Power Outage.

• Author: Wyne, Ali

While it has become nearly axiomatic for observers of world affairs to contend that the U.S.-led postwar order is under growing, if not unprecedented, duress, there is little consensus about what architecture, if any, might replace it. A recent assessment ventures that

the successor to the global system of governance we have known since the Second World War [may be] not another order but the absence of one. It is possible that the world, squeezed between the incompatible visions of a retreating U.S. and a resurgent China, is already hurtling toward chaos. Given this uncertainty about the path forward, it is not surprising that analysts seek to identify historical parallels to the contemporary era and distill what guidance those comparisons might offer to today's leaders. Two of the analogies that have emerged from that undertaking have proven especially enduring: the 1930s and the Cold War.

There are three main reasons why some observers contend that we may be either witnessing a return to--or on the cusp of reprising--the 1930s. The first is democratic recession. Freedom House observed at the beginning of 2018 that 2017 marked the 12th consecutive year of decline in global freedom. Seventy-one countries suffered net declines in political rights and civil liberties in 2017, with only 35 registering gains. Once-promising states such as Turkey, Venezuela, Poland, and Tunisia were among those experiencing declines in democratic standards.

The organization also warned that China and Russia "are acting beyond their borders to squelch open debate, pursue dissidents, and compromise rules-based institutions."

There is also growing concern about the mobilization of disintegrationist elements within Europe. In a speech in April last year, French president Emmanuel Macron warned that "a sort of European civil war is reappearing," observing that "our differences, sometimes our national egoisms, appear more important than what unites us in relation to the rest of the world." Even more ominously, he concluded that a "fascination with illiberalism...is growing by the day." Examples of that fascination abound. Italy's interior minister has called for a census of the country's Roma population. Austria's chancellor has urged his country to form an "axis of the willing against illegal migration" with Germany and Italy. In a multifaceted effort to limit George Soros' influence, Hungary has forced the closure of Central European University, a prestigious Budapest-based institution funded by the philanthropist; pressured the Open Society Foundation until Soros declared that its Budapest operations were no longer safe; and passed a "Stop Soros" law that effectively criminalizes efforts to provide humanitarian aid and legal assistance to undocumented immigrants. The country's prime minister has declared that: "Rather than try to fix a liberal democracy that has run aground, we will build a 21st-century Christian democracy."

Some perspective is in order. The first half of the twentieth century witnessed a sufficiently confident and widespread authoritarian ascent that, according to political theorist John Keane, only eleven electoral democracies remained by 1941. Franklin Roosevelt warned in a speech in March of that year that the United States would have to furnish "fuel in ever-increasing amounts" to safeguard "the great flame of democracy from the blackout of barbarism." Today there are 116 electoral democracies--down from 120 two decades ago, concerningly, but still an impressive number.

The authoritarian resurgence of the 1930s coincided with and derived momentum from the Great Depression, which gave proponents of relatively untested "isms"--fascism in Japan and Nazism in Germany, notably--grounds to argue that they had insights into the cultivation of order and the generation of prosperity that adherents of democracies either could not or refused to discern. Today, however, there is no phenomenon of comparable magnitude. While the global financial crisis that began a little over a decade ago was a major shock to the system, its principal ideological effect was to delegitimize Western-style democracy, not to lend credence to authoritarian alternatives. The distinction is an important one: skepticism about the former does not automatically translate into support for the latter. One can concurrently express alarm over the problems plaguing many democracies today--national-level political paralysis and ever-increasing income and wealth inquality--and reject the squelching of dissent and the persecution of minorities that occur under strongman rule. In brief, authoritarianism may be gaining renewed traction, but it is doing so from a lower baseline than during the interwar period; democracy, meanwhile, may be experiencing significant challenges, but from a higher baseline.

A second fear is the prospect of deglobalization. Cross-border capital flows fell from $12.4 trillion in 2007 to $4.3 trillion in 2016, a 65 percent decline. The United Nations Investment Trends Monitor reported a 16 percent decline in global foreign direct investment as well as a 23 percent decline in the value of cross-border mergers and acquisitions between 2016 and 2017. There is a growing risk, moreover, that trade tensions between the United States and China could destabilize the world's most important economic relationship.

It would be premature to suggest, however, that globalization is reversing. The World Bank reports that "net capital inflows [into developing countries] entered positive territory in 2017, following two years of large contractions"--a development that "has been facilitated by the improving economic outlook in several large emerging economies." There...