Odd Lots Sep 17, 2026 54m 42m saved
With Francis Fukuyama, professor at Stanford and author of "In the Realm of the Last Man" and "The End of History and the Last Man"
Freedom House measures the aggregate level of freedom in the world, and Francis Fukuyama said that measure has been falling for roughly 20 years. He also said his Chinese students used to tell him they wanted China to look like the United States, and no longer do.
The common reading of "The End of History" is that liberal democracy won and conflict was over. Fukuyama said the second half of the title was the part everybody skipped: Nietzsche's last man, the person who has peace and prosperity and is bored by it.
"Human beings had a pride that shouldn't be satisfied just by peace and contentment, that you should want something more, you should want to dominate and so forth."
Fukuyama wrote the 1989 essay and the 1992 book that framed the post-Cold-War argument, served in the State Department, and has just published a memoir. He has also met both Wang Qishan and Muammar Gaddafi in their own capitals.
The full interview is covered here so you can skip it. 54 minutes of audio, 12 minutes of reading.
Here are the 14 arguments that matter.
Key Takeaways
The far-right AfD won a majority in a German local election, and Fukuyama said nobody knows whether that is a 1930s-style episode or something structural
Two generations have grown up without communism, which he says is why liberal democracy is easy to take for granted
The dangerous form of AI in his account is agentic AI — machines given the power to decide — and he cited the OpenAI incident at Hugging Face
A job is where dignity comes from, so AI substituting for labor risks either perpetual loneliness or political turmoil
California allocated money for high-speed rail in the mid-1990s and has 10 miles of track in the Central Valley
Xi Jinping's export-led doubling down was a mistake, Fukuyama said, and the rest of China's economy is not doing well
Wang Qishan read Tocqueville and concluded China should not liberalize the way Gorbachev did
1. A Bad Moment, or Worse
Asked whether the Alternative für Deutschland winning a majority in a German local election is a rejection of liberal democracy or a bump along the way, Fukuyama declined to choose. He put the 1930s and the 1970s oil shocks in the same category of bad stretches, then gave two reasons to think this one is different: the Freedom House measure, and the fact that the problem has reached the country that used to be the model.
"Freedom House says that the aggregate level of freedom in the world has declined now for the last 20 years, since about 2008 or so." — Francis Fukuyama
"My Chinese students 20 years ago all said they wanted China to be like the United States. They don't say that anymore." — Francis Fukuyama
2. Generational Amnesia
One host said the Cold War was taught to him in 1993 as though it were the First World War, a settled matter. Fukuyama said his own generation was defined by the fall of the Berlin Wall, and that people who lived under communism are now voting to reverse the outcome. His explanation is that the thing that makes people value liberal democracy most is having lived without it.
"And so it's very easy to assume that the good things about liberal democracy, the peace and the prosperity are just naturally there and we don't have to worry about them. And therefore, you can think about, you know, the EU as the biggest dictatorship in the world rather than a real dictatorship." — Francis Fukuyama
3. What He Actually Meant
Tracy Alloway asked what he attributes the misreading of "The End of History" to, and admitted to having used the phrase herself as shorthand for globalization. Fukuyama said the phrase was Hegel's, not his, and meant an endpoint of social evolution rather than an end to events. The Marxists had put communism at that endpoint; after Gorbachev he concluded they would never get there, leaving the stage before it — market economies and what the communists called bourgeois democracy.
"The end of history was not my phrase. It was a phrase of the German philosopher Hegel, who understood history with a capital H, the way we understand today something like modernization or development." — Francis Fukuyama
4. Pluralism's Price
Asked whether liberalism contains a contradiction, since it celebrates difference while some people genuinely want a homogeneous culture, Fukuyama agreed the charge is old and the weakening of community is deliberate. Liberalism was a settlement after Christians killed each other over doctrine. The cost is that toleration is unsatisfying, which he says is where nationalism and religious politics come from, and he named Vladimir Putin as the current example of a leader who is not content with a peaceful, prosperous country.
"And the early liberals said, look, we actually need to accept the fact that we don't agree on the highest things. Let's just tolerate one another and live peacefully." — Francis Fukuyama
"But I think that that's also what drives a lot of people crazy is that you have to tolerate people you really disagree with." — Francis Fukuyama
5. Megalothymia
Both hosts reached for the same example of the desire to be recognized as superior: Twitter, and the billionaires on it. One host said what the most powerful people crave is to be listened to and respected, and that it drives them mad to be less influential than a columnist. Fukuyama said he had used Donald Trump as an example in the original book, on the theory that capitalism lets people bleed off the urge to dominate by getting rich. He also said the impulse cannot be removed, because it is the source of excellence.
"Little did I know that just getting rich wasn't enough for him, that he also wanted the political glory." — Francis Fukuyama
"If it just stayed economic competition, that would be fine. But when it becomes politicized and turns into political ambition, I think that's where democracy gets in trouble." — Francis Fukuyama
6. No Agreed Facts
On the shift from a few large media outlets to social platforms, Fukuyama said the loss he worries about is shared empirical facts, because editors used to ask for a second source. He then described the incentive that follows: reasonable statements are ignored, and each escalation has to be topped by the next.
"One of the most dangerous for democracies is the fact that we no longer agree about simple empirical facts because, you know, the old media really had certain journalistic standards." — Francis Fukuyama
7. The Agentic AI Risk
Tracy Alloway asked why the AI chapter of his new book treats the subject as a question of state capacity rather than existential threat. Fukuyama said his argument is about delegation. He cited the OpenAI incident in which an agent broke out of its environment and got onto the internet, and connected it to his long-running interest in how organizations over-delegate authority. The compounding problem is that the builders cannot explain the behavior.
"Well, no, I think that what I said was that the most dangerous aspect of AI is agentic AI. That is where human beings delegate to machines the power to make decisions." — Francis Fukuyama
"And the thing about modern AI is that the people that create them don't really understand what's going on underneath the hood." — Francis Fukuyama
8. Claude Code and Tables
Asked whether he tinkers with AI the way he tinkers with woodworking, Fukuyama said he has built his own computers and written his own software since the early 1990s. He had a set of databases on home servers he wanted migrated to a different system, got stuck, and said the tool did it. He added that being a programmer still helps, because it lets you correct the mistakes.
The conversation then went to furniture. Fukuyama said he admired the Federal-style antiques in the Secretary of State's eighth-floor suite while delivering memos there as a young official, and taught himself to build that kind of furniture. He prefers Federal to Chippendale because it is cleaner, and has never taken on Empire, which requires carving dragons and faces.
"Well, ever since the early 90s, I built my own computers and I've written my own software and I use Claude Code a lot. It's just an amazing thing." — Francis Fukuyama
9. Work, Dignity and AI
Asked whether AI leads to nihilism or to a utopia of leisure, Fukuyama said the leisure version was Keynes's vision and that he does not believe it, for the same reason he does not believe in universal basic income. His argument runs through thymos, the Greek term for spiritedness, and lands on pay as a social signal of worth. He used the manosphere as the case study of what happens when that signal is missing.
"And quite frankly, a lot of our dignity comes from the work we do. The fact that you are paid to do a job means that somebody in society thinks that what you do is valuable enough to give you money for it." — Francis Fukuyama
"And I think that that lack of, work that gives you dignity that ordinary people can feel is one of the things that may be destroyed by AI because it's so capable of substituting for that kind of human labor." — Francis Fukuyama
10. Ten Miles of Track
One host asked whether anyone has a positive vision for liberalism beyond pointing at rising GDP and real wages, which he said do not excite people. Fukuyama's answer was national purpose without a war, and his example of the failure was in his own state. He contrasted it with Chinese bridge-building, and returned later to the same theme with New York's Wollman Rink, arguing that liberalism accumulates too many rules.
"I live in California. We were promised high-speed rail. They allocated money for it in the mid-1990s, and we have like 10 miles of track in the Central Valley where nobody lives." — Francis Fukuyama
"So here in New York City, you know, rebuilding Wollman Rink was almost impossible until Donald Trump took it over because, you know, there are just too damn many procedural requirements that you have to go through." — Francis Fukuyama
11. China's Two Models
Fukuyama said China is the only plausible non-democratic competitor, because it stays at the technology frontier, holds social stability and posts strong growth. He then took both halves of the model apart. On the economy, he named Xi Jinping's choice to double down on exports instead of building out interior social services and pensions, and listed the property bust and youth unemployment as the consequences. On politics, he conceded the model has outperformed his expectations while saying the underlying pressure has not gone away. Asked about the Gulf states and Singapore, he said the export problem is the succession problem.
"I think Xi Jinping actually made a big mistake after he came to power because instead of investing in the interior of China in social services and pensions and so forth, he decided to double down on this export-led growth" — Francis Fukuyama
"But most authoritarian countries end up with a Lukashenko or Putin or a really bad leader. And that's the problem with that kind of concentration of power." — Francis Fukuyama
12. Wang Qishan's Lesson
Fukuyama described being summoned to meet Wang Qishan, then running Xi Jinping's anti-corruption campaign and, in his description, the second most feared man in China. Wang had read his book and introduced Tocqueville to China. The lesson Wang drew from Tocqueville's "Old Regime and the Revolution" was that the French Revolution came from reform raising expectations faster than the regime could meet them. He contrasted the encounter with an invitation to Libya from Muammar Gaddafi, whose head he said was full of conspiracy theories.
"And, you know, Wang Qishan's lesson was China shouldn't start down this road to liberalization the way Gorbachev had because that's just going to get, it's going to spiral out of control and the regime will fall." — Francis Fukuyama
13. The Straussian Split
One host noted that the neoconservatives Fukuyama broke with over Iraq are now among the loudest defenders of constitutional norms. Fukuyama traced the movement back to Leo Strauss and said his students split into an East Coast and a West Coast camp. The West Coast followers of Harry Jaffa became American nationalists and Trump supporters, Michael Anton among them. He said what puzzles him is conservatives who built their politics on limits to government power and then discarded them.
"That's what it meant to be a conservative and yet, you know once their guy gets into power they want to take all those limits off and do everything through executive orders and flout the law if that's necessary to achieve their objectives." — Francis Fukuyama
"You are actually embedded in a social circle. And you're going to believe the things that people in your social circle believe." — Francis Fukuyama
14. Stanford's Last Men
Fukuyama said Stanford differs from Harvard and Yale in that its ambitious students want to found a company rather than go to Wall Street, and that the humanities and social sciences are weak at both. Student politics changed sharply after October 7, replacing the apathy of the 1990s and early 2000s with a mobilization he called unhealthy in its goals but real in its energy. He tied the Stanford encampment directly to his own concept. Asked for advice to international relations students, he said the field now runs through economics and sociology.
"And you can't imagine a more privileged group of people than a Stanford undergrad, right? But, you know, I think what was missing in their lives was this sense that they were struggling and sacrificing for a higher cause of social justice." — Francis Fukuyama
"But if you don't see the domestic and the technological changes, and then by the way, the geopolitics of AI is really going to hit us, I think, like a freight train, because that's going to be one of the determining factors, just like nuclear weapons in a previous generation, about how power is going to be distributed in the coming world." — Francis Fukuyama
Bonus Insights
The hosts stayed on after Fukuyama left. Tracy Alloway said liberalism assumes absolute gains are enough, and that people behave as relativists instead. She raised a viral post listing the appliances an ordinary household now owns, and both hosts noted that it left out phones and social media, because nobody experiences six hours of scrolling as abundance. Joe Weisenthal returned to the billionaires.
"But my personal experience of life and the world and history is that actually people are very much relativist in nature." — Tracy Alloway
"All I could think about is this explains why so many billionaires who have all the power in the world, what they really crave deep down at the base of that Maslow's Pyramid is to be listened to and respected." — Joe Weisenthal
Fukuyama's bottom line is that liberal democracy will not be defended by pointing at growth statistics, and that the two forces working against it now are an AI that can take away the work people draw dignity from and a state that can no longer build anything visible.
Products, Companies & Tools Mentioned
OpenAI and Hugging Face (The incident Fukuyama cited as the real-world example of agentic AI, where an agent left its environment and got onto the internet)
Claude Code (Fukuyama uses it; it migrated his home-server databases to a new system after he got stuck)
Freedom House (Source of the measure Fukuyama cited showing aggregate global freedom falling for about 20 years)
Stanford (Where he teaches; he contrasted its startup-oriented students with Harvard and Yale feeding Wall Street)
Etsy (His shorthand for an economy in which people sell trinkets rather than do work that confers dignity)
Twitter and Instagram (Both hosts named Twitter as proof of megalothymia; Fukuyama described the escalation dynamic that rewards saying something untrue)
Books & Resources Mentioned
"In the Realm of the Last Man" – Francis Fukuyama (His new book, which contains the AI chapter and the Wang Qishan anecdote)
"The End of History and the Last Man" – Francis Fukuyama (The 1992 book; he says the second half of the title is the part readers skipped)
"Old Regime and the Revolution" – Alexis de Tocqueville (Wang Qishan introduced it to China; its argument about rising expectations shaped his advice against liberalization)
The "Flight 93" article – Michael Anton (Cited as the product of the West Coast Straussian tradition that turned toward Trump)
If this was worth your time, send it to someone who has to have a view on this.
Get the latest market chatter as it happens: