Constant dollars

The new era of the absence of the West

The last time the UK hosted a G7 summit, in 2013, Russia had yet to annex Crimea (resulting in its expulsion from the G8) then Chinese President Xi Jinping did had not yet abolished term limits and Covid-19 did not exist. In short, we have entered a darker era. “The world is what it is”, as VS Naipaul wrote in the famous opening line of his novel A bend in the river. “Men who are nothing, who allow themselves to become nothing, have no place there.”

Any idea that this would end with the departure of Donald Trump as US president has always been an illusion. As our international editor Jeremy Cliffe writes in this week’s cover story on page 20, when G7 leaders meet in Cornwall June 11-13, they will face a world in which “China has intensified its threats against Taiwan, Russia has threatened Ukraine by massing troops at its border, Myanmar has experienced a military coup, democracy in India (apparently part of the liberal alliance of Joe Biden) has deteriorated further ”.

In February 2020, the annual report of the Munich Security Conference spoke of a new era of “the absence of the West”, an era in which “the West is in retreat, in decline and constantly under attack – to both from the inside and the outside ”. The Covid-19 pandemic has reinforced this feeling of drift and uneasiness.

China, which suppressed the first reports of the virus and sought to thwart investigations into its origins, has emerged from the pandemic strengthened. The country of 1.4 billion people, which has held around one million Uyghurs in concentration camps in Xinjiang province, is now expected to overtake the United States as the world’s largest economy by 2028, five years earlier than expected. Xi is not running a benevolent regime. It prioritizes the interests of China and the Communist Party.

Mr. Trump has spent much of his time thinking about how to emulate the autocrats and deal with the rise of China. Mr. Biden made it his mission to contain them. Rather than passively embrace America’s decline, the new president is pursuing growth through bold moves like his $ 1.9 billion fiscal stimulus and $ 2 billion infrastructure program.

By proposing a minimum overall corporate tax rate of at least 15%, Mr. Biden is putting an end to the regressive “race to the bottom” that has prevailed since the 1980s. As Gordon Brown notes in his essay at on page 27, “It would deliver a long-awaited message that there will be no hiding places for tax evaders – and that the billions of dollars currently siphoned off by tax evasion will now be used to fund healthcare, the education and public services ”. According to the Institute for Public Policy Research, an overall minimum rate of 15% would raise an additional £ 7.9bn per year, while a rate of 21% would raise £ 14.7bn. The Trump administration’s haphazard unilateralism has given way to Mr. Biden’s more pragmatic multilateralism: the United States has joined the Paris Agreement, retained its membership in the World Health Organization, and reaffirmed its commitment to NATO.

Progressives should not be fooled, however: there will be no return to the pre-Apostolic age of the 1990s, especially because it never existed. The era of liberal post-Cold War triumphalism was the one that incubated future catastrophes. The United States invaded Iraq in 2003 (a war backed by Mr. Biden at the time) in the belief that liberal democracy could be imposed on the Middle East through military intervention. The global financial system and the eurozone came close to collapsing in the wake of the 2008 crisis after policymakers were wowed by visions of perpetual growth, market-driven globalization and “ever closer unity.” “.

These liberal illusions have been rightly discredited. But global cooperation remains essential. Faced with the Covid pandemic, some states have retreated into self-destructive nationalism. Yet in a time of chronic emergency, splendid isolation is an illusion. Rather than liberal triumphalism or defeatism, lucid realism should guide world leaders in this new era of disorder. After all, the world is what it is. There is no point in pretending otherwise.

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