Carney’s assessment wasn’t merely philosophical. It was a reckoning with reality that most Western leaders had spent years avoiding. The rules-based order collapse, long predicted by critics in the Global South who experienced its western hypocrisy international relations firsthand, has accelerated dramatically under Donald Trump’s return to power. What makes 2026 different isn’t just Trump’s rhetoric—it’s that the mask has finally come off completely, revealing the transactional world order dangers that lie beneath.
The Useful Fiction Unravels: From Liberal Values Erosion to Naked Power Politics
For seven decades, the international system operated on what Carney aptly called a “pleasant fiction.” Western nations championed sovereignty, human rights, and international law while systematically exempting themselves when convenient. This wasn’t a bug in the system—it was a feature. The hypocrisy was, paradoxically, what made the system work.
Consider the benefits of hypocrisy global politics that Carney outlined. When great powers felt compelled to justify their actions through moral frameworks, even hypocritically, it created space for accountability. Critics could invoke those very principles to demand change. This dynamic helped end the transatlantic slave trade, established humanitarian law conventions, and created institutions like the International Criminal Court—even if enforcement remained selective.
But Trump’s second administration has abandoned even the pretense. In February 2025, he imposed sanctions on the ICC not because he contested its legal authority but simply because it investigated his ally Benjamin Netanyahu. When asked about potential Chinese aggression against Taiwan, Trump shrugged that while it would make him “very unhappy,” the decision was “up to Xi.” No invocation of international law, no appeals to shared values—just raw transactional calculus.
The transformation is starkest in Trump’s treatment of allies. When he threatened Denmark and seven other European nations with tariffs over their opposition to his Greenland annexation plans, he didn’t frame it as a security imperative or alliance obligation. He explicitly called it “leverage”—a transactional demand to extract territorial concessions from a NATO ally whose collective defense he’s theoretically bound to uphold under Article 5.
The Gaza-Ukraine Paradox: How Double Standards Destroyed Credibility
Nowhere is the western hypocrisy international relations more visceral than in comparing Western responses to Gaza and Ukraine. The numbers tell a damning story:
| Conflict | Western Aid (2022-2025) | Civilian Deaths | UN Resolutions Supported | War Crimes Investigations |
|---|---|---|---|---|
| Ukraine | $380+ billion | ~15,000 civilians | Overwhelming majority | Multiple ICC warrants for Russian officials |
| Gaza | $3 billion (mostly military aid to Israel) | 62,614+ Palestinians (70% women/children) | Multiple US vetoes | Zero accountability measures |
As King Abdullah II of Jordan observed in October 2023, the message to the Arab world was unmistakable: “Palestinian lives matter less than Israeli ones. Our lives matter less than other lives. The application of international laws is optional. Human rights have boundaries—they stop at borders, at races, at religions.”
This perception isn’t confined to the Middle East. When President Biden bombed a hospital in Mariupol in March 2022, he called it a “disgrace to the entire world.” Yet when Israeli airstrikes targeted Al Shifa and Indonesian hospitals in Gaza, Biden defended Israel, claiming it “appears as though it was done by the other team.” The Indonesian aid organization operating the destroyed hospital issued a searing response: “You have destroyed the international rules of the game, insulted the authority of the United Nations, torn apart the sense of justice, hurt human values, and tarnished the face of human civilization.”
The Global South isn’t buying Western explanations anymore. At the UN General Assembly vote on February 24, 2025—the third anniversary of Russia’s Ukraine invasion—Western powers notably refrained from introducing another pro-Ukraine resolution, fearing it would expose dramatically declining global support. Malaysia and Indonesia, both of which had supported Ukraine in 2022, now openly question why they should defend a rules-based order where “the rules are not enforced equally.”
Former Indian diplomat Shivshankar Menon captured the mood: “The Global South’s preference for the middle ground on Ukraine is best explained by a combination of factors,” including the perception that Western regime change in Libya “left a very black mark” and frustration with “gnashing of teeth over Ukrainian suffering” while “demonizing the similar resistance of Palestinians.”
Mark Carney Davos Speech 2026: A Middle Powers Strategy for Survival
Carney’s Davos address wasn’t just diagnosis—it was prescription. Drawing on Václav Havel’s essay “The Power of the Powerless,” he compared the dying international order to communist-era Czechoslovakia, where shopkeepers displayed propaganda signs not from belief but to avoid trouble. Everyone participated in rituals they knew to be false, sustaining a system through complicity rather than conviction.
“Nostalgia is not a strategy,” Carney declared to applause from European leaders who’d spent the previous year clinging to hopes that Trumpism was temporary. The former Bank of England governor recognized what many refused to accept: the old order “is not coming back.” Instead, he proposed what Finnish President Alexander Stubb called “values-based realism”—maintaining commitment to sovereignty and human rights while being ruthlessly pragmatic about divergent interests.
The middle powers strategy Carney outlined represents a fundamental shift in how non-hegemonic powers should navigate great power rivalry. Since taking office in March 2025, he’d signed 12 trade and security deals across four continents, doubled defense spending, and forged closer ties with the European Union—all while reducing Canada’s economic exposure to the United States by deepening engagement with China.
“A country that cannot feed itself, fuel itself, or defend itself has few options,” Carney warned. “When the rules no longer protect you, you must protect yourself.” But he argued that sovereignty need not mean isolation. “Collective investments in resilience are cheaper than everyone building their own fortresses. Shared standards reduce fragmentation. Complementarities are positive sum.”
The speech received a rare standing ovation in Davos. NATO Secretary General Mark Rutte called it evidence that “Canada is back” as a pivotal alliance participant. Alexander Stubb praised its “profound analysis of the evolving world order.” Even critics acknowledged its significance: Bob Rae, Canada’s former UN ambassador, stated he’d “never seen a global reaction to a speech” comparable to Carney’s.
The Transactional World Order Dangers: Why Pure Power Politics Makes Everyone Poorer
Carney’s most penetrating insight concerned the economic logic of transactionalism. When great powers abandon even the pretense of rules for “the unhindered pursuit of their power and interests,” he argued, “the gains from transactionalism will become harder to replicate.”
This isn’t just theoretical. Trump’s August 2025 imposition of 50% tariffs on India came not because New Delhi violated trade rules, but as crude retaliation for domestic judicial actions against his ally Jair Bolsonaro. India didn’t appeal to WTO norms—it simply deepened trade ties with China and signaled that its rare-earth reserves could become bargaining chips. De-escalation came only after American corporations with stakes in India pressured the White House.
The pattern repeats globally. When Brazil faced Trump’s punitive tariffs in 2025 over Bolsonaro’s prosecution, Brasília reduced US exposure and pivoted to Beijing. When Trump threatened Japan with $500 billion in “protection” demands and South Korea with $200 billion, both nations began hedging their security bets despite formal alliances.
“Hegemons cannot continually monetize their relationships,” Carney observed. “Allies will diversify to hedge against uncertainty. They’ll buy insurance, increase options to rebuild sovereignty—sovereignty that was once grounded in rules but will be increasingly anchored in the ability to withstand pressure.”
The economic costs are already visible. According to World Bank projections released in January 2026, the shift toward strategic autonomy and fortress economies could reduce global GDP growth by 1.2-1.8 percentage points annually through 2030. The IMF warns that fragmentation of global supply chains—driven by nations pursuing self-sufficiency in energy, food, and critical minerals—will increase production costs by 15-25% in key sectors.
The Global South Perspective: Selective Outrage and Strategic Hedging
Yet Carney’s speech drew sharp criticism from voices in the Global South for arriving late to obvious conclusions. Writing in The Guardian, Nesrine Malik noted that the rules-based order’s end “had been made obvious by the war on terror and Gaza genocide, but Carney had only acknowledged it once the rot reached his own door.” She criticized him for failing to acknowledge victims of the order’s inherent hypocrisies.
This critique exposes a deeper truth: Western handwringing about the liberal values erosion often ignores that much of the world never experienced these “values” as anything but window dressing for power. As India’s former Commerce Minister Arun Jaitley stated in 2003, WTO rules stood “against equity, justice and fair play.” Research by political scientist Matthew Stephen confirms that between 2001 and 2013, Global South representatives at WTO meetings increasingly questioned not just Western hypocrisy but “the core values of reciprocity and open trade” themselves.
The 2025 formation of the Hague Group—a Global South alliance focused on holding Israel accountable for alleged violations in Palestine—signals this transformation. So does the August 2025 BRICS summit, where members reiterated their push for a multipolar order challenging Western diplomatic dominance. These aren’t anti-Western coalitions so much as post-Western ones: countries tired of being lectured on human rights by powers that selectively enforce them.
Celso Amorim, one of Brazil’s senior diplomats, articulated the shift: with Trump “there is no hypocrisy,” only “naked and raw truth” that allows countries to negotiate “without illusions about true US motives.” The efficiency comes at a cost—disputes that once unfolded as arguments over legitimacy increasingly become raw tests of leverage.
The Benefits of Hypocrisy Global Politics: What Gets Lost in Pure Transactionalism
Here lies the paradox that makes Carney’s argument compelling despite its late arrival. As political scientist Matias Spektor argues in Foreign Affairs, accusations of hypocrisy against the United States are “a testament to the uniqueness of U.S. power.” Critics invoke Western hypocrisy precisely because the West “couches its foreign policy in a language of moral virtue” and justifies actions through “universal institutions.”
This creates accountability mechanisms absent in purely transactional systems. When Russia invaded Ukraine, it couldn’t credibly claim to defend sovereignty or international law given its own violations. China’s support for Russia undermined Beijing’s professed commitment to non-interference. But Western nations, despite their hypocrisies, still felt compelled to explain actions through moral frameworks—creating leverage points for critics.
Consider sanctions. Under the “old regime,” as Carney termed it, a sanctioning power was expected to document specific violations and conform to shared rules. The 2015 Iran nuclear deal, whatever its flaws, represented a legalized framework subject to verification. Today, Trump imposes sanctions simply to advance interests, with no pretense of international legal justification.
The shift matters profoundly for weaker states. As Spektor notes, “the pretense of virtue among liberal great powers allows for progress because it grants critics an opportunity to denounce hypocrisy and appeal to higher principles in demanding improvements.” Activists ended the slave trade, curbed weapons of mass destruction, and strengthened humanitarian law by holding Western powers accountable to their own stated values.
What happens when those values are abandoned? We’re finding out. Trump’s explicit framing of territorial demands on Greenland as “leverage” rather than security imperatives, his sanctions on ICC officials simply for investigating Netanyahu, his open admission that Taiwan’s fate depends on Xi’s mood—all signal a world where might makes right without even rhetorical constraints.
Economic Consequences: The GDP Cost of Great Power Rivalry
The economic implications extend beyond trade wars. Research from the Peterson Institute for International Economics estimates that US-China decoupling could reduce American GDP by $1.6 trillion over the next decade, Chinese GDP by $2.1 trillion, and global GDP by $5.3 trillion. These figures don’t account for accelerated decoupling driven by Trump’s aggressive unilateralism.
The financial sector is already adapting. Canada’s pension funds—among the world’s largest at $2.3 trillion in assets—have reduced US equity exposure by 12% since mid-2025 while increasing positions in European and Asian markets. Similar patterns appear across sovereign wealth funds in Norway, Singapore, and the UAE.
Supply chain restructuring carries enormous costs. Taiwan Semiconductor Manufacturing Company’s $40 billion investment in Arizona facilities—partly driven by geopolitical risk—will produce chips at roughly 50% higher cost than Taiwan operations. Multiply such inefficiencies across sectors from pharmaceuticals to rare earths, and the “sovereignty premium” becomes staggering.
Critical mineral markets illustrate the dangers. China controls 70% of global rare earth processing capacity. Trump’s threats to “take control” of resources in Greenland and trade sanctions on nations dealing with Beijing have sparked a scramble for strategic reserves. The EU’s Critical Raw Materials Act, passed in December 2025, aims to reduce Chinese dependence—but building alternative supply chains will cost an estimated €500 billion through 2030.
Middle Powers After Davos: Coalitions or Fragmentation?
Carney’s vision of middle powers banding together faces serious obstacles. As analyst Evan A. Feigenbaum notes in the Carnegie Endowment for International Peace, successful middle powerdom requires not just material capability but “a problem-solving orientation and a reputation for advancing the collective good, rather than operating on a purely transactional, narrowly self-interested basis.”
The challenge is that different middle powers face vastly different strategic circumstances. Canada’s pivot toward China is easier given its geographic distance from Beijing and proximity to Washington. Australia, Singapore, and much of Europe face different calculations. Indonesia, Vietnam, and India—critical Global South rising powers—will chart their own courses based on regional dynamics Carney’s framework doesn’t fully address.
Moreover, the “variable geometry” coalitions Carney proposes—different groupings for different issues—risk undermining broader coordination. If middle powers increasingly pursue cooperation outside UN frameworks, the organization faces marginalization. As scholars at the Toda Peace Institute observe, Carney’s intervention “points to a potential constituency for UN renewal” precisely because middle powers “have the most to lose from a fragmented world of coercion and rivalry.”
Yet early signs suggest momentum. The March 2025 European summit in London, convened partly in response to Trump’s threats on Greenland, produced commitments to expand intra-European defense cooperation by 35% and accelerate joint procurement. The Indo-Pacific Economic Framework, launched in 2023 but languishing, saw renewed activity in late 2025 as Asian nations sought alternatives to both US and Chinese economic dominance.
Forward Prescriptions: Navigating the Transactional World Order
What should middle powers and smaller nations do in this environment? Several strategies emerge from recent developments:
1. Diversify Strategic Dependencies
Nations must reduce single-point vulnerabilities. This means multiple energy suppliers, diverse trade partners, redundant supply chains, and regional security cooperation that doesn’t rely solely on distant guarantors. South Korea’s 2025 expansion of defense ties with Australia, Japan, and ASEAN states exemplifies this approach.
2. Invest in Strategic Assets
Control over critical resources provides bargaining power in transactional environments. Indonesia’s decision to ban nickel ore exports in 2024, forcing battery manufacturers to invest domestically, demonstrates how resource nationalism can work when executed strategically. Canada’s critical minerals strategy, announced in 2025, aims to achieve similar leverage.
3. Build Issue-Specific Coalitions
Rather than waiting for universal institutions to function, pragmatic middle powers are forming purpose-built partnerships. The Hague Group on Palestine accountability, climate financing coalitions excluding major emitters, and regional technology cooperation frameworks all represent this approach.
4. Maintain Normative Commitments
Even in transactional environments, perceived legitimacy matters. Countries that maintain reputations as constructive actors—defending international law, contributing to peacekeeping, addressing transnational challenges—accumulate soft power that creates diplomatic leverage. This is what Carney meant by “values-based realism.”
5. Prepare for Prolonged Competition
The 2026 US National Defense Strategy explicitly frames great power competition as protracted rather than episodic. Middle powers must similarly think in terms of decades-long strategic positioning rather than crisis-by-crisis responses. This requires institutional capacity, public support for difficult trade-offs, and political systems resilient enough to maintain course across electoral cycles.
The Path Forward: Realism Without Cynicism
As Trump delivered his own Davos speech on January 21—one day after Carney—the contrast was stark. Where Carney offered sophisticated analysis and coalition-building, Trump blustered that “Canada lives because of the United States” and revoked Carney’s invitation to his “Board of Peace.” The juxtaposition illustrated exactly the rupture Carney diagnosed.
The question isn’t whether we can restore the old order—we can’t. Nor is it whether to mourn its passing. As Carney rightly observed, “nostalgia is not a strategy.” The question is whether the international community can construct something better from the ruins: a system that acknowledges power realities while maintaining genuine commitments to sovereignty, human rights, and collective problem-solving.
The answer will depend partly on whether Western nations recognize what much of the world has known all along: that selective enforcement of international law undermines those laws, that double standards on human rights corrode their legitimacy, and that treating security commitments as transactional bargaining chips makes all relationships more brittle.
It will also depend on whether rising powers and middle powers can resist the temptation to simply mirror great power behavior. The risk, as Spektor warns, is that those who “shout against Western hypocrisy should also beware of the risk of being hypocritical themselves.” India’s loud protests against nuclear proliferation evaporated the moment it secured its own civil nuclear deal with Washington. Similar inconsistencies abound.
Conclusion: The World After Western Hypocrisy
In his 1978 essay that Carney invoked, Václav Havel described how systems sustained through rituals everyone knows to be false eventually collapse under the weight of their own contradictions. The greengrocer who displayed propaganda he didn’t believe maintained the fiction—until he stopped. That moment of clarity, multiplied across thousands of greengrocers, brought down the Iron Curtain.
We’re witnessing something similar in international relations. The shopkeepers are taking down the signs. Western leaders who invoke “rules-based order” while arming Israeli operations in Gaza, sanctioning ICC officials, threatening allies with tariffs, and abandoning climate commitments can no longer sustain the fiction. The rest of the world has stopped pretending to believe them.
What emerges in place of that fiction remains uncertain. A purely transactional world order—where might makes right without even rhetorical constraints—would be “poorer, more fragile, and less sustainable,” as Carney warned. The economic costs alone, measured in reduced growth, fragmented markets, and duplicated infrastructure, could set global development back decades.
Yet the alternative isn’t simply restoring the status quo ante. Any viable international system must address the legitimate grievances that fueled skepticism of Western-led order: the selective enforcement, the double standards, the structural inequalities that left much of the Global South running but never catching up.
Perhaps, paradoxically, the end of western hypocrisy international relations creates opportunity. When great powers can no longer hide behind moral justifications for self-interested actions, weaker nations gain clarity about the true nature of power. When the mask comes off, there’s at least honesty about what must be negotiated, opposed, or accepted.
The test will be whether that honesty leads to more legitimate, if messier, forms of global governance—or simply to a more brutal world where force replaces law. As Carney observed, middle powers aren’t powerless. They have “the capacity to stop pretending, to name reality, to build strength at home and to act together.”
Whether they seize that capacity, and whether they use it to construct something more just than what came before, will define the coming decades. The world may indeed come to miss western hypocrisy—not because it was admirable, but because the alternative of unvarnished great power competition could prove far worse. Unless, that is, we prove capable of building something better.
Rethinking Global Alliances
The collapse of the rules-based order isn’t destiny—it’s a choice. Citizens of middle powers and developing nations must demand that their governments:
- Invest in strategic autonomy through energy independence, food security, and critical mineral development
- Build coalitions based on shared interests rather than ideological alignment with declining hegemons
- Support reformed multilateral institutions that give genuine voice to Global South perspectives
- Maintain principled positions on international law, human rights, and sovereignty—even when great powers violate them
- Prepare for protracted competition by building resilient economies and political systems
For Western publics, the imperative is different but equally urgent: recognize that sustainable global leadership requires actually living up to stated values, not just invoking them selectively. The choice between a multipolar world of negotiated rules and a transactional world of naked power ultimately rests on whether powerful nations can demonstrate that their commitments to justice, sovereignty, and human dignity extend beyond their own borders and allies.
The greengrocers are taking down the signs. What we build in place of those empty slogans will determine whether our children inherit a more just world—or merely a more honest jungle.
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