The global liberal order is holding up better than many feared a year ago.
In Europe, right-wing populists lost elections to the establishment in the Netherlands, Austria and France. U.S. President Donald Trump has prioritized traditional conservative causes like tax cuts over protectionism.
But globalists should not breathe easy. The nationalist insurgency is both growing and metamorphosing. It is not just eating away at relations between countries on issues such as free trade; it is also eroding the institutions and norms that prevail within countries.
This is not a problem for the global economy yet, as a synchronized upswing drives growth and stock prices higher. But it’s a shadow over the future. Populists sustained by legitimate grievances at the cultural and economic upheaval caused by globalization often govern by authoritarian or divisive means, undermining the stable, rules-based environment that businesses crave.