The paper analyzes the American counterculture of the 1960s and early '70s, from the New Left through the hippies, revolutionaries and Jesus people, to the counterculture's collapse in artistry and the cynicism of Watergate; this evolution is viewed as a re-enactment of Hegel's dialectic of 'active reason' in the Phenomenology of Spirit , from the critique of 'observation' to 'society as a community of animals'. Secondly, an attempt is made to account for this re-enactment in the twentieth century. The tentative (...) conclusion is that the counterculture was America's discovery of the Hegelian idea of the state, but that, in an age of world economic interdependence and universal (if sometimes unacknowledged) military insecurity, this discovery came too late. The economic and military basis of the only world-history which Hegel knew, the history of nation-states all the way from oriental despotisms to modern 'Germanic' states is, it seems, in the process of disappearance. Section on the dialectic of Observation to Active Reason revised and updated in The Dialectical Method: A Treatise Hegel Never Wrote. Prometheus Books, 2012. (shrink)