It is wrong, then, to link the shape of this future ideological project to Trump himself. His political future is uncertain. But the dissatisfaction, as well as a peculiar ideological mélange, that Trump defined is not going to go away: regardless of what happens to the man himself. Individuals certainly matter in history, but deep economic and political currents matter at least as much. After four years of Trump’s first presidency, policies that, in the beginning, appeared unusual, have been adopted by the rest of the body politic. They remained, and were even developed, after his first term. Thus the new political and economic order is already here. Trump’s second administration is continuing along the same path, and even accelerating the change.

When Trump waged a trade war with China in 2017, it was an unusual idea with very little prior support from the political class. It has since become more broadly defined, more elaborate in content, and accepted across the entire American, and increasingly European, political spectrum. It has an economic component (China is responsible for the decline of the American middle classes), a military interest (US security in Asia is jeopardized by China’s rise), and a political agenda (China is run by a dictatorial regime). The last two parts were “developed” after Trump left office in 2021, a further confirmation of the near-universal acceptance of this new thinking.

Recourse to trade wars or sanctions of individual entities or persons expanded under Trump — for instance, the reintroduction of a tough sanction regime against Cuba, increased sanctions against Iran and Venezuela — but that policy was not discontinued under President Biden. In fact, nothing changed either in policies with respect to Cuba, Iran and Venezuela, while a multitude of new sanctions were introduced against Russia, China, North Korea, Yemen and other nations. The United States has dozens of sanction regimes that affect perhaps thousands of individuals. Economic coercion is now considered a normal part of the international economic policy toolkit.

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The mercantilist approach to foreign trade, and the view of markets as solely the terrains of contestation and combat, is something that we can define as a “businessman” view of economics: it sees economic activity as a permanent struggle; and does not see the “invisible hand” of the market that reconciles various interests. The businessman view is now much more widely shared than a decade ago. The influential Financial Times commentator and writer Rana Foroohar gave it a veneer of respectability in her 2022 book Homecoming; new mercantilism is promoted by influential circles in the United States and the European Union, often under the guise of the need for greater geopolitical or military security. 

Bradford DeLong, a former US undersecretary of the Treasury under Bill Clinton, has come out defending industrial policies on the basis of national security, even using, out of context, Adam Smith’s statement that “defense is much more important than opulence”. “Friend-shoring” favors investments in politically friendly countries and de facto divides the world into competing trade blocs, not different in any essential way from the division of the world into economic blocs that reached its peak in the interwar period. “Friend-shoring” is the Imperial Preference or Japan’s Co-Prosperity Sphere that dares not speak its name.

What people who are arguing for such policies forget is that the 180-degree turn in Western policies regarding protectionism, trade blocs, industrial policy and economic coercion has international consequences. The entire post-1945 system of Bretton Woods institutions was set around the principles of free trade. Until the massive trade liberalizations in 1980, it did not exclude the use of tariffs and other protective measures: but this had to be done within an international framework (first GATT, then the WTO). With the ascendancy of the Washington Consensus, economic policies became further liberalized. It will therefore be difficult, if not impossible, to explain to the rest of the world that the entire post-1945 system ought to be revised. Should, for example, the World Bank suggest to Nigeria that it should increase tariffs and join a trade bloc? 

Or, to put it differently, if a country does exactly that and the World Bank still argues for trade liberalization, how seriously can the World Bank argue for it while the US and Europe are raising tariffs and creating trade blocs? Given the pre-eminent importance of the political West in the design and running of international organizations, these changes cannot be looked at solely from the domestic angle, as if the previous neoliberal policies can be continued in other countries as before. The change in trade policies among the most powerful countries will inevitably have repercussions for the rest of the world, not only economically but also ideologically. One would need to define a new global paradigm for international organizations like the World Bank and the IMF. The idea, and execution, of limiting immigration and increasing deportation is not exclusive to Trump. But by speaking about it ceaselessly, he has made it enter the political lexicon. The wall against Mexico continued to be built after Trump left office the first time, while children were still held in cages. 

Now, “walling oneself off” from the rest of the world has become a politically acceptable approach globally. EU boats patrol the Mediterranean, where about 3,000 people die annually while trying to cross to Europe (the statistics are intentionally vague). Walls against immigrants have also been erected on the Greco-Turkish and Serbo-Hungarian borders. The EU’s approach is uniquely schizophrenic: it prides itself on being a multicultural and multinational union, but holds it acceptable to build walls and electric fences on its borders. Trump’s anti-immigration stance has not differed from that of Theresa May when she was the home secretary and prime minister in the UK or, Giorgia Meloni in Italy (who is building camps in Albania for immigrants imprisoned by Italian authorities similar to the El Salvador prisons used by the Trump administration).

Trump’s ethnonationalism, that in the US means anti-black and anti-Latino policies, is shared, as against “their” minorities, by numerous European political parties, from the Finns Party in Finland to the Freedom Party in the Netherlands, Le Pen’s Rassemblement National in France and Vox in Spain. It is when we put these ideas together — tariff wars; sanctions as a way to conduct economic policy; trade blocs; halts to immigration — that we can better appreciate that the new ideological package “proposed” by Trump is not just his own but is similar or the same as the “packages” already applied by many in the political West. And these “many” are not just the so-called populist parties: smaller or larger parts of the “package” have been appropriated by the mainstream parties too.

A new set of political beliefs, unrelated to whether Trump is in power or not, has been created, and is likely to remain long after he is gone. One can see this clearly by listing four areas that are each in direct opposition to neoliberal ideas. First: instead of globalization, there are tariff wars and economic exclusion zones. Second: instead of economics being insulated from politics, there are politically motivated sanctions and state-led industrial policies. Third: instead of the aspiration to full mobility of people around the world, there are walls and fences. Fourth: instead of cosmopolitanism, as a desired ideology, there are openly nationalistic movements in positions of power.

There are also elements of neoliberalism that are likely to survive under this new ideological amalgam. It is, in Trump’s case, as already mentioned, a businessman’s approach to neoliberalism. It nevertheless has commonalities with standard neoliberalism: low taxation of high incomes and inheritance; tax preference given to incomes from capital vs incomes from labor; deregulation; limited state spending; no government interference in private matters (including rejection of affirmative action, gender-related policies and other attempts to level the playing field between different groups).

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The term that might be the most appropriate for this amalgam of ideas is “national market liberalism”. It includes parts of both classical liberal and neoliberal thinking when it comes to markets, but it rejects — or is at least skeptical of — other parts of the liberal project around civil equality. Further, it rejects the internationalism that was integral to both classical liberalism and neoliberalism. Hence, the “national”, a prefix I think indispensable. It may be deemed inconsistent to append the term “nationalist” to an ideology that was famously universalist, in favor of free global movement of goods, people, capital and technology. Quinn Slobodian, in his excellent book Globalists: The End of Empire and the Birth of Neoliberalism, traces the evolution of neoliberal thinking, and notes the distinction that its founders made — once they realized that the dream of a global neoliberal political federation is not achievable — between “imperium” that deals with political, cultural and symbolic matters, and “dominium”, an internationally regulated economic system within which the symbolic “imperium” is encased. The dominium ensured not only free movement of factors of production and goods and services, but also monetary stability and compatibility of legal norms. Liberals as well as neoliberals were always cosmopolitan or internationalist; their ambitions were not limited to one or two countries. The world as envisaged by fellow-Austrian political economists Ludwig von Mises and Friedrich Hayek was a borderless world. This is, as we have seen above, very far from the ideas that Trump and other challengers to neoliberalism have in mind.

The ideological amalgam that combines “national” with an ideology that is fundamentally internationalist is not a novelty. National socialism put together, not only in words, but in deed, the two elements that were considered incompatible: socialism, that was always internationalist, and nationalism. National Socialism proved that such a combination was possible and enjoyed enormous political success. Stalin’s “socialism in one country” can also be placed in the same group of systems. There, however, a communist party jettisoned internationalism and adopted Russian, or probably more exactly Soviet, nationalism. Domestically, though, it remained socialist.

Socialism shorn of its internationalist component produced national socialism in its Hitlerite and Stalinist versions. Global neoliberalism shorn of its internationalist component gives us a vision of the new emerging consensus: liberal policies limited to national markets and mercantilism abroad. This also, I believe, convincingly proves that the critics of the new consensus are wrong to call it “fascist”. Yes, it shares a nationalistic element with “fascism”, but not more so than mercantilist policies in general. Domestically, though, it eschews any socialistic element — nay, it explicitly rejects them — and in that respect it comes close to, or is indistinguishable from, neoliberalism.

***

This is an edited excerpt from The Great Global Transformation, which is published by Allen Lane on 6 November.

These similarities may be useful to gauge the internal party power of Xi, but they tell us nothing about his economic policies or ideology. While Mao’s ideology during the Cultural Revolution was directly anti-Confucian, Xi’s is pro-Confucian. While Mao’s great economic turns — “the Great Leap Forward” and the Cultural Revolution — were motivated by ideology and disregarded stability, Xi’s policies are motivated by the opposite desire: to produce a more stable society.

This reflects evolution over the past 40 years. Following Deng’s sharp pro-market turn that placed economic growth centre stage, first after Mao’s death in 1976, and then even more decisively after the Tiananmen crackdown, China grew tremendously (at an average annual rate of more than 6% per capita between 1992 and 2012), while inequality increased (measured by the Gini index, from 36 to 47 points over the same period). The new China made many people rich, reduced poverty, changed the structure of the elite by having it much more private-sector oriented, and made the country “moderately prosperous”.

This trend was overseen by Jiang Zemin, the General Secretary of the Party from 1989 to 2002, and then by Hu Jintao, who held the two highest offices (head of the Party and head of the state) during the following 10 years. The embourgeoisement of the Chinese elite had to be given an ideological veneer — and Jiang Zemin provided this in 2000, when he introduced the policy of the “Three Represents” which allowed rich entrepreneurs to be more easily accepted in the nation’s governing bodies. Thus, somewhat paradoxically, the Chinese People’s Congress became the richest legislative body in the world, exceeding even the US Congress in the number of dollar millionaires in its ranks.

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Both in personnel and ideology, then, a party whose claim to legitimacy was largely rooted in equalising chances and outcomes for most Chinese was gradually becoming the party of the rich. Based on micro data from household surveys, one paper I worked on with Li Yang and Filip Novokmet found that the top 5% of Chinese society had dramatically changed: in 1988, less than one quarter of the elite was linked with the private sector; by 2013, the year after Xi’s ascent to power, that share was close to 60%. We also found an increasing split between the social composition of the party overall and the party’s own elite: while the Party in 2013 still had a majority membership of the “old” (state-related) social groups, the top 5% was increasingly dominated by the “new” social groups (private-sector entrepreneurs and professionals).

The rich not only became more important, but were more visible too. Conspicuous consumption and disregard of public modesty — recall the story of the black Ferrari crashed in Beijing by a son of one of Hu Jintao’s top allies in 2012 — added to the perception of the Party as condoning many of the worst displays of nouveau-riche arrogance. And it seemed very possible, whether for better or worse, that the CPC might continue to evolve into an outwardly pro-rich party, defending the interests of a monied oligarchy, stimulating capitalist development, and holding power similar to the ruling South Korean party during the period of General Park’s rule. The term “communist” in the name of the Chinese party should not make us think such an evolution is impossible: North Korea’s communist party runs a monarchy.

But Xi seemed to have had a different view on the matter. At around the time he assumed his highest powers in 2012, there were two possibilities for the CPC: become a pro-capitalist party both in deed and ideology, or repress the most glaring displays of capitalist power within the party and outside and send the message that the ultimate arbiter is the State and the Party, not the new moguls and oligarchs. In addition, it could discourage ostentatious displays of wealth, punish the most corrupt, and shift the gears of the state towards ensuring less inequality, especially by reducing the urban-rural gap and the division between Eastern and Western provinces.

If we look at Xi’s “Common Prosperity” programme in a realistic way, and not fantasise that it represents some vague return to Maoism, it makes perfect sense: it is the overdue readjustment of excessively pro-capitalist policies, which, while perhaps good for growth, threatened to produce social anomie. And, in taming the liberalisation of his predecessors, what Xi proposes to do is not so different from what social democratic parties of Western Europe realised after the Second World War. Letting capitalism run amok, they thought, would produce another Great Depression, and such developments would only provide grist to the mill of the increasingly powerful Communist parties and trade unions linked with them. By contrast, their social-democratic policies were remarkably successful, so much so that a version of the period’s French sobriquet of the Trentes Glorieuses is applied across much of Western Europe. Inequality went down, growth picked up, and a “normal” middle class composed of hard-working and well-educated workers and employees was created.

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We do not know if Xi’s policies will be equally successful. Western European countries were democracies; China is not. West European policies did not depend on one man, or a narrow consensus; they were the product of a much wider intellectual movement that dated back to the pre-war period. Xi’s policies could therefore fall prey to the desire of his eventual successor to differentiate themselves from him — especially if they, similarly to Jiang Zemin, put greater emphasis on economic growth and do not shy away from supporting capitalists. Outside of government, China’s citizens may be, as some parts of the middle class seem already, tired of the repetitive insistence on an ideology that seems an awkward mélange of Marx and Confucius.

Yet while China’s future may not be as firmly seated as Xi wishes it to be, the main ideas behind his “turn to the Left” can be easily articulated: expand the role of the state and the Party, reduce the power of capitalists, and keep growth going while making sure it does not become socially destabilising. We do not need recourse to some fanciful Maoism to explain it. Rather, to borrow the metaphor of Chen Yun, one of the early Chinese Communist leaders, it is time to slightly narrow the cage within which the private sector operates. After all, if such a “readjustment” is successful, it will set China on a track for reasonable growth (of 4-5% per year) over the medium term. This will maintain some inequality, particularly when it comes to geography, and China’s capitalists will still get rich — but they will not be in political control.

Recent reports of China’s economic decline are thus much exaggerated. They reflect the unconscious absorption by Western and Chinese analysts of a Dengist emphasis on growth alone: uniquely in the case of China, growth rates below 7-8% per annum are seen as precursors of economic demise. Yet while Deng’s approach made sense in a post-Mao China traumatised by voluntarist economic policies, it cannot be, nor should it be, maintained forever. As in every country, economic growth and social stability have to be balanced. China will not grow at 10% per annum; nor will it cease to grow. It will not rule the world, nor become irrelevant. Instead, it will maintain an intermediate position — an outcome that should be welcomed by both China and the West.

This view, however, overlooks what was the principal objective for Marx: the abolition of classes, end of private property of capital and thus transcendence of capitalism. Marx and Engels were indeed activists, founders of the First International, indefatigable organisers of various workers’ assemblies, writers of The Communist Manifesto, authors of very accessible lectures delivered to workers’ associations (especially so Marx’s very simple but brilliant Wage Labour and Capital). In such activities, they necessarily argued for typical pro-workers or pro-trade union causes: reduction in the number of hours of work, a ban on child labour, higher wages, free education.

So, how could he not have been a pro-equality thinker? To understand this, one has to return to Marx’s and Engels’ principal objective: the end of class society. For that ultimate objective to be reached, workers’ activism in which Marx participated and which he supported, was necessary. It was useful too as it brought some real gains to the workers. But such activism, in Marx’s view, must never lose sight of the ultimate objective. The reduction of inequality that could be obtained through syndicalist struggles cannot by itself be the final goal. It is only an intermediate aim, on the road to the classless society.

Marx and Engels are very clear on this point in their critique of the Gotha Programme, the new programme of the German Social-Democratic Party drafted in 1875. This was the single most important occasion at which they forcefully expressed the contrast between the two objectives: reduction of income inequality within a capitalist society, and the abolition of classes. As Engels writes: “The elimination of all social and political inequality [as stated in the Gotha Programme] rather than ‘the abolition of class distinctions’ is similarly a most dubious expression, as between one country, one province and even place and another, living conditions will always evince a certain inequality which may be reduced to a minimum but never wholly eliminated.”

That their concern was not unfounded can be seen from the fact that the programme, despite Marx’s and Engels’ objections, was adopted with all of its reformist and meliorist features. The party then went even further in the reformist direction when Eduard Bernstein, who in the years before the First World War became its chief theoretician, argued that “movement is everything, goal nothing”, meaning that the continual struggle for improved workers’ daily existence is what matters, not the abstract, or perhaps, utopian goal of transcending capitalism.

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For Marx, as Shlomo Avineri and Leszek Kolakowski independently argue, this transformation of a social-democratic party into the political arm of a trade union movement wasn’t enough. Avineri moreover thinks that, for Marx, the key value of trade union activity was not in its struggle, or at times, successes in improving workers’ conditions, but in the fraternity among members that it created in the struggle for a common cause — in “the real constructive effort to create the social texture of future human relations”. The readiness for sacrifice, dedication to the common goal, and good humour that Marx saw among the Parisian proletariat in 1848 and 1871, and which he chronicled with such passion, were for him glimpses of the future classless society where solidarity will reign rather the “icy-cold water” of self-interest.

For Marx, the subsidiary or secondary importance of equality as a goal comes also from impossibility to achieve true equality under capitalism. True equality will become possible only when a minority no longer monopolises access to capital in order to hire labour, and to appropriate the surplus-value. “To clamour for equal or even equitable remuneration,” Marx writes, “on the basis of the wages system is the same as to clamour for freedom on the basis of the slavery system.”

When will concern with equality become more important? Only when the right background institutions (absence of private property) have been established. Here, as is well-known, Marx distinguishes between two stages: socialism where scarcity is still present and where equal rules will be applied to unequal people (those who work hard, are smarter or luckier will earn more), and the highest stage of development, under communism, when, as the famous formula says, “everybody will contribute according to their abilities and receive according to their needs”.

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It is only under socialism that we should begin to be primarily concerned with material inequalities — that is, at the time when class exploitation has been eliminated but before the society of plenty had arrived. As long as the background institutions are “faulty”, and as long as private capital exists, believing that reduction of inequality is the primary objective of the Left is, according to Marx, wrong because it implicitly accepts the maintenance of unfair institutions that generate inequality.

Given Marx’s writings are explicit about this, why do we tend to ignore his views on equality? The answer, I suspect, is that after the cataclysmic failures of socialism and ideological ascendance of neoliberal ideology, we have tacitly accepted the permanence of capitalism. If one has such a view, then indeed it makes sense to refashion Marx as a pro-equality thinker who cared about trade union activity, equal opportunity, higher workers’ wages and the like. In other words, if we have given up on the idea of ending capitalism, we can try to repurpose Marx into the apostle of equality under capitalism.

But it may not be easy. After all, if the Left tosses out the idea of transcending capitalism, can it be said to be Left-wing at all?