In the middle of the 19th century, Auguste Comte, the French positivist thinker and forefather of sociology, devised a new faith. His Religion of Humanity would channel the natural desire for worship towards scientific and humanist ends. There was no God, but to be human was divine. Comte described the liturgy in detail. Rather than crossing themselves, for example, congregants would tap themselves in three places on their heads, signifying love, order and progress.

Temples of Humanity sprang up in cities across England, as well as the United States and Brazil (the Porto Alegre temple is apparently still functioning). Most of Comte’s contemporaries, however, even those who admired his work in other fields, were not converted. John Stuart Mill wrote that some of Comte’s proposals ‘could have been written by no man who had ever laughed’.

Comte’s attempt to turn rationalism into a religion is an unusually vivid example of a general habit in modern liberal thought: triumphalism. Liberal intellectuals are prone to a superiority complex, believing that history is marching on their side, ushering in ever-widening individual freedoms and dissolving stifling constraints of religious piety, national pride, tribal loyalty and even family obligation. Liberals forget their limits.

In the chapters of recent history, the period from 1989 to 2009 could be titled the ‘Age of Liberal Hubris’. With communism defeated, democracy spreading and the market roaring, the victory of liberal values seemed assured. Freedom was in the air – not only for people but for markets and commerce too. Pretty much everyone was signing new trade agreements and opening up borders. Sure, China was an outlier, but the pundits confidently predicted that economic growth would eventually bring liberal democracy in its wake there too.

With his 1992 book The End of History and the Last Man, Francis Fukuyama became the intellectual poster boy of this late 20th-century liberal triumphalism. His central argument was that liberal democracy was becoming a global standard, the inevitable destination of political progress. Things haven’t quite worked out that way, making Fukuyama one of the most interesting public intellectuals around. Indeed, the recent decade has seen liberalism and democracy in full-scale retreat. To his credit, Fukuyama has been trying to figure out why, producing a fine pair of books on the historical origins and development of political order, as well as treatises on trust, biotechnology and identity. But his new book, Liberalism and Its Discontents, is his first full-throated defence of the liberal project since 1992.

It is, necessarily, more humble. Fukuyama, like many of us, is a chastened liberal. But his argument is more persuasive as a result. He takes seriously the criticisms of liberalism from left and right and is not sparing in his own criticisms of public policy. His basic message is that liberal democracy is the best way to arrange a society, but that much more attention has to be paid to ameliorating some of the downsides of liberal economic policies and more respect has to be paid to traditional views and forms of life. There’s no liberal magic dust. It takes work and humility.

In foreign policy, liberal hubris led to the extraordinary idea that democratic nations could be built on foundations of sand. It is to Fukuyama’s credit, then, that he was critical of the US invasion of Iraq. The war was the result in part of the fevered atmosphere created by 9/11 and in part of the geopolitical ambitions of Washington neo-cons. But it also reflected a general sense that the virtues of liberalism and democracy were so blindingly self-evident that the Iraqi people would rush to embrace them, even when they were delivered by the US military at gunpoint.

But the greater damage has been at home. The puncture wound in the puffed-up liberalism of the 2000s was the financial crash of 2008, which laid bare the economic precarity of the working class. In the United States, the wealth of many black families was simply wiped out. The lesson that liberals forgot is that market economies can generate huge economic inequalities, especially when they are opened up to international competition or mass immigration. The technocrats at the helm failed to see that while they and their friends were happily surfing the waves of change, many of their fellow citizens were being left behind. If they dared to complain, they were dismissed as reactionaries. The message to the working class was, effectively, get with the programme or get lost.

Bill Clinton, for example, pushed hard for free trade, but failed to deliver promised investments in training and education for dislocated workers. Like many liberals of his generation, he was a budget hawk, bowing to pressure from Wall Street and the Federal Reserve to curb spending. As Robert Reich, Clinton’s labour secretary, wrote, Fed chair Alan Greenspan had ‘Bill’s balls in the palm of his hand’. It is clear now that when most of the proceeds of economic growth are going to the liberals of the upper-middle class, liberalism becomes less popular among the masses. Inequality is a mess of liberals’ own making.

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Fast-forward to 2016, and this neglect resulted in populist revolt. The populists placed themselves in direct opposition to the liberal internationalists – ‘globalists’ was the preferred term – and tapped into nationalistic sentiments. This is an old feud: nationalism and liberalism are natural enemies. That is why liberals prefer, like John Lennon, to imagine a world without countries. During the age of liberal hubris, they put their faith in transnational institutions that they hoped would gradually supplant nation-states. Fukuyama himself was an enthusiast for the European Union as a model (he’s less sanguine about it in the new book). But as he writes, ‘liberal theory has great difficulties drawing clear boundaries around its own community, and explaining what is owed to people inside and outside that boundary.’

The reason for this is that liberalism is founded on a claim of universal and equal human dignity. The liberal ideal of universalism is at odds with the political reality of nation-states. This is a genuine tension to be lived with and worked through rather than resolved. It should be clear by now that there is no supranational short cut: liberalism will have to be built one nation at a time. Meanwhile, the goal should be a peaceful pluralism among nations, liberal or not, based on a shared interest in peace but reinforced by international alliances sufficiently strong to act when this is not enough.

If nationalism makes liberals uncomfortable, religious faith brings them out in a rash. At worst, liberals have sometimes appeared to wish to expunge religion altogether as a relic of an unenlightened age. As Fukuyama writes, for too many liberals, ‘deeply held religious beliefs on issues like abortion and gay marriage do not represent acceptable alternative understandings of important moral issues, but are merely examples of bigotry and prejudice that need to be rooted out’. What’s needed instead is what philosopher William Galston calls ‘modus vivendi liberalism’, one that is as accommodating as possible of multiple ways of life.

In his desire to resuscitate liberalism, Fukuyama occasionally gives too much ground to its critics. An especially important case is his treatment of autonomy. Fukuyama suggests that leaving individuals to come up with their own life plans and their own idea of the good provides too ‘thin’ a conception of human society. He points out that ‘human beings crave respect’. True. He furthermore argues that they desire this not just for themselves but ‘also for external things like religious beliefs, social rules, and traditions, even when such craving leads them to behavior that is individually costly’. Also true. Liberals simply insist that these ‘thicker’ identities are created by individuals themselves, very often drawing on tradition and history, rather than universally imposed by society. Fukuyama is too worried about the supposed amorality of liberalism, however. He contrasts two imaginary individuals, one lying around playing video games, ignoring the needs of others and smoking weed, the other working hard, taking part in civic life and supporting friends and family. He suggests that the most influential modern theories of liberal justice, including that of John Rawls, ‘would not allow either public authorities or the rest of us to pass judgment on these two individuals’. This is an odd claim. There is nothing in Rawls’s writing that disallows moral judgement. It is hard to imagine a liberal society in which the layabout wouldn’t face serious stigma, even ostracism. There is plenty of judging going on in liberal societies, it is just that, unlike in illiberal ones, most of it remains outside the legal realm. The irony here is that liberals often put more faith in moral tradition, and in its enforcement through social pressure, than many modern conservatives, who now seem to think that only state power can engender a good society.

These are challenging times for liberals, for sure. For them, pretty much the only thing on the menu in recent years has been humble pie. The limits of liberalism have been brutally exposed. Many liberal values, including pluralism, tolerance, equality and individuality, have been shown to be more fragile than we knew. But surely more precious, too.