The Liberal Globalization Reckoning
Matthew Yglesias has spent years defending liberalism against its critics. Now he's doing something different: conceding ground. In this third installment of his series on American liberalism's decline, he acknowledges that liberal policymakers made serious mistakes about globalization — mistakes that helped fuel the current crisis of confidence in liberal institutions.
The China Trade Illusion
The core failure Yglesias identifies is breathtaking in scale. For decades, Western liberals believed integrating China into global trade would transform its political system. Economic engagement would remake Chinese society along liberal lines. Open markets would accelerate democratization.
Matthew Yglesias writes, "When Bill Clinton signed the Permanent Normal Trade Relations bill with China, he argued that global trade would confront the Chinese government with a basic dilemma." The theory held that China would need open markets domestically and embrace modern technology to compete. A China filled with computers and private companies simply could not remain authoritarian.
Matthew Yglesias writes, "Clinton said at the time: 'Of course, opening trade with China will not, in and of itself, lead China to make all the choices we believe it should. But clearly, the more China opens its markets, the more it unleashes the power of economic freedom, the more likely it will be to more fully liberate the human potential of its people.'"
This wasn't naive optimism — it was sincere conviction shared across the liberal establishment. The collapse of the Soviet Union had convinced many that repressive governments couldn't run modern economies. The internet would tear down gatekeepers and democratize information.
As Matthew Yglesias puts it, "If you believed that was true about the internet, then it would seem to follow that a prosperous, technologically advanced society was going to have to adopt this democratizing system."
The reality proved opposite. Digital technology made surveillance easier than ever. Aggregators like YouTube, TikTok, and DoorDash created new gatekeepers rather than eliminating old ones. China's authoritarian regime adapted to the information age without liberalizing.
Matthew Yglesias writes, "None of this debunks anything about the economic argument for free trade — a key liberal idea dating back to the era when the steam engine was cutting edge technology — but commitment to those economic principles left liberals much too credulous about the idea that open trade with China would also cause world peace and the global triumph of democracy."
Critics might note that this admission comes late. The costs of failed China policy — hollowed manufacturing sectors, strategic dependency, geopolitical miscalculation — were paid by workers and communities long before liberals acknowledged the error.
"The idea that the internet would break that wheel was nice but not well-grounded."
Cosmopolitanism Versus Citizenship
On immigration, Yglesias traces a different tension within liberal thought. Rawls argued in 1999 that countries have a right to restrict immigration to protect political culture and constitutional principles. Susan Moller Okin criticized multiculturalism on liberal feminist grounds the same year. Younger thinkers disputed these conclusions, arguing liberal principles require cosmopolitan openness.
Matthew Yglesias writes, "As time has passed, I have come around to the view that Rawls was right that it follows from this political conception of equal citizenship that the state can — and to an extent must — give greater consideration to citizens than to foreigners."
This isn't anti-immigration. It's about argumentative framing. Public debate about immigration policy must emphasize citizens' interests. Rights-based arguments that erase the distinction between citizens and foreigners violate the liberal social compact.
Matthew Yglesias writes, "The idea that no human is illegal is a nice sentiment, but it flies in the face of political reality and, I think, violates the liberal social compact by acting like the bonds between citizens, or between citizens and the state, don't matter."
The tendency to conflate liberalism with cosmopolitanism has fueled illiberalism across Western democracies. Yglesias sympathizes with cosmopolitanism but argues cosmopolitan liberals must check this commitment when thinking about democratic politics.
Critics might note this concession risks validating nationalist framing. The boundary between "citizens first" and exclusionary politics is thinner than Yglesias suggests. Liberal institutions have historically thrived on openness, not closure.
The Positive-Sum Insight
What liberalism retains, Yglesias argues, is the insight that economic interactions are positive-sum. Thinking from a zero-sum premise — that immigrants take jobs from natives, that trade transfers wealth from rich to poor countries — produces bad policy.
Matthew Yglesias writes, "American manufacturing is suffering under Trump's tariff regime in ways that were both predictable and predicted during the campaign." Tariffs on foreign aluminum make aluminum expensive domestically, benefiting factory owners while harming manufacturers who use aluminum.
Matthew Yglesias writes, "The United States is losing out on foreign students and now denying itself access to foreign-born medical doctors amid nativist hysteria."
Doug Irwin's study of 19th-century American industrialization found growth driven by population growth from open immigration and capital accumulation hindered by high tariffs. The historical pattern holds.
Matthew Yglesias writes, "Immigration policy should be made primarily with a view to the national interest, but the national interest is best advanced by a relatively open approach to immigration."
Bottom Line
Yglesias offers liberalism a path forward: patriotism and realism about national interest, combined with openness to trade and immigration. The erosion of liberal values hasn't arrested decline relative to China but has degraded relationships with friendly countries. Liberalism's comeback requires stronger dose of national interest framing without abandoning positive-sum economic insights.