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Francis Fukuyama is a political scientist, author, and the Olivier Nomellini Senior Fellow at the Freeman Spogli Institute for International Studies at Stanford University. Among Fukuyama’s notable works are The End of History and the Last Man and The Origins of Political Order. His latest book is Liberalism and Its Discontents. He is also the author of the “Frankly Fukuyama” column, carried forward from American Purpose, at Persuasion. He is a member of Persuasion’s Board of Advisors.
In this week’s conversation, Yascha and Frank discuss Elon Musk and Vivek Ramaswamy’s flawed plans for reforming the federal bureaucracy (and how to actually reform it); why crises in France and Germany bode ill for Europe; and what the public reaction to the assassination of Brian Thompson says about healthcare in America.
This transcript has been condensed and lightly edited for clarity.
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Yascha Mounk: One of the very obvious things about politics is that big surprises are guaranteed, even if it's hard to foretell where the big surprises lie. Since we last spoke in the hours after the election, one of the big surprises has been the collapse of the government of Bashar al-Assad in Syria—obviously, I am extremely happy about the fact that he had to flee, tail between his legs, to Russia, and that his brutal and terrible regime has come to an end. Like many other people, though, I'm also struggling to understand what the new government is going to mean for Syria. I'm hopeful that it will somehow improve things, but also very aware that there's a real risk as to what it might imply, both for Syria itself and for the broader region.
What's your read on why Assad collapsed so suddenly and so rapidly after years of this protracted and terrible civil war, and what do you think the future might hold for Syria?
Francis Fukuyama: Anne Applebaum wrote about this shortly after the collapse. And I think she was essentially right; these authoritarian regimes are much more fragile than they appear to be through all the months and years that they continue with apparent stability. And the reason is that they're basically illegitimate, that they rule simply by force. In Assad's case, there was an Alawite minority in the country that the Assad family was part of. The rest of the society did not like them—hated them, actually—but they controlled the security apparatus and were able to hang on for 40 or more years. But the moment cracks began to appear within the Alawite community, I think that was the beginning of the end. It was just revealed that Assad managed to secret $250 million out of the country over the past couple of years, sending it to Moscow for his family's private use. And so this was a regime that was corrupt to the core. It wasn't distributing benefits even to that Alawite minority. And so, when the external supporters, Russia, Hezbollah, and Iran were weakened, it was gone. And I think something very similar could happen in Venezuela, in Russia itself, in Nicaragua, and many other dictatorships that are similarly despised by their own people.
Mounk: This is obviously a core paradox of dictatorships: because the power in them is so concentrated, it looks like it would be very difficult or impossible for them to collapse. And yet we've historically seen that dictatorships are not a very stable regime form, that they often go through upheavals and changes, some of which, many of which just lead to a different faction winning the upper hand and a different dictator installing themselves, as we saw in Egypt, where General El-Sisi ended up re-establishing something that looks quite a lot like Mubarak's regime. Of course there's also many democracies that originally come from dictatorships. By definition every democratic country comes from a country that once upon a time was subject to some form of autocratic rule. Very few people in 1985 or 1986 would have thought that by the end of the decade, the Soviet Union itself would be on the ropes and that many of its satellite states in Eastern Europe would be rapidly moving towards free elections.
Before we return to the future of Syria, what do you think that implies even for interpreting a country like China? I have this impression that in the ‘90s and 2000s, people were really naive about economic growth and trade and so on, and whether that would bring Western-style democracy to China—I don't remember you saying that anywhere, but clearly it turned out to be very wrong. But now I wonder whether we actually overestimate the stability of the regime, thinking it’s obviously unimaginable that the CCP might ever be gone. I just think it's very, very hard to predict in any of these cases.
So how much more stability does an institutionalized dictatorship buy you than in a personalist dictatorship, like those in Syria or in Russia?
Fukuyama: That's a very important point, institutionalization. One of the problems, I think, with American political science is that they've not made adequate distinctions among levels of dictatorship. And it really is based on institutionalization. Now, in China's case, it's changing. I would have said before the rise of Xi Jinping that one of the good features of the Chinese dictatorship was the degree to which it was institutionalized. There's a Communist Party with 90 million members. They are very well organized. They've got a system for recruitment and promotion that is actually very modern, it's very meritocratic. They've got very good people put in positions in the government.
What's been happening under Xi is that it's been reverting to a less institutionalized form of dictatorship. And this is one of the consequences of his removing the 10-year term limits on his own rule. That I think was a very momentous change because that was actually a sign of institutionalization—in fact, I can't think of a single other dictatorship that had a 10-year term limit. They did a complete turnover for the Chinese government twice after Deng Xiaoping left the scene. But Xi has stopped that. He's concentrated power. The English used to have this idea of the king and council, that the king couldn't simply make decisions on his own, that he would have to turn to a circle of nobles that he'd consult with and they would vet the decision and then go ahead. And that's the old Chinese system. They had a standing committee of the Politburo. There were seven members, but they were all very senior and very experienced. And you really had to get consensus within that group. And what Xi has done is to basically personalize and make everything about him. So nobody in that standing committee now has the stature to stand up and say, “You know, Jinping, I think you're wrong about that. Maybe we ought to try a different policy.” And that's what got them into trouble with Zero COVID, a policy which was clearly Xi’s pet project. So I think they're more vulnerable than they were.
But I've always had a hard time envisioning the actual democratization of China with multi-party, free and fair elections. Now, I can envision a liberal China in the future. And I think that's what most of my Chinese friends were hoping for back in 2013. But the idea that you could somehow have an opposition party that would run against the Chinese Communist Party and win elections, the way that evolution happened in Taiwan, I just find that very, very hard to envision, just because of the rock-solid institutionalization of the party at all levels of government. So what I hope for in that country is not a collapse of the dictatorship. What I hope for is that it will go back to liberalizing, as it seemed to be doing in the ‘80s and ‘90s.
Mounk: We see a very striking political weakness at the heart of Europe at the moment. Both France and Germany are in the midst of quite serious political crises. In France, Macron is deeply weakened. The composition of the Assemblée nationale is such that it's very hard to sustain any form of functional government. In Germany, the government was just granted a no-confidence vote, which it duly lost. It was never very functional, became deeply unpopular, and finally collapsed under the weight of its own contradictions. New elections are now scheduled, I believe, for February of 2025, though my hunch is that the political crisis is more severe in France; it seems to me that actually the French economic model is less at risk than Germany's.
There's nothing as acute or as deep about the crisis of the French social model, even if some reforms are certainly needed to balance the books. In Germany, it seems to me a little bit the inverse, where the political crisis is resolvable, but the German political and economic model is in a much deeper crisis than the French one. Germany, as Konstanze Stelzenmüller has said, has outsourced its security needs to the United States for a long time, its energy needs to Russia, and its export markets to China. And every element of this is now under serious threat. Trump is not going to be kind to a German state that continues to be unable to provide general security within Europe and that still spends very little money on the army. Germany's continuing reliance on cheap gas from Russia has now been disrupted at a very, very high price to German industry, which has gone into a significant recession. And of course, China has now invented electric cars that are much more modern and much better by all appearances than German cars. It's not just that suddenly Mercedes and BMW and Volkswagen can no longer sell into the Chinese market as much as they did. Suddenly, the Chinese car makers are competing with them on all kinds of international markets. So there's a kind of double threat to the revenue of the German car makers.
How do you perceive the crisis in France and Germany? What does it mean for the future of Europe and the European Union that the two core countries at its center are simultaneously facing these enormous upheavals?
Fukuyama: Well, the answer to that is simple: It's bad. It is a real political crisis for the EU as a whole. But let's take these in order. If we start with the German economy, I think you're spot on—actually, I'm still a little puzzled that the EU has not imposed much steeper tariffs on Chinese EVs the way that the United States has. Biden himself I think raised them to maybe 100%, basically closing the American market to China. And I think that Janet Yellen explained this when she was in Beijing the last time: Comparative advantage works to the benefit of everybody, but the point at which it stops is when you get social upheaval as a result of the destruction of one of your central industries. And that's arguably what happened in the 2000s after China entered the WTO; if American policymakers had not greeted that with open arms, but rather had tried to slow it down (you couldn't stop it) it would have given American industry a chance to adjust. You would have protected the livelihoods of a lot of the workers that are now voting for Donald Trump, and you might have avoided that whole populist reaction.
And unfortunately, what Beijing decided to do in the face of its economic crisis was not to shift to consumer spending and consumer demand, but to double down on its export manufacturing capability. And that's why we got all these Chinese EVs, and they cannot be allowed to get away with this. And so, if I were a German politician, in the short run, I would strongly protect the German car industry so that you don't get the kind of phenomenon that happened to the U.S. in the early 2000s. But at that point, that industry has really got to take advantage of a breathing space because in the long run, if they don't dramatically adapt to the new technological environment they're in, then this is only going to put off a decline that I think probably won't be stoppable. But you do want to protect, I think, the social stability of the country in the meantime.
As I understand it, it really is kinda high-tech that's the problem. It's the software side of the EVs that the Germans haven't been able to get. Volkswagen just fired the guy that had been running this because he had not been able to really catch up to China or to Tesla, and they've desperately got to be able to do that, so they need some breathing space.
Mounk: One of the striking things that I came across recently is that the last major tech company to be founded in Germany was founded on April 1st, 1972. And that's SAP, which tells you something about the state of the tech industry there.
Fukuyama: Yeah, I mean, and there's a lot of reasons, both policy and cultural. Europe is over-regulated. It's hard to be an entrepreneur, but culturally there isn't the kind of respect for that kind of risk-taking that there is in the United States. Draghi's report identified a lot of the problems. But it's a political question whether anyone can act on them.
Mounk: I have been reflecting on Germany and I have a new piece out on my Substack called “The German Model is Failing.” I read Angela Merkel's autobiography, which is striking in many ways. She is quite a winning person, I think. She is generally much smarter and more dogged than people give her credit for. She is also, I think, generally modest and authentic in certain ways. One of the things that journalists always said about her is that her predecessor, Gerhard Schröder, was always impressed by the German CEOs and kind of wanted to be in with them. And Angela Merkel just didn't have that need for approval. I think to go from being 35 years old and having a job as a scientist at an institute in Berlin, in communist Germany, to being the chancellor of the country 16 years later is really a phenomenal story.
And yet, it also feels to me like Merkel has gotten all of the big calls over the last 16 years wrong. I think her decisions during the refugee crisis, while well-intentioned, have turned out to be much more complicated and in some ways much more self-destructive than was obvious to polite opinion at the time. She really did not understand that Germany's “holiday from history” was ending, and that there was an urgent need to invest in the military. She was wrong to get out of nuclear, deepening Germany's reliance on coal from Poland, originally, and gas from Russia. And then I think she really misjudged how to deal with the challenge from Putin and, in a different way, from China. You were talking about protecting the German social model—Merkel defends doing business with Russia on gas and doing business with China on exports and so on by her notion of realpolitik, saying “I would love to just talk to nice people who obey human rights. But as a statesman, sometimes you have to negotiate with people who aren't very nice. And in the interest of German jobs and the German industry, I did that, in the case of Xi Jinping.” And look, you can have normative debates about the premise, but it's certainly a reasonable one. Certainly, statesmen need to speak to unsavory characters all the time, and there's a need to negotiate with them. And exactly how values-led foreign policy should be is a complicated question.
I don't think that her stance is in itself unreasonable. What struck me is that she had no recognition of the fact that this, in fact, did not turn out to be in Germany's economic self-interest, that the deepening of the trade relationship with China that continued under her—to the very last moment, with her supporting the EU-China trade partnership in 2021—is now actually an acute threat to German jobs. And she just does not seem to have taken that on board at all, which I found quite striking.
Fukuyama: It speaks to the rigidity of this kind of political decision making. Free trade had become a kind of ideology that made efficiency trump other kinds of social objectives, and now we're in the process of revising our thinking about that. Social stability is important. But as you're saying, there's many different routes to social stability. Growing a big export economy at one point looked like protection of that German social model, but then it left you vulnerable to external changes that you really couldn't control. And now it's suddenly become a big liability. Every country is now going through a reordering of those priorities. And I'm just a little bit surprised that the Germans haven't moved quicker to protect themselves from China, having now realized that this was fundamentally a big mistake.
If we could go on to the French side of the equation, I really find it hard to see how you're going to keep the Rassemblement National out of power. I thought that it would come to power after the snap election over the summer, but they managed to pull off a holding action that prevented that from happening. And I think that a lot really rests on what Marine Le Pen is actually going to be like in power, whether she's going to be more like Viktor Orbán or more like Giorgia Meloni. It's very hard to predict that. My Italian friends really don't like Meloni because, on a lot of issues (immigration, LGBTQ rights), she is really genuinely pretty conservative. On the other hand, she has shown herself flexible on issues that matter to me, like NATO and support for Ukraine. And at this point, it's a little bit hard to say how Marine Le Pen is going to be once in power. And that I think is the big question that faces not just France, but Europe. It is kind of a tragedy, because I think that Macron was actually doing all the right things, in terms of pension reform, in terms of tax reform. These all needed to be done, it's just that the French people didn't want them done.
It could be that you're facing a situation both in Germany and in France where the only way you're going to solve either the economic model problem or the political model problems is that things have to get a lot worse first. The two best performers in Europe right now are Spain and Greece, and if you wind the clock back 10 years, they look like complete disasters, and I think because they were seen as disasters, it forced them to adapt policy in a way that wouldn't have been possible in earlier periods. Maybe that's the mechanism that will be at work in both France and Germany right now because I think people haven't woken up fully to the new reality. In Germany, my particular concern is that we're really facing a big security crisis: If Ukraine goes down, Russia is going to be in a pretty dominant and self-confident position. I don't think there's been this recognition that Zeitenwende is really actually necessary, and that this kind of pacifism that was inherited from the whole experience of the Second World War is of a different political era. I think Japan has recognized that to a much greater extent than Germany, and they've been putting some serious money into defense modernization. So we'll have to see.
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Mounk: So I've written a little bit about the health care debate as well in recent days because of this really striking murder of Brian Thompson and the reaction to it.
And here, I think that there's something slightly delusional in how Americans talk about it. On the one hand, far and away the most frustrating experiences that I've had with bureaucracy in the United States is dealing with health insurance. Now, thankfully, I've always had high quality health insurance while living in the country, and I haven't had any major health problems. And at least at this point, though perhaps not as a graduate student, I have enough financial reserves that if I unexpectedly got a bill for a thousand or two thousand dollars, I'd be able to pay it. Even so, just getting a clear answer from your health insurance about how much you're going to have to pay for some minor intervention and whether some doctor is really in network, or whether some procedure is really going to be covered… You know, when I had my wisdom tooth out in June, I went into the doctor's office and they explained to me exactly the cost of the procedures and it was quite reasonable. But then I get there on the day and the surgeon says, “By the way, I really recommend this particular additional procedure because, if not, it drastically increases your chances of being deformed,” or something like that. “And that's not covered, so that's going to be an extra thousand dollars.”
Thankfully, my uncle is a dentist, so I rang him up while the doctor was judging me for taking a moment to deliberate about this decision. And he said this was absolutely not necessary. So I get it, and it is an unacceptable part of the American system, and I can't imagine how much worse it is for people who really might be unable to make rent if they make the wrong call, or they misunderstand something, and so on and so forth.
Now, at the same time, I think Americans are in absolute denial about the fact that there's many winners from the system, and that making these changes would require taking on those winners: The most obvious one of which is doctors and nurses. Doctors make over three times as much on average as doctors in the richest European countries like Germany and France. They have a net worth that's about five times as high as that of doctors in Europe, even after having to pay the exorbitant costs for medical school. Registered nurses in the United States make more money on average than doctors in many European countries like Italy and France. And in the end, there's just a basic problem: If I'm going to get a haircut, I need to pay for half an hour of my haircutter’s time. The same is true of doctors, right? Doctors make $500,000 a year, as many doctors do. I need an hour of their time, but I only make 30 or $40,000. Well, how on earth is that going to work? That's always going to be a problem. And the second thing that I just want to say in my rant and then I’ll lob it back over to you, is that I think many of my friends are in huge denial about how high the quality of care is that they receive. I mean, in Britain, when I was living there, it was virtually impossible to see a doctor. If you have the flu, you're not going to see a doctor until the flu either is resolved or you're in the hospital for pneumonia. Friends of mine who had children in the United Kingdom have a huge struggle just getting their prenatal care and so on in a reasonable time frame. In Germany when I was growing up, it was perfectly normal to wait at the doctor's office for three, four, or five hours. A perfectly ordinary experience when I was growing up.
The problem with the American healthcare system is that it is infuriating. In many ways it's deeply irrational. It also has many, many winners who receive genuinely good care or who make big salaries from it. And so to reform the system, you would have to upset the winners. And that, of course, is a very hard thing to do. I'm not arguing against doing that. I'm arguing in favor of doing that. But if you think that you go to an NHS system like in Britain and everybody's going to be happy, or you think that you can solve this problem by getting rid of the profits of health insurance companies (which amount to less than a hundred dollars a person a year) rather than the salaries of doctors (which amount to over a thousand dollars a person a year) before you factor in the salaries of residents and nurses and everybody else—I just don't think you're serious about the problem. Rant over.
Fukuyama: Yeah, there are other aspects. I mean, I'm struck at how uninformed a lot of the discussion and the reaction to Brian Thompson and the current controversy are. During Obamacare, it was made clear that a lot of the administrative costs of private health insurance is actually insurance companies trying to keep off of their rolls people that they don't want to insure, and making judgments about pre-existing conditions and that sort of thing. It is a kind of collective action problem; if you simply mandated that everybody had to get insurance and you couldn't have this pre-existing condition exclusion, then it would raise everybody's health insurance costs, but something like 30% of the administrative costs of private health insurance was due to the companies spending all this time trying to figure out who doesn't qualify. And if you simply force everybody to be qualified, then that cost goes away. It doesn't make it affordable for everybody, but it gets rid of one irrationality in the system.
Anyhow, it's a very hard problem. And by the way, among the winners in the American system are people with good health insurance, and they don't want to see that go away and have to wait in the doctor's office for four or five hours, as you were saying. That is one of the costs that you're going to have if you go to a single-payer system or something more like a European health insurance system
In the rest of this conversation, Yascha and Frank discuss Elon Musk and Vivek Ramaswamy’s plans for reforming the federal bureacracy. This discussion is reserved for paying members...
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