Mark Carney at Davos

In yesterday's post, I briefly mentioned a speech by Canadian Prime Minister Mark Carney at the World Economic Forum in Davos, Switzerland. At the time, I had only seen snippets of Carney's address. While that was enough to convince me that what he had to say was extremely important, I did not really understand its full significance until later. I am now convinced that this may turn out to have been one of the most important talks of our time. That is, if other countries heed Carney's word. Otherwise, the speech will likely simply be forgotten.

After World War I and even more so after World War II, there was widespread recognition that the existing world order had failed to maintain stability, resulting in the devastating wars. There was an eagerness to establish a new international system that would create rules for inter-state interaction and a means for preventing conflicts. The most prominent institution to result from these efforts was the United Nations. The system of international institutions and laws became known as the rules-based order or the liberal international order.

The rules-based order encouraged international trade and economic integration. If countries could count on consistent rules for governing trade and legal structures through which to settle disputes, international trade could be approached with increased confidence. It was thought that the more countries became bound by economic and trade ties, the less they would be likely to engage in conflict. Moreover, there was a widely-held belief that international trade would create a rising tide that would raise all ships. In other words, international cooperation on law, finance, trade, and defense would not only keep the peace, but it would improve lives in all countries involved.

There were similar hopes that an international system of laws and security arrangements would help prevent wars or lead to resolving conflicts more quickly. Moreover, it was believed that such structures could cultivate values such as human rights and democracy.

Carney began his speech by acknowledging that Canada had benefited from the liberal international order, saying:

For decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, we praised its principles, we benefited from its predictability. And because of that, we could pursue values-based foreign policies under its protection.

However, the rules-based order never really lived up to its promise. The Hobbesian postulation that "might makes right" was not eliminated, and powerful countries often ignored rules-based restrictions to pursue their own parochial interests. Carney suggests that less powerful countries politely ignored these transgressions in order to preserve the benefits. Or, as he puts it:

We knew the story of the international rules-based order was partially false, that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically, and we knew that international law applied with varied rigour, depending on the identity of the accused or the victim.

This fiction was useful, and American hegemony in particular helped provide public goods, open sea lanes, a stable financial system, collective security and support for frameworks for resolving disputes.

He went on to say that, "We participated in the rituals, and we largely avoided calling out the gaps between rhetoric and reality."

But now, Carney says, the integration that was once supposed to benefit all involved has instead become a tool to be used against weaker countries:

great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.

You cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination.

To be clear, Carney contends, with considerable justification, that the liberal international order was never fully implemented but that its flaws were ignored in exchange for the benefits that it did provide. But now, rather than providing benefits, it has become a source of harm. The result, Carney proclaims, is "a rupture, not a transition."

For Americans, let this sink in. Since the time of Ronald Reagan, we have been taught the benefits of free trade. Reagan started us down the road to the North American Free Trade Agreement ( NAFTA). Such treaties were supposed to establish even footing between like-minded nations. But, in Carney's view, they have become instruments of coercion. The same is true for integration on other levels, such as defense. Now, Carney is proposing another path.

The liberal international order is "ruptured," and Carney now says, "our new approach rests on what Alexander Stubb, the president of Finland, has termed value-based realism."

Or, to put it another way, we aim to be both principled and pragmatic. Principled in our commitment to fundamental values, sovereignty, territorial integrity, the prohibition of the use of force except when consistent with the UN Charter, and respect for human rights.

And pragmatic in recognizing that progress is often incremental, that interests diverge, that not every partner will share all of our values.

What this means practically is that Carney proposes to pursue arrangements with a host of countries and organizations, even those with whom Canada  may have differences on some level. One example is a recent trade agreement with China.

Carney further explains by saying:

This is not naïve multilateralism, nor is it relying on their institutions. It’s building coalitions that work issue by issue with partners who share enough common ground to act together. In some cases, this will be the vast majority of nations. What it’s doing is creating a dense web of connections across trade, investment, culture on which we can draw for future challenges and opportunities.

Carney bluntly says, "Our view is the middle powers must act together because if we’re not at the table, we’re on the menu."

In previous blog posts, I have referred to ideas proposed by Stacie E. Goddard and Abraham Newman regarding their theory of new-royalism. In this theory, elites surround a political ruler who utilizes power to force others to submit. Based on the resulting hierarchy, tributes are extracted for the benefit of the elite clique. It is important to understand that the ruler does not necessarily act in the interests of his country, but rather for the benefit of the clique. What Canada and Carney have been experiencing is cult leader, convicted felon, and failed President Donald Trump's corruption of our relationship in a manner that is not only not mutually beneficial, but not even beneficial to most Americans. While Trump's tariffs are having the effect of raising costs for Americans, their goal is to force Canada into a submissive position in the hierarchy of power. Carney is resisting submission.

Instead of integration on various levels with the United States, Carney proposes to establish a range of relationships with other countries and international bodies that will help protect Canada's sovereignty and allow the country to resist American pressure. This is a sea-change from the relationship that Canada and the U.S. have been forging.

If Carney's ideas take root, the U.S. will be facing an increasingly multipolar world. It won't just be China and Russia who are capable of challenging the United States. Carney is looking for a seat at the table, and not the kids' table either. Trump, for his part, is inadvertently doing everything he can to ensure that Carney is successful.