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PaperclipPerfector  3d ago (text post)   12550 thread views

Culture War Roundup for the week of June 22, 2026

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The End of Neoliberalism

If one were to define neoliberal globalization during the 40-year period from the early 1980s to around 2020, one could say it was driven by two ideas: cosmopolitanism and competition. One could also say these same features have now led to neoliberalism’s undoing.

Cosmopolitanism was an essential neoliberal idea going back to the meetings of the Walter Lippmann Colloquium in 1930s Paris and the early Mont Pèlerin Society. Cosmopolitanism meant that every individual in the world was to be thought of as equally important and equally capable of economic improvement if they faced optimal economic conditions—which implied security of private property, free trade, low taxes, and a “tolerable administration of justice.” Very little else, in the words of economist Adam Smith, was needed to fulfill the universal desire of all persons to “better their own condition” and for the world to attain unimagined levels of prosperity.

Cosmopolitanism was also the political idea underpinning a neoliberal world where national government as such would be out of sight and would leave individuals free to pursue their self-interest. This was, ideally, a world of small or almost invisible government. In the language of early advocates of neoliberalism, “imperium”—that is, flags, anthems, languages, and other paraphernalia of nationhood—would be left to politicians (and to voters, if citizens insisted on voting), and the more consequential world of “dominium” would consist of the movement of goods, capital, technology, and people.

For cosmopolitanism to create global wealth and prosperity, the world also had to be competitive. Not only would people be allowed to compete with (or against) one another regardless of national borders, but they also needed to be stimulated to compete by the display of all the goods that could be theirs and by the societal approval they would command if they won in that competition.

Competition produced global growth: Between 1980 and 2020-21, the average world GDP per capita more than doubled, jumping from $7,700 (in 2005 international dollars, adjusted for purchasing power parity) to almost $17,000. This makes the worldwide yearly average growth rate 2.1 percent per capita, an extraordinarily high rate for a period of 40 years. (And this despite the increase of the world population from 4.4 billion in 1980 to 8.3 billion now.) The more than doubling of per capita income combined with an almost doubling of the world population means that the total amount of goods and services produced in the world quadrupled during the era of neoliberal globalization.

But this “anonymous” growth rate, realized principally thanks to the high growth rates of Asian countries and notably China, did not help neoliberals’ case in rich countries. What was politically salient was not the 2.1 percent global rate but the fact that in the United States and in most rich Western countries, much of the population registered real (adjusted for inflation) growth rates of approximately 1 percent per year, while incomes of the rich grew two to three times faster. Moreover, the neoliberal period (dated from Ronald Reagan’s presidency onward) was not only pro-rich, in the sense that incomes of the rich increased faster than those of the middle class and the poor. It also represented a slowdown in across-the-board growth compared with the preceding period. In fact, at every point of U.S. income distribution—except at the very top—growth was slower during the neoliberal era than during the previous decade and a half.

The world, at least for a while, seemed to become uniform, divided not by borders of nation-states, race, or gender but by differences in people’s abilities, skills, and effort. It was approaching the neoliberal ideal of a borderless world full of intensively competitive individuals whose competitive juices were additionally stimulated by the ability to communicate with any part of the globe and to learn what potential competitors may do—and then to try to outdo them. But cosmopolitanism and competition, however attractive in themselves, were an unstable combination. Cosmopolitanism crashed against national political borders. Excessive competition created a world of greed, amorality, and commercialization of all activities, even those that used to be the most private ones. Fundamentally, it threatened to make family superfluous.

The winners of neoliberal globalization in rich countries—inspired precisely by their cosmopolitanism, which they regarded as a moral virtue (being free of poisonous nationalism)—were quick not only to treat their less fortunate compatriots’ welfare as of no greater importance as the welfare of a foreigner or a stranger but also to believe that their compatriots’ failure in such an open competition was indicative of some moral flaw. Economic success meant being virtuous, or as Chinese leader Deng Xiaoping, whose rise to power coincided almost perfectly with those of Reagan and Margaret Thatcher in the United Kingdom, did not deny: “To be rich is glorious.”

The political system however is organized within nation-states. The less fortunate compatriots felt forgotten and ignored, and they were resentful of the way in which they were treated. They saw the readiness, even eagerness, of the rich to invest in faraway places as callousness toward domestic workers. Promises of new jobs that would replace those lost due to cheaper imports or online work elsewhere were hard to materialize. The resulting discontent created political turbulence in the richest democracies. The 2007-08 global financial crisis made obvious what had previously only been implicit. The rich did not care for those left behind, and when the costs of the crisis had to be paid, they made sure that the bill was not sent to them.

The malcontents who in previous times would equally replenish extreme left-wing and extreme right-wing parties, as they did during the Great Depression in the 1930s, had now much less choice. The left-wing parties were either discredited by the failure of the “real-existing socialism” or, through their accommodative third-way policies, seen as accomplices of the center-right parties in promoting the type of neoliberal globalization that so disenchanted Western working and middle classes. Indeed, the peak of neoliberal globalization was achieved under the notionally left-wing governments of Bill Clinton in the United States, Tony Blair in the U.K., and François Mitterrand in France.

So the disappointed masses turned toward the right-wing parties that promoted national solidarity, an end to the (economically) equal treatment of the domestic population and foreigners, and even a return of industrial jobs. In the international arena, neoliberal globalization thus became increasingly replaced by neomercantilism, which used economic coercion, the seizure of foreign assets, import bans, and extravagant tariff policies to cut, or at least control, the free flow of goods and services. Free flow of labor was even easier to cut because its political popularity, even at the peak of neoliberal globalization, was small.

The second part of the neoliberal equation—competition within society and across borders and time zones—created, with the assistance of technical advances, a world where the upkeep of one’s homes and cars and even domestic chores, from cooking to elder- and childcare, were shifted precisely to the people who no longer had steady jobs and were part of the class of malcontents. The moral norms that previously held societies and families together and would have forestalled such outsourcing had become effaced by a desire to be “glorious”—that is, to be rich. That perceived amorality also helped the rise of anti-systemic right-wing parties. They grew on the promise of a restoration not only of lost jobs but of self-respect among malcontents and a return to allegedly traditional values for society as a whole. In short, neoliberalism has succumbed to its own substitution by a combination of protective barriers for foreign goods and foreign people and vain attempts to return to a more traditional world at home. As in a Greek tragedy, the very features that ensured neoliberal globalization’s success for decades produced its inevitable demise.

Capitalism probably isn't going anywhere, but the globalist cosmopolitan ideals of neoliberalism are in retreat. The author has previous called citizenship a form of rent seeking, which is basically accurate if you start from the principle that all people really are equal. But if you move too far from the basic idea that countries exist to secure and promote the welfare of their own citizens, you get Trump and whatever's going on in Europe. And despite his big business accolades, Trump is hardly against state capitalism (see Intel).

It's unclear how successful Trump will be at reversing the broader trends of free markets/open borders - ICE has gone much further than most people anticipated, and tariffs are still high despite liberation day numbers being cut heavily. There have been a lot of promises of reshoring but not a lot of action on that front. And while the future may remain broadly anti-globalist, it's hard to predict if the post-Trump GOP will continue along his path or revert back to lip service.

Much like with woke, I'd be careful about declaring an end of world-dominant ideologies the first moment they stumble after an uninterrupted winning streak. I can grant that the ruling elites seem to be nervously coughing about the slogans they were pretty enthusiastic about a mere few years ago, but they set into motion some rather large trends, and I'd say they are likely to continue on the strength of inertia alone. See, for example, the screeching about NY congressional elections, things like this are only likely to keep happening more, not less. Same applies to talk of "muh chips" reindustrialization, be it in Europe, or the United States for that matter - hopefully I'll be proven wrong, but so far it's all just a meme.

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