The Liberal World Order Essay

The Liberal World Order Essay

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The Liberal World Order

The liberal world order is as much an economic idea, as it is a
political one. The liberal world order is very much based on the rule
of law. Such things are apparent in a liberal world order such as
individual liberties, private property and free trade.

According to Ludwig von Mises, a liberal world order was inseparable
from liberal economic policies:

“A nation’s policy forms an integral whole. Foreign policy and
domestic policy are closely linked together, they condition each
other. Economic nationalism is the corollary of the present-day
domestic policies of government interference with business and of
national planning, as free trade was the complement of domestic
economic freedom.”1

Thus, according to Mises, a liberal world order could only arise when
governments operated a laissez-faire approach to the running of the
economy. During the liberal world order at the beginning of the 20th
Century, it was true to say that most of the governments of Europe
were either constitutional monarchies, or democracies, and the
universal concept of the rule of law was endorsed practically all
over.

However the liberal world order dramatically came to an end at the
start of the First World War, as a result of nations requiring to
raise funds for the war effort. Naturally governments took over the
running of their economies, and rapidly industries were controlled
through regulation and even re-nationalisation. In order to protect
these industries, trade barriers were put into place. Taxes also rose
in order to fund the war, and thus the governments no longer pledged
to a laissez-faire economic outlook...


... middle of paper ...


... to look out simply for their own well-being
and would again adopt their protectionist stances, destroying the
liberal world order.

This problem can be explained with simple economics, a liberal
international order is in essence a public good, in that if created,
would be available to all, and thus all would be able to benefit from
it. For that reason, no nation is willing to bear the cost of such an
effort if everyone will be able to benefit. It would be more
beneficial for that nation if they waited for another nation to set it
up, and then simply jump onto the bandwagon at no cost.

As a result it can be said that the success of the Liberal World Order
has been limited due to the difficulty of its implementation. At
present, World Politics can still be said to be predominantly realist
based in its definition.

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