Song Zhaolong and Shao Xianyue: The Essence, Crisis, and Alternatives of Neoliberal Globalization
From May 24 to 26, 2023, David Lane—Fellow of the Academy of Social Sciences (UK), Emeritus Professor in the Department of Sociology at Cambridge University, and Honorary Fellow of Emmanuel College—delivered a series of high-quality specialized lectures at Peking University under the titles "Capitalism: From Classical to Variety," "Capitalism in the Neoliberal Period," and "Capitalism as a World System." Unless otherwise specified, the views and illustrative examples attributed to David Lane in this article are drawn from the content of these lectures. Lane’s primary research fields include the politics of the Soviet Union and Eastern Europe, the capitalist transformation of post-communist countries, varieties of capitalism, and globalization and the capitalist world system. He pays particular attention to contemporary geopolitical conflicts, changes in the world landscape, and alternatives to capitalism. Lane’s representative academic works include Rethinking the "Coloured Revolutions," The Capitalist Transformation of State Socialism, and Changing Regional Alliances for China and the West. His representative academic papers include "The Post-Socialist Region in the World System," "The Significance of the October Revolution," and "The Decoupling of State Economic Elites and Political Elites: A Comparison of Russia and the UK." In 2023, Lane published a new book titled Global Neoliberal Capitalism and the Alternatives: From Social Democracy to State Capitalisms.
In this lecture series, Lane primarily analyzed the essence, crisis, and alternatives of neoliberal globalization. He pointed out that after World War II, capitalism underwent a developmental process from Internationalism to Globalization, with neoliberalism serving as the ideology of globalized capitalism. Neoliberal globalization is fraught with internal contradictions; it is both a technological process and a framework that maintains the world dominance of the transnational capitalist class, intensifying its dispossession of society. Regarding alternatives to neoliberal globalization, Lane advocates for using the "center-semi-periphery-periphery" model to describe the internal structure of the world system. He argues that the rise of the "semi-periphery," represented by China, has to a certain extent overcome the adverse effects of neoliberal globalization, creating the conditions for the realization of socialist globalization.
I. The Essence of Neoliberal Globalization
Lane argues that during the stage of internationalism, capitalist states maintained economic borders, and capitalism itself possessed various developmental models such as coordinated market economies and social democracy. With the rise of neoliberalism, national borders were broken down, and transnational corporations (TNCs) along with the transnational capitalist class behind them utilized neoliberal ideology and policy systems to pursue global expansion. The history of the emergence and development of neoliberal globalization demonstrates that it is, in essence, a modern form of imperialism.
From the end of World War II until the 1970s, capitalism possessed a variety of developmental forms. Lane posits that the predecessor of capitalism in the neoliberal period was the competitive market capitalism practiced by countries such as the United Kingdom and the United States. In addition, after World War II, modes such as the coordinated market economy and social-democratic welfare capitalism appeared in the Western world. These different developmental models secured the ruling position of the capitalist class and capital’s exploitation of labor within domestic boundaries by adjusting the capitalist relations of production and social relations. The coordinated market economy model, represented by countries like Germany, France, and Japan, advocated for state-led construction of the economic system to weaken market anarchy. In this model, the government, corporate capital, and political parties acted as a collective ruling group, forming a stable, cooperative triangular structure. Social-democratic welfare capitalism, represented by countries like Sweden and Denmark, relied on trade unions and the working class as its important political foundation; consequently, these states typically provided the population with high-standard welfare protections, including education, healthcare, housing, and pensions. While competitive market capitalism adjusted the public functions of the state to some extent—strengthening the state's role in the construction of emerging industries and the reconstruction of basic industrial sectors—it primarily advocated for free markets and free competition. Based on these differences in developmental models, individual nation-states were still able to control the transnational flow of capital and inter-state relations, causing capitalism to manifest spatially as internationalism. Lane believes capitalism has three spatial types: domestic, international, and global. Internationalism refers to the interaction between the economies of capitalist states, where the nation-state continues to play a coordinating role, determining legal and international political rules. Overall, the aforementioned models achieved certain developmental results prior to the 1970s.
Since the late 1970s, the development of capitalism has entered the neoliberal period. As the capitalist world fell into economic crisis, Keynesianism failed, and social contradictions intensified. A wave of wholesale liberalization, driven primarily by British Prime Minister Margaret Thatcher and U.S. President Ronald Reagan, rose worldwide, initiating a new round of capitalist development. Lane argues that neoliberalism is a comprehensive ideology; it is first and foremost an economic principle that takes the self-interested individual as its theoretical starting point. In the neoliberal view, "there is no such thing as society," and spontaneous exchange or spontaneous order is the foundation for the effective operation of economic life. Furthermore, it is the intentional actions and reactions of economic subjects driven by individual interest that ensure economic equilibrium. Therefore, to ensure the smooth conduct of transactions, the free market pays no heed to an individual’s race, gender, religion, or skin color; it focuses only on what people can buy and sell. Simultaneously, neoliberalism advocates for the unrestricted movement of factors of production, especially capital, and maintains that enterprises should enjoy "rights of establishment" globally—that is, the right to incorporate companies and set up branches worldwide. This led to the rapid development of TNCs at the end of the 20th century. TNCs mobilize capital across various locations, arranging production and operations, and driving the expansion of the international division of labor and exchange systems based on the organization of global production networks. To ensure these economic strategies truly function, neoliberalism also encompasses a whole set of institutional arrangements in politics, society, culture, and international relations to maximize the reduction of economic barriers between states. Accordingly, Lane defines globalization as "a process that erodes national borders, integrates the economies, cultures, technologies, and governance of all countries, and produces a complex relationship of interdependence." This process drives capitalism to break through the forms of interaction between national economies, establishing a capitalist world system through globalization.
The dominant force of neoliberal globalization is transnational capital. Lane believes that neoliberal globalization contient the logic of capitalist accumulation. Liberals usually regard modern capitalism as a process of continuous, rational pursuit of profit through corporate activity. Marxist researchers, however, not only focus on the technological changes globalization brings to the process of material production but also advocate for analyzing the leading forces of the globalization process from a class perspective. As Marx and Engels pointed out in the Manifesto of the Communist Party: "The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country... In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations." Globalization is not subject-less. At the end of the 20th century, neoliberal ideology provided perhaps the best "protective shell" for the global expansion of capital. On one hand, relying on revolutions in electronic information, transportation, and communications, globalization achieved remote action, time-space compression, and cross-regional interconnectivity, ensuring the high-efficiency operation of market mechanisms. On the other hand, technological achievements themselves are the result of the "value revolution" driven by capital. The monopoly of high-tech and intellectual property rights by TNCs, the extraction of social wealth from late-developing countries, and the dominance of international organizations over the formulation of rules for the world economy’s operation are all realized through this process. Thus, in Lane's view, globalized capitalism is "a system of production of goods and services through unimpeded international market exchange... while states operate within the global market, transnational institutions not only limit state power but in many aspects (though not all) replace it." Neoliberal globalization is a transnational form of ownership and market production.
II. Defects and Crises of Neoliberal Globalization
Neoliberalism is a system of ideology and policy suited to the global rule of TNCs and the transnational capitalist class behind them. Therefore, in practice, neoliberal globalization not only fails to avoid economic crises but also intensifies wealth polarization and social antagonism—both within individual countries and on a global scale—by safeguarding the transnational capitalists' dispossession of society. This predicament of neoliberal globalization manifests specifically in the following three aspects.
First, neoliberal globalization safeguards the global accumulation of transnational capital and cannot avoid economic crises. Lane points out that neoliberalism claims the "spontaneous order" between economic units leads to economic equilibrium, but the facts prove otherwise. For one, neoliberalism has exacerbated wealth polarization between nations. In the late Cold War [1], the neoliberal policy system profoundly influenced the socialist countries of the Soviet Union and Eastern Europe, leading some Eastern European countries to become members of the European Union after the collapse of the socialist camp. However, compared to the hegemonic members of the EU, reforms of liberalization, privatization, and marketization have kept these Eastern European countries in a subordinate position within the capitalist world economic system. Furthermore, institutions such as the International Monetary Fund, the World Bank, and the World Trade Organization are controlled by major capitalist countries like the UK and the US; they incorporate more and more countries into the capitalist world economic system through means such as providing loans. On the other hand, neoliberal globalization has changed the internal structure of the ruling class. In the process of globalization, the sphere of influence of the ruling class has broken through the individual nation-state, and a transnational capitalist class—based in hegemonic states yet possessing global influence—has stepped onto the political stage. Lane believes the transnational capitalist class includes: owners and controllers of transnational financial/non-financial corporations; officials of certain countries and regions, such as presidents and prime ministers; administrative-technical groups, such as board members and senior executives of the IMF, World Bank, and WTO; ideological groups, such as members of certain political think tanks and academic institutions; and "consumerist" groups, namely businessmen and the media. These groups are not only able to integrate closely with global economic operations via international economic organizations but are also able to seize state power, using the public opinion tools they control to further influence their own country's ideology and suppress critical voices against neoliberalism. Neoliberal globalization causes the unrestricted accumulation of transnational capital; the outbreak of the 2007–2008 financial crisis is a powerful example refuting the neoliberal "spontaneous equilibrium" order.
Second, neoliberal globalization has weakened state sovereignty, causing these nations to fall into a crisis of public welfare. Lane points out that, on the one hand, neoliberal policies have restricted the state’s ability to fulfill public functions. Compared to social democracy or "coordinated market economies," states implementing neoliberal policies no longer play a proactive role in guaranteeing the welfare of the populace; any attempt to establish a cooperative economy is viewed as an infringement upon the principles of individual self-sufficiency and social autonomy. In these countries, the private sector has replaced the state as the provider of public services. While transnational capitalists strengthen their dispossession of popular wealth through means such as adjusting employment and pricing power, they simultaneously restrict the people's struggle for their own rights by cutting welfare and establishing a "minimal state," leading these countries toward a crisis of public welfare and legitimacy. Within a single nation, the inherent opposition between neoliberal institutional design and democracy has become increasingly prominent. As Friedrich Hayek suggested, democracy is not superior to law and tradition. In the West, liberty and the rule of law are the core values of capitalism; democracy is merely regarded as a "procedural principle for defending liberty." This means the state must be constrained by laws resulting from "democratic choice," and the people have no right to use majority decisions to oppose market mechanisms or neoliberal economic measures, as this would violate the freedom of private property. On the other hand, the role of the state as a proactive defender of the liberal order has significantly strengthened. In the view of classical liberalism, the individual pursuit of private interest would benefit public well-being and social interests. Neoliberalism further extends this conclusion to globalization. From the neoliberal perspective, if the pursuit of private interest can guarantee social interests, then it is equally beneficial to the interests of the entire world and all people; therefore, the whole world has a responsibility to defend this ideology. Even after the 2007–2008 financial crisis, Western governments prioritized the allocation of massive funds to bail out large financial institutions, further worsening the situation of the populace.
Third, neoliberal globalization has intensified social contradictions, leading to the rise of new-populism. Lane points out that since the 2007–2008 financial crisis, deindustrialization, unemployment, and depression have caused Western countries to face even deeper social contradictions. In the United Kingdom, approximately 4 million people currently require government health subsidies; they have no jobs and have lost other sources of income. However, the proletariat has lost its representation in the Western world. In Lane’s view, the Western working class is currently organized by very weak socialist parties. Restricted by the system of electoral democracy, these parties have almost ceased to function and have lost their influence. The revolutionary party envisioned by Lenin [2] no longer exists in these countries. Furthermore, changes in the occupational structure of the working class, internal stratification, and the condition of deterritorialization have seriously affected the development of its class consciousness. A "creative" stratum of workers primarily engaged in computers, architecture, and law has emerged, where "the labor force is mainly composed of a non-proletarian working class." Furthermore, even if the working class possessed its own political forces in Western countries, these forces would be far from capable of contending with the close collaboration formed by transnational corporations, international institutions, and the transnational capitalist class. Consequently, the influence of socialist parties in the Western world is extremely limited, and traditional leftist parties have become too decayed to support popular movements. In this context, new-populism has become the political trend and social movement gradually coming to the fore after the financial crisis. In the UK, the Brexit movement is a typical expression of new-populism, showing to a certain extent the resistance of the populace against globalized capitalism. South Wales is an important steel-producing region in the UK and was one of the areas with the strongest desire for Brexit, because the large grants provided by the EU were used for building roads and social activity centers rather than supporting local industrial development, leading to high rates of alcoholism, divorce, suicide, and outward migration in South Wales. Lane believes that although new-populism calls for state sovereignty and for the people to regain control over the state, it neither touches the roots of the global rule of capital nor proposes a constructive plan for reconstructing society; instead, it intensifies the fragmentation and antagonism of Western society. New-populism is produced within the framework of neoliberalism; it does not constitute a challenge to neoliberal globalization but is rather a continuation of neoliberalism.
III. Alternatives to Neoliberal Globalization
Currently, new-populism is leading the world toward a dangerous path of de-globalization and anti-globalization. In Lane’s view, this merely signifies that the globalization process from the end of the 20th century to the present must be qualified with the term "capitalist," and that alternative paths to neoliberal globalization must be explored rather than negating globalization itself. Among these, the constructive plan proposed by China regarding globalization provides a beneficial choice for the construction of the future global order.
Lane believes that the crisis of neoliberal globalization cannot be resolved within the internal confines of the capitalist world-system. Neither the core countries nor the peripheral countries of the capitalist world-system can promote institutional reform of globalization. On the one hand, core countries can adjust certain parts of neoliberal policy, but the state remains an agent of the will of transnational capital groups. For example, to combat neoliberalism, France strengthened the nationalization of enterprises and control over state-owned enterprises; another example is the EU’s setting of high tariffs on products from other countries to protect the welfare of the agricultural population of its member states and maintain the existing industrial structure, avoiding market dominance by cheap North African agricultural products. These local adjustments only maintain the political and economic interests of specific countries. On the other hand, neoliberalism has caused the dependence of peripheral countries on core countries, leading them to lose economic sovereignty and substantive political sovereignty. Neoliberalism recognizes the rules of engagement for states as equal legal subjects, yet simultaneously uses its system of policies to provide support for the expansion of the capitalist world-system. Institutions such as the World Bank and the International Monetary Fund, dominated by hegemonic powers, not only possess the power to promote the neoliberal social model worldwide but can also legitimize the political intervention of liberal states into "non-liberal" states, defining such actions as "ensuring freedom and the rule of law" or "peacekeeping." The succession of the globalized order requires structural changes in the capitalist world-system. Just as there was capitalist industrialization and socialist industrialization, we can similarly envision capitalist globalization and socialist globalization.
In Lane’s view, Socialism with Chinese Characteristics has contributed a beneficial globalization plan. He believes that China did not choose to become dependent on the capitalist world economic system dominated by hegemonic countries, but has instead consistently adhered to the path of socialist development with Chinese characteristics, providing a new plan for globalization. In the economic sphere, China introduced market relations and a mixed-ownership economy, and regulated the market through the socialist system, exploring an institutional form that combines state power with market power. Between 1990 and 2017, China’s foreign direct investment remained at a relatively low level, lower than that of Latin America and the Caribbean, reflecting that China’s development was not the result of a complete liberalization of the market. Lane divides China’s development since Reform and Opening-up into three stages: the peripheral dependence stage, the competitive symbiosis stage, and the new equilibrium stage. He proposes that in the first stage, China was merely a provider of labor-intensive manufacturing in the world market; in the second stage, along with domestic economic growth, industrial development, and technological innovation, China moved toward a relationship with Western countries that was both competitive and interdependent; currently, in the third stage, countries represented by China have formed relatively autonomous economic and political systems, becoming a "semi-core" [3] force interacting with dominant core countries. The socialist market economy ensures China’s integration into and benefit from the world economic system while simultaneously allowing it to possess a considerable degree of independence, avoiding the predicament of marginalization. In the political sphere, China has shaped a strong state representing public power; this state does not only focus on individual freedom but pays more attention to social solidarity and the realization of collective interests. The government is capable of reversing the negative effects of the globalization process through policy adjustments to protect the welfare of more of the populace. In the realm of international relations, China actively organizes regional political and economic organizations, advocates for the building of a community with a shared future for humanity, and is committed to achieving true sovereign equality among nations.
Lane recognizes the proactive role China plays in the construction of the globalized order. He believes that representative scholars of world-systems theory, such as Immanuel Wallerstein, usually divide the world economy into three parts: core, semi-periphery, and periphery, and that this model has limitations. In Wallerstein’s work, the core mainly refers to capitalist hegemonic powers and the political and military organizations and transnational corporations dominated by these countries; the semi-periphery is composed of countries that both possess state-owned companies while being exploited by transnational corporations; and the periphery is dependent on the core in economic, political, and other aspects. Due to the accumulative advantage of the core, the semi-peripheral form is unstable; it will either transition to the core or enter the periphery. Lane emphasizes that this theory cannot explain the diversity and mutual conflicts within core countries, nor the rise of states and regional organizations that challenge the hegemonic status of core countries. In fact, globalization since the late 20th century has provided conditions for the economic growth of late-developing countries. Taking the BRICS countries as an example, in 1980, the total Gross Domestic Product (GDP) of Brazil, Russia, India, China, and South Africa accounted for only about 11% of the world total and 38% of that of the Americas; in 2015, the total GDP of these five countries accounted for 30% of the world total, and by 2020, the total GDP of the Americas was only about 58% of that of the BRICS five. It is evident that compared to the economic growth rates of emerging market countries, the economic status of capitalist core countries has relatively declined. Changes in economic power have further influenced geopolitics, prompting emerging market countries to no longer reside in the peripheral or semi-peripheral zones of the world system, but instead to constitute a relationship of interdependent competition with capitalist hegemonic powers. Consequently, Lane advocates for replacing the concept of "semi-periphery" with "semi-core" and views China as the main representative of "semi-core" forces. It should be noted that while the above views expound on how the Chinese path transcends the neoliberal globalization model, their structural analysis of the world system is inaccurate. Because according to Wallerstein's prediction, market relations are the dominant form regulating the world economy, and all countries will eventually join a single capitalist world system; therefore, one cannot simply incorporate China into a capitalist-dominated world system using the concept of a "semi-core." Furthermore, "core" and "semi-core" focus on examining the relationship of competition and confrontation between late-developing countries and capitalist hegemonic powers; however, under the historical conditions of the coexistence of socialism and transnational capitalism, the cooperation and exchange between the two likewise constitute one aspect of the contradiction.
IV. Conclusion
In summary, in his lecture, Lane explored the historical process of post-war capitalist development, the dominant forces of neoliberal globalization, its internal contradictions, and the possibility of constructing a new model of globalization. After World War II, especially since the 1970s, capitalism, driven by neoliberal ideology, broke through the economic and political boundaries of individual nations and gradually developed into a powerful global system. It established transnational forms of ownership relations on the basis of achieving technological transformation in the production process, making the transnational capitalist group a ruling class capable of dominating the operation of the world economy and politics. Under the rule of transnational capital, neoliberal globalization cannot avoid economic crises within a single nation or on a world scale, and is incapable of guaranteeing the economic and social rights of the populace in Western countries, leading to an increasing intensification of social contradictions in the West. In the face of the difficulties confronted by neoliberal globalization, the constructive plan proposed by China for globalization will provide a proactive alternative choice for neoliberal globalization.