The post-Second World War liberal consensus lies in tatters on the floor. Since 1945 the dominant international political idea has been that states could provide the best possible lives for their citizens by being open to the outside world. The Cold War’s end was the point at which this idea reached its peak. But when in fifty years’ time historians come to write the story of our age they will see three things—the global economic crisis of 2008, Brexit and Trump. Between them, these three occurrences have torn a hole in that post-war settlement.
The 2008 financial crisis brought a crashing end to the stability and reliability of the global economic system. Whereas before credit was plentiful and governments were happy to borrow in huge amounts at low interest rates, when the credit crunch came, deficits and government spending obligations looked increasingly hard to service. The fiscal retrenchment and heightened sense that something was very wrong with a financial system run by distant self-serving elites came as a hammer blow to the political viability of the global economic system. The “Great Moderation” ended with a storm of economic destruction.