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THE BOTTOM LINE

Is Putin right that liberalism is obsolete?

Washington

IT LOOKS as if Russian President Vladimir Putin wants to be recalled as something besides being an aggressive autocrat. He yearns, it seems, to be seen as a leading political thinker, respected for his analysis as well as feared for his actions.

This is a reasonable reading of his recent interview with the Financial Times, which included his remarkable declaration that the "the liberal idea has become obsolete".

What to make of this? For starters, let us give Mr Putin his due. You may dislike or detest him but you have to acknowledge that he is a keen observer of the times. The post-World War II liberalism that he disparages is clearly under siege. Economically, it is strapped for cash. There are at least three reasons for this.

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First, economic growth in the West has slowed. The promise of the postwar liberalism was that strong and steady growth would buy social peace. It would enable governments to ensure full employment, protect vulnerable groups (the poor, elderly and the sick) and engage in worthy causes (for example, combating climate change).

The slowdown of economic growth limits governments' ability to meet these pledges. From 1950 to 2018, US growth has averaged 3.2 per cent, but in the next decade, it is widely projected to be around 2 per cent. The slowdown reflects baby boomers' retirement - which squeezes the size of the labour force - and weak productivity growth. Other countries have experienced similar slumps.

Second, most advanced societies are ageing - which means that they are committed to paying more in benefits for the elderly. Though the ageing occurs slowly, it is dramatic. In 2015, 14.9 per cent of the US population was 65 or over; by 2050, that is projected by the Census Bureau to be 22.1 per cent. For Germany, the comparable figures are 21.5 per cent for 2015, and 30.1 per cent for 2050; for China, the ageing is especially rapid - from 10.1 per cent in 2015 to 26.8 per cent in 2050.

Finally, there are those pesky budget deficits. It is true that, until now, the United States and many other advanced countries have been able to borrow huge quantities of money at low interest rates. Perhaps that will continue indefinitely. Or perhaps it won't. Even on today's trajectory - based on admittedly optimistic economic assumptions - US federal debt would exceed 90 per cent of gross domestic product (GDP) by 2029.

As a practical matter, countries need a crude consensus as to who is in charge and what they are empowered to do. Dictatorial societies do this by fear and force. By contrast, most modern democracies - including the United States - have resorted to some form of "liberalism", broadly defined.

We have long governed by hope: a better life. In its loftiest state, postwar liberalism was expected to have a cleansing effect on countries' social climate, liberating people from prejudice and small-mindedness. The liberal appeal spanned the ideological spectrum. In the United States and Europe, centrist governments of the left and right ruled.

It is this promise of a morally elevated electorate that Mr Putin panned. The trouble, he lectured to the Financial Times, is that many people have lost faith in the liberal idea. They have moved on. Now, Mr Putin and his fellow travellers, including US President Donald Trump and others, propose that we govern by fear: a dread of outsiders.

No one should suppose that Mr Putin's nationalistic substitute for lapsed liberalism will make the world a kinder, gentler or more stable place. The liberal ideal presumed, perhaps naively, that people could be brought together by common interests and common values. The nationalistic alternative takes as its starting point the view that there will be winners and losers.

People feel threatened. Liberal high-mindedness has created a backlash by justifying policies and practices that are unpopular with large swaths of the population - open borders, unwanted immigration, globalisation and multiculturalism. Liberal policies "come into conflict with the interests of the overwhelming majority of the population", Mr Putin said.

People value their national identities. They generally fear policies and practices that would erode these identities. One question in a 2016 Pew study asked whether increases in the number of ethnic groups, races and nationalities made their countries "a worse place to live". Large shares of Greeks (63 per cent), Italians (53 per cent) and Germans (31 per cent) said "yes".

We are straddled between two systems. The daunting task is to salvage the best of postwar liberalism while, at the same time, acknowledging the importance of national identities and sovereignty. It may be a mission impossible. WP