Three important things occurred at NATO’s Vilnius summit: a breakthrough, a little-noticed but hugely consequential success, and a disappointment. The breakthrough was Turkish President Recep Tayyip Erdoğan finally consenting to Sweden’s membership. The success—the most important outcome of the summit—was approval of more than 4,000 pages of military plans for the actual defense of NATO countries. The disappointment was that Ukraine was not given a path to NATO membership.  

The breakthrough made early headlines from the meeting. President Erdoğan had been blocking Swedish accession for months, demanding that Sweden extradite about 120 alleged Kurdistan Workers’ Party (PKK) activists and Gülenists (something the U.S. also locks horns with Turkey over); lift its embargo of arms to Turkey; and adopt friendlier legislation on terrorism, “mechanisms to prevent provocations,” and even changes to its constitution. Turkey got commitments on most of these measures. But then, on the eve of the summit, Erdoğan added yet another precondition: Turkey’s admission to the European Union. Fortunately, and somewhat surprisingly, Erdoğan assented to NATO Secretary-General Jens Stoltenberg’s bargain, which evidently included a bilateral meeting with President Joe Biden, U.S. delivery of F-16 fighter planes to Turkey, and the creation of a NATO “special coordinator for counterterrorism.”  

But with Erdoğan, nothing is ever over, and we may yet see another round of negotiations, because Swedish courts have now (after the agreement was announced) blocked extraditions and the Turkish Parliament won’t be in session for another two months, so there is time for more demands.   

The great success in Vilnius was the adoption of a comprehensive plan for meeting NATO’s fundamental responsibility—defending its members’ territory. The alliance has had no such program since 1991. Attempting to allay Russian concern about extending the security of NATO membership to former Warsaw Pact and then to former Soviet Union countries, NATO professed to have no reason to station either nuclear weapons or substantial combat forces in the new member countries. That commitment was contingent on the security environment, which has changed dramatically with Russia’s aggression against Ukraine.

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The new plans adopted in Vilnius run to 4,000 pages—a testament to their seriousness—and the governments of NATO countries have agreed to them. They allow NATO military commanders to task different national forces with specific obligations, facilitating an effective common defense should a NATO ally be attacked. And the arrangement locks in a sharing of responsibilities between the United States and its European allies, which will need to reduce their reliance on Washington by increasing their military spending and providing space and cyber assets of their own.  

Coalition warfare is a delicate and difficult undertaking. Understanding in advance what allies are willing to do, and where their forces’ strengths can best be matched to need, will reassure those allies most exposed to potential Russian aggression and improve the ability of all of the allies to act effectively together. Just the fact that NATO has designed, agreed to, and set aside resources for these plans should help deter attacks on its frontline states.

The Vilnius meeting did not conclude, however, without a disappointment. More than 500 days have passed since Russia invaded Ukraine. Although they have supplied Ukraine with weapons and cooperation, the United States and the United Kingdom have failed to fully honor the commitment they made to ensure Ukraine’s security, in exchange for Ukraine giving up its nuclear arsenal, under the Budapest Memorandum of 1994. All the while, Kyiv has been agitating for a clear path to joining NATO. Ukraine acknowledged that membership wasn’t possible while the country was still at war (although NATO has in the past found creative solutions to that problem), but hoped for a pledge that once the war was over, it would become a member. Instead, President Biden said ahead of the Vilnius meeting that Ukraine wasn’t ready for NATO membership.

Ukrainian President Volodymyr Zelensky was incensed. He posted an enraged tweet in the face of rebuffs from both National Security Adviser Jake Sullivan and British Defense Secretary Ben Wallace; the latter suggested that Ukraine ought to show gratitude for all the support it’s been given.

NATO countries have indeed strongly backed Ukraine, but for people in safety to tell those under attack that they should be grateful is unbecoming. The Biden administration unfairly wants to benefit from its expansive rhetoric—the U.S. president has promised to support Ukraine “for as long as it takes” for Ukraine to win the war—without facing criticism for the timorousness of its decisions regarding the weapons Ukraine desperately needs. Washington is still holding back long-range munitions such as Army Tactical Missile Systems, for example, under a policy driven by what The Washington Post describes as the “conviction that a U.S. misstep in Ukraine could start World War III.”  

President Biden isn’t wrong to be concerned about the risk of direct involvement in the war, nor is he wrong to be stingy about extending NATO’s Article 5 security guarantee to a country at war with Russia. But the administration is wrong, both morally and practically, to defend those choices by effectively disparaging all that Ukraine is doing. Casually dismissing Ukraine’s readiness for NATO membership feels of a piece with President Biden blaming the debacle of the U.S. withdrawal from Afghanistan on Afghan security forces instead of on our own policies.

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The standards for NATO membership have always been subjective. They were subjective when Greece and Turkey had military coups after being admitted in 1952; when a divided Germany’s western half was admitted in 1955; when a democratizing Spain was admitted in 1982. More demanding standards have been set and relaxed depending on the geostrategic circumstances, and those geostrategic circumstances argue for having given Ukraine a more morale-boosting prospect of eventual membership.

Losing his composure was one of Zelensky’s few diplomatic missteps in the course of  this war, and he quickly corrected it. The Ukrainian president’s subsequent spin was reminiscent of Winston Churchill’s after the 1941 meeting at which Britain wanted but did not get American commitments to fight Nazi Germany: closer than ever, not whether but when.  

At the same time as the NATO summit, the G7 released a statement that the members would begin negotiating bilateral security arrangements with Ukraine. It was intended to be less than a NATO commitment but more than nothing. But the group’s promise was only to begin discussions—about commitments from the very countries that have been unwilling to make security commitments through NATO, and, in the case of the U.S. and the U.K., those that failed to carry out the commitments they made to Ukraine in 1994.

The best possible gloss to put on Ukraine’s continued exclusion from NATO is that the Biden White House moved next year’s 75th-anniversary NATO summit four months past the actual anniversary and closer to the 2024 presidential election in order to make a big political splash welcoming Ukraine into the NATO family at a time of maximal political value to the president. Here’s hoping the political operatives in the White House prove less timid than the national-security team.

During the Great Recession, public discourse about the economy underwent something of a Great Disappointment.

For much of the country’s history, most Americans assumed that the future would bring them or their descendants greater affluence. Despite periodic economic crises, the overall story seemed to be one of progress for every stratum of the population. Those expectations were largely borne out: The standard of living enjoyed by working-class Americans for much of the mid-20th century, for example, was far superior to that enjoyed by affluent Americans a generation or two earlier.

But after the 2008 financial crisis, those assumptions were upended by a period of intense economic suffering coupled with a newfound interest among economists in the topic of inequality. Predictions of economic decline took over the conversation. America, a country long known for its inveterate optimism, came to dread the future—in which it now appeared that most people would have less and less.

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Three arguments provided the intellectual foundation for the Great Disappointment. The first, influentially advanced by the MIT economist David Autor, was that the wages of most Americans were stagnating for the first time in living memory. Although the income of average Americans had roughly doubled once every generation for most of the previous century, wage growth for much of the population began to flatline in the 1980s. By 2010, it looked as though poorer Americans faced a future in which they could no longer expect any real improvement in their standard of living.

The second argument had to do with globalization’s impact on the worldwide distribution of income. In a graph that came to be known as the “elephant curve,” the Serbian American economist Branko Milanović argued that the world’s poorest people were experiencing only minor income growth; that the middle percentiles were benefiting mightily from globalization; that those in the upper-middle segment—which included many industrial workers and people in the service industry in rich countries, including America—had seen their incomes stagnate; and that the very richest were making out like bandits. Globalization, it seemed, was a mixed blessing, and a distinctly concerning one for the bottom half of wage earners in industrialized economies such as the United States.

                                 Branko Milanović’s “elephant curve”

The final, and most sweeping, argument was about the nature and causes of inequality. Even as much of the population was just holding its own in prosperity, the wealth and income of the richest Americans were rising rapidly. In his 2013 surprise best seller, Capital in the Twenty-First Century, the French economist Thomas Piketty proposed that this trend was likely to continue. Arguing that the returns on capital had long outstripped those of labor, Piketty seemed to suggest that only a calamitous event such as a major war—or a radical political transformation, which did not appear to be on the horizon—could help tame the trend toward ever-greater inequality.

The Great Disappointment continues to shape the way many Americans think about the current and future state of the economy. But as the pandemic and the rise of inflation have altered the world economy, the intellectual basis for the thesis has begun to wobble. The reasons for economic pessimism have started to look less convincing than they once were. Is it time to revise the core tenets of the Great Disappointment?

One of the most prominent labor economists in the U.S., Autor has over the past decade provided much of the evidence regarding the stagnation of American workers’ incomes, especially for those without a college degree.

The U.S. economy, Autor wrote in a highly influential paper in 2010, is bifurcating. Even as demand for high-skilled workers rose, demand for “middle-wage, middle-skill white-collar and blue-collar jobs” was contracting. America’s economy, which had once provided plenty of middle-class jobs, was splitting into a highly affluent professional stratum and a large remainder that was becoming more immiserated. The overall outcome, according to Autor, was “falling real earnings for noncollege workers” and “a sharp rise in the inequality of wages.”

Autor’s past work on the falling wages of a major segment of the American workforce makes it all the more notable that he now sounds far more optimistic. Because companies were desperately searching for workers at the tail-end of the pandemic, Autor argues in a working paper published earlier this year, low-wage workers found themselves in a much better bargaining position. There has been a remarkable reversal in economic fortunes.

“Disproportionate wage growth at the bottom of the distribution reduced the college wage premium and reversed the rise in aggregate wage inequality since 1980 by approximately one quarter,” Autor writes. The big winners of recent economic trends are precisely those groups that had been left out in preceding decades: “The rise in wages was particularly strong among workers under 40 years of age and without a college degree.”

Even after accounting for inflation, Autor shows, the bottom quarter of American workers has seen a significant boost in income for the first time in years. The scholar who previously wrote about the “polarization” in the U.S. workforce now concludes that the American economy is experiencing an “unexpected compression.” In other words, the wealth gap is narrowing with surprising speed.

Autor is not the only leading economist who is calling into doubt the underpinnings of the Great Disappointment. According to Milanović, his “elephant curve” proved so influential in part because it confirmed fears many people had about the effects of globalization. His famous graph was, he now admits, an “empirical confirmation of what many thought.” He is no longer so sure about that piece of conventional wisdom.

A few years ago, Milanović set out to update the original elephant curve, which was based on data from 1988 to 2008. The result came as a shock—a positive one. Once Milanović included data for another decade, to 2018, the curve changed shape. Instead of the characteristic “rise, fall, rise again” that had given the curve its viral name, its steadily falling gradient now seemed to paint a straightforward and much more optimistic picture. Over the four decades he now surveyed, the incomes of the poorest people in the world rose very fast, those of people toward the middle of the distribution fairly fast, and those of the richest rather sluggishly. Global economic conditions were improving for nearly everyone, and, contrary to conventional wisdom, it was the most needy, not the most affluent, who were reaping the greatest rewards.

                                  Milanović’s revised curve

In a recent article for Foreign Affairs, Milanović goes even further. “We’re frequently told,” he writes, that “we live in an age of inequality.” But when you look at the most recent global data, that turns out to be false: In fact, “the world is growing more equal than it has been for over 100 years.”

To this day, Piketty remains the patron saint of the Great Disappointment. No thinker is invoked more often to justify the theory. But even Piketty’s pessimistic diagnosis, made a decade ago, has come to look much less dire.

In part, this is because Piketty’s work has come in for criticism from other economists. According to one influential line of argument, Piketty mistook why returns on capital were higher than returns to labor in many industrialized countries in the decades after World War II. Absent concerted pressure to prevent this, Piketty had argued, the nature of capitalism would always favor billionaires and giant corporations over ordinary workers. But according to Matthew Rognlie, an economist at Northwestern University, Piketty’s explanation for why inequality increased during that period was based on a misinterpretation of the data.

The outsize returns on capital during the latter half of the 20th century, Rognlie argues, were mainly due to the huge growth in house prices in metropolitan centers such as Paris and New York. If returns on capital were larger than returns to labor over this period, the reason was not a general economic trend but specific political factors, such as restrictive building codes. In addition, the main beneficiaries were not the billionaires and big corporations on which Piketty focused; rather, they were the kinds of upper-middle-class professionals who own the bulk of housing stock in major cities.

Economists continue to debate whether such criticisms hit the mark. But even as Piketty defended his work, he himself started to strike a more optimistic note about the long-term structure of the economy. In his 2022 book, A Brief History of Equality, he talks about the rise of inequality as an anomaly. “At least since the end of the eighteenth century there has been a historical movement towards equality,” he writes. “The world of the 2020s, no matter how unjust it may seem, is more egalitarian than that of 1950 or that of 1900, which were themselves in many respects more egalitarian than those of 1850 or 1780.”

Like Autor and Milanović, Piketty seems to have concluded that the thesis of the Great Disappointment was, in key respects, wrong.

It would be premature to put worries about stagnating incomes or rising inequality to rest. The three former prophets of doom all emphasize the role that social and political factors play in shaping economic outcomes. As a result, they see recent wage growth for poorer Americans as caused in part by the expansionary economic policies that both Donald Trump and Joe Biden pursued in response to the pandemic.

Similarly, the huge gains that some of the poorest people in the world have made in recent decades derive in part from their governments’ efforts to use industrial policy to shape the impact of globalization on their countries. Whether, as Piketty has argued, the returns on capital will in the long run outstrip the returns to labor depends on political decisions about taxation and redistribution, about the strength of trade unions and the rules governing labor markets.

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Recent good news about our economic prospects should not lead us to conclusions that could quickly turn out to be overexuberant. But we should also avoid perpetuating an instinctive pessimism that looks less and less warranted. Although pessimism may seem smart or shrewd, cynicism about our collective ability to build a better world only makes it harder to win support for the kind of economic policies we need to create that future.

Progressives sometimes seem to believe that they can mobilize people by making the future look scary. But when voters feel threatened, it is usually unscrupulous reactionaries who make unrealistic promises and scapegoat outsiders who benefit. Wage stagnation and rising inequality are still real dangers about which we must remain vigilant—but the fact that a better economic future has come to look a good deal more achievable should be cause for full-throated celebration.