Fukuyama argues that capitalism and liberal democracy comprise the final state of society and that all nations will eventually adopt them. His basic argument for the spread of capitalism is simply that it is a more efficient way of organizing an economy, which eventually gives capitalist countries an economic and technological edge over mercantilist or command economies. But capitalism does not always imply liberal democracy, and in some cases authoritarian governments (e.g., Singapore, and perhaps China) are better able to manage capitalist expansion.
Therefore, the argument for liberal democracy rests on the theory that men do not simply strive for satisfaction of physical desires. They also strive for "recognition," in the form individual dignity or dominance over other men. He divides this spirited thriving into two categories, which he has named isothymia (from the Greek iso - equal, and thymos - spirit), the desire for equality and megalothymia (megalo - great), the desire for dominance.
Following Hegel, he describes early societies as consisting of an aristocracy who dominate based on their willingness to risk their lives to achieve fame and defend honor, and slaves who are unwilling to risk their lives. There is tension in this arrangement, however, because the fact that slaves are treated as less than human makes dominance over them unfulfilling. Only in a democracy can all people achieve the dignity having their humanity recognized by a society of other human beings.
Of course, there is also tension in a liberal democracy because people are unable to fully exercise their tendency toward megalothymia. The insistence that each person is equal under the law, and the spread of tolerance and moral relativism make it difficult for citizens of a democracy to dominate and impose our set of values on each other. Nietzsche lamented this result when he described the satisfied man of bourgeois society as weak and subhuman.
The discussion of a desire for recognition has made me think deeply about my own motives, and about how to connect with other people. On a personal level, although I consider myself a very rational person I believe that many of my decisions are driven more by the need to promote the principles that underly my view of the world than by a desire for satisfaction of physical desires. Yet when I discuss political issues I often have the tendency to assume that people ought to be satisfied with policies that achieve a maximization of self interest rather than reflect their own view of how the world should be organized. In reality, people often vote based on moral beliefs rather than on personal interest.
For example, people oppose abortion not because it hurts them personally but because they see it as evil. The desire that many people have to strictly enforce immigration laws is often based more on the principles of sovereignty and rule of law than it is on a calculation of self interest. Last night I spoke to a resident of the district who pointed out that the debate about gay marriage was mostly about two sides that wanted to force each other to adopt their personal "religion," or moral code. The word marriage has long been associated with religious beliefs and authority. Some want more than anything for society to recognize the legitimacy of homosexuality by sanctioning gay marriage; they see this social recognition as an important part of their personal dignity. Others believe that homosexuality is evil, and that government recognition would undermine the moral structure of society.
I agree with Fukuyama that although these tensions are inevitable in a democratic society, the contradictions are less fundamental than they would be in an authoritarian society. In a democracy it is possible to accept that people disagree and allow them to attempt to convert each other in the private sphere without allowing either side to enlist the power of government, and the monopoly on force that it represents, to ensure that society recognizes their views. This is one reason that I believe in the principle of limited government. Although part of me would like to enforce my understanding of morality on the whole of society, I believe that doing so would undermine the ability of people with differing views to live together peaceably. I believe that it is possible to recognize the right of others to live by a different moral code, and to design government policies with the goal of maintaining neutrality with respect to our differences.