History at a Juncture


As the world surveys the geopolitical damage generated by Donald Trump’s presidency and the COVID-19 pandemic, the coming months take on disproportionate importance as a hinge of history. Veteran diplomat Jeremy Kinsman explores the hazards and opportunities Canada will face. 

Jeremy Kinsman 

How often in these dark months have we read or said that we can’t revert to the pre-COVID “normal”; how it provides an opportunity for a better world? In The Economist, Margaret MacMillan, called it a “juncture, where the river of history changes direction.” But toward better or worse?

Martin Wolf of the Financial Times warns that it’s “Reasonable to bet that the world which emerges on the other side of the pandemic will be less open than the one that entered it.” Can nations trade dangerous competition for national advantage for cooperative solutions to humanity’s challenges? Can they sustain globalization’s benefits, which lifted billions from poverty, while taming its harmful fixation on financialized profit?

America’s retreat under Donald Trump into truculent neo-isolationism is a huge negative. His mantra of “America First” fans global flames of populist nationalism, evoking old demons that caused the Second World War. His defeat in November won’t alone restore the world’s cooperative spirit without evidence that international institutions work effectively in the interests of all. Moreover, it may not end the increasingly toxic rivalry with China for global primacy that divides the world, defines our time, and chokes the prospects of global cooperation. This crucial fourth “juncture” in the last seventy-five years follows: 1), In 1945, the creation of our rules-based system; 2), In 1989, the Cold War’s end; and 3), In 2008, the financial system’s breakdown.

Canadians revere the postwar creation of the cooperative rules-based system built on the ashes of the 20th century’s murderous wars under inspired American leadership that mixed idealism and realism. While the UN Charter opens with “We, the peoples,” the United Nations always belonged to their sovereign member-states. Most “people” had no states of their own, being still colonies.

Ex-U.S. Secretary of State Dean Acheson’s memoir Present at the Creation reminds us that UN members “are still nations, and no more can be expected of this forum for political adjustment than the sum total of (their) contributions.” Fast-forward to the politicized criticism of the UN’s World Health Organization for not extracting adequate transparency and compliance from China, as if the WHO failed to live up to a supranational mandate that the UN’s founders, especially the sovereignty-obsessed U.S., never intended.

That wasn’t a limitation when member-states were on the same page, drafted by the U.S. as the world’s uncontested leader, confident in its ability and responsibility to shape events, accounting for half of global GDP, having emerged from the war relatively unscathed. Acheson viewed the United States as “the locomotive and the rest of the world the train…that the economic aspects (were) no less important than the political aspects of peace. And only the United States had the power and the purpose to yoke them together.”

The international trade and payments ecosystem aimed to end the “beggar-thy-neighbour” nationalist protectionism that deepened the Great Depression and hastened WW II. It valorized open markets and private enterprise, too much for Stalin’s USSR to ratify, ominously signaling a divided world to come, but worked miracles for the industrialized West. Their economies boomed for three decades that the French describe as les trente glorieuses. 

Shunning different perspectives, needs and grievances of the emerging “global South,” whose national liberations occurred over those same decades, its working hypothesis was that emerging economic powers—China, India—would just merge into the globalized system of financialized capitalism. But as Martin Wolf puts it, “Latecomers will not accept disadvantage.” Meanwhile, the UN’s peace and security aspects, the General Assembly and Security Council, were paralyzed by the ideological Cold War. 

Its seemingly miraculous, euphoric end in 1989 provided the next defining “juncture” and opportunity to set things right. In ending both the Cold War and the USSR’s communist regime for essentially moral and idealistic reasons, Mikhail Gorbachev facilitated the liberation of Eastern Europe, the fall of the Berlin Wall and the unification of Germany. Withdrawal of more than a million Soviet military ended its empire, not in defeat, but to pursue a “European common home.”

Gorbachev’s project to transform the controlled Soviet society and economy that was unprecedented in scale and scope received inadequate Western support and he lost control of the process and public buy-in. Populist rival Boris Yeltsin, who couldn’t displace him as President of the USSR, broke the Soviet Union into 15 new autonomous, largely mono-cultural republics in 1991. In April 1992, George H.W. Bush committed the U.S. to contribute $24 billion to support the Russian re-form project. But grants over the 10-year period from 1990 to 2000 were $5 billion, or less than one year’s aid to Egypt or Israel at that time. Bill Clinton, whose presidency roughly coincided with that of Yeltsin, understood Russia deserved more help but couldn’t budge the U.S. Congress.

Moreover, Western economic advisers and institutions counter-productively pressed for an abrupt shift to an open market economy via “shock therapy” and “structural adjustment”, deepening what The New Yorker’s David Remnick described as “the destruction of everyday life,” as the ex-Soviet economy plunged by 42 percent. Sadly, in Russia, democracy and liberalism became and remain toxic words.

Basking in the notion it had “won” the Cold War, ingesting what Francis Fukuyama declared to be “the universalization of western liberal democracy as the final form of government,” Western self-congratulation (for Gorbachev’s initiative) extended to the assumption that the U.S. economic model was universally validated. By then, the U.S. economy was at one-fourth of the world’s GDP. But as Richard Cohen of the New York Times wrote, the U.S. “got used to the century being theirs.”

Newly sovereign states of eastern Europe and the ex-USSR initially looked to “imitate” Western economic and political systems to fill the void left by the evacuation of communism. But needing belief-systems more authentically “theirs,” nationalist populist leaders plumbed pre-communist pasts for old religious, traditional, and ethnocentric narratives, rejecting secular, multi-cultural western liberalism, and kick-starting a fixation on national “identity” that anticipated its global surge today.

A COVID infection rate map of the western world, a new geopolitical map quite different from the multilateral order after the Second World War in 1945, the end of the Cold War in 1989 and the collapse of global markets in 2008. Martin Sanchez Unsplash photo

Meanwhile, the prosperous 90s roared ahead, fueled by the globalization of world markets and information technologies indifferent to cultural pushback. WTO membership in 2001 rewarded the extraordinary rise of China, whose communist leadership had opened up the economy without embracing democracy. An emerging spirit of “globalism” conceded a need to pool some sovereignty to meet trans-national challenges of climate change and human security. But it was submerged by the 9/11 attacks against U.S. primacy, which radically changed the world’s agenda, thickened borders, prompting wars and waves of refugees, but with no interruption of the globalization of markets—until the still under-estimated financial crisis of 2008 essentially killed 1989’s “one-world” belief in convergence, setting the scene for another “juncture” in world affairs.

It became a missed opportunity. The world’s banking system was rescued, largely by the U.S., but not its victims, sapping belief in the fairness of Western-driven capital markets. Even in developed economies, resentment of globalization’s down-sides that exploited the vulnerable roiled hollowed-out communities of people left behind, accelerating grievance-based nationalist populism and polarizing electorates at the expense of the moderate centre, where compromise lives. Outcomes included Brexit and Donald Trump’s ascendancy.

Once elected, Trump’s anti-globalist administration abandoned world leadership, withdrawing from multilateral accords on climate, nuclear weapons, trade, health, and human rights, and undermining the world’s security and economic cooperation framework that the U.S. had itself created. The Trump administration unilaterally weaponized tariffs even against democratic allies in a vindictive and destructive search for competitive advantage, reducing U.S. relationships to bilateral “deals.” The most important and elusive would be with China.

Though America now accounted for only one-seventh of the global economy, the mindset of U.S. global primacy endured, increasingly rattled by China’s spectacular and unprecedented rise. President Xi’s own nationalistic pursuit of grandeur and China’s history of violating fairness requirements of multilateral and bilateral trade agreements made the rivalry toxically litigious. 

In early 2020, the COVID-19 pandemic suddenly emerged as the next potential defining global juncture. As the challenges and threats of climate change, nuclear proliferation, food security, and others loom over us, its proof of our need to cooperate across borders is understood everywhere except possibly the White House. But as a stress test, COVID-19 exposed an uneven, competitive, and politicized response, hobbled without U.S. leadership that had coordinated the international effort to subdue Ebola only five years earlier. 

The pandemic turned countries inward. Borders matter more. But if the impulse to reduce vulnerability by self-sufficiency and shorter supply chains occurs at the expense of trade, economic recovery will not generate adequate revenue to service the mountains of debt from the trillions of dollars of relief programs. Trade drives globalization’s historic benefits, which over 20 years cut the numbers living in extreme poverty from 40 percent to 10 percent of global population. 

Can international political will be mobilized? Tony Blair argues it should be obvious that doing the best for your country means working together, not that cooperation means doing the best for other countries. Ministers Freeland and Champagne have been on it, promoting a multilateralist defence solidarity group along with France, Germany and others. Canada convened efforts to reform the WTO. 

Canada’s hands-on commitment to cooperation and global reform must co-exist with the daily stress of managing our U.S. relationship, an existential balancing act, but unrelenting. If like-minded Americans return to power under Joe Biden, convening internationalist adults in a global virtual situation room will be easier. But if they don’t, we’ll have to work even harder.

It will require moderation of the increasingly “civilizational” U.S.-China antagonism. Former U.S. Treasury Secretary Larry Summers offers open-eyed realism: “We need to craft a relationship with China from the principles of mutual respect and strategic reassurance, with rather less … feigned affection … We are not partners. We are not really friends…We need to be pulling in unison if things are to work for either of us. If we can respect each other’s roles, respect our very substantial differences, confine our spheres of negotiation to those areas that are most important for cooperation, and represent the most fundamental interests of our societies.”

Our generational challenge—saving the vital postwar system through the salvation of its reform—represents a tall order. But stakes couldn’t
be higher.  

Contributing Writer Jeremy Kinsman was Canadian ambassador in Moscow, Rome, London, and Brussels and is a distinguished fellow of the Canadian International Council.