The Mask of Neoliberal Globalization Has Fallen
What for years was presented as a fair and beneficial world order is increasingly being revealed as a system that was always steered by power and interest.
The current shift toward trade wars, export controls, and economic arms races is not a break with the past but rather a harsh return to the historical norm—like a rubber band snapping back into place: trade as an instrument of power.
Neoliberal globalization—with its belief in free markets and unlimited trade—has become less and less tenable now that countries are using economic power as a weapon in geopolitical conflicts. The “invisible hand of the market” always operated in tandem with an imperial fist—often invisible to some. This fist not only served geopolitical interests but also sustained global social inequality by structuring markets in ways that allowed certain countries and groups to profit structurally at the expense of others.
That system has now imploded.
Why?
Because the hegemon has decided it is no longer in its interest.
The Mask Has Fallen
Illustrative of the shifting world order was the unusual criticism by Vice President J.D. Vance, who argued that globalization had failed as a strategy to maintain Western dominance.
“The idea behind globalization was that rich countries would move up the value chain while poor countries made the simpler things… We assumed that other countries would always stay behind us, but they began overtaking us from the top, squeezing us from both sides,” said Vance. That, of course, was never the intention.
Ironically, Vance’s nationalist critique aligns closely with what Marxist economists have been arguing for years: the neoliberal globalization propagated by the U.S. was never designed to help countries develop, but to keep them subordinate. The mask has now fallen.
This reorientation is not limited to rhetoric. Within the Republican Party, a new consensus has emerged—driven by the so-called “New Right”—that assumes American hegemony is no longer sustainable, as Oren Cass noted in the Financial Times. In February 2025, Secretary of State Marco Rubio articulated this view: “It’s not normal for the world to simply have one unipolar power. That was an anomaly, a product of the end of the Cold War. Sooner or later, we were bound to return to a multipolar world.”
How the Brief Neoliberal Dream Gives Way to Geopolitical Reality
Karl Polanyi already argued in The Great Transformation (1944) that markets are always embedded in political power relations. A year later, Albert Hirschman published National Power and the Structure of Foreign Trade (1945), showing how trade systems could be deliberately structured to create dependencies and exert political influence—not through military force, but via economic structures.
These insights were largely buried when neoliberalism, under the influence of Milton Friedman, Ronald Reagan, and Margaret Thatcher, became the dominant economic ideology. Trade was no longer seen as a tool of power but was instead presented as neutral and technical governance.
Dani Rodrik resurfaced this tension in 2011 when he pointed to a fundamental dilemma, which he called The Globalization Paradox: countries cannot simultaneously maintain hyper-globalization, national sovereignty, and democracy. The West opted for borderless trade—at the expense of democratic control and policy autonomy—a tension temporarily masked by American leadership.
Dollar dominance perfectly illustrates how the system undermined itself. Export-based economies like Japan, Germany, and later China financed U.S. consumption through their trade surpluses. The profits they made from exports were reinvested in U.S. government debt, keeping the dollar historically overvalued. This preserved demand for their goods in the U.S., but at the same time hollowed out American industry. While the U.S. secured financial dominance through the dollar system, these countries moved up the industrial value chain. A system meant to entrench American dominance ended up creating structural dependencies that now undercut it: the U.S. is heavily reliant on foreign industrial production.
The End of Hegemony—And What Comes Next
The dollar model is cracking under its internal contradictions. Economic interdependence turns out to be not a shield against conflict, but a source of geopolitical vulnerability. This is evident in sanctions, export bans, and critical raw material embargoes.
Trump’s policy turn responded to this reality. The American elite is reasserting control over the domestic economy, abandoning its role as global stabilizer and consumer of last resort. What follows is a world where states once again carry more weight.
This is not a coincidence, but the predictable end of an ideology that masked class interests and power as neutrality. Now that the masquerade is over, open struggles over economic power are returning. For countries across the world that have built prosperity on global trade and capital flows, this means a hard reckoning with the fact that economic relations are never apolitical, and never interest-free.
The challenge ahead is to find a new balance: a global order in which mutual dependence does not breed vulnerability, but is combined with sovereignty and cooperation. That demands vision—but above all, honesty about the political reality behind economic order.
The mask is off. Now the real work begins.