After the End of Globalization

Five features of emergent postliberal order

See if you can identify the author of the following quotation:

In the early 1990s, as the world emerged from the Cold War, Russia was welcomed into the global financial system and given access to global capital markets. . . . The world benefited from a global peace dividend and the expansion of globalization.

The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades.

If your reaction is similar to mine, you realize that the thrust is similar to the “end of the end of history” literature that has become common in the years since 2016—but drawing on the current conflict as an occasion to reiterate the basic point. The author of this observation, however, is no postliberal critic of the “Long 1990s” hoping to use the conflict in Ukraine to drive the point home. Rather, the author of these remarks (which were published just yesterday) is Larry Fink, chairman and CEO of BlackRock—the largest investment firm in the world and a very symbol of globalization.

If anyone could recognize that the conditions enabling globalization had come to an end, it should be someone at the helm of a global investment firm. To be sure, Fink is a few years late. When the populist insurgencies of 2016 reared their heads, the end of globalization was already well under way. But since Trump had to be gainsaid at any cost, observations about the failure of Fukuyama-inspired “end of history” theses mostly appeared in journals like American Affairs.

Ironically, in the early days after the Russian invasion of Ukraine, some commentators rushed in to claim that the invasion somehow represented a devastating blow for intellectual and political opponents of liberalism in the West: since Putin had criticized liberalism and now also started an unjust war, critics of liberalism are guilty by association—or something like that. (Never mind that in his video address to the National Conservatism conference yesterday in Brussels, Polish PM Mateusz Morawiecki also identified liberalism and its overextension as remote causes of the collapse of the post-1990s world.) A further extension of the argument claimed that postliberal and anti-liberal analyses somehow now had less purchase: with Republicans joining Democrats in calling for U.S. participation in the conflict, postliberal criticisms would have to be set aside.

One key element of Postliberal Order, however, is that postliberal analysis is neither merely hortatory nor merely evocative of some future policy platforms. Rather, postliberal analysis holds that emergent political conditions in the world involve the abandonment of liberalism. Liberalism has grown fragile and nervous, and the competition is on for ideologies and political systems to replace it.

As Fink’s observation indicates, the rapid collapse of liberal order in the wake of Russia’s invasion confirms rather than denies the point. To that end, allow me to make five observations (some of which I have made before) concerning the emergent features of our postliberal world.

1. The “values-based” international order has long since ceased to exist, yet Western leaders remain reluctant to readjust.

The priority of geopolitics over international liberalism has become rapidly apparent. Countries that have not been aligned on values now share the same line with regard to the situation in Ukraine; countries that have been aligned on values have different perspectives based on their different geopolitical situations. While situations like that are commonplace, recognition of them has been consistently obscured in the post-1990s world, where liberalism itself was said to be the basis of international order.

In recent weeks, American officials have crisscrossed the Baltics and today President Biden visits Poland. At the time of Trump’s visit (in summer of his first year in office), Washington and Warsaw were both seen as emblems of a conservative-populist rising that included Poland’s Law and Justice party as well as Trump. Now Poland and Hungary are accepting refugees from Ukraine in numbers that dwarf (proportionally to local population) the migrant movements of 2015. At the same time, Hungary has been concerned about dangers from any Western attempts to escalate the conflict.

In an interview with Mandiner several weeks ago, Prime Minister Viktor Orbán was asked what he thought the main characteristics could be of a Chinese-led international order. While those characteristics are as yet unclear, he said, “one thing is for sure: the Anglo-Saxons want the world to recognise their position as morally right. For them it’s not enough to accept the reality of power; they also need you to accept the things that they think are right. The Chinese have no such need.”

The quicker that Western leaders can stop being perplexed about the need for close ties with central Europe, the better. Yet on the occasion of today’s visit by President Biden to Poland, the Associated Press’s report was at pains to emphasize that “Poland is also a complicated ally whose populist leaders are accused by some European partners of riding roughshod over democratic norms.” With Hungary’s next election looming on April 3, we can expect similar remarks throughout the Western press.

In the medium term, even preserving Western strength in its own sphere will require a shift away from the typical “Anglo-Saxon” approach. A “NATO Belt and Road” initiative would focus on building regional infrastructure, manufacturing capacity and integrated supply chains, in addition to obvious defense investment. In central and eastern Europe, efforts such as the Visegrád Group and the Three Seas Initiative have already taken steps in that direction. But the situation can only be ameliorated by abandoning the imposition of alien cultural values and beginning a corresponding shift toward hard investment.

2. Liberal capitalism no longer believes in its power to bring about liberalism.

Fink’s letter and corporate reactions to the Russian invasion of Ukraine more broadly demonstrate that liberal capitalists no longer believe in the ability of capital markets to create liberals. Again, Fink’s letter:

These actions taken by the private sector demonstrate the power of the capital markets: how the markets can provide capital to those who constructively work within the system and how quickly they can deny it to those who operate outside of it. Russia has been essentially cut off from global capital markets, demonstrating the commitment of major companies to operate consistent with core values. This “economic war” shows what we can achieve when companies, supported by their stakeholders, come together in the face of violence and aggression. (Emphasis in original.)

From the 1990s onward there was a widespread belief in the power of capitalism to generate liberal political conditions and thus constitute a core element of the “values-based liberal order.” Typical of that were the tragicomic books of Tom Friedman, who articulated the famous “Golden Arches Theory of World Peace”—that no two countries with McDonald’s restaurants had ever gone to war against one another. If liberals still believed in the power of capitalism to spread liberal democracy, they would be calling for opening more McDonald’s restaurants in Russia rather than shutting down corporate operations there!

Instead the global corporate system has become weaponized. From their position at the helm of the dollar-based international financial system, Western corporations have attempted to “deplatform” Russia—with consequences that will be playing out, likely not in our favor, for years to come.

3. Global supply chains are a security risk.

The crisis precipitated by Russia’s invasion of Ukraine has also caused Western corporations and governments to reappraise their dependence on globally distributed supply chains. Again, a forward-thinking view of industrial policy would have identified this risk factor years ago—and indeed, that has been a motivation throughout the development of modern industrial policy at American Affairs. Again, Fink:

And while dependence on Russian energy is in the spotlight, companies and governments will also be looking more broadly at their dependencies on other nations. This may lead companies to onshore or nearshore more of their operations, resulting in a faster pull back from some countries. Others—like Mexico, Brazil, the United States, or manufacturing hubs in Southeast Asia—could stand to benefit.

Similar arguments have been made for years, particularly by Michael Lind (see, e.g., his “Trade Wars Are Strategic Sector Wars” in American Affairs, or his “The Return of Geoeconomics” in the National Interest).

Global supply chains in manufacturing are not the only risk factor. During the COVID-19 pandemic, the weakness of the medical supply chain became apparent. The United States could not manufacture its own masks economically or at scale, still less vaccines. In domestic locations where mask manufacturing was ramped up (as in Texas), local contractors were overlooked in government procurement processes that took no account of domestic vs. foreign manufacturing.

Finally, in the wake of the 2020 election, risks to the information supply chain became apparent. This leads to the fourth feature of emergent postliberal order, namely that:

4. The global internet is at an end.

Recently I took a look through corporate slogans of the last few decades. Most of the marquee American brands see themselves as global corporations spreading global values—and tech companies were a crucial part of this effort. LinkedIn’s corporate mission is “to connect the world’s professionals to make them more productive and successful”; PayPal seeks “to build the web’s most convenient, secure, cost-effective payment solution”; Amazon, “to be Earth’s most customer-centric company” (emphases added).

The global aspirations behind America’s tech brands have crashed. Indeed, the aspiration of the big tech platforms to dominate the global information supply chain is part of what has spurred reactions against it in recent weeks.

As I have noted in an earlier post on Postliberal Order, the global, open internet has already been replaced by a multipolar one. China surrounds itself by the “Great Firewall,” and it was Western powers that imposed the “Digital Iron Curtain” on Russia. The consequence of these moves will take some time to play out. But while we think of the “global, open internet” as having retreated to the American sector, in fact the “global internet” has simply split up into different sectors with specific characteristics. In the American sector, for example, foreign “state-run media” are identified with specific tags, but Western “state-run media” supposedly do not exist at all.

If the Western remnant of the “global internet” is really just the “American sector,” what we can expect is a greater tension between American tech platforms and nation-states who diverge from the American line—on any matter from foreign policy to domestic affairs.

5. Birth rates will matter.

Finally, in an environment of heightened interest around national security, attention to birth rates will continue to grow. After the widely recognized failure of Europe’s migration policy in 2015, it is obvious that declining fertility cannot be made up for by importing replacement populations—particularly ones that do not integrate with native culture and burden rather than alleviating social services.

Recently a map was widely circulated on social media indicating the percentage of different populations that were willing to die for their country. Western European countries—which have suffered the combined blow of declining native fertility and and (after 2015) the arrival of large migrant populations—show unsurprisingly low willingness to die for their countries.

Rather, it is in the culturally integrated and family-oriented populations of central and eastern Europe that willingness to die for one’s country remains high. When a population is growing, culturally proud and patriotic, parents have more “skin in the game” and citizens feel more devoted to a common cause. As western Europe awakens from its security slumber, interest in the pro-natal policies of central and eastern Europe will draw the interest of national and local governments elsewhere in Europe.

Far from being a moment for the restoration of liberalism, the features of the emergent postliberal order are becoming ever clearer.

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A version of the above was delivered to the National Conservatism conference in Brussels, March 24.