Thank you. I think this is a well-argued, comprehensive and objective piece. It's difficult to see how you could be accused of supporting Trump given what was in the previous piece about Trump's victory and what you've written elsewhere. It's quite possible to simultaneously hold the position of not celebrating neoliberalism, pinpointing its demise in Trump's inauguration, and proposing no normative view about the ensuing events. The description of the abandonment of neoliberal polciies in the international arena here is quite accurate: protection of technology and IP; tariffs; industrial policy; economic coercion; trade blocs; ending the free movement of labour. The end of most of the tenets of neoliberalism shows it has run its course in practice.
Neoliberalism has, indeed, objectively been under question since at least 2008. The ascendance of not only Trump but other statists and protectionists signals its demise. I agree that the rising isolation and rejection of immigration into Europe - supposedly the bastion of liberalism - is clear confirmation of neoliberal decline.
What replaces it is anybody's guess, and i'm slightly sceptical about those on the left who suggest that somehow there might be a Mont Pelerin moment when a coherent progressive ideology emerges. Incoherence and fragmentaiton are more likely. The supposed free-marketeers will continue to pay lip-service. The plutocrats and billionaires will talk about the free market when it suits but will keep seeking political power.
One caveat to the story that neoliberalism is dead, though, is that its adherents dominate the international institutions. It's difficult to convey exactly how pervasive it is in the IMF, World Bank, WTO, OECD and parts of the UN, as well as many governments. Everyone's been brought up on it and defaults to neoliberal-type views -- and I mean at junior to mid-level as well as the top brass. Although there are exceptions, many of these people won't change their minds soon. The doctrine has become ingrained as common sense over many decades. Without a coherent alternative it's unlikely to be dislodged soon.
«It's difficult to see how you could be accused of supporting Trump given what was in the previous piece about Trump's victory and what you've written elsewhere.»
There is a very important word that matters here: "objectively". If someone says similar things as Trump/Putin/Xi/... or explains support of Trump/Putin/Xi/... as having in part a rational base, then even without any subjective intent to support Trump/Putin/Xi/... they are "objectively" on the side of Trump/Putin/Xi/... because they "amplify" their arguments. The only way to avoid being "objectively" on their side is to attack them and attack whatever they do or say or even everything they have not done or said but is useful to pretend they have done or said.
George Orwell, "Unpublished preface to Animal Farm", 1945:
“One of the peculiar phenomena of our time is the renegade Liberal. Over and above the familiar Marxist claim that ʻbourgeois libertyʼ is an illusion, there is now a widespread tendency to argue that one can only defend democracy by totalitarian methods. If one loves democracy, the argument runs, one must crush its enemies by no matter what means. And who are its enemies? It always
appears that they are not only those who attack it openly and consciously, but those who ʻobjectivelyʼ endanger it by spreading mistaken doctrines. In other words, defending democracy involves destroying all independence of thought.”
Neo-liberalism is just an ideology - it should never had been taken seriously. The simple rule for all other countries is: 'Do not listen to what the Americans say, look at what they do!'
If neo-liberalism is replaced by global sustainable development led by BRICS and its partner countries, that would be a great outcome. I think that is indeed possible. If only the Financial Times and its journalists see that, they might be able to help the West be part of this global sustainable development project.
The sword that cuts this Gordian Knot has a well known name: "rules based international order". Of course, there not being any document to pinpoint said rules, they probably change like the sandunes in the desert.
The main goal is to keep certain polities (the proponders) in power and enrich their elites, preferably by allowing them to extract as much wealth from the rest of the newoliberalized, globalized economies. It is easier to extract wealth from others' work than to run competitive businesses yourself.
And it is not only that Bretton Woods and economic principles are dead. International law built around avoiding war crimes and genocide is dead. US finds actions in Sudan for instance that are considered genocide and crimes of war, but refuses to see worst actions of Israel as such in Gaza.
The loadstar to all is is the prime directive guiding US elites: to be the hegemon, to have full spectrum dominance around the world. And Trump is being sucked in this black hole now. See the claims for Canada, Greenland, Panama Canal! Some might say it is in fact a retrenchment and consolidation and a switcheroo: leave Europe but get Canada and Greenland as a pacifier and molifier. What about China and Taiwan and Southeast Asia?
Somebody said that in fact China is preparing not to take back Taiwan, but to use Taiwan as the anvil over which the US claim to hegemony will be crushed. Possibly so. Ukraine has already inflicted major cracks in the pillars of said hegemony and image of power.
One thing i agree with Dr Branko is that Trump is an endogenous variable - that means a net outcome of our current broken & dysfunctional political and economic system. The mainstream thinking mostly regard Trump as an exogenous variable by blaming the Russians or by cursing him as a fate of election lottery which turned out to be unfavorable. But the cause of Trump & social phenomenon he entails have deeper endogenous roots in today's very system. But mainstream thinkers continue to treat him as an outside invader who has come to destroy the system.
Regarding Neoliberalism, i concur much with Yanis Varoufakis on this. What we have today is not really Neoliberalism, it's something else. And Varoufakis describes it as Technofeudalism. Concept of Neoliberalism as a self sustainable system broke down in 2008. Hyper-financialization & transnational financial institutions were the heart & lungs of Neoliberal system. But this system failed spectacularly in 2008 and died. Since then what we have is a zombie system which was resuscitated/reanimated by trillions of bailouts and infusion into these financial institutions by central banks and treasuries of the western governments, most prominently America. So the financial institutions upon which neoliberalism operated since 2008 are zombies. This itself was a greatest scandal & corruption of 21st century which people conveniently ignore.
Now here i strongly agree with Varoufakis as he says that when something bad is dying, it's not necessary that something better will replace it. Technofeudalism in all regards is even more malignant than Neoliberalism. Without any exaggeration, the election of Trump appears to me as 'lights are going out' moment in the western world. I have no illusion about Trump. He's the most disturbed, incompetent and malignant human being on earth right now. There's nothing good that will come out of Trump regime. Only chaos and destruction of all kind - social, political, geopolitical, economic, cultural, ecological - he will degrade everything in not just America but the whole world. And the plutocrats that financed him will meddle in other nations to subvert them as well. The present system, global order is undoubtedly bad & dysfunctional but what's coming with Trump is far worse. Lights are going out in America.
'....has never been achieved for political reasons' globalisation in a nutshell. Its always been about exercising power, which is why the idea of economics being politically 'neutral' is a sham devised by its winners. The Peter principle meant 'The West' only ever preached globalisation for mercantalist reasons using free trade as the means and intellectual justification of extracting wealth from the Global South (global trickle down if you will). But with wealth now trickling east, initial conditions have changed, so time to tweak the rules and restore order, with the West's hypocrisy laid bare for all to see. Has anything much really changed?
This is indeed a great piece. As a former EU official, I can personally testify the level of inconsistency and hypocrisy between the EU purported policies on SDGs and the actual implementation of its economic and foreign policy.
In Milanovic’s text there is an element which is missing: the true supporters of globalisation as a means of economic efficiency must also be true supporters of protecting individuals and their fundamental freedoms throughout the world. One needs that to have a true level playing field on that aspect, otherwise the economic game is rigged. China is the perfect example. So I believe that the abandonment of globalisation started not only with Obama’s sanctions and tariffs but also with JW Bush’s actions in the Middle East and with the US support of the worst regimes in the world. I do not need to make a list, you know them all.
Exactly! While "we" were technologically dominant, arguing in favor of tariffs, industrial policies etc. was a consequence of the lack of knowledge. Once "others" become at least as technologically good as us, if not better, government intervention in the economy becomes not only acceptable but also necessary. Free trade while we are winning, protectionism when we start losing.
I have never understood your obsession with the need for consistent ideology.
On the one hand I very much doubt that consistent ideology is theoretically possible. If I were a mathematician I'd try to prove that assertion formally. And if successful I'd be able to watch with amusement and glee how the proof does not change anyone's opinion or behavior.
On the other hand, it has always seemed to me that getting rid of ideology was desirable. Because when the bullshit meets reality, reality wins. And that hurts very much if at some point you started to believe your own bullshit. Getting other people to believe in ideology can be beneficial for the prophet, of course.
Then I had this weird idea that economic theories and ideologies for economists and their customers (politicians, mostly) serve the same purpose as astrology does for ordinary people. They can provide a psychological cruch which makes it easier to survive in chaotic and uncertain world. They most definitely can provide the means to avoid personal responsibility for the decisions. The science says so, the experts say so, the ideological consensus says so, so we were just following order^H^H^H^H best practices.
Astrology is currently out of fashion (in intellectual circles, at least), so it's very hard to create some great disaster with that crutch because a lot of people won't take you seriously and won't follow.
But science, science has authority. And if you use a crutch that looks like it's in line with the current understanding of science, there's no end to the damage you can do.
the world and its institutional components operate using consistent ideology aka paradigms. they cause errors and harm, but they are replaced with other paradigms built by networks of practitioners who see anomalies. pragmatism is very important to this contention and advance, the ability to escape the crutch of the paradigm's explained logic ... and build a new one
"It is common for sociological discussions of ideology to begin by acknowledging, if not bemoaning, the plurality of different ways of using the term 'ideology' (Eagleton 1991). Marx and Engels used it to denote the most abstract conceptions that populate an imaginary world of ideas independent of material life; later Marxists often used it to denote a conspiratorial ideational wool pulled over the eyes of the masses; political scientists use it to denote packages of positions, often believed to be unifiable in a single preferred optimal state, and, of course, many of us use it to denote the beliefs, attitudes and opinions of those with whom we disagree." (from "What is ideology?" by John Levi Martin)
And you say that the ideology is just another name for a paradigm?
The ideology will make people take a stand and fight (first with words, then with other things). The paradigms will not.
Having a paradigm to orient oneself in a complex world is practically common sense and having a consistent paradigm is a common wish, but ideology is not just a paradigm.
Paradigms replaced by other paradigms may also seem like common sense in this age when everyone has intuitive understanding of the concept called "progress" (which did not exist as such before 17th century), but, may I ask, which practicioners are replacing them?
In the case of Washington consensus it seems to me that people replacing it are not the practicioners of economy (who, in the common sense paradigm, should be the ones replacing it). Instead, the practicioners of power are abandoning it without bothering with the replacement paradigm or ideology because they have no use for it at present time.
Which leaves economists somewhat stranded because the demand for their fables has just disappeared, but such is life (or the whim of the market, for those who think that the market knows best). There's always astrology.
I would have said rather an organized religion with the neoclassical orthodoxy and academy as its priesthood -- dedicated to justifying current economic arrangements and issuing normative judgements on behalf of their paymasters (the oligarchs) as priests have done since time immemorial on behalf of the palace complex.
A conspiratorial ideational wool pulled over the eyes of the masses? But there is a chicken and egg problem there.
Did the priests find their religion independently of the paymasters and their rewards or after they have figured out that there were rewards for those who wanted to preach the party line?
The former are true believers and the later are opportunists. I suppose they very well know who is who amongst them and they probably don't like each other very much.
Treating them as if they were one and the same isn't very beneficial for the revolutionaries.
I wasn't thinking here so much of the individual motivations as the institutional ones, which in any case are the ones transmitted across generations, no?
I would think the notion of ideology is more consistent than you think, and you are simply playing at semantic games in an attempt to dismiss it. But to what end? I'm open to being wrong, but one would suspect to unclutter your own model of "how the world works," or ideology, and so nobody can disagree.
I'd even go as far as to state getting rid of ideology is impossible and a foolhardy desire. Being free of ideology is like being free of ever being wrong. Of course everyone is, everyone has their blinders, and I'd be sincerely concerned for anyone who believed they didn't.
I think the theory with the post World War 2 order was that as countries traded more there would be less wars and more liberal democracy. There is evidence of that (the USSR traded oil, but when it hit a wall in the mid-1980s the country became less authoritarian. And China is more liberal and free than under Mao. But the desire that countries would become less war-like was more or less done for after Russia started its war with Ukraine. I think the Financial Times is more like, "This experiment did not work as well as we thought, time to rethink it." Which is healthy rather than some crazed ideologue that thinks 10 percent tariffs will reorder the world economy. Tariffs are way lower than they were pre-FDR so neoliberalism has not died. Trade blocs were part-and-parcel of the Neoliberal Order (NAFTA, EU, Bi-lateral agreements, Mercosur, and I think I may be missing a trade block in West Africa). Industrial lead development indeed has made a comeback, but that is a triumph of liberalism that it can adjust, unlike what happened under paleo-left views. Economic coercion and free migration of labor were always part of the Neoliberal order, and were even worse pre-World War 2. So I think you are finding inconsistencies that are not there and adjustments in thinking that show an intellectual health of Neoliberalism rather than even more glaring inconsistencies of the paleo-left/Marxism or greater incoherence (see Paul Krugman's recent writing on Chinese economic management).
What you seem to have missed in the above is that the main area in which inconsistencies are identified is between how practice is shifting in the developed world and what is still being preached to the developing world.
So no there is no problem with ideas changing. The problem is with the leading countries changing their views while still imposing policies on weaker countries they frankly admit have not worked for them domestically. That is more than inconsistency, it is open hypocrisy, a major issue for any ruling ideology.
I also can't find the part of Branko's post where he moves from criticising the hypocrisy of late neoliberalism to arguing that the US should adopt Marxism as its new ruling ideology? It must be there because otherwise the last part of your comment would be a bizarre non sequitur.
It seems that you are responding not to the above post, but to a different, much less interesting article.
The one thing I will give you is that the use of the term "trade bloc" in the above is a bit vague, and covers arrangements most neoliberals would have no theoretical problem with in addition to ones they usually oppose. I believe Branko is referring specifically to politically motivated trade blocs, like for example COMECON rather than free trade agreements like NAFTA, and making an analogy between the former and friendshoring.
I mean tariffs are still way down and a lot of developed countries let developing countries slide by allowing them. Japan still has a ton of trade barriers and did when it developed after World War 2. Was that a horrendous hypocrisy? I doubt it. We let Argentina have a bunch of dumb tariff policies for decades. Just because Millei is finally doing away with them for air fryers is not some grand hypocrisy of the EU.
If Branko is going to say that late neoliberalism is some grand hypocritical ideology can we say the same about any "left" ideology he is still wedded to? We can and it is fair game. No I am responding to his post by hoisting him by his own petard you silly!
I think "Neoliberals" were always down with "trade blocs" since so many "trade blocs" came about during the Golden Era of Neoliberalism. I think the EU was politically motivated. And there are probably two camps of Neoliberals regarding trade blocs, the majority who are cool with trade blocs and a much smaller group who are agains them and any trade restrictions. I think there is imprecision in how Branko lumps all of the Neoliberals together, from Paul Krugman to Larry Kudlow...
RE: Tariffs, would you care to explain how exactly what you say diverges from what Branko's statement in the original post that under the terms of the neoliberal order "tariffs are sometimes considered a necessary evil but in principle the instrument that should be discouraged and used as rarely as possible"? Again, you seem to be arguing against a total strawman- the original post is right there! You clicked on it, how hard can it be to just read it closely?
The whole point is that during the neoliberal period the general trend was for tarrifs to be "way down" following the leadership of the US, but then during the Trump administration tariffs were starkly increased because the US like a stroppy child decided that the game wasn't working out in its favour anymore. The Biden administration rather than rolling back these policies and making Trumpism an aberration decided to keep many of these tarrifs, and now with Trump 2.0 they'll rise yet again in complete contravention to the previous decades of preaching of tarriffs being a necessary evil to be used as rarely as possible.
Your examples of Japan and Argentina are again more of the same. These countries are given a pass, but then countries like Rwanda that in principle one would expect to be given special treatment as a "necessary evil" to support their development are slapped with retaliation when they erect tarriffs on imports of second hand clothing to protect their nascent textile industry. The system is ad-hoc and inconsistent, applying one rule for me and mine, and another for thee. Or to put it another way, it is hypocritical.
RE: your attempt at hoisting the author by his petard- right... I didn't mention this in my original reply as there were many incorrect things in your post and I have limited time, but you say "unlike what happened under paleo-left views"- you seem to think that "paleo-leftism" means stalinism which it certainly doesn't. So pointing to the stagnancy of eastern bloc socialist ideologies is really not a "gotcha". That's the whole idea of the "paleo-" part, returning back to the spirit of the french revolution as an alternative to the dead-ends of orthodox marxism leninism as practiced in the eastern bloc and the post-1960s western new left. Those ideologies are not the same and hence your claim came across as a strange non sequitur.
“The current abandonment of the principles of neoliberal globalization leaves the entire field of international development in chaos because it is not at all clear what types of policies should be suggested to, or imposed on, the rest of the world.” Good riddance to the Washington Consensus. And you miss the message of Acemoglu’s Nobel. The Washington Consensus failed on its promise to be a sure fire escape from the middle-income trap. Getting prices right is a lot harder than we thought. The new view holds that institutions are central to understanding why.
The threat of China comes from the fact that it is a socialist society and not a capitalist one, therefore configuring an existential threat to capitalism, whose core is in the First World (but specifically in the USA).
But there are many historical movements involved in the loss of universality of the West.
1) During the First Cold War, the capitalist world had to invent the "middle class" as the new universal human being (substituting the "high cultured" aristocratic man of the Belle Epoque) in order to fight socialism in the propaganda front. This maneuver was an astouding success -- to this day, the peoples of the West still firmly believe the middle class is the backbone of capitalism -- but it came at a mortal cost: capitalism, in order to function properly, must only have two classes: capitalists and workers (as demonstrated by Marx). The middle class, whose characteristic is be an unproductive worker who receives well beyond its subsistence levels, is a parasite to capitalism in the long term. The creation of the middle class is the USSR's greatest deformation of the capitalist world, its great legacy of the First Cold War;
2) After the dissolution of the USSR, there was an euphoric period in the capitalist world called the End of History (1992-2008), a period where the middle class ossified and entrenched itself as the de facto clerical class (the "experts") of modern capitalism. This closed the door to all possibility of positive change (revolution) in the West. But since this is all built upon the lie of the End of History, the dominant doctrine of neoliberalism must be kept alive, like a religious, sacred text, among the members of the middle class (elected politicians also became members of the middle class, because they became de facto professional politicians under the direct service of capitalists; gerontocracy);
3) The contradiction became insustainable because a) the crisis of 2008 was evidence capitalism is in irreversible decline (that it was in its descendant phase was already visible to the greatest philosopher of the Cold War and End of History, István Mészáros, since at least 1995) and b) China is indeed socialist, being a full-fledged Marxist-Leninist (Stalinist) State, whose Party (the dreaded and feared by the West, the Communist Party of China), which demonstrated the Stalinist system could indeed be reformed and saved, and carry on the historical mission laid down by Lenin in 1917.
Now, what will the capitalist world do? It seems it is trying a last desperate attempt to reverse entropy and go back to its golden age, which was the 19th Century. But here the problem is the middle class itself, which has to be eliminated (capitalist dekulakization) but now manages the administrative and ideological machinery of capitalist society. But some reforms are being done, e.g. automation of middle class jobs (AI), the elimination of women's rights related to reproduction, the legalization of children labor (in some states of the USA), etc.
Excellent as always- fair minded, clearly expressed, well informed. Thanks. I think we should welcome the demise of neoliberalism but strive to avoid a beggar thy neighbour new world order.
Having come from a periphery of sorts and via a non-standard route, you are destined for sure, privileged maybe, to see and see through what others struggle to permit their senses to even acknowledge.
The banners of equality, human rights, democracy, decolonisation, development, and, yes, development policies have served and powered three forces and purposes: those resisting the five hundred years of European expansion and the fossil-fuel-powered destruction of the biosphere in their various guises; those, like you, who worked inside the very institutions of that expansion with the best of intentions, but, crucially, also those who used them as the legitimising veil behind which the exploitation of people, the destruction of the biosphere, and the concentration of riches could continue unabated.
Those "achievements of modernity" were reached in the places thriving on the superabundance of global rent capture. If they can exist without that underlying pipework is an open question. To believe they can, is the illusion that is now falling apart in the Trump moment you describe. How they could be spread globally were the struggles of the past. Today the question is whether some of it can survive at all.
Paradoxically, you were never closer to admitting that thought than in your discussions of Doughnut Economics and degrowth. You argued that the population of the rich countries in the global north would never vote for such ideas. Well yes, precisely! But that does not prove the analysis or proposition wrong.
Your life's work and publications show that deep down you share that sentiment.
This article must be published in the Financial Times.
Since the 2008, economic crisis it is quite clear what the main principles of neoliberalism are:
1. The privatization of profits.
2. The socialization of losses.
3. Free trade/ tariffs adjusted depending on the ability of the west is able to technologically compete with other players
I think that after that crisis the liberalism has lost any credibility.
Thank you. I think this is a well-argued, comprehensive and objective piece. It's difficult to see how you could be accused of supporting Trump given what was in the previous piece about Trump's victory and what you've written elsewhere. It's quite possible to simultaneously hold the position of not celebrating neoliberalism, pinpointing its demise in Trump's inauguration, and proposing no normative view about the ensuing events. The description of the abandonment of neoliberal polciies in the international arena here is quite accurate: protection of technology and IP; tariffs; industrial policy; economic coercion; trade blocs; ending the free movement of labour. The end of most of the tenets of neoliberalism shows it has run its course in practice.
Neoliberalism has, indeed, objectively been under question since at least 2008. The ascendance of not only Trump but other statists and protectionists signals its demise. I agree that the rising isolation and rejection of immigration into Europe - supposedly the bastion of liberalism - is clear confirmation of neoliberal decline.
What replaces it is anybody's guess, and i'm slightly sceptical about those on the left who suggest that somehow there might be a Mont Pelerin moment when a coherent progressive ideology emerges. Incoherence and fragmentaiton are more likely. The supposed free-marketeers will continue to pay lip-service. The plutocrats and billionaires will talk about the free market when it suits but will keep seeking political power.
One caveat to the story that neoliberalism is dead, though, is that its adherents dominate the international institutions. It's difficult to convey exactly how pervasive it is in the IMF, World Bank, WTO, OECD and parts of the UN, as well as many governments. Everyone's been brought up on it and defaults to neoliberal-type views -- and I mean at junior to mid-level as well as the top brass. Although there are exceptions, many of these people won't change their minds soon. The doctrine has become ingrained as common sense over many decades. Without a coherent alternative it's unlikely to be dislodged soon.
«It's difficult to see how you could be accused of supporting Trump given what was in the previous piece about Trump's victory and what you've written elsewhere.»
There is a very important word that matters here: "objectively". If someone says similar things as Trump/Putin/Xi/... or explains support of Trump/Putin/Xi/... as having in part a rational base, then even without any subjective intent to support Trump/Putin/Xi/... they are "objectively" on the side of Trump/Putin/Xi/... because they "amplify" their arguments. The only way to avoid being "objectively" on their side is to attack them and attack whatever they do or say or even everything they have not done or said but is useful to pretend they have done or said.
George Orwell, "Unpublished preface to Animal Farm", 1945:
“One of the peculiar phenomena of our time is the renegade Liberal. Over and above the familiar Marxist claim that ʻbourgeois libertyʼ is an illusion, there is now a widespread tendency to argue that one can only defend democracy by totalitarian methods. If one loves democracy, the argument runs, one must crush its enemies by no matter what means. And who are its enemies? It always
appears that they are not only those who attack it openly and consciously, but those who ʻobjectivelyʼ endanger it by spreading mistaken doctrines. In other words, defending democracy involves destroying all independence of thought.”
Neo-liberalism is just an ideology - it should never had been taken seriously. The simple rule for all other countries is: 'Do not listen to what the Americans say, look at what they do!'
Good advise about all politicians and nations. Talk is cheap....
If neo-liberalism is replaced by global sustainable development led by BRICS and its partner countries, that would be a great outcome. I think that is indeed possible. If only the Financial Times and its journalists see that, they might be able to help the West be part of this global sustainable development project.
The sword that cuts this Gordian Knot has a well known name: "rules based international order". Of course, there not being any document to pinpoint said rules, they probably change like the sandunes in the desert.
The main goal is to keep certain polities (the proponders) in power and enrich their elites, preferably by allowing them to extract as much wealth from the rest of the newoliberalized, globalized economies. It is easier to extract wealth from others' work than to run competitive businesses yourself.
And it is not only that Bretton Woods and economic principles are dead. International law built around avoiding war crimes and genocide is dead. US finds actions in Sudan for instance that are considered genocide and crimes of war, but refuses to see worst actions of Israel as such in Gaza.
The loadstar to all is is the prime directive guiding US elites: to be the hegemon, to have full spectrum dominance around the world. And Trump is being sucked in this black hole now. See the claims for Canada, Greenland, Panama Canal! Some might say it is in fact a retrenchment and consolidation and a switcheroo: leave Europe but get Canada and Greenland as a pacifier and molifier. What about China and Taiwan and Southeast Asia?
Somebody said that in fact China is preparing not to take back Taiwan, but to use Taiwan as the anvil over which the US claim to hegemony will be crushed. Possibly so. Ukraine has already inflicted major cracks in the pillars of said hegemony and image of power.
One thing i agree with Dr Branko is that Trump is an endogenous variable - that means a net outcome of our current broken & dysfunctional political and economic system. The mainstream thinking mostly regard Trump as an exogenous variable by blaming the Russians or by cursing him as a fate of election lottery which turned out to be unfavorable. But the cause of Trump & social phenomenon he entails have deeper endogenous roots in today's very system. But mainstream thinkers continue to treat him as an outside invader who has come to destroy the system.
Regarding Neoliberalism, i concur much with Yanis Varoufakis on this. What we have today is not really Neoliberalism, it's something else. And Varoufakis describes it as Technofeudalism. Concept of Neoliberalism as a self sustainable system broke down in 2008. Hyper-financialization & transnational financial institutions were the heart & lungs of Neoliberal system. But this system failed spectacularly in 2008 and died. Since then what we have is a zombie system which was resuscitated/reanimated by trillions of bailouts and infusion into these financial institutions by central banks and treasuries of the western governments, most prominently America. So the financial institutions upon which neoliberalism operated since 2008 are zombies. This itself was a greatest scandal & corruption of 21st century which people conveniently ignore.
Now here i strongly agree with Varoufakis as he says that when something bad is dying, it's not necessary that something better will replace it. Technofeudalism in all regards is even more malignant than Neoliberalism. Without any exaggeration, the election of Trump appears to me as 'lights are going out' moment in the western world. I have no illusion about Trump. He's the most disturbed, incompetent and malignant human being on earth right now. There's nothing good that will come out of Trump regime. Only chaos and destruction of all kind - social, political, geopolitical, economic, cultural, ecological - he will degrade everything in not just America but the whole world. And the plutocrats that financed him will meddle in other nations to subvert them as well. The present system, global order is undoubtedly bad & dysfunctional but what's coming with Trump is far worse. Lights are going out in America.
'....has never been achieved for political reasons' globalisation in a nutshell. Its always been about exercising power, which is why the idea of economics being politically 'neutral' is a sham devised by its winners. The Peter principle meant 'The West' only ever preached globalisation for mercantalist reasons using free trade as the means and intellectual justification of extracting wealth from the Global South (global trickle down if you will). But with wealth now trickling east, initial conditions have changed, so time to tweak the rules and restore order, with the West's hypocrisy laid bare for all to see. Has anything much really changed?
Yup -- "gunboat diplomacy" never really went away, did it?
This is indeed a great piece. As a former EU official, I can personally testify the level of inconsistency and hypocrisy between the EU purported policies on SDGs and the actual implementation of its economic and foreign policy.
In Milanovic’s text there is an element which is missing: the true supporters of globalisation as a means of economic efficiency must also be true supporters of protecting individuals and their fundamental freedoms throughout the world. One needs that to have a true level playing field on that aspect, otherwise the economic game is rigged. China is the perfect example. So I believe that the abandonment of globalisation started not only with Obama’s sanctions and tariffs but also with JW Bush’s actions in the Middle East and with the US support of the worst regimes in the world. I do not need to make a list, you know them all.
Exactly! While "we" were technologically dominant, arguing in favor of tariffs, industrial policies etc. was a consequence of the lack of knowledge. Once "others" become at least as technologically good as us, if not better, government intervention in the economy becomes not only acceptable but also necessary. Free trade while we are winning, protectionism when we start losing.
I have never understood your obsession with the need for consistent ideology.
On the one hand I very much doubt that consistent ideology is theoretically possible. If I were a mathematician I'd try to prove that assertion formally. And if successful I'd be able to watch with amusement and glee how the proof does not change anyone's opinion or behavior.
On the other hand, it has always seemed to me that getting rid of ideology was desirable. Because when the bullshit meets reality, reality wins. And that hurts very much if at some point you started to believe your own bullshit. Getting other people to believe in ideology can be beneficial for the prophet, of course.
Then I had this weird idea that economic theories and ideologies for economists and their customers (politicians, mostly) serve the same purpose as astrology does for ordinary people. They can provide a psychological cruch which makes it easier to survive in chaotic and uncertain world. They most definitely can provide the means to avoid personal responsibility for the decisions. The science says so, the experts say so, the ideological consensus says so, so we were just following order^H^H^H^H best practices.
Astrology is currently out of fashion (in intellectual circles, at least), so it's very hard to create some great disaster with that crutch because a lot of people won't take you seriously and won't follow.
But science, science has authority. And if you use a crutch that looks like it's in line with the current understanding of science, there's no end to the damage you can do.
the world and its institutional components operate using consistent ideology aka paradigms. they cause errors and harm, but they are replaced with other paradigms built by networks of practitioners who see anomalies. pragmatism is very important to this contention and advance, the ability to escape the crutch of the paradigm's explained logic ... and build a new one
"It is common for sociological discussions of ideology to begin by acknowledging, if not bemoaning, the plurality of different ways of using the term 'ideology' (Eagleton 1991). Marx and Engels used it to denote the most abstract conceptions that populate an imaginary world of ideas independent of material life; later Marxists often used it to denote a conspiratorial ideational wool pulled over the eyes of the masses; political scientists use it to denote packages of positions, often believed to be unifiable in a single preferred optimal state, and, of course, many of us use it to denote the beliefs, attitudes and opinions of those with whom we disagree." (from "What is ideology?" by John Levi Martin)
And you say that the ideology is just another name for a paradigm?
The ideology will make people take a stand and fight (first with words, then with other things). The paradigms will not.
Having a paradigm to orient oneself in a complex world is practically common sense and having a consistent paradigm is a common wish, but ideology is not just a paradigm.
Paradigms replaced by other paradigms may also seem like common sense in this age when everyone has intuitive understanding of the concept called "progress" (which did not exist as such before 17th century), but, may I ask, which practicioners are replacing them?
In the case of Washington consensus it seems to me that people replacing it are not the practicioners of economy (who, in the common sense paradigm, should be the ones replacing it). Instead, the practicioners of power are abandoning it without bothering with the replacement paradigm or ideology because they have no use for it at present time.
Which leaves economists somewhat stranded because the demand for their fables has just disappeared, but such is life (or the whim of the market, for those who think that the market knows best). There's always astrology.
I would have said rather an organized religion with the neoclassical orthodoxy and academy as its priesthood -- dedicated to justifying current economic arrangements and issuing normative judgements on behalf of their paymasters (the oligarchs) as priests have done since time immemorial on behalf of the palace complex.
A conspiratorial ideational wool pulled over the eyes of the masses? But there is a chicken and egg problem there.
Did the priests find their religion independently of the paymasters and their rewards or after they have figured out that there were rewards for those who wanted to preach the party line?
The former are true believers and the later are opportunists. I suppose they very well know who is who amongst them and they probably don't like each other very much.
Treating them as if they were one and the same isn't very beneficial for the revolutionaries.
I wasn't thinking here so much of the individual motivations as the institutional ones, which in any case are the ones transmitted across generations, no?
I would think the notion of ideology is more consistent than you think, and you are simply playing at semantic games in an attempt to dismiss it. But to what end? I'm open to being wrong, but one would suspect to unclutter your own model of "how the world works," or ideology, and so nobody can disagree.
I'd even go as far as to state getting rid of ideology is impossible and a foolhardy desire. Being free of ideology is like being free of ever being wrong. Of course everyone is, everyone has their blinders, and I'd be sincerely concerned for anyone who believed they didn't.
I think the theory with the post World War 2 order was that as countries traded more there would be less wars and more liberal democracy. There is evidence of that (the USSR traded oil, but when it hit a wall in the mid-1980s the country became less authoritarian. And China is more liberal and free than under Mao. But the desire that countries would become less war-like was more or less done for after Russia started its war with Ukraine. I think the Financial Times is more like, "This experiment did not work as well as we thought, time to rethink it." Which is healthy rather than some crazed ideologue that thinks 10 percent tariffs will reorder the world economy. Tariffs are way lower than they were pre-FDR so neoliberalism has not died. Trade blocs were part-and-parcel of the Neoliberal Order (NAFTA, EU, Bi-lateral agreements, Mercosur, and I think I may be missing a trade block in West Africa). Industrial lead development indeed has made a comeback, but that is a triumph of liberalism that it can adjust, unlike what happened under paleo-left views. Economic coercion and free migration of labor were always part of the Neoliberal order, and were even worse pre-World War 2. So I think you are finding inconsistencies that are not there and adjustments in thinking that show an intellectual health of Neoliberalism rather than even more glaring inconsistencies of the paleo-left/Marxism or greater incoherence (see Paul Krugman's recent writing on Chinese economic management).
What you seem to have missed in the above is that the main area in which inconsistencies are identified is between how practice is shifting in the developed world and what is still being preached to the developing world.
So no there is no problem with ideas changing. The problem is with the leading countries changing their views while still imposing policies on weaker countries they frankly admit have not worked for them domestically. That is more than inconsistency, it is open hypocrisy, a major issue for any ruling ideology.
I also can't find the part of Branko's post where he moves from criticising the hypocrisy of late neoliberalism to arguing that the US should adopt Marxism as its new ruling ideology? It must be there because otherwise the last part of your comment would be a bizarre non sequitur.
It seems that you are responding not to the above post, but to a different, much less interesting article.
The one thing I will give you is that the use of the term "trade bloc" in the above is a bit vague, and covers arrangements most neoliberals would have no theoretical problem with in addition to ones they usually oppose. I believe Branko is referring specifically to politically motivated trade blocs, like for example COMECON rather than free trade agreements like NAFTA, and making an analogy between the former and friendshoring.
I mean tariffs are still way down and a lot of developed countries let developing countries slide by allowing them. Japan still has a ton of trade barriers and did when it developed after World War 2. Was that a horrendous hypocrisy? I doubt it. We let Argentina have a bunch of dumb tariff policies for decades. Just because Millei is finally doing away with them for air fryers is not some grand hypocrisy of the EU.
If Branko is going to say that late neoliberalism is some grand hypocritical ideology can we say the same about any "left" ideology he is still wedded to? We can and it is fair game. No I am responding to his post by hoisting him by his own petard you silly!
I think "Neoliberals" were always down with "trade blocs" since so many "trade blocs" came about during the Golden Era of Neoliberalism. I think the EU was politically motivated. And there are probably two camps of Neoliberals regarding trade blocs, the majority who are cool with trade blocs and a much smaller group who are agains them and any trade restrictions. I think there is imprecision in how Branko lumps all of the Neoliberals together, from Paul Krugman to Larry Kudlow...
RE: Tariffs, would you care to explain how exactly what you say diverges from what Branko's statement in the original post that under the terms of the neoliberal order "tariffs are sometimes considered a necessary evil but in principle the instrument that should be discouraged and used as rarely as possible"? Again, you seem to be arguing against a total strawman- the original post is right there! You clicked on it, how hard can it be to just read it closely?
The whole point is that during the neoliberal period the general trend was for tarrifs to be "way down" following the leadership of the US, but then during the Trump administration tariffs were starkly increased because the US like a stroppy child decided that the game wasn't working out in its favour anymore. The Biden administration rather than rolling back these policies and making Trumpism an aberration decided to keep many of these tarrifs, and now with Trump 2.0 they'll rise yet again in complete contravention to the previous decades of preaching of tarriffs being a necessary evil to be used as rarely as possible.
Your examples of Japan and Argentina are again more of the same. These countries are given a pass, but then countries like Rwanda that in principle one would expect to be given special treatment as a "necessary evil" to support their development are slapped with retaliation when they erect tarriffs on imports of second hand clothing to protect their nascent textile industry. The system is ad-hoc and inconsistent, applying one rule for me and mine, and another for thee. Or to put it another way, it is hypocritical.
RE: your attempt at hoisting the author by his petard- right... I didn't mention this in my original reply as there were many incorrect things in your post and I have limited time, but you say "unlike what happened under paleo-left views"- you seem to think that "paleo-leftism" means stalinism which it certainly doesn't. So pointing to the stagnancy of eastern bloc socialist ideologies is really not a "gotcha". That's the whole idea of the "paleo-" part, returning back to the spirit of the french revolution as an alternative to the dead-ends of orthodox marxism leninism as practiced in the eastern bloc and the post-1960s western new left. Those ideologies are not the same and hence your claim came across as a strange non sequitur.
"That is more than inconsistency, it is open hypocrisy, a major issue for any ruling ideology."
It's Ha-Joon Chang's "Bad Samaritans" on steroids ...
“The current abandonment of the principles of neoliberal globalization leaves the entire field of international development in chaos because it is not at all clear what types of policies should be suggested to, or imposed on, the rest of the world.” Good riddance to the Washington Consensus. And you miss the message of Acemoglu’s Nobel. The Washington Consensus failed on its promise to be a sure fire escape from the middle-income trap. Getting prices right is a lot harder than we thought. The new view holds that institutions are central to understanding why.
The threat of China comes from the fact that it is a socialist society and not a capitalist one, therefore configuring an existential threat to capitalism, whose core is in the First World (but specifically in the USA).
But there are many historical movements involved in the loss of universality of the West.
1) During the First Cold War, the capitalist world had to invent the "middle class" as the new universal human being (substituting the "high cultured" aristocratic man of the Belle Epoque) in order to fight socialism in the propaganda front. This maneuver was an astouding success -- to this day, the peoples of the West still firmly believe the middle class is the backbone of capitalism -- but it came at a mortal cost: capitalism, in order to function properly, must only have two classes: capitalists and workers (as demonstrated by Marx). The middle class, whose characteristic is be an unproductive worker who receives well beyond its subsistence levels, is a parasite to capitalism in the long term. The creation of the middle class is the USSR's greatest deformation of the capitalist world, its great legacy of the First Cold War;
2) After the dissolution of the USSR, there was an euphoric period in the capitalist world called the End of History (1992-2008), a period where the middle class ossified and entrenched itself as the de facto clerical class (the "experts") of modern capitalism. This closed the door to all possibility of positive change (revolution) in the West. But since this is all built upon the lie of the End of History, the dominant doctrine of neoliberalism must be kept alive, like a religious, sacred text, among the members of the middle class (elected politicians also became members of the middle class, because they became de facto professional politicians under the direct service of capitalists; gerontocracy);
3) The contradiction became insustainable because a) the crisis of 2008 was evidence capitalism is in irreversible decline (that it was in its descendant phase was already visible to the greatest philosopher of the Cold War and End of History, István Mészáros, since at least 1995) and b) China is indeed socialist, being a full-fledged Marxist-Leninist (Stalinist) State, whose Party (the dreaded and feared by the West, the Communist Party of China), which demonstrated the Stalinist system could indeed be reformed and saved, and carry on the historical mission laid down by Lenin in 1917.
Now, what will the capitalist world do? It seems it is trying a last desperate attempt to reverse entropy and go back to its golden age, which was the 19th Century. But here the problem is the middle class itself, which has to be eliminated (capitalist dekulakization) but now manages the administrative and ideological machinery of capitalist society. But some reforms are being done, e.g. automation of middle class jobs (AI), the elimination of women's rights related to reproduction, the legalization of children labor (in some states of the USA), etc.
Excellent as always- fair minded, clearly expressed, well informed. Thanks. I think we should welcome the demise of neoliberalism but strive to avoid a beggar thy neighbour new world order.
To: Branko Milanovic, Finland Station
Dear Branko,
Having come from a periphery of sorts and via a non-standard route, you are destined for sure, privileged maybe, to see and see through what others struggle to permit their senses to even acknowledge.
The banners of equality, human rights, democracy, decolonisation, development, and, yes, development policies have served and powered three forces and purposes: those resisting the five hundred years of European expansion and the fossil-fuel-powered destruction of the biosphere in their various guises; those, like you, who worked inside the very institutions of that expansion with the best of intentions, but, crucially, also those who used them as the legitimising veil behind which the exploitation of people, the destruction of the biosphere, and the concentration of riches could continue unabated.
Those "achievements of modernity" were reached in the places thriving on the superabundance of global rent capture. If they can exist without that underlying pipework is an open question. To believe they can, is the illusion that is now falling apart in the Trump moment you describe. How they could be spread globally were the struggles of the past. Today the question is whether some of it can survive at all.
Paradoxically, you were never closer to admitting that thought than in your discussions of Doughnut Economics and degrowth. You argued that the population of the rich countries in the global north would never vote for such ideas. Well yes, precisely! But that does not prove the analysis or proposition wrong.
Your life's work and publications show that deep down you share that sentiment.
What is to be done? Keep going!
A fan