A False Dawn for Liberalism?

Few anticipated that Russian President Vladimir Putin would act on his threat to launch a full-scale invasion of Ukraine. Even fewer anticipated that the United States, the European Union, and their major democratic partners would respond with such resolve.

Witness the power of a fully armed and operational liberal democratic community. With shocking speed, it has substantially decoupled from the Russian economy, thereby cutting the country off from many of the benefits of liberal economic order; seized the yachts of some Russian kleptocrats and promised to hunt down their overseas wealth; aggressively preempted Russian disinformation, and cracked down on Russian propaganda outlets. Germany not only joined many of its NATO allies in supplying Ukraine with military aid but also committed to boost defense spending above two percent of its gross domestic product. In the wake of the invasion, it is no longer a matter of whether but rather how Finland and Sweden will enhance their military ties with NATO and the United States.

At the same time, the Ukrainian government did not, as the Kremlin expected, implode. The Russian military, plagued by numerous operational problems, has significantly underperformed expectations. In the face of mounting military, diplomatic, and economic pressure, Putin is going full-on authoritarian, imposing limits on speech and civil society not seen in Russia since the Soviet era; since the invasion began, tens of thousands of Russians have fled the country. Pro-Putin reactionary populists and conservative authoritarians in Europe and North America are, at least for now, off balance. Beijing cannot help but note the travails of the Russian armed forces, the scope of Western sanctions, and the substantial military assistance flowing into Ukraine.

This is no small matter. Mere weeks ago, the United States, the European Union, Japan, and their major democratic partners seemed either unwilling or unable to stem an international “illiberal tide”. Commentators have been quick to note the irony. Putin, Michael Beckley and Hal Brands write, has provided the United States and its allies with “a historic opportunity” to “rebuild an international order that just recently looked to be headed for collapse”. As we argued in the January/February issue of Foreign Affairs, the unraveling of liberal international order is “only one manifestation of a much broader crisis” of “liberalism itself”.

The crisis evolved after the collapse of the Soviet Union. Since the early 1990s, the major liberal democratic powers pursued a radically open version of liberal order, most notably in the form of neoliberal economic policies such as unfettered capital mobility. These policies initially spread market democracy, but during the first decade of this century, concatenating changes in international order began to favor, as we wrote, “a diverse array of illiberal forces, including authoritarian states, such as China, that reject liberal democracy wholesale as well as reactionary populists and conservative authoritarians who position themselves as protectors of so-called traditional values and national culture as they gradually subvert democratic institutions and the rule of law”.

It is still far too soon to know whether Russia’s invasion of Ukraine will reinvigorate the liberal project, yet already there are signs of irrational exuberance among some U.S. and European observers. This could spell trouble, especially if policymakers misread the moment as, say, heralding the end of the crisis of liberal order or the restoration of Western global dominance.

The Hazard of Hubris

Even during the heyday of American post-Cold War power (the so-called “unipolar moment”), Washington was never a modern day Atlas: a titan holding up international order on its own two shoulders. The liberal order that emerged during the 1990s was composed of and maintained by a loose cartel of states and international institutions—which, in truth, amounted to something more like an informal confederation than a traditional great-power concert. Its major anchors included the United States, the European Union, the IMF and World Bank, the G7, the North Atlantic Treaty Organization (NATO), and a series of bilateral alliances and strategic partnerships.

The economic and military dominance of this liberal democratic cartel was never going to last. For one thing, the G7’s share of global economic output was already declining by the middle of the 1990s. For another, liberal democratic dominance depended on acquiescence—if not cooperation—from authoritarian states and illiberal great powers.

Given these vulnerabilities, the rise of China and the resurgence of Russian power should have prompted ever-closer strategic cooperation among the members of the liberal democratic cartel. But for much of the past two decades, that wasn’t the case: the burst of unity following the 9/11 attacks on the United States quickly gave way to frictions generated by revelations about U.S. “enhanced interrogations” and “extraordinary renditions”, the Iraq War and the Bush administration’s “doctrine of preemption”, and divergent strategies for managing Russia and China. Rather than increase liberal democratic cohesion, relative decline—combined with some major policy mistakes—undermined liberal order. It helped drive a wedge between major liberal democratic powers while empowering illiberal political movements, such as reactionary populism.

The response to Putin’s war in Ukraine demonstrates what liberal democracies can accomplish when they act in concert. Consider one of the most surprising developments: the sanctioning of the Russian central bank by the United States, the EU, and Japan. This unprecedented step— which economist Adam Tooze calls “the nuclear option” of economic sanctions—required extraordinary coordination among Western financial powerhouses. Within 24 hours, the Russian central bank lost access to $388 billion, or 60 percent, of its stockpile of $643 billion. With the ruble in near freefall, the Russian government was forced to impose de facto capital controls, restricting foreign currency withdrawals and compelling Russian businesses to sell foreign exchange. The sweeping sanctions and international revulsion toward the invasion, along with a popular backlash against Putin, have produced an exodus from Russia of hundreds of Western companies—including payment systems providers, retailers, and energy investors.

Such shows of strength can create their own problems. Liberal democratic governments may erroneously conclude that they can regain the commanding heights they occupied two decades ago. There should never have been any doubt that, when acting together, the liberal democracies form the most powerful political community on the planet. But it is irrefutable that they have lost ground since the late 1990s and the early years of this century. China’s transformation into a great power is almost complete; only an epic collapse is likely to derail it. The fact that Western military analysts appear to have overestimated Russia’s military prowess does not mean that Russia is simply, as the late Senator John McCain put it, a “gas station masquerading as a country”.

Many Americans tend to fetishize U.S. power, especially when it comes to its military capabilities, and to substantially underestimate the degree to which that power is a function of membership in a liberal democratic cartel. This impulse can be seen in talk of the United States as “the indispensable nation” during the Clinton administration and in the willingness of the George W. Bush administration to intentionally damage the cohesion of the liberal democratic community. Analogously, U.S. success in the Ukraine crisis could wind up feeding the “America first” hubris of reactionary populism.

There is another way that current developments could make an “America first” foreign policy—as well as less chauvinistic and less militaristic strategies of restraint—more plausible. Stephen Walt, a prominent realist and advocate of “offshore balancing”, argues that “the war in Ukraine shows that Europe taking greater responsibility for its security is not only desirable but feasible”. That is, the success of liberal democratic collective action in the face of Russian aggression provides evidence that the transatlantic community should reduce its political and security interdependence.

Rebalancing the liberal democratic community—in ways that afford Europe greater voice and responsibility—would certainly contribute to its long-term health. But to leave Europe to go it alone would greatly weaken, if not destroy, the liberal democratic cartel at the moment that it faces its greatest challenges since the Cold War. The dynamic here is reminiscent of the vaccination paradox, in which the overwhelming success of childhood vaccines leads people to conclude that they’re no longer needed.

Rich Man, Thief

Kleptocrats have long exploited vulnerabilities in liberal economic and political order. With the eager assistance of Western wealth managers, companies, and governments, Russia has become a major player in globalized kleptocracy. Russian oligarchs have seamlessly moved money via offshore shell companies. They have secured residence and citizenship for their families under various “golden visa” investor programs in Western countries. They have invested in luxury real estate, a sector practically devoid of meaningful oversight. All the while, they laundered their images by funding flagship cultural institutions, donating to universities, and backing politicians and political interest groups. They retain reputation management firms that, among their many unsavory activities, intimidate journalists and researchers who threaten to publicize their clients’ corrupt pasts.

The invasion of Ukraine has prompted liberal democratic governments to finally get serious about Russian kleptocracy. Already, the steps that have been taken go much further than anti-kleptocracy advocates could have hoped for: the United States, the European Union, and the United Kingdom have imposed property seizures, asset freezes, and travel bans on a broad group of Kremlin-linked oligarchs; EU countries have seized the yachts of several of Russia’s richest and most powerful figures, including Alisher Usmanov and Putin confidante Igor Sechin; Westminster has sanctioned Roman Abramovich, the high-profile owner of Chelsea football club; and the United States has announced the formation of KleptoCapture, an interagency task force that is designed to uncover and target hidden Russian-owned assets.

Of course, Russia is far from the only country whose kleptocrats exploit and undermine liberal order. U.S. businesses, Western politicians, Chinese billionaires, and Saudi princes all make use of many of the same loopholes and service providers. In an ideal world, action against Russian oligarchs would become the foundation for a general crackdown on the firms that profit from international tax-evasion schemes, the whitewashing of kleptocrats and their wealth, and everything in between. It would mean broad national and multilateral commitments to tackling the rise of global oligarchy, of which Russia has often been a leading exporter.

For the moment, such a broad mobilization seems unlikely: it runs into too many entrenched interests, enabling service providers and the politicians who serve them. Still, the invasion of Ukraine, and the resulting crackdown on Russian oligarchs, shines a spotlight on how transnational kleptocracy corrodes the political systems and threatens the national security of liberal democracies. The stigmatization of the Russian oligarchs can strengthen the hand of anticorruption advocates as they seek to expose beneficial owners—those who ultimately own or control a company’s business or holdings—dismantle golden visa and passport schemes, and investigate the shady origins of unexplained wealth.

Disinformation and dark money campaigns present an even more complicated challenge than straightforward kleptocratic asset laundering. Many liberal democracies have shut down the operations of Russian state media outlets, but Western media organizations often play a much bigger role when it comes to undermining institutional trust, social cohesion, and democratic values. RT America may have announced that it will cease operations in the United States after it was removed from cable television and tech platforms, but FOX News’ Tucker Carlson continues to promote disinformation and Kremlin-friendly propaganda to a much larger audience.

No matter how illiberal in outlook, domestic news outlets deserve free speech protections. But it is well past time to take constitutionally permissible action to further restrict the ability of foreign governments, especially authoritarian ones, to influence U.S. politics. Although dark money probably can’t be adequately addressed without somehow overturning Citizens United, responsible media platforms can take more concerted action to limit the deliberate spread of autocratic propaganda. Cable providers aren’t required to carry networks that peddle it. Activists can step up efforts to boycott sponsors.

Putinism is an important model for corrupt governance and authoritarian rule, but it needs to be understood as part of a global illiberal kleptocratic wave. Political disinformation and kleptocratic money are the two main vectors through which authoritarian regimes exploit liberal international order. They are also two of the key tools that homegrown authoritarians and reactionary populists use to undermine liberal democracy from within. Tackling their corrosive influence will require even more extensive information-sharing and sustained coordination among anticorruption agencies and regulators across the liberal democratic community.

Part-Time Partners

Even with the response to Russia’s invasion, there has been a significant division between the liberal democratic core—Europe, the United States, and allies like Japan, South Korea, and Australia—and other states, many in the Global South. Among the latter group, many are divided, and often more ambivalent, about Russia’s invasion of Ukraine. Consider the UN resolution to condemn the Russian invasion: 141 countries voted in favor, five were opposed, and 35 abstained. (Twelve, including Azerbaijan, Turkmenistan, Uzbekistan, and Venezuela, chose not to vote at all.) Among the abstainers, however, were five countries—China, India, Pakistan, Bangladesh, and South Africa—that together account for nearly one-half of humanity.

China’s abstention should surprise no one. On the one hand, Chinese policymakers are eager to avoid extending any support to Russia that would expose them to the dragnet of Western sanctions. For example, the Asian Infrastructure Investment Bank, the development bank established by China in 2016, has put a hold on its activities relating to Russia and Belarus, and China has announced that it will not supply Moscow with substitute airline spare parts. Yet Beijing has no interest in supporting the West against its strategic partner. To the contrary, official Chinese news organizations have repeated Russia’s talking points that blame the United States, NATO, and the EU for triggering the war and have amplified Russian disinformation about U.S. biological weapons.

In turn, India’s apparent neutrality toward the invasion reflects New Delhi’s underlying belief that it can maintain strategic partnerships with both Russia and the United States. India remains a major purchaser of arms from Russia and has recently bought three million barrels of discounted Russian oil. Among other fence sitters, all five of the former Soviet Central Asian states abstained or didn’t register a vote, as well as 16 countries in Africa that retain commercial and military ties with Russia. Some of these countries fear Russian pressure, but others aim to hedge their geopolitical bets, oppose sanctions out of principle and self-interest, and seek to preserve their ability to court Russia as a patron and partner.

Even some of the countries that supported the UN resolution have no intention of imposing sanctions against Russia. The United Arab Emirates, for example, has positioned itself as an important haven for Russian offshore capital flight. Israel’s tax laws will allow eligible Russian oligarchs to launder assets. And despite its NATO membership and its support for the Ukrainian military, Turkey seems poised to allow the re-registering of Russian firms under Turkish flags and Turkish banks to become intermediaries for Russia. As a result, the United States, the EU, and other members of the new sanctions regime will face the difficult choice of whether to penalize their own strategic partners or allow those partners to subvert their sanctions.

Even more importantly, spiking prices for energy, foodstuffs, and soft commodities will add to financial insecurity worldwide. Inflation and high energy prices could lead to global social unrest and build resentment against the West’s weaponization of the international economy. As was the case following the 2008 recession, illiberalism has thrived during periods of financial crisis and economic uncertainty.

The Elephant in the Room

Paradoxically, the invasion of Ukraine could show that the gravest dangers to the liberal order remain within liberal democratic countries themselves. Nowhere is the danger greater than in the United States. Efforts to defend and reform the liberal order will continue to be in jeopardy as long as antidemocratic factions are allowed to permeate the Republican party. During the Trump era, these factions not only supported American-style Putinism—an approach that included openly transgressing institutional safeguards and demonizing the independent media—but also Putin himself.

Trump’s first impeachment illustrates the danger. Faced with overwhelming evidence that the president had attempted to extort the Ukrainian government over the transfer of U.S. defensive weapons, the GOP closed ranks to oppose impeachment in the House and acquit him in the Senate. In the process, it smeared career foreign policy officials and amplified Russian messaging against Ukraine. Even more worrisome, Trump himself told advisers that he planned to withdraw the United States from NATO during a second term.

With the Russian invasion of Ukraine, the center-right of the Republican party has its strongest opportunity in years to repudiate these tendencies. Perhaps Putin’s war to snuff out a fledgling democracy will cause the GOP to rediscover the value of liberal democracy. Maybe it will make some members of the party reconsider their own campaign to dismantle democratic institutions in the United States, efforts which are most advanced at the state level. But if Donald Trump, or someone like him, is elected to office in 2024, then all bets are off.

Alexander Cooley is Claire Tow Professor of Political Science at Barnard College, Columbia University. Daniel Nexon is a Professor in the Department of Government and at the Walsh School of Foreign Service at Georgetown University.

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