In a short piece for Politico.eu (pages 24-25, printed version), I try to ask a question that has been with me since reading Steve Davies’s articulate Facebook posts on political realignment. Steve has been writing for quite a while that economic issues have lost centrality in politics, and there is a looming new alignment on identity and nationalism versus cosmopolitanism. He sees the last European elections, with traditional parties (center-right Christian-democrat conservatives, center-left socialists) losing ground and both cosmopolitan liberals and nationalists growing bigger, as a proof of that.

In this perspective, identity politics is becoming more and more important, both on the right and on the left. This is not good news for free marketers, who are losing their traditional allies, i.e., right-wing conservatives, to some sort of national corporatism. But it hardly means they are gaining friends on the cosmopolitan left, that is impermeable to *our* economic thinking:

Moderate conservative parties, members of the European People’s Party, once called for “rolling back the state.” These days, they’re unlikely to rally around the flag of free enterprise. Politically, they are moving further to the right, investing in identity issues to try to contain their nationalist competitors. The left meanwhile is socially libertarian, but its concern with inequality means it is still keen on government interventionism.

In the piece, I try to frame this evolution in the context of the old opposition of country and city. Contrary to what many think, I think that the first has been better allies of limited government than the second: perhaps not because of ideology, but of prudence. Now the situation has changed and free marketers risk ending up being politically homeless, even more than in the past.