Liberalism in Retreat

More than a year has passed since elections in the United States and United Kingdom shocked the world with the thought that liberal democracy was waning. Later elections in France, Germany, Austria, Hungry, and Poland saw the rise of right-wing parties. Right-wing parties also lead in polls ahead of scheduled presidential elections in 2018 in Latin American countries.

Political observers are putting events in context to understand the lessons of the 2016 elections, and make sense of the changes that are occurring. The weight of their conclusions suggest that they should not have been shocked. Journalist Fareed Zakaria, in a review of Edward Luce’s, The Retreat of Western Liberalism published in 2017, wrote, “We all deserve criticism for missing the phenomenon of the ‘left-behinds,” a reference to people who feel excluded politically and economically by their government.

Luce recounts several decades over which working and middle classes experienced stagnant wages that result in increasing inequality, lack of social mobility for all but a “hereditary meritocracy,” and distrust of an elite class that manipulated the political process to capture benefits for themselves and their business interests. While global economic trends have enabled humanity as a whole to become less poor, “between half and two-thirds of the people in the West have been treading water at best – for a generation.”

Western countries cannot deny complicity in liberalism’s fall from grace in the international arena. Luce cites “America’s post-9/11 blunders,” responding to terrorist attacks with “dilution of constitutional liberties,” the invasion of Iraq on false pretenses, and use of torture. The West’s democratic reputation was debased again by the financial crisis of 2008. Wall Street greed and regulatory incompetence damaged liberalism’s “brand.” Concurrently, China’s rise suggests that alternatives to liberal democracy should be considered.

Following the Second World War, and through the 1990s, the growing number of democracies exceeded 100. “Since the turn of the millennium,” Luce reports, “no fewer than twenty-five democracies have failed around the world, three of them in Europe (Russia, Turkey and Hungary).” Luce believes the values that the U.S. professes are worth preserving. “Even where it is proved hypocritical, such as in the ‘war on terror’ and during much of the Cold War, the idea of America proved greater than its faults.”

Luce believes that in order to survive, a peaceful global order compatible with liberal democracy must dial back some aspects of globalization. He supports what economist Dani Rodrik calls “thin globalization.” In Rodrik’s words:

Economic integration has overshot in some areas, such as financial globalization and regulatory harmonization. It has not gone far enough in others, such as international labor mobility. The debate we should avoid is whether globalization per se is good or bad. The real question is how to rebalance it to give excluded groups greater voice, reconstruct social compacts at home, and focus our global negotiations on areas where the potential economic gains are still really big.

But Luce concludes “nothing much is likely to happen unless the West’s elites understand the enormity of what they face. If only out of self-preservation, the rich need to emerge from their postmodern Versailles.” Luce has little use for the Davos elites, who he refers to as “the world’s wealthiest recyclers of conventional wisdom.” And his critique of the new administration in Washington leaves little doubt where he places blame for accelerating the retreat of liberal democracy. “Trump was supposed to have led a revolt against the elites. In practice, he wasted little time in laying out a tax-cutting and deregulatory banquet for their delectation. In marketing they call this bait and switch.”