If, as the Austrian economist Joseph Schumpeter famously argued, the essence of capitalism is "creative destruction", then Europe should be living through one of the most creative periods in its history. All around us, currencies are collapsing, debtors are defaulting, banks are bankrupt and the governed are ungovernable. We are witnessing nothing less than the last days of Leviathan: the end of the epoch that began with the rise of the modern state four centuries ago. Today's global crises transcend the capacity of governmental machines even to grasp what is happening, let alone to steer the course of history. The implosion of the eurozone, for example, reflects the impotence of the chancelleries, overwhelmed by events and forces beyond their control. Europe's political class is stretched on a Procrustean bed of its own making.
Whitehall civil servants were once known as "mandarins" — like their Chinese models, they were confident of their ability to administer vast empires. Today, coalition ministers privately complain that when they pull the levers, nothing happens. The civil service is not merely uncivil but positively mutinous. The elementary functions of government broke down during last summer's urban riots; the same institutional malaise has almost provoked a fuel crisis and a loss of control of our borders. Nor is Britain unique: political incompetence and financial incontinence still vitiate the West's faltering recovery; and, without warning, the enemies of civilisation (such as al-Qaeda, North Korea or Iran) may suddenly loose anarchy upon the world.
Amid the gathering gloom, however, we still have much to be grateful for. The resources, material and spiritual, of Western civilisation are by no means exhausted. In particular, we may take heart from the resilience of institutions which embody that civilisation: the British monarchy and the US presidency, Parliament and Congress, the great universities on both sides of the Atlantic, Roman law and common law, the Académie Française and the Royal Society — the list goes on.
Coeval with that civilisation are the Church, which in its various manifestations has endured for almost 2,000 years, and the Jews, who have preserved their religion and their identity intact throughout recorded history. The miraculous synthesis of Graeco-Roman and Judaeo-Christian thought has bequeathed us liberty and equality before the law, deriving from the Biblical postulate that each individual is created by God in His own image. This exaltation of the individual, refined by the Renaissance and expanded by the Enlightenment, has transformed the world so completely that other civilisations have been more or less eager to emulate the West. Until a century ago, only the West took other civilisations seriously enough to study them in great depth. Now the curiosity is mutual, with the difference that the Chinese, say, have no equivalent of the self-loathing that afflicts Western intellectuals when confronted with their own history, economy or culture. The West may be best, but only for the rest.
Will the West emerge stronger and invigorated from the present crisis, or will it lapse into terminal decline? History and first principles both suggest that the most likely outcome is comeback rather than downfall. Capitalism renews itself incessantly: it has survived wars and revolutions, booms and busts, depressions and inflations. As long as the West does not renounce capitalism, its long-term prosperity is secure. Similarly, democracy under the rule of law has stood the test of time as the system most likely to preserve our liberties. But the West must be prepared to defend itself and its values against internal subversion as well as external attack. And the best bulwark against both has proved to be the nation state.