US presidential election: judgment day for the liberal order

In less than two weeks, the people of the US will elect their president for the next four years. In doing so, they will express what sort of nation they are and how they see the world. Four years ago, Donald Trump was an unknown quantity to many who supported him to express their revulsion at the established political class. Today, there is no excuse: a vote for Trump is a vote for Trumpism and against the US the world used to know as the founder and (admittedly imperfect) standard-bearer of the postwar liberal order. This is a systemic election; a choice between regimes.

I have gone back to look at what I wrote the day after the 2016 election. I got some things wrong. While I was right to expect a crippling trade war and “enormous tax changes that would largely benefit the rich”, I mistakenly thought Trump’s victory speech promise to rebuild the US’s infrastructure might be “a serious commitment”.

But it was surely right to say the real significance went beyond economic policies, and that Trump would threaten “not just the US’s open society, but the entire postwar international liberal order”. Both are in a sorry state, and whether they survive depends on the outcome this November.

As I wrote then: “There is little doubt about the democratic legitimacy of the [Brexit and Trump] results: it is a fact that a slight majority of voters rejected the open, liberal and globalist model in favour of a more inward-looking and authoritarian state. The question is how damaging will be their victory; the challenge how to contain the damage as much as possible.”

Then and now, I believe economic factors are the most important causes for the rise of illiberalism — not so much globalisation but mismanaged policy responses to how technology has altered our economic structure from an industrial to a knowledge-based economy. This diagnosis, and what to do about it, was the theme of The Economics of Belonging, the book I was prompted to write by the events of 2016, many of whose arguments were first rehearsed on you Free Lunch readers, so thank you!

I have long argued against “cultural” explanations of the anti-liberal tide, because the undeniable cultural expression of nativist populist movements can itself be seen to have economic roots. The most powerful example of this is Sweden, which many think is a counterexample to the economic explanation for nativist populism. If a group as aggressively nativist as the Sweden Democrats can gain strong support in a country known for its welfare state, surely economic frustration cannot be the cause, the argument goes. But look closer at where and among whom the Sweden Democrats have emerged, and it turns out that far from a counterexample, Sweden confirms the economic story.

But even if economics is fundamental to understanding the backlash against liberalism, many things can go on at the same time. This year, I have read a number of books casting light on other dimensions of illiberalism’s rise, which I would like to recommend to readers.

Grassroots support for illiberal movements has economic roots, but they still need leaders, organisers and intellectual enablers. The puzzle is that these roles are often filled by people who can hardly be said to be economically left behind, and who were once decidedly opposed to authoritarianism or at least not invested in it in any way. The reasons for such turnabouts are an old question; the classic philosophical and psychological study is Czeslaw Milosz’s The Captive Mind. This year, Anne Applebaum took up the same thread. In Twilight of Democracy, she shows the jumble of motivations — from opportunism to entitlement and outright derangement — that drove people on the liberal centre-right, many of them her personal friends, to let themselves be lured by authoritarianism as her subtitle puts it.

Baser motives exist than opportunism. In a column last month, I argued that kleptocrats advance by the same methods as populists and warned not to confuse corruption with its ideological camouflage. That column was informed by two books on how the corruption that took over much of the post-Soviet space has infiltrated western finance and politics. They are Kleptopia by Tom Burgis and Putin’s People by Catherine Belton, current and former FT journalists respectively. These excellent books (for a taste, read Burgis’s FT magazine article or Applebaum’s review of Belton) are a timely warning that ill-gotten wealth often hides behind ostensibly political projects, and that taking over the state is a strategy to make one’s loot secure. They also make very clear that subduing the liberal democratic virtues — of transparency, impartial justice and open political competition — is a place where private ambition turns into systemic failure.

That is the underlying theme of my final book recommendation: Hiding in Plain Sight by American writer Sarah Kendzior. I recently interviewed Kendzior for the FT. Better than anyone I have read, she shows how Trumpism — both its authoritarian and its self-dealing aspects — is the logical consequence of two other developments in US society. Those are a decades-long economic polarisation and a hollowing out of independent institutions, which together left many US voters primed to accept Trumpism. As she put it to me: “Our institutions were very fragile and corrupt and the refusal to admit that led to the broader refusal to recognise how profoundly dangerous [Trump’s] installation was.”

We shall find out on November 3 how broad that refusal remains.

Other readables

  • Don’t miss the FT’s fantastic investigation on how coronavirus spread. Could the world have been spared?

  • The European Council on Foreign Relations has produced a must-read report on how Europe can protect itself against economic coercion by other great powers. It includes a list of proposals for realistic policy tools that should be required reading for EU politicians and policymakers. Note the geostrategic benefits of a digital euro, a topic close to Free Lunch’s heart.

  • A fascinating new paper finds that public debate on such challenges as climate change can encourage businesses to voluntary take more responsibility — “internalise the externalities” — for their activities.

Numbers news

  • Excess mortality in the US during the pandemic amounts to about 300,000 deaths, according to a CDC report. It is proportionately higher among minorities and, surprisingly, among the 25 to 44-year-olds.

  • The New York Times’s Upshot column reports a study showing the effects of US authorities’ choice to add a temporary supplement to unemployment benefits — then discontinuing the boost. It was so generous it allowed the unemployed to build up unusually large buffers of savings, but those buffers were drawn down by 74 per cent in the month after the supplement expired.

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