This is a very sharp way to frame the problem. I especially agree with the idea that neoliberal globalization was weakened not only by its opponents, but by its own two virtues: cosmopolitanism and competition.
I would only add one further layer: those virtues were never detached from material power. They sounded universal partly because they rested on a specific structure of Western advantage.
When the West could assume continued control over finance, brands, IP, standards, capital markets, advanced technology, and the upper layers of the global value chain, globalization could be narrated as openness, efficiency, consumer welfare, and global poverty reduction. Free competition looked universal because the hierarchy of competition still favored the West.
The deeper crisis began when competition produced an unexpected result. China did not remain a low-cost assembly platform. It used the globalization window to build a full industrial system, with supplier density, engineering capacity, infrastructure, domestic scale, and state coordination reinforcing one another.
That is when the moral language changed. Openness became strategic dependence. Free competition became unfair competition. Global efficiency became supply-chain vulnerability. Globalization became a national security problem.
This does not mean every Western concern is invented. Subsidies, state capitalism, security risks, and coercive leverage are real issues. But the timing matters. The moral vocabulary changed when the competitive outcome began to weaken the material foundation of Western industrial control.
So the deeper issue is not only how the virtues of neoliberal globalization turned against it. It is also why those virtues depended so much on a Western industrial hierarchy in the first place.
These 40 years overlap precisely with my adult life. I saw this phenomenon, I experienced it, and I know that your vision — especially when seen as a Greek tragedy (hubris, nemesis) — is painfully true and fully predictable.
Anyway, as written by Upton Sinclair, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
You present the narrative as though it was some kind of natural occurrence or evolution, rather than a quite deliberate, calculated ruling-class attack on the power and solidarity of workers and the structures of the welfare state that worker-power had brought about. These had to be destroyed so that capitalists could run riot and commodify everything in sight. Neoliberalism was also a gigantic experiment in socio-psychological engineering via the use of ‘market forces’ as a blunt instrument: “Economics is the method but the aim is to change the heart and soul”—Margaret Thatcher to The Times, 1981.
As is often the case with Branko’s blogs, it is hard to know where to start in critiquing his analysis. As commented below Branko presents his narrative as some kind of natural occurrence or evolution. Indeed, globalization is often seen as some sort of exogenous inevitable process like industrialization, urbanization, or modernization. Nothing could be further from the truth (about any of them). Calling it (rightly) neoliberal globalization (NLG) should make it clear that the form globalization has taken is the result of policies and processes that gave us the past 45 years of neoliberalism (which is still in force despite Trump and the global rightward march).
That is because – contrary to Branko – NLG was not driven by his two ideas of cosmopolitanism and competition. Branko’s idea of cosmopolitanism is more than strange – “every individual in the world is equally important.” On what planet is this a tenet of neoliberalism or real world globalization. NLG has actually been driven by the one core idea of neoliberalism which is that government should be minimized because it is self-interested and incompetent. And the neoliberal version of competition is also not its driving force nor as Branko blithely assumes nor is it responsible for decades of GNP growth (which, for example, in China is due to industrial polices, anathema to neoliberalism). NLG was not a “success for decades” and the idea that “the world became one by reflecting “difference in people’s abilities, skills, and efforts” is utter nonsense. NLG presided over the most savage increase in inequality in human history and the continued impoverishment and precarity of billions of people, by far the majority of the planet. And despite Trump and others, tariffs, etc. the core idea that the private sector is to be glorified and government is to be despised is not gone, there is no “inevitable demise,” and we are still stuck in a rapacious capitalism where the world is governed by a billionaire class more than ever.
Just to be clear: I do not think nor write that NLG was a natural process. It was a policy choice, principally by the Western elites, but then got accepted quickly by China (around 1982), India (1991) and Russia (1991). I also do not think that policy-makers when deciding had in mind explicitly cosmopolitanism and competition. I think that these were underlying ideas, part of the ideology that guided globalization. Finally, NLG is associated with increased inequalities domestically, but lower global inequality (thanks to high growth rates of Asian economies and esp. China).
I appreciate your clarification. But I don’t believe NLG has improved global inequality, despite China’s success. It depends how you measure it and many, like Jason Hickel, argue global inequality has worsened. I have worked in international “development” for 50 years and when I started back-breaking agriculture day labor paid $2 - $3 a day and it still does while the Gates’ of this world now “earn” millions of dollars per hour!
The right wing parties that have arisen are in almost all cases only superficially anti-systemic. Meloni-ism seems to be the bait-and-switch formula they are operating with. Which suggests that neoliberalism has a deeper hold than is generally assumed in the demise of neoliberalism critiques currently in vogue. In turn this suggests the need for a renewed, updated approach to causal analysis that gives due weight to structural factors - perhaps it could be called neoclassism!
Excellent analysis of what happened. It was the best thing that happened to humanity, brining the world economies and populations closer together. It was a brilliant example of creative destruction. Malcontent wrath was expected outcome, and it will have to be ridden trough. Maybe by brining extreme right to power and then showing it being incompetent, as Hungary has done, or now US? It is a risky process, but then democracies are more resilient than they were in 1930s, and then main nemesis, Russia, is much weaker compared to the West than Germany was in WW2. There is no way back, malcontents will eventually get disillusioned and give up. Mercantilism will eventually negotiate itself to more efficient world order, some new bout of neoliberalism, since it is just much more efficient for all. But not before some inefficiencies of the old World order are replaced. The risks that it will all end in devastating World War are there, but chances that this time it will be different are high assessing from Russia being bogged down, Europe awakening, US midterms looming, China quickly repositioning and age of oil ending.
"No one argues about global poverty diminishing (a success of neoliberalism). However, poverty... once above the absolute life-sustaining minimum... becomes relative to context. Country-level contexts define people's experience... economic -> political. And politics is local. The rise of anti-liberalism is based in local, nation-level politics (with context-based notions of poverty/wealth). And that's what neoliberalism didn't address adequately. A smarter neoliberalism... with all the wealth it was producing, could have done more to address local, nation-level economic and cultural concerns... instead of (Bill Gates style) simply pointing to the efficiency of a dollar invested in Africa vs. in poor US neighborhoods."
This looks like a sound narrative to me explaining the broad outlines of what has been happening.
However, the graph does not end in 2019 unless the last interval does not represent 5 years but rather, the difference between 2019 and 1996, an interval of 23 years. So, the curve after 1996 is steepened so that it does not convey the rate of change in a consistent fashion.
Another beef: I would have chosen the 10-20 and 40-50 and 90-100 percentiles to document how people at the low end compare in their income growth rate with the middle and top end.
This is potentially a powerful presentation. Would love to see this type of graph used to make comparisons between the UK France, Germany, Australia and China.
It was Obama who bailed out Wall Street in 2007-8 initiating a period of steeply declining interest rates. From this point the Fed chased growth in economic activity by expanding the money supply to prop up investment. This helped to save the bacon of the debtors, including the US government, via enabling them to refinance their debt at lower rates. But this policy comes up against the law of diminishing returns in terms of growth and employment and increasing returns to financiers and rentiers abetted by the trend to monopolization, with dire consequences for housing affordability and health care. It would have been better to give Wall Street and US auto makers the haircut they so richly deserved. But of course, Obama came from Detroit.
I would like to see intervals marked that inform the reader as to the coming and going of presidents.
There is an additional complexity that needs to be considered. The decline in prices of consumer goods that China facilitated propped up the welfare of lower income earners in Western countries and the US oligarchs that shifted manufacturing from a high wage short work week to the opposite where motivation to work is stronger. This needs to be factored into the calculations because the failure of incomes to grow in monetary terms does not necessarily relate to living standards.
If we want to chase greater welfare for all it would be better to forgo tariffs and subsidies for exports, let China do its thing, accept the generosity of their Belt and Road initiative, share the benefits of all new technology wherever it comes from, better machines and the provision of energy to boost production as widely as possible, and above all revisit the problem of how to pay for goods and services that move across boundaries without giving the country that exerts force to give themselves a massive free kick at the expense of the rest of the globe. Bullying should not be tolerated.
The demise of neoliberal globalization is now undeniable even for the most enthusiastic proponent like me.
But as left ideologues routinely defend the idea of communism by separating it from its various real-world implementations, I would ask to separate the virtues of globalisation from their historical use and misuse.
It was not the cosmopolitism that crashed against the national borders, it was nationalism that crashed agains the cosmopolitism. The competition was rigged and the pursuit of success futile, but I doubt that mercantilism will automatically fill the pockets of impoverished workers.
The failure was in the domestic policies of the political west to manage distribution of the benefits of globalized “efficiency” across their citizenry, leading to what ought to have been obviously predictable sociopolitical disorders.
Isn't this is a very Polanyian "disembedding" and "double-movement" account of neo-liberalism? As one who finds Polanyi's analysis of the 1830 to 1930 first coming of liberalism and globalisation very convincing, I'm definitely on board with it. However I'm curious whether the author thinks the differences in those two periods are significant: eg the 19th c. one featured empires and colonies, not explicitly present in our contemporary period; was there a similar "China" in the first period (Japan?); will China follow the same inward/nationalistic path as the West seems to be doing; will ours inevitably end the same way?
Another instance of Hegel's dialectic of history. Every historical process carries within it the seed of its ultimate failure.
The neoliberal project was, from the outset, a class struggle project. The fact that the social democratic parties of Europe failed to recognize this, or ignored it, ultimately led to their downfall.
I was lucky enough to be studying China throughout the neoliberal era so knew how deeply and frequently they considered the structure, shape and trajectory of their economy. And how royally they rewarded foreign economists who gave them sound advice.
I'm not going to oppose this story, but it seems to me that something doesn't add up.
For someone to be rich, someone else has to be poor. For someone to be beautiful, someone else has to be ugly. For someone to be smart, someone else has to be stupid. And so on.
If everyone is rich, then no one is. So "to be X is glorious" is unattainable, regardless of what X is. That might work, for a time, if there's an ample supply of outsiders who are a lot less X than insiders.
However, I find it hard to believe that so-called elites weren't aware of this.
We know what happened: everyone has a plan until they get punched in the face. But what was the plan?
Flows did what flows do: they found the most efficient path.
Externally, they worked brilliantly. Capital, technology, and supply chains flowed to poorer countries and lifted billions. That part of neoliberal globalization succeeded.
The failure was domestic, in the rich world. Since the 1980s, we didn't just fail to update the internal architecture for a scaled economy. We actively moved it in the wrong direction.
We lowered top marginal rates. We deregulated capital flows. We weakened labor bargaining power. We treated financial engineering as productive. We unplugged the recycling mechanism for exceptional flows at the very moment when scale made concentration most likely.
So external flows created prosperity elsewhere. But internal flows were allowed to concentrate into unassailable stocks—trusts, family holdings, offshore structures—with the friction systematically removed.
The backlash was not a verdict on globalization. It was a verdict on decades of domestic architectural reversal. We changed the scale without adjusting the valves.
That is the lesson: external openness works. But internal flow regulation must scale with it. Otherwise, the winners detach entirely, and the system breaks—not from foreign competition, but from domestic concentration.
The valve exists. The question is whether we choose to install it.
I thought cosmopolitanism meant “no loyalties to a local community”, and therefore excludes the possibility of social choice over (say) poverty eradication, public health, universal education.
In Voice, Loualty and Exit, Albert Hirschman teaches us of the importance of loyalty in the health of any organisation or society.
I didn’t have much use for Theresa May, but she was onto something with her “citizens of nowhere” barb:
“But today, too many people in positions of power behave as though they have more in common with international elites than with the people down the road, the people they employ, the people they pass in the street.
But if you believe you’re a citizen of the world, you’re a citizen of nowhere. You don’t understand what the very word ‘citizenship’ means.
So if you’re a boss who earns a fortune but doesn’t look after your staff…
An international company that treats tax laws as an optional extra…
A household name that refuses to work with the authorities even to fight terrorism…
A director who takes out massive dividends while knowing that the company pension is about to go bust…
I’m putting you on warning. This can’t go on anymore.”
This is a very sharp way to frame the problem. I especially agree with the idea that neoliberal globalization was weakened not only by its opponents, but by its own two virtues: cosmopolitanism and competition.
I would only add one further layer: those virtues were never detached from material power. They sounded universal partly because they rested on a specific structure of Western advantage.
When the West could assume continued control over finance, brands, IP, standards, capital markets, advanced technology, and the upper layers of the global value chain, globalization could be narrated as openness, efficiency, consumer welfare, and global poverty reduction. Free competition looked universal because the hierarchy of competition still favored the West.
The deeper crisis began when competition produced an unexpected result. China did not remain a low-cost assembly platform. It used the globalization window to build a full industrial system, with supplier density, engineering capacity, infrastructure, domestic scale, and state coordination reinforcing one another.
That is when the moral language changed. Openness became strategic dependence. Free competition became unfair competition. Global efficiency became supply-chain vulnerability. Globalization became a national security problem.
This does not mean every Western concern is invented. Subsidies, state capitalism, security risks, and coercive leverage are real issues. But the timing matters. The moral vocabulary changed when the competitive outcome began to weaken the material foundation of Western industrial control.
So the deeper issue is not only how the virtues of neoliberal globalization turned against it. It is also why those virtues depended so much on a Western industrial hierarchy in the first place.
These 40 years overlap precisely with my adult life. I saw this phenomenon, I experienced it, and I know that your vision — especially when seen as a Greek tragedy (hubris, nemesis) — is painfully true and fully predictable.
Anyway, as written by Upton Sinclair, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
You present the narrative as though it was some kind of natural occurrence or evolution, rather than a quite deliberate, calculated ruling-class attack on the power and solidarity of workers and the structures of the welfare state that worker-power had brought about. These had to be destroyed so that capitalists could run riot and commodify everything in sight. Neoliberalism was also a gigantic experiment in socio-psychological engineering via the use of ‘market forces’ as a blunt instrument: “Economics is the method but the aim is to change the heart and soul”—Margaret Thatcher to The Times, 1981.
As is often the case with Branko’s blogs, it is hard to know where to start in critiquing his analysis. As commented below Branko presents his narrative as some kind of natural occurrence or evolution. Indeed, globalization is often seen as some sort of exogenous inevitable process like industrialization, urbanization, or modernization. Nothing could be further from the truth (about any of them). Calling it (rightly) neoliberal globalization (NLG) should make it clear that the form globalization has taken is the result of policies and processes that gave us the past 45 years of neoliberalism (which is still in force despite Trump and the global rightward march).
That is because – contrary to Branko – NLG was not driven by his two ideas of cosmopolitanism and competition. Branko’s idea of cosmopolitanism is more than strange – “every individual in the world is equally important.” On what planet is this a tenet of neoliberalism or real world globalization. NLG has actually been driven by the one core idea of neoliberalism which is that government should be minimized because it is self-interested and incompetent. And the neoliberal version of competition is also not its driving force nor as Branko blithely assumes nor is it responsible for decades of GNP growth (which, for example, in China is due to industrial polices, anathema to neoliberalism). NLG was not a “success for decades” and the idea that “the world became one by reflecting “difference in people’s abilities, skills, and efforts” is utter nonsense. NLG presided over the most savage increase in inequality in human history and the continued impoverishment and precarity of billions of people, by far the majority of the planet. And despite Trump and others, tariffs, etc. the core idea that the private sector is to be glorified and government is to be despised is not gone, there is no “inevitable demise,” and we are still stuck in a rapacious capitalism where the world is governed by a billionaire class more than ever.
Just to be clear: I do not think nor write that NLG was a natural process. It was a policy choice, principally by the Western elites, but then got accepted quickly by China (around 1982), India (1991) and Russia (1991). I also do not think that policy-makers when deciding had in mind explicitly cosmopolitanism and competition. I think that these were underlying ideas, part of the ideology that guided globalization. Finally, NLG is associated with increased inequalities domestically, but lower global inequality (thanks to high growth rates of Asian economies and esp. China).
I appreciate your clarification. But I don’t believe NLG has improved global inequality, despite China’s success. It depends how you measure it and many, like Jason Hickel, argue global inequality has worsened. I have worked in international “development” for 50 years and when I started back-breaking agriculture day labor paid $2 - $3 a day and it still does while the Gates’ of this world now “earn” millions of dollars per hour!
The right wing parties that have arisen are in almost all cases only superficially anti-systemic. Meloni-ism seems to be the bait-and-switch formula they are operating with. Which suggests that neoliberalism has a deeper hold than is generally assumed in the demise of neoliberalism critiques currently in vogue. In turn this suggests the need for a renewed, updated approach to causal analysis that gives due weight to structural factors - perhaps it could be called neoclassism!
Excellent analysis of what happened. It was the best thing that happened to humanity, brining the world economies and populations closer together. It was a brilliant example of creative destruction. Malcontent wrath was expected outcome, and it will have to be ridden trough. Maybe by brining extreme right to power and then showing it being incompetent, as Hungary has done, or now US? It is a risky process, but then democracies are more resilient than they were in 1930s, and then main nemesis, Russia, is much weaker compared to the West than Germany was in WW2. There is no way back, malcontents will eventually get disillusioned and give up. Mercantilism will eventually negotiate itself to more efficient world order, some new bout of neoliberalism, since it is just much more efficient for all. But not before some inefficiencies of the old World order are replaced. The risks that it will all end in devastating World War are there, but chances that this time it will be different are high assessing from Russia being bogged down, Europe awakening, US midterms looming, China quickly repositioning and age of oil ending.
https://x.com/sotirov/status/2003518722842227160
The text of my tweet from Dec 2025:
----
"No one argues about global poverty diminishing (a success of neoliberalism). However, poverty... once above the absolute life-sustaining minimum... becomes relative to context. Country-level contexts define people's experience... economic -> political. And politics is local. The rise of anti-liberalism is based in local, nation-level politics (with context-based notions of poverty/wealth). And that's what neoliberalism didn't address adequately. A smarter neoliberalism... with all the wealth it was producing, could have done more to address local, nation-level economic and cultural concerns... instead of (Bill Gates style) simply pointing to the efficiency of a dollar invested in Africa vs. in poor US neighborhoods."
This looks like a sound narrative to me explaining the broad outlines of what has been happening.
However, the graph does not end in 2019 unless the last interval does not represent 5 years but rather, the difference between 2019 and 1996, an interval of 23 years. So, the curve after 1996 is steepened so that it does not convey the rate of change in a consistent fashion.
Another beef: I would have chosen the 10-20 and 40-50 and 90-100 percentiles to document how people at the low end compare in their income growth rate with the middle and top end.
This is potentially a powerful presentation. Would love to see this type of graph used to make comparisons between the UK France, Germany, Australia and China.
It was Obama who bailed out Wall Street in 2007-8 initiating a period of steeply declining interest rates. From this point the Fed chased growth in economic activity by expanding the money supply to prop up investment. This helped to save the bacon of the debtors, including the US government, via enabling them to refinance their debt at lower rates. But this policy comes up against the law of diminishing returns in terms of growth and employment and increasing returns to financiers and rentiers abetted by the trend to monopolization, with dire consequences for housing affordability and health care. It would have been better to give Wall Street and US auto makers the haircut they so richly deserved. But of course, Obama came from Detroit.
I would like to see intervals marked that inform the reader as to the coming and going of presidents.
There is an additional complexity that needs to be considered. The decline in prices of consumer goods that China facilitated propped up the welfare of lower income earners in Western countries and the US oligarchs that shifted manufacturing from a high wage short work week to the opposite where motivation to work is stronger. This needs to be factored into the calculations because the failure of incomes to grow in monetary terms does not necessarily relate to living standards.
If we want to chase greater welfare for all it would be better to forgo tariffs and subsidies for exports, let China do its thing, accept the generosity of their Belt and Road initiative, share the benefits of all new technology wherever it comes from, better machines and the provision of energy to boost production as widely as possible, and above all revisit the problem of how to pay for goods and services that move across boundaries without giving the country that exerts force to give themselves a massive free kick at the expense of the rest of the globe. Bullying should not be tolerated.
The demise of neoliberal globalization is now undeniable even for the most enthusiastic proponent like me.
But as left ideologues routinely defend the idea of communism by separating it from its various real-world implementations, I would ask to separate the virtues of globalisation from their historical use and misuse.
It was not the cosmopolitism that crashed against the national borders, it was nationalism that crashed agains the cosmopolitism. The competition was rigged and the pursuit of success futile, but I doubt that mercantilism will automatically fill the pockets of impoverished workers.
The failure was in the domestic policies of the political west to manage distribution of the benefits of globalized “efficiency” across their citizenry, leading to what ought to have been obviously predictable sociopolitical disorders.
Neoliberal economies engage in zero-sum financial trading. Was this considered by Adam Smith?
Isn't this is a very Polanyian "disembedding" and "double-movement" account of neo-liberalism? As one who finds Polanyi's analysis of the 1830 to 1930 first coming of liberalism and globalisation very convincing, I'm definitely on board with it. However I'm curious whether the author thinks the differences in those two periods are significant: eg the 19th c. one featured empires and colonies, not explicitly present in our contemporary period; was there a similar "China" in the first period (Japan?); will China follow the same inward/nationalistic path as the West seems to be doing; will ours inevitably end the same way?
Another instance of Hegel's dialectic of history. Every historical process carries within it the seed of its ultimate failure.
The neoliberal project was, from the outset, a class struggle project. The fact that the social democratic parties of Europe failed to recognize this, or ignored it, ultimately led to their downfall.
The German SPD serves as an example.
I was lucky enough to be studying China throughout the neoliberal era so knew how deeply and frequently they considered the structure, shape and trajectory of their economy. And how royally they rewarded foreign economists who gave them sound advice.
I'm not going to oppose this story, but it seems to me that something doesn't add up.
For someone to be rich, someone else has to be poor. For someone to be beautiful, someone else has to be ugly. For someone to be smart, someone else has to be stupid. And so on.
If everyone is rich, then no one is. So "to be X is glorious" is unattainable, regardless of what X is. That might work, for a time, if there's an ample supply of outsiders who are a lot less X than insiders.
However, I find it hard to believe that so-called elites weren't aware of this.
We know what happened: everyone has a plan until they get punched in the face. But what was the plan?
Flows did what flows do: they found the most efficient path.
Externally, they worked brilliantly. Capital, technology, and supply chains flowed to poorer countries and lifted billions. That part of neoliberal globalization succeeded.
The failure was domestic, in the rich world. Since the 1980s, we didn't just fail to update the internal architecture for a scaled economy. We actively moved it in the wrong direction.
We lowered top marginal rates. We deregulated capital flows. We weakened labor bargaining power. We treated financial engineering as productive. We unplugged the recycling mechanism for exceptional flows at the very moment when scale made concentration most likely.
So external flows created prosperity elsewhere. But internal flows were allowed to concentrate into unassailable stocks—trusts, family holdings, offshore structures—with the friction systematically removed.
The backlash was not a verdict on globalization. It was a verdict on decades of domestic architectural reversal. We changed the scale without adjusting the valves.
That is the lesson: external openness works. But internal flow regulation must scale with it. Otherwise, the winners detach entirely, and the system breaks—not from foreign competition, but from domestic concentration.
The valve exists. The question is whether we choose to install it.
More at flowvsstock.substack.com
https://branko2f7.substack.com/p/how-the-virtues-of-neoliberal-globalization/comment/250874612?utm_source=share&utm_medium=android&r=452ny
I thought cosmopolitanism meant “no loyalties to a local community”, and therefore excludes the possibility of social choice over (say) poverty eradication, public health, universal education.
In Voice, Loualty and Exit, Albert Hirschman teaches us of the importance of loyalty in the health of any organisation or society.
I didn’t have much use for Theresa May, but she was onto something with her “citizens of nowhere” barb:
“But today, too many people in positions of power behave as though they have more in common with international elites than with the people down the road, the people they employ, the people they pass in the street.
But if you believe you’re a citizen of the world, you’re a citizen of nowhere. You don’t understand what the very word ‘citizenship’ means.
So if you’re a boss who earns a fortune but doesn’t look after your staff…
An international company that treats tax laws as an optional extra…
A household name that refuses to work with the authorities even to fight terrorism…
A director who takes out massive dividends while knowing that the company pension is about to go bust…
I’m putting you on warning. This can’t go on anymore.”
https://www.independent.co.uk/news/uk/politics/theresa-may-speech-tory-conference-2016-in-full-transcript-a7346171.html