Following its publication in The Observer, this article has stimulated a great deal of interest and debate in the UK and the US. It received almost 500,000 unique visitor views and trended on Twitter.
In the late 1970s Martin Jacques was one of the first to herald the emerging dominance of neoliberalism in the west. Here he argues that this doctrine is now faltering. But what happens next?
Donald Trump seeks a return to 1950s America, well before the age of neoliberalism. Photograph: H. Armstrong Roberts/Retrofile/Getty Images
The western financial crisis of 2007-8 was the worst since 1931, yet its immediate repercussions were surprisingly modest. The crisis challenged the foundation stones of the long-dominant neoliberal ideology but it seemed to emerge largely unscathed. The banks were bailed out; hardly any bankers on either side of the Atlantic were prosecuted for their crimes; and the price of their behaviour was duly paid by the taxpayer. Subsequent economic policy, especially in the Anglo-Saxon world, has relied overwhelmingly on monetary policy, especially quantitative easing. It has failed. The western economy has stagnated and is now approaching its lost decade, with no end in sight.
After almost nine years, we are finally beginning to reap the political whirlwind of the financial crisis. But how did neoliberalism manage to survive virtually unscathed for so long? Although it failed the test of the real world, bequeathing the worst economic disaster for seven decades, politically and intellectually it remained the only show in town. Parties of the right, centre and left had all bought into its philosophy, New Labour a classic in point. They knew no other way of thinking or doing: it had become the common sense. It was, as Antonio Gramsci put it, hegemonic. But that hegemony cannot and will not survive the test of the real world.
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The rise of China continues unabated. In a Western world that is constantly seduced by bearish sentiment about China’s economic and political prospects — and ultimately by the idea that its rise is unsustainable — this deserves to be constantly repeated. Otherwise we find ourselves diverted from the most fundamental geopolitical trend of our time, that China is in the process of changing the world as we know it.
This is not to ignore, or brush away, the many problems that China faces. The most important of these during the course of the last year has been the government’s twin struggle to reform the economy while maintaining its target growth rate of 7.5 percent. It is possible that the latter will prove unachievable and that the growth rate might settle down more in the region of 5 to 6 percent, but, especially in the context of what is clearly a major structural shift in the nature of the economy — which may already be rather more advanced than previously thought — this should be regarded as perfectly acceptable. What we should not expect is a hard landing, entailing a much lower growth rate, or some kind of implosion. This remains an extremely unlikely scenario.
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The term Chinese Dream has been used several times by President Xi Jinping since the Chinese Communist Party’s 18th Congress in November 2012. The term has become a major focus of discussion in China. The paper below was given as a keynote speech at a major conference held in Shanghai last December.
The Chinese Dream is a new departure – both as a political idea and slogan. It is, for one thing, immediately accessible and, as a result, populist. Everyone knows about dreams, we all have them, whether in our sub-conscious or conscious state. Dreams belong to everyone. There is also a sense of freedom about dreams. When we dream we are not constrained by material circumstance or the real world, on the contrary we are allowed to escape from those kind of restraints. Dreams empower: they are highly personal, each and every one of us their author. The evocation of the word dream summons us all to be bold, to imagine the world not as it is but as it might be, how we would like it to be.
The term Chinese Dream is of the present: its moment has arrived. It would not have been appropriate in 1978. That was not the nature of the time. The term Chinese Dream urges the Chinese to move on, to think anew and afresh, to turn over a new page, to begin a new chapter. The Chinese Dream announces the beginning of something new but also the end of something: the end of the era of Deng Xiaoping.
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The following essay appeared in an edited, cut-down form on the China Daily website.
The challenges that China faces over the next decade are a product of changes in the country’s external environment together with the consequences of China’s home-grown transformation.
The external context has shifted in two profound respects. A decade ago, the Western economies still seemed in relatively robust health and were growing at a reasonable rate. Since 2008, that picture has changed dramatically. The Western economies are mired in a deep structural crisis which shows no sign of being resolved. This is the worst crisis of Western capitalism since the 1930s and it seems likely that the crisis has not yet even reached its halfway point. In other words, the Great Recession will last at least until the 19th Communist Party Congress, and perhaps even, in the case of Europe in particular, the 20th Congress in 2022.
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This is the script of the Point of View talk first broadcast on BBC Radio 4 on October 26th, 2012, also available on the BBC News Magazine. Missed the programme? Download it as a podcast or listen again on BBC iPlayer.
China and the United States are about to choose new leaders via very different methods. But is a candidate voted for by millions a more legitimate choice than one annointed by a select few, asks Martin Jacques.
This week will witness an extraordinary juxtaposition of events. On Tuesday the next American president will be elected. Two days later, the 18th congress of the Chinese Communist Party will select the new Chinese president and prime minister.
The contrast could hardly be greater.
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This is the script of the Point of View talk first broadcast on BBC Radio 4 on October 26th, 2012, also available on the BBC News Magazine. Missed the programme? Download it as a podcast or listen again on BBC iPlayer
I was on a taxi journey in Shanghai with a very intelligent young Chinese student, who was helping me with interviews and interpreting. She was shortly to study for her doctorate at a top American university. She casually mentioned that some Chinese students who went to the US ended up marrying Americans.
I told her that I had recently seen such a mixed couple in Hong Kong, a Chinese woman with a black American. This was clearly not what she had in mind. Her reaction was a look of revulsion. I was shocked. Why did she react that way to someone black, but not someone white? This was over a decade ago, but I doubt much has changed. What does her response tell us – if anything – about Chinese attitudes towards ethnicity?
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There has been virtually no discussion or coverage of China’s intellectual debates in this country. Perhaps the assumption is that there isn’t one; or if there is, then it is of little consequence. This is wrong on both counts. There is an extremely vibrant intellectual debate in China on many questions. This belies the widely-held view in the west that because China is not a western-style democracy, serious argument and debate must be largely absent. In fact, the contrary is true. The arguments among Chinese intellectuals are, I would suggest, more interesting and more novel than is the case in Britain, or even the United States.
The reason for this is twofold. First, China is changing so quickly that it constantly throws up new challenges and problems that require response and solution. In contrast, an economy growing at 2 percent – or these days, of course, barely at all – poses new kinds of problems only occasionally. Second, not only is China changing with extraordinary rapidity, but since the turn of the century it has also been transforming the world with great speed (even if this remains barely recognised in Britain’s insular and blinkered public discourse). Chinese intellectuals are no longer confronted simply with how to handle the country’s domestic development but also with what kind of global power China should become. Far from China’s foreign policy debate being of interest only or mainly to the Chinese, it has enormous import for the rest of the world. If we want to understand what the world will be like as China steadily usurps the US as the dominant global power, then the starting place must be the debate within China about the country’s future foreign policy.
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The financial crisis has seen the global economy turned on its head. And it is China, rather than America, that is set to dominate through both soft and hard power
The 2008 financial crisis marked a fundamental shift in the relationship between China and the United States. Nothing could or would be quite the same again. The management of the US economy was revealed to have been fatally flawed, a lightly regulated financial sector almost allowed to shipwreck the entire economy. In a few short months, the crisis served to undermine a near-universal assumption of American, and western, economic competence; in contrast, China’s economic credentials have been considerably burnished. The crisis at the same time exposed the huge levels of indebtedness that have sustained the American economy, accentuated since by the financial rescue package, while underlining the financial strength of the Chinese economy, now the world’s largest net creditor with its massive foreign exchange reserves. Although hardly new, the crisis finally woke Americans up to the fact that China had become their banker, with all this meant in terms of the shifting balance of power.
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The business and political elite are flying blind. This is the mother of all economic crises. It has barely started and remains completely out of control
We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.
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