Introduction
CAMBRIDGE – The post-neoliberal consensus is here, though not in the policies of U.S. President Donald Trump. After a decade of negative reactions, it’s time to accept not only that neoliberalism is dead but also that a new consensus is replacing it. Surprisingly, significant segments of both the U.S. left and right have reached an agreement on broad economic policy lines.
The Three Pillars of the New Consensus
1. Addressing Economic Power Concentration
The first element of the emerging consensus is recognizing that economic power concentration has become excessive. This concern is expressed differently by various groups. Some directly complain about income and wealth inequality and its corrosive effects on politics. Others worry about market power and its negative implications for competition. For others, the key issue is financialization and the distortion of economic and social priorities it generates.
Available solutions vary from wealth taxes to robust enforcement of antitrust laws and campaign finance reform. However, the desire to limit the economic and political power of corporate, financial, and tech elites is widespread, uniting progressive Bernie Sanders supporters with populists like Steve Bannon, former Trump advisor and podcast host.
2. Restoring Human and Regional Dignity
The second element emphasizes restoring the dignity of individuals and regions left behind by neoliberalism. Good jobs are essential to this agenda, as they not only generate income but also provide identity and social recognition. A robust middle class, built on good jobs, forms the foundation of social cohesion and a sustainable democracy.
Dislocation is inevitable in a changing economic world. Until the 1990s, numerous safeguards—labor protections, trade restrictions, price controls, and regulations controlling finance—limited the impact on workers and communities. Neoliberals viewed these safeguards as inefficiencies to be eliminated, ignoring the economic and social suffering caused by job losses from technological change, globalization, or economic liberalization.
3. Active Government Role in Economic Transformation
The third component is that government has an active role to play in shaping the necessary economic transformation. Markets alone cannot generate economic resilience, national security, advanced technology innovation, clean energy, or good jobs in disadvantaged regions. Government must drive, pressure, and subsidize. Industrial policy has moved from the margins of economic debate to its center.
Challenges and Opportunities
While these three principles offer a novel and generally laudable understanding of economic policy goals, the devil is in the details. Real outcomes will depend on specific policies chosen and implemented.
Consider the goal of creating good jobs. Both left and right seem to agree on the convenience of relocating and revitalizing manufacturing. Historically, industrial labor played a crucial role in building equitable middle-class societies. However, automation and other technological forces have turned manufacturing into a job-eliminating sector. Even China has lost millions of manufacturing jobs in recent years. Thus, even if manufacturing investment and production are revived in the U.S. and Europe, job impact is likely to be minimal.
The future of employment resides in services: healthcare, retail, hospitality, logistics, collaborative economy, etc. Any approach to good jobs that doesn’t focus on organizational and technological innovations in these services will inevitably be disappointing.
Of course, there are other compelling reasons to support manufacturing. Advanced manufacturing, along with the digital economy, plays a vital role in innovation and national security. It makes sense to implement industrial policies focused on these economic activities, alongside service-oriented policies that absorb labor. However, the “how” matters as much as the “what” here too.
Industrial policies must be cautious, as they can be disastrous if they foster corruption or favor narrow corporate interests. Unfortunately, Trump’s approach offers little reassurance in this regard. His trade policies and tech company deals have been erratic, transactional, and lacking a long-term coherent strategy benefiting the public interest. Worse, they are part of an agenda deepening authoritarianism and disregarding the rule of law.
Key Questions and Answers
- What is the post-neoliberal consensus? It’s a new understanding of economic policy goals, emphasizing addressing excessive economic power concentration, restoring human and regional dignity through good jobs, and an active government role in economic transformation.
- Why is the post-neoliberal consensus important? It offers a broader checklist to evaluate current agendas, including Trump’s, which fails spectacularly. While promoting jobs and industrial policy for economic transformation, it also fosters greater wealth and power concentration. A clientalist state capitalism model attempting to resurrect an extinct industrial economy is not an antidote to neoliberalism.
Author:
Dani Rodrik, Professor of International Political Economy at Harvard Kennedy School of Government, is a former president of the International Economic Association and author of “Prosperity for All in a Fractured World: A New Economy for the Middle Class, the Global Poor, and Our Planet” (Princeton University Press, 2025).
Copyright: Project Syndicate, 1995 – 2026
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