Liberalism and globalisation serves the elites; the world needs a return to the nation state

The disintegration of the Western liberal social contract, coupled with the struggle between various forces that seek to restore or reforge that contract, is the main root cause of the trend of deglobalisation and the internal unrest of developed countries in recent years.

The anti-globalisation movement originated in the West. In its early days as a spontaneous grassroots movement, it was a potpourri of various causes, spanning issues about human rights, the environment, labour, nation, religion, terrorism, transnational crime and so on. In recent years, Brexit and Donald Trump's America First stance marked the movement's elevation to the national level. It was further bolstered by justification along the lines of national security, thanks to the coronavirus pandemic.

As for Western liberalism, it originated in ancient Greece and Rome, and was reborn during the Enlightenment. Through the industrial revolution, colonial expansion, the French revolution, the US declaration of independence and the UN universal declaration of human rights, it gradually took shape as we know it today. In the crucible of America's New Deal (under Franklin D. Roosevelt), the civil rights movement and the welfare state, its principles gave rise to a fairly complete social compact. These same principles, pushed by the US after WWII, were adopted by the Western countries, and rose to be the mainstream of the world after the Cold War. For a time, a political system underpinned by freedom, equality, democracy, human rights, rule of law and republicanism - perfectly married as a whole with the liberal capitalist economic system - was seen as "the end of history". It became the benchmark of the new politically correct.

Liberalism's social compact has had its golden age. Where there was peace, stability, prosperity and social consensus, its ideals and values worked excellently, and had power, both soft and hard, to show for it. However, in recent years, the compact is gradually disintegrating under the impact of three forces: the excesses of individualism, identity politics running rampant, and cross-border capital flows.

The whole liberalist ideology is centred around the freedoms and rights of the individual. The government's legitimacy is derived from the people voluntarily surrendering some freedoms in exchange for the government's protection and services. Hence, the government has to be elected by the people and have limited powers. Also of importance to liberalism are personal responsibilities, duties and commitments to be taken upon oneself. After all, did John F. Kennedy not famously say "Ask not what your country can do for you - ask what you can do for your country"?

In spite of all this, from the day it was born, liberalism has always served mainly capital. Supported by an entire system and culture, its proclivity towards individualistic values far overpowers the supposedly counterbalancing notions, rendering the latter largely ineffectual and even distorting them. For example, the poor are thought to have not worked hard enough, the homeless are looked upon with disdain, and the mentally ill are banished to the streets. Duty towards and care for one's fellow people, along with the sense of responsibility towards the state and nation, thin out or even fade away altogether in the tough struggles for much narrower interests.

In the US, the rule of law has become a paradise for attorneys to pursue financial gains, as well as the battleground for various political forces to vie with one other. Meanwhile, large segments of the underprivileged demographic and even middle-class families are being excluded by the commercialisation of healthcare.

The supremacy of individual rights stands out, particularly in the coronavirus pandemic. It is the main reason why the virus situation is still out of control in the Western countries after so long. Mask-wearing, social distancing, restrictions on groups gathering, community quarantines, lockdowns, the closure of businesses and schools - all of these are at odds with liberalist values.

In the shadow of the credo that cries "Give me liberty or give me death", the popularly elected government either can only do nothing or would openly support the protests like Trump does. The rule of law which the West takes pride in is no longer working. In the context of the pandemic, personal liberty so exercised is very clearly at the expense of the interests of others and one's country. Similar situations will continue to challenge liberalism's bottom line for the foreseeable future.

Amid the clamour of the politically correct empowered by liberalism, identity politics is in the ascendant. Political pursuits for various causes keep emerging. Their proponents do not yield, nor do they relent; they latch on and fight tenaciously. Liberalism applies the economic dictum of "every man for himself and everyone benefits" to the domain of politics, encouraging individuals and small groups to pursue their own interests, all in the belief that a greater unity can be achieved this way. Amid a globalised world, the flow of migrants and refugees aggravate clashes between different ethnicities, religions, cultures and values. Political correctness has led the national policies of many countries to be informed by multiculturalism.

And yet multiculturalism has failed to produce the hoped-for melting pot effect. On the contrary, identity politics based on ethnicity, gender, religious faith, political party, social status, class, region of migrant origin, sexual orientation, ideology, values etc is tearing society apart. What is more, it is undermining the social foundation for electoral democracy and toxifying the atmosphere of democratic politics. In fact, democratic politics is degenerating from a process of give-and-take coordination to professionalised manoeuvres bent on opposition for the sake of opposition, ruination for the sake of ruination, winning elections for the sake of winning elections. With this situation, the social consensus is shattered, the bottom line of morality is breached and opportunities for extremism are created.

Western countries are experiencing an endless string of terrorist attacks. The incident in France some days ago of a man beheaded in the streets highlights the powerlessness of liberalism in dealing with the new realities. It mercilessly mocks the politically correct in the immigration policies of these countries for all its unadaptable pedantry. Such events also further trigger the rebound of right-wing extremists. Thanks to social media and we-media, many people are living in closed circles of individuals similar to themselves, and they hardly interact with those who are of a different kind. People become more convinced of their own correctness and less willing to compromise, which means extremist tendencies arise more easily.

At the end of the day, the most fundamental reason for the disintegration of the liberal social contract is the withdrawal of capital. Under the conditions of capitalism, for a fairly reasonable, people-oriented distribution of wealth to be achieved, there needs to be a compact between capital, society and the government. The three must form a community of common destiny. The state and society need to rein in capital in the second and third round of distribution. However, what happens instead is that globalisation takes capital out of the three-sided cooperation, or else capital turns "one man, one vote" (as espoused in democratic politics) to "one dollar, one vote". Whichever the case may be, the result is the same: capital breaks free from the restraints of the state and society.

Capital empowered by globalisation has turned into internationalised players that roam between countries. Contrary to Marx's vision that calls for "workers of the world" to "unite", the working classes of various countries are competing intensely with one another for jobs, while the capitalists form internationalised leagues of the elite. Fundamentally speaking, liberalism is only effective for these elites. For the masses at large, it is often just a bad cheque.

Globalisation is a grand banquet for capital. Capital seeks the maximisation of profits, firstly by drawing from the cheap labour, resources and untapped markets in the undeveloped countries; and secondly by evading its home country's heavy taxation, laws and policies, as well as the high costs that stem from high standards for labour, the environment, hygiene, resource usage and so on. Capital can move freely between countries in a way that labour cannot. What benefits capital is often disadvantageous or detrimental for labour. The maximisation of profits for capital does not equate to the maximisation of social welfare.

The taxes that failed to be collected from capital are an important source of finances for the home country's infrastructure, healthcare, education, national defence, social insurance and so on. The high standards shaken off by capital are precisely what should give the masses of the home country a better quality of life. The most destructive aspect of all is the loss of jobs. Just a single job could solve almost all the problems of a household, and provide far better coverage than any welfare or insurance the government can offer.

There are reasons why the common folk of the developed countries are lashing out at globalisation. Not only do these people bear the brunt of globalisation, but they are also living in democratic countries where they are free to engage in protests and make themselves heard. However, since democratic politics is often manipulated by capital, their protests have no choice but to come forth in the form of populism. The various movements we are seeing, including Trumpism, essentially seek to reforge the failing social compact, to force government policies to shift from capital-centred globalisation to a path that revolves around something else - namely, the livelihoods of the home country's people.

A return to the nation-state is the precondition for repairing the social compact. For the foreseeable future, overall planning for national defence, public security and social welfare - for which I include aspects like healthcare, education, provision for the aged, infrastructures, environmental protection, pollution management, disaster and emergency management, aid for the poor and disabled, unemployment insurance, as well as employment (and in-service) training - will necessarily be up to the nation-state or smaller units to carry out. Transnational or supranational organisations, such as the World Bank, UN, EU and other regional organisations, are far less up to the job in comparison.

One thing is particularly notable. Although liberalism is at the root of the predicament that Western countries presently find themselves in, the values of this ideology have not been challenged by the protest movements. On the contrary, most movements still raise the liberalist banners of freedom, equality, democracy, human rights and so on. What they protest about is how these values have failed to be realised. The protesters are demanding that a social compact based on such values be restored or re-established. Political correctness has restricted the imagination and creativity of the West.

To a great extent, the future of globalisation hinges on the face-off between capital and the masses. It comes down to the question of which side will be able to gain the upper hand over government and public policies. On the whole, capital still has a lot of room to manoeuvre across the globe, whereas the masses hardly have any fallback in their home country. This situation is not going to change in the foreseeable future.

Various forces are now vying with one another to shape a new social compact. Such is the case in America, Britain and some other Western countries. The dynamics thereof will in various ways constrain the space for globalisation and the forms in which globalisation can be realised. China's dual circulation strategy for development is an instinctive response to this general trend. The deficiencies and inward retreat of liberalism have given China and other Asian countries an opportunity to develop a better social compact.

Related: China's turn towards domestic market amid global uncertainties - good for the world? | Globalisation as we know it shall come to an end | The lies of globalisation | Covid-19: Is deglobalisation on the cards?