The Death of Neoliberal Globalisation was Written into its DNA
Liberals need to learn the right lessons from its collapse.
Rachel Reeves is headed to Washington to make the case for global free trade. Reeves will use her speech to the IMF to repeat the argument that liberals have been making for decades: free trade is good for everyone.
Defenders of the so-called ‘liberal international order’ have spent the last half century arguing that the globalisation of trade, finance, and production would lead to higher incomes, rising living standards, and greater prosperity for everyone. Poor countries could specialise in the extraction of raw materials, middle income countries could take on labour-intensive manufacturing, and the rich world could specialise in professional services and the ‘knowledge’ industry.
Unsurprisingly, this model of globalisation - neoliberal globalisation - did not deliver on its promise of prosperity for all.
Neoliberal globalisation embedded a hierarchy of global production in which the rich world dominated. Powerful multinational corporations located in the global North could exploit cheap labour in the poor world, avoiding tax and regulation, before reshoring all their profits back home. The only countries that managed to escape this model of ‘development’ were those that rejected the free trade consensus, like China.
But in the end, the rebellion against free trade came from the rich world, not the poor world.
When working class communities lost jobs to globalisation, these communities didn’t only lose income – they lost their sense of identity. Deindustrialisation created a powerful sense of loss and decline in many parts of the global North – and the far right has latched onto these feelings with astonishing success.
The backlash against globalisation seen in deindustrialised communities across the US is what gave us Brexit and Trump. But the opponents of these projects have utterly failed to understand the conditions that gave rise to their success. The liberal rules based order did not collapsed because of one bad President. It has collapsed because it enriched a small elite at the expense of people and planet, undermining democracy in the process.
The End of History
Liberals spent decades arguing that the liberalisation of trade, investment, and global finance would create opportunities for everyone. Globalisation would lift poor nations out of poverty. It would create better jobs for workers in the rich world. And it would make the whole planet better off.
When poor countries refused to see the benefits of the liberal rules-based order, they would have these rules forced upon them. International institutions like the IMF and the World Bank threatened to consign poor nations to bankruptcy if they didn’t implement the structural adjustment programmes designed by economists in Washington.
The problems with this model were visible from its inception. Across much of the poor world, structural adjustment increased inequality and undermined democracy. In the rich world, privatisation and deregulation saw the finance sector balloon to obviously unsustainable proportions.
After the financial crisis, the cracks began to widen. Poor countries that had been prevented from achieving sustainable development found themselves suddenly unable to service their debts. Rich countries that had hosted bloated finance sectors were forced to divert all their resources to bailing out struggling banks, while imposing ruthless austerity programmes on working people.
As the cracks widened, liberal elites clung even tighter to the fantasy, blaming the victims of globalisation for failing to adapt, rather than questioning the structure of the system itself. Instead of confronting the failings of neoliberal globalisation, in which manufacturing jobs were outsourced to low-wage countries, entire regions were hollowed out, and wealth was sucked into bloated finance sectors in rich countries, liberals dismissed these issues as teething problems.
Politicians like Tony Blair went so far as to argue that neoliberal globalisation was inevitable. In a speech to the Labour Party conference, he argued that debating globalisation was like debating ‘whether autumn should follow summer’.
Liberal politicians saw the devastation created by neoliberal globalisation as a communications problem, not a policy one. They told themselves that working people wouldn’t be so angry about the transformation of the world economy if they only realised that globalisation was good for them. The arrogance of these politicians is precisely what led us to the current crisis.
Worse, rather than engaging with left movements that offered a coherent critique of neoliberal globalisation, liberals have spent the better part of the twenty first century demonising them.
The alter-globalisation movement acknowledged the devastation wrought by the ‘liberal rules-based order’ and sought to strengthen economic democracy, empower workers, and support the creation of international institutions that could manage the global economy in a fair and sustainable way. This movement is exactly the one that Tony Blair was attacking when he argued that globalisation was inevitable.
More recently, the left’s warnings about the consequences of neoliberal globalisastion were dismissed as dangerous populism - from Jeremy Corbyn’s critique of the European Union, to Bernie Sanders’ anti-elitist message to working class voters in deindustrialised communities. Instead of working to build a more equitable global economy, liberal politicians arrogantly closed ranks around supporting the status quo, dismissing any critique of their approach as naïve or dangerous.
Into this vacuum stepped the far right. Figures like Trump were able to seize the moment and channel popular rage at neoliberal globalisation into xenophobia, authoritarianism, and nationalism. By undermining left alternatives to neoliberalism, liberals ended up empowering the very forces they claimed to oppose. They handed nationalist movements the banner of ‘anti-elitism’, allowing them to build a Faustian pact between working people angry at deindustrialisation and billionaires who wanted tax cuts.
Learning the Wrong Lessons
As the US reels from the consequences of decades of elite mismanagement, liberal politicians would do well to learn the right lessons from the current crisis. They should know better than to rehash the benefits of neoliberal globalisation, which had demonstrably failed to improve people’s lives in the way its adherents claimed. They should have the humility to learn from their failures: to finally acknowledge that free trade isn’t truly free given the vast inequalities of power that exist within global capitalism.
Instead of trying to defend the broken ‘liberal rules-based order’, liberals should realise they need to build something new. That means rebalancing global trade in favour of workers rather than multinational corporations. It means investing in the regions and communities hollowed out by neoliberal globalisation. And it means building international cooperation on a foundation of cooperative development, not competitive exploitation.
The liberal order didn’t collapse because people failed to appreciate its benefits. It collapsed because it failed the vast majority of people it was supposed to serve. If we want to avoid repeating the mistakes of the last forty years, we need to start listening to those who’ve been excluded, and start building an international order that works for everyone.
Very well put, as the old saying goes, 'scratch a (neo)Liberal and also fascist bleeds, it's been proven that the social called 'grown up' liberal elite as demonstrated in Starmer and Reeves would rather be handmaids to the far right than give ground to anything from the centre left/left.
I wholeheartedly strike a chord with Grace’s clear-headed critique of neoliberal globalization in this awesome article!It’s precise and it’s based on working class’s perspective.Your highly theoretical and critical analysis of the horrible impacts that neoliberal globalization has on working class reminds me of the writings I’ve read by Noam Chomsky,Joseph Stiglitz,Amartya Sen,David Harvey，Alex Callinicos,Michael Hardt,Naomi Klein and China’s foremost thinker Wang Hui.
Whether it’s the word“liberal”“liberalism”,they are all the depoliticized political concepts,these concepts wear of masks of having nothing to do with politics and ideology,in essense they are not neutral,in contrast,they are highly political and ideological.
Although China hasn’t fully accepted the doctrines of Washington Consensus from the end of 20th century to the beginning of the 21st century,since 1990s,it has been the historical period when those neoliberal ideas about economics,culture,history have become quite influential and dominant on China’s mainstream media,university podiums, lecture halls,policy-making circles and official documents.During that period,American hegemony has nearly been eulogized by those pro-America Chinese liberal intellectuals as the perfect shining example for China to follow suit.It is also during that period that the neoliberal institutional arrangements have begun to infiltrate Chinese society,particularly the radical marketization and massive privatization of China’s state-owned enterprises have led to massive corruption and widening polarization,socialist elements in China have been devoured by neoliberal reformers,public ownership of those SOEs have been transferred into private hands at very low costs in a highly untransparent and undemocratic way behind doors,this aspect has been downplayed or neglected by those economists like Joseph Stiglitz, Jeffrey Sachs and also Keyu Jin(a mainstream Chinese economist at LSE),these economic luminaries seem to like to emphasize the economic achievements of China like the alleviation of poverty of millions of people while ignoring the reality that the socialist elements of China have gradually been eroded,China’s unions have been disempowered,revolution,global south,Marxism,Maoism have been turned into the detoxified and ossified official doctrine instead of the rallying call of mobilizing and powerful lenses of analysing the new reality.Crises and grievances have become omnipresent since 1990s in China.
Though China’s new technology and astounding scientific breakthroughs like electric cars,renewable energy,5.5G smartphones and AI chatbot deepseek have once and again spearheaded and amazed the world,though China’s achievements in building infrastructures and great capacity in manufacturing have won the global recognition,I have to admit that the worst part resembles to the oligarchic America，China nearly has all the worst features of crony capitalism——billionaires exert tremendous influence on policy-making,the ideology of money worship and so on.
Besides those deleterious economic impacts neoliberalism has imposed on the whole world,the dumbfounding effects neoliberalism has inflicted on morality,on ethics,on human relationships should also be taken seriously.
Neoliberalism has made relationships between people based on profits instead of mutual appreciation and concern,it has eroded the relationships between people and made everything transactional.Everything has become commodified,it has turned everything into an exchange of profit,such as making friends,falling in love and getting married.It is quite alarming.This has been the tragedy for China’s neoliberal turn since 1990s.Neoliberalism has made men and women calculating and sophisticated,compassion and nobleness have become the laughing stock,cheating and lying have become prevalent,prostitution has been more severe and popular,using money to buy official positions,job positions,academic scores and various kinds of prizes have become common place,there have been more and more fake products,like fake honey,fake milk powder,fake oil,fake alcohols,fake credentials----environmental consequences have been felt quite strongly,rivers and lakes have been polluted by chemicals,housing prices have been skyrocketing,money has become the new religion with lots of loyal worshipers,numerous excellent Chinese young people from elite universities would consider of becoming financiers and bankers rather than critical intellectuals like Owen Jones and Grace Blakeley with great commitment to fighting against social injustices and arousing people to grapple with structural social inequalities.
Maybe the fortunate thing is that China has the thousands of years of Confucian tradition and 20th century socialist legacies to counteract these noxious effects of neoliberalization in the reform era.As a result,in today’s China,we still could feel the warmth and care among people though it’s more and more rare.
And I believe the proper way for China and the whole world to get out of the neoliberal consequences is to follow the prescription of democratic socialism.