The theories of Seymour Martin Lipset, Adam Przeworski, and Francis Fukuyama fostered complacency and hubris within policymaking circles following the collapse of the Soviet Union. Collectively, these frameworks shaped U.S. and Western strategic thinking after 1991, contributing to miscalculations that inadvertently facilitated China’s emergence as both a global manufacturing hub and a technological innovation powerhouse.
Seymour Martin Lipset’s Modernization Theory: Optimism and Assumptions
Seymour Martin Lipset’s modernization theory posited a direct and seemingly inevitable link between economic development and the emergence of stable democracies. According to Lipset, as societies grow wealthier, urbanize, and expand access to education, a burgeoning middle class arises, fostering democratic values that ultimately sustain stable governance. This framework implicitly suggested that economic growth would naturally cultivate liberal norms and political accountability, creating a sense of predictability and order for policymakers who sought to promote democracy through development initiatives. The theory carried an unspoken promise: supporting market reforms, foreign investment, and economic modernization could be assumed to steer societies toward democratic governance without requiring deeper institutional intervention.
In practice, this optimism contributed to a form of strategic complacency in the post-Soviet era. U.S. policymakers, emboldened by the perceived inevitability of Lipset’s framework, assumed that the spread of market liberalization would automatically yield democratic consolidation. This perspective underestimated the resilience of non-democratic states and overlooked the possibility that such regimes could pursue rapid economic growth, technological learning, and industrial capacity building without succumbing to democratic pressures. China’s trajectory vividly demonstrated these limitations. By combining market-oriented reforms with strong state control, China achieved remarkable economic and technological advancement while maintaining an authoritarian political system, thereby challenging the assumption that economic development and democracy are inseparably linked. In this sense, Lipset’s theory, though analytically compelling, fostered hubris among policymakers who failed to anticipate the capacity of non-democratic states to modernize efficiently and strategically.
Adam Przeworski’s Democratic Resilience Theory: False Sense of Security
Adam Przeworski’s Democratic Resilience Theory has long been cited as a benchmark for understanding the stability of democracies. At its core, the theory posits that once a country’s per capita income surpasses approximately $6,055, its democratic institutions are unlikely to collapse. This claim, by offering a seemingly quantitative and scientific standard, has lent itself to an aura of certainty around the stability of established democracies. For policymakers, it appeared to provide a clear metric for predicting the resilience of democratic governance, fostering the assumption that economic prosperity and liberal institutions were inextricably linked.
In practice, however, this framework encouraged a dangerous sense of complacency. Policymakers in the United States, Europe, and other high-income democracies often treated the income threshold as a guarantee of enduring stability. As a result, any signs of democratic backsliding or institutional strain were dismissed as anomalies or temporary aberrations. The events of January 6, 2021, when the U.S. Capitol was attacked, starkly exposed the fragility of this assumption, demonstrating that economic affluence alone cannot safeguard a democracy from internal political crises or the erosion of civic norms.
The overconfidence generated by this interpretation of Przeworski’s theory had broader strategic implications. By conflating economic power with political resilience, policymakers underestimated vulnerabilities within their own systems, often assuming that mature, wealthy democracies were immune to internal disruptions. This illusion of stability reinforced a blind spot regarding emerging global competitors operating under non-democratic models, obscuring the need for vigilance and adaptation. In essence, the quantitative allure of the theory inadvertently fostered strategic hubris, highlighting the limitations of relying on income-based thresholds to gauge the robustness of democratic governance.
Francis Fukuyama’s “End of History”: Ideological Complacency
Francis Fukuyama’s “The End of History” advanced the provocative claim that liberal democracy and market capitalism represented the culmination of humanity’s ideological evolution. In the wake of the Soviet Union’s collapse, this perspective fostered widespread complacency in Western policy circles. Policymakers assumed that liberal democracy and market-driven economies were globally inevitable, and that economic liberalization would naturally produce political liberalization, as many expected would occur in China following its accession to the World Trade Organization in 2001. This assumption encouraged Western governments to focus inward, consolidating technological capabilities and market positions under the belief that political systems elsewhere would eventually converge toward liberal democracy. The perceived ideological dominance of the West contributed to a sense of strategic overconfidence, resulting in underinvestment in industrial and technological resilience, as the absence of a peer competitor seemed to confirm the unassailable position of liberal democratic states.
This intellectual complacency extended into economic theory and practice, reinforcing the allure of hyper-globalization. Global integration was widely regarded as self-reinforcing, exemplified in Thomas Friedman’s “Golden Arches Theory,” which suggested that countries engaged in deep commercial exchange were unlikely to wage war against one another. Western elites assumed that free-market dynamics would benefit all participants, fostering peace and prosperity while allowing advanced economies to specialize in high-value sectors. The result was a pronounced reliance on global supply chains and the offshoring of manufacturing, based on the belief that liberal, market-driven systems would automatically confer technological and economic advantage. This approach, however, underestimated the capabilities of non-democratic states that could deploy alternative models of development.
China, in particular, exposed the limitations of this ideological hubris. Despite being a single-party state, it emerged as a global leader in high-tech manufacturing, 5G, artificial intelligence, and green energy technologies. Through state-led industrial strategy, massive R&D investment, and the ability to mobilize resources on an unprecedented scale, China demonstrated a capacity for strategic innovation that many in the West had discounted. While liberal democracies often foster a culture conducive to bottom-up, radical innovation through open debate, protection of intellectual property, and transparent institutions, China showed that top-down approaches, when combined with coherent industrial planning and resource mobilization, could achieve comparable breakthroughs in targeted sectors. Western policymakers’ underestimation of China’s state-directed innovation, coupled with overreliance on global supply chains, eventually contributed to strategic vulnerabilities, fostering economic and political anxieties that would later manifest in protectionist and isolationist movements such as the “America First” agenda.
In retrospect, Fukuyama’s thesis encouraged a period of ideological and strategic complacency in which the West assumed its systems were self-reinforcing and unchallenged. This belief overlooked the adaptive capacities of alternative governance models and masked the importance of sustained investment in industrial resilience, technological capability, and strategic foresight. The experience of the early twenty-first century demonstrates that global influence is not solely determined by ideological appeal but by the ability to integrate policy, innovation, and industrial strategy in a rapidly changing international environment. In this sense, the “end of history” narrative underestimated both the dynamism of non-democratic states and the fragility of Western assumptions about technological and industrial dominance.
Cumulative Effect on China’s Rise
Western policymakers long underestimated China’s capacity for innovation, assuming that its authoritarian governance and so-called “rote learning” culture would confine it to low-end manufacturing and mere imitation of foreign technology. This misjudgment overlooked a broader principle embedded in China’s industrial strategy: the process of introduction, digestion, absorption, and re-innovation. By emphasizing “learning by doing,” China transformed imported technologies into indigenous capabilities rather than simply replicating foreign designs. This approach allowed the country to scale manufacturing rapidly, absorb global technological know-how, and establish dominance in sectors ranging from electronics and machinery to solar panels, all while largely avoiding serious pushback from Western competitors.
China’s rise as a technological powerhouse was facilitated by a unique convergence of domestic policies and global circumstances. Drawing on insights from the assumptions of theorists such as Seymour Martin Lipset, Adam Przeworski, and Francis Fukuyama, Western elites assumed that liberal democracy and market capitalism were inevitable and that economic development would naturally produce liberal political norms. This ideological complacency coincided with periods of significant Western distraction, including the wars in Iraq and Afghanistan and the ongoing Russo-Ukrainian conflict, which limited the United States’ capacity for sustained strategic countermeasures against China. Simultaneously, intellectual property enforcement remained relatively lax, while global markets and investment flows provided China with opportunities to climb the value chain, acquire critical knowledge, and integrate advanced technologies.
State planning, targeted research and development, and strategic industrial policy enabled China to harness these global opportunities to develop sectors such as artificial intelligence, telecommunications, semiconductors, and renewable energy, eventually positioning itself as a competitor to established Western incumbents. This success occurred even as Reagan-era ideology in the West, reinforced by the International Monetary Fund, World Bank, and the U.S. Treasury, promoted financialization, limited government intervention, and market primacy, effectively displacing industrial policy as a central instrument of national economic strategy. The combination of Western strategic misreading and China’s disciplined, iterative industrial approach allowed the country to advance technologically and economically without adopting Western-style democratic institutions, demonstrating that economic growth need not automatically produce liberal norms. In this way, China exploited both its own institutional strengths and the miscalculations of its competitors to achieve industrial and technological dominance on the global stage.
Conclusion
The post-Cold War era saw the widespread influence of several political and economic theories that, while intellectually rigorous, inadvertently fostered a sense of complacency among policymakers. Seymour Martin Lipset’s modernization theory suggested that economic development would naturally generate democratic values, implying a near-automatic progression from wealth to liberal governance. Adam Przeworski’s work appeared to reinforce this notion by implying that affluent democracies were inherently stable, lending a quantitative veneer of security to existing political systems. Meanwhile, Francis Fukuyama’s proclamation of the “end of history” posited that liberal democracy and market capitalism represented the inevitable endpoint of ideological evolution. Together, these frameworks encouraged a policy environment that was largely blind to alternative developmental trajectories, particularly in non-Western contexts.
This intellectual overconfidence had tangible consequences. Western policymakers assumed that political liberalization would follow economic growth almost mechanically, leading them to underestimate the capacity of non-democratic states to innovate, industrialize, and compete globally. In this context, China was able to exploit the strategic space left by Western complacency. Leveraging state-directed research and development, deliberate ecosystem building, and targeted industrial policies, China rapidly transformed into a global manufacturing powerhouse. Its rise was characterized not only by scale and efficiency in production but also by the cultivation of technological capabilities that allowed it to challenge established competitors, demonstrating that alternative pathways to development were not only possible but highly effective. The result was a dramatic reconfiguration of the global economic landscape, one that exposed the limitations of theoretical assumptions that had dominated Western policy thinking.