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The 2008 financial crisis and the subsequent global recession were nowhere nearly as painful as the Great Depression. But the effects are similar. The heady growth of the 2000s led Europeans and Americans to believe they were on firm economic ground; the shattering of banks, real estate markets and governments in the wake of the crash left tens of millions of people at sea, angry at the institutions that had failed them, above all the politicians who claimed to be in charge.

Why, voters ask, did the government allow so many bankers to behave like criminals in the first place? Why did it then bail out banks while letting car factories go under? Why is it welcoming millions of immigrants? Are there separate rules for the elites, defined by a hypermodern liberal worldview that ridicules the working class — and their traditional values — as yokels?

In America and Europe, the rise of anti-establishment movements is a symptom of a cultural shock against globalized postmodernity, similar to the 1930s’ rejection of modernity

Today, as in the 1930s, we are seeing the failure of the liberal mainstream to respond to serious challenges, even those that threaten its very existence.

He also issued an executive order designed to weaken the Dodd-Frank financial reform, enacted in 2010 in the aftermath of the financial crisis.

Why, after all, was the fiduciary rule created? The main issue here is retirement savings — the 401(k)’s and other plans that are Americans’ main source of retirement income over and above Social Security. To invest these funds, people have turned to financial professionals — but most probably weren’t aware that these professionals were under no legal obligation to give advice that maximized clients’ returns rather than their own incomes.

This is a big deal. A 2015 Obama administration study concluded that “conflicted investment advice” has been reducing the return on retirement savings by around one percentage point, costing ordinary Americans around $17 billion each year. Where has that $17 billion been going? Largely into the pockets of various financial-industry players.

why are consumer protections in the Trump firing line?

Gary Cohn, the Goldman Sachs banker appointed to head Mr. Trump’s National Economic Council — populism! — says that the fiduciary rule is like “putting only healthy food on the menu” and denying people the right to eat unhealthy food if they want it. Of course, it doesn’t do anything like that. If you want a better analogy, it’s like preventing restaurants from claiming that their 1400-calorie portions are health food.

Mr. Trump offers a different explanation for his hostility to financial reform: It’s hurting credit availability. “I have so many people, friends of mine that had nice businesses, they can’t borrow money.” I

Only 4 percent of the small firms surveyed by the National Federation of Independent Business report themselves unsatisfied with loan availability, a historic low.

Unfortunately, that also means that the more the fact-based media tries to debunk the president’s falsehoods, the further it will entrench the battle lines.

The press secretary also declined to answer a straightforward question about the unemployment rate, suggesting that the number will henceforth be whatever the Trump administration wants it to be.

In a stunning demonstration of the power and resiliency of our new post-factual political culture, Mr. Trump and his allies in the right media have already turned the term “fake news” against its critics, essentially draining it of any meaning. During the campaign, actual “fake news” — deliberate hoaxes — polluted political discourse and clogged social media timelines.

For years, the widely read Drudge Report has linked to the bizarre conspiracy theorist Alex Jones, who believes that both the attacks of Sept. 11 and the Sandy Hook shootings were government-inspired “false flag” operations.

But now any news deemed to be biased, annoying or negative can be labeled “fake news.” Erroneous reports that the bust of the Rev. Dr. Martin Luther King Jr. had been removed from the Oval Office or misleading reports that sanctions against Russia had been lifted will be seized on by Mr. Trump’s White House to reinforce his indictment.

In that world, the leader becomes the only reliable source of truth; a familiar phenomenon in an authoritarian state, but a radical departure from the norms of a democratic society. The battle over truth is now central to our politics.

By now, it ought to be evident that enemies are important to this administration, whether they are foreigners, refugees, international bankers or the press.

But discrediting independent sources of information also has two major advantages for Mr. Trump: It helps insulate him from criticism and it allows him to create his own narratives, metrics and “alternative facts.”

The Russian dissident and chess grandmaster Garry Kasparov drew upon long familiarity with that process when he tweeted: “The point of modern propaganda isn’t only to misinform or push an agenda. It is to exhaust your critical thinking, to annihilate truth.”

Mr. Trump and his allies are empowering this alt-reality media, providing White House access to Breitbart and other post-factual outlets that are already morphing into fierce defenders of the administration.

Scottie Nell Hughes, was asked to defend the clearly false statement by Mr. Trump that millions of votes had been cast illegally. She answered by explaining that everybody now had their own way of interpreting whether a fact was true or not.

Or as George Orwell said: “The very concept of objective truth is fading out of the world. Lies will pass into history.”

In the meantime, we must recognize the magnitude of the challenge. If we want to restore respect for facts and break through the intellectual ghettos on both the right and left, the mainstream media will have to be aggressive without being hysterical and adversarial without being unduly oppositional.

There may be short-term advantages to running headlines about millions of illegal immigrants voting or secret United Nations plots to steal your guns, but the longer the right enables such fabrications, the weaker it will be in the long run. As uncomfortable as it may be, it will fall to the conservative media to police its worst actors.

Conard said Baker was undercounting the social benefits of investment. He looks, in particular, at agriculture, where, since the 1940s, the cost of food has steadily fallen because of a constant stream of innovations. While the businesses that profit from that innovation — like seed companies and fast-food restaurants — have made their owners rich, the average U.S. consumer has benefited far more. Conard concludes that for every dollar an investor gets, the public reaps up to $20 in value. This is crucial to his argument: he thinks it proves that we should all appreciate the vast wealth of others more, because we’re benefiting, proportionally, from it.

What about investment banks, with their complicated financial derivatives and overleveraged balance sheets? Conard argues that they make the economy more efficient, too. The financial crisis, he writes, was not the result of corrupt bankers selling dodgy financial products. It was a simple, old-fashioned run on the banks, which, he says, were just doing their job

He argues that collateralized-debt obligations, credit-default swaps, mortgage-backed securities and other (now deemed toxic) financial products were fundamentally sound. They were new tools that served a market need for the world’s most sophisticated investors,

“A lot of people don’t realize that what happened in 2008 was nearly identical to what happened in 1929,” he says. “Depositors ran to the bank to withdraw their money only to discover, like the citizens of Bedford Falls” — referring to the movie “It’s a Wonderful Life” — “that there was no money in the vault. All that money had been lent.”

In 2008 it was large pension funds, insurance companies and other huge institutional investors that withdrew in panic. Conard argues in retrospect that it was these withdrawals that led to the crisis — not, as so many others have argued, an orgy of irresponsible lending

Conard concedes that the banks made some mistakes, but the important thing now, he says, is to provide them even stronger government support. He advocates creating a new government program that guarantees to bail out the banks if they ever face another run.

the central role of banks, Conard says, is to turn the short-term assets of nervous savers into risky long-term loans that help the economy grow.

A central problem with the U.S. economy, he told me, is finding a way to get more people to look for solutions despite these terrible odds of success. Conard’s solution is simple. Society benefits if the successful risk takers get a lot of money

As Conard told me, one of the crucial lessons he learned at Bain is that it makes no sense to look for easy solutions. In a competitive market, all that’s left are the truly hard puzzles. And they require extraordinary resources. While we often hear about the greatest successes — penicillin, the iPhone — we rarely hear about the countless failures and the people and companies who financed them.

we live longer, healthier and richer lives because of countless microimprovements like that one. The people looking for them, Conard likes to point out, are not only computer programmers, engineers and scientists. They are also wealthy investors like him

He said the only way to persuade these “art-history majors” to join the fiercely competitive economic mechanism is to tempt them with extraordinary payoffs.

When I look around, I see a world of unrealized opportunities for improvements, an abundance of talented people able to take the risks necessary to make improvements but a shortage of people and investors willing to take those risks. That doesn’t indicate to me that risk takers, as a whole, are overpaid. Quite the opposite.” The wealth concentrated at the top should be twice as large, he said. That way, the art-history majors would feel compelled to try to join them.

Rather than simply serving as an invitation for everybody to engage in potentially beneficial risk-taking, inequality can allow those with wealth to crush new ideas.

Unlike Romney, Conard rejects the notion that America has “some monopoly on hard work or entrepreneurship.” “I think it’s simple economics,” he said. “If the payoff for risk-taking is better, people will take more risks

Conard sees the success of the U.S. economy as, in part, the result of a series of historic accidents. Most recently, the coincidence of Roe v. Wade and the late 1970s economic malaise allowed Ronald Reagan to unify social conservatives and free-market advocates and set the country on a pro-investment path for decades. Europeans, he says, made all the wrong decisions. Concern about promoting equality and protecting favored industries have led to onerous work rules, higher taxes and all sorts of social programs that keep them poorer than Americans.

Now we’re at a particularly crucial moment, he writes. Technology and global competition have made it more important than ever that the United States remain the world’s most productive, risk-taking, success-rewarding society. Obama, Conard says, is “going to dampen the incentives.” Even worse, Conard says, “he’s slowing the accumulation of equity” by fighting income inequality.

Conard’s book addresses what is perhaps the most important question in economics, the one Adam Smith set out to answer in “The Wealth of Nations”: Why do some countries grow so rich and others stay poor? Where you come down on the answer has as much to do with your politics as your economic worldview (two things that can often be the same)

Nearly every economist I spoke with said that Conard has too much faith in the market’s ability to reward only those who create real value. Conard, for instance, insists that even the dodgiest financial products must have been beneficial or else nobody would have bought them in the first place. If a Wall Street trader or a corporate chief executive is filthy rich, Conard says that the merciless process of economic selection has assured that they have somehow benefited society. Even pro-market Romney supporters take issue with this. “Ed ought to be more concerned about crony capitalism,” Hubbard told me.

“Unintended Consequences” ignores some of the most important economic work of the past few decades, about how power and politics influence economic growth. In technical language, this field is the study of “rent seeking,” in which people or companies get rich because of their power, not because of their ideas.

wealthy individuals and corporations are able to influence politicians and regulators to make seemingly insignificant changes to regulations that benefit themselves. In other words, to rig the game

Conard’s version of the financial crisis ignores much reporting and analysis — including work I’ve done with NPR’s “Planet Money” team — that shows that some of the nation’s largest banks actively manipulated customers and regulators and, sometimes, their own stockholders to profit from dangerous risk

he expressed anger over the praise that Warren Buffett has received for pledging billions of his fortune to charity. It was no sacrifice, Conard argued; Buffett still has plenty left over to lead his normal quality of life. By taking billions out of productive investment, he was depriving the middle class of the potential of its 20-to-1 benefits. If anyone was sacrificing, it was those people. “Quit taking a victory lap,” he said, referring to Buffett. “That money was for the middle class.”

Perhaps concentrated wealth will inspire a nation of innovative problem-solvers. But if the view of many economists is right — that it sometimes discourages innovation — then we should worry

on this one he resorted to anecdotes and gut feelings. During his work at Bain, he said, he saw that successful companies had to battle against one another. Nobody was just given a free ride because of their power. “Was a person, like me, excluded from opportunity?” he asked rhetorically. “If so, I wasn’t aware!”

both could be true. The rich could earn a great deal of wealth through their own hard work, skill and luck. They could also use their subsequent influence to make themselves even richer

One of the great political and economic challenges of our time is figuring out the balance between wealth that benefits society and wealth that distorts.

Glenn Hubbard said only that at a broad level, Romney and Conard share “beliefs about innovation and growth and responsible risk-taking.”

Conard and Romney certainly share views on numerous policy matters. Like many Republicans, they promote lower taxes and less regulation for those who achieve financial succes

To refuse to discuss ideas such as types of capitalism deprives us of language with which to think about these problems. It makes it easier to stop thinking about what the economic system is for and in whose interests it is working.

Perhaps the protesters occupying Wall Street are not so misguided after all. The questions they raise — how do we deal with the local costs of global downturns? Is it fair that those who suffer the most from such downturns have their safety net cut, while those who generate the volatility are bailed out by the government? — are the same ones that a big-picture economic vision should address. If economists want to help create a better world, they first have to ask, and try to answer, the hard questions that can shape a new vision of capitalism’s potential.

A European central banker said he had always wondered how Europe’s leaders could have stumbled into World War I. “From the middle of a crisis,” he said recently, “you can see how easy it is to make mistakes.”

The new rules, combined with the other major changes, have effectively removed both the floor and the ceiling. It’s easier for some to make a lot more money and for others to fall much further behind. That has meant a huge increase in inequality. The top 1 percent of families now makes 26 times the average of the other 99 percent (the ratio was 11 to 1 in 1979). The top 0.1 percent makes 130 times the bottom 99 (up from a 38-to-1 ratio 40 years ago). And the inequality is not just between classes. The average wages of the average American have stayed largely flat for decades, but those averages hide a lot of volatility, as more people find themselves at the extremes of wealth or poverty. A successful plumber who has mastered all the new water-flow sensor technology and pipe-fitting innovations (and is probably in a union) can make more than $100,000 a year, while other plumbers, who just know the basics, could make less than $20,000.

The increasingly vicious battle between left and right is, at the most basic level, a dispute over how to respond to these new rules. Republicans largely claim that the new rules will make the country richer and, in the long run, will be beneficial to everyone willing to put in the hard work. Few Democrats call for a return to record high taxes and trade barriers — after all, the free flow of cheap goods has helped many, particularly the poor. But many do want a return to the spirit of the old rules, when the government sought to make life more equal, more stable and, for some, less rewarding.

I used to say of investment banking that it was good one day a year: the day you got your bonus. The kicker: that bonus was nothing more than the present value of an inevitable pink slip. Being well paid but expendable was a fact of life.

my abiding memory is the drudgery of it all — none of which has ever been captured on film or in print. With good reason: much of what happens on Wall Street is terrifically boring.

The change Wall Street needs is about what people get rewarded to do, which is to take risks with other people’s money.

We saw how corrosive bad incentives were in the years leading up the financial crisis, when huge bonuses were paid to those who bundled up millions of faulty mortgages into securities and sold them as safe investments to people all over the world. Many of them knew better, but they did it anyway.

Speculating without any concern about being held accountable is exactly what the army of Wall Street bankers and traders will continue to do. Regardless of the fact that this very behavior was a key cause of the recent financial mess, that is what they are still being rewarded to do. Wall Streeters like to extol the complexity of their work, but in reality, it’s that simple.

Adam Smith argued forcefully that we would do better to trust in the pursuit of self-interest than in the good intentions of those who pursue the general interest. If everyone looked out for just himself, we would reach an equilibrium that was not just comfortable but also productive, in which the economy was fully efficient. To the morally uninspired, it’s an appealing idea: selfishness as the ultimate form of selflessness. (Elsewhere, in particular in his “Theory of Moral Sentiments,” Smith took a much more balanced view, though most of his latter-day adherents have not followed suit.)

Things didn’t turn out well for our economy or our society. As millions lost their homes during and after the crisis, median wealth declined nearly 40 percent in three years. Banks would have done badly, too, were it not for the Bush-Obama mega-bailouts.

This cascade of trust destruction was unrelenting. One of the reasons that the bubble’s bursting in 2007 led to such an enormous crisis was that no bank could trust another. Each bank knew the shenanigans it had been engaged in — the movement of liabilities off its balance sheets, the predatory and reckless lending — and so knew that it could not trust any other bank

bankers used their political influence to eviscerate regulations and install regulators who didn’t believe in them. Officials and academics assured lawmakers and the public that banks could self-regulate. But it all turned out to be a scam. We had created a system of rewards that encouraged shortsighted behavior and excessive risk-taking. In fact, we had entered an era in which moral values were given short shrift and trust itself was discounted.

THE banking industry is only one example of what amounts to a broad agenda, promoted by some politicians and theoreticians on the right, to undermine the role of trust in our economy. This movement promotes policies based on the view that trust should never be relied on as motivation, for any kind of behavior, in any context. Incentives, in this scheme, are all that matter.

So C.E.O.’s must be given stock options to induce them to work hard. I find this puzzling: If a firm pays someone $10 million to run a company, he should give his all to ensure its success. He shouldn’t do so only if he is promised a big chunk of any increase in the company’s stock market value

Similarly, teachers must be given incentive pay to induce them to exert themselves. But teachers already work hard for low wages because they are dedicated to improving the lives of their students. Do we really believe that giving them $50 more, or even $500 more, as incentive pay will induce them to work harder? What we should do is increase teacher salaries generally because we recognize the value of their contributions and trust in their professionalism. According to the advocates of an incentive-based culture, though, this would be akin to giving something for nothing.

Of course, incentives are an important component of human behavior. But the incentive movement has made them into a sort of religion, blind to all the other factors — social ties, moral impulses, compassion — that influence our conduct.

This is not just a coldhearted vision of human nature. It is also implausible. It is simply impossible to pay for trust every time it is required. Without trust, life would be absurdly expensive; good information would be nearly unobtainable; fraud would be even more rampant than it is; and transaction and litigation costs would soar.

When 1 percent of the population takes home more than 22 percent of the country’s income — and 95 percent of the increase in income in the post-crisis recovery — some pretty basic things are at stake. Reasonable people, even those ignorant of the maze of unfair policies that created this reality, can look at this absurd distribution and be pretty certain that the game is rigged.

Trust between individuals is usually reciprocal. But if I think that you are cheating me, it is more likely that I will retaliate, and try to cheat you. (These notions have been well developed in a branch of economics called the “theory of repeated games.”) When Americans see a tax system that taxes the wealthiest at a fraction of what they pay, they feel that they are fools to play along.

a deeper rot takes hold: Attitudes and norms begin to change. When no one is trustworthy, it will be only fools who trust. The concept of fairness itself is eroded. A study published last year by the National Academy of Sciences suggests that the upper classes are more likely to engage in what has traditionally been considered unethical behavior. Perhaps this is the only way for some to reconcile their worldview with their outlandish financial success, often achieved through actions that reveal a kind of moral deprivation.

As always, it is the poor and the unconnected who suffer most from this, and who are the most repeatedly deceived. Nowhere was this more evident than in the foreclosure crisis.

The banks figured out how to get court affidavits signed by the thousands (in what came to be called robo-signing), certifying that they had examined their records and that these particular individuals owed money — and so should be booted out of their homes. The banks were lying on a grand scale, but they knew that if they didn’t get caught, they would walk off with huge profits, their officials’ pockets stuffed with bonuses. And if they did get caught, their shareholders would be left paying the tab

But perhaps even more than opportunity, Americans cherish equality before the law. Here, inequality has infected the heart of our ideals.

I suspect there is only one way to really get trust back. We need to pass strong regulations, embodying norms of good behavior, and appoint bold regulators to enforce them.

the financial industry has grown much faster than either the flow of savings it channels or the assets it manages.

Defenders of modern finance like to argue that it does the economy a great service by allocating capital to its most productive uses — but that’s a hard argument to sustain after a decade in which Wall Street’s crowning achievement involved directing hundreds of billions of dollars into subprime mortgages.

Wall Street’s friends also used to claim that the proliferation of complex financial instruments was reducing risk and increasing the system’s stability, so that financial crises were a thing of the past. No, really.

if our supersized financial sector isn’t making us either safer or more productive, what is it doing? One answer is that it’s playing small investors for suckers, causing them to waste huge sums in a vain effort to beat the market.

Another answer is that a lot of money is going to speculative activities that are privately profitable but socially unproductive.

n short, we’re giving huge sums to the financial industry while receiving little or nothing — maybe less than nothing — in return. Mr. Philippon puts the waste at 2 percent of G.D.P.

et even that figure, I’d argue, understates the true cost of our bloated financial industry. For there is a clear correlation between the rise of modern finance and America’s return to Gilded Age levels of inequality.

The sellers of slaves, Baptist insists, were not generally paternalistic owners who fell on hard times and parted reluctantly with members of their metaphorical plantation “families,” but entrepreneurs who knew an opportunity for gain when they saw one. As for the slave traders — the middlemen — they excelled at maximizing profits. They not only emphasized the labor abilities of those for sale (reinforced by humiliating public inspections of their bodies), but appealed to buyers’ salacious fantasies. In the 1830s, the term “fancy girl” began to appear in slave-trade notices to describe young women who fetched high prices because of their physical attractiveness. “Slavery’s frontier,” Baptist writes, “was a white man’s sexual playground.”

After the legal importation of slaves from outside the country ended in 1808, the spread of slavery into the states bordering the Gulf of Mexico would not have been possible without the enormous uprooting of people from Maryland and Virginia. Almost one million slaves, Baptist estimates, were transported to the cotton fields from the Upper South in the decades before the Civil War.The domestic slave trade was highly organized and economically efficient, relying on such modern technologies as the steamboat, railroad and telegraph. For African-Americans, its results were devastating. Since buyers preferred young workers “with no attachments,” the separation of husbands from wives and parents from children was intrinsic to its operation, not, as many historians have claimed, a regrettable side effect.

The cotton kingdom that arose in the Deep South was incredibly brutal. Violence against Native Americans who originally owned the land, competing imperial powers like Spain and Britain and slave rebels solidified American control of the Gulf states. Violence, Baptist contends, explains the remarkable increase of labor productivity on cotton plantations. Without any technological innovations in cotton picking, output per hand rose dramatically between 1800 and 1860. Some economic historians have attributed this to incentives like money payments for good work and the opportunity to rise to skilled positions. Baptist rejects this explanation.

Slavery was essential to American development and, indeed, to the violent construction of the capitalist world in which we live.

Planters called their method of labor control the “pushing system.” Each slave was assigned a daily picking quota, which increased steadily over time. Baptist, who feels that historians too often employ circumlocutions that obscure the horrors of slavery, prefers to call it “the ‘whipping-machine’ system.” In fact, the word we should really use, he insists, is “torture.” To make slaves work harder and harder, planters utilized not only incessant beating but forms of discipline familiar in our own time — sexual humiliation, bodily mutilation, even waterboarding. In the cotton kingdom, “white people inflicted torture far more often than in almost any human society that ever existed.”

in the 1830s Southern banks developed new financial instruments, bonds with slaves as collateral, that enabled planters to borrow enormous amounts of money to acquire new land, and how lawmakers backed these bonds with the state’s credit. A speculative bubble ensued, and when it collapsed, taxpayers were left to foot the bill. But rather than bailing out Northern and European bondholders, several states simply defaulted on their debts. Many planters fled with their slaves to Texas, until 1845 an independent republic, to avoid creditors. “Honor,” a key element in Southern notions of masculinity, went only so far.

As the railroad opened new areas to cultivation and cotton output soared, slave owners saw themselves as a modern, successful part of the world capitalist economy. They claimed the right to bring their slaves into all the nation’s territories, and indeed into free states. These demands aroused intense opposition in the North, leading to Lincoln’s election, secession and civil war.

It is hardly a secret that slavery is deeply embedded in our nation’s history. But many Americans still see it as essentially a footnote, an exception to a dominant narrative of the expansion of liberty on this continent.

Where Baptist breaks new ground is in his emphasis on the centrality of the interstate trade in slaves to the regional and national economies and his treatment of the role of extreme violence in the workings of the slave system.

ArtsBeat Book Review Podcast: Walter Isaacson’s ‘The Innovators’

The bank, according to Mr. Picard’s lawsuit, generated handsome sums by allowing Mr. Madoff’s brokerage firm to “funnel billions of dollars” through its account with JPMorgan, “disregarding its own anti-money laundering duties.”

On June 15, 2007, when a JPMorgan committee met to ponder the proposal, new suspicions emerged about Mr. Madoff. A senior risk management officer at the bank e-mailed colleagues to report that another bank executive “just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme.” The senior officer added that “I think we owe it to ourselves to investigate further.”

But according to Mr. Picard, the bank’s further research amounted to a phone call with Mr. Madoff and “a Google search with no follow-up.”

Similar concerns were enough to deter JPMorgan’s own private bank from doing business with Mr. Madoff. In an e-mail, a JPMorgan wealth management executive remarked that Mr. Madoff’s “Oz-like signals” were “too difficult to ignore.”

After Mr. Madoff’s arrest in December 2008, Mr. Picard said, a flurry of JPMorgan e-mails captured the lack of surprise at the bank. One employee, referring to the agenda for the June 2007 meeting, wrote, “Perhaps best this never sees the light of day again!!”

Based on the current trajectory, war between the United States and China in the decades ahead is not just possible, but much more likely than recognized at the moment. Indeed, judging by the historical record, war is more likely than not.

A risk associated with Thucydides’s Trap is that business as usual—not just an unexpected, extraordinary event—can trigger large-scale conflict. When a rising power is threatening to displace a ruling power, standard crises that would otherwise be contained, like the assassination of an archduke in 1914, can initiate a cascade of reactions that, in turn, produce outcomes none of the parties would otherwise have chosen.

The preeminent geostrategic challenge of this era is not violent Islamic extremists or a resurgent Russia. It is the impact that China’s ascendance will have on the U.S.-led international order, which has provided unprecedented great-power peace and prosperity for the past 70 years. As Singapore’s late leader, Lee Kuan Yew, observed, “the size of China’s displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world.”

More than 2,400 years ago, the Athenian historian Thucydides offered a powerful insight: “It was the rise of Athens, and the fear that this inspired in Sparta, that made war inevitable.

Note that Thucydides identified two key drivers of this dynamic: the rising power’s growing entitlement, sense of its importance, and demand for greater say and sway, on the one hand, and the fear, insecurity, and determination to defend the status quo this engenders in the established power, on the other.

However unimaginable conflict seems, however catastrophic the potential consequences for all actors, however deep the cultural empathy among leaders, even blood relatives, and however economically interdependent states may be—none of these factors is sufficient to prevent war, in 1914 or today.

Four of the 16 cases in our review did not end in bloodshed. Those successes, as well as the failures, offer pertinent lessons for today’s world leaders. Escaping the Trap requires tremendous effort

Lee Kuan Yew, the world’s premier China watcher and a mentor to Chinese leaders since Deng Xiaoping. Before his death in March, the founder of Singapore put the odds of China continuing to grow at several times U.S. rates for the next decade and beyond as “four chances in five.

Could China become #1? In what year could China overtake the United States to become, say, the largest economy in the world, or primary engine of global growth, or biggest market for luxury goods?

Could China Become #1? Manufacturer: Exporter: Trading nation: Saver: Holder of U.S. debt: Foreign-direct-investment destination: Energy consumer: Oil importer: Carbon emitter: Steel producer: Auto market: Smartphone market: E-commerce market: Luxury-goods market:   Internet user: Fastest supercomputer: Holder of foreign reserves: Source of initial public offerings: Primary engine of global growth: Economy: Most are stunned to learn that on each of these 20 indicators, China has already surpassed the U.S.

In 1980, China had 10 percent of America’s GDP as measured by purchasing power parity; 7 percent of its GDP at current U.S.-dollar exchange rates; and 6 percent of its exports. The foreign currency held by China, meanwhile, was just one-sixth the size of America’s reserves. The answers for the second column: By 2014, those figures were 101 percent of GDP; 60 percent at U.S.-dollar exchange rates; and 106 percent of exports. China’s reserves today are 28 times larger than America’s.

On whether China’s leaders are serious about displacing the United States as the top power in Asia in the foreseeable future, Lee answered directly: “Of course. Why not … how could they not aspire to be number one in Asia and in time the world?” And about accepting its place in an international order designed and led by America, he said absolutely not: “China wants to be China and accepted as such—not as an honorary member of the West.”

As the United States emerged as the dominant power in the Western hemisphere in the 1890s, how did it behave? Future President Theodore Roosevelt personified a nation supremely confident that the 100 years ahead would be an American century. Over a decade that began in 1895 with the U.S. secretary of state declaring the United States “sovereign on this continent,” America liberated Cuba; threatened Britain and Germany with war to force them to accept American positions on disputes in Venezuela and Canada; backed an insurrection that split Colombia to create a new state of Panama (which immediately gave the U.S. concessions to build the Panama Canal); and attempted to overthrow the government of Mexico, which was supported by the United Kingdom and financed by London bankers. In the half century that followed, U.S. military forces intervened in “our hemisphere” on more than 30 separate occasions to settle economic or territorial disputes in terms favorable to Americans, or oust leaders they judged unacceptable

When Deng Xiaoping initiated China’s fast march to the market in 1978, he announced a policy known as “hide and bide.” What China needed most abroad was stability and access to markets. The Chinese would thus “bide our time and hide our capabilities,” which Chinese military officers sometimes paraphrased as getting strong before getting even.

With the arrival of China’s new paramount leader, Xi Jinping, the era of “hide and bide” is over

Many observers outside China have missed the great divergence between China’s economic performance and that of its competitors over the seven years since the financial crisis of 2008 and Great Recession. That shock caused virtually all other major economies to falter and decline. China never missed a year of growth, sustaining an average growth rate exceeding 8 percent. Indeed, since the financial crisis, nearly 40 percent of all growth in the global economy has occurred in just one country: China

What Xi Jinping calls the “China Dream” expresses the deepest aspirations of hundreds of millions of Chinese, who wish to be not only rich but also powerful. At the core of China’s civilizational creed is the belief—or conceit—that China is the center of the universe. In the oft-repeated narrative, a century of Chinese weakness led to exploitation and national humiliation by Western colonialists and Japan. In Beijing’s view, China is now being restored to its rightful place, where its power commands recognition of and respect for China’s core interests.

Last November, in a seminal meeting of the entire Chinese political and foreign-policy establishment, including the leadership of the People’s Liberation Army, Xi provided a comprehensive overview of his vision of China’s role in the world. The display of self-confidence bordered on hubris. Xi began by offering an essentially Hegelian conception of the major historical trends toward multipolarity (i.e. not U.S. unipolarity) and the transformation of the international system (i.e. not the current U.S.-led system). In his words, a rejuvenated Chinese nation will build a “new type of international relations” through a “protracted” struggle over the nature of the international order. In the end, he assured his audience that “the growing trend toward a multipolar world will not change.”

Given objective trends, realists see an irresistible force approaching an immovable object. They ask which is less likely: China demanding a lesser role in the East and South China Seas than the United States did in the Caribbean or Atlantic in the early 20th century, or the U.S. sharing with China the predominance in the Western Pacific that America has enjoyed since World War II?

At this point, the established script for discussion of policy challenges calls for a pivot to a new strategy (or at least slogan), with a short to-do list that promises peaceful and prosperous relations with China. Shoehorning this challenge into that template would demonstrate only one thing: a failure to understand the central point I’m trying to make

What strategists need most at the moment is not a new strategy, but a long pause for reflection. If the tectonic shift caused by China’s rise poses a challenge of genuinely Thucydidean proportions, declarations about “rebalancing,” or revitalizing “engage and hedge,” or presidential hopefuls’ calls for more “muscular” or “robust” variants of the same, amount to little more than aspirin treating cancer. Future historians will compare such assertions to the reveries of British, German, and Russian leaders as they sleepwalked into 1914

The rise of a 5,000-year-old civilization with 1.3 billion people is not a problem to be fixed. It is a condition—a chronic condition that will have to be managed over a generation

Success will require not just a new slogan, more frequent summits of presidents, and additional meetings of departmental working groups. Managing this relationship without war will demand sustained attention, week by week, at the highest level in both countries. It will entail a depth of mutual understanding not seen since the Henry Kissinger-Zhou Enlai conversations in the 1970s. Most significantly, it will mean more radical changes in attitudes and actions, by leaders and publics alike, than anyone has yet imagined.

his public readings are crammed with fans. I attended one the other day and was shocked to see how a teenage schoolgirl was shouted down and hustled out of the room by security guards for mildly questioning the Sarrazin thesis.

a party that would be critical of Islamic expansion in Europe and that seeks to control immigration -- could win 15 percent of the vote, thus seriously shaking up the German political system

"The crimes of the Nazi era," he told the cheering crowd, "are not an excuse for you to refuse to fight for your own identity. Your only responsibility is to avoid the mistakes of the past." The cardinal error of the interwar years, according to Wilders, was the failure to identify gathering threats against democracy. In his analogy, it was the Muslims who were the Nazis. The audience rose to its feet to applaud him. It was the first time in decades of reporting from Germany that I witnessed a passionate response to a passionately delivered political speech.

Merkel does not want to grasp the nettle of anti-immigrant populism -- one senses it stings her as much as it does the Muslims she finds herself unloading against. But if she doesn't, if she simply bides her time, she will see her Christian Democratic party crumble. Germans are restless, and they increasingly believe their political class is tone-deaf. Popular resentment is running high, and there is a powerful head of steam behind the emerging anti-Islam movement

And that explains why creditor interests bulk so large in policy; not only is this the class that makes big campaign contributions, it’s the class that has personal access to policy makers — many of whom go to work for these people when they exit government through the revolving door.

All it requires is the tendency to assume that what’s good for the people you hang out with, the people who seem so impressive in meetings — hey, they’re rich, they’re smart, and they have great tailors — must be good for the economy as a whole.

some areas of academic life aren't vulnerable to this crisis of confidence in the importance of one's work. Scientists can rest secure in the knowledge that their labors will help shove along the modern project of advancing health—and wealth.

Then there is economics, the new queen of the sciences—a discipline perfectly tailored to the modern market-driven university, and not coincidentally the most popular concentration

The humanities have no such reservoirs of confidence. And attempts by humanities professors to ape the rigor of their scientific colleagues have led to a decades-long wade in the marshes of postmodern academic theory, where canons are scorned, books exist only as texts to be deconstructed, and willfully obscure writing is championed over accessible prose. All this has merely reinforced capitalism's insistence that the sciences are the only important academic pursuits, because only they provide tangible, quantifiable (and potentially profitable) results. Far from making the humanities scientific, postmodernism has made them irrelevant.

The retreat into irrelevance is visible all across the humanities curriculum. Philosophy departments have largely purged themselves of metaphysicians and moralists; history departments emphasize exhaustive primary research and micro-history. In the field of English there is little pretense that literature is valuable in itself and should be part of every educated person's life, rather than serving as grist for endless academic debates

Sure, historians believe in their primary sources, English scholars in their textual debates, philosophers in their logic games. But many of them seem to believe that they have nothing to offer students who don't plan to be historians, or literary theorists, or philosophers. They make no effort to apply their work to what should be the most pressing task of undergraduate education: to provide a general education, a liberal arts education, to future doctors and bankers and lawyers and diplomats.

In this environment who can blame professors if, when it comes time to grade their students, they sometimes take the path of least resistance—the path of the gentleman's B-plus?

the Core's mission statement asserts, with a touch of smugness, that "the Core differs from other programs of general education. It does not define intellectual breadth as the mastery of a set of Great Books, or the digestion of a specific quantum of information … rather, the Core seeks to introduce students to the major approaches to knowledge in areas that the faculty considers indispensable to undergraduate education."

These words, which appear in the course catalogue each year, are the closest that Harvard comes to articulating an undergraduate educational philosophy. They suggest that the difference in importance between, say, "Democracy, Development, and Equality in Mexico" and "Reason and Faith in the West" (both offerings in Historical Study) does not matter. As the introduction to the history courses puts it, both courses offer a "historical" approach to knowledge that is presumably more valuable than mere "facts" about the past. Comprehending history "as a form of inquiry and understanding" trumps learning about actual events. The catalogue contains similarly pat introductions to the other disciplines. In each case the emphasis is squarely on methodology, not material.

The few Core classes that are well taught are swamped each year, no matter how obscure the subject matter. The closest thing to a Harvard education—that is, to an intellectual corpus that most Harvard graduates have in common—is probably obtained in such oversubscribed courses as "The Warren Court and the Pursuit of Justice," "First Nights: Five Performance Premieres," and "Fairy Tales, Children's Literature, and the Construction of Childhood."

As in a great library ravaged by a hurricane, the essential elements of a liberal arts education lie scattered everywhere at Harvard, waiting to be picked up. But little guidance is given on how to proceed with that task.

Harvard never attempted to answer that question—perhaps the most important question facing any incoming freshman. I chose my classes as much by accident as by design. There were times when some of them mattered to me, and even moments when I was intoxicated. But achieving those moments required pulling myself away from Harvard's other demands, whether social, extracurricular, or pre-professional, which took far more discipline than I was usually able to exert.

It was hard work to get into Harvard, and then it was hard work competing for offices and honors and extracurriculars with thousands of brilliant and driven young people; hard work keeping our heads in the swirling social world; hard work fighting for law-school slots and investment-banking jobs as college wound to a close … yes, all of that was heavy sledding. But the academics—the academics were another story.

What makes our age different is the moment that happened over and over again at Harvard, when we said This is going to be hard and then realized No, this is easy. Maybe it came when we boiled down a three-page syllabus to a hundred pages of exam-time reading, or saw that a paper could be turned in late without the frazzled teaching fellow's docking us, or handed in C-quality work and got a gleaming B-plus. Whenever the moment came, we learned that it wasn't our sloth alone, or our constant pushing for higher grades, that made Harvard easy. No, Harvard was easy because almost no one was pushing back.