Neo-Liberal Consensus Disintegrating
The global Covid response marked a turning point in public trust, economic vitality, citizen health, free speech, literacy, religious and travel freedom, elite credibility, demographic longevity, and much more. Now, five years after the virus first spread, triggering the largest-scale despotisms of our lives, the postwar neo-liberal consensus appears to be crumbling.
The world we knew just a decade ago is in turmoil, as nations erect new trade barriers and grapple with unprecedented citizen uprisings. The outcome of this upheaval will answer the question: what does political revolution look like in advanced industrial economies with democratic institutions?
US-China Relations and the Shift Towards Globalism
From China's opening in the 1980s to Donald Trump's election in 2016, trade imports from China grew steadily. This was a clear sign of a general shift towards globalism that began after the Second World War and accelerated with the end of the Cold War. Tariffs and trade barriers fell, and dollars as the world reserve currency filled the coffers of world central banks. The US was the global source of liquidity that made it all possible.
However, this came at a significant cost. Over the decades, the US lost its manufacturing advantages in many industries. Today, even the much-celebrated “green energy” industries seem destined to be outcompeted.
Trump's Impact on Trade
Donald Trump's election in 2016 was driven in part by resentment against the internationalization of manufacturing. As financialization replaced domestic manufacturing, and class mobility stagnated, a political realignment took shape in the US that stunned the elites. Trump focused on erecting trade barriers against countries with whom the US was running trade deficits, primarily China.
By 2018, the volume of trade with China took a significant hit, reversing a 40-year trajectory of growth and dealing a major blow to the 70-year postwar consensus of the neo-liberal world.
Covid Response and Trade Reversal
The Covid response led to a reversal of this trade decline. In the midst of the lockdowns, the US had to turn to China for supplies. As a result, trade with China soared. Within weeks, Americans were using Chinese-made personal protective equipment and medical supplies.
Globalism vs. Nation-States
Today, the core political fight in the world concerns nation-states and the populist movements driving them versus the type of globalism that brought a worldwide response to the virus and the worldwide migrant crisis. Both efforts failed spectacularly.
The problem of migration and pandemic planning are only two of the latest data points suggesting that nation-states are giving way to a form of government we can call globalism. This refers not only to trade across borders but also to political control, shifting away from citizens in countries toward something else that citizens cannot control or influence.
Global Governance and the Threat to Freedom
The world today is full of wealthy institutions and individuals that stand in revolt against the ideas of freedom and democracy. They do not like the idea of geographically constrained states with zones of juridical power. They believe they have a global mission and want to empower global institutions against the sovereignty of people living in nation-states.
They argue that there are existential problems that require the overthrow of the nation-state model of governance. These include infectious disease, pandemic threats, climate change, peacekeeping, cybercrime, financial stability, and the threat of instability.
We are all being acculturated to believe that the nation-state is nothing but an anachronism that needs to be supplanted. Keep in mind that this necessarily means treating democracy and freedom as anachronisms too. In practice, the only means by which average people can restrain tyranny and despotism is through voting at the national level.
Regaining National Sovereignty
It becomes supremely urgent for every person who aspires to live in peace and freedom to regain national sovereignty and reject the transfer of authority to institutions over which citizens have no control. Devolving power from the center is the only path by which we can restore the ideals of the great visionaries of the past.
The neo-liberal consensus built in the postwar period contained the seeds of its own destruction. It was too dependent on the creation of institutions beyond people's control and too reliant on elite mastery of events. The Covid controls, nearly simultaneously imposed all over the world to underscore elite hegemony, exposed the fist under the velvet glove.
The populist revolt of today might someday appear as the inevitable unfolding of events when people become newly aware of their own disenfranchisement. Human beings are not content to live in cages.
Bottom Line
Many of us have long predicted a backlash to the lockdowns and all that was associated with them. The full scale of it none of us could have imagined. The drama of our times is as intense as any of history's great epochs. The only question now is whether this ends like America 1776 or France 1790.
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