The Great Political Realignment

In this episode of the Cato Podcast, host Ryan Bourne interviews Steve Davis, author of 'The Great Realignment,' about a profound shift in global politics. Davis argues that the traditional left-right economic divide—centered on capitalism versus socialism—has collapsed since around 2005, replaced by a new political axis focused on identity, nationalism, and national sovereignty. This realignment, he contends, is not merely a reaction to globalization or populism but a structural transformation driven by deep economic and technological changes, including the rise of a globally connected network of city regions and mass migration. While the new divide features free marketeers on both sides and big government supporters on both, the core conflict now revolves around whether society should embrace a cosmopolitan, pluralistic identity or a thick, ethnocultural national identity. Davis emphasizes that this shift is not limited to the U.S. or Brexit; it's a worldwide phenomenon, with similar movements emerging in Europe, Japan, Australia, and Latin America. He warns that attempts to suppress or dismiss these new political currents will only radicalize them further, drawing parallels to the historical suppression of socialism in the 19th century. For libertarians, Davis concludes, the only coherent position is to align with the liberal, cosmopolitan left, as the nationalist right’s goals—such as restricting immigration and economic sovereignty—require authoritarian state intervention that contradicts free markets and limited government. He predicts that over time, a new secondary issue—attitudes toward technology and AI—will emerge as the next major political fault line. The episode also explores the implications of this realignment for federalism, democracy, and the future of political coalitions. Davis suggests that the U.S. may see a resurgence of federalism not as a principle but as a tactical necessity, given the deep national polarization. He forecasts a future where four major presidential candidates could emerge in 2028, reflecting deep ideological fractures. Ultimately, Davis argues that political consensus is not predetermined but forged through prolonged contestation, compromise, and debate. He remains cautiously optimistic that liberal principles—rule of law, constitutionalism, and individual liberty—can survive and even thrive in this new era, especially if they are defended not through suppression but through intellectual engagement and coalition-building across traditional divides.