The West’s Strategic Mistakes and Broken Resolve. Jonathan Holslag on World Politics Since 1989

Our editor Ferenc Laczo interviews Jonathan Holslag (Free University Brussels) regarding his new book “World Politics Since 1989” (Polity Press). You may listen to the podcast or read the edited transcript below.

Ferenc Laczo: Your new book World Politics Since 1989 devotes much attention to the story of the West, but you are similarly interested in the perspectives of practically all the other players. You discuss the decades since 1989 as a story of lost momentum and long-missed opportunity and diagnose a profound power shift. You show that there has been increased trade, much growth, and new prosperity. However, economic openness, even if it truly existed, did not lead to political openness. Political openness in fact hardly increased during the past 30 years, while the West in many ways undermined its own position at the center of the global order.

As you persuasively argue, globalization as we have known it has helped make authoritarian countries rich. High levels of trade, capital movement, migration, and the exchange of knowledge did not alleviate strategic distrust and did not lessen the force of nationalism either. Let me ask you some rather general questions first: what are some of the key reasons for why the West has ended up undermining its own position? Why has there been so little political opening and democratization in these post-Cold War decades?

Jonathan Holslag: That is an excellent summary of the book’s key arguments and, as you indicated, these are very broad questions indeed. Let me first state how I came to write the book, which will lead me to answering your question more directly. What is quite startling is that, about three decades after important walls and important political barriers came down, we see the return of walls and fences as well as more and more nationalism and protectionist narratives inside the West and around it. If you teach the contemporary period, one of the evident questions you can ask is: how did we transit from a period of optimism and great expectations about openness and democracy into an age in which retrenchment, nationalism and authoritarianism become very prominent again and in which many questions are asked about the very use of democracy and even our way of life? There are many expert explanations about that. 

One of the important characteristics of my new book is that I did not want to pin it down to a single explanation or a single key observation. I think dealing with world politics also implies having an eye for the complexity, and for the fact that a lot of elements are affecting one another. A very important explanation to consider is that so-called “constructive engagement”, a policy which expected countries such as Russia, China, and the Gulf States to slowly move toward democracy and economic openness as a consequence of trade and diplomatic exchange, was very inconsistent. From the early 1990s, constructive engagement became a matter of pursuing business without necessarily fostering political change. It became very opportunistic: key companies went far to have access to the Chinese or Russian markets, yet the diplomatic efforts to really engender political change were very modest. When we saw that some of these countries were backsliding, such as Russia from the arrival of Putin onwards, and China two years after its accession to the WTO, the West did not have the courage to act.

That brings me to a second important explanation. Often, we knew very well that this policy of constructive engagement was a failure. I have been participating myself in some of the internal evaluations by EU institutions throughout the years, as well as some of the dialogues that we had with Asian countries like China, and it was very clear that it was not working. We knew there was a problem, but we lacked the political courage to clench our fist and warn these countries that, if they were to diverge considerably from the common agenda, we would have to reconsider the economic dimension too. 

A third important explanation refers to the fact that there was a sort of economic detachment of key companies from the Western marketplace: many MNCs – such as Volkswagen, Siemens, General Electric, and General Motors – came to identify their future and profit more with emerging countries than with the future of the West. As they became more powerful, they started lobbying and insisting on pragmatism and caution towards many authoritarian countries. As a result of that, governments became very reticent to acknowledge that constructive engagement was turning into a failure.

Finally, it is very important that, as a rich society, we have become very dependent on these authoritarian countries for our consumerism. We can no longer imagine life in Europe without having access to all those nice and relatively cheap Chinese goods, or to still relatively favorably priced Russian natural gas. 

It seems to me we became addicted to a lot of things that authoritarian states had to offer and this broke our resolve to stand up for our values. 

The tragedy overall is not so much that we failed to change China, Russia, and other countries; they made it clear from the beginning that they were unlikely to do so. 

The more important downside of the failure of our constructive engagement is that it has weakened democratic countries from the inside. As we tied our markets to the imports of fossil fuels from those countries, we had deindustrialization and the departure of a lot of activities to authoritarian countries. We lost important momentum to reform our industry in a more sustainable and green direction, and to implement policies of strategic autonomy.

All of the above had two important effects: the strengthening and emboldening of authoritarianism, the weakening of Western economies and, as a result, an important opportunity lost to preserve the legitimacy of the democratic system.

Ferenc Laczo: Your book is divided into three acts that correspond to the last three decades. Let us explore them a little more. In the concluding part of the book, titled “Watershed”, you refer to the 1990s as “the charade of liberal humanitarianism”, the first decade of the 21st century as “a travesty of globalization”, and you call the 2010s “retribution and retreat.” 

You show that economic globalization and democratization went hand in hand in the 1990s. However, while the former advanced, the latter stagnated after 2000. The 2010s have seen stagnation when it comes to economic globalization and recession when it comes to democracy. Could I ask what you mean by these expressions, i.e., “the charade of liberal humanitarianism”, “a travesty of globalization”, and “retribution and retreat”? More generally, how would you explain the sequence of these three decades?

Jonathan Holslag: The 1990s were essentially characterized by what we can consider a very shallow and inconsistent kind of foreign policy liberalism, with the Clinton administration upfront and American National Security Strategy stating that the key intention of foreign policy conduct was more economic and political openness in the world. However, as I indicated with reference to constructive engagement, this kind of liberal approach was very one sided and the West missed many opportunities to genuinely tie conditions for political liberalization to the economic agenda. The fact that the Clinton administration dropped the human rights clauses to grant China the most-favored-nation approach provides an important example, as does the fact that we allowed China to enter the WTO. Chinese officials were making it very clear at that time that they would not backtrack on so-called strategic industries and that the government would retain the commanding heights of the economy, i.e., that the communist system had to be preserved. There was a betrayal of liberalism in Western foreign policy already in the 1990s. 

I also think that it came with a betrayal of the core convictions of liberalism in internal policy. Let us look, for instance, at the policy of the internal market. If one goes back to the origins of liberalism and its roots in the Enlightenment and free markets, one finds transparency first: production chains must be sufficiently transparent for producers. A free market in the spirit of the Enlightenment, in the spirit of true liberalism, also requires the emancipation of citizens: they have to be critically minded as consumers. First of all, it has to be very clear to them what the main ideals and values are, which in turn should allow them to make rational decisions about their consumption. Furthermore, they must be properly aware of what the social and national projects are and what the state is all about.

I believe that was another important downside of neoliberalism in the 1990s: it abandoned the cultivation and promotion of strong citizenship. Citizenship, or civic education, if you wish, continued to erode after 1989 – the trend was already visible in the 1980s. Not many efforts were made to make sure that the pillars of democracy and its origin were properly understood by the citizens who are supposed to vote and decide. 

I believe that many of the seeds of bipartisanship and political fragmentation we see today were sown back in the 1990s. 

Both in terms of internal and external policy, liberalism and especially neoliberalism was, in essence, more of a charade or a façade than a genuine project.

When we come to the “travesty of globalization” after 2001, in terms of foreign policy the West continued to strengthen authoritarianism and increasingly turned its back on the liberal agenda. 9/11, for instance, forced us to work very closely with authoritarian countries in the Gulf even as our diplomats and intelligence services continued to report that those countries were at least passively supporting extremism and terrorism. During the Doha Round at the WTO, which started in late 2001, we gave up to a large extent on the idea of reciprocity. 

As for internal politics, instead of really standing up for the defense of democracy and the core convictions of Western society, politicians like George W. Bush in effect came to see consumption and consumerism as a main patriotic act. In the United States you saw a lot of American flags being waved and heard a lot of patriotic statements at the time, yet patriotism became largely reduced to going to a shopping mall or even purchasing on Amazon. Such patterns obviously create a very shallow notion of citizenship. In Europe too, we were in the habit of over-emphasizing the importance of the internal market and economic openness without paying proper attention to strengthening citizenship. These diseases, if you wish, were already visible in the 1990s and events like the terrorist attacks of 9/11 only accelerated their spread. Perhaps one of the main achievements of Al-Qaeda has been that their terrorist attacks somewhat accelerated this sort of hollowing out of citizenship and patriotism, and encouraged politicians, certainly in the United States, to identify with very trivial and materialistic things.

When it comes to “the retrenchment and the retribution”, I think that is exactly what we are witnessing in Afghanistan as we speak [the interview took place on September 1, 2021]. 

What we have been witnessing in the last decades is that regimes that we had empowered – China, Russia, some of the Gulf States – are actively pushing back against Western values and Western interests. 

Moreover, some of the power vacuums that we have created with our, shall I say, reckless interventionism in Iraq and Afghanistan have turned around and have led to a defeat, or at least a humiliation, of the West. 

I believe that what we have witnessed in the past decade or so is the price that needs to be paid for the preceding two decades of hubris – and that only seems to affirm and confirm a tendency of the West to opt for retrenchment. In the European Union we see a discussion about the refugees from Afghanistan and there is a very strong tilt towards retrenchment, while in the United States disengagement is somewhat explained by the necessity to turn to China. However, all in all, what you see is that the West is being repelled by a lot of its competitors. The question, of course, is what the consequences of that might be in the longer run.

Ferenc Laczo: Let us explore your interpretation of global politics a bit more. You claim that states, large companies, and international organizations shape international politics. You also state that the globalization of recent decades was basically made through a prosperous and technologically advanced West, the labor force of China in particular, and the raw materials of the rest of the world. Political tensions were never far from the surface as large parts of the world have remained economically dependent on the West but also suspicious towards it. 

Crucially, you show that developing countries and multinational companies created an alliance and resisted tying trade rules to social and environmental standards. As you write, the main priority of the West was “to empower consumption and corporate giants, whatever the consequences in terms of financial instability, pollution, and geopolitics.” Trade was soon all that mattered. How has this alliance come about between developing countries and multinational companies? Secondly, and equally importantly, what has been the role of China in shaping globalization and how did China manage to seize its window of opportunity so cunningly?

Jonathan Holslag: This unholy alliance is indeed a fascinating theme. We can see three important parts, just as you summarized. First, Western governments carried out a pro-consumption policy; a main objective of Western economic policy was to sustain consumption by repressing inflation. In doing so, cheap imports were very helpful and so was continuing to pile up external credit which allowed governments to spend and consumers to consume. In addition, big multinationals were restlessly searching for cheap labor, new export markets and new investment markets – not only manufacturing multinationals, but also big investment companies that search for higher interest rates and return on their investment. Finally, we have the elites of developing countries – I would not say the people – who sometimes were driven by the expectation that those Western multinational companies would help them develop their countries. However, other times these leaders were just very opportunistically looking for short-term profit. For instance, the big mining companies came in with big investments and often offered contracts that allowed elites to move that money back out of the country to tax havens – to Geneva, to Paris, to London and so forth.

What is exciting and troubling to observe is that, on some occasions, there was active lobbying from those big Western companies not to tie social and environmental clauses to WTO standards and to discourage the domestic elites of developing countries to work towards more stringent labor rules. 

For instance, when China was preparing its new labor law, a lot of big European and American multinationals encouraged it not to do so. This episode characterizes very well the opportunistic part of globalization. Some continue to assert that it was all about creating a more humane, sustainable, and balanced world order, but in fact it was about connecting the overconsumption in the West with the redundancy of cheap labor in developing countries as well as the willingness of local elites to accept a large degree of environmental pollution, social abuse, and other such harmful things.

Ferenc Laczo: Your book is also interested in how the world looked like from outside the West and China. There are two important theses you formulate and that I would like us to address in turn. You claim that the global South – that is to say, South Asia, Africa and Latin America – have basically failed to develop in recent decades and the number of people living in poverty in these places has even greatly increased. Secondly, you insist that numerous powers are now pursuing a policy of what you call “hard hedging”, a strategy which they may combine with militarism and unilateralism. 

Could you tell us a bit about how and why the global South has not managed to develop more and what major issues it faces today in the context of world politics? Secondly, what do you mean by “hard hedging” and what does it imply for international relations today?

Jonathan Holslag: If we take stock of the impact of globalization on world development and on the so-called emerging markets, the balance is indeed very mixed. We certainly need to make a distinction between China and the other BRICS. China has in fact been the only major developing country that has been able to benefit from globalization in terms of job creation and real GDP growth. If you compare that with the other BRICS – Brazil, South Africa, or India – their progress has been much more limited. That is partially the consequence of the fact that China has lured away most of the manufacturing through its very aggressive industrial and trade policy, thereby becoming capable of generating big current account surpluses and significant productivity boosts – although that trend is now fading a little.

Other countries continue to struggle with a very significant commodity dependency. Consider India, which somewhat expected to become the leader of the IT sector, but its exports still mostly consist of raw materials – it does export IT services, but that remains on a quite modest scale. As for South Africa and Brazil and, by extension, the whole of Latin America and sub-Saharan Africa, the main driver of growth after the turn of the century was commodity exports – those with commodities made profits, whereas those without commodities profited much less and have even faced deindustrialization due to competition from China. Moreover, these countries’ bad governance and lack of transparency often led to massive capital flight. I show in the book that the volume of capital flight or money taken out by governments illicitly is bigger than the money that the West invests.

In terms of economic development, political stability and in environmental terms, the current situation in the global South, and in South Asia and sub-Saharan Africa in particular, is bleak indeed. This precariousness is going to be an important factor in global politics over the next decades; the fact that the global South missed the momentum during globalization will make it cast a dark shadow on the global political landscape also in the future.

As for “hard hedging” –  besides the fact that the poorest countries did not profit a lot from globalization, we also see that the relative weakening of the West and the rise of China encouraged and enticed a lot of countries to play both sides against one another: they try to enhance their strategic autonomy by going for relations with both China and the West. A very good example is Russia, which geographically is at the heart of Eurasia and, hence, is also a gatekeeper or balance-holder between Europe and China. Indeed, the Russians have been doing that in an effective way: they have been making money out of their gas exports to Europe, and they are increasingly making money out of their energy exports to China too while pushing back against NATO and the EU. It is about maximizing their maneuverability, and they will continue to do so in the years to come; I do not think that there is going to be a genuine diplomatic revolution in which Moscow will again drift in the direction of the West. Turkey is another good example. Initially, it had some reservations about the treatment of the predominantly Muslim minority in the west of China, but it also came to cultivate relationships with Beijing as one of the endpoints of the Belt and Road Initiative. At the same time, Turkey became more critical of the West. 

As a result of the demise of the West as the center of world politics and the rise of China, many middle powers and lesser powers no longer put all their eggs in one basket and are trying to have it both ways. That certainly makes world politics less predictable. 

We can be very critical of the United States as a superpower and I think we should be, but what we observe now is a kind of smaller scale manifestation of hubris, interventionism, and the kind of recklessness that America displayed. 

For instance, we have Russians intervening all along their borders and Turkey is also becoming more interventionist. Interventions by the superpower are being supplemented and partly supplanted by many different interventionisms.

Ferenc Laczo: I wished us to return to the crisis of the West, which is among the key subjects of your book. You discuss how the West became fixated on technology, services, and consumption. While infrastructure, education and productive industries were all neglected, its internal disorientation has led to patterns of overconsumption, to financial speculation and external debt.

Not only has such a declining global power learned too little, but it has in fact been engaged in the business of self-deception. As you argue at one point, the West appears to have lost touch with the deep forces of world politics. Instead of trying to create innovative and sustainable economies at home, Western politicians have displayed what you call “flimsy patriotism” and “security populism.”

As a final question, could I ask you what are the deep forces of world politics you reference in your book? Since the book offers such a critical treatment of the recent history of the West, let me also ask what do you think needs to urgently change? Last but not least, how do you view the chances of such a renewal of Western politics and societies?

Jonathan Holslag: When we discuss the important forces that shape, and will likely continue to shape global politics, I think there are three important geopolitical forces gathering. First, we see a changing strategic landscape in Eurasia with the rise of China. China continues to have a lot of vulnerabilities, but I believe that in the next years it will manage to struggle through those and will continue to consolidate its position. There will be some setbacks, but China’s rise engenders huge changes in terms of the positioning of other countries, like the middle powers, the posture of the United States, and so on. The second important change is the failure and the disappointment of the Global South in the context of demographic explosion that we are expecting. That too will continue to haunt us in the years to come, and will bring considerable instability and migration pressure. The impact of that on the Western world, and especially on Europe, is going to be quite large. Finally, the third evolution gathering importance is the weakening of Western civilization as a cluster of norms, values, and ideas – a weakening both economically and technologically, and even demographically, especially when it comes to Europe. This is, in part, a relative power shift, but it is also felt in absolute terms by citizens – after all, many Europeans are still worse off than before the Eurozone crisis.

What worries me the most is not so much the return of nationalism and competition since those belong to international politics as we have seen during most of history. I believe that the character of world politics will always be turbulent, unpredictable, and competitive. What worries me much more than the return of geopolitics and rivalry is the fact that, particularly in Europe, we have a great gift for self-deception. Despite recognizing that the world is changing and that new threats are building up, we continue to deceive ourselves. We do so not only through shallow nationalism and the idea that we can protect Europe in the short run by erecting fences on the outside and pushing migrants and refugees back. 

The pragmatic and moderate elite in power in Brussels is now coming up with a series of slogans, such as “open strategic autonomy” and a “Green New Deal”, which are not backed by effective policies. 

They may talk about open strategic autonomy but, in essence, our energy policy is tying our markets ever more to Russia and authoritarian countries elsewhere for natural gas supplies. We talk about a Green New Deal, but if you look at what this entails in terms of trade and defense against environmental dumping, the actual policy is rather negligible and almost non-existent. 

On the right and the far-right, you have demagogues and populists who pretend that we are going to get security by erecting fences and by opting for isolationism. That is just not going to work, for others will fill the spheres of influence we vacate. At the same time, you have the cautious centrist politicians who are doing the same while coming up with seemingly more constructive policies which are not substantive either. I am afraid this will lead us to more years of what one might call great pretending: we will pretend as if we did respond to changes in the world, while in fact we are not doing much of anything at all. We still cherish the illusion that citizens can lean back and preserve their way of life without doing much. 

It is a kind of anesthesia for a rich society: instead of waking society up to confront the challenges, you confirm people in their passivity. This is a political and strategic mistake that both the center politicians and the new populists on the right are making.

This transcript has been edited for length and clarity.

In collaboration with Giancarlo Grignaschi and Oliver Garner.

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