By Benjamin Studebaker
After World War II, the administrations of Presidents Franklin Roosevelt and Harry Truman in the United States led the construction of the liberal order, a group of international institutions, with the consent of the nation states.
The aim was to maintain peace and prosperity in the decades following the devastation of World War II, thus preventing the spread of communism and fascism. But during the last 30 years of the twentieth century, the liberal order changed.
It no longer aims primarily at protecting the West from communism and fascism through wage increases, and the implementation of broad social programs. Rather, this order became an engine of globalization, economically integrating the entire world into a unified system.
And the contemporary liberal order does this through 2 moving elements: capital and labor. Capital mobility allows the transfer of assets and businesses in different countries where there are different groups of economic rules.
When capital is mobile, capital controls do not prevent individuals and companies from shifting their assets from one economy to another, and trade barriers encourage businesses to operate in fiscal havens without facing fees.
The liberal order enables the movement of a rapid flow of investment and people from one country to another. These flows facilitate economic growth, and reduce the cost of consumer goods, but they also produce instability. The transfer of a lot of money very quickly to a particular part of the world creates the phenomenon of "bubbles".
The movement of many people out of a region very quickly produces a 'brain drain'. The liberal order exists on three levels: global, regional and national. Globally, it is made up of major international organizations, which focus mainly on regulating trade, borrowing and investment such as the International Monetary Fund (IMF) and the World Bank.
At the regional level, the liberal order creates stronger trade relations, through agreements such as the North American Free Trade Agreement (NAFTA), and strengthens organizations such as the European Union. In the case of the EU, regional institutions also ensure the free movement of people, a common currency and a series of fiscal rules and regulations. At the national level, the liberal order is embodied by political parties that are committed to protecting and preserving it.
For the past 12 years, since the 2008 global economic crisis, the liberal order has been surrounded on all sides. On the left, traditional social democratic parties have been weakened, or shunned by anti-establishment parties.
Bernie Sanders upset the balance in the Democratic Party in the United States. Jeremy Corbyn did the same with the Labor Party in Great Britain. In France, the Socialist Party has moved to the outskirts of the political scene by the most radical of La France Insoumise.
The traditional center-left party in Greece, PASOK, was posted by the most radical Syriza.
On the right, Donald Trump carried out a hostile takeover of the Republican Party leadership in the United States. In the UK, the Conservative Party took the country out of the EU. Republicans in France are challenged by Marin Le Pen's National Gathering party. In Germany, the far-right Alternative für Deutschland is now the largest opposition party.
In Italy, the center-left Democratic Party and the Five Stars Movement came together to form a coalition government. All of these parties and movements are interested in reviewing or ignoring the liberal order. Russia is celebrating the degradation of this order, while China has begun to build alternative institutions.
But that doesn't mean the order is vulnerable. Global and regional institutions are capable of causing economic hardship to populations. The EU, the IMF and the World Bank may deny countries access to the necessary funds, threatening them with economic crises if they do not follow the rules.
And governments know very well that they will not be able to survive the next election if these organizations provoke financial chaos in their countries. For example, in 2015, Greece tried to resist the demands of the EU's austerity measures, threatening to withdraw from the eurozone monetary union if Brussels refused to provide more financial support.
But leaving the eurozone would severely hurt the Greek economy in the short term, and Brussels knew it. The EU called the threat a Greek bluff, and Athens eventually withdrew. Last summer, SYRIZA was defeated by New Democracy, the country's center-right traditional party.
The liberal order has brought economic integration, but this has often been unfavorable in political terms. In the post-2008 era, global and regional institutions have encouraged many states to cut public spending, eliminating social programs and weakening public services and infrastructure.
In many countries, the living standards of ordinary voters have stalled in the country, or they have taken steps backwards. The mobility of capital enables billionaires and large corporations to move their assets rapidly around the world, and this means that they have a lot of influence on national governments.
If a government raises taxes to support public services, taxed individuals and companies can leave, depriving the country of both tax revenue and jobs and the necessary investment. And the economic recession that follows could cost a government the next election.
To attract new investment, governments are forced to compete with each other over who favors oligarchs and transnational corporations. That means low taxes and salaries, and few regulations. Governments are not willing to take the risk of capital flight.
Voters, meanwhile, are nostalgic for a time when public services were very good, and their lives were improving. And instead of directly challenging the liberal order, national governments formally point the finger of blame at this order, and on the other hand continue to approach it economically.
The most typical example is the Trump movement. He abandoned Barack Obama's Trans-Pacific Partnership (TPP) in favor of tariffs, but the latter's goal is to be achieved through the "stick", which Obama aimed to achieve through the "carrot": the movement of companies and investment from China towards US allied economies in the Pacific.
By hurting China and gradually discouraging American companies from doing business there, Trump may seem to be rising up against the liberal order, when in fact he is exchanging a group of East Asian trading partners with another.
In this way, he receives political credits from appearing hostile to the liberal order, but without actually taking action, which would significantly increase the cost of goods and services in the short term.
But this balance is difficult to maintain. If a government goes too far against the liberal order, it risks losing it. This is what happened to the left-wing SYRIZA and its leader Alexis Tsipras in Greece. His confrontation with the EU was very direct for Brussels to tolerate.
After the Cyprus block was exposed, his party was discredited. At the same time, if a government avoids bombastic rhetoric and tries to manage expectations, it may no longer pose a threat to the liberal order. This is what happened to Theresa May in the UK.
As prime minister, Ms. May's rhetorical style was not very aggressive, and the Brexit agreement she proposed did not bring about major changes in the country's trade agreements with the EU. This led to the rebellion of the most anti-EU wing in its Conservative Party, replacing it with Boris Johnson.
As nationalists ridicule the liberal order, radical Democrats try to make citizens feel involved in decision-making. Most importantly, it does not take away control of the liberal order. He still deals with economic integration, but it is the nation-state that is taking over the main powers.
Part of what makes nationalism and radical democracy attractive is that these strategies emphasize our national, individual, or group differences. Global political institutions are flattening differences, and are making special decisions for the whole world.
We don’t want a standard model. But unfortunately, the liberal order has already given us one. So we are facing a terrible choice. We can continue to embrace the nationalist strategy of keeping the liberal order alive, creating the conditions in which it will "die."
This will lead to disruption of order, damaging economic growth, and causing a huge increase in the cost of goods and services. Our living standards will fall dramatically. The nation-state will return to the center of the stage, but at the cost of damaging the prosperity we have achieved since World War II.
Either we can embrace radical democratic reforms, and try to convince ourselves that they will empower us, or at least give us a satisfying sense of empowerment.
Taken with abbreviations from "Aeon.co" - Bota.al