Often a bad sign.

Photographer: Andrey smirnov/afp/getty images

Freedom Is Receding Around the World

Noah Smith is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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The economic dangers of Britain’s exit from the European Union are probably exaggerated. The U.K.  is in a bit of trouble, since falling real estate prices might spark a recession there. But it seems unlikely that the spillover to the global economy will be severe. British trade policy probably won't change much, and extremists in the U.K. Independence Party, which spearheaded the "leave" campaign, are unlikely to take power. The EU itself is on shaky ground, but that was just as true before Brexit.

Brexit’s real importance probably comes not from its direct effects, but from its symbolism. It’s a sign of a much bigger, broader trend -- a global political regime change. The shift was happening before Brexit, and it will continue after. It’s something we should be worried about.

In the aftermath of World War II, the globe was divided into two main blocs -- a U.S.-led group that embraced liberal democracy, capitalism and free trade, and a Soviet-and-Chinese-led group that favored autocracy, economic isolationism and various forms of communism. Neither side was particularly unified, and neither one lived up fully to its professed ideals. But gradually, the liberal bloc succeeded economically and socially, and the other one failed. As this became apparent, many countries started changing their institutions to be more like the U.S. China and other authoritarian countries liberalized their economies, while many others converted from autocracy to democracy.

In recent years, that trend has halted, and the institutional tide now appears to be moving in the other direction. Illiberalism -- political autocracy and restriction of civil liberties -- are on the rise.

Many organizations track these trends, and they tend to have different definitions of democracy and freedom. But they all seem to agree on the broad trend. For example, Freedom House, an organization sponsored by the U.S. government, says that freedom in the world has been declining for the past 10 years. Since 2006, the number of countries it records as having experienced declines in freedom has been greater than the number of countries where freedom has advanced:

If you weight the world by population rather than by the number of countries, the retreat for democracies is less dramatic, but still clear. The Economist Intelligence Unit maintains democracy index, which it says has been "in limbo" or declining since the index was created in 2006. Reporters Without Borders, an international nonprofit, sees a “deep and disturbing decline” in press freedom around the globe. And the widely used Polity IV data set shows the number of democratic countries stagnating or falling in almost all regions of the globe since the early 2000s. The World Economic Forum believes that the liberal order is being “challenged by a variety of forces.”

Brexit is widely seen as a harbinger of this trend. In the New Yorker magazine, Benjamin Wallace-Wells writes that “the liberal project is increasingly an American one.” The New York Times’ Roger Cohen sees the potential of a return to pre-World War II authoritarianism in Europe. In Foreign Policy, Harvard international relations professor Stephen Walt says that Brexit, and the rise of Donald Trump in the U.S., show that the benefits of liberalism were oversold and that a backlash is in progress.

I’m not so sure that Brexit is a manifestation of illiberalism. Yes, the pro-Brexit camp was partly motivated by fear and dislike of immigrants, but the vote was democratic, and the EU has long suffered from a “democratic deficit.” Trump is a clearer danger. His divisive vilification of America’s minority groups, his campaign’s social media ties to white supremacist groups and the authoritarian attitude of his support base, are all red flags signaling that a significant part of the U.S. isn't a fan of the liberal ideals that the country promoted in the 20th century.

This is a bad development. Of course, human rights and civil liberties are immeasurably valuable in their own right. But a less liberal world is also a more dangerous one.

As psychologist Steven Pinker extensively documented in his book “The Better Angels of Our Nature,” war has declined a great deal since the end of World War II. There are many theories for why this has happened, but two of the leading ones are the democratic peace theory and the capitalist peace theory. The former holds that democracies tend not to fight each other, and the latter says that countries with freer markets have fewer disputes. Evidence generally supports both theories, meaning that the U.S.-led liberal project has reduced war via multiple channels.

But as Pinker cautions, the decline of war is no historical certainty. The pattern could reverse at any time. If the U.S.-led liberal order is really collapsing, it could herald perilous times ahead. One especially fraught spot is the South China Sea. China has claimed most of that body of water as its sovereign territory, which has presented a challenge to the U.S.-backed postwar convention of freedom of the seas. With many smaller nations -- including some U.S. allies like the Philippines -- pressing their own rival claims in the area, the South China Sea is a tinderbox that could produce armed conflict between China and the U.S.

Such a clash, between the world’s largest economies and most powerful militaries, could easily spiral into a broader conflict or touch off a descent into geopolitical anarchy. If the mercurial and pugnacious Trump pulls off an upset win in November, this threat to global prosperity and security rises. Meanwhile, the South China Sea is far from the only hot spot; a Russian invasion of the Baltic countries, which are part of the North Atlantic Treaty Organization, could also trigger a major conflict and reverse the gains of the past 70 years. And if the advance of illiberalism continue, the flashpoints could easily multiply as democracy and capitalism lose their power as engines of peace.

So the real danger to the world isn’t Brexit -- it’s the rise of illiberalism. This is definitely something we should be very worried about, and do everything in our power to resist.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Noah Smith at nsmith150@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net