Tuesday, January 17, 2017

Liberalism's Minsky Moment

Why do so many people around the world hate liberalism so much that a Trump election became possible?

Another class of explanations seek to pin the blame on the liberal order, most commonly by characterising populism as a revolt by the losers of globalisation. Except that globalisation has been a tremendous success. Of course there have been some losers, especially in countries like America and Britain with feeble policies for using the winnings from freer trade to compensate and retrain workers in unlucky industries, but not enough to win elections. And populism is riding high even in European countries with elaborate compensation and retraining schemes.

I have another explanation. Liberalism works just fine. It's just that the people got bored with it.


Liberalism has been an enormous moral, political, and economic success. But it has not achieved what seemed easiest of all: convincing those who grow up under it of its moral legitimacy and practical effectiveness in comparison to alternatives. Worse, it seems that those who grow up in the prosperous cocoon of a liberal society may be especially prone to political risk-taking. An uninhibited politics in which everything is permitted has a heady appeal, especially for those who have never had to worry about its risks.

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