Francis Fukuyama’s book, The End of History and the Last Man, achieved world-wide celebrity because of its bold claim that with the fall of Soviet communism the institutions of democratic capitalism constituted “the final form of human government”: human history-understood as the history of conflicting ideologies-had ended. Much criticised for its neglect of nationalism, religion and ethnicity as causes of conflict, Fukuyama nevertheless reaffirms his thesis in his new book, Trust: The Social Virtues and the Creation of Prosperity. In Trust, Fukuyama identifies the cultural sources of differences in economic performance among different types of capitalism. He finds one source of divergence in the “social capital” embodied in habits of trust. Fukuyama argues that differences in trust between cultures are reflected in varying types of economic activity. Thus Chinese societies, in which high levels of trust exist within but not between families, contain large numbers of flourishing family-based firms, whereas societies such as Japan and the US, in which trust relationships are strong among people who are not kin, are marked by the growth of large-scale business enterprises. Fukuyama’s book demands that the perception of America as a radically individualist culture be revised to allow for the strong civic culture noted by Alexis de Tocqueville. But Fukuyama warns that the growth in the US of a culture of litigation and of unconditional rights is reducing its competitiveness with the emerging Asian powers. Trust shows him responding to post-cold war anxieties about the future of democratic capitalism. He now acknowledges the profound ramifications of cultural difference. Having achieved global fame (while an adviser at the US State Department) as an expositor of western triumphalism following the Soviet collapse, Fukuyama has re-emerged in the mid-1990s (now at the Rand Corporation) as a theorist of global economic rivalry and, perhaps, of American decline. Born in Chicago, the son of a Protestant preacher, Fukuyama has a Japanese mother and paternal grandfather but cannot speak Japanese and gave up studying Japanese politics while at Harvard, finding it “too boring.” He is a staunch Republican. John Gray spoke to him last month.

Q In your new book “Trust” you restate your view that the world’s political and economic institutions are tending towards convergence. How does your present view differ from “The End of History and the Last Man”?

A I don’t think I have changed my views on this. If you read The End of History carefully I actually had a section on the importance of culture. I said that liberal modernity was not self-sustaining-that a society based on rational individuals simply contracting with one another to satisfy their narrow self-interest didn’t work. But it was not my main point of emphasis then. If you take seriously my view in The End of History that basically there is no alternative to our existing institutions-we are all going to be living in capitalist democracies with elections and party systems-then the question of trust is what follows naturally. Differences between societies and their social problems are going to manifest themselves on a cultural level, not on the level of states and public policy. The current problems of the US ultimately exist on a cultural level.We have a big problem with family breakdown in the US and I have not heard any intelligent proposals about how it can be addressed at an institutional level. It originates in cultural changes and developments which have occurred over the past two generations. The solution must be found at that level.

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