How the West Killed Liberalism

Flemming Rose and I Discuss The Post-1989 Unravelling

Flemming Rose is one of the most courageous journalists alive today. As culture editor of Jyllands-Posten, he was responsible for publishing the Muhammed cartoons in September 2005, subject of much controversy. An international free-speech advocate and senior fellow at the Cato Institute, he recently interviewed me to discuss my First Things essay, “Actually Existing Postliberalism.”

For those of you who want to brush up on your Danish, you can read the original here. The translation is below. Any errors therein are my own.

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How the West killed liberalism

For this week's “Free Thinking,” I spoke with political philosopher Nathan Pinkoski. I did so because this fall Pinkoski published a remarkable essay titled “Actually Existing Postliberalism” in the journal First Things, founded in 1989 by a Lutheran pastor named Richard John Neuhaus, who later became Catholic.

According to Pinkoski, his essay is an attempt to articulate how liberal society in the US and Europe has been dismantled in recent decades. He has found both right- and left-wing critiques of liberalism—emphasizing woke culture and identity politics on the one hand, and economic inequality on the other—insufficient. Instead, Pinkoski's essay looks at the institutional changes the West has undergone since 1989. His conclusion is that the West's liberal governments in the US and the EU have buried liberalism by systematically undermining fundamental liberal principles. Liberalism was killed by its loudest adherents, not by Donald Trump or populist governments and movements in Europe.

He begins his essay with the words: “20th century civilization has collapsed”. This is a hidden quote from Hungarian-born political economist Karl Polanyi's classic 1944 work The Great Transformation: The Political and Economic Origins of Our Time, which begins with the sentence: “19th century civilization has collapsed.”

Nathan Pinkoski is a research associate at the Institute for Politics, Philosophy and Technology in California. He holds a doctorate in political theory from the University of Oxford.

Enjoy the show.

Fukuyama throws in the towel

Three days after the 2024 US presidential election and Donald Trump's victory, one of the most influential Western intellectuals of recent decades, Francis Fukuyama, published a remarkable essay in the Financial Times in which he threw in the liberal towel.

Fukuyama’s famous 1989 essay “The End of History?” articulated the liberal order as the optimal organization of society both within individual Western countries and on the international stage. But now, Fukuyama recognizes that classical liberalism has gone off the rails, driven by two distortions of the liberal idea: the idea of equality before the law and equality between citizens in a constitutional state that protects their rights, and the establishment of constitutional restrictions on the state's ability to limit these rights.

Distortions of liberalism

The two distortions Fukuyama points to are widespread criticisms of modern liberalism on the left and right . The left blames so-called neoliberalism, which, according to Fukuyama, elevates the market to an absolute good while reducing the state's ability to protect those who suffer most as a result of economic change.

Fukuyama notes this development in recent decades:

“The world got a lot richer in the aggregate, while the working class lost jobs and opportunity. Power shifted away from the places that hosted the original industrial revolution to Asia and other parts of the developing world.”

While the left points to neoliberalism as one distortion of classical liberalism, the right points to identity politics or “woke liberalism” as the other distortion, where concern for the welfare of the working class has been replaced by a demand to protect marginalized groups such as ethnic minorities, immigrants, and sexual minorities.

Fukuyama comments:

“State power was increasingly used not in the service of impartial justice, but rather to promote specific social outcomes for these groups.”

According to Fukuyama, Trump is ushering in a new era in American politics and perhaps the world at large, and the liberal guru predicts a gradual decay of liberal institutions similar to what has happened in Hungary under Viktor Orbán—a decay that is already underway. Fukuyama believes that Trump has already caused serious damage to the liberal order.

Fukuyama's paradigm crisis

One of those who read Fukuyama's essay with a certain intellectual satisfaction was Canadian-born historian of ideas Nathan Pinkoski. In November, Pinkoski published an essay in the journal First Things in which he states that the liberal order is dead and that we already live in a post-liberal world. And now one of the world's most prominent liberal intellectuals has recognized that this is the way things are going.

Pinkoski says:

“It's a fascinating essay in which Fukuyama recognizes that the paradigm he's been using to explain the world for the past few decades no longer holds. He can't use it as an explanatory model, so he has suffered a paradigm crisis.”

He adds:

“It's really interesting that one of the most celebrated intellectuals of our time has to put aside his arguments about the end of history to explain what's happening to the liberal West, choosing instead to resort to the conventional left and right wing critiques of liberalism and their explanations of what has gone wrong.”

Pinkoski continues:

“Fukuyama has been moderating the debate on liberalism from a centrist position for years, but now he has to drop his own script and ally himself with the scripts of the left and right to describe what is happening.”

According to Pinkoski, this development can be seen in liberal evangelist Fukuyama's last two books, the first on identity politics, Identity: The Demand for Dignity and the Politics of Resentment, published in 2018, and the second on liberalism, Liberalism and Its Discontents, published in 2022.

Fukuyama's growing dogmatism

-In a review of Fukuyama's book on liberalism, you indicate that he has moved a lot since the original essay and in the subsequent book on the end of history that he has become more dogmatic. What do you think?

“Yes, I think that's true, but he has also changed his understanding of liberalism. Originally, he emphasized that liberalism was linked to a certain idea of human nature and thus also of human limitations. He was aware that many could find the end of history rather boring and reject it. Furthermore, Fukuyama was aware that massive technological change could restart history. In this picture, liberalism consists of a set of tenuous beliefs and institutions that are successful in a particular historical situation, but not always.”

-And what about the later Fukuyama?

“Here he drops his talk about human nature, as often happens among progressives on the left. People get nervous when you talk about human nature, because it's tied to absolutes or has a religious resonance to it. So Fukuyama's definition of liberalism now focuses more on human autonomy as the ultimate goal of liberalism, and he has become more friendly to the progressive left and more hostile to the conservative right.”

What characterizes liberal society?

Francis Fukuyama is a symptom of the death of liberalism.

In his essay on the post-liberal state of Western societies, Pinkoski attempts to deconstruct how we got here. He autopsies the corpse of liberalism to find the cause of death, and his central argument is that it is liberals who have done away with liberalism.

Before we take a closer look at Pinkoski's analysis, it is appropriate to introduce his definition of a liberal society. Liberalism implies a clear distinction between society and state, and between public and private. The first demarcation is intended to guarantee the individual a space in which the state cannot interfere, the inviolability of privacy, while the second establishes a sphere for companies, associations, organizations, media and similar civic and private enterprises to operate without state interference, as long as they comply with the law. In turn, the public sphere is protected from being taken over by private interests.

The distinction between the private and the public also depends on the neutrality or impartiality of the state - which, by the way, is precisely what Fukuyama believes identity politics undermines. A liberal state cannot punish or favor certain attitudes, as long as they are not against the law, and a liberal state must be impartial when it comes to the legal system and a neutral body in the market.

1989 was not what we thought

According to Pinkoski, Western liberal societies have been undermining both demarcations for years, so that we now live in a post-liberal world.

For Pinkoski, 1989 is a watershed year, a revolutionary year—but not in the way many in the West imagine. He believes that 1989 was not a triumph for liberalism—quite the opposite. Instead, the end of the Cold War heralded the end of the liberal order: not an expansion of the Western order into the former Soviet bloc in the East, but a transformation of liberal democracy.

The introduction of the euro and the establishment of the European Central Bank, both freed from any national control, is an early example of this development, says Pinkoski. But also, state control of civil society groups as delegates to take on tasks that are normally the responsibility of the state points in the same direction.

In recent years, this trend has become even clearer in the state's alliance with digital platforms to exercise censorship. We saw this especially during the pandemic, but also with the state's alliance with the financial sector to target its enemies: first to target terrorists abroad, and now also political opponents at home.

In a liberal democracy, the private sector usually acts as a counterweight to the state. But in the postliberal world, according to Pinkoski, the private sector operates as an arm of state power. This is one of the explanations for a seemingly paradoxical concept: totalitarian liberalism.

The 20th century: 1945-1989

Pinkoski believes that the golden age of the liberal order, or what he calls 20th century civilization, extended from the end of World War II in 1945 to the fall of the Berlin Wall and the end of the Cold War in 1989. It was based on an international financial system with the dollar at its center, the so-called Bretton Woods system; a world order with two poles, Western and Soviet (agreed at Yalta between Franklin Roosevelt, Winston Churchill and Joseph Stalin); and a strengthening of national parliaments and checks on executive power after the horrors of World War II.

According to Pinkoski, the liberal golden age ended in 1989, when the Soviet bloc fell apart and the US became the global hegemon.

The West began to weaponize the financial system, first against external enemies, but later against its own citizens. The strategic goal shifted from containing the Soviet threat to the expansion of Western institutions everywhere. But parliaments and representative governments were displaced by technocrats and managerialism, and liberalism rooted in a regulated market was abandoned in favor of a liberalism that became synonymous with a deregulated market.

History as a comic book

Pinkoski believes that this development represents a radical break with the past and not continuity.

He states:

“Many people prefer to see 1989 as an expression of continuity, with Western institutions moving eastward and expanding, but I think you have to recognize the break with the past and see it as a revolutionary moment.”

-In your essay, you accuse the 1989 generation of having very limited knowledge of the Cold War and virtually no knowledge of its beginnings, even though they see themselves as heirs to the Cold War generations and believe they are continuing where others left off. What do you mean by that?

“The architects of the post-war period, people like Charles de Gaulle and Winston Churchill, were aware of the tragic dimension of history because they had lived through the war themselves. They were aware of the limitations of man, and not least of their own. But the boomer generation had a comic, cartoonish view of history. They believed that history had a positive direction and would lead to something good, and that it's just a matter of pushing things forward.”

Is it people like Bill Clinton and Tony Blair?

“Those are good examples, yes, but also George W. Bush and Barack Obama.”

-Ok, the difference between the ones you mention and the last Cold War generation, people like Reagan, Thatcher, Mitterrand, Gorbachev and Kohl, is that the latter leaders had experienced World War II themselves, while the former did not. Does that play a role?

“Exactly. There is something that makes the boomer generation receptive to the theology of progress, an unshakable belief in progress. There's this certain belief that everything will ultimately end in a victory for the kind of Western system that we started propagating in the 1990s.”

From restraint to confrontation

One aspect of this mentality, according to Pinkoski, is a over-willingness to be confrontational with foreign powers, and to label calls for caution and restraint as kneeling before authoritarian powers. He points to the intense debate that raged in the US when a few hundred Stinger missiles were supplied to Afghan insurgents under Reagan in the 1980s, while there was no such debate about the delivery of 3,000 Stinger missiles to Ukraine.

The same trend, Pinkoski continues, can be seen in the debate over nuclear weapons. During the Cold War, America's leading strategist Henry Kissinger insisted that we had an obligation to engage in diplomacy with the Soviet Union and make disarmament and arms control agreements with Moscow because of the threat of nuclear war and apocalypse, but after the end of the Cold War, that became less important.

The start of a political revolution

In his essay on the reality of post-liberalism, Pinkoski highlights a speech by President Clinton's National Security Advisor, Anthony Lake, in September 1993 at Georgetown University in the US capital. The title is “From Containment to Enlargement” - and in an ironic nod to history, it's perhaps worth mentioning that Lake then had a young speechwriter named Antony Blinken, the prior US Secretary of State.

Pinkoski highlights the speech not because it is particularly insightful or profound, but because Lake articulated the post-Cold War consensus that drives American foreign and security policy. Lake expressed ideas that all right-thinking people in Washington have since subscribed to.

Lake pointed to the close connection between the market economy and democracy and suggested that the US foreign and security policy strategy going forward should focus on spreading these institutions as far out into the world as possible. The more market and democracy, the more security, prosperity and influence for the US.

Interestingly, in this speech Lake also advocated that the US should use its military muscle if necessary against states hostile to democracy and the market economy, a practice that was realized under President George W. Bush.

The extended arm of the state

Lake suggested that civil society and private actors should increasingly act as an extension of the state in pursuit of Washington's foreign policy goals: academics, philanthropists, journalists, businesses and social entrepreneurs. According to Pinkoski, this represents a clear break with a fundamental principle of the liberal order: the separation and independence of civil society and the private sector from the state.

Out in the world, the US is funding NGOs in the former Soviet Union. They do not function as NGOs in the classical liberal sense, but as instruments of the US state's foreign policy and interests.

According to Pinkoski, this approach has the distinct advantage that civil society groups are not subject to the same scrutiny as state actors. This model has since been imported to the US itself, where the government has delegated the monitoring and regulation of speech to civil society institutions under the pretext of fighting disinformation and misinformation.

Politicization of the financial sector

According to Pinkoski, the area where the breakdown of the liberal divide between society and state and between private and public has been most profound is the financial sector. The neutrality and confidentiality between bank and customer of the past has been replaced by a politicization of finance that has become a weapon first used against enemies abroad, and in recent years, under the name “de-banking”, has been directed against political enemies at home in Western countries - from crypto-industry entrepreneurs and law-abiding Muslims to British politician Nigel Farage and Donald Trump's wife and son, Melania and Barron.

Initially, the financial world resisted political encroachment. When US intelligence agencies in the 1990s wanted the Treasury Department to use its knowledge of the system to target al-Qaeda accounts, the Treasury refused. The risk of undermining America's liberal credibility was deemed too great. But that changed after al-Qaeda's terrorist attacks on the US in 2001. George W. Bush ended the impartiality of the international financial system with a series of landmark decisions in the aftermath of 9/11.

On September 23, 2001, President Bush signed Executive Order 13224 with the words:

“We’re putting banks and financial institutions around the world on notice. If you do business with terrorists, if you support or sponsor them, you will not do business with the United States of America.”

Banks risked having their assets frozen and being excluded from the US-dominated international system, and having their reputation destroyed. The G7, IMF and World Bank became part of the US sanctions regime.

The US needed information on bank transfers and after 9/11 pressured SWIFT - a European-based digital money transfer system - to hand over the necessary information. Outwardly, SWIFT maintained its neutrality, but behind closed doors it shared information with the US government.

Private banks become weapons of the state

The so-called Patriot Act from the same period gave the US Treasury Department the power to characterize institutions as a risk if they suspected money laundering was taking place, even if the authorities had no evidence.

The government could then send a warning to private banks to cease all business with these suspect institutions, even if there was no evidence of illegal activity. In this way, private banks became an effective weapon in America's fight against its enemies: first against terrorists, but since 2003 against disliked regimes - from Syria, Belarus and Myanmar to Ukraine, Iran and North Korea. And, today, against political opponents at home.

The new partnership between the state and the private sector thus took on a systemic character that helped deliver a death blow to the liberal order. Banks changed their understanding of risk. Previously they had prioritized customer protection and confidentiality, but now they did not hesitate to disclose information about their customers to the authorities - without their customers' knowledge.

Pinkoski notes:

“The private sphere will never be the same. The tradition of banking secrecy has been sacrificed.”

This trend continued under President Obama, who froze 37 billion dollars of Libyan assets in 2011, and then in the following year, allied with SWIFT to exclude the entire Iranian banking sector from the international system for transferring money between banks.

Targeting their own citizens

Later, governments begin to use the state-private sector partnership against their own citizens.

And just as 9/11 provided authorities with a blank check to do pretty much whatever they pleased, the pandemic provided a similar opportunity for the state to expand its partnership with the private sector and civil society.

Pinkoski comments:

“Whether you're targeting Muslims, people with links to Brexit, or those with Russian names, there's a pattern. Just as civil rights legislation has given corporations the right to impose an ideology of Diversity, Equity, Inclusion on the entire business community, anti-terrorism legislation allows corporations to resort to political loyalty tests throughout the financial system, but the direction of that evolution was set decades earlier.”

Pinkoski concludes, referring to those who have their bank accounts closed or are unable to open one because they hold politically incorrect views, or those who are excluded from digital platforms where the public conversation primarily takes place for the same reason:

“We are now seeing on the domestic scene what has been happening at the global level since the 1990s. Civil society, especially its economic dimension, is being weaponized. Those who threaten the regime, or who give the impression of being someone who could pose a threat, risk being turned into non-persons.”

Liberal strategy heralds the death of liberalism

-Going back to Anthony Lake's 1993 speech, which set the stage for how the US intends to govern the world after the Cold War, I understand your point to be that what Washington then saw as the recipe for the dominance of the liberal order actually ends up undermining that order, first in the world and in recent years also in the US and other parts of the West, not least Britain. Is that correctly understood?

“Yes, it's clear with both the digital part of the financial sector and with digital platforms, where the tools used to fight insurgency in Iraq end up being used to fight so-called disinformation at home. In 2012, Obama repeals the law that prohibits the transmission of US propaganda to US citizens. Previously, it was only transmitted abroad via media like Voice of America or Radio Free Europe, which are funded by the US government, so what it means to be a citizen of a liberal democracy has changed.”

-Can you give an example of de-banking, where the financial sector is politicized and used as a weapon against your own citizens?

“I’m Canadian, and I remember the Canadian truck drivers' protests against the government shutdown during the pandemic, when drivers had their bank accounts frozen. The banks were more than willing to provide the necessary information to the authorities. None resisted, and the banks even asked if the government wanted even more information.”

Liberalism is cracking

-You also point out that the new partnership between state and society, between the public and private sectors and the breakdown of the divide between home and abroad is beginning to show signs of crisis and cracks. You even make a claim about “the deformation of the state.” Where do you see that?

“The Washington Post had a story last summer about how the bureaucracy has been overwhelmed by requests from the business community on how to implement this or that sanction. They can't keep up, so companies are forced to make their own decisions on national security issues. When it comes to digital platforms, it's unclear whom to hold accountable. A state actor insists that they did not tell Facebook to close this or that person's account or remove certain speech, while Facebook insists that they only did what the authorities asked them to do. Within the government bureaucracy, there is growing skepticism about the use of sanctions and their effectiveness. No sane observer believes that the US-led global financial system is neutral anymore, so many countries are starting to look for alternatives, which will eventually challenge the dollar's status as a reserve currency and thus the financial foundation of US power. Finally, you can see how some of the rights you would normally expect Western governments to protect are no longer so important. For example, property rights, as we have seen in the debate about the freezing of Russian assets in the West.”

No plan B

-You also point out how sanctions no longer work as intended and can therefore also be seen as a systemic crisis sign. How so?

“Yes, it's clear in relation to Russia, if you go back to 2022 and see what the Biden administration envisioned. They believed that sanctions would collapse the Russian economy and that they would lead to regime change. They thought that in Ukraine, the West could achieve with sanctions what usually requires military force. But they are realizing that the entire strategy of the transatlantic alliance has failed. It turns out that we don't have the power we thought we had.”

Pinkoski continues:

“In retrospect, we also see that we have stopped investing in artillery production. The deindustrialization that has been going on for decades has weakened our ability to fight a conventional war, so we cling to sanctions as this magical weapon that can achieve everything we want. We have now discovered that it doesn't work, but we have no plan B. We are in a situation where the industrial power of the West has been beaten by a country we call a gas station disguised as a country. But the Russians have made some strategic choices in recent decades that are now paying off.”

Pinkoski adds:

“We've assumed for a long time that just because we are the West, we have the upper hand militarily and in other areas, but now we suddenly see that the Russians are able to produce these advanced hypersonic missiles that we don't have. It's a shock. For a long time we assumed that the West was synonymous with modernization and technological superiority. We've invested so much in that notion that when we see it's not true, we have an identity crisis.”

The anti-disinformation paradigm in action

While this point is particularly relevant in relation to China, a technological superpower, I was also struck by three recent elections in Moldova, Georgia and Romania that Western governments are more concerned with the outcome than the democratic process.

They are only interested in the process when the 'wrong' side wins an election or when their allies are subjected to censorship. Many Western governments bought the explanation for the annulment of the Romanian election on the grounds that Russia had played a sinister role in supporting the populist winner Calin Georgescu, who is against aid to Ukraine and wants the war stopped, but it turned out, according to the Romanian tax authorities, that the social media ads in question were paid for by a liberal and pro-EU Romanian party trying to draw votes away from their competitors. But Western governments do not comment on this.

“Yes, here we see in practice the anti-disinformation paradigm that Jacob Siegel was the first to describe in detail a few years ago in Tablet magazine. It shows that the principles that drove post-war liberal democracy are incompatible with this anti-disinformation paradigm.

The election was annulled by Romania's Constitutional Court, but the court did not provide evidence of electoral fraud or other illegalities. It based its decision on a statement from the intelligence services claiming that Russia had interfered in the election and ran a campaign on TikTok. It was against this alleged threat of spreading false information on social media that Western governments praised the court's decision.”

Pinkoski adds:

“It is a direct application of the anti-disinformation paradigm that politicians and technocrats have promoted for years, invoking disinformation and misinformation to claim the right to censor. It began to attract attention back in 2016, when President Obama tasked a so-called Global Engagement Center under the US State Department to combat disinformation.

Ever since, elites have been obsessed with it, and a year ago, European Commission President Ursula von der Leyen reiterated that the EU's main concern is 'disinformation and misinformation'. This is what we see in Romania, and Western governments praise it. But it is incompatible with the liberal democracy that was established after World War II.”

The crisis of democracy

On the democratic process and the fact that China is technologically ahead of the West in some areas, Pinkoski says:

“In the postwar period, there were two forms of democratic legitimacy, one for input and another for output. Input focused on the democratic process, while output referred to concrete results. Process meant a lot then, but it doesn't anymore, and this is also part of the West's identity crisis. The Chinese and Russians point out that we link democracy to technological progress, prosperity and modernization, but then say they have delivered all that without the uncomfortable democratic part that the West itself has problems with when it results in Brexit or Trump's election victory. It has led to an identity crisis that we don't take input legitimacy seriously, denigrate it or define it in a way that makes it irrelevant. This is in contrast to the period from 1945 to 1989 when we took it seriously.”

Nathan Pinkoski mentions several times the struggle of Western governments against misinformation and disinformation, and he mentions American author and journalist Jacob Siegel. You can read my interview with Siegel and his original essay on the censorship-industrial complex in the US here.

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