When Vladimir Putin ordered his tanks across the Ukrainian border in the early hours of Feb. 24, he brought a brutal end to a three decade long era in geopolitics. That period had begun at midnight in joyous optimism on Nov. 9th, 1989 with the very different breaching of a frontier 750 miles away. The fall of the Berlin Wall. The 33 years between the euphoric dismantling of a barrier that had torn a society apart and the barbaric violation of a border that had kept a country sovereign were a sunny season in human history. But that time has now come to an end. And one of our most urgent tasks is determining what will replace it. We are living through a moment of extreme economic upheaval, and today, I want to lay out the new economic path that the World's democracies should chart together.
The past 33 years were guided by an idealism that was both high-minded and, for the countries of the Transatlantic Alliance, supremely comfortable. We were fat and happy; Assured in our belief that we could do good by doing well. Now with hindsight, it's easy to mock the hubris and naïveté which animated that era. But as we set about building it's successor it's important to start by remembering how generous and humane our intentions were.
The effort that followed the fall of the Berlin Wall was not punitive or vengeful or colonial. The objective wasn't conquest. It was fellowship. It was more 'Marshall Plan' then "Treaty of Versailles'.
The past three decades were framed by two complementary convictions. The first was what, was that we had come to what
Francis Fukyuama vividly termed "
The End of History". That the contest between competing forms of human social and political organisation was over, and that capitalist democracy had emerged as the single best way for people to live. Our core belief was the rights and opportunities enjoyed by citizens of Western countries could- and should be- universal. That people around the world wanted and merited and could achieve the freedom and prosperity we already enjoyed.
Now, it's impossible to utter these words without a shamed-face grimace; without an acknowledgement of how inconsistent and ineffective we've been at putting this moral commitment to universal rights and values into practice. But, for a moment, just consider how radical and how progressive this universalism was. For most of human history, even democracies had built their relations with other states on the naked and unabashed assumption that liberty, the liberty and prosperity we cherish were somehow undesirable or unnecessary or unsuitable for other people- for Slaves, for Asians, for Africans, for Arabs.
The End of History was founded on the profoundly Liberal and egalitarian conviction that everyone in the world had the right and the ability to live as well as we do. That's why it was such a powerful and promising idea. And
The End of History had an economic corollary. Not only did we believe that the capacity for Liberal democracy was universal, we also thought it was inevitable provided a society got rich enough. The struggle between Transatlantic Capitalism and Soviet Communism seemed to have ended on Nov. 9th, 1989. And history would end in other parts of the world as they, too, became more prosperous. And we believed, or perhaps we hoped, that as countries became richer, and as they built their increasing prosperity on trade with one another, war would become an anachronism. This conviction was most colourfully captured by
Thomas Freedman with his
Golden Arches Theory of Conflict Prevention. The view that no two countries that have a McDonald's would fight a war against each other.
Now, these two broad ideas that all human societies were heading towards democracy and that growing rich together would make the world both more democratic and more peaceful have been the guiding principles of Western statecraft for the past 33 years. They inspired hopes for a peace dividend and visions of a Europe free and united from the Atlantic to the Urals. They were the intellectual foundations for Moscow's admission to the IMF in 1992 and Beijing's accession to the WTO in 2001. They were why Germany worked with Russia to build Nordstream II, and why Australia and New Zealand negotiated free-trade agreements with China.
As we look back on the past three decades, and move beyond them, we should remember that a world in which we all grew free-er and richer together was a laudable objective and one worth taking some risk to construct. But we also need to be clear-eyed about the results of that effort. Liberal Democracy worldwide has, today, declined back to 1989 levels. And autocracies have been making a comeback. Many, including China- the second most powerful country in the world- have grown both wealthier and more coercive. And as Putin is murderously proving, economic interdependence does not always prevent war. All of this means is that we, the countries of the non-geographic west, need to build a new paradigm.
The Cold War is still over but so is the
End of History. It's up to us to design what replaces it.
So, let me begin by suggesting how we should think about this new era.
First, the worlds democracies must be realistic about the world we inhabit. History hasn't ended. We share the planet with authoritarian regimes and there is no inevitability to their decline, just as there is no inevitability to our continued existence. Democracies account for a minority of the world's population and while we possess, comfortably, more then half of it's wealth, our portion is shrinking. We need to assume that in the decades to come we will be sharing the planet with rich and powerful countries who do not share our values, who, in fact, see our values as both hostile and inferior to theirs. Yet, we need to find ways to coexist.
And, secondly, we must not be naive about that coexistence. Because we believe prosperity was the mid-wife of Liberal Democracy and that economic interdependence was the best shield against war, we opened our economies to our former adversaries and committed ourselves to building a rules-based system of global free-trade. The problem is that many of the worlds dictators have been guided by entirely different principles from our own. The economic ties that we thought would constrain Russian bellicosity are instead being used to try and blunt our own response to the Kremlin's war crimes. With hindsight, it's clear that appointing
Gerhard Schröder to the
Rosneft Board was as essential an element in Putin's war planning as any military exercise.
(Section in French that I don't understand but the last word was 'Huawei'. Anyone who speaks Quebec French could translate from 15:26 to 16:41? And whoever chooses to do this, you are a warrior.)
And so, nearly eight months after the invasion of Ukraine, we find ourselves in a world where bloody history is back. And where muscular dictatorships show little sign of mellowing into Liberal democracies. And yet also where, in conscious contrast in the age of the Iron Curtain we have spent more then three decades building an interconnected, global economy. This is the reality of the 21st century. Now is the time for the world's democracies to craft a policy to respond to it and to shape it.
Today, I'd like to propose three pillars of what that new policy should be.
The first and most fundamental pillar is that we, the world's democracies, must strengthen our connections with each other.
The immediate and necessary reaction to Putin's invasion of Ukraine has been to deepen and expand our core military alliance- NATO. Sweden and Finland have joined ending generations of neutrality. The Transatlantic Alliance is cooperating more closely than ever with other democratic partners around the world; most notably in the Indo-Pacific. But we must now expand that closer cooperation to the economy. As fall turns to winter, Europe is bracing for a cold and bitter lesson in the strategic folly of economic reliance on countries whose political and moral values are inimical to our own. China's increasingly aggressive wolf diplomacy has already given many smaller democracies a foretaste of that experience. Now, for some democracies, especially the largest among us, a tempting response to these vulnerabilities will be autarchy. But for most democracies, that just isn't feasible. And for all of us, the economic cost would be very high. A better alternative is what US Secretary of the Treasury, Janet Yellen, has described as '
friendsuring'. That democracies must make a conscious effort to build our supply chains though each other's economies. Where democracies must be strategically vulnerable, we should be vulnerable to each other. One way to do this is through trade agreements. Canada is proud to be the only G7 country with trade deals with every other G7 partner. But we would be happier still to give up our bragging rights and to have out feat replicated by each of our allies. And trade deals aren't enough. Going forward, we should design our government procurement and incentive programs with 'friendsuring' in mind. The Inflation Reduction Act is a forward thinking example of this approach. The new $7,500 tax credit to buy a new electric vehicle requires that its battery be built using critical minerals and metals produced in countries with which the US has a trade agreement.
Now, trade deals are one way to define who our friends are. A complementary approach exemplified by the EU's proposed ban on imports produced with forced labour is to identify shared values. Replicated across the world's democracies, 'friendsuring' is a historic opportunity for our workers and our communities. For Canada and Canadian workers, and for those of our democratic allies around the world, this is an economic opportunity to attract new investment, create more good-paying jobs, and for us all to thrive in a changed global economy. It can make our economies more resilient, our supply chains true to our most deeply held principles and protect our workers and the social safety-net they depend on from unfair competition created by coercive societies and race-to-the-bottom business practices.
Workers in our democracies have long understood that global trade without values-based rules to govern it made our people poor and our countries more vulnerable. They have long known that it enriched the plutocrats but not the people. Friendsuring is an answer to these long-standing and legitimate concerns. But if we are to tie our economies even more closely together, we must be confidant that we will all follow the rules in our trade with each other, even, and especially, when it would be easier not to. We will friendsure more quickly and effectively if we work together to develop shared approaches and if we make an explicit commitment to each other to implement them, and, crucially, we must then be prepared to spend some domestic political capital in the name of economic security for our democratic partners.
The EU set a powerful example during the Covid pandemic when European vaccine makers honoured their contracts with non-European allies. Canada remembers. Canada must, and will, show similar generosity in fast-tracking, for example, the energy and mining projects our allies need to heat their homes and to manufacture electric vehicles. I cite these examples because, critically, 'friendsuring' must be 'green'. The curse of oil is real and so is the dependence of many of the worlds democracies on the world's petrol-tyrants. 'Friendsuring' can both defend Liberal democracy and help preserve the planet if one of our objectives is to speed-up the green transition together.
The Canadian-German hydrogen partnership
announced in Newfoundland in August by Prime Minister Trudeau and Chancellor Scholz is one example of this 'green friendsuring' in action. Friendsuring should also mean: standing-up for each other in the face of economic bullying from the world's dictators, an approach
Anders Rasmmusen and
Ivo Daaldur described as an "economic version of NATO's article 5". We cannot allow Lithuania to be coerced over its policy towards Taiwan or South Korean companies be harassed and boycotted in retaliation against legitimate national security decisions taken by Seoul. A commitment to support each other in the face of such economic strong-arming is the best way to ensure it doesn't happen again.
The second pillar- and the hardest question that a 'friendsuring' approach must grapple with- is our attitude towards the in-between countries. It's easy enough to make the case for deepened economic ties between the countries of the non-geographic West bound, as we already are, by close political and often military alliances. NATO allies and the rich industrial democracies of the Indo-Pacific. But what about the other countries of Asia, Africa, the Middle East and Latin America? Their experience of the
End of History era was different from ours and the reaction of some to the invasion of Ukraine has, accordingly, been more ambivalent. Where should they fit into a world in which some of the battlelines that were erased 33 years ago have been redrawn? Our lines of democracies must be open. 'Friendsuring' can't be a closed club, be it the G7 or NATO or the
Five Eyes. It cannot be only for rich countries or only for historic partners. It must be open to the democracies of the Caribbean, of Latin America, of Africa, of the Middle East and of Asia; open to any country that shares our values and is willing to play by collectively agreed-upon rules.
(Another French section in which she mentions 'Iraq'. From 25:32 to 26:50.)
History shows that the West is not innocent of Imperialism or transactional deals but neither are the world's dictators today. We must keep the door wide open and not doubt the long term appeal of our principles. And remember, the rules-based order we are seeking to strengthen is most valuable to the smaller, poorer countries who are most susceptible to coercion by larger and more hostile economies. One of our most convincing arguments will be our success. Winning matters and winning works. Victory creates its own momentum. Ukraine is proving that with its battlefield progress. We will all show it by delivering widespread prosperity for our own people.
The third pillar is our relationship with the worlds autocrats. This is where our break with our assumptions and our approaches of the past 33 years must necessarily be the sharpest. We should all still hope Martin Luther King's assertion about the
arc of the moral universe is true and that it applies to all of humanity. But we also need to recognise that it does not accurately describe much of the world right now.
We must govern our relationships with the world's authoritarian rulers accordingly. Those relationships should be predicated on the imperative that the world's democracies intuitively recognised, on Feb. 24th, that in the 21st century some actions are utterly unacceptable and require an unequivocal response.
The
End of History has not been a garden of Eden, and the
Golden Arches Theory of Prevention has not held perfectly true. But over the past 33 years and indeed in the entire post-war era, the world has largely been free of the wars of conquest which were a principle means of conducting foreign policy in all the time, in all of human history, before 1945. As
Tanisha Fasal has calculated, between 1816 and 1945, a state disappeared, on average, every three years. Before Feb. 24th, it had been more then 30 years, with the Iraqi invasion of Kuwait, since one country had tried to conquer another internationally recognised country outright. This was, perhaps, the greatest achievement of the post-war era. We agreed to refrain from eating each other. Allowing the Kremlin's anachronistic invasion of Ukraine to would plunge us all back into the 19th century. That's why
Narendra Modi told Putin last month that the era of war was over. It must be. And that is why Putin must be defeated. But after Ukraine triumphs- and we must do everything in our power to ensure that victory comes and comes quickly- we will, quite likely, continue to face a tyrannical Russia on Europe's boarder and powerful authoritarian regimes elsewhere. Our approach to them must be different from what it has been over the past three decades. Rather then imagining that their political systems will gradually, peacefully and enthusiastically come to resemble our own as we all grow richer together, we need to understand that authoritarian regimes are fundamentally hostile to us. Our success is an existential threat to them. That is why they have tried to subvert our democracies from within, and why we should expect them to continue to do so. We must, likewise, recognise that authoritarian regimes have as little fundamental respect for rules-based order among states as they do for the rule of law within their own countries. That means we need to be cautious with our economic relations with the world's dictators and their elites. We need to make clear that it will no longer be possible to rule like Stalin but live like
Abramovich. We should continue to trade but we should avoid strategic vulnerabilities in our supply chains and our economies more broadly.
(Third French section. Robert Habeck's name was mentioned. From 31:44 to 32:37.)
Yet, even as we are more cautious and more limited in our economic ties with authoritarian regimes we need to work with them to preserve the global commons. That means, first and foremost, continuing to work together on tackling the preeminent threat of climate change. It also includes armed security, pandemic preparedness and the stability of the international financial system. During the Cold War, we learned to contain and engage at the same time. Washington understood that it could not prevent nuclear armageddon without talking to Moscow. We cannot save the planet today without working with Beijing.
(Forth section in French. From 33:22 to 34:20)
We democracies may have been sincerely convinced that we were all converging towards global peace and prosperity. But the world's dictators never believed that and they never believed us. They thought we must be either fools or liars. They are cynical and craven and they think we are too. Paradoxically, we may find that the worlds authoritarian regimes understand us better and respect us more when we are brutally frank about all of our profound disagreements.
Now, I recognise that the broad thrust of what I have just discussed was intuitively obvious to most of the citizens of the worlds democracies on Feb. 24th. Our people immediately understood that Putin's invasion of Ukraine was among the greatest threats to our security in a generation, that Russia and its leadership must, henceforth, be pariahs and that the worlds democracies needed to work more closely together then we had since the second World War. We have all known, from the very outset, that this war matters so much because Putin's invasion will be either inspiration or a cautionary tale for the worlds tyrants. Yet, I also know that following the path that I have outlined will be hard and controversial. The world's democracies may understand that this is the right and prudent course to follow. But it is, by no means, certain that we will summon the collective will to do so.
One reason that consciously breaking with the
End of History era and building a new paradigm will be so difficult, is that it means giving up an uplifting and self-validating vision of the future. After the sacrifice of the greatest generation and the nuclear standoff of the Cold War, it was a relief and a vindication to imagine the entire world peacefully marching together towards global Liberal Democracy. It is dispiriting and frightening to accept that it is not so.
A second cause for hesitation is economic. One reason the
End of History was so beguiling is that it promised us that we could do good by doing well. I am now proposing that the only way for us to do well is if we do good. The turbo-charged globalisation of the past three decades made many Western fortunes and brought down the cost of consumer goods and commodities for us all. 'Friendsuring' may come with an initial price-tag. Although, as Europe is discovering this autumn, the cost of economic dependence on a dictator can be much, much higher.
But I think the biggest reason to question our collective ability to move beyond the
End of History is our own self-doubt. Democracies are strong because we are self-critical. The jeers I face in Question Period- and they are real jeers-, the fact-checking of skeptical journalists, the hard verdict of the ballot-box, all of these make me a better minister if we governed in splendid authoritarian isolation. But we must always balance that essential capacity for self-criticism with the equally important power of self-confidence. Democracies are flawed, to be sure.
As a Canadian, I am always conscious of my country's original sin against indigenous peoples. As finance minister, I worry every day about our ability to build an economy that works for everyone, even as we act to preserve our planet. But in awareness of unredeemed historical crimes and of our serious, fresh challenges in no way contradicts my equally profound conviction that the Liberal Democracy that we are so lucky to enjoy in Canada is the best way humans have found, so far, to organise a society. Self-criticism is a feature of democracies, not a bug. But it is a pitiless mirror that can rattle our self-confidence when we measure ourselves against tyrants and their armour of oblivion. We should not doubt our own strength. Moral, social, political and, indeed, economic, we have enjoyed greater freedom and prosperity for more of our people then any civilization in human history. Yet I also know that Liberal Democracy faces threats, as it always has.
"You may not be interested in war," Trotsky reputedly said, "but war is interested in you." War is interested in us, and it has shattered the
End of History hopes of the past 33 years. And so we find ourselves at another crossroads. The
End of History is over and now is the time to replace it. Putin's world where 'might makes right' and where oil means impunity is one option. We cannot- we will not- go down that path. Instead, let's build a world where we can save the planet and ensure that working people have good jobs and lead comfortable, secure lives. A world where we look after our friends. A world where democracies depend on democracies rather then despots. A world where the door is open and a helping hand is extended to all people everywhere who are choosing to do the hard work of building their own democracies.
Putin's invasion of Ukraine could have been, indeed it was intended to be, a broader defeat for Liberal Democracy. He sought to create a world, indeed, to bring back a world where greater powers dominated lesser ones and where Liberal values and human rights were universally viewed with the contempt with which they are seen by the Kremlin. instead, the incredibly brave people of Ukraine have reminded us all that democracy is both important enough to die for and strong enough to win. As we set out to build a new world together, let that inspire us to build one in which all Liberal Democracies cannot just survive but thrive.
Thank you very much.
written all over it.
