What comes after neoliberalism?

What will artificial intelligence do to people, societies, and states? We continue to discuss this. I ended last week's essay with this question:

Without falling into digital feudalism or digital fascism, and without yet reaching utopian communism, what will we put in place of neoliberalism during this transition period of the artificial intelligence age?

Social and economic systems do not change overnight. Therefore, before seeking an answer to this question, it is useful to look at how humanity has changed its economic and social systems and how long these changes have taken.

The first known major economic revolution in human history began approximately 12,000 years ago, according to archaeological discoveries. Hunter-gatherer communities began to transition to settled life, cultivate the land, and domesticate animals. The Agricultural Revolution did not just change how humans fed themselves. For the first time, humans, who could regularly produce more than they consumed, began to create surplus product.

Surplus product could be stored. It could be accumulated. It could be exchanged. And, of course, it could be seized by others.

Approximately 5,000 to 6,000 years passed from the beginning of the Agricultural Revolution to the emergence of the first major cities. In Mesopotamia, cities, temples, rulers, armies, and city-states emerged. Those who produced and those who managed the surplus product gradually became separated. Then, city-states began to seize each other's lands, products, and people.

The history of the state, classes, armies, and economic power also developed largely alongside the history of surplus product.

Thousands more years passed. Empires were built and destroyed. Slave-based systems, feudal structures, and kingdoms emerged. At the foundation of production, for a long time, there was land and human labor. One of the most important sources of economic and political power was to control the land and the surplus product produced by the people working on that land.

When the oceans began to be crossed in the late 15th century, the scale changed. Gold and silver from the American continent were transported to Europe. Raw materials were brought from colonies, and the slave trade turned into a global economic system. From the 16th century onwards, mercantilism made powerful central states, foreign trade, colonies, and the accumulation of precious metals parts of the same economic model.

It took humanity about 10,000 years to get from the beginning of the Agricultural Revolution to this point. Then, history began to accelerate.

It no longer took thousands of years to get from the rise of the mercantilist order to the Industrial Revolution. About 250 years were enough.

The Industrial Revolution, which began in the second half of the 18th century, brought the factory and mass production. It changed the means of production, classes, property relations, and eventually, states. Capital and industry emerged against land-based economic power. The bourgeoisie formed against the aristocracy, and the growing working class formed against the bourgeoisie.

The American Revolution, the French Revolution, the revolutions of 1848, the rise of nation-states, parliaments, labor movements, unions, socialism, universal suffrage, social security systems, and finally, the social state...

It took humanity about two centuries to digest the economic and social transformation created by the Industrial Revolution. A friend of mine expressed this with a very beautiful concept after the second essay I wrote about China: Digestion period.

Humanity's body of knowledge grew continuously. One generation inherited the knowledge of the previous generation and added new things to it. The printing press accelerated the spread of knowledge. The steam engine accelerated production, the telegraph and telephone accelerated communication, the computer accelerated data processing, and the internet accelerated the global circulation of information. Now, artificial intelligence is accelerating this process once again.

When we look at the speed of change in economic and social systems, an interesting picture emerges. The first major transformations took thousands of years. Then, thousands of years turned into centuries. Are we now entering a period where centuries are turning into decades?

And now we are facing a new problem: The speed of technological change may exceed the speed at which society can digest that change.

THE DIGESTION PERIOD OF NEOLIBERALISM DID NOT EVEN LAST 50 YEARS

After the emergence of industrial capitalism, the great struggle between capitalism and socialism shaped economic and political systems for about two centuries. After the Second World War, an interesting result of this struggle emerged, especially in Western Europe: the social state.

I had expressed this before with a somewhat provocative sentence:

“The insurance of democracy was not capitalism, but socialism.” (1)

I am not saying that the Soviet system was democratic. In the bipolar world order that emerged after the Second World War, the socialist system had created a strong alternative to the capitalist system in many areas such as housing, health, education, and the right to art. However, democracy and freedoms were limited.

The existence of a socialist alternative against the capitalist system changed capitalism. The capitalist and Western world marketed democracy and freedoms as a superiority, and against the competition of the socialist system in the field of social rights, they increased taxes and focused on social state expenditures. Of course, I must remind you that in the development of the social state in the West, besides this competition, the working class and union struggles should not be ignored.

Before the Berlin Wall fell and the Soviet Union collapsed, the neoliberal transformation had begun in the early 1980s with Reagan and Thatcher. With the collapse of the Soviet Union, the need for the capitalist system to compete with the socialist system through a stronger social state also disappeared. Neoliberalism turned into the dominant economic understanding of the unipolar new world order.

The share of social expenditures in the budget, especially in education and health, decreased, and these rights were left to the market. Labor unions weakened. Income and wealth inequalities grew.

Not even half a century has passed yet. Now we are discussing what should be put in place of neoliberalism. Moreover, this question is also being asked by mainstream economists in many parts of the world.

In the book The London Consensus – Economic Principles for the 21st Century, published in 2025 and edited by Tim Besley, Irene Bucelli, and Andrés Velasco of the London School of Economics, more than 50 economists and policy experts are discussing what kind of economic order should be established after the principles of the Washington Consensus, which guided world economic policies in the 1990s, have become insufficient. (2)

I will dwell on the book separately. Although it does not exactly overlap with the model we are looking for, there are important discussions approaching that model. But I can say this.

Humanity is looking for a new economic system. And this time, we do not have thousands or hundreds of years of time like in previous transformations.

WHAT KIND OF SOCIAL STATE?

In my book Turkey's Factory Settings for the Twenty-First Century – Counter-Revolution in the Economy, which I started writing in 2023 and was published in 2024, I argued that the neoliberal order was unsustainable, considering not only increasing inequalities but also developments in technology; I proposed a mixed economic model for Turkey based on the state, the private sector, and cooperativism, prioritizing planned development and the social state. (3)

Today, looking from the point where the artificial intelligence revolution has arrived, I think the main framework of this idea needs to be further strengthened.

When defining the social state, we must perform a debt-credit accounting. For me, the shortest definition of this is as follows:

The citizen's right is the state's debt. (4)

While defining citizenship rights such as the right to life, the right to housing, freedoms, and the right to be equal before the law; we had also added health, education, social security, the right to live in a cleaner environment, and similar rights to these. And we had mentioned the right to social property as the source of financing for these rights.

Health, education, social security, and similar rights are not the state's favor, but its debt. Otherwise, why would people pay taxes?

While constructing the social state, we also have to discuss planning and distribution. It is necessary not to forget a very important feature of the market economy:

The market does not make decisions according to the needs of society, but according to demand supported by purchasing power.

A person needing housing is not enough for the market. They must have the money to pay the rent or buy a house. A child needing a good education is not enough. If you leave education to the market, their family must have the income to buy that education. We can multiply the examples.

The social state must see the social need that the market does not see or does not have to see.

We can now return to this question. Instead of naming the system to be put in place of neoliberalism today, we can now describe its basic features.

A transition order that benefits from the market's power to produce prices and information... But that does not leave the future of society to the spontaneous results of the market... That prioritizes fair distribution... Where private property and freedom of enterprise continue... Where the state is an entrepreneur when necessary and invests in strategic areas... Where planning benefits from the possibilities of artificial intelligence and big data.

Here we come to planning. It is necessary to understand the spirit of the concept of planning: Planning is trying to shape the future instead of waiting for what will happen to us in the future and accepting the results that will emerge. It is an effort to determine one's own destiny. And every plan is also a system of preferences.

Planning is not just the state's right to intervene in the economy: It is the right of society not to leave its future to coincidences and the results that will spontaneously emerge from the market.

Such planning is also required in the transition order we are looking for. But here we come to the old debate of the 20th century:

Plan or market? What kind of price mechanism in the age of artificial intelligence...

We will discuss this in the next article.

Footnotes

(1) Meriç Köyatası, “The insurance of democracy was not capitalism, but communism”, 12Punto, March 30, 2025.

(2) Tim Besley, Irene Bucelli and Andrés Velasco (ed.), The London Consensus: Economic Principles for the 21st Century, LSE Press, 2025.

(3) Meriç Köyatası, Turkey's Factory Settings for the Twenty-First Century – Counter-Revolution in the Economy, 2024. [pp 26-29, pp 218-223]

(4) Meriç Köyatası, “Since basic rights have been left to the market, why do we pay taxes?”, 12Punto, 2025.