Is the world order heading for a tectonic shift? And, if yes, what will that shift be like?
These are the questions that German Chancellor Olaf Scholz poses in an article for the American magazine Foreign Affairs, published almost immediately after his lightning visit to China. The word that Scholz uses to describe the shift is “Zeitenwende” or “game-changer”, but the tone of the article is more in tune with Europessimism of the kind expressed by French President Emmanuel Macron, reflecting the current Zeitgeist or “spirit of the time” in Western democracies.
Scholz speaks of a “multipolar” world order but does not say where his imaginary poles are located. He then proceeds to depict what could only be described as a one-and-a-half pole system in which the one pole is constituted by the United States as “the decisive power of the 21st century” with the European Union and the “Anglo-Saxon” world, that is to say, Great Britain, Canada, Australia, and New Zealand, plus Japan, South Korea, and Taiwan in tandem. Together they represent “liberal democratic capitalism.” The remaining half a pole is The People’s Republic of China which Scholz regards as a successful example of “autocratic capitalism”.
Scholz’s analysis ends up as a new version of the “West and the rest” in which Russia represents “Kleptocratic capitalism” with the remaining 150 or so other nations spread across the globe representing a new version of the Third World where the three kinds of capitalism mentioned will compete for business, security interests and political influence.
Scholz’s analysis includes a number of encouraging points.
First, he admits that successive chancellors, including at least one from his own Social Democratic Party (SPD), were wrong to make Germany so dependent on Russia for energy. He also distances himself from the European left’s anti-military and NATO-bashing narrative to emphasize the crucial role of the alliance in ensuring security and preventing a “new Cold War”. More importantly, perhaps, he calls for correcting the mistakes of globalization.
What he fails or decides not to mention is the need to acknowledge the return of the nation-state as the key force capable of correcting those mistakes.
What he calls “liberal democratic capitalist” nations need to consider is a massive program of re-industrialization, a task that would require them to understand that something more than the profit margin is needed to ensure their freedom, prosperity, and security.
Because a certain gang of Germans gave nationalism a bad name in the last century one must not forget that in a world of diversity, the nation-state is the most workable model of socio-political and economic organization.
A world of nation-states does not mean “each one for him”, all the time, pursuing narrow and selfish “national interests”. Groupings of nation-states such as NATO or the European Union would be based on the common interests of all member nations with their right of opt-out or veto on certain issues preserved, something that Scholz wants the EU to abolish.
While warning of a looming Cold War, Scholz seems all at sea when it comes to the hot war going on in the heart of Europe in Ukraine. He offers no road map toward ending that war, giving the impression that signing cheques and delivering “defensive weapons” to Volodymyr Zelensky remain the only options.
Fomenting angst shouldn’t divert attention from the real problems that the “liberal democratic capitalist” nations are facing today.
The dramatic upsurge of inflation after almost three decades of relative price stability couldn’t be blamed solely on energy prices. The claim that inflation reflects a shortage of supply is designed to discredit Milton Friedman’s monetarist theories.
Today, however, energy production, including oil and natural gas, is at a record-high level. A shortage of supplies of certain agricultural goods may be partly due to the war in Ukraine while Covid-19 has also affected industrial production in China.
However, the real force that pushes inflation upwards may be the decision by “liberal democratic capitalist” governments to print money on a no-tomorrow basis. Even if Scholz, being a Social Democrat, cannot appear as a Chicago Boy, he might at least consider the possibility that the current inflationary spiral may be due to a combination of supply shortages of farming and industrial goods and increases in money supply, both in the EU and the US.
Scholz may also wish to reconsider his thinly disguised dismissive reference to “the others”, that is to say, the small, medium, and big nations that together form the majority of the United Nations. There, again, treating the world as a family of nation-states might help with each family member capable of making an important, sometimes decisive, contribution to global peace and welfare.
In other words, shibboleths such as “liberal democracy” or “autocratic capitalism” may be useful analytical tools for policymakers but need not divide the world along ideological lines. In a world of nation-states, difference need not be regarded as opposition let alone hostility. The good news is that Scholz seems to be ditching the last remaining illusions of the German center-left constituency, completing the work started in Bad Godesberg at the height of the old Cold War. Also, the good news is that the chancellor distances himself, ever so gingerly, from the federalist project of some of the founders of the European Union in its earlier version as the Common Market.
Unlike Macron who preaches “the end of abundance”, Scholz keeps his pessimism within a perimeter of political realism; and that, too, is good news.
Reminding Europeans that there is no peace without security and no security without a measure of self-sufficiency in strategic domains is a timely contribution to the current debate about the future of democracy in an increasingly complex world.
I remember a luncheon with Angela Merkel, Scholz’s predecessor as German Chancellor, in which she informed the guests, only half-jokingly, that she spent half her time and energy keeping her two-party coalition together. With a three-party coalition, Scholz has an even tougher time attending to global challenges.
Whether or not Scholz succeeds in keeping his ramshackle coalition together, let alone claiming a leadership position in the European Union remains to be seen. Right now, however, he is touching the right chords.
