Gérard Araud on the decline of neoliberalism
By Scott Sumner
Alex Tabarrok quotes from an interview of French Ambassador Gérard Araud:
I don’t think that anything irreparable is happening in the U.S. I don’t know what would have happened in France if Marine Le Pen had been elected, because our institutions are much weaker.
Let’s look at the dogma of the previous period. For instance, free trade. It’s over. Trump is doing it in his own way. Brutal, a bit primitive, but in a sense he’s right. What he’s doing with China should have been done, maybe in a different way, but should have been done before. Trump has felt Americans’ fatigue, but [Barack] Obama also did. The role of the United States as a policeman of the world, it’s over. Obama started, Trump really pursued it. You saw it in Ukraine. You are seeing it every day in Syria. People here faint when you discuss NATO, but when he said, “Why should we defend Montenegro?,” it’s a genuine question. I know that people at Brookings or the Atlantic Council will faint again, but really yes, why, why should you?
I agree with the bit about America’s institutions being strong, but the rest seems disappointingly superficial to me. Let’s take the points one by one:
Why should we defend Montenegro?
Let’s apply a cost/benefit analysis to this question. Start with the benefits. During the 1990s, a series of wars in the former Yugoslavia killed over 100,000 people. Eventually the US became involved, even though the area was not a part of NATO. Having Montenegro join NATO reduces the already low probability of a Serbian invasion to basically zero. That’s a benefit. Consider the fate of countries that are not a member of NATO, such as Kuwait, Ukraine, etc.
As far as costs, I don’t see any. NATO’s combined military strength is already greater than the rest of the world combined, even before Montenegro joined. We don’t need to beef up our military to defend Montenegro, we already have a military that is strong enough to deter a Serbian invasion of Montenegro.
If you don’t like that “green eyeshades” answer and want something more poetic, consider the history of NATO countries in the 70 years before NATO was created, and the 70 years since its creation. NATO is not perfect, but it’s arguably the most successful international organization in all of world history, by far.
Let’s look at the dogma of the previous period. For instance, free trade. It’s over.
If he means the dogma of free trade is over, he’s right. But who cares? Nothing much is happening to the reality of free trade. Global trade is roughly as free as 10 or 20 years ago.
Trump is doing it in his own way. Brutal, a bit primitive, but in a sense he’s right. What he’s doing with China should have been done, maybe in a different way, but should have been done before.
But what exactly is Trump doing? He demanding that China adopt a more free trade regime, which would boost Chinese exports to America. Is that consistent with the previous claim that free trade is “over”? Or maybe he is referring to demands that we “get tough”. Again, what does that mean? Ousting China from islands in the South China Sea would indeed be getting tough, but that’s not what Trump is doing. Demanding that China become a more free market economy, and hence a richer and more powerful rival to the US, is an odd way of getting tough with a country.
I understand that the French have never liked neoliberalism, and that some are not happy that the EU keeps signing free trade agreements with countries like Canada and Japan. But wishing something doesn’t make it true, and there is little evidence that the world is moving away from free trade in any meaningful way. Yes, there are still some trade barriers, but that’s always been true. Each year a few more are added and a few are removed.
This isn’t to say that he’s wrong about the rhetoric. The neoliberal rhetoric of recent decades has given way to the nationalist rhetoric of the 2010s. But the reality on the ground has not reflected that change. For instance, the Trump administration has some pretty harsh things to say about illegal immigration, but the rate of illegal immigration into the US is surging, partly due to the policies of Trump himself (stronger economic growth, less foreign aid to Central America, failure to compromise to get a wall, etc.) I’m not the first to notice that Trump ran as a populist but has often governed as a country club Republican (deregulating banks and big corporate tax cuts but no infrastructure program, no reduction in trade deficits, no reduction in illegal immigration, no increase in the minimum wage, and no real plan to save manufacturing.)
Intellectuals focus too much on interesting rhetoric and too little on mundane reality.