Free World
Share of global GDP by country and level of freedom based on political rights and civil liberties
Sources: IMF; Freedom House
Note: GDP figures are the latest available.
The Power of Alliances
Military expenditure in 2019 U.S. dollars
Source: SIPRI
Note: Figures for China and Russia (1992-2012) are SIPRI estimates.
Putin and Xi Exposed
the Great Illusion of Capitalism
Unless the U.S. and its allies mobilize to save it, the
second great age of globalization is coming to a catastrophic close.
ByJohn Micklethwait and Adrian Wooldridge
March 24, 2022, 4:01 AM GMT
A book published in 1919 on “The Economic Consequences of
the Peace” isn’t the obvious starting place for understanding the economic
consequences of the current war in Ukraine. But it’s worth taking a little time
to read John Maynard Keynes’s famous description of the leisurely life of an
upper-middle-class Londoner in 1913 — just before the Great War changed
everything:
The inhabitant of London [in 1913]
could order by telephone, sipping his morning tea in bed, the various products
of the whole earth, in such quantity as he might see fit, and reasonably expect
their early delivery upon his doorstep; he could at the same moment and by the
same means adventure his wealth in the natural resources and new enterprises of
any quarter of the world, and share, without exertion or even trouble, in their
prospective fruits and advantages.
Keynes then describes how this Londoner could speculate on
the markets and travel wherever he wanted without a passport or the bother of
changing currency (the gold standard meant that his money was good everywhere).
And then the famous economist delivers his coup de grace by going inside the
privileged Londoner’s head:
[The Londoner] regarded this state of affairs as normal,
certain and permanent, except in the direction of further improvement, and any
deviation from it as aberrant, scandalous and avoidable. The projects and
politics of militarism and imperialism, of racial and cultural rivalries, of
monopolies, restrictions and exclusion, which were to play the serpent to this
paradise, were little more than the amusements of his daily newspaper, and appeared
to exercise almost no influence at all on the ordinary course of social and
economic life, the internationalization of which was nearly complete in
practice.
Keynes’s cosmopolitan Briton, completely unaware that the
first great age of globalization was about to be shot to pieces at the Somme,
is the urban equivalent of the cavorting toffs in “Gosford Park,” Robert
Altman’s movie about a weekend in a grand country house just before the
outbreak of war. One of us possesses a photograph of the Bullingdon, Oxford’s
poshest dining club, in 1913: The future rulers of the world stare out at us
with frozen arrogance. Within a year most of them were in the trenches.
Foppish aristocrats weren’t the only ones who were
complacent. Intellectuals agreed. Norman Angell’s “The Great Illusion,” the
Edwardian bestseller published in 1909, argued that war was impossible given
the interconnectedness of the world. The great businesses of Europe and the
U.S. operated on the same assumption. The first great age of globalization,
which started in the 1860s and was underpinned by British power and coordinated
by British statecraft, had left the commercial classes free to make money —
businesspeople then faced far fewer barriers than their modern equivalents when
it came to moving money, goods or people around the world.
It’s easy to mock the shortsightedness of the West’s ruling
class in 1913 — for not seeing how the rise of Germany and the complex web of
alliances between the Great Powers could turn an assassination in Sarajevo into
a global conflict. Clio, the muse of history, is always wise after the event,
but future generations could well ask the same question about us: How could
they not know?
Keynes’s Londoner, lounging in his
bed, had at least this excuse: The end of his age of globalization came with
little warning. In our case, globalization has been under sustained attack for
two decades, with serious assaults in 2001 (when two planes, hitherto symbols
of modernity, slammed into the World Trade Center); 2008 (when Lehman Brothers
collapsed and the global financial system went into cardiac arrest); and 2016
(when the British voted to leave the world’s largest free-trade zone and
Americans elected a nativist TV personality as president). The “decoupling” of
the global economy into Chinese and Western portions has been gathering pace
for some time. And the biggest drama before Ukraine was a virus that froze
supply chains and forced the world into hibernation.
And yet, at the beginning of 2022, many of us shared the
assumptions of Keynes’s Londoner. We ordered exotic goods in the confident
expectation that Amazon would deliver them to our doors the next day. We
invested in emerging-market stocks, purchased Bitcoin, and chatted with people
on the other side of the world via Zoom. Many of us dismissed Covid-19 as a
temporary suspension of our global lifestyle. Vladimir Putin’s “projects and
politics of militarism” seemed like diversions in the loonier regions of the Twittersphere.
Now that we have been shaken awake, most of our attention is
on the bloodshed in Ukraine, and rightly so. But just as World War I mattered
for reasons beyond the slaughter of millions of human beings, this conflict
could mark a lasting change in the way the world economy works — and the way we
all live our lives, however far we are from the carnage in Eastern Europe. The
“inevitable” integration of the world economy has slowed, and the various
serpents in our paradise — from ethnic rivalries to angry autocracies to a
generalized fury with the rich — are slithering where they will.
That doesn’t mean that globalization is an unalloyed good. By
its nature, economic liberalism exaggerates the downsides of capitalism as well
as the upsides: Inequality increases, companies sever their local roots, losers
fall further behind, and — without global regulations — environmental problems
multiply. Yet liberalism has also dragged more than a billion people out of
poverty in the past three decades and, in many cases, promoted political
freedom along with economic freedom. The alternatives, historically speaking,
have been wretched. Right now, the outcome that we have been sliding toward
seems one in which an autocratic East gradually divides from — and then potentially
accelerates past — a democratic but divided West.
From this perspective, the answer to globalization’s woes
isn’t to abandon economic liberalism, but to redesign it. And the coming weeks
offer a golden opportunity to redesign the global economic order.
By any economic measure the West is significantly more
powerful than the East, using the terms “West” and “East” to mean political
alliances rather than just geographical regions. The U.S. and its allies
account for 60% of global gross domestic product at current exchange rates;
China, Russia and the autocracies amount to barely a third of that. And for the first time in years, the West is
coming together rather than falling apart. This week, Joe Biden is
traveling to Europe as the leader of the newly united and reinvigorated free
world.
So far, for all his talk of uniting democracies, Biden has
done little to highlight, let alone advance, the economic dimension of freedom.
The question for Biden and the European leaders he will meet this week is
simple: What sort of world do they want to build in the future? Ukraine could
well mark the end of one great episode in human history. It could also be the time that the free world comes together
and creates another, more united, more interconnected and more sustainable one
than ever before. Seizing that opportunity will require an understanding of
both economics and history.
The Way We Were
The end of the last global age was particularly brutal. Even
once the slaughter had begun in Flanders, British shopkeepers, with stoic
good humor, displayed signs as the war started that read “Business as usual
during alterations to the map of Europe.” But it was not to be. The
conflagration quickly halted trade, capital flows and migration. Governments
interfered in the economy more deeply than ever before. When the guns finally
fell silent in 1918 and peace was forced on Germany at Versailles (in the
Carthaginian terms that Keynes decried so eloquently), the Bidens, Johnsons and
Macrons of the time tried to restore the old world order of free trade and
liberal harmony — and comprehensively failed.
The new superpower, America, refused to become the defender
of the faith that Great Britain had protected with such skill until 1913. A
beggar-thy-neighbor policy of tariffs slowed the world economy and eventually
produced the Great Depression, with global trade shrinking by more than half in
1928-1933. The serpents continued to slither: Lenin, Mussolini and
Hitler exploited defeat and poverty to create aggressively anti-liberal
regimes, the Soviet version of which lasted for seven decades. The situation
for liberal economics was so dismal that, by the mid-1930s, Keynes himself had
abandoned free-market liberalism as a lost cause and was campaigning for
national self-sufficiency.
Only after the Second World War did economic integration
resume its advance — and then only on the Western half of the map. What most of
us today think of as globalization only began in the 1980s, with the arrival of
Thatcherism and Reaganism, the fall of the Berlin Wall, the reintegration of
China into the world economy, and, in 1992, the creation of the European single
market.
Yet once politicians got out of the way, globalization sped
up, driven by technology and commerce. Young technology companies such as Microsoft
Corp. and Apple Inc. took off while old technology companies such as Nokia Oyj,
a Finnish rubber-boot and electronics maker that by 2010 was the world’s
largest manufacturer of mobile phones, got a new lease on life. McDonald’s
Corp. opened restaurants in Moscow’s Pushkin Square in January 1990 and just
off Beijing’s Tiananmen Square in April 1992. As the new century dawned and an
unknown “pro-Western” bureaucrat called Vladimir Putin came to power in Russia,
the daily volume of foreign-exchange transactions reached $15 trillion.
More recently, as the attacks on globalization have mounted,
economic integration has slowed and in some cases gone into reverse.
But Russia’s invasion of Ukraine marks a bigger and more
definitive assault than the previous ones.
That’s partly because the immediate rupture is so savage.
The supply of basic commodities, from wheat to nickel to titanium to oil, has
been disrupted. The West is doing everything it can to “cancel” Russia from the
global economic system — sanctioning oligarchs, expelling Russian banks from
the global financial plumbing, and preventing Russia’s central bank from
accessing its reserves. There’s talk of throwing Russia out of the World Trade
Organization.
Even when they haven’t been forced to do so by law, Western
companies are boycotting Russia and closing down their Russian operations.
Russian consumers can no longer use Visa, MasterCard and American Express. The
McDonald’s in Pushkin Square is closed — along with 850 other branches. Photos
have appeared on social media of Russians standing in interminable queues for
sugar and other basic foods or else fighting over remaining scraps, just as
they did in the Soviet days. For its part, the Kremlin has hit back by blocking
access to Facebook and threatening to imprison or fine anyone suspected of
spreading “fake” news, thereby essentially closing down Western news
organizations inside the country.
We Didn’t Mean It
The Western policymakers meeting this week will say they
have no intention of closing down the global order. All this economic savagery
is to punish Putin’s aggression precisely in order to restore the rules-based
system that he is bent on destroying — and with it, the free flow of commerce
and finance. In an ideal world, Putin would be toppled — the victim of his
own delusions and paranoia — and the Russian people would sweep away the
kleptocracy in the Kremlin.
In this optimistic scenario, Putin’s humiliation would do
more than bring Russia back to its senses. It would bring the West back as
well. The U.S. would abandon its Trumpian isolationism while Europe would start
taking its own defense seriously. The culture warriors on both sides of the Atlantic
would simmer down, and the woke and unwoke alike would celebrate their
collective belief in freedom and democracy. McDonald’s would be open again in
Pushkin Square — and Keynes’s various serpents would slither out of the garden.
There’s a chance this could happen. Putin wouldn’t be the
first czar to fall because of a misjudged and mishandled war. Many of
Russia’s most powerful people are seeing their mansions, yachts and private
planes confiscated, all for an invasion they weren’t consulted about.
Younger Russians, particularly in the big cities, are more liberal than their
parents. Russian shoppers don’t want to return to the Soviet era.
Meanwhile in the West, Ukraine has already prompted a great
rethink. As German Chancellor Olaf Scholz has proclaimed, we are at a Zeitenwende — a turning point. Under his leadership,
pacifist Germany has already proposed a defense budget that’s larger than
Russia’s. Meanwhile, Ukrainian immigrants are being welcomed by nations that
only a few months ago were shunning foreigners, and, after a decade of slumber
in Brussels, the momentum for integration is increasing.
The Power of
Alliances
Military
expenditure in 2019 U.S. dollars
Source: SIPRI
Note: Figures
for China and Russia (1992-2012) are SIPRI estimates.
But this turning point can still lead in several directions.
The chances of a regime change in the Kremlin remain slim, given Putin’s
popularity and terror machine. Western Europe has heard pious words about
integration and immigration before. And look at the West’s leaders! Joe Biden
hardly conveys an image of world-changing dynamism; after his initial heroics,
Olaf Scholz greeted Volodymyr Zelenskiy’s speech to the German parliament with
pudding-like inertia; Emmanuel Macron is bent on winning an election while
trying to look like Zelenskiy, in hoodie and stubble; while Boris Johnson has
dared to compare the Ukrainian resistance to Brexit.
As we wait for these giants to act, the facts on the ground
are changing in economics as well as politics. In particular, the invasion of
Ukraine is accelerating changes in both geopolitics and the capitalist mindset
that are deeply inimical to globalization.
The changes in geopolitics come down to one word: China,
whose rapid and seemingly inexorable rise is the central geopolitical fact of
our time.
The immediate question with China is how far it will support
Putin in Ukraine. On the sidelines of the Winter Olympics in February, Xi and
Putin signed a statement rejecting NATO expansion in Europe and American
alliance-building in Asia and agreed that the promotion of democracy was a
Western plot. China has still notably failed to participate in Western
sanctions. But now that Putin’s triumph looks less assured, China’s support
for him looks more conditional. A week ago, the mere rumor that Russia had
asked for military assistance — a rumor that Beijing immediately denied —
sparked the biggest drop in China’s stock market since 2008. On the same day, a
Chinese think tanker, Hu Wei, posted a fascinating memorandum warning his
country that the invasion of Ukraine is revitalizing the West, and that China
needs to dump the burden that is Russia.
Regardless of whether China’s leader decides to ditch Putin,
the invasion has surely sped up Xi’s medium-term imperative of “decoupling” —
insulating his country from dependence on the West. Xi has spent much of his
rule building a Sinocentric economic
order through the Belt and Road Initiative. China has joined the 15-member
Regional Comprehensive Economic Partnership (RCEP) and applied to join the
11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership
(CPTPP), a free-trade bloc that the U.S. first invented, then foolishly
abandoned.
For the “wolf pack” of young Chinese nationalists around Xi,
the reaction to Ukraine is another powerful argument for self-sufficiency.
China’s vast holdings of dollar assets now look like a liability given
America’s willingness to confiscate Russia’s assets, especially if the regime
were to think about invading Taiwan (where its claim that the island is
culturally and legally part of China is frighteningly like Russia’s claims
about the Ukraine).
Some Americans are equally keen on decoupling, a sentiment
that bridged Republicans and Democrats before Putin’s invasion of Ukraine.
Biden may have dropped Trump’s Sinophobic rhetoric — there’s no more talk of
“the China virus” — but he has kept in place most of the tariffs, export
controls and investment regulations that he inherited, and added a few of his
own. For many Americans, too, Ukraine has been a pre-Taiwan test case: They
don’t want to end up relying on Taiwanese components that might suddenly
disappear in a puff of smoke.
So, absent any decisive action by the West, geopolitics is
definitively moving against globalization — toward a world dominated by two or
three great trading blocs: an Asian one with China at its heart and perhaps
Russia as its energy supplier; an American-led bloc; and perhaps a third
centered on the European Union, with the Europeans broadly sympathetic to the
U.S. but nervous about the possible return of an America-First isolationist to
the White House and irked by America’s approach to digital and media
regulation. Other powers will vacillate between these two (or three) great
blocs, much as they did during the Cold War. India may do what it has done so
well over Ukraine and play both sides. Pakistan will lean toward China but not
fully commit while India is in play. Saudi Arabia will exploit uncertainty over
energy supplies to pursue brutality at home and Islamist policies abroad. And so
on.
The Bonfire of the Certainties
Just as important as this geopolitical shift is the change
in the capitalist mindset. If the current age of globalization was facilitated
by politicians, it has been driven by businesspeople. Ronald Reagan and Margaret
Thatcher didn’t decide that the components of an iPhone should come from 40
countries. Facebook wasn’t created by senior politicians — not even by Al Gore.
Uber wasn’t an arm of the Department of Transportation.
From a CEO’s viewpoint, Putin’s invasion of Ukraine has done
more than unleash Western embargoes and boost inflation. It is burying most of
the basic assumptions that have underlain business thinking about the world for
the past 40 years.
In the great intellectual battle of the 1990s between
Francis Fukuyama, who wrote “The End of History and the Last Man” (1992), and
his Harvard teacher Samuel Huntington, who wrote “The Clash of Civilizations”
(1996), CEOs have generally sided with Fukuyama. The view from the boardroom
has been straightforward: Democracy won’t always win (China taught capitalists
that quickly), but sensible economics usually will. Businesses could rely on a
world in which countries would specialize in their comparative advantage.
Commerce and free trade would bring people closer, as Fukuyama argued, rather
than divide them, as Huntington warned — and businesses that ran themselves
globally and wove the most cost-effective supply chains would prosper.
Commercially speaking, this bet paid off spectacularly. Over
the past 50 years multinationals have turned themselves from federations of
national companies into truly integrated organizations that could take full
advantage of global economies of scale and scope (and, of course, global
loopholes in taxes and regulations). World trade in manufactured goods doubled
in the 1990s and doubled again in the 2000s. Inflationary pressures have been
kept low despite loose monetary policies. Even with a barrage of political
disruptions — Trump’s tariffs, Brexit and so on — profits have remained high,
as the cost of inputs (such as energy and labor) have been kept low.
Now what might be called the Capitalist Grand Illusion is
under assault in Kyiv — just as Norman Angell’s version was machine-gunned on
the Western Front. All the dangers that used to appear at the bottom of a CEO’s
morning briefing are slithering to the top. Militarism and cultural rivalries
keep trumping economic logic. Putin invading Ukraine is merely one in a long
list of economically self-harming decisions that vary from dynastic
thuggishness (Saudi Arabia bombing Yemen and murdering journalists) to
knee-jerk isolationism (Brexit). And these stupidities reinforce each
other: Thus, the French are responding to Britain’s act of self-harm in leaving
the EU by cutting their companies off from the continent’s main source of cheap
capital in the City of London.
Against such persistent irrationalism, CEOs who used to
build empires based on just-in-time production are now looking at just-in-case:
adding inefficient production closer to home in case their foreign plants are
cut off. The head of one of the world’s most powerful investment firms, with
shares in almost every significant Western company, talked privately about “a
tsunami of recalculations” on the weekend after Putin invaded Ukraine. The
CEO of one of America’s most iconic multinationals admits that he is
reexamining production across China. Every Western company is now wondering how
exposed it is to political risk. Capitalists are all Huntingtonians now.
Nor is just fear changing the capitalist mindset. Greed is
also acquiring an anti-global tint. CEOs are rationally asking how they can
profit from what Keynes called “monopolies, restrictions and exclusions.” Now
that governments are using national security as an excuse for national
champions, businesspeople can choose from a plateau de fruits de mer of opportunities
for rent-seeking and competition-crushing in industries like energy,
pharmaceuticals and semiconductors. That erstwhile Thatcherite Narendra Modi
now echoes Mahatma Gandhi’s calls for self-sufficiency and imposes tariffs for
local industries. Japan’s new prime minister, Fumio Kishida, has created the
job of economic-security minister with a mandate to intervene in cybersecurity,
chipmaking and much else besides. Macron has declared that “The state will need
to take in hand several aspects of the energy sector.” Biden used his State of
the Union speech on March 1 to promise that “Everything from the deck of an
aircraft carrier to the steel on highway guardrails is made in America from
beginning to end. All of it.” Both sides of Congress applauded.
So the second age of
globalization is fading fast. Unless something is done quickly and
decisively, the world will divide into hostile camps, regardless of what
happens in Ukraine. And this divided world will not suit the West. Look at the
resolution passed by the United Nations General Assembly to condemn Russia’s
invasion of Ukraine. The most trumpeted figure is that only 40 countries did
not vote for this (35 abstained, and five voted against it), compared with 141
countries who voted in favor. But those 40 countries, which include India and
China, account for the majority of the world’s population.
These deeper changes in capitalism and geopolitics increase
the stakes this week. Joe Biden and his European interlocutors have a lot on
their plate with Putin’s escalating terror and nuclear-tinged threats, but they
also need to address the wider economic ramifications of the war sooner rather
than later. Do nothing and the drift toward protectionism will inevitably
accelerate. The Chinese, for one, seem pretty sure that the West lacks the
collective character to keep up its current stance as energy prices soar and
compassion fatigue sets in. But we still have time to shape a very different
future: one in which global wealth is
increased and the Western alliance bolstered.
Despite his less-than-stellar presidency thus far, Biden
comes to Europe with several big advantages. The first is that the West is more
united and determined than it has been for decades. The sense of unity behind
liberal values is no longer confined to the metropolitan elite. One of the
great problems with modern liberalism for the past few decades has been its
lack of a gripping narrative and a compelling cast of heroes and villains.
Globalists have talked a bloodless language of “comparative advantage” and
“non-tariff barriers,” while populists have talked about sneering elites and
hidden conspiracies. Now Putin has inadvertently reversed all that. Freedom is
the creed of heroes such as Zelenskiy; anti-liberalism is the creed of monsters
who drop bombs on children.
The second is Biden’s long experience. George H. W. Bush,
another long-serving vice president who stumbled into the big job, was much
mocked for his lack of “the vision thing.” Yet his handling of the last days of
the Soviet Empire in 1989 was exemplary: He provided Mikhail Gorbachev with
gentle encouragement, resisted premature triumphalism, and worked with allies
to lay the foundations of a new global order. So far, Biden’s handling of the
Ukraine invasion has been similarly nuanced. He has drawn a line between
supplying the resistance and becoming involved in the war (or giving others an
excuse to claim the U.S. is involved). And he has put firm pressure on China to
stay out of the conflict.
Biden needs to go
further in the coming weeks. He needs to reinforce the Western alliance so
that it can withstand the potential storms to come. The American president
has spent his first year in office talking about reengaging America with the
world after Trump’s isolationism, and forming an alliance of democracies, but
so far he has failed to give his allies the economic cement to bind together
these alliances — especially free-trade pacts. His commerce secretary, Gina
Raimondo, was dispatched to Asia last year to talk about inviting countries
like Singapore and Malaysia into vague things like “frameworks,” when all
America’s Asian allies really want is a solid trade deal — in fact, one like
the CPTPP deal that Trump jettisoned.
Biden needs to recognize that expanding economic interdependence
among his allies is a geostrategic imperative. He should offer Europe a
comprehensive free-trade deal to bind the West together; it could be a slightly
remolded version of the rejected Transatlantic Trade and Investment
Partnership, based on regulatory convergence (under which a product safe to
sell in the EU is safe to sell in the U.S., and vice versa). He should also
join CPTPP.
It is not difficult to imagine Europe or democratic Asia
signing up for these sorts of pacts, given the shock of Putin’s aggression and
their fear of China. Biden’s problem is at home. Why should the Democratic left
accept this? Because, Biden should say, Ukraine, China and America’s security
matter more than union votes. The U.S. president’s first job is to protect his
country. Biden is old enough to remember that the United States won the last
Cold War peacefully because it united the free world behind it. This is the way
to win the next one peacefully as well. Put together the free world’s economic
potential — the EU, North America, Latin America’s biggest economies and the
democracies of Asia — and it can do more than see off the autocracies; it can
pull them toward freedom.
Biden should pursue a two-stage strategy: First, deepen
economic integration among like-minded nations; but leave the door open to
autocracies if they become more flexible. China could be wooed toward freedom.
But nothing will improve unless Biden first glues together the free world. That means freer trade — and the sooner
he tells his party that, the better.
Biden can soften that message at home by adding a political
dimension to his trade agenda. “Build back better” applies to globalization,
too. A global new deal should certainly include a focus on making multinational
companies pay their taxes, and the environment should be to the fore. But Biden
should also talk about the true cost of protectionism in terms of higher
prices, worse products and less innovation. Spreading economic freedom remains
the best guarantor of both global and American prosperity: global prosperity
because, for all its travails, the last 50 years of globalization have enriched
most of the world; and American prosperity because his country’s prosperity
depends on his country’s security.
Constructing such a “new world order” will be laborious
work. But the alternative is a division of the world into hostile economic and
political blocs that comes straight out of the 1930s. Biden, Johnson, Scholz
and Macron should think hard about how history will judge them. Do they want to
be compared to the policymakers in the aftermath of World War I, who stood by
impassively as the world fragmented and monsters seized the reins of power? Or
would they rather be compared to their peers after World War II, policymakers
who built a much more stable and interconnected world?
Nobody would understand the significance of that choice
better than Keynes. He first came to prominence as a decrier of the Treaty of
Versailles — and the know-nothing statesmen of the time. But at the end of
World War II he participated in something that was much more constructive.
In 1944, with the defeat of Hitler seemingly inevitable,
President Franklin Roosevelt invited the Allied powers to a conference to
design the postwar order — under the aegis of Keynes and, on the American side,
the economist Harry Dexter White.
The elderly Keynes had heart problems and a strong dislike
for American summers — “one sweats all day and the dirt sticks to one’s face” —
so he was delighted that the conference was held in New Hampshire rather than
the infernal federal capital. The Mount Washington Hotel in the White Mountains
was selected partly for the climate, but also because it had all the amenities
of civilized life — its own power plant, post office, golf course, church,
beauty parlor, barber shop, bowling alley and cinema.
This was the setting for the most consequential conference
since the disastrous Paris Peace Conference in 1919. Keynes, no longer a
protectionist, played a leading role in designing the International Monetary
Fund, the World Bank, and the infrastructure of the postwar Western order of
stable exchange rates. He helped persuade the U.S. to lead the world rather
than retreating into itself. He helped create the America of the Marshall Plan.
This Bretton Woods settlement created the regime that eventually won the Cold
War and laid the foundations for the second age of globalization.
At the closing banquet on July 22, the great man was greeted
with a standing ovation. Within two years he was dead — but the world that he
did so much to create lived on. That world does not need to die in the streets
of Kyiv. But it is on course to do so, unless the leaders meeting this week
seize the moment to create something better.
— With assistance by Lara Williams
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