Symposium | Security Policy Is Economic Policy

The Liberal Order Isn’t Coming Back: What Next?

By Bruce W. Jentleson

Tagged national securitytrade

Since Donald Trump was elected President with his “America First” foreign policy, we’ve been hearing one invocation after another of the “Liberal International Order.” They’ve come from Democratic and Republican internationalists, foreign policy pundits of a variety of stripes, and academics of various –isms and schools.

Part of this has been a chocolate-vanilla reaction supporting free trade against Trump’s protectionism, re-affirming alliances against his anti-NATO potshots, advocating democratic values countering his embrace of authoritarians. I understand the politics of that, the psychology too.

But the debate accentuates a question that was there even before Trump: Is the Liberal International Order (LIO) the optimal system for the twenty-first century world? While it worked well for many decades, the LIO was showing substantial signs of strain pre-Trump. This shouldn’t surprise us as much as it seems to have. Think about it: Why should we expect that a system established more than 70 years ago based on a particular distribution of power and array of threats should have the same effectiveness now? Indeed, there’s been an “end of history” element to all this—just as Francis Fukuyama argued that democracy and capitalism had emerged from centuries of contestation as the optimal political and economic systems to be refined but not fundamentally changed going forward, the LIO is vaunted as the culmination for global peace and prosperity applicable on an ongoing basis.

Forging a viable alternative to Trumpian America First policy requires ideas, policies, and political strategies that build on the LIO’s strengths while addressing weaknesses that had become more evident over time and adapting to the way the world is today more than how it used to be.

LIO’s Crumbling Pillars

The Liberal International Order had four pillars: an increasingly open international economy, rules and institutions for multilateral cooperation, democracy as the optimal domestic political system, and American power in all its forms as the system’s underwriter and guarantor. While sturdy for many decades, all were crumbling even before Trump’s sledge-hammering. Let’s consider each.

Challenges to Western Global Economic Order
Coming out of World War II, and with citizens’ memories of how the 1930 Smoot-Hawley tariff made the Depression even worse than it would have been, “protectionist” was second only to “soft on communism” as a feared political label. With Europe and Japan still reconstructing from wartime destruction, the Soviet bloc largely sealed off in its own economic autarky, and much of the rest of the world just beginning to emerge from colonialism, the United States enjoyed exceptional economic competitiveness. Even then protectionism was used selectively for sectors most vulnerable to low-wage competition, such as clothing and textiles. By the 1970s, though, America’s international economic position was sufficiently threatened that we resorted to largely unilateral exercises of American power: the August 1971 “Nixon shock” imposing dollar devaluation, ending the gold standard, and surcharging imports an additional 10 percent was one notable such exercise; the 1980–81 “voluntary” auto export restraints on Japan were another. Trade bills kept passing Congress, but increasingly contentiously—politics were shifting with constituencies like labor seeing what had been a positive cost-benefit balance go negative.

Three ensuing economic developments intensified these dynamics. First, with countries like Mexico (1993 North American Free Trade Agreement, Nafta) and China (2001 World Trade Organization membership) playing larger roles in the international economy, American industry faced a far greater gap in wages and other costs of production than ever before. Even filtering out politically motivated exaggerations, respected economists have shown a “China shock” on manufacturing and other sectors of the American economy. Second, technology was causing its own and by most analyses greater job reductions: e.g., while 2017 retail sales increased about 4 percent, technologies such as the 75,000 robots Amazon added contributed to an estimated loss of 170,000 jobs. Third, the financialization of globalization, with its prioritization of shareholders over stakeholders and impetus for short-term profit-taking, did its own stripping of viability from formerly solid blue collar-manufacturing-based communities. In so many ways those making policy and those setting private-sector priorities contributed to what Council on Foreign Relations Senior Fellow Edward Alden calls “a failure to adjust” that in itself has been a key factor in America getting “left behind in the global economy.”

The electoral results across Western Europe reinforce that this is not just a Trump effect, but a wider revolt by the losers of globalization.

In these and other ways the anti-trade wave that Trump capitalized on in 2016 had been building for decades. His xenophobic rhetoric made it an even more potent brew. It’s not that it’s a majority view. But on their own open trade policies have the uneven political dynamic of particularistic costs versus diffuse benefits: The lower cost of my Subaru shapes my vote a lot less than the job lost by someone who was laid off due to import competition or offshoring. Moreover, the fact that similar brews have been cooking up in one Western European country after another—Brexit being the most consequential thus far, but others dangerously simmering—reinforces that this is not just a Trump effect, but a wider revolt by the losers from globalization across the Western world. This populist anger, whatever its vituperative elements, also reflects a genuine belief that work is part of one’s identity and provides self-respect, not just income and sustenance.

Along with this questioning from within, the 2008–09 Wall Street meltdown had countries around the world paying the price for American financial irresponsibility. Instead of the American economy being the engine driving the global economy, the driver’s recklessness crashed other economies into deep recession. The Euro crisis added its own element to concerns about Western economic policy becoming a danger to others.

Juxtaposed to all this has been China’s economic success. While President Xi Jinping’s claim at the 2017 Davos World Economic Forum to the mantle of free trade was a tad disingenuous, it was a clever play on Trump’s economic nationalism and the bipartisan disowning of the Trans-Pacific Partnership (Trump pulled out, Hillary Clinton said she would). As of 2015, an estimated 43 countries counted China as their largest trade partner compared to 32 with the United States. While much of this has been driven by Chinese natural resource imports and low-wage manufacturing exports, China is now moving into technology-intensive sectors such as renewable energy, electric cars, artificial intelligence, and quantum computing. It has done all this more by adapting capitalism than adopting it, opening its system up enough to bring Western investors in and get into Western markets while maintaining a state-market mix tilting much more to the former than in the Western model.

Underperforming International Institutions
It’s easy to forget amidst all the UN-bashing by conservatives how important the United Nations has been to world order at key moments. The Korean War was fought under the UN flag. UN Secretary-General Dag Hammarskjöld played a key role in managing the 1956 Suez crisis. Saddam Hussein’s August 1990 invasion of Kuwait was undone by a 27-nation coalition authorized by the Security Council. In January 1992 President George H.W. Bush joined other world leaders at the first-ever summit of the heads of state of UN Security Council members in a joint call for “ways of strengthening . . . the capacity of the United Nations.”

Over the years, and with plenty of responsibility to go around, the UN and all too many other international institutions have been underperforming. UN peacekeeping fails more than it succeeds, and has had scandals such as the Haiti cholera epidemic and sexual abuse by peacekeepers in the Central African Republic. The Human Rights Council continues its hypocrisy. The World Food Program is barely half-funded by member states. The World Health Organization was ill-prepared for the Ebola pandemic. The whole gamut of organizations dealing with refugees is overwhelmed by a world that has more refugees than at any time since World War II. Murderous leaders continue to manipulate claims to sovereignty while slaughtering masses of their own people despite the UN General Assembly having adopted Responsibility to Protect. Even the heralded Paris Climate Agreement, while better than nothing, falls well short of what is needed.

Democracy: Tarnished Model
Hopes soared for a while after the Cold War ended as former Soviet bloc countries democratized, military regimes gave way in Latin America, apartheid in South Africa ended with a peaceful democratic transition. But that democratic wave has broken up on rocky shores. According to Freedom House, the last year in which more countries had greater gains in freedom than had declines was 2005. “Things are unquestionably getting worse,” the founder of the Oslo-based Freedom Forum (the Davos for dissidents, according to the BBC) reflected on the state of human rights, “and that is not embellishment or melodrama.” Amnesty International warns of the spread of “Orwellian” technologies of repression, including in ostensible democracies.

And exactly which established democracy can hold itself up as a model these days? Even in Scandinavia, often depicted as highly tolerant, anti-immigrant parties have been running strong. Denmark passed a “jewelry law” confiscating personal possessions of value from refugee migrants or denying them welfare benefits. A party founded by former Nazis is part of the new Austrian government. A neo-Nazi party won enough votes to gain representation in the German Bundestag. The Brexit victory was an expression of cultural anxiety as well as economic dislocation. Spain wrestles with Catalan secession. One could go on . . .

And then there is the United States. A country in which the validity of two recent presidential elections has been disputed. In which other than in the immediate rally-round-the-flag atmosphere right after 9/11, trust in government has not been higher than 50 percent in close to 50 years. In which racial, religious, and ethnic animosities are on the rise. In which infrastructure crumbles, public education corrodes, health care has been a political football for 25-plus years. Even its vaunted Horatio Alger social mobility lags, not leads, most other Western democracies. And, yes, in which the current President is reviled far more than respected around the world, and for his persona even more than his policies.

American Power as System Guarantor
In the LIO’s inception and for many decades, the United States had the power and wealth to sponsor and buttress the system. What it gave the world (e.g., Marshall Plan aid and NATO protection for Europe, bilateral security and economic dispensations for Japan while it rebuilt its economy in the 1950s–60s) and what it took (e.g., control over alliance policy, selective protection for its own politically sensitive sectors like agriculture and textiles) were generally seen as in balance. To the extent they weren’t, as with military and covert interventions installing friendly governments and deposing unfriendly ones in Third World countries, others had limited power to do much about it. Indeed there’s been quite a bit of selective historical recall heavy on successes and light on failures of the LIO-Cold War era.

Even so the manner in which the Cold War ended marked an apex for American leadership. Plenty of credit also went to Soviet leader Mikhail Gorbachev, and to European leaders and social movements that played key roles. But once the initial euphoria passed, no New World Order emerged. Here too there was plenty of responsibility to spread around. But given all the talk about a unipolar moment and its indispensability, much of the blame lay with the United States. The Clinton Administration spoke the language of multilateralism but couldn’t get political support for key global agreements including the Land Mines Treaty, the International Criminal Court, and the Kyoto Climate Change Protocol. The Bush Administration went to war in Iraq against the will and interests of key allies. The Obama Administration was generally refreshing to many in the international community, but left with unfulfilled expectations and missed opportunities, the sense that it knew more what it didn’t want to do than what an alternative “grand strategy” was. Even if Hillary Clinton had won, doubts were already there about America as a reassuring guarantor of whatever new system was emerging.

What Next?

Three fundamental challenges need to be met if there is to be an international order that has the potential to do for the twenty-first century what the Liberal International Order did on balance for the second half of the twentieth century: forge peace, foster prosperity, and affirm core principles. While the United States has a crucial role to play in all of these, none is a matter of just reasserting “American leadership,” as the usual bipartisan trope would have it.

Forging Peace: Navigating Multi-Dimensional Geopolitics
Managing great power rivalries remains the most crucial factor for avoiding major war. In four other respects, though, the geopolitics are significantly different than in prior eras.

First, no one country has sufficient dominance to set the rules largely on its own and in its own image. The U.S. position is strong but less singular. China needs to have a say befitting its own relative power and standing. And even then, it won’t be just a “G-2” process, or even an expanded version of nineteenth-century multipolarity with a few more seats around the table for other major and emerging powers. Ours is the first truly global era in which, notwithstanding differentials in power, more countries are actors, rather than acted upon.

Second, in contrast to the bloc-based world of the Cold War, we’re seeing a “pluralization of diplomacy,” in which more countries have more relations with one another on a wider range of issues. Some bilateral relationships are more important than others, but few any longer are exclusive. In the Middle East, for instance, along with relations with the United States, Saudi Arabia has made China its top trading partner for imports as well as oil exports. Egypt has been working out new military cooperation with Russia. Israel and Russia have an encrypted military hotline for de-confliction in Syria. In Asia, China and Japan recently reached their own agreement for a crisis management hotline for the East China Sea/Sea of Japan. Australia tries to keep relations with the United States and China in balance. Indian Prime Minister Narendra Modi holds summits with both Trump and Xi. In Africa, Djibouti hosts military bases for both China and the United States. In Latin America, Brazil joins with Russia, China, and India, and South Africa in the BRICS. The Czech Republic, Bulgaria, and Hungary—while still in NATO and the European Union—also have improved relations with Russia. Longstanding NATO member Turkey buys new missile systems from Russia and sides more with Russia in the Syrian conflict than with the United States. Fourteen European Union members including the United Kingdom, Germany, and France joined the Asian Infrastructure Investment Bank (AIIB) despite U.S. opposition. This array of relationships and coalitions could constrain major-power influence by creating a thicker and stabilizing set of connections.

While the UN and other international bureaucracies are morasses, many of their failings are the result of constraints imposed on them by states.

Third, effective international institutions are more important than ever. In such an interconnected world there are many threats that can’t be met by even the most powerful states on their own. While the UN and other international institutional bureaucracies are their own morasses, many of their failings are the result of the constraints and inefficiencies imposed on them by the states that constitute and control them. While this is by no means up to the United States alone, one area in which the United States could play a critical role is in empowering the UN Secretary-General. Dag Hammarskjöld, who more than any other holder of the office showed what a strong and determined S-G can contribute to global peace and security, is the model. What if current S-G Antonio Guterres had the standing to help mediate the North Korea crisis the way Hammarskjöld did in the Suez crisis? Or to lower tensions in bilateral disputes as Hammarskjöld did in 1953–54, getting “Red” China to release American prisoners of war. The trade-off of some encroachment on national prerogatives for a UN that is more effective can be a net positive even for the major powers: actually, given the global scope of their interests, especially for the major powers. “A more independent U.N. leader . . . may be an occasional irritant,” as one of the more astute UN-watchers put it, “but also more useful when it really matters.”

Fourth are non-governmental actors (NGOs) playing vital roles that governments are unwilling or unable to play. Human Rights Watch had its own satellite technology to publicize images of Rohingya villages burnt by the Burmese military. The Commission for International Justice and Accountability has been playing a lead role in gathering evidence of war crimes in Syria. The Gates Foundation is both second only to the United States as a funder of the World Health Organization and has its own extensive global health programs. Civil society activists and people power movements work the nodes of what Anne-Marie Slaughter calls the “networked age.”

Fostering Prosperity: Toward a Hybrid System, and the Urgency of Sustainability
A combination of the weaknesses of Bretton Woods institutions and the initiatives China has taken is moving us toward a “hybrid” international economic system. The multilateral approach to trade, close to two decades since the World Trade Organization (WTO) initiated the Doha Round, is on life support at best. The International Monetary Fund (IMF) is scorned in many parts of the world. Meanwhile the China-led AIIB now has over 60 members and over 20 prospective members, drawn from every region, and is carving out a role that even Forbes magazine calls “sorely needed.” Even if the $1 trillion, 68-country official Chinese estimates for the Belt and Road Initiative prove inflated, it’s likely still going to exceed World Bank lending and foreign aid from the United States, European Union and the 33 other Organization for Economic Cooperation and Development (OECD) countries combined. Adding to all this, the U.S. decision to pull out of the Trans-Pacific Partnership may have cleared the way for China’s 16-nation Regional Comprehensive Economic Partnership, which would create the world’s largest trading bloc by population.

Even with its own uncertainties and downsides, China’s approach of adapting not just adopting capitalism, striking a distinct balance between markets and state control, has been having its attractiveness to countries around the world. “Market-based” and “state-controlled” are not dichotomous; there are plenty of points along the spectrum for various balances. While the United States long has attributed its economic success to its being on the market end of the spectrum, there is real question as to whether this model can be as successful in the twenty-first century as it was in the twentieth. There may be something to work with in statements such as Apple CEO Tim Cook’s about “a moral responsibility to help grow the economy, to help grow jobs, to contribute to this country.”

A new order also has to, finally, take sustainability seriously. “Meeting the needs and aspirations of the present generation without compromising the ability of future generations to meet their own needs”: it’s been almost 30 years since the Brundtland Commission laid out the essence of sustainability. Prosperity cannot continue being calculated myopically—excessively focusing on quarterly returns, monthly indices and other short-term measures—and with tunnel vision excluding all those “externalities” like environment and public health. The old zero-sum calculation that policy could be green only in one way or the other, economically or environmentally, no longer holds. Moreover, whatever absorptive capacity was there in prior decades for carbon emissions and other environmental spoilation has been more than spent. The lack of public health infrastructure in poverty-stricken yet no longer as isolated areas has vastly increased the risk of local infectious disease outbreaks becoming global pandemics. Whichever country guides the international community to a stronger climate change regime and mechanisms embedding other aspects of sustainability in core conceptions of prosperity will have its leadership stature enhanced.

Affirming Core Principles: Making Our Democracy Work
In a sense there’s a competition going on internationally over who can govern their own states effectively. China’s system has had to turn up the political repression as well as still struggle with corruption and policy failures that raise public demands for more accountability. The nations of the Arab world still search for a political system that can non-repressively maintain basic order while also tackling their societies’ human development challenges. Russia’s authoritarian kleptocracy is less stable than it looks. Africa still has too many strongmen and too few strong institutions. Latin America keeps lurching between the left and the right. Hungary and Poland are showing dangerous signs of authoritarianism. Western Europe has the rumblings and strains noted earlier.

As much as I try to maintain historical perspective on other periods when American democracy has been in rough shape so as to avoid woe-is-us-ism, the pervasive dysfunction and fundamental dangers of our current period can’t be underestimated. It’s not just who’s up and who’s down, it’s deep-seated concerns about “deconsolidation” of our democracy. Polls show declines in Americans who believe in democracy as a political system. The trend is greatest among the younger age cohorts: e.g., 72 percent of those born before World War II believe democracy to be “essential”, as do 54 percent of baby boomers, but only around 30 percent of millennials. On the even more pointed issue of a military coup, those open to accepting such a development rose from 6 percent in 1995 to 17 percent more recently.

Here too I’m trying to push deeper than the impact Trump has been having. As painful and enraging as his violations of so many of our most basic norms and practices is on a daily basis, of even greater concern are enduring corrosive effects on American political culture. Yet we also have to recognize that Trump is not just a cause but an effect of many forces and trends that would have been there if he had lost and will be there when he is gone. The policy gridlock was there before him. So was greater incivility. And increasing racism and other forms of identity-based animosities. And a shrinking middle class and generally widening economic inequality. And one social justice metric after another showing the United States lagging other Western democracies.

A healthy dose of soft power will go to whichever system shows its own people and the world that it can meet these challenges. That, more than invocations of America as “city on the Hill” and other nostalgic affirmations, will affect America’s capacity to have our political ideas and ideals shape the twenty-first century order. But it’s not just ideas, values, soft power. In a world as competitive as ours continues to become, no country can succeed in most any way unless its political system functions effectively.

As noted at the outset I have intentionally not focused on Trump. He, his policies and his persona, have made every problem raised here worse. Critiques of them have been amply made, and need to continue to be made. Drawing sharp contrasts like supporting allies versus bashing allies, beneficial trade vs beggar-thy-neighbor trade, the virtues of democracy versus the evils of authoritarians clearly have their political utility. But within that we should realize that there is no going back to the role and system we reveled in before, that its heyday was ending, and that the crucial issue is how the United States can help develop a twenty-first-century order that can help forge peace, promote prosperity, and affirm core values.

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Bruce W. Jentleson is a Duke University Professor. He served as Senior Advisor to the State Department Policy Planning Director (2009-11). His new book is The Peacemakers: Leadership Lessons from Twentieth-Century Statesmanship (W.W. Norton, 2018).

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