In the era of Brexit, Corbyn and Trump, it’s natural for us in the despised metropolitan media liberal elite to engage in soul-searching. I’ve done it and arrived at the difficult but ineluctable conclusion that I’ve been right all along. For those who support liberal-democratic internationalism, European integration, open borders and multiculturalism, this is no time for sober reflection and humility. Our ideas have worked; they need asserting.
John Maynard Keynes wrote in 1936: “The ideas of economists and political philosophers… are more powerful than is commonly understood. Indeed the world is ruled by little else.” If this seemed a touch hyperbolic at the time, it was borne out less than a decade later. Keynes went from academia to presiding over the negotiation of a new international order. Meanwhile, Hjalmar Schacht, the theorist of economic nationalism, went from being head of the central bank of the world’s second-biggest economy to going on trial at Nuremberg (he was acquitted).
The liberal order envisaged in the negotiations at Bretton Woods by allied governments in 1944 has proved astonishingly successful. Even in its time of greatest economic danger, with the collapse of the banking system in 2007-09, the power of ideas—specifically Keynes’s ideas of fiscal and monetary activism—prevented a deep recession from turning into another Great Depression. Even when—amid economic crises, galloping inflation and Soviet expansionism in the 1970s—the western democracies appeared increasingly ungovernable, liberalism survived and eventually prevailed. Social reforms initiated in the 1960s, and the accompanying shifts in mores—on censorship, divorce, capital punishment, race relations, gay rights, sexual equality, and availability of contraception and abortion—have made western societies freer and more civilised places. Above all, the institutions of the postwar order have demonstrated their value in subordinating raw state power to a framework of rules. They’re imperfect but Nato, the EU, the UN, international tribunals, the World Trade Organisation and others provide global public goods: law, security, the benefits of market exchange across borders, and a system of payments. In the absence of any supranational body with the ability to exercise sovereignty, the United States has been the system’s ultimate guarantor.