In 2002, there was no such uncertainty — at least according to one unnamed Bush aide, who explained how American imperial power was so unstoppable its government could remake reality at will:

“We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality – judiciously, as you will – we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”

To put it simply: America got to decide what was real, because America was the only hegemon. Believe that or not, two decades on, our confidence in the plastic nature of reality has certainly been accelerated. With an unprecedented chunk of the population confined to their homes, and digital screens now the main window on to the world for many, politics and reality increasingly feel connected by only the thinnest of threads.

Something of this distorting effect — this weirding of public life — infuses the strange recent story of Hilaria Baldwin, the celeb-influencer wife of actor Alec Baldwin. Born Hillary Lynn Hayward-Thomas to all-American parents in Boston, she was revealed recently to have spent the last decade pretending to be Spanish.

Suggested reading

Where the American Dream goes to die

By Ian Birrell

Why did no one say anything? It’s a safe bet that Hilaria’s parents knew she wasn’t really Spanish. It’s also reasonable to assume that Alec has met his in-laws, at which point no doubt he would have learned that they were no more Spanish than Hilaria. Presumably most of her friends knew, too, and a fair number of her enemies. So why did everyone just nod and smile for a decade, while Hilaria pretended she’d forgotten the English word for ‘cucumber’ on cookery programmes?

There are two plausible explanations for this. The first is that the oath of omertà was upheld, even by those who didn’t wish her well, because her circle believed she had the power to inflict negative social consequences on anyone who broke it. The second, and to me more interesting, possibility is that no one wanted to be the one to dunk on the power of dreams.

For belief in this power – whether promoted by Walt Disney or under the scientific-sounding “Law of Attraction” – is held by Americans of all social classes, all the way from White House aides to the working class. Or at least it was in 2002, the year that Bush aide was interviewed, as I discovered when I took a solo post-university trip across the United States by Greyhound bus.

The Greyhound bus routes that lattice the USA are probably as close as that car-centric nation gets to affordable long-distance public transport. Most passengers are simply trying to get cheaply from A to B, but curious or foolhardy tourists can buy an open pass and go road-tripping. It’s best attempted when you’re young enough to go without sleep, showers and personal space. It’s also, by English standards, surreally friendly. Everyone talks to you on a Greyhound bus, whether you like it or not. Jammed into cramped seats, rattling through empty wilderness and humid one-horse towns, I had many such conversations. They left me with the impression that even the most impoverished Americans believed they could create their own reality, through sheer force of conviction.

By the same author

Libertarianism never ends well

By Mary Harrington

Is it true, though? Or is it just another American Dream? Well, while the optimism underscoring this belief is very American, the Hilaria view of reality — perhaps we could call it “Hilarity”? — is not wholly baseless. What you expect to find in the world will, to a degree, colour what you actually find. If you’ve ever hunted madly for your keys while repeatedly looking straight past them because they were somewhere slightly out of the ordinary, you’ll know what I mean.

But there are also limits to Hilarity. I can’t believe my keys back into my handbag if my toddler has in fact buried them in the sandpit. Indeed, the fact that those around Hilaria grew tired of honouring her version of reality, and that someone eventually broke ranks, surely speaks to a wider disenchantment with the power of “positive thinking” that’s taken hold in the years since my Greyhound road trip.

For example, we know now that the confidence expressed in America’s reality-creating power by that Bush aide was misplaced. America’s ability to forge a new liberal, democratic paradise in the bomb craters of Iraq and Afghanistan was not, in fact, limitless. Nor was the absolute power of the Western financial system, later that decade, able to create money out of nowhere simply through financial engineering, without any substantive foundation in making anything.

And so, were I to board a Greyhound bus today, I’m not sure I would find big dreams nearly as evident in what American writer and photographer Chris Arnade calls “back-row America”. Or at least, I suspect I’d find such dreams as battered by subsequent disappointments — just as the spooky, humid and beautiful city of New Orleans was by Hurricane Katrina, three years after I visited. Perhaps that goes some way to explaining why today, for many, faith in the power of dreams has curdled into its bleak mirror-image: belief in the pervasive presence of shadowy forces and malign conspiracy.

The power of this curdled variant of Hilarity made its presence known yesterday via hundreds of protesters in Washington. In Hilarity terms — or in terms of reality-as-symbol — the power of seeing the inner sanctum of that “shining city on the hill” stormed by QAnon characters has shaken America to the core.

Meanwhile, a stubborn rump of those nearer the top of the pile are still hanging on to the old, more stable reality. It is, after all, relatively easy to believe that the world is whatever you want it to be when you have a self-righteous internet filter bubble, as well as the political and financial resources to bankroll your convictions and shield yourself from evidence to the contrary. But if reality in the 21^st century has proven most sharply disappointing to those at the bottom, the cracks in Hilarity are now visible upstream too. Just look at the elites’ repeated shock at “un-progressive” electoral results that were in fact anything but shocking. And with QAnon invading the Capitol, both liberals and conservatives alike are now waking up to the profound displacement of stable narrative that defines 21^st-century American politics.

Suggested reading

How America came apart

By Douglas Murray

Still, if the eruption of Trumpism implied a threat to the grand progressive narrative, Trump’s deposition has been treated by many as a repudiation of that threat – despite not being the anticipated landslide at all. It has also been hailed as a return to American internationalism. After the election, Joe Biden promptly announced that America is “back, ready to lead the world”. That’s all very well, but it raises an important question: to what extent does that story still fit?

The initial signs are ambivalent. According to the prevailing narrative behind Hilarity’s world-as-we-wish-it, the democratic West should be forming a united front in support of freedom and liberal values. But just as Hilaria’s haters were only going to keep schtumm as long as they were afraid of her, those very ideals once promulgated by Pax Americana seem to be on the wane. As far back as 1987, Paul Kennedy argued that the USA could not sustain global hegemony indefinitely while its relative economic power continued to shrink. In this light, with China predicted to overtake the US economically by 2028, should we really be surprised to see the EU thumb their noses at the incoming Biden presidency, by declining a transatlantic alliance to contain China in favour of securing a market for German manufacturing with Beijing?

Yet at the core of Hilarity is the idea that belief can only be transformative if you really believe. Setbacks cannot derail the true believer. The existence of a competitor hegemon with increasingly tangible ideological and geopolitical clout is merely a minor setback, and unlikely to dent the faith of those still committed to America’s vision of global utopia. Witness the reaction of that high priest of progress, Stephen Pinker, to 2020’s war, death, famine, pestilence, snake-infested seafoam, and new Ed Sheeran releases: these events are blips, he insisted, and things are still getting better.

It’s not yet clear, then, whether the implosion of Hilaria’s personal myth-making is an omen indicating a general loss of American faith in the power of dreams, or just an intensified battle over doctrine. The American longing for power to define reality may become even more of a free-for-all. Certainly the emergence of “the QAnon shaman’’as the face of the Capitol invasion suggests how widespread and occult the American weirding of politics is. My bet is that this weirding is only just beginning. And I suspect the increasingly fractious elite debate about such events will continue to interact in unpredictable ways with those realities that stay irreducibly real whatever we want to believe.

For it’s all very well noting that the world has shifted for those who, in part thanks to the pandemic, now experience reality mainly through increasingly skewed and angry social media lenses. But for those whose occupations don’t allow for working from home, or who are facing the brutal pinch of the Covid recession, real versions of reality will not be displaced. Meanwhile, as world powers compete to shape the globe post-pandemic, this contest for hegemony may well take more material forms.

But amid this turbulence, the future belongs not just to the loudest voices. It belongs to whoever is best able to navigate the noise. That is, it belongs to whoever can build both power and a vision of a good society on seeing the world as it really is.

However, as always, economics is a slippery business. For a start, there’s the practical challenge of measuring production. For various reasons, the most reliable way of doing so is at the point of purchase. Using this expenditure method, GDP is equal to personal consumption plus business investment plus government expenditure plus net exports. That, however, leaves the question of what to include under each of these headings.

Further Reading

Don't fight dirty with statistics

By Tom Chivers

In an article for the Global Poverty and Inequality Dynamic Research Network, Jacob Assa and Ingrid Harold Kvangraven point out that the standard methodology has changed in recent decades – and that the effect of those changes has been to make the western economies look richer (in comparison to non-western economies) than they really are:

“…changes made to GDP measurement over the past two decades have a bias towards countries traditionally in ‘the West’. As this has had a substantial impact on the assessment of comparative growth among countries in those two groups, we deem it as a form of kicking away the statistical ladder “

What changes are we talking about?

“Examples include the reclassification of financial intermediation services, Research and Development  activities (R&D) and owner-occupied dwellings as productive activities. This means finance has been ‘made productive’ (as Brett Christophers puts it), R&D is no longer considered an intermediate input and home ownership is now included in GDP in the form of the imaginary rent that homeowners would have paid to a landlord had they owned their home…”

The authors propose a new measure of “core GDP” that would exclude the funny money and focus “only what can be directly measured”:

“Such directly measured industries include agriculture, utilities, manufacturing, retail trade, transportation, and communication.”

In a fascinating paper they compare the official GDP figures to their “core GDP” measure and find that the choice of method makes a big difference to the relative sizes of the western and non- western economies. For instance, according to the official figures the non-West only overtook the West in the middle of 2000, but according to the core GDP figures the cross-over took place much earlier – at some point before 1990 (when the comparison starts).

Further Reading

Lies, damned lies and energy statistics

By Peter Franklin

Choice of statistical method doesn’t change how rich or poor people actually are, but the authors observe that the bias to the West does impact on “our perception of growth in the world” and also on the weight of western influence in global institutions like the World Bank and the IMF.

As well as this apparent unfairness to the non-West, I’d argue that the official measures of GDP are doing damage in the western nations too.

A key issue here is that of ‘imputed rent’ – which takes a bit of explaining. Official GDP figures include the rents that tenants pay to their landlords. They also include an estimate of what owner occupiers would pay if they too rented their homes instead of owning them – these are the imputed rents. It is as if owner occupiers were paying rent to themselves. This might seem fanciful, but the justification is that though owner occupation doesn’t generate an actual transaction, it still has a measurable financial value.

Assa and Kvangraven argue that including imputed rents in the measurement of GDP has “the peculiar effect of making countries with housing bubbles appear to grow more rapidly”. Well, fair comment, but on that basis one shouldn’t include any kind of rent in the GDP figures – imputed or actual.

Further Reading

Home Truths – Part III: The nine drivers of a broken market

By Liam Halligan

In fact, taking rent out of GDP would remove some deeply perverse incentives for policy-makers. Ever wondered why government does such a bad job of solving the housing crisis? Well, if it did a better job, and rental values came down, GDP would take a corresponding hit.

In the longer term, I think the real productive economy would benefit hugely from lower, more stable rents and land values – but that’s not the sort of thing factored into the models of bean-counting finance ministries.

To this end, Mill proposed a system of plural voting in which graduates would have more votes than the one granted to ordinary citizens. As he framed his proposal in Considerations on Representative Government (1861):

“All graduates of universities, all persons who have passed creditably through the higher schools, all members of the liberal professions, and perhaps some others should be registered, and allowed to give their votes as such in any constituency in which they chose to register: retaining, in addition, their votes as simple citizens in the localities in which they reside.”

Mill’s proposal reflected his belief in the advance of human knowledge. He looked forward to an ‘Exact Science of Human Nature’, which would formulate laws of psychology and society as precise and universal as those of the physical sciences. With the development of Utilitarianism, morality was itself becoming a science. In future, ethics and politics would not be ruled by the primitive intuitions of uneducated people. Decisions would be made on the basis of the expert judgment of people trained in the social sciences. This was the path to progress.

Mill has had a good press lately. The Economist has presented him as a classical liberal who can serve as a guide to the perplexed in a time of liberal confusion. Many who have been alarmed by practices such as de-platforming have urged that we revisit his celebrated defence of free expression in On Liberty.

Here at UnHerd, Victoria Bateman has argued that Mill is “a thinker for our times”, who could help create a freer and fairer type of capitalism. If we returned to Mill’s verities, liberals would have a firmer grip on their values and a shaky liberal order could be set back in place.

Further reading

Could Mill's model mend capitalism?

By Victoria Bateman

Corbyn’s near-victory last June is an ironic commentary on these hopes. The university graduates whose enhanced influence Mill believed was so essential to human progress were crucial in bringing the Labour leader to the brink of power. A major factor was Labour’s offer to abolish student tuition fees. But graduate support for Corbyn extended well beyond those that would benefit from this policy.

The Remainer internationalism that the party seemed to embrace during the campaign (while officially endorsing Leave in its election manifesto) chimed with a progressive consensus taught in universities for decades. Like Mill, millions of graduates believe liberal values are gradually unfolding in the course of history. Labour managed to project itself as the embodiment of these values.

The ironies here are multiple. If Labour had won, it would have presided over an eclipse of liberal values. Equipped with the resources of British state, the alt-Left party Corbyn has created would have been in a position to condone antisemitic racism and endorse terrorist movements. At the same time, the erosion of freedom of expression in universities would intensify. The progressive consensus would become immovably entrenched. Soon the contestation of received truths Mill celebrated would be barely a memory.

From the same author

The rise of post-truth liberalism

By John Gray

At this point, a fork in Mill’s liberalism becomes visible. If only one set of values can be grounded in science, why allow others to be promoted in centres of learning? There can be little reason for giving anyone who rejects scientifically established truth equal freedom to speak or shape collective decisions. In effect, this was the rationale of Mill’s proposal for plural voting. But if those who base their values in a science of society are given overriding weight and influence, the result will be intellectual uniformity of the kind Mill attacked in On Liberty.

In fact, Mill’s science of society was nothing of the sort. He aimed to formulate laws as exact as those in the natural sciences, and as powerfully predictive. Yet he was unable to identify a single one of these laws and anticipated none of the great upheavals that were to come. Not only did he fail to anticipate the rise of 20th-century totalitarian movements, such as Nazism and communism, but 21st-century illiberalism was beyond his imagination. The worst he could imagine was that progress would stall and what in On Liberty he called “Chinese stationariness” – intellectual and social stagnation – would settle on Europe. The rise of an innovative and authoritarian China was inconceivable to him.

Mill never doubted that a universal civilisation grounded in liberal values was the eventual destination of all of humankind. With a few perfunctory reservations, this remains liberal orthodoxy today. The empirical basis of this orthodoxy is slight. Twenty-first-century liberals claim to base their values on observation and experience. Some, like Mill, have posited a science of society that supports these values.

But there is nothing scientific in the belief that a liberal way of life that existed in parts of Europe and North America over the few past hundred years is set to spread throughout the world. If we rely on observable facts and trends, the likelihood must be that a liberal world order belongs in the past.

Further reading

The West divided: Populism versus liberalism in the 21st century

By Peter Franklin

Writing in the introduction to On Liberty, Mill tells us that he grounds his argument for freedom not on “abstract right” but “utility – the ultimate appeal on all ethical questions; but it must be utility in the largest sense, grounded in the permanent interests of man as a progressive being”. What is “man”, though? Certainly not an empirically observable species.

All that can actually be observed is the miscellaneous human animal, with its many contending values and ways of life. Again, there are many understandings of progress. If Mill believed it meant increasing freedom and individuality, for the founder of modern utilitarian ethics, Jeremy Bentham, it meant maximising the satisfaction of wants. Mill spent much of his adult life vainly trying to reconcile the two.

Mill’s liberalism did not rest on experience or observation. Though he was not raised as a Christian – his father, a disciple of Bentham, made sure of that – Mill was like other Victorian thinkers in relying on ideas that make little sense outside of a theistic world-view. The belief that “man” is a collective agent working out its destiny in history is a relic of Christianity, unknown in polytheistic cultures and non-western religions such as Buddhism and Taoism.

The very idea that humans share a common historical destination is a remnant of monotheism. Reframing the universal clams of western religion, Mill’s secular liberalism – like his science of society – was not the result of any process of rational inquiry but an expression of faith.

Further reading

How the populist era could revive liberal democracy

By Henry Olsen

Viewed historically, the liberal era was a moment in the aftermath of post-Reformation Christianity. If Europe had not been Christianised, it would most likely have been shaped by the polytheistic and mystery cults of the ancient world. Today it might resemble India. A universalistic, evangelising impulse would be weak or absent. Whether it would have been better or worse – or both – the West would not have produced political faiths like liberalism, that aim to project their values throughout the world.

Core liberal values, such as freedom of belief and expression, are by-products of early modern struggles within Christian monotheism. This fact could be passed over as long as successive versions of liberal values were underwritten by Western power. In Mill’s day they rested on European colonialism, and following the collapse of communism on the supposed triumph of free-market capitalism. The illusion persisted that the rise of liberalism revealed a universal law of human development.

In the event, a liberal world order has lasted only as long as Western hegemony. Today, non-Western powers are pursuing different paths of development, while much of the West has become the site of a paralysing culture war between hyper-liberal ideology and the forces of populism.

While Europe’s hegemony was lost as a result of the Great War, Western hegemony was reaffirmed in the American-led international system that was set in place after the Second World War. But it is a system that is palpably crumbling. If Russia is mocking and flouting the “rules-based order”, China is bent on reshaping it in its own image. India goes its own way.

Internally, Western societies are dismantling the liberties that were supposedly spreading throughout the world. Geopolitically, the West is heavily dependent on the authoritarian system that is under construction in China. Western commentators may complain about Xi Jinping’s surveillance state – a high-tech version of Bentham’s Panopticon, in which society was remodelled as an all-seeing prison – but not too loudly. The consequences of any serious upset or slowdown in China would be unfathomable. Any return of Chinese stationariness could be fatal to Western capitalism.

Further reading

The political centre is not where liberals think it is

By Peter Franklin

The time has passed when the West could dictate the terms of human development. Yet the delusion persists that the growth of wealth will give liberal values another lease on life. The sub-Marxian mantra that expanding middle classes will demand liberal freedoms as societies become richer is repeated endlessly in business gatherings and academic seminars.

No matter that Putin and Xi continue to be fêted by the middle classes in Russia and China, while in Europe they flock to Orbán and Salvini, Austria’s Sebastian Kurz and Jimmie Åkesson, leader of the Swedish Democrats. Never mind that that middle-class graduates are demanding that liberal freedoms be shut down in the institutions that once embodied them. Best not dwell on such facts, for they suggest that a liberal world order was an historical accident that cannot be repeated.

Classical liberalism – the default position of The Economist, along with The Wall Street Journal and The Financial Times – is a dead end. China is not going to become a liberal democracy, nor will it deviate from its market-Leninist economic system. Putin is not going to be replaced by a Justin Trudeau-like figure with a Harvard degree in economics. The far-Right will continue its advance across Europe for as long as key policies such as immigration remain removed from majority control. Whether or not he is re-elected, Trump marks an irreversible American retreat from the role of global backstop.

The combination of an intractably divided and fast-retreating America with an ascendant China means the post-war global settlement is history. Anyone who looks to classical liberal thinkers to deliver the West from its present difficulties is fixated on an irretrievable past.

It is possible to envision a stoical and realist liberalism that would accept that freedom and toleration must survive in a hostile or indifferent world. Liberalism would be recognised to be a particular form of life, like the others that humans have fashioned and then destroyed, but still worth defending as a civilised way in which humans can live together.

In practice a stance of this kind is hardly possible. Liberals cannot do without the faith that they form the vanguard of an advancing way of life. The appeal of John Stuart Mill is that he allows them to preserve this self-image, while the liberal world continues to evaporate around them.

Further reading

Liberal smugness will destroy the Left

By Giles Fraser