Was the World of the 1990s Better Than Today’s?

It is a fundamental question. Did we go very wrong somewhere and thus ended up in today’s bad situation?

To many young people, it might seem a strange question to ask. To them, the world of the 1990s is a faraway world of which, by experience, they know almost nothing. But they are familiar with the key terms of the period — such as the Global Financial Crisis, liberal imperialism and the Washington Consensus.

While one cannot say that today’s world is “better,” I think that one can rather confidently affirm that the world of the 1990s was a world of unmatched hypocrisy and ideas that almost all turned out to be wrong.

Why do I speak of hypocrisy in this context? In my view, it is a necessary condition for any society to exist: Too little of it makes society violent and rough, but too much makes it rotten.

What were the core ideas of the 1990s?

1. Financialization is good

In the 1990s, it was thought that, both domestically and internationally, greater financialization would make individuals and countries grow faster. It was presented as a substitute for economic equality: Everybody who wanted to study or had a good idea could easily borrow and supposedly become rich. Individuals could do it within a country, poor countries could do it within the world.

As John Rawls wrote in his very 1990s book “The Law of Peoples,” poor countries could easily borrow from the “Society of Nations” and solve their problems. A deep financial sector was supposedly a cure-all.

Did it really cure all? Not really. Free movement of capital between nations brought about the Asian financial crisis that led to large income declines in South Korea, Malaysia, the Philippines and Indonesia — and later spread to Russia and Latin America.

Then, in 2007-08, unchecked financial liberalization in the West, combined with high levels of inequality, caused the Global Financial Crisis with a recession. Those responsible for the recession were bailed out by governments.

Those who lost were left out to dry. So this truth of the 1990s certainly turned out to be wrong.

2. Multi-ethnic societies are good

This idea was affirmed in public. However, note that at the same time, Western elites and media supported the break-up of multi-ethnic, formerly communist federations in Europe and Africa (e.g., Ethiopia).

How was it that multi-ethnicity in one part of the world was good, while in the other part of the world it was bad?

The answer is that the theory worked only if you thought of it in terms of naked political realism. Its logic: Let’s break those whom we consider enemies so that we can become stronger. It was a sugar-coated lie.

And as multi-ethnicity became a problem in the West, increasingly strong obstacles to the free movement of labor were set up. Most notably so in Europe. It had surrounded itself with electric fences (although they had been ostentatiously destroyed in 1989 on the border between Hungary and Austria).

Now fast boats in the Mediterranean to protect Europe against what its elites ideologically said they supported: Multi-ethnicity. This truth of the 1990s also turned out to be wrong.

3. Poor countries can easily become rich

The 1990s claim was that rich countries and the elites there were keen to help poor countries grow out of their poverty.

According to this very American 1990s idea, poor countries were poor because they were corrupt and unable to use technological knowledge that existed in the world. The transfer of technology and the application of the principle of comparative advantage were therefore deemed desirable.

But when China used that worldwide technological knowledge to get ahead of the rest of the world, suddenly the story changed. Now the poor were stealing the technology that rightly belonged to the rich.

This truth of the 1990s, too, turned therefore out to be wrong, or more exactly, what was claimed was not sincerely believed.

4. Government is the problem

According to this idea, everything could be done better by the private sector. Except when the combination of the private sector and the state reshuffled the cards in the world and made China grow at two-digit rates.

Then the mantra suddenly changed: The state should implement industrial policies, erect security barriers and defend itself.

Conclusion

Thus, almost all that was believed in the 1990s was either proven wrong, or was self-serving. Any daring or alternative opinion was relegated to the lunatic fringe.

Freedom of expression in the ideologically dominant part of the world — the United States — was not controlled by the thought police, but by what the mandarins of knowledge saw as requirements for success. They asphyxiated the thought and created a wooden language that distorted reality.

Everybody knew what to think (or at least what to say) to get ahead. It was ideologically a barren period where clichés were regarded as ultimate accomplishments of human thought.

Today’s world may not be better — but is certainly intellectually freer.