It was an action-packed week for the “new world order,” emerging after the “rupture” of the old set of rules, according to Canadian Prime Minister Mark Carney.
Speaking at Davos – the global epicentre of the past several days – Carney elicited a standing ovation from the crowd for his eulogy of the “rules-based international order” that has been in place since the end of World War II. In a thinly veiled critique of US President Donald Trump’s worldview, the Canadian leader explained that for decades, countries like his had benefitted from a global order upheld by the United States that allowed for the provision of “public goods, open sea lanes, a stable financial system, collective security and support frameworks for resolving disputes.” It was all a sham though, in that the rules weren’t enforced fairly but generally to the benefit of the strongest and their allies. Things are very different now, with leaders like Trump applying a different rulebook.
Carney dixit: “Over the past two decades, a series of crises in finance, health, energy and geopolitics have laid bare the risks of extreme global integration. But more recently, great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited. You cannot live within the lie of mutual benefit through integration, when integration becomes the source of your subordination.”
This has led way to a new set of rules based on “sovereign realism,” which could be defined as a belief in power and self-reliance as the guiding principles of international relations. The Trump administration has laid out its vision in its 2025 National Security Strategy (NSS): the “Donroe doctrine” of focusing on the Western Hemisphere and a return to the old “spheres of influence” mindset, together with a rejection of multilateralism and the strategic denial and disruption of Washington’s rivals, many times through strength. Foreign policy becomes fully transactional.
This was visible in plain sight during Trump’s speech at the World Economic Forum in Davos this week, in which he berated Europe. The US had “given so much and we get so little in return,” complained the Republican leader. “We want a piece of ice for world protection, and they won’t give it.” Trump had been raising the heat on his desire to annex Greenland, indicating he was considering taking it by force, which would imply violating the sovereignty of Denmark, a NATO member. Trump even threatened those opposing his plans with steep tariffs – mainly leading European nations – before ultimately reaching some sort of agreement with NATO Secretary-General Mark Rutte. He stood down his threats while claiming to have won. Trump applied the full rulebook of what has become his “art of the deal” approach on the global stage, pushing the situation to the brink, and ultimately extracting some sort of value or commitment.
Breaking NATO apart could prove counterproductive to the US. While it seems part of his strategy, he is managing to get European nations to increase their military spending and presence, with Germany and France going on a spending binge, as well as multiple Baltic states. Whether it is by design or consequence, Trump’s transactional pressure on his NATO allies appears to be creating greater unity among European nations, which are buffing up their militaries as a result. With Vladimir Putin knocking on their doors via Russia’s invasion of Ukraine, unity and greater military spending sounds a reasonable move for the EU. It also forces them to pick up the tab for an eventual confrontation with Russia, or for fronting the costs of putting in place proper deterrents.
Argentina’s own Javier Milei was among the limited number of foreign dignitaries who signed on to Trump’s ‘Board of Peace’ during a sideline meeting in Davos. This new body appears to be Washington’s direct challenge to the United Nations Security Council, given that the man in the Oval Office has expanded its mission from the pacifying and reconstructing of Gaza to becoming a global conflict arbiter. Of course, it is chaired by Trump – indefinitely – and its Executive Board is composed of many of his closest advisors including US Secretary of State Marco Rubio, son-in-law Jared Kushner, and buddy Steve Witkoff. The Board of Peace asks for a US$1-billion down payment to secure a permanent seat and – counter-intuitively – has even extended invitations to Russia and China, asking them to join. Milei got his picture alongside Trump while Kushner presented slides depicting Gaza as a futuristic real-estate project. While the Board of Peace was originally endorsed by the United Nations, it has already been criticised for not mentioning the two-state solution, for the lack of actual involvement of Palestinian leaders and the opacity of how the funds would be managed. There is also the suggestion that Trump is looking to secure his spot in the centre table of global affairs after the end of his second term. Sources inside the Casa Rosada indicate that Argentina wouldn’t be coughing up the requested US$1-billion for a permanent seat on the Board of Peace, but that it would be mooching a three-year presence as a founding member thanks to the affinity between Milei and Trump.
The presence of Argentina’s President at Davos was much less of a fanfare than Trump’s appearance. He spoke immediately after the US President to a room that had begun to empty out towards the end of Trump’s speech. He limited his bellicose, anti-socialist ranting of the past few years, instead opting for an academic discourse packed with references to philosophers and economists in an attempt to “prove” that “free-enterprise capitalism is the only just” and efficient system. He started with a critique of Italian political philosopher Niccolo Machiavelli, went on to question the utilitarianism of British political economist John Stuart Mill, before turning on Italian sociologist and economist Vilfredo Pareto’s principle of efficiency. Milei advocated for deregulation and once again proclaimed that market failures are non-existent, adding this time for good measure that monopolies are good for growth. After Trump’s bombastic presentation, Milei’s mechanical tone and jargon-filled essay seemed rather bland.
It was also part of the President’s plan to throw his hat into the ring for the Nobel Prize in Economics, as he’s suggested in the past. The same day he spoke in Davos, an advisor posted a co-authored paper of sorts on social media, titled ‘When regulation kills growth.’ It was formatted like an academic paper and included complex mathematical equations in the body of the text, yet the paper hasn’t been formally presented to any journal, as Reidel later admitted on social media. The file was hosted on his personal digital storage account on Google, and had the file name “full_paper_with_new_front_page (2).” It includes many of the terms mentioned by Milei in a speech in 2024 when he said, “my chief advisor Damien Reidel and I are re-writing a substantial part of economic theory in order to derive Pareto optimality, both static and inter-temporal, with non-convex production functions ... if it comes out well, they’ll probably give us the Nobel Prize in Economics.” The unpublished paper suggests that regulating monopolies could push economies into a poverty trap and therefore governments should desist from regulation. It isn’t clear whether an 18-page paper posted on social media, which lacks even a bibliography, could be Nobel-worthy but Milei isn’t particularly known for the moderation of his statements.
The contours of a new world order are beginning to express themselves. Milei, and Reidel, want a piece of it. They’ve joined Trump in the culture war against wokeness and are now trying to mathematically derive a formula to show that monopolies and deregulation generate growth, in an explicit hat tip to Big Tech and Silicon Valley. Argentina has signed on to the Board of Peace, confirming its total political alignment with the United States and becoming a key ally in the region. Whether the optimal strategy is to oppose US sovereign realism – as Canada’s Carney suggests – or to totally submit – as Milei has decided to – remains to be seen.
Comments