The Broken Bargain

How Nationalism Came Back

Meeting in the middle: Viktor Orban greets Angela Merkel in Budapest, February 2015. Tibor Ilyes / AP

Nationalism and nativism are roiling politics on every continent. With the election of President Donald Trump in the United States, the growing power of right-wing populist parties in Europe, and the ascent of strongmen in states such as China, the Philippines, and Turkey, liberals around the world are struggling to respond to populist nationalism. Today’s nationalists decry the “globalist” liberalism of international institutions. They attack liberal elites as sellouts who care more about foreigners than their fellow citizens. And they promise to put national, rather than global, interests first.

The populist onslaught has, understandably, prompted many liberals to conclude that nationalism itself is a threat to the U.S.-led liberal order. Yet historically, liberalism and nationalism have often been complementary. After World War II, the United States crafted a liberal order that balanced the need for international cooperation with popular demands for national autonomy, curbing the aggressive nationalist impulses that had proved so disastrous in the interwar years. The postwar order was based on strong democratic welfare states supported by international institutions, such as the World Bank and the International Monetary Fund (IMF), that coordinated economic policy between states while granting them the flexibility to act in their own national interest. The political scientist John Ruggie has called this arrangement “embedded liberalism,” because it embraced free markets while subjecting them to institutionalized political control at both the domestic and the international level—a bargain that held for several decades.

Yet over the past 30 years, liberalism has become disembedded. Elites in the United States and Europe have steadily dismantled the political controls that once allowed national governments to manage capitalism. They have constrained democratic politics to fit the logic of international markets and shifted policymaking to unaccountable bureaucracies or supranational institutions such as the EU. This has created the conditions for the present surge of populist nationalism. To contain it, policymakers will have to return to what worked in the past, finding new ways to reconcile national accountability and international

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