On this episode of Free Range, host Mike Livermore is joined by Paul Stephan, a comparative and international law expert at UVA Law and author of the new book, “The World Crisis and International Law: The Knowledge Economy and the Battle for the Future,” recently published by Cambridge University Press.

Stephan defines the concept of a knowledge economy as the increasing reliance on conceptual work rather than physical labor as a means of adding value to goods and services. He cites the example of container shipping and its impact on the distribution of goods around the world. Stephan argues that innovation is a driving force in the world economy and that international liberalism has emerged as a means of reducing barriers to talent and scalability, which are essential components of the knowledge economy (00:40-9:22).

Stephan discusses how global trade systems like the WTO and GATT were formed to promote international liberalism and reduce barriers to trade. He also discusses the “four freedoms” at the heart of the project of international liberalism, which are freedom of movement of goods, services, capital, and people. The expansion of Western liberal internationalism to other parts of the world after the end of the Cold War is also discussed. In the post-Soviet era, liberal internationalism and free trade institutions were expanded to other parts of the world, like Russia and China, in hopes they would follow (9:23-22:58).

Stephan discusses how the benefits of the knowledge economy are not spread evenly across the global economy with local distribution of winners and losers as well (22:58-28:32). In the 80s, Russia was a high human capital country but they chose a resource extraction pathway instead of disruptive innovation and production. For Stephan, China has a longer term perspective while Russia has pursued a strategy of using force in international relations and attempting to exploit divisions in competing polities (28:33-40:59).

In the context of climate change, Stephan emphasizes the importance of providing incentives for states to develop innovative technological solutions. He praises the transparency of the Paris Agreement and encourages the sharing of technological breakthroughs while still maintaining incentives to innovate (41:00-49:31).

Regarding the future of institutions like the WTO and the European Union, Stephan believes that these organizations can survive through adaptation. The conversation ends on a hopeful note, with the possibility of creating a world where incentives work to induce investment in carbon reduction, and where global cooperation is managed through an evolving but still robust international order.