Thanks very interesting. A lot that I would agree with or at least sympathise with. But it does come across as a very Western-centric take. Especially “blaming” China for the demise of Neo-liberalism. Not sure if that really was your intent, but surely it’s more accurate to say that the West was responsible for its own demise, not China. My own reading was that China was always willing to support US leadership of the global economy, even to the extent of stimulating its own economy to mitigate the impact of the 2008 global financial crisis and buying US treasury bonds at the request of the US treasurer. It’s the US (and West in general) that cannot accept their relative decline and view China’s rise as a threat. China at no time sought to undermine the West other than by developing itself and catching up. What is China supposed to do? Stop developing and stop raising the living standards of its own people?
But from a non-Western perspective, globalisation will continue but it will be increasingly South-South. We cannot be hostage to Western hegemony. We should and will continue to trade and invest in one another, but will do so in ways that are independent of the US financial system.
I totally agree with you. I know that to some it might seem like blaming China; but clearly, it does not make sense; countries want to develop. My point is simply that the West could not (or did not want) to continue with globalization, or to tolerate a globalization, that reduced its relative power.
Very good and can't wait to read new book. But, just to quibble, seems to underplay how the neolibs value system in the US, anti-gov't, essentially, in new geo-political circumstances, "national liberalism" or "political capitalism," or whatever you want to call them, seriously disadvantages the US in this new multipolar world, as evidenced by the humiliating way China has utterly outflanked the US in the green energy transition over the last 20 years and triggered such violent, self-destructively illiberal neolib reaction in the US.
The Chinese Communist Party government may be using our own Western corporate and oligarchic greed, as well as our domestically-destabilizing democratic freedoms, against us. The CCP knows that American and Canadian governance is heavily steered and may therefore be disadvantaged by domestic corporate/oligarchic interests, sometimes through the latter's economic intimidation.
We exist in a system that enables such big-money lobbyists to pull our (typically politically vulnerable) governments by the nose. For example, high-level elected officials can become crippled by implicit/explicit corporate threats to transfer or eliminate jobs and capital investment, thus economic stability, if corporate ‘requests’ aren’t met.
The lobbyists also write bills for our governing representatives to vote for and have implemented, supposedly to save the elected officials their own time writing them up. The practice may have become so systematic that those who are aware of it, including mainstream news-media political writers, don’t find reason to publicly discuss or write about it.
Meanwhile, the biggest of businesses (at least here in Canada) get unaccountably even bigger, defying the very spirit of government rules established to ensure healthy competition by limiting mass consolidation. Nations like China, on the other hand, are governed while essentially maintaining control over its own big-money and business sector thus market, which likely gives the government an overall foreign trade/relations edge over that of America and Canada.
... Does it not largely come down to complete political/governmental control?
For example, while watching the little amount of news feed allowed to leave China at the outset of the pandemic in late 2019, I was somewhat amused by TV images of some citizens being literally dragged — a few even invertedly by their legs — back into their residences to help contain viral transmission.
As the months passed and Covid-19 became a global pandemic, I couldn’t help but notice how China's strict handling of its own outbreak, while allowing little rights and freedoms to its people (and maybe even internal/external big business), likely enabled a relatively short duration of its initial crisis.
Still, many Chinese citizens have tasted and enjoyed samples of freedom's sweetness, either through trans-Pacific travel or Western images perhaps missed by China's internet censors. Potentially problematic for China's authoritarian government, those samples cannot be un-experienced.
My larger point: With greater democratic freedoms can come weaker national security, and vice versa. While I wouldn't exchange my (Western) freedom for such national security, it is still foolish to pretend a national-security sacrifice isn't being made in exchange.
My concept of neoliberalism does not directly involve globalism. It is cultural. Neoliberalism is a set of economic policies that select for shareholder primacy (SP) economic culture. Globalization is something businesses operating in an increasingly SP world adopt because it furthers their goals. Globalization is enabled by US foreign policy, making economic culture one of several factors affecting international relations.
The international rules based order should just be called economic liberalism or liberal globalization. Neoliberalism is a national program. It is NOT a libertarian agenda. Neoliberalism is about activist economic governance. It is an activist government that is pro-business, pro-growth, and pro-market. Neoliberal governance promotes a favorable business environment, business confidence, it promotes competitiveness, it establishes special economic zones, it de-risks investment, it corrects supply chain bottlenecks, it reduces transaction costs, it increases productivity and innovation, it removes barriers to entry, undoes price rigidities, it helps to finance and develop business start-ups, it provides infrastructure and makes social investments, etc. This however, is a different mode of governance than the authoritarian developmental state of China/East Asian Model. In the US, private business often take the lead and the relationship with the state is through public private partnerships (P3s) and quangos. The planning is done by business and finance while the government helps and facilitates.
In the linked post I associate neoliberalism with the policy changes made in the 1980’s by Republicans under the standard of “the Reagan Revolution” as “neoliberalism” Policy in this same vein made later is also neoliberal policy as I see it. Self-described libertarians were generally very supportive, even enthusiastic about these changes at the time. A tongue-in-cheek definition of a libertarian in those days was “a conservative who smokes weed”. This was the time of affluent people describing themselves as “fiscally conservative but social liberal” These folks started out voting Republican (based on their low tax policy) and after the DLC call not to contest the Reagan Revolution and acknowledge that tax cuts were here to stay, they started to vote Democratic due to the liberal social policy. Such people in earlier times saw themselves as libertarian (but more social and economic). Economic libertarians remained solidly Republican until MAGA, when there has been some splitting.
I was not using the term libertarian to classify political-economic trends.
I do not take a philosophical approach as many do focusing on the development of *ideas* and how they influence policy.
I used the term neoliberalism, which I defined *empirically* and theoretically in terms of the cultural standpoint which I take. That is, my take is not based on ideas but on *behaviors* that business executives collectively perform (i.e. culture) and on the empirical outcomes of those behaviors.
So, while from an idea pov, many claim neoliberalism as ended because of MAGA. From a cultural pov neoliberalism is still going strong. Globalization was simply a means to an end for neoliberalism, not part of its core nature.
As for libertarianism, David Nolan developed the original two-dimensional political characterization involving a left-right economic axis and an authoritarian-libertarian axis. I don't find this a very useful scheme and instead use a scheme that replaces the second axis with a red-blue cultural axis. I don't see libertarian as a used term for analysis.
Trade, investment, and technology transfer are primary mechanisms of global economic integration. However, what about the role of the dollar as the world's reserve currency, the exorbitant privilege that allows the United States to run persistent trade deficits, and the weaponization of the dollar through sanctions. These omissions are significant because the dollar system is a central mechanism of American power, and the erosion of that system is a central feature of the transition to a multipolar world.
The self-undermining logic is real, but it cuts deeper than trade policy. Neoliberalism required open capital markets to function globally - and open capital markets transferred the technology and manufacturing capacity that made Asia's rise possible. The ideology provided the justification for the conditions of its own displacement. That's not irony. That's the mechanism.
Good diagnostic is a precondition of healing. Branko offers a powerful analysis that, one hopes, will help those in charge of healing the ailing patient - raptured world.
The PPP-adjusted ratio of US per capita income to China’s, 3.5, in relation the current price ratio, 7, indicates that one RMB buys half as many dollars as it “should.” This despite China running current account surpluses for 30 years. The policies that blocked the natural tendency of currencies of surplus countries to appreciate deserve most of the blame for the rest of the world’s disenchantment with neoliberalism. The naivety of the US expert class is blameworthy but it raises the question whether the US might have swallowed the hollowing out of its manufacturing had Beijing fulfilled the reform/democratization hopes that were used to sell its 2001 accession to the WTO.
No — because the US is itself is not an honest broker, as ought to have been obvious at least since it didn’t forgive the war debts of its erstwhile allies after WWI, or when the US Congress didn’t approve joining the League of Nations.
But if those examples aren’t sufficient there’s the rejection of Keynes’ Bancor in favour of the $USD architecture of Bretton Woods and its institutions, the IMF and the World Bank.
Followed, some would say inevitably, by the Nixon shock and the abandonment of the Bretton Woods currency regime.
How about asking your readers here for questions for an interview? Then you take the interesting ones, and write your answers in the post titled: Hive Mind Interviews Branko Milanović.
I'd really like to read an answer to the following:
The title of your new book looks suspiciously close to Karl Polanyi's The Great Transformation. Are we indeed in the process of transformation of a similar magnitude?
Perhaps, at a suitable point, followed by: Could you compare Polanyi's concept of embeddedness with what China is doing today? One could say China is trying to subordinate economic activity to social relationships.
Thanks very interesting. A lot that I would agree with or at least sympathise with. But it does come across as a very Western-centric take. Especially “blaming” China for the demise of Neo-liberalism. Not sure if that really was your intent, but surely it’s more accurate to say that the West was responsible for its own demise, not China. My own reading was that China was always willing to support US leadership of the global economy, even to the extent of stimulating its own economy to mitigate the impact of the 2008 global financial crisis and buying US treasury bonds at the request of the US treasurer. It’s the US (and West in general) that cannot accept their relative decline and view China’s rise as a threat. China at no time sought to undermine the West other than by developing itself and catching up. What is China supposed to do? Stop developing and stop raising the living standards of its own people?
But from a non-Western perspective, globalisation will continue but it will be increasingly South-South. We cannot be hostage to Western hegemony. We should and will continue to trade and invest in one another, but will do so in ways that are independent of the US financial system.
I totally agree with you. I know that to some it might seem like blaming China; but clearly, it does not make sense; countries want to develop. My point is simply that the West could not (or did not want) to continue with globalization, or to tolerate a globalization, that reduced its relative power.
Very good and can't wait to read new book. But, just to quibble, seems to underplay how the neolibs value system in the US, anti-gov't, essentially, in new geo-political circumstances, "national liberalism" or "political capitalism," or whatever you want to call them, seriously disadvantages the US in this new multipolar world, as evidenced by the humiliating way China has utterly outflanked the US in the green energy transition over the last 20 years and triggered such violent, self-destructively illiberal neolib reaction in the US.
Xi xinping fighting corruption is a good thing but corruption happens in capitalism to benefit the top most
The Chinese Communist Party government may be using our own Western corporate and oligarchic greed, as well as our domestically-destabilizing democratic freedoms, against us. The CCP knows that American and Canadian governance is heavily steered and may therefore be disadvantaged by domestic corporate/oligarchic interests, sometimes through the latter's economic intimidation.
We exist in a system that enables such big-money lobbyists to pull our (typically politically vulnerable) governments by the nose. For example, high-level elected officials can become crippled by implicit/explicit corporate threats to transfer or eliminate jobs and capital investment, thus economic stability, if corporate ‘requests’ aren’t met.
The lobbyists also write bills for our governing representatives to vote for and have implemented, supposedly to save the elected officials their own time writing them up. The practice may have become so systematic that those who are aware of it, including mainstream news-media political writers, don’t find reason to publicly discuss or write about it.
Meanwhile, the biggest of businesses (at least here in Canada) get unaccountably even bigger, defying the very spirit of government rules established to ensure healthy competition by limiting mass consolidation. Nations like China, on the other hand, are governed while essentially maintaining control over its own big-money and business sector thus market, which likely gives the government an overall foreign trade/relations edge over that of America and Canada.
... Does it not largely come down to complete political/governmental control?
For example, while watching the little amount of news feed allowed to leave China at the outset of the pandemic in late 2019, I was somewhat amused by TV images of some citizens being literally dragged — a few even invertedly by their legs — back into their residences to help contain viral transmission.
As the months passed and Covid-19 became a global pandemic, I couldn’t help but notice how China's strict handling of its own outbreak, while allowing little rights and freedoms to its people (and maybe even internal/external big business), likely enabled a relatively short duration of its initial crisis.
Still, many Chinese citizens have tasted and enjoyed samples of freedom's sweetness, either through trans-Pacific travel or Western images perhaps missed by China's internet censors. Potentially problematic for China's authoritarian government, those samples cannot be un-experienced.
My larger point: With greater democratic freedoms can come weaker national security, and vice versa. While I wouldn't exchange my (Western) freedom for such national security, it is still foolish to pretend a national-security sacrifice isn't being made in exchange.
China has lowest death rate when west opened due to business pressure probably.same with other capitalist countries
Interesting.
That is what happened.
My concept of neoliberalism does not directly involve globalism. It is cultural. Neoliberalism is a set of economic policies that select for shareholder primacy (SP) economic culture. Globalization is something businesses operating in an increasingly SP world adopt because it furthers their goals. Globalization is enabled by US foreign policy, making economic culture one of several factors affecting international relations.
https://mikealexander.substack.com/p/what-is-neoliberalism-an-empirical
The international rules based order should just be called economic liberalism or liberal globalization. Neoliberalism is a national program. It is NOT a libertarian agenda. Neoliberalism is about activist economic governance. It is an activist government that is pro-business, pro-growth, and pro-market. Neoliberal governance promotes a favorable business environment, business confidence, it promotes competitiveness, it establishes special economic zones, it de-risks investment, it corrects supply chain bottlenecks, it reduces transaction costs, it increases productivity and innovation, it removes barriers to entry, undoes price rigidities, it helps to finance and develop business start-ups, it provides infrastructure and makes social investments, etc. This however, is a different mode of governance than the authoritarian developmental state of China/East Asian Model. In the US, private business often take the lead and the relationship with the state is through public private partnerships (P3s) and quangos. The planning is done by business and finance while the government helps and facilitates.
In the linked post I associate neoliberalism with the policy changes made in the 1980’s by Republicans under the standard of “the Reagan Revolution” as “neoliberalism” Policy in this same vein made later is also neoliberal policy as I see it. Self-described libertarians were generally very supportive, even enthusiastic about these changes at the time. A tongue-in-cheek definition of a libertarian in those days was “a conservative who smokes weed”. This was the time of affluent people describing themselves as “fiscally conservative but social liberal” These folks started out voting Republican (based on their low tax policy) and after the DLC call not to contest the Reagan Revolution and acknowledge that tax cuts were here to stay, they started to vote Democratic due to the liberal social policy. Such people in earlier times saw themselves as libertarian (but more social and economic). Economic libertarians remained solidly Republican until MAGA, when there has been some splitting.
Was Friedman a libertarian or neoliberal? No offense, but you need a policy approach rather than a cultural approach.
I was not using the term libertarian to classify political-economic trends.
I do not take a philosophical approach as many do focusing on the development of *ideas* and how they influence policy.
I used the term neoliberalism, which I defined *empirically* and theoretically in terms of the cultural standpoint which I take. That is, my take is not based on ideas but on *behaviors* that business executives collectively perform (i.e. culture) and on the empirical outcomes of those behaviors.
So, while from an idea pov, many claim neoliberalism as ended because of MAGA. From a cultural pov neoliberalism is still going strong. Globalization was simply a means to an end for neoliberalism, not part of its core nature.
As for libertarianism, David Nolan developed the original two-dimensional political characterization involving a left-right economic axis and an authoritarian-libertarian axis. I don't find this a very useful scheme and instead use a scheme that replaces the second axis with a red-blue cultural axis. I don't see libertarian as a used term for analysis.
https://mikealexander.substack.com/p/an-alternate-american-political-spectrum
Trade, investment, and technology transfer are primary mechanisms of global economic integration. However, what about the role of the dollar as the world's reserve currency, the exorbitant privilege that allows the United States to run persistent trade deficits, and the weaponization of the dollar through sanctions. These omissions are significant because the dollar system is a central mechanism of American power, and the erosion of that system is a central feature of the transition to a multipolar world.
The self-undermining logic is real, but it cuts deeper than trade policy. Neoliberalism required open capital markets to function globally - and open capital markets transferred the technology and manufacturing capacity that made Asia's rise possible. The ideology provided the justification for the conditions of its own displacement. That's not irony. That's the mechanism.
Why do you think west will do something to undermine itself? That too right wingers like reagan,thatcher ?
Because western economic elites are short sighted and selfish.
Good diagnostic is a precondition of healing. Branko offers a powerful analysis that, one hopes, will help those in charge of healing the ailing patient - raptured world.
Thanks so much for promoting this!
The PPP-adjusted ratio of US per capita income to China’s, 3.5, in relation the current price ratio, 7, indicates that one RMB buys half as many dollars as it “should.” This despite China running current account surpluses for 30 years. The policies that blocked the natural tendency of currencies of surplus countries to appreciate deserve most of the blame for the rest of the world’s disenchantment with neoliberalism. The naivety of the US expert class is blameworthy but it raises the question whether the US might have swallowed the hollowing out of its manufacturing had Beijing fulfilled the reform/democratization hopes that were used to sell its 2001 accession to the WTO.
No — because the US is itself is not an honest broker, as ought to have been obvious at least since it didn’t forgive the war debts of its erstwhile allies after WWI, or when the US Congress didn’t approve joining the League of Nations.
But if those examples aren’t sufficient there’s the rejection of Keynes’ Bancor in favour of the $USD architecture of Bretton Woods and its institutions, the IMF and the World Bank.
Followed, some would say inevitably, by the Nixon shock and the abandonment of the Bretton Woods currency regime.
Catching on yet?
How about asking your readers here for questions for an interview? Then you take the interesting ones, and write your answers in the post titled: Hive Mind Interviews Branko Milanović.
I'd really like to read an answer to the following:
The title of your new book looks suspiciously close to Karl Polanyi's The Great Transformation. Are we indeed in the process of transformation of a similar magnitude?
Perhaps, at a suitable point, followed by: Could you compare Polanyi's concept of embeddedness with what China is doing today? One could say China is trying to subordinate economic activity to social relationships.