MacroPolis

The speech delivered by Canadian Prime Minister Mark Carney at the World Economic Forum in Davos has rightly attracted significant attention. It offered the crisp, crystallised analysis of global order, or disorder, that the world needed, enabling leaders to assess options based on a realistic understanding of the present rather than an idealised fantasy.

Carney articulated what many close observers of global events since the 1990s have long suspected but hesitated to admit: the so‑called “international rules‑based order” was little more than a diplomatic euphemism. It created the illusion of balance while masking the asymmetries that defined international relations. As Carney put it, it was simply “a nice story.”

“We knew the story of the international rules‑based order was partially false. The strongest exempted themselves when convenient. Trade rules were enforced asymmetrically. International law applied with varying rigour depending on the identity of the accused or the victim,” Carney told his Davos audience.

“This fiction was useful, and American hegemony, in particular, helped provide public goods: open sea lanes, a stable financial system, collective security, and frameworks for resolving disputes.”

His remarks recalled the way analysts acknowledge, after a financial crash, that all stakeholders knew they were fuelling a bubble but chose to ignore it so long as they benefited from the illusion.

They also echoed comments by British academic Helen Thompson on the BBC’s Radical podcast: “I don’t think that at any time really during the Cold War was anybody actually talking about a rules‑based international order.” Thompson noted that the term only gained currency in the 1990s - a decade marked by the Soviet Union’s collapse and only the first steps in China’s economic-fuelled rise.

Many of today’s leaders and opinion‑makers began their careers in that decade, oblivious to how much of an outlier it was. Some believed history had ended, and that boundless peace and prosperity were within reach. The illusion might have shattered after 9/11, yet many in the West clung to the idea of a prevailing liberal democratic order - even as the Iraq war undermined it and China’s economic ascent accelerated.

Meanwhile, Vladimir Putin, his mistrust of the West hardened by the Iraq war, set Russia on a path to challenge the concept of a rules‑based order. Even after Crimea’s annexation in 2014, many in the West refused to acknowledge that the construct was collapsing.

“We participated in the rituals,” Carney said. “And largely avoided calling out the gaps between rhetoric and reality. This bargain no longer works.” He added bluntly: “We are in the midst of a rupture, not a transition.”

Thompson identified this rupture in her 2022 book Disorder: Hard Times in the 21st Century, which argues that the West has entered an era of overlapping geopolitical, economic, and democratic crises driven above all by energy geopolitics. Competition for resources (including rare minerals) is feeding back into domestic politics, mirroring instability on the international stage.

“To mitigate against the destructive politics to come, collective understanding must catch up with the realities of energy and climate change,” Thompson writes. “Careering between technologically driven salvation and an inescapable Götterdämmerung is a hopeless response.”

She adds: “Both the biosphere and the application of energy impose limits, even as human beings push against them. How democracies can be sustained within those limits, as contests over climate change and energy consumption destabilise them, will become the central political question of the coming decade.”

This is the reality now confronting us: instability in international relations intertwined with uncertainty in domestic politics. Although he is intent on exploiting it, this is not a world created by Donald Trump, but one years in the making. The US President’s blunt, power‑hungry approach - using tariffs as leverage, supply chains as pressure points, and financial systems as tools of coercion - has merely stripped away the last illusions about the forces shaping global developments.

By declaring the end of the “rules‑based international order” narrative, Carney has opened the door to a long‑delayed discussion about what comes next. “Nostalgia is not a strategy,” he warned.

He urged “middle powers” to build flexible coalitions that function in practice, reduce vulnerabilities, and establish new rules grounded in reality rather than wishful thinking. Borrowing Finnish President Alexander Stubb’s phrase, Carney called this approach “values‑based realism” - a framework for collective agency and the construction new international order.

In the dust kicked up by a series of diplomatic events that might each have been era‑defining in earlier decades, the path forward remains unclear. But at least the fiction has been pulped and we have a sharper picture of where we stand, even if it is an extremely uncomfortable and dangerous place to be.