America on the Brink   /   Fall 2020   /    America on the Brink

To Make the World Select for Democracy

What have we gained from cosmopolitan liberalism?

John M. Owen

Protestors atop a Soviet tank during the 1968 Prague demonstrations hold up a sign that reads “unauthorized entry strictly prohibited”; CTK/Alamy Stock Photo.

Is democracy an inevitability, or an achievement? Can we be confident, in America, that constitutional self-government is here to stay, regardless of how we pummel it? Or is it fragile, contingent, something to cherish, but never to take for granted? Two decades ago, as the twentieth century ended, democracy seemed permanent in the United States, and indeed a juggernaut elsewhere. The Soviet empire had recently collapsed; China was reforming its economy; there seemed no alternative.

The 1990s now seem as distant as the 1950s. America is famously polarized into cultural tribes, each regarding the other with contempt and alarm. In the White House sits a populist entertainer with little evident commitment to constitutional norms. Sober scholars publish books with titles such as How Democracies Die 11xSteven Levitsky and Daniel Ziblatt, How Democracies Die (New York, NY: Crown, 2018).   and The Road to Unfreedom.22xTimothy Snyder, The Road to Unfreedom: Russia, Europe, America (New York, NY: Tim Duggan Books, 2018). The coronavirus that burrowed into the country in early 2020 has made vices of the old American virtues of individual liberty and decentralized government. China’s relative competence in public health has lent its increasingly autocratic regime a new luster, notwithstanding its being the birthplace of the virus.

In thinking about the predicament of the American republic, we find ourselves looking not only within the country but abroad—at beleaguered democratic allies, at elected leaders sidling toward dictatorship, at Russian mischief, and at Chinese wealth and assertiveness. Scanning the world for trends in domestic regimes is a democratic tradition. For democrats hold the twin convictions, seldom defended but deeply felt, that self-government is an international phenomenon and democracies are in some way interdependent. If constitutional rule is spreading in the world, it is good for democracy in the United States; if authoritarian giants such as China and Russia are thriving, it is ominous for us.

A City in the Middle of a Jungle

This creedal faith that no democracy was an island informed the Monroe Doctrine of 1823, an explicit attempt to preserve the young republics of Latin America against the encroachments of European monarchism. It also shaped the radical measures taken by the administrations of Franklin Roosevelt and Harry Truman between 1944 and 1950 to build a multilateral, rule-based international order. International relations theorist John Ikenberry has shown that the architects of this matrix of institutions governing economic, military, and political relations among its member countries had in mind not a move toward world government or domination by US corporations, but the preservation of democracy in the United States.33xG. John Ikenberry, A World Safe for Democracy: Liberal Internationalism and the Crises of Global Order (New Haven, CT: Yale University Press, 2020). These economists, lawyers, and diplomats employed a kind of evolutionary theory, according to which a country’s social and political environment favored and selected for one type of regime or another. They believed that the international system of the 1930s had favored authoritarian regimes. They sought, in words we can borrow from evolutionary biology, to construct a niche that would select for liberal democracies. They wanted to build a city in the middle of a jungle.

Their success was nearly total. The city—the liberal international order—had its hypocrisies, particularly in what was called the Third World, but it was partly responsible for the democratic reconstitution of Japan, Germany, and Italy; the spectacular growth of middle classes in Western democracies even as they shed their empires; and the nonoccurrence of a third world war. Democracy not only survived in its original member countries, but also displaced communism and authoritarianism in much of the world. In the 1990s, the liberal international order was what the End of History looked like.

But something has changed since then. This same liberal international order, it seems, is no longer selecting for democracy. In recent years, in its original core countries of Europe and North America, it has skewed the distribution of wealth and eroded established ways of life and the trust on which democracy depends. Outside of those core states, it is providing governments with tools to dismantle or forestall constitutional self-rule. The most spectacular case of democratic forestalling is a country once considered one of the order’s greatest prospective triumphs: China, where the ruling Communist Party is exploiting the order to entrench its monopoly on power and presenting its model to a candid world as plainly superior.

Cosmopolitan Liberalism

How the US-built international order went so wrong—how the niche constructed to preserve democracy has come to undermine it—is a complex story. Crucial to that story is that the “liberal” in the liberal international order has changed. Liberalism is not what it was in the 1940s. Then, the elites who ran democracies were preoccupied with issues of class, particularly with ensuring full employment (of adult males). This welfare liberalism—which had itself displaced an older, classical liberalism—made perfect sense after the Great Depression and the extremism and war it spawned. Today’s liberalism retains a concern for employment, but has a different preoccupation: ensuring the ability of each individual, regardless of geography, history, or culture, to choose a style of life and define an identity. Where welfare liberalism’s chief foe was unfettered capital, cosmopolitan liberalism’s enemies are traditional boundaries, norms, and institutions.

Cosmopolitan liberalism predominates among the people who run governments, corporations, nonprofit organizations, universities, and media in many countries. Its culture alienates adherents of the older liberalisms—classical and welfare—even as its policies take little notice of their interests. It disappoints even its own nonelite adherents, who find available only a simulacrum of the autonomy it promises, in the forms of the gig economy and social media. Cosmopolitan liberalism also has reshaped international institutions and practices. The most consequential result to date has been the admission of China to the World Trade Organization (WTO) in 2001, which has resulted in the loss of as many as 2.5 million US manufacturing jobs. To be sure, allowing China into the WTO was defensible on some grounds. But it has helped remake the liberal international order, the niche America created in the 1940s, from a protector of democracy to an enabler of autocracy.

Constructing a Niche

“The world must be made safe for democracy,” Woodrow Wilson declaimed in April 1917 as he made the case to Congress that America should join the Great War. But for Wilson, the United States was not to be just another belligerent, joining one set of allies (Britain and France) to fight another (Germany, Austria-Hungary, and the Ottoman Empire). America was fighting on behalf of mankind. And Wilson wanted his country to use its eventual victory to remake the international system so that it would no longer conduce to power grabbing and war.

The grand Wilsonian attempt that followed, centered on the hapless League of Nations, ended in infamous failure. A generation later, at the close of World War II, the administrations of Roosevelt and Truman, chastened by the traumas of the preceding quarter-century, put together an improved version of the League, joining with their European counterparts to design an international system of rules and institutions for democracies. At the Bretton Woods Conference, in 1944, delegates agreed to creation of the International Monetary Fund (IMF) and the World Bank, which would lend money to distressed economies. These two entities were joined in 1948 by the precursor to the WTO, the General Agreement on Tariffs and Trade, the purpose of which was to lower tariffs and eliminate other barriers to foreign trade. To secure the European democracies against Soviet intimidation, the United States became in 1949 a founding member—and the de facto leader—of the North Atlantic Treaty Organization, and pledged to defend Japan as well.

As a general rule, importing concepts from the natural sciences is a doubtful business. But what the Americans and their junior partners were up to can be illumined with a Darwinian metaphor. The clever policymakers of the 1940s effectively altered the political, economic, and social environment in which democracies dealt with the challenges they faced. In building the liberal international order, they sought to make the world select for democracy.

More precisely, they were constructing a niche. “Niche construction” happens when organisms alter selection pressures by modifying their own environment. Beavers construct dams to help them catch food; if it works, they live longer than beavers without dams, and the genetic material that led them to build the dams is propagated. People and their institutions dwell in social environments as surely as organisms dwell in natural environments.44xJeremy Kendal, Jamshid J. Tehrani, and John Odling-Smee, “Human Niche Construction in Interdisciplinary Focus,” Philosophical Transactions of the Royal Society 366 (2011): 785–92, doi: 10.1098/rstb.2010.0306. A country’s social environment includes other countries, nonstate actors, technology, and institutions and norms. A social environment rewards some types of practices and punishes others. Governments that grasp this fact try to shape their social environments to their advantage so that they can persist over time.

Roosevelt, Truman, and their agents were radical in departing from America’s traditional aloofness from European politics. The roots of the thinking of these twentieth-century American liberals came from Europe—from eighteenth-century Prussia, of all places. Immanuel Kant of Königsberg is known mainly as a philosopher of metaphysics and ethics, but he cared deeply about politics. Kant believed that the right political conditions would make it more likely that people would act morally and advance the human race. Those conditions would be met in the republic, or law-governed state (Rechtsstaat), a polity with a “perfectly just civic constitution” in which the freedom of each was compatible with the freedom of all. That is, approximately, what we call liberal democracy.

In his Idea for a Universal History (1784), Kant wrote that building a republic was the hardest problem facing the human race, partly because such a regime could not survive in a world where war was a constant threat. The rule of law among nations was required before republican government could be ensured within nations. In Toward Perpetual Peace (1795), Kant laid out the preliminary steps for achieving such a system, including the formation of a league of republics that would trade with rather than fight one another. The league would enable republics to exist in a system of mutual trust; within its bounds, the law of the jungle would give way to civilization.

Republics, in other words, would construct a niche for themselves, an environment in which they could deal with other law-governed states. Going further, Kant argued that over the very long term, the international system’s brutality would actually select for republicanism and hence expand the league. Wars among nonrepublics would become so frequent and destructive that the impoverished subjects of these despotic states would arise and demand republican government. Kant called this evolutionary logic “nature’s secret plan.”

Although Roosevelt and Truman were probably unfamiliar with these writings of Kant, the logic they embraced from 1944 to 1950 was similar. The narrative, exemplified by policymakers such as Cordell Hull, Roosevelt’s secretary of state, went something like this: Liberal democracies help one another thrive through trade and peaceful relations. But when democracies mishandle the boom-bust cycles of capitalism, they can fall victim to political extremism, either Soviet-style communism or the fascism that nearly destroyed civilization in World War II. The United States needed to depart from its own isolationist history in order to keep extremism at bay and preserve its own democracy. It needed to recognize that democracy in America depended on the existence of other democratic states. And thus it needed to construct a niche in which it could bind together and protect all of these democracies.

Keynesian Underpinnings

The niche worked better than expected. The liberal international order did select for democracy, helped end the Cold War, and grew. We live under the direct descendant of the order America and its allies built. But the order has changed, and understanding that change is necessary to understanding where things have gone wrong.

The main policy concern of liberal elites in government and commerce in the late 1940s, the immediate postwar period, was how to keep the American workforce fully employed—the workforce being understood to consist, at the time, of men between the ages of about sixteen and sixty-five. For it was the persistently high unemployment of the Great Depression, and the inability of liberal democracy to put people back to work quickly, that had led many factory workers and intellectuals toward communism, and many businessowners, whether on Wall Street or Main Street, toward fascism. Laws and institutions to smooth out capitalism’s boom-bust cycles, then, were essential to the preservation of liberal democracy. Liberalism’s chief method for increasing employment was state intervention.

This was the high point of Keynesian economics. In contrast to the old neoclassical economic theory, which said that labor markets will function to the benefit of all if left alone by the state, Keynesianism called for the government to cut taxes and boost government spending: that would stimulate demand and keep the number of factory orders high, and thus raise the demand for labor. By 1936, when the British economist John Maynard Keynes published his General Theory of Employment, Interest, and Money, a number of wealthy countries, including the United States, had already departed from neoclassical economics. Keynes provided the intellectual underpinning for this new welfare liberalism.

For new it was. First-stage, classical liberalism favored a small state that protected property rights but otherwise interfered little with employment or the distribution of wealth. For classical liberalism, regnant in the nineteenth and early twentieth centuries, the chief threat to individual liberty was the despotic state, a complex of monarchical and aristocratic power that stifled individual freedom. For welfare liberalism, the chief threat was unfettered capital—businesses whose leaders and owners held most of the power and whose overriding goal was to maximize profit. It took many decades and much industrial strife for welfare liberalism to become predominant, so that governments in democracies would consider it a normal policy to protect workers.

The Austro-Hungarian polymath Karl Polanyi called the recruitment of the state to manage the modern industrial economy the “great transformation.” Polanyi argued, however, that another change, at the multilateral level, must take place. As Polanyi and others pointed out, the protective tariffs and competitive currency devaluations of the early 1930s, which deepened and lengthened the Depression, were implemented because interventionist states did not coordinate their interventions. Welfare liberalism within democracies could not coexist with the classical liberalism among democracies. Keynes himself, who headed the British delegation at Bretton Woods in 1944, agreed: Democratic governments would need to coordinate their interventions in their economies, or else they would impoverish one another and only exacerbate their problems.55xJohn Gerard Ruggie, “International Regimes, Transactions, and Change: Embedded Liberalism and the Postwar Economic Order,” International Organization 36, no. 2 (Spring 1982): 379–415, doi.org/10.1017/S0020818300018993. In addition, Karl Polanyi’s The Great Transformation: The Political and Economic Origins of Our Time (1944) still rewards the reader.

The liberal international order, then, was a project of welfare liberalism, made necessary by its embrace of government action. Which raises the question: What happens when welfare liberalism itself gives way to something else?

The Cosmopolitan Turn

Welfare liberalism no longer predominates among elites in democracies. Its successor is cosmopolitan liberalism. This third-stage liberalism, gestated in decades of prosperity and cultural change, is the liberalism of the self-defining individual, empowered to choose and rechoose identities and modes of life. For cosmopolitan liberalism, the chief threat to individual autonomy is traditional norms and institutions. Christian Smith’s summary of the normative mission of his discipline of sociology will serve as an encapsulation of third-stage liberalism: “the visionary project of realizing the emancipation, equality, and moral affirmation of all human beings as autonomous, self-directing, individual agents (who should be) out to live their lives as they personally so desire, by constructing their own favored identities, entering and exiting relationships as they choose, and equally enjoying the gratification of experiential, material, and bodily pleasures.”66xChristian Smith, The Sacred Project of American Sociology (New York, NY: Oxford, 2014), 7–8.

In a sense, cosmopolitan liberalism is a fusion of what we call, in ordinary discourse, economic conservatism and social liberalism. This fusion, which emerged in the late twentieth century, departs from welfare liberalism in the way it prizes markets and private enterprise for the power they grant the individual to overcome tradition. Indeed, cosmopolitan liberalism is more purely market-oriented than classical liberalism, which valued the nation-state and was tolerant of at least some traditions. Adam Smith’s famous text is called An Inquiry into the Wealth of Nations, not the Wealth of Individuals; Smith understood that states face tradeoffs between sovereignty and wealth.77xStephen G. Brooks, Political Economy of International Security (Princeton, NJ: Princeton University Press, forthcoming). Richard Cobden, leader of the laissez-faire Manchester School of economic thought in Victorian Britain, valued free trade for its contribution to the good of the nation. Today’s cosmopolitan liberalism does not particularly value nations. It seeks complete openness, a world without “legacy” boundaries to constrain human interaction and fulfillment.

This is the politics of neither mainstream American party. Rank-and-file Republicans tend to reject the social liberalism, while rank-and-file Democrats are often suspicious of free markets. Cosmopolitan liberalism is instead the ideology of elites in government, business, law, nonprofits, journalism, academia, and entertainment who wield immense political, economic, and cultural power. They speak the language of motion and change; in the exhortation of Jeff Bezos of Amazon, they seek to “move fast and break things.” They hop among careers and socially progressive cities in North America, Europe, and East Asia.88xSee e.g. Michael Lind, The New Class War: Saving Democracy from the Managerial Elite (New York, NY: Portfolio, 2020); David Goodhart, The Road to Somewhere: The Populist Revolt and the Future of Politics (London, England: Hurst, 2017).

The fusion happened in a sequence of steps. Cosmopolitan liberalism’s economic conservatism arose from the failure of welfare liberalism to remedy the economic stagnation of the 1970s. Keynesian economics called for heavy state regulation of the economy, but after the 1960s, persistent low growth and high unemployment afflicted most Western economies. Coming from the political right, the Reagan-Thatcher revolution of economic deregulation and tax cuts was adopted in modified form by parties of the center-left in the 1980s and 1990s and deemed the “third way” (capitalism and socialism being the first two ways). For Bill Clinton, Tony Blair, and other third-way politicians, crucial to this shift was the reduction of national barriers to the movement of goods and capital. Mainstream parties all over the West became convinced that the chief end of government was to sustain high economic growth, which in turn meant the ruthless pursuit of efficiency. Trade unions must be tamed and manufacturing offshored to Asia and Latin America, where labor costs were much lower. Workers in the West must retrain for the new high-technology economy.

Cosmopolitan liberalism’s social liberalism came from a different place. An early glimpse appears in John Stuart Mill’s claims in 1859 that true liberty entails “experiments in living” and that custom and religion are barriers to such experiments.99xJohn Stuart Mill, On Liberty and Other Essays, ed. John Gray (London, England: Oxford, 1998). Originally published in 1859. It took more than a century for Mill’s version of liberalism to occupy the commanding heights of culture and commerce. The moment came with the cultural revolution of the 1960s, when the civil rights and women’s rights movements gained wide followings. For all of the progress that welfare liberalism brought the working class, women and racial and ethnic minorities noticed that it did little to secure their autonomy.

The remedy required identifying a new enemy, however; unfettered capital no longer seemed the fundamental problem. Just as welfare liberalism had once borrowed ideas from Marxism, such as the necessity for organized labor, cosmopolitan liberalism looked to the nonliberal left for ideas. Notions of hegemony and power from thinkers such as Antonio Gramsci and Michel Foucault enabled the discontented to see classical and welfare liberalism not as the universal liberating projects they claimed to be, but as disguised projects to favor one particular group—white males. Multiculturalism was another source of ideas. In its pristine form, multiculturalism granted the members of traditional minority cultures claims that liberalism could not honor. The hold that Québecois or Shia culture had over its adherents made liberals nervous. The solution was liberal multiculturalism, which recast minority cultures as additional items on the menu of identity choices for all individuals. So long as no one was under social pressure to join or remain in a culture, all was well.1010xFor a critical survey, see George Crowder, Theories of Multiculturalism: An Introduction (New York, NY: Polity, 2013). Indeed, cultural diversity, rightly understood, became a positive boon for liberal society; monocultural societies began to look illiberal.

Cosmopolitan liberalism is not simply an extension or evolved version of welfare liberalism, one that recognizes the humanity of all citizens rather than a subset. Its economic “conservatism” or “neoliberalism” contradicts welfare liberalism and cannot be hived off. The emphasis on openness and efficiency and corresponding relegation of the rights of labor and of state regulation of the economy are essential to cosmopolitan liberalism.1111xSee Ross Douthat, “The Rise of Woke Capital,” New York Times, February 28, 2018, https://www.nytimes.com/2018/02/28/opinion/corporate-america-activism.html. And far from working at cross-purposes, the two faces of cosmopolitan liberalism are mutually supportive. Countries with open markets increase individual choice and are more diverse, and that diversity makes democratic societies depend on economic openness. As Mark Lilla has written, “The cultural and Reagan revolutions have proved to be complementary, not contradictory, events.”1212xQuoted in Christopher Caldwell, The Age of Entitlement: America since the Sixties (New York, NY: Simon & Schuster, 2020), 93.

Selecting for Authoritarianism

One problem with cosmopolitan liberalism is that the old liberalisms never went away. Classical liberalism continues to reside in the average Republican household, and many GOP politicians continue to emphasize it in their rhetoric and their preoccupation with tax cuts. Welfare liberalism is found in many traditionally Democratic households (which include a sizable cohort of Trump voters). Bernie Sanders is the closest we have to a welfare-liberal politician, as is shown by his discomfort with issues of race, gun control, and other cosmopolitan liberal priorities. The struggles among the three liberalisms are an important source of America’s current agonies. Each camp of liberalism includes large numbers who do not recognize adherents of the other liberalisms as liberal, and in fact see them as a danger to democracy.

The more fundamental cause of this polarization, however, is the way in which cosmopolitan liberalism has worked its way into laws, policies, and institutions. The concrete outcomes of this infiltration have served the interests of elite cosmopolitan liberals, but have alienated classical and welfare liberals and have let down even ordinary cosmopolitan liberals—those people, often young, who embrace the vision but have found themselves unable to enact it because of high levels of debt and limited job opportunities. The outline of the situation is familiar: the increasingly bowed income and wealth curves, the decreasing social and economic mobility, the rise in drug addiction and suicides, and so on. Critics tend to blame one or the other face of cosmopolitan liberalism: Welfare liberals blame neoliberalism, and classical liberals blame social liberalism. What they miss is that the two have been synthesized into a single ideology and culture in today’s America.1313xPatrick J. Deneen, Why Liberalism Failed (New Haven, CT: Yale University Press, 2018). Deneen sees the fusion of economic conservatism and social liberalism relationship as a genetic feature of liberalism, not as the contingent historical phenomenon that I am describing.

That international liberal order originally was a niche constructed to safeguard democracy, on the understanding that welfare liberalism was the right formula. It has been transformed over the past few decades into a creature of cosmopolitan liberalism. An early change came to international financial institutions in the late 1980s with the set of policy prescriptions that became known as the Washington Consensus. Distressed countries seeking aid would now need to stabilize and privatize their macroeconomies and open themselves up to foreign trade.1414xDani Rodrik, The Globalization Paradox: Democracy and the Future of the World Economy (New York, NY: Norton, 2012), 161–77.

Where the internationalization of cosmopolitan liberalism has affected the United States itself most obviously is in the so-called China shock—the normalization of trade relations with China in 2000 and the admission of China to the WTO the following year. The opening to China was a bipartisan effort—the Clinton administration took the first step, the administration of George W. Bush the second—and there were sound reasons for these policy changes at the time. Low-cost exports from China have increased the purchasing power and consumption rates of huge numbers of Americans by propelling the spread of large retail stores. No one forces Americans to shop at Walmart; they enter the big box because they get what they want inside.

But there has been a price. The estimated 2.5 million US jobs lost to China in the present century represent 20 percent of American manufacturing employment.1515xAdam Tooze, “Whose Century?”, London Review of Books, vol. 42, no. 15, July 30, 2020, https://www.lrb.co.uk/the-paper/v42/n15/adam-tooze/whose-century. Big-box stores also put smaller retail establishments, some locally owned, out of business, and that can shrivel a town’s commercial district and alter its way of life. Gigantic retail stores employ large numbers of workers, but the wages and benefits often are far less than what the shuttered factories once offered.1616xCharles Fishman, The Wal-Mart Effect: How the World’s Most Powerful Company Really Works—and How It’s Transforming the American Economy (New York, NY: Penguin, 2006).

The loss of jobs and deterioration of wages in the increasingly nonworking working class are not simply attributable to free trade. The automation of production plays a role as well. But the export of so many manufacturing jobs is part of what has induced a loss of confidence in the centrist policies that have sustained liberal democracy, as well as the parties and politicians that have implemented them. Entangled with this decimation are disruptions to culture that flow from cosmopolitan liberalism. Messages from media that real freedom entails casting aside traditional norms and institutions make sense in elite society, where they enable creativity and raise earning potential. They do not work so well in exurbs and rural areas, where traditional institutions are most of what holds society together. Donald Trump’s takeover of the Republican Party, his subsequent 2016 victory, and his three-ring circus of a presidency cannot be understood without recognizing the “two Americas” equilibrium brought about by cosmopolitan liberalism.

The damage to confidence in American democracy is matched by the boost to confidence in Chinese autocracy. China has gone from strength to strength in the liberal international order. For that country’s economy and overall power and influence, joining the club has paid off handsomely. China’s economy is set to surpass that of the United States sometime in the next decade; meanwhile, its regime actually has become more authoritarian since 2001. President Xi Jinping has concentrated power in his office; censorship has increased; civil rights in the “autonomous” province of Xinjiang and the “special administrative region” of Hong Kong have deteriorated sharply. The Communist Party’s monopoly on power looks as robust as ever.

Curiosity about the “China model” has captivated many authoritarian leaders in other states. For years, China has been bringing government officials from less developed countries to its leading universities to learn public administration.1717xChen Jia and Ding Qingfen, “Overseas Officials Head to Chinese Classrooms,” China Daily, August 5, 2010, http://www.chinadaily.com.cn/china/2010-08/05/content_11098280.htm. Vladimir Putin’s United Russia Party has tried to learn from the Chinese Communist Party how to sustain a capitalist economy without acceding to multiparty elections.1818xJoshua Kurlantzick, “Why the ‘China Model’ Isn’t Going Away,” The Atlantic, March 12, 2013, https://www.theatlantic.com/china/archive/2013/03/why-the-china-model-isnt-going-away/274237/. China’s innovations in the use of digital technology to solidify its hold on power—including methods of monitoring and penalizing citizen dissent—have attracted particular attention from authoritarians. More broadly, China’s rebound from the 2008 financial crisis—more vigorous than that of the West’s wealthy democracies—and its relatively quick taming of COVID-19 have burnished the international image of the China model.

The Chinese Communist Party under Xi is reshaping the international order to make it still less conducive to liberal democracy. China’s $1 trillion infrastructure investment project, now called the Belt-Road Initiative, is financing and building ports, railroads, power grids, and other projects from Southeast Asia to Africa, the Middle East, and even Europe. China’s alternative to the IMF, the Asia Infrastructure Investment Bank, has plenty of capital but none of the irksome restrictions that rein in the US-founded financial institutions. A Sino-American cold war would be regrettable, and need not happen. But an internationalism with Chinese characteristics is emerging, and the United States is not thinking clearly about how to respond.1919xJohn M. Owen IV, “Not Melting into Air,” The Hedgehog Review, vol. 19, no 3 (Fall 2017): 52–62.

A Dose of Realism

As the global financial system was starting to crash in 2008, Wang Qishan, a Chinese politician, told Henry Paulson, the US secretary of the treasury, “You were my teacher, but now here I am in my teacher’s domain, and look at your system, Hank. We aren’t sure we should be learning from you anymore.” Later that year, Paulson was to reach for the telephone dozens of times to implore his Chinese counterparts to save the American economy by pouring money into investment banks.2020xPaul Blustein, “The Untold Story of How George W. Bush Lost China,” Foreign Policy, October 2, 2019, https://foreignpolicy.com/2019/10/04/the-untold-story-of-how-george-w-bush-lost-china/?fbclid=IwAR2Dt14tq7BB0hl9dVxX5V24Pq33QcMkIRT_nEDHMmpDucMObx9YmJlAx1U. Blustein is quoting Henry M. Paulson’s 2013 memoir On the Brink. The irony has been noted by more than one analyst: Chinese communism saved Western capitalism. But the question continuing to haunt Washington and Wall Street is why capitalism needed such a savior. The cosmopolitanism of today’s liberal international order, with its relentless drive for economic efficiency and the effacing of borders, bears some responsibility. Indeed, cosmopolitan liberalism helps make sense of other highly costly American international moves, such as the excruciating efforts begun under the George W. Bush administration to turn Afghanistan and Iraq into democracies.

These and other American policies made sense to many two decades ago, and with reason. The Whig theory of history was plausible then; it was difficult to doubt that foreign trade and investment, and the growth of a middle class, would pull countries into democracy.2121xOrville Schell, “The Death of Engagement,” The Wire China, June 7, 2020, https://www.thewirechina.com/2020/06/07/the-birth-life-and-death-of-engagement/. Besides, all political questions had become technical, to be solved by smart people trained in engineering and the natural and social sciences. And China in particular had such technocrats in abundance, many educated at American universities. Yet it is worth noting that powerful company heads—some of the pioneers of cosmopolitan liberalism—wanted access to the growing Chinese market, and lobbied heavily to that end.2222xTooze, “Whose Century?”. That intense political pressure casts doubt on the thesis that the root problem with democracy today is simply that Reagan and Thatcher put the machine into reverse, backing it into old classical liberalism. Notwithstanding the frequent invocation of his name to support the opening of all markets all the time, it is not at all clear that Adam Smith, with his abiding concern for his nation and his counsel against letting wealthy merchants influence foreign policy, would have approved of normalizing trade with an authoritarian regime that still had (and has) an immense state-owned sector. Normalization of trade with China was a large step toward the borderless world envisaged by cosmopolitan liberalism, a world where individual choice is unencumbered and the traditional notion of a protected class of breadwinners must give way.

It is not surprising that China’s rulers would use their growing leverage to try to reshape the international order to select for autocracy. What is surprising is that the United States’ leaders no longer seem to be trying to shape that same order to support democracy, as their predecessors did. In the case of many elite cosmopolitan liberals, the error is probably innocent; they believe they are working to increase the freedom and autonomy of every individual. Ideologies work like that. But it is time they recognized what is really happening.

Whether or not democracy is inevitable—whether history moves in the direction of freedom and self-government—is ultimately a metaphysical question. The current era, however, does not lend confidence to the Whig theory. We must assume that democracy needs active defense. That is a hard task. It will be made still harder if those in the White House and elsewhere who despise the very idea of a liberal international order, who fancy themselves realists and believe that America would win if only we returned to old-fashioned great-power politics, have their way. America the state is rich and powerful and would surely hold its own in such a world. America the republic would not. True realism recognizes that a self-governing country, even a superpower, needs a niche. Just not the one we have.