.
In the aftermath of Russia’s invasion of Ukraine in 2022, Western powers responded by imposing a slew of sanctions. But those measures proved to be less than effective, given the way that several countries continued doing business with Russia.
Applebaum dedicates her book to “the optimists,” and in her final chapter she showcases activists from different parts of the globe who are combating such threats to democratic institutions.
She also suggests how the West as a whole might go about meeting these challenges.
One of her proposals: the establishment of an international anti-corruption alliance.
Other proposals of hers could, if implemented, be game changers.
“We could, for example, require all real estate transactions, everywhere in the United States and Europe, to be totally transparent. We could require all companies to be registered in the name of their actual owners, and all trusts to reveal the names of their beneficiaries…We could close loopholes that allow anonymity in the private-equity and hedge-fund industries too. We could create effective enforcement teams and then help them operate across countries and continents.”
It remains to be seen if such reforms can be realized in these difficult times.
