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From a Liberal Democratic World Order to a Social Democratic World Order: An Alternative Model

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Adam Arthur

Readers of Foreign Affairs and similar publications will notice a particular pattern that plagues the frequent discussions of the American-led world order in policy circles. Specifically, in envisioning U.S. global leadership as a “Liberal Leviathan” that seeks to pursue hegemony or to maintain order over an anarchic world, commentators will often conflate principles such as democracy promotion with the spread of a specifically American form of capitalism rooted in the Weberian notion of a Protestant Work Ethic.

This version of capitalism is often incorrectly viewed by pundits and policy wonks as a distinctly American sacred cow. Critics of this take on capitalism often avoid critiquing capitalism directly, potentially out of fear that they will be ostracized from their seat at the table. Instead, such appellations are established as “crony capitalism”, “disaster capitalism”, and so on. Yet in attempting to export its values abroad in the pursuit of global leadership, the United States has often backed unpleasant economic regimes rooted in market fundamentalism. This is true not just of the United States itself, but of International Financial Institutions (IFIs) such as the World Bank and International Monetary Fund (IMF), which World-Systems and Dependency theorists have long critiqued as a proxy for the spread of American capitalist values that equate modernization and American global leadership with radical privatization and liberalization. A take on this viewpoint that is more accessible to audiences not trained in these academic paradigms is John Perkins’ Confessions of an Economic Hit Man. While Perkins often leans into the sensational, and has at times become a darling of conspiracy theorists, this makes his critique of these institutions and their (ab)uses no less relevant.

Inherent to the viewpoint equating American leadership with capitalist liberal democracy is the notion that American values are intractable from this form of hardline capitalism. Social democracy, a viable alternative, is often unfairly dismissed in elite circles. Yet many of the United States’ allies, particularly NATO members such as Germany and the Nordic states, embrace the principles of a mixed-market economy that provides significant benefits to citizens such as robust healthcare, retirement, and social welfare programs. In the United States, such programs are often dismissed by both the elite and the public. This dismissal is particularly pronounced among older generations, who view social democracy as an alien threat. Critics of such programs, as they exist in Europe, will claim that such programs are threatened by mass migration from abroad. This is particularly true of right wing populist parties and movements who believe that foreign immigration threatens European welfare state programs. Yet the fact that these parties and movements believe this is a convincing argument is something that itself attests to the effectiveness and desirability of programs rooted in social democratic principles.

In short, a social democratic welfare state functions as a Hobbesian Leviathan that holds society together against an anarchic war of all against all. Yet the United States, both in its domestic politics and in its global influence, has seen fit to foster economic regimes that allow for just such a war of all against all, without the state serving in its desirable role as Leviathan. An argument as to the “why” of this might be pulled from the veteran geopolitical commentator Robert D. Kaplan’s 2023 book, The Tragic Mind: Fear, Fate, and the Burden of Power. Kaplan contends that it is a necessity in policy – foreign, but also domestic – to think “tragically” and embrace the fear of worst-case scenarios in order to effectively safeguard against them. Kaplan notes that his own generation, the Baby Boomers, have lost their sense of the tragic. They have been coddled by a history of success, and are thus out of touch with the more “tragic” reality. Generation X was the first generation to identify this, though they remained distant from the travails provided by blind faith in market fundamentalism.

Newer generations, however, such as Millennials and the so-called “Generation Z”, have expressed pronounced skepticism of American free market institutions and their scaffolding principles both at home as well as abroad.  Younger generations of Americans are thus more keen to embrace something like Kaplan’s model of “tragic” thinking. Social democratic institutions, furthermore, exist as a product of such tragic thinking. They exist as a result of awareness that anarchic capitalism, without safeguards, creates a worst-case scenario that is deleterious not only to domestic politics, but also to a state’s influence abroad through public diplomacy and development programs.

While defenders of so-called “free” market institutions and principles might praise them as a Book of Job-like test of individual strength and character, this is clearly not the view of the younger American electorate. In a 2020 article in Foreign Policy, Sheri Berman discusses the upswing of social democratic thought in the United States and its potential for the improvement of domestic American economic policy. Berman notes, for example, the rise in popularity of civic-minded progressive politicians such as Bernie Sanders and Alexandria Ocasio-Cortez who make introducing social democratic norms into American politics their raison d’être. Moreover, such a change would have the impact of aligning the United States more closely with the allies it seeks to lead.

The United States’ substantively different economic model – one that is more cutthroat than that of its European allies – means that those allies might challenge or resent the United States’ position of global leadership, which is not a good position for the United States to be in. That the United States does maintain such a leadership role ought not itself be in question. Former President Donald J. Trump’s discussion of cutting American spending toward NATO is a good example. While apologists for this proposal praised it as an attempt to create a multilateral model that encouraged European states to pay their fair share, critics saw the policy proposal for what it was – a craven attempt to initiate the retreat of American global leadership. With Donald Trump’s run for a second-non-consecutive term, the threat of such a policy change continues to loom large over the 2020s. That such a prospective policy change raises alarms among U.S. allies is a key signal that, for all the skepticism of U.S. global leadership among the politically-minded layperson, it is something that remains in great demand. The U.S., however, must consider changing flawed internal systems that undermine its ability to lead by example.

The United States is a country rooted in the principles of freedom. Of life, liberty, and the pursuit of happiness. The United States is also a country that, to ensure its global leadership position as a “Liberal Leviathan”, has a pronounced interest in exporting these principles abroad in hopes that they will benefit other states and civilizations. Yet the United States itself finds itself with a significant portion of its population skeptical of its conflation of freedom with an economic war of all against all, and its refusal to let government serve as a social democratic Leviathan that provides not only freedom “from” – that is, freedom from terrorist attacks, crime, and hostile behavior by foreign states – but also freedom “for”. The freedom for individuals to pursue a life of liberty and happiness. The U.S. government must seek to serve as a Leviathan at home, in order to ensure its status as a Leviathan abroad. To do so, the U.S. policy elite must consider a major change – from serving as the leader of a liberal democratic world order founded on cutthroat capitalism, to serving as the leader of a social democratic world order founded on the principles of a welfare state that provides individuals – both at home and abroad – the tools for justice and economic equity.