Russia and China, Challenges for Liberal Democracy PETERSBURG - Liberal democracy faces a new and decisive challenge - figuring out how to deal with the "post-Communist oligarchies" of Russia and China. These regimes - authoritarian, capitalist and eagerly integrated into the global economy - are without precedent. Figuring out how to deal with them is the greatest strategic and moral question the West faces today. How we answer it will determine the shape of the 21st century, much as the struggle with Communism and fascism shaped the 20th. This is the assertion Michael Ignatieff, the Canadian intellectual and former leader of the Liberal Party, made in a powerful lecture in the Latvian capital, Riga, at the beginning of this month. Mr. Ignatieff's thesis came to mind during the annual St. Petersburg International Economic Forum, held last week as the gracious former imperial capital for which the forum is named glowed in the pure white light of the summer solstice. Central to Mr. Ignatieff's argument is his insistence that "history has no libretto." It isn't marching toward any particular destination, including liberal democracy: "As late as Benedetto Croce, liberals still thought of their creed as being the wave of the future and thought of history as the story of liberty." When it comes to Russia and China today, we still hope we will all eventually sing along to this seductive libretto. "It is a cliché of optimistic Western discourse on Russia and China that they must evolve toward democratic liberty," Mr. Ignatieff argued. Sadly, though, we're wrong: "But we should not assume there is any historical inevitability to liberal society." As Mr. Ignatieff explained to me in a telephone conversation this week: "The simple point is that we thought they were coming towards us. What if they are not? The optimistic Western cliché Mr. Ignatieff described was very much the conventional wisdom in St. Petersburg. It is what the visiting Western business titans wanted to believe, and it is what the presiding Russian government chiefs wanted them to believe. Klaus Kleinfled, the chief executive of Alcoa and chairman of the U.S.-Russia Business Council, said in an interview that President Vladimir V. Putin's opening speech at the conference was "very, very good. He was basically clear that he stays on the course of reforms. He stays on the course of modernization. When I suggested that Mr. Putin might instead be taking Russia backward - freedom of assembly was sharply curtailed this month and several activists, including Putin's goddaughter, were questioned by the police and had their homes searched - Mr. Kleinfeld demurred. Referring to the reformist promises of Mr. Putin's speech, Mr. Kleinfeld said, "We have to take that at face value." Mr. Kleinfeld also said that Russia's progress needed to be judged in historical context. How the country has emerged in the last 20 years, I think, is pretty amazing. I think most people that are easy with their criticism measure Russia against countries that had much, much more time to go into a market economy," he said. Some of these processes take a little time to struggle themselves through. They are on a good path. What is striking is what you might call the "libretto" assumption in these remarks: Russia is on the right path, just give it time. At least when they speak English, this is a view that Mr. Putin's people are eager to endorse. When I asked Igor Shuvalov, the suave and sharply dressed first deputy prime minister what he made of Mr. Putin's speech he, too, spun it as proof that Russia is on the path to becoming more like us. I was very pleased that yesterday what he announced was completely in line with a new generation. It was everything which any citizen of the European Union, or other developed countries, wants. It's exactly how Putin sees the future for Russia in just a few years," Mr. Shuvalov explained. "We are passing the way all developed countries pass," he said.