The Cracks
Lehman collapses; the financial system requires the nation-state in ways the nation-state cannot afford. The Bitcoin whitepaper proposes an alternative. The Arab Spring tests authoritarian sovereignty; the Eurozone crisis tests pooled sovereignty; Brexit, Trump, the surveillance state, the platform monopolies all chip at the Westphalian frame from different angles.
Part of Farewell To Westphalia
12 moments in this segment.
- — The Lehman Collapse. The Lehman Brothers logo at the firm's Times Square headquarters shortly before bankruptcy, New York, September 2008. Place: 745 Seventh Avenue, New York Figures: Richard Fuld, Lehman CEO · Henry Paulson, US Treasury Secretary · Timothy Geithner, New York Fed President · Ben Bernanke, Federal Reserve Chair · the unnamed counterparties of $639 billion in assets The Weekend at the New York Fed The weekend of 12 to 14 September 2008 is spent in the Liberty Street conference rooms of the Federal Reserve Bank of New York. Paulson, Geithner, and the chief executives of the surviving Wall Street firms try to assemble a private-sector rescue. Barclays declines under pressure from UK regulators. Bank of America peels off to take Merrill Lynch instead. By Sunday evening it is clear: there will be no buyer. Lehman files Chapter 11 at 1:45 a.m. Monday morning with $639 billion in assets and $619 billion in debt. The largest bankruptcy in United States history. Within 36 hours the consequences arrive in series. AIG, the largest insurer in the world and the counterparty on roughly half a trillion dollars of credit-default swaps, requires an $85 billion Federal Reserve loan to avoid liquidation. The Reserve Primary Fund breaks the buck, triggering a global money-market run. Commercial paper markets freeze. The interbank dollar lending rate spikes. Within a week the Fed has opened or expanded swap lines with fourteen foreign central banks; the dollar shortage is planetary. Who Can Actually Backstop the System The Westphalian state turns out to be the only entity that can backstop a global financial system. TARP authorizes $700 billion in the United States on 3 October. The United Kingdom recapitalizes RBS, HBOS, and Lloyds. Ireland guarantees the entire deposit base of its six largest banks. Iceland's three largest banks collapse and the country negotiates an IMF program. Germany guarantees Hypo Real Estate. The transnational financial system is sustained only by sovereign balance sheets that will strain for a decade afterwards under the resulting public debt. The lesson, drawn by everyone in different directions: globalized finance had outgrown the national container, yet only the national container could save it. Six weeks after Lehman, on 31 October, a nine-page paper proposing a financial system that requires no national container at all is posted to a cryptography mailing list. (See [[bitcoin-whitepaper-2008]].) The era's two main responses to the crisis appear within forty-six days of each other. Video: Al Jazeera English report on the morning of 15 September 2008, the day Lehman Brothers filed the largest bankruptcy in United States history.
- — The Bitcoin Whitepaper. The Bitcoin logo, the public emblem of the protocol first described in Satoshi Nakamoto's whitepaper of 31 October 2008. Place: the metzdowd cryptography mailing list, the early internet Figures: Satoshi Nakamoto, identity unknown Six Weeks After Lehman Lehman Brothers fails on 15 September 2008. On 7 October, Iceland's three largest banks collapse in 36 hours. The Troubled Asset Relief Program (TARP) passes the US Congress on 3 October, authorizing 700 billion dollars to recapitalize failing banks. The Federal Reserve opens dollar-swap lines with foreign central banks at unprecedented scale. Whatever the Westphalian state was supposed to do for its currency, that month it does an enormous amount of it. On 31 October, a nine-page paper titled Bitcoin: A Peer-to-Peer Electronic Cash System is posted to the metzdowd cryptography mailing list by someone using the name Satoshi Nakamoto. The paper describes a digital cash system that requires no central authority, no nation-state, no bank. The cryptographers on the list, who have been trying to build such a thing for two decades (DigiCash, Hashcash, b-money, Bit Gold), recognize that this proposal works. Genesis Block On 3 January 2009, Nakamoto mines the genesis block. Embedded in the coinbase parameter, the field that lets miners include arbitrary data with their block, is a UTF-8 string from that day's London Times front page: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks. It is the most explicit timestamp of intent in software history. A medium of exchange whose protocol makes sovereign currency manipulation impossible has been deployed, with a citation to the specific failure it intends to correct. Bitcoin's market capitalization over the next sixteen years grows from zero to (in the trillions of dollars). The technical primitive (a censorship-resistant, fixed-supply, peer-to-peer ledger) becomes the substrate for an entire alternative financial system. Whether this constitutes an exit from Westphalian monetary sovereignty, or merely a parallel system the Westphalian state will eventually capture, is the live question Hope and Ludlow's Farewell to Westphalia takes up directly.
- — The Greek Debt Crisis. Demonstrators fill Syntagma Square in Athens during the anti-austerity Aganaktismenoi movement, 2011, at the height of the Greek bailout crisis. Place: Athens (formal request); Brussels and Frankfurt (subsequent decisions) Figures: George Papandreou, Greek Prime Minister · Wolfgang Schäuble, German Finance Minister · Jean-Claude Trichet, then Mario Draghi, ECB Presidents · Yanis Varoufakis, Greek Finance Minister (2015) · Alexis Tsipras, Greek Prime Minister (2015) The Request On 23 April 2010, from the island of Kastellorizo, George Papandreou formally requests financial assistance from the European Union and the International Monetary Fund. Greek ten-year yields have crossed 9 percent. The previous October's revised deficit number (12.7 percent of GDP, twice what the prior government had reported) has revealed that the country has been borrowing on terms its books cannot support. The first sovereign-debt crisis inside the eurozone has begun. The structural diagnosis is immediate and uncontested among economists: a monetary union without fiscal union cannot survive a major asymmetric shock without either fiscal transfers or exit. Greece can no longer devalue (it does not have its own currency), cannot inflate (the ECB sets policy for Germany too), and cannot grow its way out at the speeds required. What it can do is borrow from the so-called Troika (European Commission, ECB, IMF) on terms that mandate austerity. Five Governments and the German Floor The crisis runs to 2018. Three bailout programs total roughly €289 billion. Five Greek governments fall. Unemployment peaks at 27.5 percent in 2013. The Tsipras-Varoufakis government wins a 5 July 2015 referendum to reject Troika conditions with 61 percent όχι, then accepts harsher conditions a week later under the threat of euro exit. The Eurogroup confirms, by the manner of its negotiation, that pooled sovereignty has a German floor: there is a member-state whose preferences the union will not override. Greece does not exit. The eurozone holds. But the price has been paid in two coins: the Greek standard of living (which by 2018 has fallen roughly 25 percent from the 2008 peak), and the European public's confidence that the monetary union belongs to all its members equally. Both currencies devalue further over the remainder of the decade. (See [[brexit-vote-2016]] for the political aftershock.) Video: Al Jazeera English Inside Story panel on the Greek bailout programme, the austerity terms imposed by the Troika, and the political crisis they triggered.
- — The Arab Spring Begins. Protesters confront security forces in central Tunis on 14 January 2011, the day President Ben Ali fled, set in motion by Mohamed Bouazizi's self-immolation in Sidi Bouzid. Place: Sidi Bouzid, Tunisia Figures: Mohamed Bouazizi, fruit vendor · Faida Hamdi, municipal inspector · Zine El Abidine Ben Ali, Tunisian President (fell 14 January 2011) · Hosni Mubarak, Egyptian President (fell 11 February 2011) · Bashar al-Assad, Syrian President (held) Sidi Bouzid Mohamed Bouazizi is 26 years old. He sells fruit from a cart on the main street of Sidi Bouzid, a market town of 40,000 in the Tunisian interior, to support his mother and six siblings. On the morning of 17 December 2010 a municipal inspector confiscates his scales for the third time. He goes to the governorate to complain, is refused a meeting, returns to the street in front of the building, douses himself in paint thinner, and sets himself on fire. He dies on 4 January 2011. By then the protests in his name have spread across the country. On 14 January 2011 Ben Ali, in power for twenty-three years, flees to Saudi Arabia. The first Arab autocracy of the satellite-television and social-media era has fallen in under four weeks from a single act of self-immolation by a man whose video reached the diaspora through Facebook before reaching state television at all. The Wave and Its Limits Within months the wave reaches Egypt, Libya, Yemen, Bahrain, Syria. Mubarak falls in eighteen days. Gaddafi falls after a NATO air campaign authorized under UN Security Council Resolution 1973, the first invocation of the responsibility to protect doctrine for active regime change. Yemen's Saleh is negotiated out. Bahrain's Khalifa survives with Saudi help. Syria's Assad survives by reducing several of his own cities to rubble; the resulting civil war becomes the most consequential of the decade and the proximate cause of the 2015 European refugee crisis. By 2014 only Tunisia has produced a durable democratic transition. The Arab Spring is the first major test of whether networked communications would let civil societies overrun authoritarian Westphalian containers. The answer turns out to be: sometimes the container breaks, more often it adapts; the regimes that survive learn faster than the protesters do. The lesson is absorbed by every authoritarian state with a competent intelligence service, and applied through the rest of the decade. Video: Middle East Eye reconstruction of the December 2010 events in Sidi Bouzid, from the confiscation of Bouazizi's scales to the fall of Ben Ali twenty-eight days later.
- — The Fukushima Disaster. Damaged reactor buildings at the Fukushima Daiichi Nuclear Power Plant in the aftermath of the 11 March 2011 earthquake and tsunami. Place: Fukushima Daiichi Nuclear Power Plant, Ōkuma, Fukushima Prefecture Figures: Naoto Kan, Japanese Prime Minister · Masao Yoshida, plant manager (stayed at his post; died 2013) · TEPCO executives · the unnamed Fukushima 50, plant workers who remained Three Meltdowns At 2:46 p.m. on 11 March 2011, a magnitude 9.1 earthquake strikes off the Tōhoku coast. The plant's reactors scram successfully. Forty-one minutes later the tsunami arrives at heights of up to 14 meters, overtops the 5.7-meter seawall, and floods the emergency diesel generators in the basements. Cooling fails in Units 1, 2, and 3. Over the following four days, three reactor cores melt, hydrogen explosions destroy the secondary containment buildings of Units 1 and 3, and Unit 4's spent-fuel pool comes within hours of dewatering. Masao Yoshida, the plant manager, holds his crew in place through repeated TEPCO orders that the Japanese government later concludes would have abandoned the site to total breach. He authorizes seawater injection against headquarters' explicit instruction. The decision is the difference, in the post-incident analysis, between Fukushima as the third-worst nuclear accident in history and Fukushima as something for which there is no precedent. The Limits of Sovereign Containment The Japanese government cannot adequately disclose: SPEEDI radiation-dispersion data is withheld from the public for weeks. TEPCO cannot adequately contain: contaminated cooling water continues to leak to the Pacific for years. The international response is constrained by sovereign jurisdiction: the IAEA can advise but cannot direct; foreign offers of robotic and remediation assistance are slow to integrate; the 30-kilometre exclusion zone is a Japanese decision affecting downwind populations across several jurisdictions. Germany announces its nuclear phase-out within four months. Switzerland and Belgium follow. The release of treated tritium water into the Pacific, beginning 2023, requires twelve years of diplomacy with neighbors who hold no veto. Sovereignty over nuclear technology meets the limits of what any single state can manage when the failure mode is climatic, trans-jurisdictional, and trans-generational. The relevant time horizon (a thousand years for the spent fuel, a million for the high-level waste) is longer than the Westphalian system itself has existed. Video: BBC News account of the 11 March 2011 earthquake, tsunami, and reactor meltdowns at the Fukushima Daiichi Nuclear Power Plant.
- — The Snowden Revelations. Edward Snowden, the former NSA contractor whose leaks to The Guardian and Washington Post broke in June 2013. Place: The Guardian, London; The Washington Post, Washington Figures: Edward Snowden, NSA contractor · Glenn Greenwald, journalist · Laura Poitras, filmmaker · Barton Gellman, journalist · James Clapper, US Director of National Intelligence (had testified to Congress in March that the NSA did not collect data on millions of Americans) The Hong Kong Hotel Room Edward Snowden, 29 years old, an NSA infrastructure contractor with broad systems-administrator access, has been copying documents for months. He flies to Hong Kong on 20 May 2013 with four laptops of classified material. He meets Greenwald, Poitras, and Ewen MacAskill at the Mira Hotel. The first story, on the Foreign Intelligence Surveillance Court order compelling Verizon to hand over all domestic call metadata, runs in The Guardian on 5 June. PRISM, the program collecting from Google, Facebook, Apple, Microsoft, Yahoo, YouTube, Skype, and AOL, runs in both papers on 6 June. Over the following months the revelations expand. XKeyscore (searchable surveillance of nearly all internet activity). Tempora (UK GCHQ tapping of transatlantic fiber cables). Bullrun (NSA sabotage of commercial encryption standards). The bugging of Angela Merkel's personal phone. The bugging of Dilma Rousseff's office. The bugging of UN secretariat communications, of EU offices in Washington and at the UN, of OPEC. What the Westphalian Communications Were Made Of The structural revelation is not that intelligence services spy. It is that the digital infrastructure on which contemporary Westphalian states conduct their sovereign business (Google's email, Microsoft's operating systems, Facebook's social graph, undersea fiber owned by US-listed companies) runs largely on platforms that one state's intelligence services treat, with legal sanction, as their own. Merkel's Abhören unter Freunden, das geht gar nicht (eavesdropping among friends, that simply isn't done) acknowledges that the friendship has been one-sided. Snowden, charged under the Espionage Act, flies to Moscow on 23 June. The United States revokes his passport while he is in transit. He receives Russian temporary asylum and then, after years, citizenship. Brazil and Germany jointly draft UN General Assembly resolution 68/167 on the right to privacy in the digital age. The EU passes the GDPR in 2016. End-to-end encryption deploys to Signal, then WhatsApp, then iMessage. Nothing replaces the underlying architecture. The disclosure is metabolized; the dependency remains. Video: The Guardian's first published interview with Edward Snowden, filmed in Hong Kong in June 2013 by Glenn Greenwald and Laura Poitras.
- — The Annexation of Crimea. Vladimir Putin signs the treaty admitting Crimea and Sevastopol to the Russian Federation, Kremlin, 18 March 2014. Place: Kremlin, Moscow (treaty signed); Simferopol, Crimea (referendum, 16 March) Figures: Vladimir Putin, Russian President · Sergey Aksyonov, installed Crimean leader · Viktor Yanukovych, ousted Ukrainian President · the unmarked Russian troops (little green men) who took the peninsula without insignia Little Green Men On 27 February 2014, three days after Yanukovych flees Kyiv, soldiers in unmarked uniforms seize the Crimean parliament building in Simferopol. They install Sergey Aksyonov as prime minister of an autonomous Crimea that has not, until now, sought to be one. By the following weekend, similar uniformed personnel hold every Ukrainian military base, airport, and government building on the peninsula. Putin denies they are Russian troops; in April he will acknowledge they were. The 16 March referendum, organized at two weeks' notice under occupation, reports 96.77 percent in favor of joining Russia. The annexation treaty is signed at the Kremlin on 18 March. Putin's accompanying speech invokes Crimea's historical Russianness back to the baptism of Vladimir the Great in 988, the Crimean War, Sevastopol's defense in 1941–44, and Khrushchev's 1954 transfer of Crimea from the RSFSR to the Ukrainian SSR as an administrative act within a single Soviet state. The argument: Ukrainian sovereignty over Crimea was always a Soviet-era technicality, and the technicality has now been corrected. The Helsinki Settlement Broken The Helsinki Final Act of 1975 had committed all signatories, the USSR among them, to the inviolability of frontiers and the territorial integrity of states. The 1994 Budapest Memorandum had committed Russia, the United States, and the United Kingdom to respect Ukraine's existing borders in exchange for Ukraine's surrender of the world's third-largest nuclear arsenal. Both commitments are now visibly broken without effective Western response. Sanctions are imposed and absorbed; Russia is expelled from the G8; SWIFT is not yet touched. The first forcible annexation of European territory since 1945 sets the conditions for [[invasion-of-ukraine-2022]] eight years later. The lesson drawn by Western capitals (that Russia must be deterred more credibly) and the lesson drawn by the Kremlin (that the cost of redrawing borders is manageable) point in opposite directions and lead, by their interaction, to the larger war. The Westphalian principle of territorial integrity, the load-bearing assumption of the UN Charter (see [[un-charter-1945]]), is now openly contested in Europe. Video: Euronews full recording of Vladimir Putin's address to the Federal Assembly and the Kremlin signing of the treaty incorporating Crimea into the Russian Federation, 18 March 2014.
- — The Iran Deal. Federica Mogherini and Mohammad Javad Zarif announce the Joint Comprehensive Plan of Action in Vienna, 14 July 2015, as Steinmeier, Kerry and Hammond look on. Place: Palais Coburg, Vienna Figures: Mohammad Javad Zarif, Iranian Foreign Minister · John Kerry, US Secretary of State · Federica Mogherini, EU High Representative · Wang Yi, Sergey Lavrov, Philip Hammond, Frank-Walter Steinmeier, Laurent Fabius · Ali Akbar Salehi and Ernest Moniz, the nuclear physicists on each side The Joint Comprehensive Plan of Action Ten years of negotiation, three of them at full intensity, conclude in Vienna at 10:30 a.m. on 14 July 2015. Iran agrees to reduce its low-enriched-uranium stockpile by 98 percent, cap enrichment at 3.67 percent for fifteen years, dismantle two-thirds of its operating centrifuges, redesign the Arak heavy-water reactor so it cannot produce weapons-grade plutonium, and accept the most intrusive verification regime in the history of nuclear non-proliferation. In exchange, nuclear-related sanctions are suspended; some $100 billion in frozen Iranian assets are released over time. P5+1 plus Iran. The most ambitious multilateral arms-control agreement of the century, negotiated by the only configuration of powers that could plausibly enforce it. Endorsed unanimously by UN Security Council Resolution 2231 six days later. The technical achievement is acknowledged even by critics: the nuclear breakout time, estimated at two to three months in 2013, is pushed to roughly twelve months under the deal's restrictions. What One Administration Can Undo On 8 May 2018, Donald Trump withdraws the United States from the JCPOA and reimposes sanctions. The other five P5+1 parties (UK, France, Germany, Russia, China) attempt to preserve the deal through INSTEX, a special-purpose vehicle designed to bypass dollar clearing. INSTEX never reaches meaningful volume; secondary US sanctions are sufficient to deter European corporates from any Iran-related transaction. Iran begins exceeding enrichment limits in 2019. By 2022 it is enriching to 60 percent, weeks from weapons-grade. The collapse demonstrates that even a fifteen-year multilateral negotiation, ratified by the Security Council, can be undone by a single sovereign's administration change. The dollar's role as global reserve currency, and Washington's willingness to police it, gives the United States a unilateral capacity to nullify multilateral instruments to which it has acceded. The Westphalian principle of sovereign equality coexists, in practice, with a financial asymmetry that no treaty has yet succeeded in containing. (See [[trump-elected-2016]].) Video: Secretary of State John Kerry in Vienna on 14 July 2015, announcing the conclusion of the Joint Comprehensive Plan of Action between Iran and the P5+1.
- — The Ethereum Launch. The Ethereum logo, emblem of the smart-contract platform whose Frontier mainnet went live on 30 July 2015. Place: the genesis block; the early protocol, mined globally Figures: Vitalik Buterin, lead designer · Gavin Wood, co-founder and Yellow Paper author · Joseph Lubin, co-founder · Charles Hoskinson, co-founder · the Ethereum Foundation, registered Zug, Switzerland What Bitcoin Could Not Do Vitalik Buterin, then 19, publishes the Ethereum whitepaper in late 2013. His argument: Bitcoin's scripting language is deliberately limited to financial transactions, but the underlying primitive (a censorship-resistant, globally replicated state machine) can run arbitrary programs. The whitepaper proposes a Turing-complete virtual machine on top of a Nakamoto-style consensus layer. Funded by a 2014 token presale that raises roughly 31,000 bitcoin (about $18 million at the time), the protocol launches at block zero on 30 July 2015 with the Frontier release. Gavin Wood's Yellow Paper formalizes the Ethereum Virtual Machine in mathematical specification. The instruction set, the gas-metering model, the state-trie data structure are all defined to be implementable by any developer in any language. Within a year there are clients in Go, Rust, C++, Python, Java. The protocol is not a product; it is a specification that anyone can run. The Substrate for Sovereign-Equivalent Institutions Where [[bitcoin-whitepaper-2008]] proposes an exit from sovereign monetary policy, Ethereum proposes the substrate for arbitrary sovereign-equivalent institutions: DAOs as constitutions, ENS as identity systems, on-chain voting, Kleros and Aragon Court as dispute-resolution venues, stablecoins as private currencies, NFTs as property registries. The technical primitive for Hope and Ludlow's Farewell to Westphalia argument (that the institutional functions of the nation-state can be unbundled and reassembled on programmable consensus) is now deployed in production. By 2025 the system settles trillions of dollars annually, hosts a stablecoin float of several hundred billion, and runs application logic in roughly two hundred jurisdictions simultaneously without operating in any of them. Whether this constitutes the substrate for post-Westphalian governance or merely a sophisticated marketplace the Westphalian state will eventually regulate is the live question of the next era. The substrate exists; what is built on it remains contingent. Video: Vitalik Buterin at DEVCON1 in November 2015, four months after the Ethereum genesis block, explaining the protocol's account model and the Ethereum Virtual Machine.
- — The Paris Agreement. French Foreign Minister Laurent Fabius brings down the gavel as 196 parties approve the Paris Agreement at COP21, Le Bourget, 12 December 2015. Place: COP21, Le Bourget, Paris Figures: Laurent Fabius, COP21 President · Christiana Figueres, UNFCCC Executive Secretary · Ban Ki-moon, UN Secretary-General · François Hollande, French President · the 196 parties (195 states plus the European Union) The Hammer At 7:25 p.m. on 12 December 2015, Laurent Fabius brings down a small green gavel, fashioned for the occasion, on the table of the plenary at Le Bourget. 196 parties have adopted the Paris Agreement: each state submits a nationally determined contribution toward holding warming well below 2 °C above pre-industrial levels and pursuing efforts to limit it to 1.5 °C. The text is twenty-seven pages. Two decades of failed top-down negotiations (Kyoto, Copenhagen) had insisted on legally binding emissions targets; Paris abandons that structure in exchange for universal participation. The compromise of the era: planetary problem, Westphalian instruments. Each sovereign sets its own contribution. There is no binding enforcement and no penalty for non-achievement. The mechanism is a ratchet: every five years, each party submits a new NDC that will represent a progression. Peer review and transparency replace legal compulsion. The wager is that publicly committed targets, in a system where everyone can see who is missing them, will outperform mandatory targets that the largest emitters would never have signed. What the Agreement Settles, and What It Cannot Trump notifies withdrawal in 2017 (effective 4 November 2020, one day after the election that returns him to opposition). Biden rejoins in 2021. Trump notifies again in 2025. The on-off-on pattern itself becomes part of the test: the agreement is designed to survive any single party's exit because participation, not compliance, is its load-bearing feature. By 2025 global emissions are still rising, but the rate of increase has slowed and renewable deployment exceeds the IEA's most optimistic 2015 projections. Whether the agreement is sufficient is the live question of the next two decades. The 1.5 °C threshold is on track to be breached on the multi-year average by the early 2030s. The instruments themselves remain Westphalian: 196 sovereign decisions, aggregated. Hope and Ludlow's argument that planetary-scale collective-action problems may exceed the capacity of the sovereign-state system to solve them is, on the climate question, the central wager of this folio. The wager has not yet resolved. Video: UNFCCC recording of Laurent Fabius bringing down the green gavel at Le Bourget on the evening of 12 December 2015, signalling the adoption of the Paris Agreement.
- — The Brexit Vote. Result of the United Kingdom's referendum on EU membership, 23 June 2016: Leave 51.9%, Remain 48.1%. Place: United Kingdom (referendum) Figures: David Cameron, UK Prime Minister (resigned the morning after) · Boris Johnson, Vote Leave figurehead · Nigel Farage, UKIP leader · Theresa May, Cameron's successor · Michel Barnier, EU chief negotiator 51.9 to 48.1 Turnout reaches 72.2 percent, the highest in any UK national vote since 1992. Leave wins 51.9 percent to Remain's 48.1, by a margin of 1.27 million votes out of 33.5 million cast. The result is geographically distinct: England outside London and Scotland votes Leave; Scotland and Northern Ireland vote Remain. Cameron, who called the referendum to settle his party's European question, resigns on the steps of Downing Street the following morning. Sterling falls 8 percent against the dollar in a single trading session. The campaign had been fought largely on sovereignty: take back control. Of borders, of laws, of money. The EU's pooled-sovereignty arrangement (the single market's four freedoms, the European Court of Justice, the customs union, the contributions to the EU budget) is reframed by the Leave campaign as a transfer of authority that a sovereign state should never have made and can always retract. The Westphalian principle that a state can unilaterally exit a supranational arrangement is reasserted. Negotiating the Exit Article 50 is triggered on 29 March 2017. Three and a half years of negotiation produce a withdrawal agreement (the May version is rejected three times by the Commons; the Johnson version passes); the United Kingdom formally leaves on 31 January 2020; the transition period ends on 31 December 2020. The Trade and Cooperation Agreement, signed on Christmas Eve 2020, preserves zero-tariff zero-quota trade in goods but imposes customs declarations, sanitary checks, and the end of services passporting. The Westphalian retrieval is achieved at significant cost to both sides. The Office for Budget Responsibility estimates a long-run 4 percent reduction in UK GDP versus continued membership. The Northern Ireland Protocol, designed to keep the island border open, creates a customs interface in the Irish Sea that fundamentally complicates UK internal sovereignty over its own territory. Scottish opinion polls show sustained majorities for independence for the first time in the union's history. Pooled sovereignty turns out to have been, on this evidence, easier to enter than to leave; the act of leaving reorganizes the leaving state itself. Video: David Cameron's statement outside Number 10 on the morning of 24 June 2016, the day after the United Kingdom voted to leave the European Union, announcing his resignation.
- — The Trump Election. Donald Trump addresses supporters on his post-election Victory Tour in Hershey, Pennsylvania, 15 December 2016. Place: United States (general election) Figures: Donald Trump, Republican nominee · Hillary Clinton, Democratic nominee · Mike Pence, running mate · Stephen Bannon, campaign chair · the 304 Republican electors who cast the official vote America First Donald Trump wins 304 electoral votes to Hillary Clinton's 227, despite losing the popular vote by 2.87 million. The margin runs through Pennsylvania, Michigan, and Wisconsin (states no Republican had carried since 1988) by a combined 77,744 votes. Every major political analyst, every major polling firm, and most of his own campaign staff had predicted Clinton would win. The inaugural address on 20 January 2017 frames the platform: From this day forward, it's going to be only America First. America First. The phrase carries deliberate historical weight. The America First Committee of 1940–41 had opposed US entry into the Second World War and the internationalist consensus that produced the UN Charter (see [[un-charter-1945]]) and the post-1945 alliance system. Trump's reuse is not accidental. The doctrine is articulated as explicit Westphalian retrenchment: the United States is a sovereign state with interests, and those interests are not served by treaties and institutions that constrain it more than they constrain its rivals. The Withdrawals The first term withdraws from the Trans-Pacific Partnership (23 January 2017), the Paris Agreement (notified 1 June 2017), UNESCO (12 October 2017), the UN Human Rights Council (19 June 2018), the Iran nuclear deal (8 May 2018), the INF Treaty (announced October 2018), the Open Skies Treaty (May 2020), the WHO (notification July 2020). NAFTA is renegotiated as USMCA. NATO contributions are publicly questioned. The Republic of China is granted formal cabinet-level contacts that previous administrations had carefully avoided. The post-1991 liberal-internationalist consensus is now openly contested from within its leading power. Biden reverses many of these in 2021. Trump reverses many of the reversals in 2025. The on-off pattern itself becomes the new normal. The era's central recognition (that even the leading power of the postwar order can be turned, through ordinary electoral mechanisms, against the order it built) propagates through every other capital: every multilateral commitment is now conditional on the next election. This is, in a sense, the Westphalian system functioning exactly as designed. It is also, in a sense, the end of the system's capacity to address problems that Video: ABC News broadcast of Donald Trump's full victory speech at the Hilton Midtown in New York, in the early hours of 9 November 2016.
