If we look at the elements of the international system from 1945 to today, we can see that the superficial structural rigidity of the Cold War masked other more substantive changes happening in the international system. And we can also see that today, most of the elements of the 1945 post-war settlement remain in place and may be even more robustly developed. We can also see that these changes have had profound consequences for how we view “liberalism.”
First, we can see that economic growth has become the key measure of power and success in competition between states. Military power is still vital but less exercisable, and it is seen as dependent on economic growth. The third factor to look at is the growing change, and rate of change, in interdependence and economic power. This was facilitated in large part by the deregulation of capital and currency flows since the 1970s. This deregulation was itself largely caused by the needs of the United States to sell bonds to fund Cold War armaments and proxy wars. By the 1990s, industrial production for the core western economies was increasingly shipped abroad, with only the administrative and design elements remaining at home. Corporations had moved production ‘off-shore’ in order to cut labour costs. To further economic competitiveness, large-scale free trade deals were negotiated to allow products to more easily ship back and forth across national boundaries, with NAFTA being the signature free trade deal for Canada.
For the international system, the key point on these deals is that while capital flowed freely, labour remained constrained to national boundaries. While foreign corporations were given equality status in law and access, individual rights and privileges were not. This resulted in the loss of jobs and industrial production in core western economies. And while it increased general wealth in recipient countries, it did not necessarily translate to a greater share of intellectual property by countries outside the core Western states. Nor for that matter did it automatically promote liberal-democratic values.
Second, this economic growth has ironically undermined the power of the western political liberal democracy. The wealth and growth of non-state economic actors has come to hold huge sway on domestic political calculations and to influence domestic and sub-state policies.
Third, the nature of liberalism has changed. There have been internal changes in the belief systems and consequently the normative practices – the ideologies – of key western states. Shrinking the role of the state became acceptable grounds for political contestation based on a mix of ideas now commonly referred to as “neoliberalism” – a variant of classical liberalism defined by smaller government, less taxation, deregulation, and greater individual choice. These things have all been equated to liberty – above all economic liberty – in the face of an oppressive state. These ideas were developed in reaction to Soviet communism and to the growth of the liberal-welfare state in the West through the Great Depression, the Second World War, and the Cold War itself. Reducing the narrative of liberty and rights to the narrower scope of individual freedom and ownership of property in the face of an overarching, bureaucratic government won political victories for Margaret Thatcher and Ronald Reagan in the 1970s and 1980s. It has set the parameters for political discourse in the United States and consequently for many other Western states ever since.
The combination of a reframed liberalism based on individual wants and rights, along with an increasing number of claims on the state’s role in society, led over time to a much more polarized, fractious political climate in western liberal democracies. Prioritization among competing interests has become more difficult. Partisanship and the overt use of majoritarian political power has become a more frequent phenomenon.
These three factors have combined to create a new constellation of actors and institutions based on the principles of the post-war settlement. The core organizations remain, but increasingly other transnational and international organizations have created other channels to increase the dense web of international, multilateral organizations such as the EU, TPP, NAFTA, and G7.
Within the state, the combination of a reframed liberalism based on individual wants and rights, along with an increasing number of claims on the state’s role in society, has led over time to a much more polarized, fractious political climate in western liberal democracies. Prioritization among competing interests has become more difficult. Partisanship, and with it the overt use of majoritarian political power to consolidate systemic partisan advantage, has become a more frequent phenomenon. The influence of wealthy interests in domestic political affairs – lobbying and spending in political contests – has become if not greater, then more overt.