The post-neoliberal consensus has already been formed, but don't look for it in the policies of US President Donald Trump.
After a decade of resistance, it is time to admit: neoliberalism is not only dead, but a new consensus has taken its place. Surprisingly, a significant part of the left and right in the United States agree on the general contours of economic policy. The debates in universities and think tanks are now based on a common understanding that differs significantly from the neoliberal orthodoxy of the last fifty years.
The first element of the new consensus is the recognition that the concentration of economic power has become excessive. This concern manifests itself in different forms among different groups. Some openly point to the inequality of income and wealth and the pernicious impact of this inequality on politics. Others are concerned about market dominance and its negative consequences for competition. For still others, the key problem is financialization and the distortion of economic and social priorities that it produces.
The proposed remedies are diverse - wealth taxes, strict antitrust controls, campaign finance reform. But they share a common goal: to limit the economic and political power of the corporate, financial and technological elites; it unites progressive supporters of US Senator Bernie Sanders and populists like Steve Bannon, who now hosts a podcast and was previously an adviser to Trump.
The second element of the new consensus is the importance of restoring the dignity of people and regions that neoliberalism has left behind. This requires good jobs. Because jobs are not just a means of providing income. They are also one of the foundations of identity and social recognition. Good jobs are the foundation of a strong middle class, which in turn is the foundation of social cohesion and stable democracy.
In a world of economic change, labor market shocks are inevitable. Until the 1990s, there were a multitude of protective mechanisms (job protections, trade restrictions, price controls, regulatory norms to rein in the financial sector) that mitigated the negative consequences for workers and communities. But neoliberals believed that these measures created inefficiencies and should be eliminated. They ignored the economic and social problems that job losses due to technological change, globalization, or economic liberalization could cause.
The third element of the new consensus: the state must play an active role, influencing the necessary transformations in the economy. Markets cannot be trusted to provide economic stability, national security, innovation in advanced technologies, clean energy, or good jobs in troubled regions on their own. The authorities must initiate processes, exert pressure, subsidize. Industrial policy is no longer shamefully marginal - it has taken a central place in economic discussions.
Taken together, these three principles constitute a new understanding of the objectives and instruments of economic policy - novel and, generally speaking, commendable. However, the devil, as always, lies in the details. The actual results will depend on the choice and implementation of concrete solutions.
Take the task of creating good jobs. The left and right have apparently reached a consensus on the desirability of reshoring manufacturing and reviving industry. Historically, the industrial workforce has played a key role in creating an egalitarian society with a middle class. But automation and other technological forces have transformed manufacturing into a labor-displacing sector. Even in China, the number of people employed in manufacturing has fallen by millions in recent years. So even if the US and Europe increase investment and output in manufacturing, the effect on employment is likely to be minimal.
Whether we like it or not, the future of employment is linked to the service sector - care services, retail, hospitality, logistics, the gig economy, etc. Any attempts to create good jobs that are not based on organizational and technological innovations in the service sector will inevitably disappoint.
Yes, there are other important reasons to support industry. Advanced industry, together with the digital economy, plays a key role in innovation and national security. It makes sense to implement industrial policy with a focus on these aspects of economic activity, with parallel measures to develop the service sector, which absorbs the workforce. However, here too, the question of “how” is as important as the question of “what”.
There are also objections to industrial policy. It can fail completely if it encourages corruption or serves the narrow interests of corporations. On this issue, Trump's approaches, unfortunately, seem discouraging. His trade policy and agreements with technology companies are chaotic, transactional, and devoid of a coherent long-term strategy that would serve the interests of society. In addition, they have become part of a program to strengthen authoritarianism and undermine the principles of the rule of law.
Post-neoliberal economic policy principles provide us with a broad checklist for evaluating real programs - and Trump fails this test. In words, he supports good jobs and industrial policies that encourage transformations in the economy, but in practice he contributes to the increased concentration of wealth and power. A model of clientelistic state capitalism that tries to revive a long-dead industrial economy can hardly be an antidote to neoliberalism.
The best that can be said about Trump's approach to the economy is that it represents an experimental phase in the post-neoliberal transition. The good news is that future policymakers will not have to go far in search of new guiding principles. The new consensus is already here.
The author is a professor of international political economy at Harvard University
Copyright: Project Syndicate, 2025. (translation: NR)
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