Branko’s FP piece argues that neoliberalism, understood as the form of globalization dominant from the early 1980s to around 2020, was built on the principles of cosmopolitanism and competition. Cosmopolitanism meant treating individuals everywhere as equally entitled to pursue improvement through private property, free trade, low taxes, and limited government. Competition meant allowing and encouraging people and firms to compete across borders.* In his view, these principles generated exceptional global growth, above all because of Asia’s and especially China’s rapid expansion.
He acknowledges that this period greatly increased global output and income. Average world income per person more than doubled between 1980 and 2020–21. To a great extent as a result of the growth of the East Asian Tigers, and then China and India. Total global production therefore expanded enormously. But Branko notes that this aggregate success did not translate into political support for neoliberal globalization in the rich countries, because much of the electorate there experienced weak real-income growth while the rich did much better. His elephant graph explains this.
For him, this uneven distribution was crucial. Neoliberalism was not merely pro-rich. In the United States and much of the West, it also produced slower broad-based growth than the preceding postwar period. The global gains associated with China’s development and international integration were real, but politically abstract for workers in advanced economies who experienced deindustrialization, stagnant wages, insecure employment, and the erosion of local economic opportunities.
His point is that cosmopolitanism and competition eventually undermined one another. Cosmopolitanism treated the welfare of foreigners and compatriots as morally comparable, while national political systems remain organized around citizens who expect some degree of national solidarity. The winners of globalization, he argues, often appeared indifferent to compatriots who lost from import competition, offshoring, or the reorganization of production. Worse, they tended to interpret failure in competitive markets as evidence of personal or moral inadequacy.
The 2007–08 global financial crisis made these tensions unmistakable. It showed, in his account, that the rich and the financial sector could be rescued while those who had lost economic security were expected to absorb much of the cost. The center-left was poorly positioned to capture the resulting discontent because it was either discredited by the history of “real-existing socialism” or associated, through Third Way politics (New Dems, New Labour, etc.), with the very neoliberal globalization that had alienated working and middle-class voters.
This helps explain why the backlash moved predominantly to the right. Right-wing nationalist parties promised national solidarity, limits on the equal economic treatment of citizens and foreigners, the return of industrial employment, and a restoration of dignity and traditional values. In the international sphere, Milanovic sees neoliberal globalization being replaced by neomercantilist policies, protectionism and the increase in tariffs, import restrictions, the use of economic sanctions, including asset seizures, and a much more politically acceptable restriction of migration.
In somewhat Marxian fashion, he says that the internal contradictions of neoliberal globalization produced the conditions for its own demise. Globalization’s success created global growth but generated domestic inequality, social resentment, and political nationalism in the rich countries. Neoliberalism is therefore being replaced by a more protectionist, nationalist, and economically coercive international order.
Branko thinks neoliberalism has genuinely ended and has been replaced by neomercantilism. I’m more skeptical about that. The United States and Europe may now use industrial policy, tariffs, subsidies, and geopolitical controls, but it’s not clear that they ever stopped using them. Meanwhile a good part of limits imposed on the working class in advanced economies and in the periphery, remains subject to the old neoliberal discipline. In other words, the attachment to free-market ideology was always qualified in the center, and the complete reversal of policies should be taken with a grain of salt.
It is clear that neoliberal globalization generated political discontent, weakened labor, intensified inequality, and helped create the conditions for nationalist backlash. It is also true that the old cosmopolitan language of free trade and borderless markets is no longer adequate to describe the behavior of the major powers. But it doesn’t follow that neoliberalism itself has ended. In my account, the system has adapted remarkably well because its core purpose was never simply free trade or small government. It was the reorganization of society in favor of capital, the discipline of labor, and the restriction of democratic policy space.
The main thing that Branko underestimates is that cosmopolitanism and competition were never the whole substance of neoliberalism. They were important ideological and institutional forms, but the underlying project was the protection of capital, the weakening of labor, and the encasement of markets against democratic control. When the free-market ideology ceases to serve those purposes, neoliberalism can survive through protectionism, industrial policy, militarization, fiscal rules, and geopolitical coercion. Let alone that in good parts of the periphery – certainly in many parts of Latin America, like in Argentina – the old neoliberal free-market ideology and policies are alive and kicking.
Further, and perhaps more importantly, free-market ideology has not been completely abandoned by right-wing populists such as Trump. The celebration of entrepreneurship, the belief that markets are the most effective mechanism for coordinating information, and the idea that there are no workers, only potential entrepreneurs, remain central to the MAGA revolt. The self-made-man myth is still doing much of the ideological work. Tariffs and sanctions are therefore presented less as a rejection of markets than as a means of leveling the playing field against foreign competitors and unfair practices. In other words, the ostensibly post-neoliberal right maintains core neoliberal ideological commitments, they abandoned cosmopolitanism, but not free-market individualism.
* I’m not sure that people, or more precisely, workers were, at any point in the more recent neoliberal era, allowed to move freely. There was an asymmetry between the mobility of labor and capital for sure. Free labor, in the neoliberal context, often meant free from unions, which are seen as an impediment on the individual bargaining position.
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