THE political economy of the world is changing again. Where is it heading, and who will arbitrate its direction? What will be its new grundnorm? Will states reclaim control over their markets? How will it impact multilateral institutions, nations, non-state actors and individuals across an uneven world?

These questions have been around for a while and it will be some time before their final answers take shape. Their relevance, nevertheless, has grown with the recent (and significant) change of administration in the US. Social forces, akin to those responsible for the ongoing political turmoil in western Europe, now control the levers of state power in the US, which has set the ideological agenda of the global capitalist economy since the Second World War.

Across the West, the winds of social change have blown away entrenched economic, political and moral distinctions between liberalism and conservatism, left and right, populism and authoritarianism. There are now strange hybrids — erstwhile conservatives who adopt LGBT causes, and proclaimed liberals who support rabid nationalism — that defy categorisation, and many see the roots of a new kind of fascism sprouting from this mishmash.

These new identities are, in turn, reshaping the political landscape of Western democracies. In their bid for survival and relevance, many political parties are trying to align themselves with the pernicious populisms being espoused by demagogues and debutante parties. In many cases, their leaders have had no qualms in ditching their old worldviews and embracing the new reality and its champions.

Can Western populists really redefine the world’s economy?

Such a transition took place in the 1980s in the US and UK when political parties to the left of centre moved away from welfare-ism to adopt the free market economic agenda of globalisation, popularised by Reaganomics and Thatcherism, to remain relevant. However, the current challenge is far greater and broader, with racial, cultural and religious undercurrents that are more treacherous than its economic dimension.

The West had triumphantly proclaimed the rise of political liberalism intertwined with free market economics as the ‘end of history’, the final iteration of government. As it is, this victory has been short-lived, and the West is now gearing up to embark on another ideological journey. Their populist leaderships would naturally aim to reconfigure the global economy in accordance with the priorities of the social groups who elected them — constricting the free flow of goods, capital and particularly labour across borders, and replacing globalisation with a new ideological paradigm they pledged would reboot their stagnant economies. The question is whether they can steer this new ideological shift and transmit it to the rest of the world, as was done in the past through Bretton Woods Institutions and other means. There are at least three major factors that make this a challenging task in today’s world.

First, the rise of competing centres of power and prosperity in different parts of the world, brought about by two major historical developments, decolonisation and globalisation, which radically transformed the world’s political and economic landscape after the Second World War. There are many large nation-states outside the western hemisphere that possess the military and economic clout to set their own domestic and regional political economy agendas and assert their power in case the need arises. Many are actually hostile to the new economic and political ideas being peddled by the West’s ascendant social groups and perceive them as serious threats to world peace and prosperity.

Second, the West itself is a house divided. Its internal dissonance is at its worst since the Second World War. More than any other force, globalisation has eroded its social and political cohesion by creating economic winners and losers amongst states and individuals. It has also nurtured a critical mass of individuals who staunchly believe in liberal values (openness, tolerance and diversity) as the way forward for their societies and are willing to engage in political activism. Mired in domestic troubles, Western states are mostly looking inwards. They are interested in putting their own house in order rather than projecting their combined power to the global arena.

Third, the digitisation and global outreach of communication, business and knowledge networks. This great innovation of our times, a gift of globalisation, has eliminated the distinction between ‘centre’ and ‘periphery’ when it comes to building ideological resistance and disseminating alternative viewpoints. Similarly, global production and consumption value chains have created interdependencies, which can only be calibrated through the convergence of ideas across borders. It is difficult to subsume such complexities in ideological agendas that serve the interests of particular groups or states.

The world beyond globalisation may actually be without a hegemonic ideology, with powerful states pursuing their own agendas.