5 facts you need to understand the new global order

We are living in abnormal times. The global liberal order is in an advanced state of meltdown. And as the world rapidly shifts from a uni-polar to a multi-polar reality, the international system itself is exposed to profound instability. If the situation is not handled with extreme care, the potential for a major collapse is real. The question is whether our world leaders are capable of fully understanding what is happening in real time and can muster the collective action to set new rules of the road.

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The old global liberal order served as the bedrock of peace and stability since 1945. It was purposefully designed by the US and its western allies to prevent armed conflict and the economic nationalism that gave rise to it. It is composed of the United Nations, the International Monetary Fund and World Bank, the World Trade Organization, the North Atlantic Treaty Organization, the G20 and a thicket of treaties and agreements. While experiencing its ups and downs, it set the rules for a stable positive-sum game.While virtually everyone agrees that a rules-based system is essential to managing security and trade, a power struggle is underway over who writes and enforces them. The spectacular rise of China over the past two decades and the relative decline of the US mean that sparks are bound to fly. Yet most westerners are only dimly aware of what’s occurring since the rug was so quickly pulled out from under them. The potential for catastrophic miscalculations — including US trade actions against China — are rising, with potentially devastating cascading effects to the global economy.To get to grips with the seismic shifts taking place, consider these five facts.

Image: Visual Capitalist

All the while, the west seems to be asleep at the wheel. There is a certain irony in our current predicament. On the one hand, the world is experiencing unparalleled levels of prosperity and connectivity, due in no small part to the US-backed global liberal order. Yet these advances are associated with ever greater complexity and systemic risks, increasing the liberal order’s vulnerability to collapse. The world’s global and national institutions are increasingly incapable of managing stresses to the system. Democracies, it turns out, lack the incentive systems to address higher-order and longer-term imperatives.

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All of this will be hard to swallow for stalwarts of the global liberal order. It will also need to be explained to a public that is accustomed to linear change. The current transformations are both non-linear and increasingly exponential, processes that are hard for humans to grasp. We are fixated to the forward march of democracies and the underlying principles on which they are based, yet we must learn to compromise and accommodate multiple value systems.

The next order will be more complex and potentially more precarious, but that is the brave new world we face.

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