(Photo: Handout via Reuters)
John Maynard Keynes’ The Economic Consequences of the Peace (1919) remains one of the most prescient critiques of postwar settlement in modern history. In it, Keynes warned that victory can hollow itself out when the victors lose their sense of humility. The punitive reparations imposed upon Germany after World War I, he argued, sowed the seeds for future instability by humiliating and impoverishing a nation that, once stripped of dignity and hope, would not long consent to the order imposed upon it. His insight was both economic as well as moral and political: sustainable peace requires magnanimity, not vengeance; it presupposes an architecture of inclusion, not one of exclusion. In today’s parlance, it rejects blocs aimed at those outside and seeks to ground relations in the idea of indivisible peace.
A century later, as the 500-year arc of Western colonial and imperial dominance visibly wanes, Keynes’ warnings echo anew. The collapse of the Western-led unipolar order - accelerated by the strategic defeat of the political West in Ukraine and its failure to contain China’s rise - marks not just a redistribution of power, but a crisis of moral and intellectual legitimacy. Europe and latterly the United States, long accustomed to shaping the world in their image, now find themselves flailing, unable to adapt to a world that no longer accepts their exceptionalism.
The West has been here before, though in a different guise. When the Soviet Union dissolved in 1991, Washington and its allies declared not just victory in the Cold War but the “end of history.” The United States entered its so-called unipolar moment, interpreting the collapse of its great rival as proof that liberal capitalism and U.S. primacy were not simply triumphant, but universal and permanent. Instead of magnanimity, there was hubris; instead of inclusion, we got expansion. The West sought not to integrate Russia into a common security and economic architecture when the chance was there but to extend its own, pressing NATO ever eastward and using the rhetoric of “democracy promotion” as a tool for strategic penetration.
As Monica Duffy Todt and Saditha Kushi show in their 2023 book Dying by the Sword, the United States engaged in more military interventions per year on average during this three-decade period of unipolar dominance than in any other era of its history. Rather than a peace dividend, the end of the Cold War brought an inflation of military activism - from the Balkans to the Middle East, from Central Asia to North Africa. Washington mistook primacy for invulnerability and power for virtue. It could not imagine a world in which it was one among many, rather than the singular arbiter of global affairs. This was, in Keynesian terms, Versailles on a planetary scale: the victors mistaking domination for stability, and in doing so, planting the seeds of their own undoing.
Today, the results are plain. The moral authority of the “political West” lies in tatters, its financial and security architecture fraying, and its promises of universal prosperity exposed as self-serving myths. The wars in Iraq, Afghanistan and Libya; the weaponisation of sanctions and finance; the double standards on sovereignty and human rights - all have eroded trust in the Western model and driven much of the Global South to seek alternatives. The unipolar moment, far from consolidating peace, produced a world of permanent conflict and alienation.
The temptation for the ascendant powers - China, Russia, and the wider Global South - is now to meet this Western decline with their own form of triumphalism, to “put the foot to their throat,” metaphorically speaking. Yet history counsels restraint. Keynes’ lesson is that humiliation breeds resentment, and resentment breeds conflict. A just and stable new order cannot emerge from vengeance; it must emerge from generosity and strategic patience.
So far, China and much of the Global South appear to have internalised this lesson. Rather than impose or punish, they have sought to enable: to construct a multipolar system that widens participation rather than narrows it, that integrates rather than isolates. Initiatives such as the Belt and Road, the Shanghai Cooperation Organisation, and BRICS+ reflect not a desire to replace Western hegemony with another, but to dissolve the very logic of domination itself - to build a world of coexistence and mutual development. This is magnanimity in practice: the exercise of power with humility, not hubris.
The ongoing trade negotiations is another contemporary case in point. China has demonstrated that it is no longer subordinated to the whims of the west. It responded tit-for-tat when the U.S. launched the “Liberation Day” tariffs on April 2, 2025. The U.S. was forced to arrive at a detente with China, paving the way for negotiations on which China’s peer status has progressively been asserted.
The piece de resistance was the announcement of export licensing regulations to apply to a broad range of rare earth elements (REEs) and other materials, on October 9, 2025. The American reaction was apoplectic. The material soft underbelly of the U.S. political economy was laid bare. Now, the negotiators from both sides have met in Kuala Lumpur. Early reports indicate that a framework has been agreed, enabling respective leaders to take the matter forward. The Chinese side said little of detail; the U.S. side was much quicker to open the space for speculations on what may be included. This is standard operating procedure from the Americans, for whom “claiming PR wins” is essential to legitimacy.
It’s reported that there will be a further deferral of threatened 100% tariffs. Scott Bessent spins this as a “win” of America’s leverage; the reality is the U.S. can ill-afford more tariffs. The U.S. needed an out on a failing policy; the Chinese gracefully provided one. Further, we see reports of room for China to purchase U.S. soybeans again. This has been a particularly sore point for Trump, as his mid-western farming base turned on his administration particularly after the bailout of Argentina, which then Argentina drop export duties and sell soybeans to China.
There’s also speculation that some form of deferral on the application of the rare earth export licensing regime may be possible. Assuming that this is the case, what we are witnessing is a shift in register. China has demonstrated its capacity to respond to the U.S. in kind (it is now a peer, to be engaged with on the basis of “equality and respect”), and the prerogatives of dispensations are just as much in Beijing’s hands as they were once solely in the hands of the U.S.. The window is more likely about the precise mechanisms & procedures of applications; what constitutes dual use; what quota thresholds act as “risk triggers”; how fast-lane processes can be expedited etc. Bureaucratic detail is precisely the space in which apparatuses of state like to operate. The regulations are now in place; there’s no going back on that. The goal posts were redefined. Now, the “argy bargy” is on a different plane.
The capacity to regulate the global flow of REEs and their uses has been successfully asserted. This was unimaginable a year ago, even as China provided ongoing “hints” that escalation of control was possible. Recall that export regulations were applied to Germanium and gallium in the second half of 2023. China is now in a position to further shape global value flows. When Trump launched the trade wars in March 2018, when he declared that “trade wars are good, and easy to win,” that China could impose a new regime for REEs was singularly unimaginable. That’s how far the world has changed.
China’s approach to global leadership is marked by a philosophical orientation distinct from the Western impulse to dominate. Rooted in its own civilisational traditions, the Chinese concept of harmony without uniformity (和而不同) suggests that order need not depend on conformity. Rather, it arises from the coordination of difference, from finding balance among diverse interests and values. This contrasts sharply with the Western universalist model, which has historically demanded ideological alignment as the price of inclusion and sanctions and punishment as the default remedy to non-compliance.
In practice, this philosophy underpins the design of China’s global initiatives. The Belt and Road Initiative, for instance, does not insist that participants adopt a particular political or economic model; instead, it seeks practical cooperation around shared infrastructure, trade, and technological development. The emphasis is on connectivity rather than control, on mutual benefit rather than zero-sum competition. The same logic applies to BRICS+, which brings together countries of widely differing systems and traditions on the basis of equality and respect for sovereignty. The aim is not to replace one hegemon with another, but to create the institutional scaffolding for coexistence in diversity.
Even the trade negotiations with the U.S. are expressions of this mentalite. Trade is a “win-win” relationship as far as China is concerned; only the U.S. insists that it is zero sum. The trade negotiations demonstrate that trade works when the trading parties are both benefiting. China has demonstrated that it can adjust to American market barriers; the evidence of the past few months shows that. Expansion of trade with non-American markets has accelerated; this trend isn’t going to abate. But, this doesn’t mean China does not wish to trade with the U.S. It simply means that it can get by without doing so.
To deny itself access to the U.S. market would be short-sighted folly, as far as China is concerned. Additionally, China’s perspective is shaped by a sense of how a functional multipolar world needs to look. An impoverished and isolated America is not in the interests of anybody, a point I argued some time ago. But a unilateral and belligerent United States is similarly not consistent with the unfolding dynamics of multipolarity,
This has changed.
China, Russia, the growing BRICS consort and the Global South more broadly speaking are pursuing their objectives in a distinctly multipolar way. While the Western model has historically relied on coercion - through sanctions, military bases, or ideological campaigns - the emerging multipolar approach seeks influence through partnership, demonstration and reciprocity. It is an enabling form of power: one that multiplies the capacities of others rather than diminishing them. China’s own emergence is as a “great enabling power”, and its sense of what a multipolar world looks like is articulated clearly via its series of Global Initiatives.
Such an approach represents not merely a strategic adjustment but a moral evolution. It recognises that power, to be legitimate, must be exercised with restraint and foresight. The West’s failure since 1991 has been a failure of imagination; that is, its inability to conceive of power without domination and of leadership without subordination. Magnanimity, in Keynes’ sense, requires precisely that leap of imagination: to see one’s own victory as an opportunity to build a broader peace, not to entrench advantage.
If Keynes were alive today, he might recognise in China’s development financing, its patient diplomacy, and its avoidance of punitive posturing a distant echo of his own vision for post-war reconstruction: that prosperity and peace are indivisible, and that stability cannot be built on humiliation. The question for the emerging multipolar order is whether it can sustain this magnanimity as power continues to shift. History’s warning is clear: the temptation to moralise the new order, to humiliate the fallen and to convert material advantage into moral superiority are pathways back to instability.
The challenge of the coming decades will be to prove that power and magnanimity can coexist; that justice need not mean retribution; and that a world freed from Western dominance need not replace one hierarchy with another. Keynes’ voice reaches across a century to remind us that the true test of victory lies not in defeating one’s rivals but in transcending the impulse to punish them. Magnanimity, in this sense, is not weakness but wisdom. It is the foundation upon which a durable and genuinely shared peace can be built.
