Will America ever recover?(Mark Makela/Getty Images)

August 21, 2023   5 mins

Since the rise of psychoanalysis in the late 19th century, philosophers, psychologists, historians, and cultural theorists have all sought refuge in the comfort of so-called “narratives”. In university classrooms across the world, this nebulous term is now frequently deployed when attempting to describe human affairs. A narrative, we’re told, is what gives us our identity. With a coherent narrative, we have a coherent identity; without one, identity starts to break down.

At its most extreme, this focus descends into a postmodern oblivion: a world where everything is narrative and there is no difference between Newton’s Principia Mathematica and Carroll’s Alice in Wonderland. Yet this does not mean that narrative analysis is useless. Quite the opposite, in fact.

For more than a decade, our ability to form a coherent narrative about ourselves has been degrading. By “our”, I mean the West, which emerged in its current form in 1945 after three decades of war, desolation, and economic upheaval. The narrative that it told itself was crystalised during the Cold War: that the West would stand for liberty and freedom against the very live totalitarianism of the Soviet Union.

But this framework crumbled together with the Berlin Wall and the fall of communism. Overnight, a new narrative was needed, and it didn’t take long for one to emerge. The post-Cold War narrative formed in response to the Gulf War in 1990, when Saddam Hussein’s Iraq aggressively attacked Kuwait, principally with an eye to seizing its oil reserves. The United States and a 42-country coalition intervened, the Iraqis were soon pushed back, and Kuwait was allowed to govern itself. Here was the seed of the new narrative: the West, having won the Cold War, would keep the peace in the new status quo.

This updated founding myth required a domestic component — something tangible at home — and it found it in the ideology of the New Economy, which emphasised the transition of Western developed nations from highly industrialised economies to more technologically driven ones. This idea grew organically with the computer revolution, a loosening of financial and trade regulations, and the feelgood vibes of the Nineties’ economic boom. This was a world where Bill Clinton played the saxophone as the stock market rocketed.

By the early 2000s, however, this post-Cold War narrative started to fracture. The first blow was the collapse of the New Economy ideology as a massive bubble in the stock market unwound at the turn of the millennium. And then, three years later, came the invasion of Iraq. This intervention was very unlike the first Gulf War in which Hussein had clearly acted as the aggressor. This time, the conflict was instigated by Britain and the United States, opposed by many European countries, and was justified based on false, made-to-order intelligence — the now infamous “dodgy dossier”.

Still, even with these tremors, our narrative broadly held together: economic growth continued apace, and the war gave rise to an anti-war movement that would eventually produce future President Barack Obama. But then came the next hit — a real hammer blow. In 2008, as housing markets collapsed across the world, much of the growth of the 2000s turned out to be fake, fuelled as it was by housing debt. More debilitatingly, the impressive financial architecture that had sprung up as the sector was liberalised turned out to be rotten.

But all was not yet lost, as two movements emerged out of the ashes of the 2008 collapse: the Right-wing populist movement and the Left-wing populist movement. The former, associated mostly with the Tea Party movement in the United States, saw the government and corporations as corrupt interlopers. Its Left-wing cousin, associated with the rise of Bernie Sanders and Jeremy Corbyn, saw things the same way. The two movements only differed on preferred solutions, with the Left wanting a more interventionist approach and the Right wanting to cut down on the state and promote market competition.

In the subsequent years, its Left-wing incarnation has mostly disappeared. In the US, it was absorbed back into the mainstream of the Democratic Party, won over with promises of radical social and cultural agendas that did not interfere with the economic bottom line. In the UK, the Corbyn movement collapsed in a wave of scandal, and a slightly confused group of Blairites seized the reins.

Meanwhile, the Right-populist movement mutated. Driven largely by the Brexit movement and the rise of Donald Trump, it dropped many of its more libertarian-leaning firebrands and became more pragmatic. It no longer wanted, say, tax cuts for the sake of tax cuts. Rather, it wanted cultural and economic rejuvenation. Taking place against a backdrop of severe and ever-increasing social and economic problems, this evolution was far from a surprise.

Today, however, there is reason to believe that the Right-populist movement has also failed. Donald Trump won the presidency, but he did not produce much in the way of constructive change. What happened instead is that the American political system became highly unstable, and many of the previously existing norms that held it together started to dissolve. This reached its crescendo in recent weeks with the arrest and indictment of Trump, an anarchic blip from which the country is unlikely to ever recover.

In Britain, the Brexit movement got its way and, after years of bickering, the Conservative Party eventually managed to pull the country out of the European Union. Once again, though, nothing changed. The economy did not take off like a rocket. Mass immigration increased rather than decreased. Right-populist cultural and institutional concerns remain as they had before Brexit. At the same time, nothing catastrophic happened either. The Remainers who promised economic collapse and a sharp fall in trade with Europe were wrong. None of this happened. Indeed, nothing happened.

In both the UK and US, then, there is reason to think that we have no real coherent narrative. No one is sure where to go next or what to believe. And as three recent events have demonstrated, this noxious position is already causing serious dysfunction in our political culture.

The first was the Covid-19 outbreak and the responses in the form of the lockdowns and the vaccines. Compare this traumatic incident with, say, the Iraq War. Today, most people in the West agree that the Iraq War was a mistake; it was tragic and produced a terrible aftermath, and we have managed to come to terms with it. If you were to sit down at a dinner table full of strangers, you would all broadly know what the narrative is on the Iraq War — and so you can discuss it. Yet this is not the case with Covid-19 and the government’s response to it. There is no accepted narrative. Did we beat the virus with our prudent and rational response? Or did we overreact and create havoc? There is no settled answer, so it festers.

The second of these events was the destruction of the Nord Stream pipeline last year. Once again, we have no official or widely accepted narrative of what happened. Most people appreciate that it was an enormous development that will have tremendous economic and geopolitical ramifications in the coming years. Yet we do not have a coherent narrative of why the pipeline was destroyed, who destroyed it, and what this means. Instead, conspiratorial thinking permeates and, as with Covid-19, it festers.

Then, at the start of summer, there was the march of Yevgeny Prigozhin, the head of Russia’s Wagner private military company, on Moscow. As it happened, the media went into overdrive. We were told that a world-changing coup was unfolding; a major historic event, possibly of the magnitude of the collapse of the Soviet Union, was taking place before our eyes. But then, once again, nothing happened. Prigozhin stopped, apologised, and went to Belarus with some of his troops. The conclusion was inconclusive; there is no coherent narrative about what happened. We cannot digest it, and so it festers.

In turn, each of these world-changing moments confirmed that narrative breaks are becoming more frequent as time marches forward. The recent coup in Niger demonstrates this once again, exposing uncomfortable truths about French-African relations that we would prefer to ignore. And yet, as we try to ignore it, our global influence ebbs. Increasingly, major events — or pseudo-events — are taking place in the world and provoking impassioned reactions, but then seem to lead into a ditch of unmeaning.

And then what happens? After the initial passion or even hysteria, people are forced to move on without processing what has just happened. In other words, we, as a society, advance without forming a coherent, broadly accepted narrative. We drift on, allowing doubt to fester, paralysed by a sneaking suspicion that the West is losing the plot.

Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics