Reading lists say lot about a person, or at least what they care to spend their time thinking about. Ben Harris, who served as chief economic adviser to President Joe Biden when Biden was still the VP, remembers prepping for his first day on the job in 2014. The vice president’s policy staff had sent Harris a large pile of documents designed to get him into Biden’s headspace. It was filled with esoteric papers on corporate governance, financial market short-termism, and labor policy. Still, Harris wanted to know more about the personality traits of his new boss. When he asked his predecessor, Sarah Bianchi, about Biden’s character, Bianchi said, “What can I tell you? This guy is the vice president of the United States, but he still gets up on a ladder and cleans his own gutters.” 

He also stands in picket lines with UAW members. Biden is, of course, an excellent politician, and he’s long been a friend to labor. Still, few people would have expected, when he entered the White House, that his administration would herald the beginning of a sea change in America’s political economy, from trickle down to bottom up, or, as the president’s campaign slogan put it, to a core emphasis on “work, not wealth.” 

The record on that score is unequivocal. His COVID-19 stimulus bailed out people, not banks. His domestic economic policy has been about curbing giant corporations and promoting income growth. His infrastructure bills invested in America in a way not seen since the Eisenhower administration. He has taken commerce back to an earlier era in which it was broadly understood that trade needed to serve domestic interests before those of international markets. 

The contrast with the so-called neoliberal economics of recent decades, in which it was presumed that markets always know best, and particularly the Clintonian idea that “free” trade and globalization were inevitable, could not be starker. With a few notable exceptions (Joseph E. Stiglitz, Jared Bernstein), Bill Clinton’s administration, like Barack Obama’s, was filled with neoliberal technocrats who bought fully into the idea of the inherent efficiency of markets. Although they might have occasionally looked to tweak the system, many of the academic economists running policy basically believed that capital, goods, and people would ultimately end up where it was best and most productive for them to be without the sort of public-sector intervention you’ve seen during the Biden administration. 

In this world, so long as stock prices were going up and consumer prices were going down, all was well. Monetary policy trumped fiscal stimulus. And if the latter had to be used, it should be, in the words of the economist Larry Summers, “timely, targeted, and temporary.” (The Biden stimulus, by contrast, is designed to be broad based and long term.) In this political economy, outsourcing wasn’t a bad thing. China would get freer as it got richer. Americans should aim to be bankers and software engineers, not manufacturers. 

“The conventional wisdom was, ‘We don’t need to make T-shirts here,’” remembers Beth Baltzan, a career trade staffer who has served under several administrations and is now senior adviser to U.S. Trade Representative Katherine Tai, one of the numerous Biden appointees who are taking a fundamentally different economic tack than Democrats of the past. There was, of course, almost no air between this view and the Republican take that it doesn’t matter for national competitiveness whether a country makes “computer chips or potato chips,” as an economic adviser to George H. W. Bush once quipped. 

The pandemic, the war in Ukraine, and the U.S.-China conflict have changed all that, of course. But so has Biden, who has led a kind of stealth revolution, the depth and profundity of which have yet to be fully understood by the media, the public, or, indeed, many elites in Washington, D.C. This is perhaps because we haven’t had a true economic paradigm shift in nearly half a century, since the era of Ronald Reagan and Margaret Thatcher overturned the New Deal/Keynesian paradigm that had reigned in the United States and much of the Western world for decades before. As Franklin Foer writes in his recent Biden biography, The Last Politician, “Where the past generation of Democratic presidents was deferential to markets, reluctant to challenge monopoly, indifferent to unions, and generally encouraging of globalization, Biden went in a different direction.” Rather than speaking to Goldman Sachs, Biden spoke to autoworkers. 

While paradigm shifts take years, indeed decades, to play out, there’s no question that one is underway: A massive boom in manufacturing engineered with federal dollars. Aggressive antitrust lawsuits brought against the biggest tech behemoths. (See “Winning the Anti-monopoly Game” by Will Norris.) International agreements on corporate tax evasion, and an even tougher stance on Chinese mercantilism than we saw during the Trump administration. Beyond this, the White House has begun laying out a powerful new post-neoliberal narrative. From Biden’s July 2021 address to Congress announcing the end of trickle-down economics, through to National Security Council Director Jake Sullivan’s April 2023 speech on building back better abroad and the call from USTR Tai last May for a “postcolonial” trade paradigm, a new political economy in America is taking shape. You can call it Bidenomics. You can call it a post-neoliberal world. You can call it “the new economics,” as some progressives who want to separate the changes that are afoot from a single president are inclined to do. But whatever you call it, it’s an epochal shift in how America—and possibly the world—works. 

Whether this shift continues past 2024 is, of course, an unknown. What’s even more mysterious, and worth explaining, is how it is being engineered by perhaps the last national leader you’d expect: the “moderate” and “conventional” Joe Biden.

The Road to a Post-Neoliberal World

For the past four decades, under both Republican and Democratic administrations, America bought wholesale into the idea that the World Was Flat. As long as markets were free, individuals—at home and abroad—would eventually prosper. Some would get rich faster than others, but eventually, wealth would trickle down to the masses. Pulling emerging market nations, most particularly China, into the global trading system would benefit all, as they would eventually become more democratic, and free traders. 

But there was a chink in the “Washington consensus,” and that was that capital always moved faster than people. The global economy as a whole grew at the fastest level after the 1980s in the period from 2003 to 2007. But inequality within individual countries grew in most places, as capital—meaning multinational companies, financial institutions, and the people who ran them—flew 35,000 feet above the problems of the nation-state. Wall Street pulled away from Main Street, as a group of cosmocratic elites working in global service industries—the sort of people whom the British writer David Goodhart calls “Anywheres”—left the “Somewheres,” meaning those tethered to place, behind. This happened not just in the United States, but in many developed countries as well. But while markets, particularly financial markets, are global, politics still happens at the level of the nation-state. As voters in many places became convinced that the political economy was no longer being crafted for them, liberal democracy itself was put in jeopardy. 

The seeds of this were already in evidence as far back as 1999, during the “Battle in Seattle” protests of a World Trade Organization meeting where young progressives and environmental groups were beginning to question the costs of free trade and globalization, for both people and planet. Nobel Laureate Joseph E. Stiglitz wrote his first challenge to the economic status quo, Globalization and Its Discontents, a few years later. Naomi Klein was writing about the disproportionate power of global corporations. In 2005, the same year that Thomas Friedman wrote The World Is Flat, the journalist Barry Lynn, who now runs the Open Markets Institute, wrote a very different and, as it turned out, quite prescient take on the global economy, End of the Line: The Rise and Coming Fall of the Global Corporation. In it, he laid out the vulnerabilities of the highly concentrated global supply chains, and the “just in time” efficiency models driven by Wall Street, that would become so obvious during the coronavirus pandemic and the war in Ukraine. 

But most people in government at this point, even on the left, didn’t really have a deep understanding of the complexities of globalization. Nobody yet knew how risk could ricochet from Iceland to Iowa via highly concentrated financial institutions monopolized by a handful of big Western companies. Nor did they understand that no amount of cheap stuff made in China would paper over the fact that the “labor share”—meaning the amount of gross domestic product paid out to workers, in wages and benefits—has been declining in the United States and many other developed countries since the 1980s. The fall since 2000 has been particularly precipitous, leading to stagnant pay, growing inequality, and a loss of consumer purchasing power. While the fortunes of the country, companies, and citizens used to rise in tandem, those links have weakened over time, as productivity and pay have diverged. Meanwhile, the cost of key goods and services that determine entry into the middle class—housing, health care, and education—have been rising much faster than the core inflation rate. 

The fall of Lehman Brothers and the great financial crisis in 2008 made it clear that neoliberal economic models didn’t always work as they were supposed to. Banks were bailed out, and homeowners were left holding the bag of exploding debt. Private equity swooped in to buy up foreclosed homes on courthouse steps, and Blackstone eventually became the country’s largest landlord. Main Street suffered while Wall Street enjoyed record growth thanks to a flood of easy money from the Federal Reserve. All of this eventually gave rise to the Occupy movement, although it took years—until 2011, really—for the left to turn that felt experience into a slogan: “We are the 99 percent.” 

That slogan carried the seeds of solidarity and a new political narrative. Meanwhile, there were a new crop of policy makers and academics, like the former Harvard professor Elizabeth Warren, talking about predatory loans and the increasing inability of working Americans to make ends meet. INET, the Institute for New Economic Thinking, was funded by George Soros to challenge neoliberal economics in academia and the media. Rob Johnson, the new institution’s president, and a former portfolio manager for Soros’s Quantum Fund, supported a new crop of thinkers challenging the old economic paradigms. (Johnson was a key source for my 2016 book, Makers and Takers: How Wall Street Destroyed Main Street.) Johnson, Soros, Warren, and a host of other key academics, policy makers, and financial market participants spoke in 2010 at a Roosevelt Institute conference, “Make Markets Be Markets,” which looked at how to bring integrity back to the U.S. financial system after the crisis. 

Meanwhile, one of the biggest drivers of inequality and market dysfunction went largely unrecognized even by most progressive economists: the growing monopolization of industry after industry thanks to the boom in corporate mergers enabled by the gutting of antitrust enforcement that began under Reagan. That started to change in the early 2010s with a raft of investigative exposés, primarily in the Washington Monthly, by journalists including Barry Lynn, Phillip Longman, and Lina Khan, who is now chair of the Federal Trade Commission. Like the “muckrakers” who took on corporate monopolies in the early 20th century, these writers brought to light how the workings of cornered markets in everything from airlines to agriculture to tech to health care were driving down wages and job growth, stifling innovation and entrepreneurship, and widening geographic inequality. 

In 2013, the French academic Thomas Piketty published his book Capital in the Twenty-first Century, using hundreds of years of global tax records to show quantitatively what everyone suspected—the rich were getting richer, and far from trickling down, wealth was actually trickling up. In fact, in lieu of wars or government interventions like the New Deal, the rich would inevitably take a greater share of global wealth, since asset values grew so much faster than income. (In the U.S., 89 percent of stock assets are owned by the top 10 percent of the population.) 

In the neoliberal worldview, so long as stock prices were going up and consumer prices were going down, all was well. Monetary policy trumped fiscal stimulus. And if the latter had to be used, it should, said Larry Summers, be “timely, targeted, and temporary.”

By this point, certain Washington think tanks were starting to spread this new economic gospel. John Podesta and Heather Boushey cofounded the Washington Center for Equitable Growth to study inequality and its effects. In 2015, the Roosevelt Institute, led by Felicia Wong, published “Rewriting the Rules,” a paper by Joe Stiglitz, which essentially laid out all the ways in which the policy status quo resulted in a rigged system. The think tank Demos took on the issue of growing private debt and the way in which it penalized the poor. Barry Lynn launched the Open Markets program at the New America Foundation to study monopoly issues, later spinning it off into the Open Markets Institute. Others, like Michael Wessel, senior trade strategist and counselor to the United Steelworkers and a member of the U.S.-China Economic and Security Review Commission, became more vocal about how the outsourcing of American capital and multinational supply chains to lower-cost countries like China supported autocracy at the cost of U.S. labor.

Slowly but surely, it was becoming more widely understood (at least among the progressive chattering classes) that neoliberal policies, including financial deregulation and trade deals that looked good on paper but didn’t take into account the human cost of joblessness, had created huge pockets of pain in many rich countries, not just the United States. That pain had resulted in voters pulling away from the mainstream of both American parties. Capital did travel freely—the world’s financial assets were six times larger than the real economy as of 2020. Goods were relatively mobile. But most people, and jobs, were not. The problem for policy makers is that people vote. And in 2016, they voted for Donald Trump, who made hay with the Clinton and Obama legacies of free trade deals on the campaign trail. 

Trump would pull the greatest political con job of all time by self-interestedly leveraging a true felt experience among most Americans that there is, in fact, a smoky back room in Washington where powerful people make decisions for their own benefit. Unlike any other politician before him, Trump actually said this One True Thing aloud—embedding a single truth in a welter of lies is the gift of the con man. But then, being who he is, he took a whole host of metaphorical cigars into the Oval Office and stank it up to high heaven. 

A New Narrative

A surface read of Joe Biden’s record in public life would not suggest someone eager to usher in a new economic paradigm. As a senator, his passions were foreign affairs, oversight of the judiciary, and protecting the interests of his home state corporations. He voted for NAFTA and normalizing trade relations with China, and as vice president supported trade deals like the never-completed Trans-Pacific Partnership.

But those who have worked with Biden say he was never fully on board with the arguments for globalization and full trust in markets—nor comfortable with the brainy meritocratic set that made them. One manifestation of this was his long, heartfelt support for organized labor—something the last three Democratic presidents never quite conveyed. Another was a certain skepticism of elite groupthink, a trait that biographers of Biden, from Richard Ben Cramer to Franklin Foer, have tied to his peculiar mix of class resentment and anxiety—his pride in his Scranton roots and state school education, his desire to be taken seriously by Ivy League–educated colleagues, his keen sense that many don’t. That distrust increased after the 2008 financial crisis, when centrists in his own party put limits on fiscal stimulus, which led to extended unemployment and pain for average families during the latter Obama years and, ultimately, to greater support for Trump.

As vice president, Biden never openly broke with the administration’s policies. But he gave several speeches that hinted at his growing concerns, such as one in 2017 at the Century Foundation that focused on building a high-wage America. He even talked about the need to ban things like noncompete clauses, which penalized labor relative to capital. 

Biden wasn’t the only establishment Democrat who was having doubts about the wisdom of the reigning neoliberal order. So were many of his closest advisers, including his long-serving aide Ted Kaufman. Often described as Biden’s closest friend in Washington, Kaufman was appointed to serve out the last two years of his boss’s Senate term when Biden became vice president. He used that time to become an expert on the dangers that megabanks posed to the country’s financial and economic health and to craft legislation with Democratic Senator Sherrod Brown limiting their size. The measure died in 2010, thanks in part to hostility from Obama’s own Wall Street–oriented economic consiglieres.

Another veteran Biden adviser whose views on modern capitalism were changing was Bruce Reed. As head of domestic policy for Bill Clinton and, later, president and CEO of the centrist Democratic Leadership Council, Reed was a driving force in the party’s shift away from traditional liberalism. But after leaving the job of Biden’s chief of staff in the Obama White House, Reed went on to advise a nonprofit that was attempting to protect children from the predatory behavior of the entertainment industry. That group’s successful effort to negotiate a strong privacy law in California in 2018 brought him into contact with social media companies like Facebook, and, according to Politico, he didn’t like what he saw. “Reed had begun to read about the history of the anti-monopoly tradition in America, which stretched back to Thomas Jefferson,” Foer writes in The Last Politician, and “to wonder if the nation had strayed too far from that tradition.” (Reed was also a reader of and, as Foer notes, an occasional writer for, the Washington Monthly.) 

Jake Sullivan, Biden’s current national security adviser, also experienced a dark night of the soul during these years. Sullivan was the senior political adviser to Hillary Clinton when she ran for president in 2016. The shock of losing that election launched him on a path toward recognizing how modern capitalism had gone awry and was threatening democracy—a journey he recounted in a 2018 article in, appropriately, Democracy: A Journal of Ideas. He went on to argue, in a 2020 Foreign Policy article coauthored with Jennifer Harris, that America’s place on the world stage depended on getting economic policy right, at home and abroad. Other top Biden advisers, including Ron Klain and John Podesta, went on similar intellectual voyages during the Trump years.

When the 2020 presidential primaries began, Biden staked out relatively moderate positions on most issues compared to his more progressive rivals such as Bernie Sanders. But after securing the nomination that summer, he moved left on some key economic ones. Reporters at the time chalked this up to the need to win Sanders’s endorsement. But while that was true, it was also the case that Biden and his inner circle were surprisingly agreeable to the shift.

One illustrative moment, according to several insiders, was when Biden decided not to use taxes as a lever for issues like climate. “I called Ben Harris that summer [before the election] and asked why we didn’t have a carbon tax proposal,” says Boushey, who was at the time a volunteer to the Biden campaign offering primarily economic advice. “And he said, ‘We just don’t think the markets will deliver what we need here.’ ” “That was a big moment for me,” Boushey says. “It was clear that they understood we’d had 50 years of letting the markets take care of climate, and they hadn’t.” Now a member of the White House Council of Economic Advisers, Boushey was one of many younger, progressive wonks the Biden team recruited to fill key economic policy positions in the government after the election. (Not coincidently, Biden put Ted Kaufman in charge of the transition.) 

Once in the White House, the new administration lost no time rolling out major policies that defied the old neoliberal order—beginning with the American Rescue Plan, a massive economic stimulus bill. Biden and his top advisers, all veterans of the Obama White House, reasoned that it was better to spend big on pandemic relief to keep the economy and employment afloat, even at the risk of inflation, than to underspend and leave average Americans unemployed, as the government did after the 2008 financial crisis. 

Another momentous break with the old order was Biden’s revival of anti-monopoly policy. The administration put several younger progressive appointees on the front lines of this new battle, including Lina Khan at the Federal Trade Commission, Jonathan Kanter at the Department of Justice, and Tim Wu, a Columbia University law professor who until recently served as Biden’s special assistant for technology and competition policy. More experienced hands, however, were needed to help the president become fully comfortable with the policy shift. 

In The Last Politician, Foer tells the story of Biden, in the summer if 2021, reading through the draft of a sweeping executive order written by Wu with Reed’s support that would direct a dozen federal agencies to rein in anticompetitive corporate practices. A creature of the Senate, Biden didn’t approve of presidents overstepping their designated powers, and, pen in hand, he searched through the text for worrying passages. “But Reed had spent so many years working over Biden’s shoulder that he knew how to shape policy to avoid his peeves and how to calm his anxieties,” Foer writes, “by reminding Biden of the specifics that mattered to him the most.” Reed highlighted a provision outlawing the sort of noncompete clauses that Biden had long condemned. Such specifics “appealed to Biden’s political instincts. That made for a good narrative. Everyday folks could relate to that.” Biden signed the order.

Economic Statecraft

Meanwhile, the pandemic and the war in Ukraine made the vulnerabilities of the old economics impossible to miss. Suddenly average Americans understood that cheap Chinese PPE masks could disappear when Beijing needed them for its own citizens, forcing U.S. apparel companies to try to make home-grown versions again (it turns out it did matter if the U.S. made T-shirts, or at least cotton cloth). The war in Ukraine and trade tensions with China made it clear that it mattered whether countries got their energy from an autocrat, or depended on a strategic adversary for crucial pharmaceutical inputs or the minerals needed for the green transition. The White House plans for reindustrialization and place-based economics fit well in this new world, where resiliency mattered as much, if not more than, efficiency. 

It was a big shift away from the old system of globalization that had emerged from the Bretton Woods system. That established the post–World War II framework for global commerce via institutions like the International Monetary Fund, the World Bank, and what eventually became the World Trade Organization. Purpose built for its time, the system was born out of war-torn Europe and focused more on connecting global capital and business to avoid future conflict than on raising the fortunes of workers in individual nation-states. 

Biden was never comfortable with the brainy meritocrats who argued for unfettered markets. His skepticism was tied to his class anxiety—his pride in his state school education, his desire to be taken seriously by Ivy League–educated colleagues, his keen sense that many don’t.

It was also because, as Beth Baltzan wrote in the Washington Monthly in 2019 and 2020, congressional Republicans killed FDR’s and Harry Truman’s plan for an international trade organization that would require that lower tariffs be combined with worker rights, anti-monopoly provisions, and controls on capital flows. In another influential Monthly article earlier this year, Barry Lynn detailed how presidents from Thomas Jefferson through Dwight Eisenhower wielded federal power to ensure that the U.S. military and the American economy would not be vulnerable to industrial chokepoints caused by monopoly suppliers at home and abroad. Some of what the Biden administration is attempting to do on trade can best be understood as a revival of this older American vision of industrial policy.

USTR Tai is attempting to knit together a Bidenomics approach to both competition and trade. In a May speech at the Open Markets Institute, she spoke about chokepoints that needed to be addressed and broken up, regardless of whether they were the result of Chinese mercantilism (in the case of rare-earth minerals), Russian aggression (food crops and fertilizer), or multinational corporate power in areas such as digital trade. She stressed the need to move away from traditional free trade agreements, which “reinforce existing supply chains that are fragile and make us vulnerable. This does not make sense at a moment in history when we are trying to diversify and make them more resilient.” 

Perhaps most provocatively, she said the Biden administration wanted to “turn the colonial mindset on its head”—by partnering with emerging markets and allies as part of what Treasury Secretary Janet Yellen has called “friend-shoring.” Rather than allowing big companies to put jobs and investments wherever it was cheapest for them, Tai wanted to put a floor, rather than a ceiling, on labor and environmental standards while building new supply chains. “The key is to offer economies a spot in vertical integration so that developing countries are not perpetually trapped in an exploitative cycle,” she said. Of course, the devil will be in the details, and Tai’s speech was short on those. Still, paradigm shifts begin with narrative shifts. And the USTR’s intervention was the latest proof that the thinking around free trade is changing profoundly.

This new thinking is a clear rejection of the approach from the 1990s and 2000s, in which the United States tried to negotiate broad trade agreements by breaking down regulatory barriers to advance the interests of large American corporations. It is also a rejection of the Trump approach, which was to unilaterally bludgeon other countries—allies in Europe as well as adversaries like China—with tariffs until they bought more American goods (which they did not). Instead, the Biden administration, while keeping some of the Trump-era tariffs as leverage, is trying to negotiate a series of multilateral agreements in discrete areas—such as supply chains, labor and environmental standards, antitrust, privacy, data security, technology transfer, and so on—while sidestepping the more contentious issues, like the restrictions Europe imposes on agricultural imports to protect its small farms. 

Biden wasn’t the only establishment Democrat who was having doubts about the wisdom of the reigning neoliberal order. So were many of his closest advisers, including Clinton White House veterans Bruce Reed, Ron Klain, and John Podesta.

The administration has already racked up a few successes, including a U.S.–European Union agreement to measure the carbon content of steel and aluminum and a U.S.-OECD agreement on a minimum 15 percent tax on global corporations. The aim is not just economic; it’s also geostrategic. It is to raise middle- and working-class wages in countries that sign on to the agreements—the better to undermine the rise of illiberal politics—while challenging the economic predations of Russia and China. Under the new steel and aluminum agreement, for instance, China will not be able to sell into the American and European markets until it moves away from forging its aluminum and steel with polluting (but cheaper) energy sources like coal.

Many conventional economists are trying to pretend nothing has shifted in the past 20 years, and that driving down prices should still be the ultimate goal for society. Trickle-down economics has simplicity, if not truth, going for it. “The objective has to be buying as cheaply as possible,” said former Treasury Secretary Larry Summers, in reference to procurement for the Biden administration’s $1.2 trillion infrastructure program. It’s an alluring argument in a more inflationary era. Still, most people seem to understand that cheap isn’t cheap if you tally up the true cost of labor and carbon. Ever-cheaper goods have raised wages in some parts of Asia, and created incredible profits for big companies, but they haven’t led to a healthier and more sustainable form of market capitalism. Liberal democracy hasn’t fared well, either. 

The new world is, admittedly, messier, and it will come with some downsides in the short term. Take inflation, for example. There’s no doubt that products made by big companies using job-replacing technology or labor from autocratic states that suppress wages are cheaper. Moving from a globalized, concentrated economy to one in which production and consumption are more tightly geographically connected, and in which stakeholders, not just shareholders, have a voice, may come with some short- to mid-term inflationary pressures. But the costs of the old paradigm—environmental degradation, labor abuses, rising inequality, and toxic politics—were high, too. 

As the Inflation Reduction Act (IRA) rolls out, Bidenomics will have to address tough questions: What is the right balance between, say, foreign and domestic concerns when we’re thinking about trade policy? Is it in the national interest to push for more domestically produced solar panels that will raise prices in the short term, even if doing so brings back the industrial commons in the long term? Or it is better to use cheap equipment from China as quickly as possible? Does this even make sense if you price whether those Chinese panels were made with coal-powered electricity? What are the new metrics for measuring inclusive, sustainable growth? How does one measure the political risk inherent in far-flung globalized supply chains that run through politically vulnerable countries? And what should be done at home to build a stronger, better workforce? How might better education and competition policy mitigate the downsides of our new era? 

April 2023 marked the 10th anniversary of the Rana Plaza factory collapse in Bangladesh, in which 1,100 garment workers were killed because a shoddily constructed factory collapsed on top of them. It turned out that the factory was making goods for major global brands. The company managers who made the decision to outsource to unknown individuals way down the production line were just doing what Finance 101 would tell them to do: Move expense off the balance sheet, and treat labor like a cost, not an asset. Never mind the risks hidden in plain sight, even those that result in death and despair. 

That kind of thinking has dominated the global economy for decades: Let capital, goods, and labor move where they will, even if that results in human suffering and the degradation of the planet. Chinese labor camps in Xinjiang are perhaps the apex of this sort of thinking. How can any country, or company, compete with state-subsidized operations with few environmental safeguards that are accused of forcing slaves to dig for silica, which is then used in solar panels, electronics, and other types of goods dumped into the world at below-market rates? Answer: You can’t, unless you change the economic rules of the game. 

In what may be the most impactful foreign policy speech of the Biden era, U.S. National Security Adviser Jake Sullivan laid out the beginnings of a new rule book at the Brookings Institution in April 2023, connecting American domestic plans with foreign policy. He made it clear that the old “Washington consensus” was over—in part because it had not been able to manage the challenges of a more vulnerable financial system, fragile supply chains, and working-class job losses (with the subsequent blows to democracy). 

Embedded in the old system, as Sullivan put it, was an assumption “that the type of growth did not matter. All growth was good growth. So, various reforms combined and came together to privilege some sectors of the economy, such as finance, while other essential sectors, like semiconductors and infrastructure, atrophied. Our industrial capacity—which is crucial to any country’s ability to continue to innovate—took a real hit.” 

Sullivan’s speech was an attempt to reassure allies that the new economics isn’t about “America alone,” or even primarily about containing China (in truth, the very notion that any nation could contain China is a fiction). Rather, it’s about working with allies—which are being more broadly defined to include parts of the Global South—to create a system built on the assumption that power exists and can’t be economically modeled, and that not all growth is the same. “Our objective isn’t autarky,” Sullivan said in his speech. “It’s resilience and security in our supply chains.” 

Biden lost no time rolling out policies that defied the old neoliberal order—beginning with the American Rescue Plan. He reasoned that it was better to spend big to keep the economy and employment afloat than to underspend and leave average Americans unemployed.

The challenges to that are, of course, immense, and not everyone within the Biden administration is on the same page. The Commerce and Treasury Departments, as well as some in the White House, have been more eager to soft-shoe it with China, particularly at a time of rising inflation. The administration is under pressure to settle for less strict labor and climate provisions in negotiations currently underway to create new strategic alliances in Asia and the rest of the Global South. Some worry about the inflation and market effects of decoupling too quickly from China. Ambitious plans like the global minimum tax have yet to be enforced. Priorities like child and senior care, which were carved out of the first stimulus packages, risk going by the wayside. The president is walking a fine line in supporting union workers in Detroit while much of the IRA and CHIPS stimulus is pouring into right-to-work red states. It’s unclear whether Europe—in particular Germany, which depends on exports to China—will come to a shared view about the new world. Will allies support shared purchasing agreements around critical minerals, even if they violate WTO rules? Will Washington and Brussels—not to mention India, South Africa, Malaysia, and other such nations—be able to agree on new trade rules of the road? The U.S. can’t go it alone in a post-neoliberal world. It will take all of Biden’s political acumen to balance the needs of his two favorite interest groups: workers and allies. 

But despite all this, it is impossible to ignore that this administration has already marked a sea change in economic history. Not only is there increasing overlap between the progressive left and parts of the right on issues like industrial strategy and trade, it’s also impossible to imagine anyone running for president and winning with a neoliberal message. Americans used to believe that the rules of capitalism were handed down on stone tablets. This White House has made it clear that they can be rewritten. As the president put it when he signed his landmark July 2021 executive order on fighting monopoly power, “Capitalism without competition is exploitation.” When a guy like Joe Biden is using language like that, you know there are big changes underway.

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Rana Foroohar is associate editor and columnist at the Financial Times and the author of Homecoming: The Path to Prosperity in a Post-Global World, out in paperback October 17.