Attendees of the annual World Economic Forum this week in Davos, Switzerland, are reportedly in a somber mood. The past two years have upset their dreams of unfettered globalism as war, disease, inflation and famine reveal its risks and downsides. Their unease is long overdue.
Russia’s invasion of Ukraine and China’s suppression of freedom in Hong Kong have exposed the second poorly conceived dogma. That idea held that the aggressive instincts of nondemocratic nations would be curbed by economic interdependence with the democratic West. It’s now abundantly clear that ambitious autocrats are more than willing to impoverish their citizens in the pursuit of malign objectives. European leaders sincerely believed that when push came to shove, Russian President Vladimir Putin would prefer wealth over military power. Wrong!
The consequence of this faulty premise is now unfolding for the world to see. European nations are attempting to forgo Russian oil by buying other, more expensive energy sources. And the Western world’s decision to levy unprecedented sanctions on Russia will hurt their own economies, most evidently in the food crisis resulting from embargoes on Russian grain and fertilizer exports. These nations now clearly see that economic entanglement makes them beholden to autocrats, not the other way around. This is a serious blow to Davos-ism.
The third fallacious dogma is that supply chains would always remain open and free. The pandemic’s continuing impact on China shows this is decisively wrong. Businesses are now realizing that there are huge risks to outsourcing production to nations thousands of miles and many oceans away. If those plants were within the West, business could pressure democratically elected governments to balance the economic harm of lockdowns against the putative health gains. They have no such influence with China and other foreign governments, leaving them helpless as they fail to fulfill orders.
No one denies that globalism has been a massive boon for the world’s poor. The share of the world’s population living in extreme poverty, as measured by the World Bank, has plummeted from 36 percent in 1990 to about 9 percent today. That decline has been especially sharp since China joined the World Trade Organization in 2001, dropping from a shade under 30 percent to its current level. This is a massive advance, and no decent person refuses to credit globalism for this achievement.
But democratic governments do not exist to finance other nations’ advances. Their primary responsibilities are to support their own countries. It would be wonderful if they can achieve that while helping others, but no set of elected leaders will long endure if they ignore the public’s needs at home.
The exposure of globalism’s bankrupt premises will drive public opinion toward rebalancing in the foreseeable future. That does not have to mean rebuilding tariff walls and severely curtailing international trade — although it could mean that if the Davos set decides it’s better to break than bend with the prevailing wind. But it does mean that citizens will demand reform, and that reform will slow the pell-mell rush to One Worldism that Davos attendees avidly desire.
They will wail and gnash their teeth as nations push to re-shore crucial industries and favor investment closer to home and within their spheres of influence. But that’s what the Davos crowd’s ancestors — the aristocrats and plutocrats of the 1930s — did as the modern mixed economy was built in reaction to the Great Depression. They resented every new tax and regulation that democratically elected governments imposed. The result, however, was a politically stable and free West that became the envy of the world.
That’s what prudent populists should aim for today. They should want to reform global capitalism, not end it. Most important, they should preserve democracy and the rule of the people. Davos attendees might be tempted by the alleged efficiency of autocracy, but populists should reject economic advancement if it comes at the price of political regression. Hong Kong might be rich and stable, but the messiness of freedom is preferable.
For decades, the specter of Davos’s undemocratic globalism haunted the world. Today, free citizens of the world can banish that ghost if they so choose. They have nothing to lose but their chains.