Welcome to the post-liberal world

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.

The effect of the financial crisis on the EU and eurozone was cataclysmic. Whereas the credit crunch had been associated with the collapse of a medium-sized Wall St brokerage—Lehman Brothers—the eurozone crisis threatened to destroy an entire country, Greece, and possibly even drag down a currency used by 500m people, the euro. This, combined with the refugee crisis driven in large part by the war in Syria, undermined the standing of the European project in the eyes of British and European voters, who came to see the EU as a project run by distant elites for their own benefit—just like the banks. We were not better together.

And now Trump. He may well turn out to be entirely unlike the man we have come to know from the campaign. There is always a chance that he will turn out to have been pretending all along. In the event that this is not the case, and if he is in fact the man we have been watching for the last two years, then he represents the last in this three beat movement away from the era of the international liberal political consensus. Trump is a protectionist. He disdains the transnational institutions that for so long have helped maintain the global order—the IMF and Nato among them. He is scornful of regional and international trade agreements. He has no interest in military alliances that do not deliver immediate benefits for the US. Trump’s political instincts are the antithesis of the liberal internationalist. He is a nationalist.

But he has his voters—millions of them, many of whom feel dispossessed and cut adrift in their own country. The same goes for those who voted for Brexit. In large part, their animus is fuelled by the loss of jobs, status and opportunities, and of the spectacle of large numbers of jobs being sent off-shore to developing economies, where labour is cheaper. They are seized by the notion that they are losing out in the liberal global economy.

It is no surprise that the US and UK are the first two countries to register a large anti-liberal reaction to the global order—they are after all the two countries with the most developed and open economies in the world, and as such they have the most to lose from the economic rebalancing that comes with globalisation. During the last thirty years, the global economy has brought hundreds of millions of people in India, China and other nations out of extreme poverty. Conversely, the fortunes of millions of American and British people have stagnated. No wonder they have voted the way they have.

One of the first to congratulate Trump on his victory was Marine Le Pen, leader of the French National Front. She will contest the presidential elections next year. She wants France to leave the EU. Bepe Grillo, leader of the populist Italian Five Star Movement, wants Italian withdrawal. Italy will hold a constitutional referendum in December which may unseat the Prime Minister Matteo Renzi. The Alternative for Deutschland party in Germany is also anti-EU, and won a surge of support in September’s local government elections.

We are now entering the post-liberal world. Its leader is Donald Trump. Welcome.