Under Chancellor Olaf Scholz, staunchly pacifist Germany recently proposed to radically increase its defense budget to a level that exceeds the $67 billion Russia spent in 2020. Scholz called Russia’s invasion of Ukraine zeitenwende, a turning point.

The first age of globalism was a British project begun in the 1860s. It was fueled by faith in British exceptionalism, naval power, and administrative proficiency. The Commonwealth was the product of unbridled colonialism, riddled with racial injustice only barely visible to watchers of Downton Abbey.

When it came to moving money, goods, and people across the globe, Edwardian Britons faced fewer barriers than we do today. Pre-WWI Londoners could shop from home by phone, speculate on markets and commodities from all over the world, and travel wherever they wanted without a passport or the need to change currencies.

In the words of economist John Maynard Keynes, Britons of the first global era regarded their idyllic age as “normal, certain and permanent, except in the direction of further improvement.”

So complete was this conviction that in 1909 Norman Angell published The Great Illusion, a bestseller that argued conventional war was becoming impossible given the extensive interconnectedness of the world.

Echoes of Angell’s flawed optimism can be readily found in more recent arguments for reintegrating Russia and China into the world economy. Capitalism will foster liberalism by osmosis, we were told. One can only hope that Xi Jinping’s obliteration of Hong Kong’s independence and Vladimir Putin’s existential assaults on Ukraine will temper those “trade eliminates conflict” nostrums more effectively in the future.

The second age of globalization began in the 1980s, with the ascent of Reaganism and Thatcherism, fall of the Berlin Wall, rise of container shipping technology, and reintegration of China into the world economy. It accelerated in 1992 with the creation of the single European market.

The impact of globalism 2.0 is so vast it is difficult to visualize. In 1980 trade accounted for 37% of global GDP. By 2008 trade accounted for 61% of all global economic output.

Globalism has also been under assault for decades. The trend started in 2001, when 9/11 forced America to reckon with its Middle East entanglements. It accelerated in 2008 when the Great Recession undermined confidence in the dollar economy. It bloomed fully in 2016 when America named a nativist ideologue president and Britain voted to exit the world’s largest free trade zone.

The Economist recently pointed out that between 2008 and 2019 global trade relative to global GDP declined by 5%, immigration flows also slowed, and global long-term investments fell by half from 2016 to 2019.

Many pundits suggest that returning to politicized trade blocs will destroy our economy. We should scrutinize what “our” means in this context. Multinational corporations with sovereign scale and resources are a relatively recent phenomenon whose benefits and character are still vigorously debated, and they are the primary beneficiaries of increased trade.

The interconnections that accompany globalism create dependencies that can be weaponized. The US has led the charge to engineer new forms of leverage from banking and trade sanctions. Putin neutered NATO’s response to his Ukraine assault peremptorily by threatening to cut the EU off from Russian oil and gas.

Is it folly to emphasize political alignment when courting deeper economic partnerships?

If we use “East” and “West” to mean political alignment rather than geography, the US and its allies in the West account for 60% of current global GDP. China, Russia and the other autocracies amount to under a third of that.

John Micklethwait and Adrian Wooldridge penned a superb essay in Bloomberg from which several points above were cribbed. They acknowledge that “economic liberalism exaggerates the downsides of capitalism as well as the upsides.”

But Micklethwait and Wooldridge still advance a variation of the Angell thesis, suggesting that “liberalism has also dragged more than a billion people out of poverty in the past three decades and, in many cases, promoted political freedom along with economic freedom.”

New York Times columnist David Brooks recently diagnosed things differently, suggesting economic competition is merging with political and moral rivalries.

Brooks rejects the Angell thesis, arguing that “human behavior is often driven by forces much deeper than economic and political self-interest.” Most people are demonstrably influenced by the need to be respected, have strong loyalties to place and nation, and are powerfully driven by their own cultural values. In each of those dimensions, Brooks contends that the West is fueling divergence rather than convergence.

In this conception, urban elites around the world who benefitted most from globalism make easy targets for populist leaders like Donald Trump, Narendra Modi, Marine Le Pen and Boris Johnson. Meanwhile, “authoritarians like Putin and Xi Jinping practice this politics of resentment on a global scale. They treat the collective West as the global elites and declare their open revolt against it.”

Brooks argues that the great divergence is about “politics, economics, culture, status, psychology, morality and religion all at once. More specifically, it’s a rejection of Western ways of doing things by hundreds of millions of people along a wide array of fronts.”

He also acknowledges that outrage – which social media has amplified immeasurably – is a pivotal catalyst. Autocrats use it to flog wedge issues that manipulate opinions at home and sow chaos in the democratic world. “Authoritarian rulers now routinely weaponize cultural differences, religious tensions and status resentments to mobilize supporters, attract allies and expand their own power. This is cultural difference transmogrified by status resentment into culture war.”

Brooks’ broader diagnosis of the great divergence by necessity implies that at least some of the forces now dividing the globe originate within the West. That begs a difficult set of questions.

Must we separate our economic interests from our political and cultural values to restore the momentum of global economic integration? What elements of Western culture offend our most strategic trading partners? How would Western societies balance evangelizing their own values against the rigorous neutrality required by this type of cultural relativism?