Donald Trump represents everything that the Davos crowd hates – and it is unlikely they are any more well-disposed towards him after being forced to listen to more than an hour of the president’s rambling speech today. He is a protectionist, not a free trader. He thinks the climate crisis is a hoax and is suspicious of multilateral organisations. He prefers power plays to dialogue and he doesn’t have any time for the “woke” capitalism that Davos has been keen to promote, with its focus on gender equality and ethical investment. The shindig’s organisers, the World Economic Forum (WEF), had to agree to sideline those issues in order to secure Trump’s appearance.

For decades, anti-globalisation protesters have sought to shut down the WEF. Thanks to Trump’s threat to take over Greenland, their prayers may soon be answered. In today’s world, Davos is an irrelevance and it seems fitting that Trump should be on hand this week to deliver the coup de grace to the liberal international rules-based order that the WEF prides itself on upholding.

Emmanuel Macron, the French president, was right when he said there has been a shift to a “world without rules”, and there is some irony in that, given that the liberal international rules-based order that has been in place since the second world war was largely a US construct.

Pared back to basics, the liberal rules-based order has been just another way of describing US hegemony, with Europe as its junior partner. As part of this arrangement, the US guaranteed Europe’s security through Nato, and acted as the world’s consumer of last resort. Even before the arrival of Trump, this version of a liberal order was breaking down.

There are a number of reasons for this. For a start, the institutional framework that makes and enforces the rules is no longer fit for purpose. The economic architecture of the postwar world – the International Monetary Fund (IMF) and the World Bank – is now more than eight decades old and was designed along specifications drawn up by policymakers in Washington when US power was at its zenith.

The US was granted an effective veto over IMF and World Bank decisions. By dint of a gentleman’s agreement, it has the right to appoint the president of the World Bank, while Europe is allowed to choose the managing director of the IMF. Powerful emerging countries such as China, India and Brazil see no reason why the governance of the IMF and World Bank should reflect the world as it stood when they were created in 1944, as opposed to the one that exists today.

It is a similar story when it comes to trade. The liberalisation deals that reduced tariffs and increased market access were effectively a stitch-up between the US and Europe. Terms were agreed by the US and its western allies and then imposed on other countries. As developing countries have grown in size and importance, they have proved increasingly resistant to the idea that they should meekly accept agreements that offer them so little. Increasingly, the rest of the world sees little merit in a system weighted in favour of the rich developed nations. It has been more than 30 years since the last global trade agreement.

Since then, the US’s position as the world’s economic hegemon has come under serious threat as the result of China’s rapid growth. Europe is in a worse state than the US. It has grown much more slowly, displays no signs of matching US innovation, and relies on it for its security. If Trump did decide to take Greenland by force, Europe collectively would be unable to stop him.

The rules-based order is under internal as well as external threat. It was one thing when liberal democracy underpinned an economy in which a rising tide lifted all boats, but quite another in a world where the rich are getting richer while those on middle incomes and below are struggling. That’s most obviously the case in Trump’s America, where labour’s share of national income has fallen to its lowest level since records began.

The question is what happens next. Clearly, a well-functioning international order is preferable to the law of the jungle, but crafting one is not going to be easy. It requires faster and more inclusive growth. It requires significantly higher investment in public infrastructure. It requires the rich west to give poorer countries financial help so that they can protect themselves against the climate crisis. It requires Europe to do more to pay for its own defence. And it requires reform of the international institutions: the United Nations and the World Trade Organization as well as the IMF and the World Bank.

The original aim of the IMF was to help countries with balance-of-payments problems and the UK, represented by John Maynard Keynes, argued that both creditor and debtor nations should have a role to play. The suggestion that creditor nations should be obliged to import more was turned down flat by the US, then comfortably the world’s biggest creditor nation. Instead, the burden of adjustment would fall on debtor nations through lower imports and domestic austerity. A properly functioning rules-based system would remedy this defect.

There is no room for complacency. It may be tempting to imagine that things will be different when Trump has left the White House, but such optimism is misplaced. It is not just a question of replacing the narcissist currently residing in the White House. It is about tackling the structural reasons why the rules-based system is collapsing.

As Mark Carney, Canada’s prime minister, said in Davos earlier this week, the old order “is not coming back”.

• Larry Elliott is a Guardian columnist