Global Advisors | Quantified Strategy Consulting

“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.” – Mark Carney – Prime Minister of Canada

Mark Carney’s invocation of Thucydides at the World Economic Forum represents far more than rhetorical flourish-it signals a fundamental recalibration of how middle powers must navigate an era of renewed great power competition. Delivered at Davos on 20 January 2026, the Canadian Prime Minister’s address articulates a doctrine of “value-based realism” that acknowledges the erosion of the post-Cold War international architecture whilst refusing to accept the fatalism such erosion might imply.

The Context: A World in Transition

Carney’s speech arrives at a pivotal moment in international affairs. The rules-based order that underpinned global stability since 1945-and particularly since the Cold War’s conclusion-faces unprecedented strain from great power rivalry, economic fragmentation, and the weaponisation of interdependence. The Canadian Prime Minister’s diagnosis is unflinching: the comfortable assumptions that geography and alliance membership automatically confer prosperity and security are no longer valid.¹ This is not mere academic observation; it reflects lived experience across the Western alliance as traditional frameworks prove inadequate to contemporary challenges.

The quote itself draws directly from Thucydides’ account of the Melian Dialogue, wherein the Athenian envoys declare that “the strong do what they can and the weak suffer what they must.” By invoking this ancient formulation, Carney grounds contemporary geopolitical anxiety in historical precedent, suggesting that the current moment represents not an aberration but a return to a more primal logic of international relations-one temporarily obscured by the post-1989 liberal consensus.

The Intellectual Foundations: Realism and Its Evolution

Carney’s framework draws upon several strands of international relations theory, most notably classical realism and its contemporary variants. The concept of “value-based realism,” which Carney attributes to Alexander Stubb, President of Finland, represents an attempt to synthesise realist analysis of power distribution with liberal commitments to human rights, sovereignty, and territorial integrity.¹ This is a deliberate intellectual move-rejecting both naive multilateralism and amoral power politics in favour of a pragmatic middle path.

Classical realism, articulated most influentially by Hans Morgenthau in the mid-twentieth century, posits that states are rational actors pursuing power within an anarchic international system. Morgenthau’s seminal work Politics Among Nations established that national interest, defined in terms of power, constitutes the objective of statecraft. Yet Morgenthau himself recognised that power encompasses more than military capacity-it includes economic strength, technological capability, and moral authority. Carney’s approach resurrects this more nuanced understanding, arguing that middle powers possess distinct forms of leverage beyond military might.

The realist tradition has evolved considerably since Morgenthau. Kenneth Waltz’s structural realism emphasised the anarchic nature of the international system and the security dilemma it generates, wherein defensive measures by one state appear threatening to others, creating spirals of mistrust. This framework helps explain contemporary great power competition: as American hegemony faces challenge from rising powers, each actor rationally pursues security through military buildups and alliance formation, inadvertently triggering the very insecurity it seeks to prevent. Carney’s diagnosis aligns with this logic-the “end of the rules-based order” reflects not malice but the structural pressures inherent in multipolarity.

More recent theorists have grappled with how middle powers navigate such environments. Scholars such as Andrew Pratt and Fen Osler Hampton have examined “middle power diplomacy,” arguing that states lacking superpower status can exercise disproportionate influence through coalition-building, norm entrepreneurship, and strategic positioning. This intellectual tradition directly informs Carney’s prescription: middle powers must act together, creating what he terms “a dense web of connections across trade, investment, culture” upon which they can draw for future challenges.¹

The Diagnosis: Structural Transformation

Carney’s analysis identifies three interconnected phenomena reshaping the international landscape. First, the erosion of the rules-based order reflects genuine shifts in material power distribution. The post-Cold War moment, characterised by American unipolarity and the apparent triumph of liberal democracy, has given way to multipolarity and ideological contestation. Great powers-whether the United States, China, or Russia-increasingly view international institutions and agreements as constraints on their freedom of action rather than frameworks for mutual benefit.

Second, economic interdependence, once theorised as a force for peace, has become weaponised. Sanctions regimes, technology restrictions, and supply chain manipulation now constitute standard instruments of statecraft. This transformation reflects what scholars term the “securitisation” of economics-the process whereby economic relationships become framed through security logics. Carney explicitly warns against this: middle powers must resist the temptation to accept “economic intimidation” from one direction whilst remaining silent about it from another, lest they signal weakness and invite further coercion.¹

Third, the traditional alliance structures that provided security guarantees to middle powers have become less reliable. NATO’s continued existence notwithstanding, the United States under various administrations has questioned its commitment to collective defence, whilst simultaneously pursuing unilateral policies (such as tariff regimes) that undermine allied interests. This creates what Carney identifies as a fundamental strategic problem: bilateral negotiation between a middle power and a hegemon occurs from a position of weakness, forcing accommodation and competitive deference.¹

The Intellectual Lineage: From Thucydides to Contemporary Geopolitics

Carney’s invocation of Thucydides connects to a broader contemporary discourse on great power competition. Graham Allison’s “Thucydides Trap” thesis-the proposition that conflict between a rising power and a declining hegemon is structurally likely-has become influential in policy circles. Allison argues that of sixteen historical cases where a rising power challenged a ruling one, twelve ended in war. This framework, whilst contested by scholars who emphasise contingency and agency, captures genuine anxieties about Sino-American relations and broader multipolarity.

Yet Carney’s deployment of Thucydides differs subtly from Allison’s. Rather than accepting the Trap as inevitable, Carney uses the ancient formulation to establish a baseline-the world as it actually is, stripped of comforting illusions-from which alternative paths become possible. This reflects what might be termed “tragic realism”: an acknowledgment of structural constraints coupled with insistence on human agency and moral choice.

Contemporary theorists of middle power strategy have developed frameworks relevant to Carney’s prescription. Scholars such as Amitav Acharya have examined how middle powers can exercise “agency” within structural constraints through what he terms “norm localisation”-adapting global norms to regional contexts and thereby shaping international discourse. Similarly, theorists of “minilateral” cooperation-agreements among smaller groups of like-minded states-provide intellectual scaffolding for Carney’s vision of issue-specific coalitions rather than universal institutions.

The Prescription: Strategic Autonomy and Collective Action

Carney’s response to this diagnosis comprises several elements. First, building domestic strength: Canada is cutting taxes, removing interprovincial trade barriers, investing a trillion dollars in energy, artificial intelligence, and critical minerals, and doubling defence spending by decade’s end.¹ This reflects a classical realist insight-that international influence ultimately rests upon domestic capacity. A state cannot punch above its weight indefinitely; sustainable influence requires genuine economic and military capability.

Second, strategic autonomy: rather than accepting subordination to any hegemon, middle powers must calibrate relationships so their depth reflects shared values.¹ This requires what Carney terms “honesty about the world as it is”-recognising that some relationships will be transactional, others deeper, depending on alignment of interests and values. It also requires consistency: applying the same standards to allies and rivals, thereby avoiding the appearance of weakness or double standards that invites further coercion.

Third, coalition-building: Carney proposes plurilateral arrangements-bridging the Trans-Pacific Partnership and European Union to create a trading bloc of 1.5 billion people, forming buyers’ clubs for critical minerals anchored in the G7, cooperating with democracies on artificial intelligence governance.¹ These initiatives reflect what might be termed “competitive multilateralism”-creating alternative institutional frameworks that function as described, rather than relying on existing institutions that have become gridlocked or captured by great powers.

This approach draws upon theoretical work on institutional design and coalition formation. Scholars such as Barbara Koremenos have examined how states choose institutional forms-examining when they prefer bilateral arrangements, multilateral institutions, or minilateral coalitions. Carney’s framework suggests that in an era of great power rivalry, minilateral coalitions organised around specific issues prove more effective than universal institutions, precisely because they exclude actors whose interests diverge fundamentally.

The Philosophical Underpinning: Beyond Nostalgia

Carney’s most provocative claim may be his insistence that “nostalgia is not a strategy.”¹ This rejects a tempting response to the erosion of the post-Cold War order: attempting to restore it through diplomatic pressure or institutional reform. Instead, Carney argues, middle powers must accept that “the old order is not coming back” and focus on building “something bigger, better, stronger, more just” from the fracture.¹

This reflects a philosophical stance sometimes termed “constructive realism”-accepting structural constraints whilst refusing to accept that they determine outcomes. It echoes the existentialist insight that humans are “condemned to be free,” forced to choose even within constraining circumstances. For middle powers, this means accepting that great power rivalry is real and structural, yet refusing to accept that this reality precludes agency, moral choice, or the possibility of building alternative arrangements.

The intellectual roots of this position extend to theorists of social construction in international relations, particularly Alexander Wendt’s argument that “anarchy is what states make of it.” Whilst the anarchic structure of the international system is given, the meaning states attribute to it-whether it necessitates conflict or permits cooperation-remains contestable. Carney’s vision assumes that middle powers, acting together, can construct a different meaning of multipolarity: not a return to Hobbesian warfare but a framework of genuine cooperation among states that share sufficient common ground.

Contemporary Relevance: The Middle Power Moment

Carney’s address arrives at a moment when middle power agency has become increasingly salient. The traditional Cold War binary-alignment with either superpower-has dissolved, creating space for states to pursue more autonomous strategies. Countries such as India, Brazil, Indonesia, and the European Union member states increasingly resist pressure to choose sides in great power competition, instead pursuing what scholars term “strategic autonomy” or “non-alignment 2.0.”

Yet Carney’s formulation differs from classical non-alignment. Rather than attempting to remain neutral between competing blocs, he proposes active coalition-building among states that share values-democracy, human rights, rule of law-whilst remaining pragmatic about interests. This reflects what might be termed “values-based coalition-building,” distinguishing it both from amoral realpolitik and from idealistic universalism.

The stakes Carney identifies are genuine. In a world of great power fortresses-blocs organised around competing powers with limited cross-bloc exchange-middle powers face subordination or marginalisation. Conversely, in a world of genuine cooperation among willing partners, middle powers can exercise disproportionate influence through coalition-building and norm entrepreneurship. Carney’s challenge to middle powers is thus existential: act together or accept subordination.

This framing resonates with contemporary scholarship on the future of international order. Scholars such as Hal Brands and Michael Beckley have examined whether the liberal international order can be reformed or whether it will fragment into competing blocs. Carney’s implicit answer is that the outcome remains undetermined-it depends on choices made by middle powers in the coming years. This is neither optimistic nor pessimistic but genuinely open-ended, contingent upon agency.

The Broader Implications

Carney’s Davos address represents more than Canadian foreign policy positioning. It articulates a vision of international order that acknowledges structural realities-great power rivalry, the erosion of universal institutions, the weaponisation of economic interdependence-whilst refusing to accept that these realities preclude alternatives to hegemonic subordination or great power conflict. For middle powers, this vision offers both diagnosis and prescription: the world has changed fundamentally, but middle powers retain agency if they act together with strategic clarity and moral consistency.

The intellectual traditions informing this vision-classical and structural realism, middle power diplomacy theory, constructivist international relations scholarship-converge on a common insight: international order is not simply imposed by the powerful but constructed through the choices and actions of all states. In an era of multipolarity and great power rivalry, this construction becomes more difficult but also more consequential. The question Carney poses to middle powers is whether they will accept the role assigned to them by great power competition or whether they will actively construct an alternative.

“It is time for companies and countries to take their signs down… You cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination.” – Mark Carney – Prime Minister of Canada

In his special address at the World Economic Forum’s Annual Meeting 2026 in Davos, delivered on 20 January 2026, Canada’s Prime Minister Mark Carney issued a stark warning about the collapse of the rules-based international order. The quote captures Carney’s pivot towards ‘value-based realism,’ urging nations to abandon naive assumptions of automatic prosperity through globalisation and instead prioritise strategic autonomy, domestic strength, and recalibrated alliances.^3,5

Mark Carney: From Central Banker to Prime Minister

Mark Joseph Carney, born on 16 March 1965, is a Canadian economist and politician serving as Canada’s 24th Prime Minister since March 2025. Elected leader of the Liberal Party with over 85.9% of the vote on 9 March 2025, Carney was sworn in as Prime Minister on 14 March without prior elected office, a first in Canadian history. He represents Nepean in Parliament and led the Liberals to a minority government in the subsequent election.^1,2

Carney’s career trajectory is marked by high-profile roles in global finance. He served as Governor of the Bank of Canada from 2008 to 2013 and then as Governor of the Bank of England from 2013 to 2020, becoming the first non-Briton in that position. Post-governorship, he advised Canadian Prime Minister Justin Trudeau on COVID-19 economic responses and chaired the Liberal Party’s Task Force on Economic Growth in 2024. Ideologically a centrist technocrat and ‘Blue Grit Liberal,’ Carney’s premiership has focused on economic resilience amid geopolitical tensions.²

Since taking office, Carney has enacted transformative policies: repealing the federal consumer carbon tax, passing the One Canadian Economy Act to eliminate interprovincial trade barriers, fast-tracking a trillion dollars in investments in energy, AI, critical minerals, and infrastructure, and doubling defence spending by decade’s end. His government has recognised the State of Palestine, improved ties with China-including a January 2026 visit yielding tariff reductions on canola and electric vehicles-and sustained support for Ukraine.^2,3,4

Context of the Quote: Davos 2026 and Canada’s Strategic Shift

Carney’s address came amid an escalating trade war with the United States and the erosion of post-Cold War globalisation. He declared the end of comfortable assumptions that geography and alliances guaranteed security and prosperity, advocating engagement ‘with open eyes’ and relationships calibrated to shared values. Canada, he noted, was among the first to heed this ‘wake-up call,’ shifting to build strength at home while inviting middle powers to join in ‘value-based realism’-a term borrowed from Finland’s President Alexander Stubb.³

The speech highlighted domestic actions like tax cuts on incomes, capital gains, and business investment, alongside broad engagement to maximise influence in a fluid world. Carney received a standing ovation, underscoring the resonance of his message on naming ‘reality’ and acting decisively.^2,3

Leading Theorists on Globalisation, Integration, and Subordination

Carney’s critique echoes longstanding debates in international relations and economics on the limits of globalisation. Key theorists provide intellectual foundations for his views:

• Joseph Nye and Robert Keohane (Regime Theory): In Power and Interdependence (1977), they argued that complex interdependence fosters mutual benefits through institutions, but power asymmetries can lead to subordination. Carney’s call to ‘take down signs’ of mutual benefit aligns with their recognition that regimes falter when great powers exploit them.²
• Graham Allison (Thucydides Trap): Allison’s 2017 book warns of inevitable conflict when a rising power (e.g., China) threatens a ruling one (e.g., US), fracturing integration. Carney’s emphasis on strategic autonomy mirrors Allison’s advice for middle powers to hedge amid US-China rivalry.³
• Dani Rodrik (Trilemma of Global Economy): Rodrik posits governments cannot simultaneously pursue hyper-globalisation, national sovereignty, and democracy. Carney’s policies-relaxing regulations, boosting defence, and diversifying trade-reflect choosing sovereignty over unchecked integration.²
• John Mearsheimer (Offensive Realism): In The Tragedy of Great Power Politics (2001), Mearsheimer contends states maximise power in anarchy, rendering mutual benefit illusory when subordination looms. Carney’s ‘honesty about the world as it is’ evokes this realist turn from liberal optimism.³
• Alexander Stubb (Value-Based Realism): As Finland’s President, Stubb popularised the term Carney invokes, blending realism with values like human rights. This framework guides Carney’s calibrated engagements, such as the China partnership focused on trade without ideological naivety.³

These thinkers collectively underscore Carney’s thesis: integration’s promise of mutual benefit dissolves when it enables dominance, necessitating realism over idealism in trade and alliances.

“We know the old order is not coming back. We shouldn’t mourn it; nostalgia is not a strategy. But we believe that from the fracture, we can build something bigger, better, stronger, and more just.” – Mark Carney – Prime Minister of Canada

Mark Carney’s address at the World Economic Forum in Davos on 20 January 2026 articulated a philosophical pivot that extends far beyond Canadian policy. His assertion that “the old order is not coming back” represents a candid acknowledgement of the structural transformation reshaping international relations-a transformation that demands not nostalgic resistance but strategic innovation. The quote encapsulates a broader intellectual movement among contemporary policymakers who recognise that the post-Cold War consensus, built on rules-based multilateralism and assumed Western dominance, has fundamentally fractured.

The Context of Carney’s Intervention

Carney delivered this address as Canada’s 24th Prime Minister, having assumed office in March 2025 following his election as Liberal Party leader with an unprecedented 85.9% of the vote on the first ballot. His ascension marked a significant departure in Canadian political history: he became the first Canadian Prime Minister never to have held elected office before assuming the premiership. This unconventional trajectory-from central banking to the highest political office-reflects the technocratic orientation increasingly evident in responses to complex geopolitical challenges.

The timing of Carney’s Davos intervention proved strategically significant. His address came mere days after a high-profile visit to Beijing, where he met with Chinese President Xi Jinping and negotiated a “new strategic partnership” that substantially reduced tariffs on Canadian canola oil (from 85% to 15%) and Chinese electric vehicles (from 100% to 6.1%). This diplomatic manoeuvre exemplified the very philosophy he articulated at Davos: rather than lamenting the erosion of Western-led institutional frameworks, Canada was actively recalibrating its relationships to reflect contemporary geopolitical realities.

The Intellectual Architecture: Value-Based Realism

Carney’s formulation draws explicitly on what he termed “value-based realism,” a concept articulated by Alexander Stubb, President of Finland. This framework represents a deliberate synthesis of two traditionally opposed analytical traditions: the idealist commitment to universal values (human rights, sovereignty, democratic governance) and the realist acknowledgement of power dynamics and national interest. Rather than treating these as contradictory, value-based realism posits that nations can maintain principled commitments whilst simultaneously engaging pragmatically with the world as it exists rather than as they wish it to be.

This intellectual positioning reflects broader currents in contemporary international relations theory. The concept challenges what scholars term “liberal internationalism”-the post-1945 consensus that institutionalised rules, multilateral organisations, and shared norms could transcend power politics. Carney’s acknowledgement that “the old comfortable assumptions that our geography and alliance memberships automatically conferred prosperity and security” no longer hold valid represents a significant concession to structural realist arguments that have long emphasised the primacy of material capabilities and strategic positioning over institutional arrangements.

Leading Theorists and Intellectual Foundations

Structural Realism and the Multipolar Transition: Carney’s analysis aligns substantially with structural realist scholarship, particularly the work of scholars examining the transition from unipolarity to multipolarity. Theorists such as John Mearsheimer have long argued that the post-Cold War unipolar moment was inherently unstable and that the rise of peer competitors (particularly China) would inevitably erode the institutional frameworks built during American hegemony. Carney’s acknowledgement that “the powerful have their power” whilst Canada must “build our strength at home” reflects this realist recognition that material capabilities ultimately determine strategic options.

Strategic Autonomy and Middle Power Theory: Carney explicitly positioned Canada as a “middle power” capable of exercising disproportionate influence through strategic positioning. This concept draws on middle power theory, developed by scholars including Andrew Cooper and Evan Potter, which argues that states occupying the intermediate tier of the international system can leverage their geographic position, institutional expertise, and coalition-building capacity to exercise influence beyond their material weight. Carney’s emphasis on “building strategic autonomy whilst maintaining values” reflects this theoretical framework-middle powers must avoid dependency on great power patrons whilst retaining the principled commitments that differentiate them from purely transactional actors.

The Fracture Metaphor and Institutional Decay: Carney’s use of “fracture” rather than “collapse” or “transformation” carries theoretical significance. This language echoes the work of scholars examining institutional erosion, particularly those studying the decline of post-war multilateral organisations. Theorists including Dani Rodrik have documented how globalisation and geopolitical competition have strained the institutional consensus that underpinned the Bretton Woods system and its successors. The fracture metaphor suggests not apocalyptic breakdown but rather the splintering of previously unified frameworks into competing regional and bilateral arrangements.

Constructivist Approaches to Order-Building: Carney’s assertion that “from the fracture, we can build something bigger, better, stronger, and more just” reflects constructivist international relations theory, which emphasises that international orders are socially constructed rather than determined by material forces alone. Scholars including Alexander Wendt have argued that actors can reshape international structures through strategic communication and norm entrepreneurship. Carney’s framing positions Canada not as a passive victim of systemic change but as an active participant in constructing new institutional arrangements-a distinctly constructivist orientation.

The Rejection of Nostalgia as Strategic Doctrine

Carney’s explicit rejection of nostalgia as a strategic framework warrants particular attention. This formulation directly challenges what scholars term “nostalgic nationalism”-the tendency of declining powers to seek restoration of previous hierarchies rather than adaptation to new circumstances. The statement “nostalgia is not a strategy” functions as both intellectual critique and practical warning. It implicitly critiques both American efforts to reassert unilateral dominance and European attempts to preserve Cold War alliance structures unchanged.

This positioning reflects contemporary debates within strategic studies about how established powers should respond to relative decline. Scholars including Hal Brands have examined whether declining powers typically pursue accommodation or confrontation; Carney’s framework suggests a third path: strategic recalibration that preserves core values whilst abandoning outdated institutional assumptions.

Domestic Foundations: Building Strength at Home

Carney’s emphasis on building “strength at home” through tax reductions, removal of interprovincial trade barriers, and a trillion-dollar investment programme in energy, artificial intelligence, and critical minerals reflects economic nationalism tempered by liberal institutional commitments. This approach synthesises elements of developmental state theory (the strategic deployment of state capacity to build competitive advantage) with market-liberal principles. The doubling of defence spending by decade’s end, coupled with investments in domestic industrial capacity, reflects what scholars term “strategic decoupling”-the deliberate reduction of dependency on potentially unreliable partners through domestic capability development.

This domestic orientation also reflects recognition of what political economists call the “trilemma of globalisation”: the impossibility of simultaneously maintaining democratic sovereignty, deep economic integration, and fixed exchange rates. By prioritising sovereignty and strategic autonomy, Carney’s government implicitly accepts reduced integration with some partners whilst deepening selective relationships (notably with China) where mutual benefit is demonstrable.

The Broader Geopolitical Significance

Carney’s Davos address arrived at a moment of acute geopolitical tension. The ongoing trade conflict with the United States, the continuation of Russian aggression in Ukraine, and the intensifying competition for technological and resource dominance between Western and Chinese-led blocs have created what scholars term a “multiplex world order”-one characterised by simultaneous cooperation and competition across multiple domains rather than simple bipolarity or unipolarity.

His reception-described as earning “a rare standing ovation” at Davos-suggests that his articulation of value-based realism resonated with an international audience of business and political leaders grappling with similar strategic dilemmas. The framework offers intellectual legitimacy for the pragmatic recalibration that many middle and smaller powers have already undertaken, whilst maintaining rhetorical commitment to universal principles.

Implications for International Order-Building

Carney’s vision of building “something bigger, better, stronger, and more just” from the fracture of the old order represents an optimistic but contingent proposition. It assumes that the emerging multipolar system need not replicate the zero-sum competition that characterised earlier multipolar eras, and that institutional innovation can accommodate both great power competition and cooperative problem-solving on transnational challenges.

This optimism reflects what scholars call “liberal institutionalism”-the belief that even in anarchic international systems, institutions can facilitate cooperation and reduce transaction costs. Yet Carney’s framework differs from earlier liberal institutionalism in its explicit acknowledgement that such institutions must reflect contemporary power distributions rather than attempting to preserve outdated hierarchies. The Canada-China strategic partnership, with its focus on trade, energy, and technology, exemplifies this approach: cooperation structured around mutual benefit rather than ideological alignment or institutional obligation.

The intellectual coherence of Carney’s position lies in its rejection of false dichotomies. It refuses the choice between principled commitment and pragmatic engagement, between national interest and international cooperation, between acknowledging systemic change and working to shape its trajectory. Whether this framework can sustain itself amid intensifying great power competition remains an open question-one that will substantially determine the character of the emerging international order.