Prize Essay - Can developing nations be independent?

Today's globalised economy is dominated by a single ideology, but the frontiers which imprison poor

Inukai Tsuyoshi lay slumped over the bureau in his prime ministerial office. His argument with the young soldiers who had forced their way into the inner sanctum of Japanese power was settled with a bullet from a Japanese navy-issue handgun. Japan was entering the final stages of an ideological clash that would lead it into catastrophic war with the Allied forces.

Frontiers come in many forms. That night, 15 May 1932, a simple office bureau had served as the dividing line between an authentic clash of civilisations. Parliamentary democracy, reinforced with a belief in international engagement, the League of Nations, free trade, tolerance and progress domestically - an ideology that inspired Prime Minister Inukai's commitment - was purged that night in favour of a different path to modernity. The naval officers' ideology, legitimised by a reference to the spiritualist mystique of Japanese cultural tradition, demanded a militarist build-up, imperial authority and colonial expansion. Japan's independence would be achieved by subjugation of its Asian neighbours; it would be a nation in charge of its destiny once more.

It is not difficult to imagine Inukai pondering his nation's future and recent past in the hours prior to his assassination. Japan was strong-armed into the international community by the gunships of Commodore Perry in 1854, a national humiliation.

Inukai might have reflected that experiments with party democracy and cultural release during the 1920s had been halcyon days. However, after 1929, the devastated rural economy had fatally tipped the balance in favour of the militarists. The military were out of control, annexing the Chinese province of Manchuria and swathes of Inner Mongolia in what was euphemistically labelled an "incident". It was as much an "incident" as German tanks rolling into Prague. Japanese subordination and, in the mind of the navy, subservience at the London Naval Conference of 1930 worsened the hypertension in the body politic. The choice was simple. Japan could either subject itself to continuing political and economic humiliation at the hands of the Great Powers, or it could control its own economy, its own society, an independent path that would restore national pride and unity.

Inukai met his assailants' might with what he thought was the most powerful weapon in a democrat's arsenal. He debated with them. They responded with the most powerful weapon that they had to hand. They shot him.

Japanese history is salutary in a world where every nation, people, culture and creed is trying to come to terms with the rise to supremacy of one ideology. Liberal democracy, embodied in the mega-power of America, flows into every crevice of potential resistance. Bill Clinton is fond of saying that we live in a world that is interdependent but not integrated. His outlook is an optimistic one. We actually live in a world defined as much by its many frontiers as by its integration.

Japan symbolises the struggle of a developing country to attain independence in the face of mighty external forces. It metamorphosed from an isolated feudal archipelago into the Asian outpost of international liberalism by the end of the 20th century, but not without struggle and not without unimaginable cost.

A bureau in Prime Minster Inukai's office separated militarism from parliamentary democracy. In our world, theocratic terrorism confronts modernity in a struggle to suppress a shoe-bomber in economy class on a transatlantic flight; alchemists of deadly poison are arrested in a flat in Wood Green, London; Great Powers face each other across the three-quarter moon of the Security Council table. Far from reaping a "peace dividend" bestowed upon us by the "end of history", we are faced with a world that is in many ways more terrifying than anything we have faced before. Premodernity clashes with modernity, alternative routes to modernity and independence collide.

And herein lies the central challenge to the west. By increasing the intensity with which we force our world on others we force the apocalyptic question of independence versus engagement. This is the polarisation that had such devastating consequences for the world when forced upon Germany and Japan. Independence can come but only through isolation and aggression. This is not a cost-free choice. The cost is development.

If there is any doubt about the appalling cost of isolation, one has only to look at the recent histories of Iraq and North Korea. One in ten Iraqi children dies before his or her fifth birthday; 25 per cent are malnourished. This is despite Iraq sitting on top of the second-largest oil resource on the planet.

An even greater proportion of North Korean children are malnourished; 40 per cent lack the nutrition that they need. Across the border, South Korea is one of the economic success stories of the past half-century, even taking into account the Asian financial crisis. But North Korea's economy is skewed towards a militaristic build-up while millions lack even basic food. Interdependence comes at a price, but the cost of isolation is higher.

Understandably, since 11 September, the world has been focused on the dismal threat of terrorism combined with the proliferation of weapons with potential for horrific destruction. That focus is necessary. But it is no more important than the fight against the root causes of the instability and resentment that mobilise young men to sign up to the terrorist cause.

Prophets of globalisation, the ideology that insists on the inevitability of global integration and interdependence, must show greater honesty and humility. In an interdependent world, damage in one place can easily magnify to cause crises elsewhere.

A combined package of global free markets and majoritarian democracy, inherent to globalisation, can itself lead to destruction and atrocity. There is nothing natural or progressive about the liberal democratic system. It has evolved in our culture and our history but may not be suitable or even possible in other contexts. In her recent book, World on Fire, Amy Chua provides the example of the fate of the Chinese community in Indonesia. Free-market policies introduced by the Suharto regime empowered the Chinese minority. Once Suharto was removed, the functioning of majoritarian democracy led to a backlash against the relatively wealthy Chinese. Free markets create inequality and empower some in relation to others; democracy can give expression to the consequent resentment.

Throughout history, every strong nation has been able to choose the extent to which it engages politically and economically with the wider world. This choice is now denied to the world's weaker nations. We force them to decide between isolation and engagement. Either option can create conditions that empower those who threaten and resent.

The issue of unfair terms of trade is as seismic and epoch-defining as the struggle against the proliferation of weapons of mass destruction. Nations will choose paths that upset some but we should not force them into choosing between independence and development.

While we preach free trade, we subsidise rich-world farmers under the Common Agricultural Policy and the US Farm Bill. Such support leads to the dumping of produce from the developed world on local markets. By 2001, total OECD subsidy of agriculture was US$302bn, fives times the global aid budget.

The greatest barrier to an interdependent and integrated world is thus not third-world tyrants and weapons of mass destruction, but inequalities in international terms of trade. Europe, America and Japan are guilty of a foolish disregard for their own interests and a callous oblivion to the interests of the rest of the world.

All three trading groups should know better. Europe should remember what happens when chill global winds blow on exposed economies. The Great Depression was the economic DNA at the core of the organism of fascism. How paradoxical that in 2002, France and Germany should collude in hanging on to the Common Agricultural Policy. Europe itself was protected by the institutional canopy of the Bretton Woods financial system after the Second World War, essentially limiting the free flow of international capital while the postwar economies found their feet once more. When their economies were able to withstand it, they moved to a more liberalised system of international capital.

Japan and America have both actively managed their relationship with the international economy. In the postwar era, Japan turned a policy of protectionism against foreign products and open access to overseas markets for its own products into an art form. It is still managing its economic relationship with the wider world and pursues a project similarly mercantilist to those of America and Europe. We should remember that these three great regional powers - America, Europe and Japan - cause unforgivable suffering to the world's poorest: a fact that should inspire humility in even the most hawkish of liberal democrats.

In the moments before he was shot on that evening in 1932, Inukai Tsuyoshi might have reflected on the terrible price that Japan had been forced to pay for membership of the liberal international community. It proved too high a price and millions lost their lives in Japan's subsequent search for resource and political independence. In this world, with its many and varied frontiers, we should be cautious not to force questions of independence against development. If we do, and there is every sign that we have become deaf to the murmurs of our recent past, then new and extreme frontiers will emerge. These will prove as violent and preventable as any we have previously seen.

This was the winning entry in the New Political Writing Prize 2003, awarded by the Barry Amiel and Norman Melburn Trust and the New Statesman for writers under the age of 30