May 21, 2006

Liberalism Under Attack (And Poorly Defended)

This past week was a bad one for liberalism and free societies in general. President Ahmadinejad of Iran sent an 18-page letter to President Bush in which he stated that liberal democracy has failed humanity and that people are (rightfully) turning to God instead. On the other side of the world, the Bolivian President, Evo Morales, who just nationalized the Bolivian gas sector and has threatened further nationalization of the country’s resources, stated that neoliberalism has failed and that Latin America is on the verge of a “new era” (presumably more failed socialist experiments). At the same time, despite some of the strongest economic growth and lowest unemployment in the industrial world, most Americans are pessimistic about the economy, and increasingly skeptical that the benefits of free trade and globalization are worth the costs.

After the end of the Cold War, it was assumed that the tenets of liberalism--free markets, open societies, private property rights, and democracy--would soon be ascendant throughout the world. Liberal societies had delivered the goods, and liberal principles guided the strongest nations on the planet. So why does the transition to more liberal societies now seem to be lagging, and why has our own ambivalence grown so much in recent years?

While the answer is complex, a few reasons stand out.

One of the hallmarks of societies governed by free markets is the process of “creative destruction” in which the forces of capitalism continually reshuffle the deck of winners and losers and create large degrees of uncertainty. This can come into conflict with the sense of stability and security that people crave. For this reason, some of liberalism’s strongest proponents have also advocated government policies that create social safety nets and redistribute the gains throughout broad sections of the populace. This has been one of the central paradoxes of great liberal societies: in order to ensure that people support free markets, the government must act to ease the pains of transition and ensure that wealth doesn’t become too heavily concentrated at the top.

On this score, the Bush Administration, with its strong aversion to progressive policies, has utterly failed. At a time when the forces of globalization are accelerating, the need for greater stability is increasing; yet within the U.S. the ranks of the poor continue to grow, median income has stagnated, more and more people lack basic health insurance, education has become significantly more expensive, and income (and wealth) inequality has sharply increased. Apart from this indifference to the plight of the lower and middle classes, who have not shared substantially in recent economic gains, the Administration has promoted an energy policy full of subsidies for fossil fuels (and rebates for SUVs Hummers), but little in the form of greater conservation. Such a policy will do almost nothing to help America become less dependent on oil, or ease prices at the pump in either the short or long-run.

On the international front, liberalism sometimes has been a harder sell since it often appears to pit the economic interests of rich superpowers against the interests of smaller developing countries. This (largely untrue) perception can only be overcome if developed countries truly open up their markets and eliminate subsidies, offer trade adjustment assistance to poor countries, and support institution-building, without which smaller nations will not be able to reap the gains brought about by free markets (and will likely lead as well to cronyism and corruption). Unfortunately, over the last few years, the richer nations like the United States have not made sufficient movement towards opening up their own markets or providing incentives for developing nations to complete the latest round of multilateral trade negotiations. The Doha round, dubbed the “development round”, is now stalled with no signs of being reinvigorated anytime soon; this is a blow to continued global economic growth and integration, and to the spread of liberalism.

The Bush Administration shares a large part of the blame and has missed a great opportunity for constructive engagement with the world on the benefits of free trade. Bush imposed tariffs on steel and fought the WTO rulings on cotton export subsidies; its signature development aid program, the Millennium Challenge Accounts, has barely gotten off the ground (despite its good premise).

In addition, the Administration’s foreign policy has given liberalism a bad name. In many parts of the world democracy is now associated with images of war-torn Iraq and Abu Ghraib. The religious fundamentalism we have unleashed in Iraq is actually violently opposed to the very foundations of liberalism, and is yet further evidence that simply holding elections does little to ensure openness and freedom in society. At the same time, visas for foreigners wanting to come and study in the U.S. have decreased (at just the time we need to actively promote the U.S. image abroad), and almost no action has been taken to prevent the Sudanese genocide.

What is so tragic is that not only is the retreat of liberalism a harbinger of diminished economic prospects for countries such as Bolivia and Iran, but the widespread embrace of liberalism would be extremely beneficial to U.S. interests. If the Bush Administration weren’t so myopic in its worldview, it would realize that a concerted defense of liberalism, backed with progressive policies at home and serious engagement with the rest of the world on issues of trade, the environment, and human rights, constitutes one of the best ways to ensure continued U.S. economic prosperity and win allies in the war against Islamofascism.

I am not suggesting that liberalism’s diminished status is totally due to the failures of the Bush Administration; there is plenty of blame to go around. But as the greatest economic and military power, the U.S. is the country with the most clout and influence. Our policies have been inconsistent at best, and in many ways counter-productive. At just the moment when a forceful defense of liberalism is needed, the world instead is getting mixed messages from a superpower seemingly more intent on global militarism than on actually leading by constructive example. (Exception: one area where the Bush Administration has been doing a good job is in fighting international sex trafficking)

Liberalism will ultimately win out over competing ideologies, whether socialist or theocratic, because it is the best set of ideas the world has ever known. No other system of governance has ever led to such sustained levels of prosperity.

The real question is not if all of the nations of the world will ultimately adopt liberal economic and political systems, but when. The “when” matters a great deal, however; whenever liberalism wanes or is ignored, it means less prosperity, less efficiency, less openness, less human fulfillment, and unfortunately, more human misery.

Jason Scorse