Leaders need followers. Last month, US National Security Advisor Jake Sullivan delivered a speech outlining the Biden administration’s international economic policy at the Brookings Institute in Washington. The “New Washington Consensus” was not directed at citizens but at capitals abroad. Sullivan’s speech took aim at the rise of global Trumpism. He addressed a question posed by social democrats the world over: Why can’t the center hold? An erosion of legitimacy, he argued, is at the core of the problem. In the face of compounding crises—economic stagnation, political polarization, and the climate emergency—a new reconstruction agenda is required.

Hegemony, however, is not the ability to prevail—that’s dominance—but the willingness of others to follow (under constraint), and the capacity to set agendas. Sullivan’s speech frames those common problems faced by countries and provides a menu of solutions: full employment, local content requirements, subsidies for manufacturers, loan guarantees, place-based incentives, pro-labor provisions, public R&D, tax the rich for others to creatively adapt to their domestic political economies.

Gone are the shibboleths of previous US administrations that extolled free trade, open capital flows and fiscal discipline. De-risking state interventionism is here. Treasury Secretary Janet Yellen laid out the logic of “modern supply-side economics,” while Biden’s former chief economic advisor Brian Deese said the administration won’t accept “that the individualized decisions of those looking only at their private bottom lines will put us behind in key sectors.” Since neither climate, inequality, nor the rise of China could be tackled by the market, he added, “the state had to step in.”