Song Chaolong, Shao Xianyue: The Substance, Crisis, and Alternatives of Neoliberal Globalization
On May 24–26, 2023, David Lane—Fellow of the Academy of Social Sciences (UK), Emeritus Professor of the Department of Sociology at Cambridge University, and Honorary Fellow of Emmanuel College—delivered a series of high-quality specialized lectures at Peking University titled "Capitalism: From Classical to Varieties," "Capitalism in the Neoliberal Era," and "Capitalism as a World System." [1] Lane's primary research areas include the politics of the Soviet Union and Eastern Europe, the capitalist transformation of post-communist states, varieties of capitalism, and globalization and the capitalist world system. He is particularly concerned with current geopolitical conflicts, the changing global 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 and Political Elites: A Comparison of Russia and Great Britain." In 2023, Lane published a new book titled Global Neoliberal Capitalism and the Alternatives: From Social Democracy to State Capitalisms.
In this series of lectures, Lane primarily analyzed the essence, crisis, and alternatives to neoliberal globalization. He pointed out that after World War II, capitalism experienced a developmental process from Internationalism to Globalization, and neoliberalism is the ideology of globalized capitalism. Neoliberal globalization is rife with internal contradictions; it is both a technical 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 using "center-semi-center-periphery" to describe the internal structure of the world system. He argues that the rise of the "semi-center," represented by China, has to some extent overcome the adverse effects of neoliberal globalization, creating conditions for the realization of socialist globalization.
I. The Essence of Neoliberal Globalization
Lane believes that during the internationalist stage, capitalist states maintained economic boundaries, and capitalism itself possessed various developmental models such as the coordinated market economy and social democracy. With the rise of neoliberalism, the boundaries of the nation-state were broken down. Transnational corporations (TNCs) and the transnational capitalist class behind them utilized neoliberal ideology and policy systems to move toward 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 existed in various 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, models such as the Coordinated Market Economy (CME) and social-democratic welfare capitalism emerged in the Western world. These different developmental models secured the dominant position of the capitalist class domestically and guaranteed the exploitation of labor by capital by adjusting the relations of production and social relations of capitalism. 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. Within this, the government, corporate capital, and political parties acted as a joint ruling group, forming a stable and cooperative triangular structure. Social-democratic welfare capitalism, represented by countries like Sweden and Denmark, took trade union power and the working class as its important political base; therefore, these states typically provided high standards of welfare security for the populace, including education, healthcare, housing, and pensions. Although competitive market capitalism adjusted the public functions of the state to a certain extent—strengthening the state's role in fields such as 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 the relations between states, causing capitalism to manifest as internationalism in terms of its spatial typology. [2] 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, primarily pushed by British Prime Minister Margaret Thatcher and U.S. President Ronald Reagan, rose worldwide, initiating a new round of capitalist development. Lane believes that neoliberalism is a comprehensive ideology. First and foremost, it is 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"; spontaneous exchange or spontaneous order is the basis for the effective functioning of economic life. Furthermore, it is precisely the intentional actions and reactions of economic subjects driven by individual interest that guarantee 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, but only to what people can buy and sell. At the same time, neoliberalism advocates for the unrestricted flow of factors of production, especially capital, and maintains that enterprises should enjoy "rights of establishment" globally—that is, the right to form 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, arrange production and operations, and promote the expansion of the international division of labor and exchange systems on the basis of organizing 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 aimed at minimizing economic barriers between states. Accordingly, Lane defines globalization as "a process that erodes national borders, integrates national economies, cultures, technologies, and governance, and produces complex relationships of interdependence." This process drives capitalism to break through 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 embodies the logic of capitalist accumulation. Liberals usually view modern capitalism as a process of continuously pursuing profit through persistent, rational corporate activity. Marxist researchers, however, do not only focus on the technical changes globalization brings to the material production process; they also advocate for analyzing the leading forces of the globalization process from a class perspective. As Marx and Engels pointed out in the Communist Manifesto: "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." [3] 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 realized remote action, time-space compression, and cross-regional interconnectivity, guaranteeing the high-efficiency operation of the market mechanism. On the other hand, technical achievements are themselves the result of capital pushing for a revolution in value. The monopoly of high and new technology and intellectual property rights by TNCs, the seizure of social wealth from late-developing countries, and the dominance of international organizations over the formulation of the rules for the operation of the world economy are all realized in this process. Thus, in Lane's view, globalized capitalism is "a system of production of goods and services through unhindered international market exchange... although states operate within the global market, transnational institutions not only limit the power of the state but in many ways replace it (though not in all)." Neoliberal globalization is a transnational form of ownership and market production.
II. The Defects and Crisis of Neoliberal Globalization
Neoliberalism is an ideology and policy system adapted to the global rule of TNCs and the transnational capitalist class behind them. Consequently, in actual operation, neoliberal globalization not only fails to avoid economic crises but also intensifies the divide between rich and poor and social antagonism within countries and worldwide by securing the transnational capitalists' dispossession of society. This lands neoliberal globalization in a predicament, manifested specifically in the following three aspects.
First, neoliberal globalization secures the global accumulation of transnational capital and cannot avoid economic crises.
Lane points out that while neoliberalism claims the "spontaneous order" between economic units leads to economic equilibrium, the facts prove otherwise. On one hand, neoliberalism has exacerbated the divide between rich and poor among nations. In the late Cold War, the neoliberal policy system profoundly influenced the socialist states of the Soviet Union and Eastern Europe, leading some Eastern European countries to become members of the European Union after the disintegration of the socialist camp. However, compared to the hegemonic members of the EU, liberalization, privatization, and market-oriented reforms have kept these Eastern European countries in a subordinate position within the capitalist world economic system. [4] 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; a transnational capitalist class, based in hegemonic states but 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 merchants and the media. These groups are not only able to integrate closely with global economic operations through international economic organizations but can also seize state power, using the instruments of public opinion 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 neoliberalism's "spontaneous equilibrium" order.
Second, neoliberal globalization has weakened national sovereignty, plunging these countries into a crisis of public welfare.
Lane points out that, on the one hand, neoliberal policies have restricted the state’s capacity to perform 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 masses; 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 the people's wealth through various 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 crises of public welfare and legitimacy. Within nations, the essence of the neoliberal political institutional design as antithetical to democracy has become increasingly prominent. As Friedrich Hayek argued, democracy is not superior to law and tradition. In the West, liberty and the rule of law are the core values of capitalism, while democracy is regarded merely as a "procedural principle for the defense of liberty." This implies that the state must be constrained by laws of "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 an active defender of the liberal order has been significantly enhanced. In classical liberalism, the individual pursuit of private interest was seen as conducive to the public well-being and social interest. Neoliberalism further extends this conclusion toward globalization. From the neoliberal perspective, if the pursuit of private interest can safeguard social interest, then it is likewise conducive 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 investment of massive funds to bail out large financial institutions, further exacerbating the plight of the masses.
Third, neoliberal globalization has intensified social contradictions, leading to the rise of neo-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 elective democratic system, these parties have nearly ceased to function and have lost their influence. The revolutionary party envisioned by Lenin no longer exists in these countries. Furthermore, changes in the occupational structure of the working class, internal legal stratification, and de-territorialization have seriously affected the development of class consciousness. A "creative" stratum of workers primarily engaged in computers, architecture, law, and other industries has risen, and "the labor force is mainly composed of a non-proletarian working class." [5] Furthermore, even if the working class possessed its own political power in Western countries, such power would be far from able to contend with the close coordination 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 mass movements. Against this backdrop, neo-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 manifestation of neo-populism, to some extent demonstrating the masses’ resistance to 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; this is because the large grants provided by the EU were used for building roads and social community centers rather than supporting local industrial development, resulting in high rates of alcoholism, divorce, suicide, and population outflow in South Wales. Lane believes that although neo-populism calls for national sovereignty and the restoration of popular control over the state, it neither touches the foundations of capital’s global rule nor proposes a constructive plan for restructuring society; instead, it intensifies the fragmentation and confrontation within Western society. Neo-populism arose 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, neo-populism is leading the world down a dangerous path of de-globalization and anti-globalization. In Lane’s view, this merely means 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 proposal put forward by China regarding globalization provides a beneficial option for the construction of a future global order.
Lane believes that the crisis of neoliberal globalization cannot be resolved within 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 may adjust certain aspects of neoliberal policies, but the state remains an agent of the will of transnational capital groups. For example, to counter neoliberalism, France strengthened the nationalization of enterprises and the control over state-owned enterprises; for another example, to protect the welfare of the agricultural population of member states and maintain existing industrial structures, the EU set high tariffs on products from other countries to prevent its market from being occupied by cheap North African agricultural products. These partial adjustments only safeguard the political and economic interests of specific countries. On the other hand, neoliberalism has caused peripheral countries to depend on core countries, making them lose their economic sovereignty and substantive political sovereignty. Neoliberalism recognizes the rules of interaction for states as equal legal subjects, but simultaneously uses its policy system to provide support for the expansion of the capitalist world-system. Institutions such as the World Bank and the IMF, dominated by the hegemon, 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 it as action to "ensure freedom and the rule of law" or "peacekeeping." A change in the globalized order requires structural changes in the capitalist world-system. Just as there exist capitalist industrialization and socialist industrialization, we can likewise conceive of capitalist globalization and socialist globalization.
In Lane’s view, Socialism with Chinese Characteristics has contributed a beneficial globalization proposal. He believes that China did not choose to depend on the capitalist world economic system dominated by the hegemon, but has always persisted in a socialist development path with Chinese characteristics, providing a new globalization proposal. Economically, 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 forces. 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 opening of its market. [6] Lane divides China’s development since the Reform and Opening-up into three stages: the peripheral dependency 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 and Western countries moved toward a relationship of both mutual competition and interdependence; currently, in the third stage, countries represented by China have formed relatively autonomous economic and political systems, becoming a "semi-core" force interacting with the dominant core countries. [7] The socialist market economy guaranteed that China could integrate into and benefit from the world economic system while maintaining a considerable degree of independence, avoiding the dilemma of marginalization. Politically, China has shaped a powerful state representing public power; this state focuses not only on individual liberty but more on the solidarity of society as a whole and the realization of collective interests. The government has the capacity to reverse the negative impacts of the globalization process through policy adjustments and to protect the welfare of more people. In the field of international relations, China actively establishes 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 positive role played by China 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, but this model has limitations. For Wallerstein, the core mainly refers to capitalist hegemons and the political/military organizations and transnational corporations they dominate; the semi-periphery consists of countries that both possess state-owned companies and are exploited by transnational corporations; and the periphery depends 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 move toward the core or enter the periphery. [8] Lane emphasizes that this theory cannot explain the diversity and internal conflicts within core countries, nor can it explain the rise of countries and regional organizations that challenge the hegemonic status of the core. 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 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; by 2015, the total GDP of these five countries accounted for 30% of the world total, and by 2020, the GDP of the Americas was only about 58% of that of the BRICS five. [9] Clearly, compared to the economic growth rates of emerging market countries, the economic status of the capitalist core countries has relatively declined. Changes in economic power have further affected geopolitics, prompting emerging market countries to no longer reside in the periphery or semi-periphery of the world system, but to constitute an interdependent and competitive relationship with the capitalist hegemon. [10] Thus, Lane advocates replacing the concept of "semi-periphery" with "semi-core" and regards China as the primary representative of this "semi-core" force. It should be noted that while the above views expound on the transcendence of the Chinese path over the neoliberal globalization model, the structural analysis of the world system remains inaccurate. 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 the capitalist-dominated world system using the concept of a "semi-core." Furthermore, "core" and "semi-core" focus on examining the competitive and adversarial relationship between late-developing countries and the capitalist hegemon, but under the historical conditions where socialism and transnational capitalism coexist, the cooperation and exchange between the two also 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 and internal contradictions of neoliberal globalization, and the possibility of constructing a new model of globalization. After World War II, and especially since the 1970s, capitalism—driven by neoliberal ideology—broke through the economic and political boundaries of individual nations and gradually developed into a highly influential global system. It established transnational forms of ownership on the basis of achieving technological changes in the production process, enabling the transnational capitalist class to become 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 nations and on a global scale, and is unable to guarantee the economic and social rights of the masses in Western countries, leading to increasingly fierce social contradictions in the West. Faced with the dilemmas of neoliberal globalization, the constructive proposal put forward by China provides a positive alternative choice for neoliberal globalization.