Almost a quarter of a century ago, the Western democracies were celebrating their victory in the Cold War, and Francis Fukuyama would supply the fanfare with his 1992 book The End of History and the Last Man, which saluted the final, irreversible triumph of liberal democracy. Today, that euphoria has been replaced by worries about the future of the established democratic states. Their military might is confronting the asymmetric threat of terrorism, they seem financially incontinent as they struggle to balance their budgets, and many institutions of political life and civil society appear to be in decline – as, all the while, Chinese state capitalism presents a new, more challenging, form of autocratic rival. In this sharply perceptive analysis of democracy’s strengths and weaknesses, David Runciman argues that if we are not yet at the end of history and able to trust in a democratic future, it is not because Fukuyama was wrong about the virtues of liberal democracy, but because he was, on some points at least, right.

History, Runciman writes, shows “that democracies can deal with whatever is thrown at them”; they can win wars, handle economic crises and outperform and outlast rival systems of government. It is, however, this very success that leads to the “confidence trap” that could prove their undoing. His survey of the way that established democracies survived threats from autocracies during the 20th century enables him to point to the strengths that have given them their capacity for survival; at the same time, he is acutely aware of the obverse, the weaknesses of democracies that have so many times nearly led to disaster. Democracies have “muddled through”, but remain overconfident that their inherent merits will always enable them to do so.

Democracy, in the pages of The Confidence Trap, comes close to being synonymous with American democracy, and if Runciman does not see the US as democracy’s only model, he clearly sees it as the salient one, as the state that most emphatically cast aside autocracy, aristocracy and oligarchy. Appositely, he finds his fugleman for democracy in Alexis de Tocqueville, a French aristocrat, who at first disapproved of the noisy, untidy society and political system he found in early 19th-century America, but then warmed to their virtues. While he continued to have reservations, particularly on the danger of the tyranny of the majority and the vulgarity of elections, those “fake crises” with their “ritualised hysteria”, he considered that democratic life, with all its messiness, had a power and vitality that no rival system could match. However, he worried about democracy’s ability to deal with crises. Its strengths typically showed themselves in the long term – including the ability to adapt, experiment and recover from mistakes – while more autocratic forms of government were better suited to making swift, firm decisions in times of crisis.

De Tocqueville’s analysis of the ability of democratic states to handle crises supplies the structure for Runciman’s examination of some critical years in the 20th and 21st centuries: 1918, the year that brought victory over autocratic Germany and the beginning of Woodrow Wilson’s failure to remodel the world; 1933, when in the midst of a global economic crisis the World Economic Conference saw the US and the European democracies apparently floundering as totalitarian states boasted of their supposedly superior command economies; and 1947, when the US shouldered the burden of protecting Western Europe from the Soviet threat. These studies illustrate the paradox that the very characteristics that made democracies effective were also weaknesses, just as, as Runciman argues, “the grounds for democratic optimism were the source of de Tocqueville’s fundamental worries about democracy”. Democrats, all too ready to believe that history was on their side, were not only slow to spot crises but had a feverish propensity to overreact to minor setbacks. Although de Tocqueville thought democracies would find it hard to make the firm decisions necessary in a crisis, nevertheless if a war or a recession persisted, democracy’s adaptability and capacity for experimentation would give it an advantage over autocracy. Subsequent history bore this out: democracies had the capacity for survival in the long term – provided, of course, that they were not destroyed in the short term.

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Runciman has written a brilliant book in which both the prose and the ideas sparkle, but he arguably neglects factors other than political structures when evaluating the capacity of the US and its allies to withstand critical pressures. Were the crises he discusses primarily tests of political systems? Many historians would argue, for instance, that Germany’s defeat in the First World War was attributable to the Allies’ overwhelming superiority in terms of population and economic resources. The nature of democracies’ governments is not their sole salient characteristic, even though it is a common denominator and may be the most important one. Here, of course, the qualification “liberal capitalist” or “free market” is obviously essential, as it is the liberal element in democracies’ constitutions that provides the bulwark against the tyranny of the majority that de Tocqueville was so concerned about. Indeed, it is arguable that these states’ ability to survive crises lies as much in their liberalism, or their free-market economic systems, as in their democratic structures. The Cold War, for instance, can be seen either as a battle between democracy and authoritarian or totalitarian regimes, or between capitalism and Marxist socialism. The economic factor takes on an interesting new dimension when we consider China, with its considerable degree of economic freedom and consumer choice, as the new autocratic rival to liberal democracy.

Although he is far more alert than US neoconservatives to the difficulties of transplanting democracy, Runciman’s emphasis on “established democracies” means that he spends little time on a consideration of the context for it. Are the democratic societies he discusses stable because they are democracies or because they are cohesive societies whose members have more in common than they have at variance? It could be argued that democracy is only really suited to societies in which voters are prepared to lose, because the losing side is not in danger of losing everything. Where there are great ethnic or religious divisions – and Runciman makes little mention of religion – this is not the case.

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Such criticisms do not, however, detract from the importance of this insightful history of the established democracies and its analysis of their contemporary problems. The dangers of overconfidence and complacency that Runciman discerns in the crises of the past provide a disturbing background to the challenges of the world economic crisis that began in 2008. Yes, democracies have muddled through, but the belief that they can always do so may lead to disaster when one day they face a crisis far too serious for muddling. The recent imbroglio in Washington with a US president and Congress unable to agree on a budget is certainly a sobering example of potential disaster, even if the financial markets seem, as yet, complacent.

Democracies continue to have many disadvantages when weighed against their totalitarian rivals: electorates inevitably demand “jam today”, low taxation and high public spending and are rarely prepared for money to be spent on defence until it is too late. As Runciman observes: “The knowledge that democracies can adapt encourages delay; delay encourages drift; fear of drift encourages precipitate action; precipitate action encourages mistakes; mistakes encourage caution.” Nevertheless, democracy has weathered storms to date; we must, with the author, be prepared to give it two cheers.