By Greg Godels
July 16, 2022
Of course, Putin had not manufactured Trump or his Make America Great Again movement. Trump was the homegrown product of a political order that, in the eyes of majorities of Americans, on the left and right, had failed. A neoliberal order prizing global free markets and free movement of people had left too many people behind. It had favored Wall Street over Main Street; tolerated extreme levels of inequality; ignored the problem of mass incarceration and the massive loss of wealth experienced by minority homeowners in the wake of the Great Recession; legitimized a war on Iraq that America had no business fighting and then a reckless stab at reconstruction that failed in Iraq and that spread additional misery to much of the Middle East. Distress in America had been palpable years before Trump seized America’s political stage. That a master manipulator of grievance and resentment would arise in this moment hardly seems surprising. –The Rise and Fall of the Neoliberal Order
Professor Gary Gerstle, Paul Mellon Professor of American History Emeritus and Paul Mellon Director of Research at the University of Cambridge has an important new book, The Rise and Fall of the Neoliberal Order.
This is not a review of the book, however, but a critical discussion of the interesting theory elaborated in the book and the implications of that theory.
Gerstle is no Marxist. In fact, his book exhibits a common, vulgar anti-Communism and anti-Sovietism of the odious variety of Timothy Snyder and his ilk.
But Gerstle, nonetheless, takes the data of history– revealed contemporary history– and constructs a credible account of how these events weave together into an explanatory fabric. He proposes a theory that develops a historical thread– liberalism– that, should we follow it closely, will take us from the US bourgeois revolution of the late 1700s to the rise of Trump and Sanders.
This theory takes a throw-away word “neoliberalism” — a word abused by left and right to denote a dark era of unhinged capitalism or a life-saving revival of capitalism– and gives it both a definite meaning and a status as a politico-socio-economic order.
Where others saw neoliberalism as a disposition, a policy, or a philosophy ushered in by political change, Gerstle proposes that we view it as a definite, enduring shift based on “a distinctive program of political economy.” For Gerstle, this means that neoliberalism, as a political order, transcends the mere changes between election cycles, the shift in popular tastes, or the adoption of intellectual fashions.
The ideal-types of his theory are the twentieth-century orders of what might be called laissez-faire that precede 1930, the New Deal order enduring from 1930 until 1970, and the Neoliberal Order beginning in 1970 and lasting until 2020. Gerstle is well aware that the dates are inexact markers and the transitions are not discrete, but continuous. Moreover, the dimensions of these orders are somewhat fuzzy and the transitions are uneven; neither fact detracts from the theory as a first approximation.
Insofar as the scope of Gerstle’s theory of successive political orders is primarily focused on the transition between the New Deal Order and the Neoliberal Order, his discussion of the preceding order (what he calls laissez faire) is sketchy, only sufficient to explain the conditions that gave rise to the New Deal– that is, that necessitated a new order.
Prior to the New Deal, the dominant order celebrated free, unfettered markets, marginally regulated by a minimalist government removed from economic matters. This was the era of recovery from the First World War and its immediate post-war economic disruptions. While Europe struggled to achieve stable growth, the US became the leading industrial power. Innovative industrial organization, new marketing and financial schemes, and intensifying concentration made the US the driving force of this order. Perhaps unfairly, this era is associated with the fulsome, but ultimately misplaced optimism of US President Herbert Hoover.
The New Deal Order
Of course, the fragility of this order was brought forward by the stock market crash in the fall of 1929. The story of the subsequent Great Depression is often told and Gerstle adds little to it. But he does frame it as the factor bringing the old order down and paving the way for a new one. The instability, the hardships, the uncertainties spawned by an unparalleled economic crisis called the laissez faire order into question, rocking the very foundations of capitalism. Moreover, the example of an emerging, but radically different order– socialism– loomed threateningly over the shaken foundations.
The rise of a new order answering to the failure of the previous one came through the vehicle of the Roosevelt administration, though Gerstle would acknowledge that the leaders, ideas, and movements driving the new order were incubating far earlier.
The features of the New Deal order are well known. Most importantly, it assigned a central role to the government. That is, the government was unleashed to design programs, fund initiatives, employ the unemployed, initiate projects and enterprises, goad, regulate, and discipline business, and intercede in virtually every other aspect of life.
The construction of the new order was far more complex than a change of administration. It involved vital, militant movements in labor, agriculture, small business, and political forces beyond the two parties. It was shaped over time, with setbacks and retreats.
Gerstle does not fear designating events as cardinal in the transition from one order to another:
General Motors capitulated in March 1937, as did the Supreme Court, which voted by the slimmest of margins (5-4) to uphold the constitutionality of the congressional act that created the new system of labor relations. At that moment (March 1937), laissez-faire in America lost whatever was left of its moral and jurisprudential hold on American politics.
A key ideological building block of the New Deal was the idea that government was an anchor for shaping economic life with a role in conditioning social life as well. While this is today often associated with the economic doctrines of John Maynard Keynes, Gerstle recognizes that the New Deal was crafted before Keynesianism was deeply rooted.
After World War II, the New Deal order consolidated. For Gerstle, the final ascension of a new order is established when its opponents– the former advocates of the old order– embrace it. Gerstle finds that victory embodied in the administration of Dwight Eisenhower. While Eisenhower paid lip service to the old Republican vérités of laissez faire, he and the majority of his party ruled in step with the principles of the new order (many astute historians note that governance during the Nixon years were likewise more “liberal” than during the subsequent rule of later Democratic Party liberals).
The dynamic of this mature version of the New Deal order was driven by the fear of Communism, just as its rise was forged by fear of the Communist alternative to the 1930s collapse of capitalism. Gerstle sees anti-Communism as the gravity pulling political parties together in a common crusade.
The post-war reorganization of the New Deal paralleled the Cold War. In Gerstle’s words: “The Cold War, then, secured the New Deal order.”
The purging of the Communist left and its Popular Front allies from political and social life was an essential element in establishing the New Deal consensus.
For labor, a trade-off was constructed– labor surrendered militancy, internationalism, and social justice while embracing business unionism and, in return, capital granted wage and benefit growth commensurate with productivity increases, job protection, and longer contracts. A template for this consensus was the UAW’s so-called treaty of Detroit.
To combat the Cold War over racism and colonialism, the New Deal consensus began to set the conditions for the dismantling of US segregation and the worst features of its apartheid racial regime. Gerstle does a thorough and able job of explaining these profound changes in terms of the competition with Communism. Brutal US race policies were a constant embarrassment to the US ruling class in an era of decolonization.
Anchored in the government’s support of Brown versus Board of Education, the New Deal order sought to build a new image of racial harmony that in some ways encouraged, but could not contain the popular movement for civil rights and against racism.
Likewise, the New Deal order coalesced around militant anti-Communism in foreign relations, aggressively meeting, overtly or covertly, Communist gains anywhere and everywhere in the world. The demands of a domestic war on poverty, especially Black poverty, and policing the world against Communism would prove too much of an economic burden for the order, a burden that would play a big role in the fall of the New Deal Order.
The 1970s proved to be the fatal decade for the New Deal order. A particularly pernicious species of economic crisis– stagflation — plagued the era. The unprecedented combination of stagnant, even slacking economic growth and high inflation overwhelmed the Keynesian tools favored by the New Deal order.
Intense competition from countries devastated by World War II– earlier weaned from left-wing influence by the Marshall Plan and other aid packages– now pressured US corporate profit rates with their technologically superior, cost-savings industries. US monopolies found their home market invaded with cheaper, often superior products. Thus, the economic crisis hurt corporations as well as working people. Mills and plants closed, stripping workers of good paying jobs, especially in the Midwest.
The decade also brought social and political crises with the defeat of the US military in Vietnam and the scandals associated with President Richard Nixon’s criminal actions and forced resignation.
The Neoliberal Order
The fatal decade ended with the election of Jimmy Carter, a relatively unknown Southerner, who Gerstle considers to be a transitional figure towards a new order– Neoliberalism. Carter did indeed anticipate Reagan with his distrust of government and urge to deregulate. In perhaps one of the more controversial of Gerstle’s claims, he locates the roots of Carter’s departure from New Deal policies in his association with Ralph Nader. Both viewed the government “not as a tool for restoring democracy but as an instrument of corporate domination and bureaucratic drift.” Given the penetration of capital into every nook and corner of the state– what Marxists call “State-Monopoly Capitalism” — the Carter/Nader thesis is not far-fetched. Gerstle sees this as the beginnings of left-neoliberalism, a theme that he returns to again and again.
Gerstle suggests three critical reasons that the commanding corporate heights– including many capitalists who had made their peace with the New Deal– were ready for a new order, an order to be realized beginning with the election of Ronald Reagan:
- “First, the American economy performed poorly for much of the 1970s, its reputation for global preeminence now tarnished, the instruments in the Keynesian toolkit stiff and rusty.” The blow to profitability in key industries long dominated by US monopolies challenged capital to find new answers.
- “Second, the sharp escalation of foreign goods invading the US marketplace made many in corporate ranks less willing to tolerate the power of organized labor.” The intense competition with low wage, modernized industries in West Germany and Japan brought class peace– secured by compromises like the Treaty of Detroit– to an end. Henceforth, capital would be on the offensive against labor.
- “…unhappiness about the steady creep of government regulations that neither the recession of the 1970s nor the political leadership of America… seemed capable of stalling or reversing.” New Deal regulation was meant to protect capitalism from itself by dampening insurrectionary waves through the enhancements of the welfare state and by stifling capital’s self-destructive impulses. By the 1970s, the Great Depression and the system’s collapse seemed far off and improbably recurring to the captains of industry.
As with the New Deal and its identification with the Roosevelt election, the Neoliberal order became identified with the Reagan election, but the ideas and movements associated with Neoliberalism incubated much earlier.
Gerstle points to the post-war creation of the Mt. Pelerin society, a proto-think tank of free-marketeers who helped shape and popularize the ideology of Neoliberalism. Their members brought the idea of extending markets to all aspects of life. Further, they subscribed to a fetish-like ascription of personal freedom to every question.
He overlooks the contemporaneous development of a new social science based upon Kenneth Arrow’s pioneering work and the Rand Corporation’s application of it to strategic and military matters. Rational Choice theory and Game Theory became the intellectual foundations for Neoliberalism, a development brilliantly developed by S. M. Amadae in her neglected work, Rationalizing Capitalist Democracy.
In the 1970s, an infamous memo circulated by future Supreme Court justice, Lewis Powell, served to alarm corporate leaders to the new “dangers” posed to capitalism by the New Deal order.
Since the debacle of the Goldwater campaign in 1964, an ideologically fueled series of think tanks had risen to construct alternatives to New Dealism. Funded by right-wing figures like Joseph Coors, John M. Olin, and the Koch brothers, these institutions substituted intellectual gravitas for the previously conventional ultra-right rants and conspiracy theories. Figures like Paul Weyrich, George Gilder, and William Simon carried the messages forward. Thus, was built a Neoliberal intelligentsia to counter the New Deal establishment. Gerstle explains:
The constituent parts of this order– the capitalist donors, the intellectuals, the think tanks, the politicians, the media, and the personal networks linking them together– were all visible in the 1970s. The speed with which the neoliberal order implanted itself on politics in the 1980s is inconceivable without what we might call the “silent phase” of its construction.
Reaganism quickly implemented and shaped the rudiments of a Neoliberal order, laying waste to the existing regulatory regimen and dismantling the progressive-tax structure. The Reaganaut attack on the judiciary laid the foundation for the rigid “original intent” silliness that dominates the courts today.
The overthrow of the media’s Fairness Doctrine in 1987 removed the last vestige of the media’s pretense to political impartiality and opened the door to the further influence of wealth and power.
Despite the rhetoric, Reaganism was not about budget busting or small government. Government spending for the military grew at an unprecedented peace-time rate. Federal debt reached new heights.
And the roots of the carceral state– the filling of the jails with poor, often Black youth– are to be found in the Reagan years and became a signature feature of Neoliberalism.
The fall of the Soviet Union in 1991 further consolidated Neoliberalism. Gerstle recounts the results of the end of Soviet power:
One result of communism’s fall is obvious: It opened a large part of the world… to capitalist penetration… capitalists and capital poured into Eastern Europe… After 1991, no country or movement in the world was in a position… to challenge the capitalist way of organizing economic life. Perhaps, then, there was no longer a need for capitalists to purchase insurance against such challenges by paying American workers the high wages that the New Deal order demanded. To the contrary, high wage insurance policies could be dropped and labor protests against wage cuts ignored or met by threats to ship production abroad. The defenders of this hyper-globalized capitalist order argued that whatever American workers lost in wages would be counter-balanced by falls in the cost of consumer products now manufactured abroad for a fraction of their former costs…It is hardly surprising that economic inequality rose sharply in these circumstances, to pre-New Deal levels.
Gerstle understands a consequence of the fall of the Soviet Union upon the left — the real left, the radical left– that few acknowledged then or now:
The collapse of communism… shrank the imaginative and ideological space in which opposition to capitalist thought and practices might incubate, and impelled those who remained leftists to redefine their radicalism in alternative terms, which turned out to be those that capitalist systems could more, rather than less, easily manage. This was the moment when neoliberalism in the United States went from being a political movement to a political order. [my emphasis]
By the mid-1980s, many Democrats had gravitated towards Neoliberalism. A beachhead was firmly planted in the Democratic Party with the founding of the Democratic Leadership Council. Prominent Democrats like Paul Tsongas, Gary Hart, Bill Bradley, Michael Dukakis, Al Gore, and Bill Clinton were drawn into the arms of Neoliberalism (old New Dealers like Tip O’Neill and Ted Kennedy were less easily seduced).
If Eisenhower’s presidency signaled the Republican surrender to the New Deal order, then Clinton’s presidency did the same for the Democrats’ surrender to Neoliberalism.
Certainly, the victory of Bill Clinton in the 1992 presidential election sealed the capture of the Democratic Party, but the process began earlier. Market-based solutions to social problems attracted some Democrats engaged in “The War on Poverty.” Gerstle, again, locates left-wing roots of Neoliberalism in the Nader campaign for “consumer sovereignty” and the frustration with regulation as a solution to corporate abuse.
Of course, part of the Democratic Party surrender was pure opportunism– Reagan’s revolution held power for twelve years, so they felt that they must give up the fight and join them.
Gerstle recognizes another factor: “the giddiness that accompanied the information technology (IT) revolution.” Infatuated with “tech hipsters,” the Democrats saw the new tech industry titans– often libertarians and free marketeers– as creators of a new market-based era. The pundits of the new era– Esther Dyson, George Gilder, George Keyworth, and Alvin Toffler– preached a renewal of “the American Dream.” Toffler “framed the revolution in terms of ‘Third Wave’ innovation.”
The seduction of these techno-libertarians and futurists was pervasive. This wedded the Democrats to Wall Street investors backing the tech phenomenon and moved politicians like Al Gore towards a reinvented, less intrusive government which would be more agreeable to a “third wave” economy.
The Telecom Act of 1996 completed the liberation of media and communication from non-partisanship and diversity, as media consolidated into the hands of a few mega-corporations that are producing the vulgarity, sensationalism, and conformity that exists today.
The Clinton era’s Gramm-Leach bill performed a similar function, liberating the financial industry from restrictions imposed in the 1930’s, enabling the economic crises of 2000-2001, 2007-2009, and that of today.
Despite unanimity on the core values of Neoliberalism, the two parties split on social values. Nonetheless, as Gerstle explains: “The contrasting cultures embraced by the two parties — cosmopolitanism in the case of the Democrats, neo-Victorianism in the case of the Republicans — were both compatible with the ascendant political economy.” With consensus on political economy, culture — including identity issues — became the battleground for political discourse in the twenty-first century.
The Clinton decade was the triumphant highpoint of Neoliberalism; its decline began in the early years of the twenty-first century.
Neoliberal foreign policy became a disaster with military adventures in the Middle East and elsewhere. The idea that the US was the international police and responsible for imposing Neoliberal values, free markets, cultural and political values– in other words, a Neoliberal civilizing mission — fell apart before resistance in Afghanistan, Iraq, and elsewhere. Gerstle writes of US “hubris” — a proper term for the US’s Neoliberal missionary role in imposing the order’s infrastructure on the entire world.
Nothing exhibits its failure better than the two-decade-long war in Afghanistan, a failure that pitted history’s greatest military against a guerilla army of a pariah movement rooted in feudal social and political ideologies.
Nothing demonstrates the arrogance of Neoliberalism more than the failure to remake Iraq in the Neoliberal image.
Gerstle tells these familiar stories well.
Likewise, Neoliberal hubris was demonstrated domestically. The first two decades of the new century were rocked by two serious economic crises, a devastating, poorly managed viral pandemic, and a third unfolding economic crisis. Neoliberalism’s response to all four was devastating to millions of people, yet the political order sheltered– even enriched — the wealthy and powerful. Hubris, indeed.
Credibly, Gerstle sees the political rise and election of Barack Obama as Neoliberalism’s last political hurrah. Obama may have been perceived as a champion of the people with new ideas, but he was, in fact, a fireman for the Neoliberal order charged with extinguishing the greatest economic challenge since The Great Depression. Insofar as he did so, he did it with the partisans and tools of that now-shaky order.
In the aftermath of the Great Recession, globalization and neoliberalism could no longer be promoted as policies that lifted all boats. Techno-utopianism could no longer hide the truth that serious structural imbalances in the global economy threatened not to collapse economies but to rend the social fabric of nations. The economic hardship and distress caused by the crash would linger for years. Political anger would smolder for a time and then erupt into a series of whitehot insurgencies. The neoliberal order would not be able to stand the heat.
The group that had benefited most from the New Deal order — whites in the small Midwestern towns and in the industrial pockets spread across the US became big losers with the Neoliberal order. Premature deaths, alcoholism, suicide, drug addiction– the usual afflictions of the poor and neglected– were now the common afflictions of the unemployed, underemployed, discouraged workers that had loyally celebrated and trusted capitalist rule.
Gerstle chose a 2012 study of a largely white Philadelphia neighborhood to illustrate the despair wrought by Neoliberalism, despite the fact that its author, Charles Murray, would likely be the last person to blame the order for the plight of those in Fishtown.
Of course, the Neoliberal order was even less kind to the Black working class, a demographic that always was the first and hardest hit with the economic crises. African American home ownership and household wealth were devastated in the aftermath of the 2007-2009 crisis.
The Neoliberal answer to despair was the imprisonment of more people proportionally than any other country, a harsh solution that fell especially hard on Black people because of the racist criminal justice system.
Perhaps the statistic most telling of the end-state crisis of Neoliberalism is life expectancy. The average US life expectancy dropped for the first time in the four-year period between 2014 and 2018. Of course, the drop is even greater for Blacks and Latinas/Latinos.
And of course, inequality in the US has reached levels unseen since the Great Depression.
Gerstle recounts the emergence of popular movements against Neoliberalism, both left and right. The Tea Party marked a backlash against the Neoliberal, corporate Republicans who lead the party. Wealthy rightwingers like the Koch brothers used their financial might to channel the movement into cultural directions and away from any serious economic critique, but its core attraction remained a hazy anti-elitism.
The left had its own uprising with the unexpected rise of the Occupy Wall Street movement. Undoubtedly, its surprising appeal sprung from its direct and unambiguous outrage at inequality expressed by the attack on the 1%. Gerstle explains: “In the short term, organizational chaos and indecision resulted from the movement’s anarchist-inflected resistance to having formal leaders.” Nonetheless, the experience led to hordes of young people entering electoral politics in protest, most eventually nesting in the Bernie Sanders campaign to convert the Democratic Party into the social democratic vehicle that it never really was.
Sanders garnered considerable support in both his runs for the US presidency. Given the growing dissatisfaction with the Neoliberal order, it should come as no surprise that he did well in the Democratic primaries, where his outlier counterpart, Donald Trump, also did well, given their common vocal rejection of the Neo-liberal order. But the dominant Democratic Party Neoliberals were successful in knee-capping Sanders in both campaigns.
Trump was more successful, shocking everyone that he emerged as a candidate, shocking everyone that he won the primary, and further shocking everyone that he actually won the election in 2016.
Putting aside Trump’s checkered, volatile rule during his four years, Trump exists as the product of rejectionist populism. And whether voters understand the essence of what they are rejecting, the political and economic substratum spurring that rejection is Neoliberalism. Whether Trump, an ideological slippery creature, represents any commonality with the grievances of most of his electoral supporters, he stands against something and he has convinced many that it is what they are against as well.
Like Sanders, whose supporters think they understand how he will secure the changes needed, Trump is the standard bearer for a movement looking to defeat the old order.
The new order is yet to emerge.
The New Deal order sold a large majority of Americans that a strong central state could manage a dynamic, but dangerous capitalist economy in the public interest. The neoliberal order persuaded a large majority of Americans that free markets would unleash capitalism from unnecessary state controls and spread prosperity and personal freedom throughout the ranks of Americans and then throughout the world. Neither of these propositions today commands the support or authority that they once possessed. Political disorder and dysfunction reign. What comes next is the most important question the United States, and the world, now face.
–The Rise and Fall of the Neoliberal Order
Assessing Gerstle’s Theory
Like the celebrated academic wealth and income expert, Thomas Piketty, before him, Gerstle is not a radical in any sense. Piketty’s empirical work unintentionally revealed what Marxist theory had long deduced: the tendency, over time, for capitalism to produce and reproduce inequality– it is in its DNA. His results, upon further study, moved him leftward, though he remains distant from being a Marxist.
Gerstle, an academically esteemed historian, has made a uniquely thorough study of the political, social, and economic history of the United States in the modern era. Like any good historian, Gerstle searches for patterns, commonalities, and trends when he places the facts of history next to each other. Despite his solid mainstream credentials, his review of the last hundred years of US history surfaces a theory of the evolution of US capitalist society that is strikingly similar to what a Marxist might accept.
- Gerstle sees history unfolding between 1930 and today as a dynamic process of different regimes trying to manage the US economy by establishing a widespread consensus around a specific capitalist ideology, a set of policies, and a core constituency. These regimes, when successful, become a political order.
- Insofar as the practice of the new order stabilizes capitalism, promotes the advance of capital, and sustains or raises the profitability of capital, it is widely accepted and retains the loyalty of elites. In the case of the US, the elites voice their consensus through the subscription of the two major parties.
- When capitalism becomes unstable, the existing order comes into question.
- In the face of crises, pre-existing factions within the old order question the existing consensus and shift their allegiance to another political order.
- A vigorous struggle ensues to determine a successor order to the failed one, usually decided in the electoral contests.
- The winner enjoys the opportunity to stabilize US capitalism and establish a new order.
As competently as Gerstle organizes and establishes this sequence of events into a coherent theory of political motion, he hesitates to attribute it to the inherent instability of capitalism. He clearly finds the US unstable to the point that– every thirty or forty years– the old political order decays and necessitates rescue by a new order. He clearly sees that the new order, while initially enjoying some success, carries the seeds of its own demise. Yet he never asks why this instability arises so frequently and what might be its cause.
This failure to seek ultimate causes is peculiar because Gerstle shows that he is fully aware of the significance of Communism as “capitalism’s most ardent opponent.” He acknowledges: “Generally missing from studies of the international roots and reach of neoliberalism… is a reckoning with the Soviet Union and communism more generally. And yet, this book argues, the Soviet Union and international communism cannot be ignored. Few international events in the twentieth century matched the Russian Revolution of 1917 in importance.”
While Gerstle sees successive political orders as threatened by Communism, he fails to concede that the credibility of that threat is precisely because capitalism is inherently unstable, therefore potentially unpopular, and ripe for rejection. His anti-Communism blinds him to take that step.
While Gerstle affirms that “no other single political force [than Communism and anti-Communism] had a comparable influence on the world or American politics across the twentieth century,” one must wonder if he really understands the full consequences of this affirmation. The construction of US anti-Communism as a veritable religion stains virtually every aspect of life and thought in the US to this day, including the building of alternatives for the creation of a new political order.
Since Gerstle confines his study mostly to the US, he fails to recount how the US political orders he exposed– laissez faire, The New Deal, and Neoliberalism– spread like a virus throughout the capitalist world in their time. Margaret Thatcher– considered a co-henchwoman of Neoliberalism with Ronald Reagan– has only two brief references in the book.
But the very fact that these political orders became a feature of global capitalism and not limited to individual states surely demonstrates that their dynamic is generated from capitalism and not anything peculiar to the US or the UK. The Neoliberal political order, like its antecedents, was adaptive in the Darwinian sense, for the survival of global capitalism.
Gerstle’s theory suggests a weak, but definite sense of irreversibility– the laissez faire order of the early twentieth century was spent; it could not solve the contradictions of the 1930s; nor could it return to solve the contradictions of the 1970s (though it shared features with Neoliberalism).
The New Deal order of the 1930s was also spent; it could not solve the contradictions of the 1970s; nor can it solve the contradictions of Neoliberalism (though elements of it may appear in Neoliberalism’s successor).
And Neoliberalism– as we know it– will not return in the future, but, if we fail to break the cycle with socialism, an order may emerge with some of its features.
Of course, this is neither inevitability nor fatalism. As Engels reminds us– and it is particularly apt today– another option is that society could simply perish. But within the bounds of twenty-first century capitalism, Gerstle is arguing that Neoliberalism is spent and its replacement as a political order is yet to be decided. He leaves no doubt of his conclusion when he ends his book with the charge that determining the next political order “is the most important question the United States, and the world, now face.”
But political orders do not arise from nothing; nor do they prevail arbitrarily. Gerstle shows in his narrative of the rise and fall of orders that antagonistic political currents percolate in the recesses of the existing order, preparing to vie for succession when the dominant political order falters. The balance of social and political forces determines the successor political order, typically fought out on the electoral field-of-play in the advanced capitalist countries.
Despite the neat dynamic of Gerstle’s theory, one senses that we have arrived at a crossroads. Certainly, the theory accounts for the rise of Trumpism (and its global right-wing, populist counterparts in the UK, the Baltics, Poland, Hungary, India, etc.) as a logical development from the decline of the Neoliberal order and a desperate attempt to establish a new counter-Neoliberal order. But what are the other alternatives?
Absent from Gerstle’s account is the widespread collapse of the center-left and center-right parties that historically resolved the transition to a new order. In most advanced capitalist countries, they have been electorally marginalized or racked with division and factionalism. They no longer serve as the guarantee of transitional moderation, nor have they escaped the clutches of Neoliberalism.
For the US, Gerstle only projects Bernie Sanders and his quasi-New Dealism as both a response to Neoliberalism and an alternative to Trumpism. However, Sanders refuses to break with the solidly Neoliberal Democratic Party, a party that has twice demonstrated its obstinate refusal to accept Sanders’ program.
Thus, at this moment, from the perspective of Gerstle’s theory, the only viable alternative that has emerged to Neoliberalism is the right-wing populism associated with Trump. Sadly, Gerstle, like much of our left, cannot imagine escaping the succession of political orders that strive to rescue and manage capitalism.
“…the most important question… [we] now face.”
It was not so long ago that Rosa Luxemburg’s famous comment– “Bourgeois society stands at the crossroads, either transition to Socialism or regression into Barbarism” — resonated with millions of people, including many in the Western capitalist countries. Today, that is not so.
Gerstle explains why this has come to be. The setback to international socialism that came with the demise of the Soviet Union in 1991 ushered in an era when leftists would “redefine their radicalism in alternative terms, which turned out to be those that capitalist systems could more, rather than less, easily manage.” [my emphasis]
With some high drama, he adds: “This was the moment when neoliberalism in the United States went from being a political movement to a political order.”
With this, Gerstle is astonishingly insightful, though the Neoliberal order has blocked his imagination as well. Neoliberalism has effectively stunted the radical imagination, leaving the vision of socialism to a small, but determined minority.
In place of politics driven by a vision of socialism– the end of the exploitation of labor and its attendant injustices– Neoliberalism has cultivated an era of political cynicism and overwrought moral outrage. As Gerstle observes, what counts as leftism today fits neatly into what capitalism allows: reforms that fail to challenge not only the relations between capital and labor, but even the balance of power between the capitalists and the rest of us; a fetish of capitalist democratic procedure which projects that– should all the obstacles to popular participation be removed– the interests of the people will magically be recognized and satisfied by the ruling apparatus; and an absorption with an adolescent notion of freedom that celebrates the individual not of the collective, but outside of it.
Today’s left, coloring inside the lines of what capitalism allows, would be aghast at the idea of revolutionary socialism. Better to talk of local politics, humanizing the Democratic Party, small-scale cooperatives, human rights campaigns, non-profit corporations, foundations, expanded welfare, democracy promotion projects, networks of progressive interest groups, etc., etc. All relatively inoffensive to the Neoliberal order and unthreatening to capitalism.
Today’s left makes angry noises about the threat of fascism, dangers to “our” democracy, and the rise of right-wing populism without acknowledging that all are the children of capitalism. It is, and has been, capitalism that fears the rising of the people and seeks to disable the tools that enable the people to rise. Defending capitalism from itself will not secure a bright future for working people.
Let us suppose that Gersle is right– and I think he is– that we are at a crossroads where one political order is dying and another is yet to take its place. What does that mean for the left?
In past transitions from one order to another, the specter of Communism was a decisive factor in shaping the new political order, as Gerstle concedes. The New Deal would not have taken the form it did without a powerful left formed around militant working-class organizations, especially the Communist Party. A workers’ state did not ensue, but a political order that conceded far more to working people than it would have without the socialist alternative looming.
In the transition to Neoliberalism, the specter played a negative role. The advances of Communism– victories in Asia, Africa, and even in Latin America, with Communist Parties enjoying greater influence in global politics– shocked capitalist elites and rocked the economically shaky New Deal order, hastening the rise of Neoliberalism.
Today, the lack of a militant left committed to advancing socialism stunts any attempt to establish a new political order that will both rival the hollow posturing of left and right populism and answer the unprecedented challenges facing the world today.
As insightful as Gerstle’s theory is, it suffers a failure of imagination. Understandably, he and many others fear what will succeed Neoliberalism. The prospects of managing capitalism are growing dim. It’s time to look beyond rescuing a failing, rotten system; it’s time to build a movement for socialism.