The old rules-based order is over

'Values-based realism' that rests on principles and pragmatism is the way forward for countries dealing with hegemons, said Canada's Prime Minister at the World Economic Forum in Davos on Jan 20. Here is an edited transcript of his speech.

- Mark Carney

It seems that every day we're reminded that we live in an era of great power rivalry, that the rules-based order is fading, that the strong can do what they can, and the weak must suffer what they must.

And this aphorism of Thucydides is presented as inevitable, as the natural logic of international relations reasserting itself.

And faced with this logic, there is a strong tendency for countries to go along to get along, to accommodate, to avoid trouble, to hope that compliance will buy safety.

Well, it won't.

So, what are our options?

In 1978, the Czech dissident Vaclav Havel, later president, wrote an essay called "The Power of the Powerless", and in it, he asked a simple question: How did the communist system sustain itself?

And his answer began with a greengrocer.

Every morning, this shopkeeper places a sign in his window: "Workers of the world unite". He doesn’t believe it, no one does, but he places a sign anyway to avoid trouble, to signal compliance, to get along. And because every shopkeeper on every street does the same, the system persists - not through violence alone, but through the participation of ordinary people in rituals they privately know to be false.

Havel called this "living within a lie".

The system’s power comes not from its truth, but from everyone’s willingness to perform as if it were true, and its fragility comes from the same source.

When even one person stops performing, when the greengrocer removes his sign, the illusion begins to crack. Friends, it is time for companies and countries to take their signs down.

For decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, we praised its principles, we benefited from its predictability. And because of that, we could pursue values-based foreign policies under its protection.