The Wrecking of the Liberal World Order 

Photo: Dmitry Demidovich.

Guidotti, Andrea. (2024). “The Wrecking of the Liberal World Order.” ECPS Book Reviews. European Center for Populism Studies. January 17, 2024. https://doi.org/10.55271/br0013

 

In his book, “The Wrecking of the Liberal World Order,” Vittorio Emanuele Parsi argues that the neoliberal distortion of democracy has led to its erosion, giving rise to populism. This phenomenon has permeated both public discourse and the political culture of mainstream parties. Faced with this challenge, these parties find themselves at a crossroads, having to decide between a defensive response to the surge of populist movements or adapting and converging with their political platforms to prevent substantial losses in electoral support.

Reviewed by Andrea Guidotti

Some major shifts are shaping international politics in recent decades. Firstly, there is a noticeable decline in American leadership as the primary global force, accompanied by the simultaneous ascent of authoritarian powers such as China and Russia, altering the power dynamics among major nations. Secondly, terrorism, particularly its religiously charged variants, has gained increasing relevance and urgency, raising concerns in some regions, with the Mediterranean standing out prominently. Thirdly, during Donald Trump’s presidency, the United States veered away from the multilateral system, exhibiting unprecedented revisionist stances. Lastly, the ascent of nationalist and, more significantly, populist movements has tainted political discourse, disengaging citizens from liberal and, particularly, democratic principles in distinct yet interconnected ways.

In his book "The Wrecking of the Liberal World OrderVittorio Emanuele Parsi, Professor of International Relations at the Catholic University of Milan, Italy, delves into the current state of the international political and liberal system. With a keen focus on the ongoing changes within the system, potentially jeopardizing its stability, Parsi’s central argument posits that since the 1980s, the Liberal World Order has gradually given way to the Neoliberal World Order, fundamentally altering its intrinsic nature.

The book contends that the foundational pillars of the system face challenges from various political and ideological movements: (i) Neoliberalism, which highlights the shortcomings of ‘big governments’ in terms of resource mismanagement and hindrance to the efficiency of market mechanisms; (ii) Neoconservatism, countering the ‘progressive’ agenda by emphasizing traditional values and principles of law and order; and (iii) Ordo-liberalism, utilized to justify state policies favoring capital at the detriment of labor.

The Liberal World Order is grounded in two fundamental objectives: firstly, the establishment of a system that is both open and institutionalized, ensuring the potential for democracies to flourish and prosper; and secondly, the reinforcement of the domestic political and socioeconomic systems upon which the overarching system is constructed. These goals were envisioned to materialize through the establishment of the United Nations, a universal and comprehensive institution replacing the ineffective League of Nations. It acknowledged the privileged status of the great powers that emerged victorious in World War II – the United States, the Soviet Union, China, the United Kingdom, and France.

The fundamental distinction between Liberalism and Neoliberalism lies in the nuanced relationship they establish between democracy and the market economy. Democracy, built on the premise of equality despite inherent individual differences, contrasts with the free market economy’s tendency to thrive on inequality, rewarding the most efficient entities and individuals based on their abilities/capabilities, productivity, and merits. The Neoliberal project, therefore, deviated by downplaying concerns related to inequality and fostering a system where increased productivity, driven by technological advancements, exclusively rewarded capital investments. This shift was not isolated; it emerged as a response to the widespread perception among politicians of stagnant wages and growing job insecurities.

The underlying logic was as follows: ‘income does not matter; consumption does.’ In simpler terms, as long as the middle class could maintain its consumption levels due to the newly implemented policies, it might not be overly concerned about the growing levels of inequality. What tends to be overlooked in these arguments is the reality that, even if there is no deliberate attempt to eliminate economic inequality with the aim of preventing political inequality, people do not need convincing that their unequal economic power translates into political disparities. Consequently, public policies geared towards creating more favorable conditions to attract international capital began to progressively fuel unemployment among the middle class, heighten job insecurities, erode the Welfare State, and bring an end to redistributive policies. In essence, an ideological clash between economic freedom and political sovereignty (the efficacy of democracy) emerged within and from the framework of the Liberal World Order.

According to Parsi’s book, the first problematic dimension of the current Liberal World Order is its altered distribution of power, coinciding with the transition from a unipolar to a multipolar system, where the US no longer stands as the sole global great power. On one hand, China is growing more assertive in the Pacific and Indian Ocean, implementing a ‘String of Pearls Strategy’ that involves cultivating privileged diplomatic, commercial, and military relations with certain countries, aiming to control vital sea lines of communication and strategic logistical supplies. Specifically, China seeks to assure its neighbors that it is a reliable actor, refraining from unnecessary threats as long as its perceived interests remain intact. On the other hand, Russia, exemplified by the annexation of Crimea and the invasion of Ukraine, is endeavoring to expand its sphere of influence, willing to employ military means if deemed necessary. Additionally, both China and Russia are strategically involved in the Middle East, where the American presence has become increasingly problematic. While not explicitly sharing a strategy against the US, it is evident that Russia and China have been striving to establish a common platform against American hegemony.

The second problematic dimension involves the ‘molecularization and privatization of the threat,’ a consequence of the proliferation of terrorist groups that particularly destabilizes Western public opinions and political elites. In particular, Islamist terrorism has demonstrated a significant capacity for deconstruction within the Liberal World Order. Two noteworthy aspects emerge here. Firstly, the Mediterranean region has regained significant importance, serving as a focal point for indirect strategic actions against European countries to undermine their political stability. Secondly, Russia has reopened the front of contention in the Baltic Sea with respect to NATO.

The third problematic dimension is the American shift concerning the system during Trump’s presidency. Trump built his political credibility by addressing concerns about the emergence of ‘jobless growth,’ where economic expansion fails to translate into an expansion of job opportunities. In another light, argues Parsi, there’s the phenomenon of the ‘rentierization of the capitalistic system,’ which significantly favors financial investments over productive ones. Moreover, Trump pledged to deconstruct the Liberal World Order from within to rectify these distortions. Within Trump’s framework, the US revealed itself as a revisionist power within the system. By rejecting multilateral practices as a means to express its vision of a ‘constraint-free’ America, the US administration undermined the foundations of its own credibility in the eyes of both partners and allies, as well as adversaries.

The fourth problematic dimension revolves around democratic contamination caused by sovereigntist populism and technocratic oligarchies. The emergence of populist movements has led to a democratic deformation wherein opinions are simplistically and systematically transformed into decisions. The neoliberal distortion of democracy and its erosion have fostered populism, intoxicating both public discourse and the political culture of mainstream parties. These parties are then confronted with the choice of either defensively responding to the rise of these populist movements or adapting and converging with their political platforms to avoid significant loss in electoral support. According to the book, two strands of populism are crucial to this analysis: one targeting economic and financial elites, advocating for policies perceived as betraying the interests of American workers, and the other embodied in Trump’s politics, characterized by racial and ethnic-based nationalism and the notion of a ‘true America’ with distinct political inclinations. In a broader sense, populism can be viewed as a signal of discontent but also as a call to restore the balance between elites and the common people. Crucially, even when acknowledging that economic and social inequality naturally arises from individual differences in abilities and resources, this acceptance should not be used as a justification for the perpetuation of existing political inequality.

Professor Parsi concludes the book with a chapter on the pandemic and its relationship with the current (Neo)Liberal World Order, exploring potential solutions to the issues discussed throughout the book. Covid-19 showed that we were not all equally vulnerable to the virus, as its impact is asymmetric both for natural and especially economic reasons. This asymmetry mirrors the asymmetries, imbalances and inequalities inherent in the (Neo)Liberal World Order, where a few dictate its political and economic structure, disregarding the interests of the many and violating the foundational principles established post-WWII. Consequently, three key takeaways are proposed as potential remedies or paths worth pursuing: (i) rebuilding an up-to-date Liberal World Order by way of revitalizing democratic regimes in such a way that they can gain back control of market dynamics; (ii) the premise of the project should be a privileged relationship between the two sides of the Atlantic, i.e. democratic powers; (iii) We must not forsake values in favor of interests only, ensuring that those with underrepresented political strength are not overlooked or allowed those to wield power solely based on their economic and status position, influencing and shaping the rules of the game regarding the functioning of the system.


The Wrecking of the Liberal World Order by Vittorio Emanuele Parsi (Palgrave Macmillan, 2021). 325 pp. €139,09 (Hardback), ISBN: 3030720454, 9783030720452

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