From Open Hands to Clenched Fists: The Imminent Collapse of the Liberal International Order

 

The liberal international order, once the cornerstone of global stability, is now perilously close to collapse, with current geopolitical tensions threatening to trigger a catastrophic disintegration akin to the sudden collapses seen in world history.

The current state of the world economy, at a superficial glance, presents an image of resilience and robustness. The United States has thrived amidst escalating trade tensions with China. Germany has adeptly navigated the cessation of Russian gas supplies without spiraling into economic turmoil. Even amidst conflicts in the Middle East and actions by missile-firing Houthi rebels, the global flow of goods remains largely undisturbed. Economically, trade as a share of global GDP has not only recovered from the setbacks of the pandemic but is also projected to continue its healthy growth.

However, a deeper analysis reveals a contrasting picture, marked by profound fragility and the looming threat of disintegration. The liberal international order, which has underpinned global economic and political stability since the aftermath of the Second World War, is teetering on the brink of collapse. This erosion has not been sudden but gradual, and now, the possibility of an abrupt and irreversible breakdown looms large, threatening to plunge the world into an era where the rule of might supersedes the rule of law, and economic calamities could unfold swiftly and mercilessly.

The decay of this once-sturdy framework is palpable across several dimensions. Sanctions, particularly from the United States, have become a common tool, employed with four times the frequency of the 1990s. Recent implementations of secondary penalties on entities aiding Russia’s military efforts are a testament to this escalation. Simultaneously, a subsidy war has erupted globally, mirroring the vast state support for green manufacturing seen in China and the U.S., signaling a move away from free trade principles towards more protectionist economic policies.

More alarmingly, the institutions that have historically safeguarded global stability are now either defunct or rapidly losing their influence. The World Trade Organization, set to mark its 30th anniversary, has been largely inactive for over five years due to neglect from leading nations, particularly the U.S. The International Monetary Fund is caught in a dilemma between advancing a green agenda and maintaining financial stability. The paralysis of the UN Security Council and the politicization of supranational courts, such as the International Court of Justice, further exemplify the diminishing efficacy of these international bodies. High-profile threats of sanctions against the International Criminal Court by American politicians, if it pursues leaders of allied nations, underscore the growing disregard for international legal norms.

Historical precedents provide stark reminders of how quickly and drastically the global order can deteriorate. The outbreak of the First World War abruptly ended what many believed was an enduring golden age of globalization. Similarly, the early 1930s witnessed a rapid collapse in global trade following the U.S. imposition of the Smoot-Hawley tariffs, exacerbating the Great Depression. The unilateral decision by President Richard Nixon in 1971 to suspend the dollar’s convertibility into gold precipitated the rapid disintegration of the Bretton Woods system, underscoring the vulnerability of global economic structures to political decisions.

Today, scenarios that could trigger such catastrophic breakdowns seem not only plausible but increasingly likely. The potential re-election of Donald Trump, known for his zero-sum approach to international relations, could further erode trust in and the effectiveness of multilateral institutions. A military conflict over Taiwan between the U.S. and China, or between the West and Russia, could disrupt global economic stability on an unprecedented scale.

Amidst these unfolding crises, the liberal international order's achievements in reducing poverty, improving health standards, and maintaining peace are at significant risk. The breakdown of this order might not be replaced with a new system of governance but rather a return to a Hobbesian state of nature characterized by disorder and conflict. This shift could severely hamper global efforts to address pressing challenges such as arms control in artificial intelligence and international cooperation in space exploration.

In plain terms, the superficial resilience of the global economy masks deep-seated vulnerabilities within the liberal international order, pointing towards a troubling outlook. While global markets show robust growth and geopolitical conflicts have yet to cause major economic disruptions, the foundational elements that have maintained international stability since World War II are eroding. This gradual degradation is setting the stage for potential sudden and severe repercussions. The visible signs of this decay are evident in the escalating use of economic sanctions, the politicization of international courts, and the growing disregard for global governance norms, all of which are indicators of a system in distress.

Without a deliberate and sustained effort to rejuvenate and fortify global cooperation and institutions, there is a real risk that the world could spiral into chaos and instability. The ongoing decline of the liberal order, both in quiet erosion and in overt crises, necessitates urgent and proactive measures from the international community. If these efforts are not undertaken, we may see a shift towards a world where economic and political upheaval are commonplace, and the achievements of decades of globalization could be undone. As the threads of the current global framework continue to unwind, the international community must prepare for profound and enduring transformations that could reshape the geopolitical landscape dramatically.