It was June 2008. “The Americans scolded the Chinese on mismanaging their economy…. Your economic system, the Americans strongly implied, should look a lot more like ours.” The Chinese fired back, “loudly rebuking the Americans on their handling of the economy, defending their own more assertive style of regulation, and blaming Washington’s ‘warped conception’ of market regulation for the subprime mortgage crisis that is rattling the world economy.” In this vindictive toing and froing, Joseph Stiglitz, a professor of economics at Columbia University, cast what might be considered the deciding vote: “U.S. credibility and the credibility of U.S. financial markets is zero everywhere in the world.”
His comment was prescient. By mid-September 2008, the Lehman shock had occurred and “many credit markets [had] stopped working normally as investors around the world frantically moved their money into the safest investments, like Treasury bills.” The Friedmanite model of a self-regulating, free market had failed, exposed for what it was and always had been, a Utopian construct, serving Western governments’ neoliberal agenda to benefit the elite. But, as Stiglitz made clear, the issue was more than just about money. America’s credibility was now being questioned. Not only had it tarnished its reputation for financial competence, it had also lost any claim to moral authority that it might hitherto have claimed, greatly diminishing its stature both within the United States and within the Liberal International order (LIO).
America has never recovered its global standing. We would be wrong, however, to think that the underlying causes of America’s loss of credibility were sudden. Although they only became manifest to broad swathes of the American public following the financial crisis of 2008, expressed through events such as the Occupy Movement, they had been percolating through the political and economic systems for years. As Adam Tooze observed in Crashed, “2008 revealed that since 1976 national economic policy had been subordinated to the needs of a cluster of transnational banks,” adding: “of the growth generated by the economic recovery since 2009, 95% was monopolized by the top 1%. They saw their incomes rebound by 31.4%. Meanwhile, 99% had seen virtually no gain in income since the crisis.” Economic inequality collided with social injustice to form a cocktail of misery that the government expected a large portion of citizens to imbibe, as it lavished financial institutions with eye-watering bailouts.
The election of Donald Trump was the culmination of a developing need in American society: finding a spokesperson for the grievances of the Occupy Movement’s 99%. As he dramatically promised at the 2016 Republican National Conference in Cleveland, Ohio: “My pledge reads: ‘I’M WITH YOU – THE AMERICAN PEOPLE.’ I am your voice.” Not the federal government; not the Republican Party; but, I, Donald Trump, am your voice. We didn’t fully recognize it then, but at that moment, he spoke as an authoritarian, in the style of a Victor Orban, or a Xi Jingping, or a Vladimir Putin, or, if we are seeking his true godfather, a Mussolini.
Trump’s defeat by Joe Biden in the General Election outed him. Richard Donoghue’s notes of Trump’s 27 December 2020 telephone call with the acting attorney general, Jeffrey Rosen, are chilling: “Just say the election was corrupt + leave the rest to me and the R congressmen.” Robert Reich, the Chancellor’s Professor of Public Policy at the University of California at Berkeley, cites this note as evidence of Trump’s “‘proto-fascism’ which poses the largest internal threat to American democracy since the civil war." Trump may no longer be president, but the Republican Congressmen referred to in Donoghue’s note of the call, at which Donaghue himself was present, are still in Trump’s thrall.
America’s decline and its loss of leadership of the LIO was not a sudden catastrophic event; it was a process that began in the 1970s, following the unraveling of the New Deal Coalition. It continued via the relentless rise of transnational banks, and wound its way through the ascendance of neoliberalism, as conceived by Friedman and Hayek and nourished by Reagan and Thatcher and their successors, feeding off of events such as Britain’s Big Bang in 1986 and the repeal of Glass-Steagall in 1999. It became fully manifest over a period of eight years, from the financial crisis of 2008 to the election of Donald Trump in 2016, achieving Its inglorious consummation on January 6, 2021.
As a consequence, we are currently mired in an interregnum, as governments struggle with what Antonio Gramsci described as a crisis of authority. “The crisis,” he said, “consists precisely in the fact that the old order is dying and the new order cannot be born; in this interregnum a great variety of morbid symptoms appear.” These symptoms include: “open political violence, outbreaks and manifestations of mass discontent, the rise and acceptance of extreme political positions and their respective leaders, shifts in international relations of unprecedented dimensions, and the sudden depletion of once strong institutions.”
It is wishful thinking to believe that the election of Joe Biden will enable the US to recreate the LIO in its postwar form. America’s problem is systemic. The Republicans are mired in grievance politics, with no defined policies and a growing commitment to eroding voting rights and embracing authoritarianism; the Democrats, although possessing an abundance of policies, are internally riven and devoid of strong leadership. President Biden himself has continued to diminish America’s position within the dying LIO. His double-tongued approach to the country’s Indo-Pacific foreign policy is undermining America’s long-standing relations with the EU. By pursuing the revival of American hegemony, Biden is jeopardizing a multilateral foreign policy with a fruitless grab for a return to the unipolarity that existed briefly at the end of the cold war. To achieve this, he is relying on the middle powers in the Anglosphere, Australia and the United Kingdom, to the detriment of rekindling and strengthening alliances that deteriorated during the Trump years, with members of the G-7 and NATO.
The meetings of both in June 2021 already seem to belong to another era, with the EU Commission president, Ursula von der Leyen, saying acerbically: “One of our member states has been treated in a way that is not acceptable, so we want to know what happened and why.” She partially answers the questions herself when she states: “You know, we are friends and allies, and friends and allies talk to each other, and they talk to each other mainly on the issue of common interest, so this has clearly not happened, and we need to talk.” Von der Leyen exposed Biden’s duplicity, outing what we might legitimately call perfidious America. Her insight also helps to underline the very different image of the US at the end of World War Two, when it assumed leadership of the LIO, and now.
During the period that the French call Les Trente Glorieuses, from 1945 to 1975, America was seen as a beacon of freedom and democracy to which other states which aspired to an equally free society were drawn. Although this period saw the beginning of the Cold War, the Korean War, McCarthyism, the Cuban Missile Crisis, and the Vietnam War, it also included the Marshall Plan, the New Deal Coalition (which the only Republican President during this period, Dwight D. Eisenhower, supported), Johnson's Great Society and the success of the Civil Rights Movement, the creation of NATO and the construction of the United Nations Secretariat building in New York City. America was imperfect, but, as a symbol, it carried a compelling argument for imitation. Now, imitating the US is quite low on the list, even among the younger generations.
The American Academy of Arts and Sciences earlier this year reported that, “Fewer than one-third of Millennials consider it essential to live in a democracy.” As another study released by The Bennett Institute for Public Policy at the University of Cambridge in October 2020 indicates, millennials complain that “existing structures have failed to address longstanding resentments in society, ranging from inequalities of wealth, to economic insecurity, to malfeasance among economic and social elites.” Not surprisingly, “only following the early 2000s recession did millennial satisfaction with democracy begin to trend downwards, before crashing lower with the global financial crisis.”
Millennials are rejecting the market society that Polanyi saw as “fundamentally threatening to human society and the common good,” resulting from neoliberalism's making society subordinate to the market. When, as Fred Block, at the University of California at Davis, and Margaret R. Somers, at the University of Michigan, observe, the market treats “virtually all of what makes social life possible, including clean air and water, education, health care, personal, legal, and social security, and the right to earn a livelihood…as if they are commodities produced for sale on the market, rather than protected rights, our social world is endangered and major crises will ensue.”
As Gramsci noted, “organic crises are rooted in an alienation of the masses from their political representation, giving rise to a mismatch between ‘represented' and representatives’.” The mismatch occurs when citizens, such as Millennials and the Occupy Movement protesters, who seek equality, good governance, and social justice jar with their leaders, who are only interested in self-aggrandizement, which they achieve by kowtowing to a small percentage of the population and serving their demands for regulated inequality. It is a misnomer to say that neoliberals want deregulation; in fact, they want a heavily regulated market that operates unfairly in their favor.
If fewer than 30% of millennials no longer consider it essential to live in a democracy, it could be because they have had no experience of one. The built-in inequalities in the US make it more akin to an oligarchy than to a democracy. For millennials, as for the rest of us, they can see that the old order is dying through the vivid display of the morbid symptoms that Gramsci lists as endemic to an interregnum, some of which this article has already enumerated, in particular the manifestation of mass discontent among Americans and the extreme political positions that have moved the Republican party towards authoritarianism.
“The depletion of once strong institutions” is graphically portrayed in the US Congress. Biden’s foreign policy that pits democracy against autocracy is mirrored on the two sides of the aisle in Congress. “Open political violence,” which the attack on the Capitol represents in its extreme form, has been reduced to what the Republicans are now styling as “legitimate political discourse,” providing an open invitation to more of the same in the upcoming US midterm elections in 2022 and the general election in 2024.
The US can no longer speak with authority because, as noted above, it has lost its credibility and influence among its allies and the international community at large. If, after World War II, it led the liberal international order, it is now at the root of its demise. America is the core of the problem, which Gideon Rachman describes as “the West’s growing inability to function as a pole of stability and power, imposing order on a chaotic world.” In this interregnum, we are at the mercy of the strongmen.
Tim Bovy has been teaching Japanese diplomats at EJEF, formerly the Euro-Japanese Exchange Foundation, since 2010, and is an elected member of the Royal Institute of International Affairs, Chatham House, London. Tim is also the CEO of Six Sentinels, an international consulting firm, located in London. He has over 35 years of experience in designing information and risk management systems for organizations in Europe, the Middle East, and the US. Tim has a BA, magna cum laude, from the University of Notre Dame, and MA and C.Phil degrees from the University of California, Davis.
 Edward Wong, “Booming, China Faults U.S. Policy on the Economy,” The New York Times, June 17,2008, available at https://www.nytimes.com/2008/06/17/world/asia/17china.html
 Please see footnote 1 above.
 Please see footnote 1 above.
 Vikas Bajaj, “Financial Crisis Enters New Phase,” The New York Times, Sept. 17, 2008, available at https://www.nytimes.com/2008/09/18/business/18markets.html
 Adam Tooze, Crashed: How a Decade of Financial Crisis Changed the World, London: Allen Lane, 2018, p. 456
 Ibid., p. 455.
 “Donald Trump’s Full Acceptance Republican Nomination Speech,” available at https://www.politico.com/story/2016/07/full-transcript-donald-trump-nomination-acceptance-speech-at-rnc-225974
 Robert Reich, “A Trump bombshell quietly dropped last week. And it should shock us all,” The Guardian, 3 August 2021, available at https://www.theguardian.com/commentisfree/2021/aug/03/donald-trump-memo-election-corrupt-justice-department
 Please see footnote 8
Antonio Gramsci, Selections from the prison notebooks (New York: International Publishers, 1971). Quoted in Milan Babic, “Let’s talk about the interregnum: Gramsci and the crisis of the liberal world order,” International Affairs, volume 96, number 3, May 2020, p. 773
 Milan Babic, “Let’s talk about the interregnum: Gramsci and the crisis of the liberal world order,” International Affairs, volume 96, number 3, May 2020, p. 773
 Christiane Amanpour interview of Ursula von der Leyen, CNN, September 20, 2021, available at https://edition.cnn.com/videos/tv/2021/09/20/amanpour-ursula-von-der-leyen-aukus-eu-france.cnn
 The Germans and the Italians called the same period Wirtschaft swunder and miracolo economico.
 Our Common Purpose: Reinventing American Democracy for the 21st Century, available at https://www.amacad.org/sites/default/files/publication/downloads/2020-Democratic-Citizenship_ Our-Common-Purpose_0.pdf
 Foa, R.S., Klassen, A., Wenger, D., Rand, A. and M. Slade. 2020. “Youth and Satisfaction with Democracy: Reversing the Democratic Disconnect?” Cambridge, United Kingdom: Centre for the Future of Democracy, available at https://www.cam.ac.uk/system/files/youth_and_satisfaction_with_democracy.pdf
 Please see footnote 11.
 Fred Block and Margaret R. Somers, “The Free Market is an impossible Utopia,” The Washington Post, July 18, 2014, available at https://www.washingtonpost.com/news/monkey-cage/wp/2014/07/18/the-free-market-is-an-impossible-utopia/
 Please see footnote 17.
 Milan Babic, “Let’s talk about the interregnum: Gramsci and the crisis of the liberal world order,” International Affairs, volume 96, number 3, May 2020, p. 772
 Please see footnote 11.
 Please see footnote 11.
 See, for example, Jonathan Weisman and Reid J. Epstein, “G.O.P. Declares Jan. 6 Attack ‘Legitimate Political Discourse,’” The New York Times, Feb. 4, 2022, available at https://www.nytimes.com/2022/02/04/us/politics/republicans-jan-6-cheney-censure.html
 Rachman, G 2016, Easternisation: War and Peace in the Asian Century, The Bodley Head, London, p.3