The Threat is Real – The Global Order and Its Travails

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Donald Trump greets supporters during his election night rally in Manhattan. REUTERS/Mike Segar

Donald Trump greets supporters during his election night rally in Manhattan.

There is no doubt today about the threat to the Liberal Order.  For decades we thought the the greatest threat to the Liberal Order was posed by those outsiders, the bad Russians, Mao’s China, other authoritarian adversaries.

But we were wrong!

The election of Donald Trump as the 45th President of the United States poses the greatest challenge yet to the Liberal Order the United States and its allies built after World War II.  Gideon Rachman in the FT , yesterday, November 8th, expressed it well:

Mr Trump’s proposed policies threaten to take an axe to the liberal world order that the US has supported and sustained since 1945. In particular, he has challenged two of the main bipartisan principles that underpin America’s approach to the world. The first is support for an open, international trading system. The second is the commitment to the US-led alliances that underpin global security.

And Stewart Patrick at CFR emphasized this current threat as well:

Trump’s triumph will accelerate its disintegration, by undermining the network of rules, institutions, and alliances that twelve presidents, Republican and Democratic alike, have nurtured since 1945.  The results of the election suggest that the main threats to the liberal world order are no longer foreign but domestic.

It is more than slightly ironic that this greatest challenge to the Liberal Order comes not from external authoritarian adversaries but from the leading liberal democracy – the United States and significant societal elements.  And it is depressing to reflect on the fact, as pointed out by Gideon Rachman today in his FT article, that this is the 27th anniversary of the fall of the Berlin Wall.  What a feeling of optimism then; what a feeling of gloom surrounds the election of ‘the Donald’.

How did this come about? And more importantly, how can those that support the Liberal Order respond in a way that can sustain, even revitalize the Liberal Order, which after all isdesigned to offer global prosperity and more than a measure of security.

FT View  clarified the FT position just a month or so ago:


There can be little doubt that in western Europe and the US, economic populism, incorporating a rejection of globalisation, has been on the rise. But unless Donald Trump is elected as US president in a month’s time, in which case all bets are off, there is not much evidence that the world economy is about to be fractured by the widespread re-emergence of trade barriers.

The International Monetary Fund warned this week that political risk was one of the biggest threats to the world economy, though without mentioning Mr Trump and his protectionist threats by name. But, to its credit, the fund has also recently accepted that, although global trade growth has been weak, there is not much sign that protectionism is to blame.

Dani Rodrik writing in the NYT more recently put his finger on what he believes is roiling the politics of many countries:

Democratic politics remain tethered to nation-states, while institutions that make the rules for global markets are either weak or seem too distant, especially to middle- and lower-class voters.

Globalization has deepened the economic and cultural divisions between those who can take advantage of the global economy and those who don’t have the resources and skills to do so. Nativist politicians like Donald J. Trump have channeled the resulting discontent as hostility to outsiders: Mexican or Polish immigrants, Chinese exporters, minorities.

Joe Nye in Project Syndicate suggested some assessments of are overdrawn  :

But it is an overstatement to say that the 2016 election highlights an isolationist trend that will end the era of globalization. Instead, policy elites who support globalization and an open economy will have to be seen to be addressing economic inequality and adjustment assistance for those disrupted by change. Policies that stimulate growth, such as infrastructure investment, will also be important.

… In 2014, the US exported $400 billion in information and communication technologies (ICT)-enabled services – almost half of all US services exports. And a poll released last month by the Chicago Council on Foreign Relations found 65% of Americans agreeing that globalization is mostly good for the US, while 59% say that international trade is good for the country, with even stronger support among the young.

So, while 2016 may be the year of populism in politics, it does not follow that “isolationism” is an accurate description of current American attitudes toward the world. Indeed, in crucial respects – namely, on the issues of immigration and trade – Trump’s rhetoric appears to be out of step with most voters’ sentiments.

Yet, notwithstanding this more nuanced view from Nye, Rodrik’s assessment of the problem and therefore the solution as well  is clear:

We must reassess the balance between national autonomy and economic globalization. Simply put, we have pushed economic globalization too far — toward an impractical version that we might call “hyperglobalization.

… The new model of globalization stood priorities on their head, effectively putting democracy to work for the global economy, instead of the other way around. The elimination of barriers to trade and finance became an end in itself, rather than a means toward more fundamental economic and social goals. Societies were asked to subject domestic economies to the whims of global financial markets; sign investment treaties that created special rights for foreign companies; and reduce corporate and top income taxes to attract footloose corporations.

Fashioning adequate responses to these liberal order issues, and let’s face it populist and nationalist sentiment is, of course far harder than describing the problems.  Rodrik emphasizes what he calls hyperglobalization.  Others, like Stewart Patrick, while acknowledging distrust among citizens for globalization has identified three issues that progressives, liberals, moderates, whatever must address at least with respect to those who were prepared to take a ‘leap’ with Trump:

  • distrust of globalization;
  • weariness of overseas commitments; and
  • restoring US sovereignty.

The first seems to come down to an economy that provides tangible benefits to all. Politicians must address the ‘death of prosperity’ especially through the ‘Rust Belt’ and especially among white undereducated males.  Here again ironies abound.  The effort to provide jobs through ramping up a serious infrastructure programs, which Trump does propose, or significant funds to support workers in transition, or other support – health care for instance, have been largely ‘killed off’ by Republicans.  So what will a Republican Congress do now when a Trump administration urges serious support for white working class folks?

On commitments to our allies, it will require allies visibly stepping up to assist US leadership initiatives but more importantly it is likely that what will move this issue is a serious failure of policy in say a place like the Middle East, the obvious case, or more ‘nail-bitingly’ say Iran.  These settings and others are crises that a Trump administration will have to deal with and without allies, well … .  Also allies and friends will need to take the lead on issues where the US will be inclined to hang back, say climate change.  It will also require NSAs (non-state actors) to step up and set the agenda toward a low -carbon world – while the Trump administration plays ‘hookey’.

On restoring US sovereignty, border and immigrants, well that’s a cultural battle that needs to be fought out in the US. Nativist Jacksonian impulses are hard to deal with politically. But Nye points out the majority, not the loud Trump minority, may carry the majority view on things like immigration.  It may also be that early efforts at forced return may have a powerful impact on the US public.  For there are few of us who are not a short distance from being an immigrant, legal or illegal.

Image Credit: REUTERS/Mike Seagar

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