The Neo-Liberal Consensus Is Coming Apart

The Global Covid Response as a Turning Point

Five years after the initial spread of the Covid-19 virus, we are witnessing a significant shift in various aspects of public life. Trust in public institutions, economic vitality, citizen health, freedom of speech, literacy, religious and travel freedom, elite credibility, and demographic longevity have all been impacted. The postwar neo-liberal consensus also seems to be crumbling.

Global Unrest and the Rise of Trade Barriers

Today's world is experiencing significant upheaval, with nations erecting new trade barriers and dealing with citizen uprisings, both peaceful and violent. The question now is what political revolution looks like in advanced industrial economies with democratic institutions.

US-China Relations and the Shift towards Globalism

Looking at the history of US-China relations, we see a trajectory towards globalism that began after the Second World War and accelerated with the end of the Cold War. However, this came at a significant cost as the US lost its manufacturing advantages in numerous industries.

The Shift from Manufacturing to Financial Products

Over time, manufacturing industries were largely replaced by debt-financed financial products, government-backed medical sector, information systems, entertainment, and government-funded education. This shift led to resentment against the internationalization of manufacturing, which played a role in Donald Trump's election in 2016.

Trump's Trade Barriers and the Impact on Neo-Liberal Consensus

Trump's decision to erect trade barriers against countries with whom the US was running trade deficits, primarily China, led to a significant hit in trade volume. This move reversed a 40-year trajectory of growth and dealt a major blow to the neo-liberal world's postwar consensus.

The Covid Response and Its Impact on Trade

The Covid response led to a reversal of this trend. As the US scrambled to find supplies, it had to rely on China, leading to a surge in trade. However, this reversal was short-lived as trade relations broke down and new trade blocs were formed.

Global Governance and the Diminishing Power of Nation-States

Today, we see an intensification of the power of globalist institutions. Organizations like the World Health Organization (WHO), International Monetary Fund (IMF), and World Bank are exercising outsized influence on monetary and financial policy. The United Nations also plays a significant role in this shift towards global governance.

The Threat to Freedom and Democracy

The shift towards global governance threatens the ideas of freedom and democracy. The only means by which average people can restrain tyranny and despotism is through voting at the national level. However, citizens have no influence over the policies of global institutions, leading to universal disenfranchisement.

Regaining National Sovereignty

It is crucial for individuals who aspire to live in peace and freedom to regain national sovereignty and resist the transfer of authority to global institutions. Devolving power from the center is the only path by which we can restore the ideals of freedom and democracy.

The Collapse of the Neo-Liberal Consensus

There are reasons to regret the collapse of the neo-liberal consensus and concerns about the rise of protectionism and high tariffs. However, the neo-liberal consensus was built on the transference of sovereignty away from the people in their communities and nations to supranational institutions over which citizens have no control.

The Populist Revolt

The populist revolt of today might be seen as the inevitable reaction when people become aware of their disenfranchisement. The drama of our times is as intense as any of history's great epochs. The question now is how this will end.

Bottom Line

The neo-liberal consensus is coming apart, and we are witnessing a significant shift in various aspects of public life. The postwar neo-liberal consensus is crumbling, and the world is experiencing significant upheaval. The shift towards global governance threatens the ideas of freedom and democracy, and it is crucial for individuals who aspire to live in peace and freedom to regain national sovereignty. The drama of our times is as intense as any of history's great epochs. What do you think about this? Share your thoughts with your friends and sign up for the Daily Briefing, which is every day at 6 pm.