This episode of Hub Dialogues features host Sean Speer in conversation with Cambridge University professor Gary Gerstle about his fascinating new book, The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era.
They discuss what differentiates a political order from a political movement, what defined the neoliberal order, and why it ended and what has replaced it so far.
You can listen to this episode of Hub Dialogues on Acast, Amazon, Apple, Google, Spotify, or YouTube. The episodes are generously supported by The Ira Gluskin And Maxine Granovsky Gluskin Charitable Foundation.
SEAN SPEER: Welcome to Hub Dialogues. I’m your host, Sean Speer, editor-at-large at The Hub. I’m honoured to be joined today by Gary Gerstle, an award-winning historian who’s currently the Paul Mellon professor of American History and a Fellow of Sidney Sussex College at the University of Cambridge. He’s also the author of the fascinating new book, The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era, which argues that we’ve recently come through the second political order of the past century and are now awaiting its successor. This intellectual history has profound consequences for how we think about economics, politics, and our society. Gary, thanks for joining us at Hub Dialogues, and congratulations on the book.
GARY GERSTLE: Thank you for having me. Pleasure to be here.
SEAN SPEER: I want to start the conversation with some contextual questions if that’s okay. First is, what is a political order? How does one start, and how does it typically end?
GARY GERSTLE: I developed the idea of a political order to understand and grasp political developments that cannot be understood within the normal two, four, six-year election cycles of American politics. Those elections draw an enormous amount of attention, rightfully so. They are enormously important events, but there are ideas, developments, forms of political economy that really cannot be understood within that time frame.
A political order is an effort to develop a different conception of political time. It refers to a political movement that through a series of victories at the polls, through developing reliable constituencies, through stable network of donors, policy networks, think tanks, media platforms, acquires influence in certain areas of American life, political life that endure for 25, 30, 35 years. A question is, when does a powerful movement become something more? When does it become a political order? My litmus test for that is when a political movement is able to compel its opposition to play on its turf.
For the first political order, I talk about it in the book, the New Deal political order, which arose out of the Democratic Party and Franklin Roosevelt in the 1930s and ’40s—a very powerful movement in American life won many elections, profoundly transformed American life—it doesn’t really become a political order in my telling until Dwight Eisenhower becomes president in 1953. He’s the first Republican president in 20 years. The question is, is he going to accept the basic principles of the New Deal order, which were fashioned by Democrats, or is he going to try and roll it back?
What the Democrats had done was to declare that capitalism left unregulated was disastrous, that it had to be regulated by a powerful government willing to intervene in many different areas of economic life. This was not Republican policy. These were not Republican principles. The question is, when the first Republican becomes president, is he going to try and roll this back, or is he going to acquiesce? Eisenhower acquiesces. He accepts the core principles of New Deal politics. At that point, the New Deal moves from being a political movement to a political order.
Something similar happened with the neoliberal order in the 1990s. The architect is Ronald Reagan and his Republican party, but the litmus test for when this becomes a political order is when Clinton becomes the first Democratic president in 12 years. Is he going to try and roll back the Reagan revolution, or is he going to lead his political party to acquiesce to it? He leads to acquiescence. The Democratic party under Clinton in the 1990s becomes also an instrument of neoliberal thinking and neoliberal ideas.
Political orders tend to arise in moments of economic crisis when existing forms of governance are no longer working, when the economy has been sent into a serious tailspin to which there are no easy answers, and that is a moment when ideas that have been dominant throughout the political spectrum come to be questioned and ideas that are not necessarily new but have been consigned to the margins, suddenly have an opportunity to buy for mainstream appeal.
Neoliberal ideals, which had been percolating in various sectors of the global North, really from the 1930s forward, they were not new ideas in the 1970s, but it was the crisis of the New Deal order, the crisis of having inflation, and rising unemployment at the same time, and the Keynesian toolkit not being useful for addressing those questions, this allowed for what had been regarded as heterodox ideas to become mainstream. Similarly, when the neoliberal order begins to break up in the 2010s, you have figures like Trump and Bernie Sanders, Right and Left on the political spectrum, they weren’t really saying anything different in the 2010s than they had been saying in the 1990s.
Bernie Sanders in the 1990s was considered a pest. You had to sometimes swat him away but he didn’t really cause you any trouble. And Donald Trump among New York City residents was regarded as a fool. Very good at getting attention but not much else. Suddenly these two marginal figures become the major forces for new political ideas in American life. What created the opportunity was the financial crisis of 2008-09, which throws the neoliberal political world and political economy into disarray and once again allows ideas that have been on the margins to flow into the mainstream and bid for mainstream appeal, gives those ideas an opportunity that they had not had before.
SEAN SPEER: There are tons of lines of analysis there, Gary, that I want to pick up in our conversation. If you’ll indulge me, I just want to ask a couple more big-picture questions before we get into some of the specifics in the book. Must we have a political order? What guides political and policy thinking in the absence of such an ideational framework?
GARY GERSTLE: We’re living in such a moment right now. Even though I wrote a book that said the last 90 years in American politics have been dominated by two political orders, I do not want to give the impression that America must have a political order. You could have a different system where two parties were genuinely competitive with each other and unable to establish their authority beyond an election cycle or two. I think we’re living in such a moment now. You can see the outlines of new political orders seeking to be born, I would say one on the Left and one on the Right, but there’s no sign yet that either is going to triumph in the next few years.
I think it is possible to have politics that are genuinely competitive and quite healthy in that way, in terms of different parties fighting each other at the polls and having contests with a clear winner and loser and voters changing their minds. It’s also possible to have a politics that is characterized less by healthy competition and more by paralysis. I would characterize our current moment as falling more into the latter category. We are without a political order now, but I would say we are not in a healthy state of U.S. politics. The answer to your question is yes, absolutely.
You can have a period of time in which there is no political order and we would have to then analyze whether that’s a healthy form of politics for the United States or whether it’s leading to volatility and explosiveness and unpredictability that is bad for politics over the long-term.
SEAN SPEER: One final contextual question. Can a political order be confined to a single country, or by definition, does it tend to be global in nature? I would just say in parentheses that I asked that question in large part as a Canadian who, of course, can’t help but see our political ideas influenced by intellectual and political movements in the United States.
GARY GERSTLE: Well, the story of political order that I tell is a national story for the United States rooted in my study for decades now of American politics. However, both the New Deal and neoliberal orders have analogs in other countries and have international sway. When you think about the New Deal order, sometimes I describe it as America’s variant of social democracy. It’s a light form of social democracy but when you have states heavily involved in regulating markets, you’re getting close to social democratic politics. That politics in the United States when it was at its height from the 1940s to the 1970s parallels what was going on in Western Europe at the time.
Similarly, the rise and fall of the neoliberal order in the U.S. tracks very closely with what I would say is its rise and fall in Britain. Thatcher should be twinned with Reagan. Blair should be twinned with Clinton. I lived in 2016 through Brexit and Trump at the same time. Both of them hit me very hard, an American by birth and culturally working and living in England for a long period of time. What struck me about that moment is how much Brexit and Trump were themselves twinned.
They were similar phenomena playing out in different countries. Also, the neoliberal order, in particular, aspires to be a global order. It imagines its triumph as being bound up with a world that is freed up for capitalist penetration everywhere. It aspires to be a global order and to be truly successful on its own terms, one has to have an international frame of that sort.
By the same token, I don’t want to exaggerate my knowledge of the politics of other countries. I don’t want to say that the domestic character of political orders is the same in other countries as I’ve analyzed it in the United States. I think we have to allow for a variety there because political systems are different. Canada, Britain, the United States, France, Germany, all democracies but they don’t function exactly alike. They have different traditions. They have somewhat different systems. I wouldn’t want to say that the political order, as I’ve described it in the United States, is a universal model for democratic nations. I wouldn’t want to go there.
SEAN SPEER: I would just say that it is a useful framework I think for understanding political economy developments in Canada. If Thatcher and Reagan were twins and Clinton and Blair were twins, I think you could add Mulroney and Chrétien to your broader story. As you said, the book argues that after a 30 or 40-year run as the prevailing paradigm, the “neoliberal order itself is broken.” Why don’t you elaborate a bit, Gary, on when and how it ultimately broke?
GARY GERSTLE: The breaking point is the financial crash of 2008-09. A political order as I analyze it, for it to be successful, it has to have popular appeal. It has to persuade voters to cast their ballots for when the elections come up, or for the candidates who are promoting it. In that respect, I see the neoliberal order in somewhat different terms than other people who write about neoliberalism who see it mostly as an elite project developed by industrial elites, financial elites, and their servants in government to maximize opportunities for capital accumulation of development and free capitalist enterprises from democratic surveillance, public interest, popular control.
I don’t deny that those are elements of neoliberalism, ideologically and politically but I also think that to become an order, a philosophy has to have a popular base. Neoliberalism required a message that it could take to the masses. Reagan articulated that most eloquently and successfully. Neoliberalism was about freedom. It’s about the government not telling you what you could and couldn’t do. It was opening up a life for you to live as you wanted. Free enterprise was going to get you the economic component of that. No government would be telling you how to live your life.
Individuals, groups, capital, enterprise, all would be freed from constraints. This, in its own way, is a powerful vision and a powerful dream. In the U.S., it’s connected to the American Revolution freeing people from the tyranny of George III and seeing government as the source of tyranny. Neoliberalism had to sell more than just a message of freedom and had to deliver on something, or had the promise to deliver on something. The promise was that if you freed capitalism from constraints, it would become so productive and so efficient that it would lead to an extraordinary period of affluence and it would open up economic opportunities for all sorts of people.
Neoliberals acknowledge that if you free capitalism a lot, you’re going to deepen economic inequality between the rich and the poor. That would be okay because so much abundance would be generated that all boats would rise so that if the boats of the small people wouldn’t rise quite as high as the boats of the big people, if your and my boat wouldn’t be as big as Jeff Bezos’ yacht that he’s trying to sail out of the Netherlands, then certainly we’d still have a little yacht that we could call our own and we’d be happy. It was a promise that all boats would rise. I think that was always a fantasy.
Throughout the neoliberal era of the neoliberal order I think the problems of inequality were quite severe and there were winners and losers in the globalization world. If you were part of a global district and had access to those opportunities, you could be very affluent and you could prosper. If you were not, if you were in a de-industrialized district cut off from currents of global trade and employment, you and your children and your family were in a lot of trouble economically with other kinds of problems to follow.
I think the problems were always there, but the fantasy that all boats would rise was sustained for a long time through the 1990s and the first decade of the 21st century. A lot of it through mirrors and through the schemes of issuing all sorts of credit to people, subprime mortgages, subprime loans, all premised on unending growth. When that bubble burst, the neoliberal bubble burst in 2008-09, and the bursting of the bubble was compounded by the responses of the U.S. and other governments of the global North.
Their responses were to bail out the banks first and to put the financial world in order, and to let those banks be pretty much what they had been before, even though they were widely perceived accurately as having triggered this global crisis. Not enough was done for ordinary people who had suffered as much as banks had and in many cases had suffered more, had lost more, and were in great peril. You know what? People noticed the divergence in terms of who was being bailed out and who was not. This occurred under the Obama administration in the U.S. and I now think of him as the last of the neoliberal presidents. It’s not all on his shoulders.
I don’t know how I would have reacted. You don’t know how you would have reacted when you saw the reports of how close the entire financial system of the world came to Armageddon and complete meltdown. Also, I think to be fair to Obama, he did not have a robust Left at hand that he could use as leverage against the Right that he was already fighting. But he accepts neoliberal solutions to the problems that neoliberalism had caused. He brings back into his administration a lot of the people who had been responsible for the neoliberal architecture of the 1990s, the Ruben and Goldman Sachs crowd.
Then you see sharp divergences in recovery rates between the asset class and the non-asset class. If you had money in the stock market in the U.S. or elsewhere in the global North, you were pretty much back to your old asset mix by 2011, 2012, in some cases, sooner. If you were not part of that mix and you were living on Main Street and you were dependent on a job and wages, even in 2016 you were not back to where you had been in 2008. And so a sharp divergence opens up and it deepens the divide that had been present in neoliberalism all along. That then gives rise to grievances that do not get addressed and those people who have those grievances begin to look to people who had been considered far Right or far Left or just illegitimate.
And on the Right, it’s the forces that Donald Trump is able to muster. On the Left, it’s Bernie Sanders. And the revival of an American Left, in American socialism with Bernie Sanders, is as big a surprise in 2016 as Trump is. He makes himself into the second most successful socialist in all of American history in terms of the breadth of his appeal. It is not as though neoliberal policies disappear during this time, or neoliberal practices or neoliberal institutions, but they lose their authority, they’re contested.
Sometimes I have a shorthand for understanding the core principles of neoliberalism. I call them the four freedoms of neoliberalism. They’re not the four social democratic freedoms that Roosevelt enunciated in 1941. They are ones of my own fashioning but everyone recognizes them. Free movement of people, free movement of goods, free movement of information, free movement of capital. In a perfect neoliberal world you want these four freedoms operating at full throttle, and in the heyday of the neoliberal order they do. Beginning in 2016, each of them comes under challenge.
Free movement of people is challenged: borders are going up everywhere. Suddenly, both Sanders and Trump are protectionists. They’re not free traders. They’re fair traders. They don’t believe in the gospel of free trade being the most efficient allocation of the world’s resources. Suddenly, there’s a digital Cold War going on and you can no longer assume something that you and I are discussing is going to appear in China or Russia or Turkey or in India.
The Ukraine War then puts the most draconian measures on the free movement of capital that we’ve seen in a generation or two. In the loss of the authority of these freedoms—it’s not that there aren’t people in the world advocating for these freedoms now and trying to restore neoliberalism to its perch. But these freedoms, they’re acting as a route to a better world during the neoliberal heyday. They had been unquestioned and now each one is under serious challenge.
SEAN SPEER: You make the case that one of the downfalls of the neoliberal order may have been somewhat inherent to its cultural and intellectual coalition. Its political power derived from the uneasy coexistence of what you described as “two strikingly different moral perspectives on how to achieve the good life”. What were these two perspectives? How did they end up on the same intellectual side of the debate in the years following the fall of the Berlin Wall and did it make neoliberalism’s unraveling inevitable in your view?
GARY GERSTLE: I consider the moral component of the neoliberal order to be a really integral and interesting part of the story. I’m glad you brought it up because I think it’s one of the more interesting parts of the book. For a political order to be successful, it has to carry within it a vision of a good life and how to achieve it. Also to recognize if there are dilemmas in the vision of a good life, how are they going to be addressed? It has to be expressed simply in a way that a lot of people can understand.
On the aright, the dilemma is this: if we free capitalism to do its thing and we free markets, how are we going to ensure that people behave responsibly? If we’re going to give people an opportunity to truck, barter, and exchange, and remove government regulation, how are we going to be sure that people aren’t going to consume too much or go into deep debt or spend their money on vices, prostitution, [laughs] gambling, things of that sort? The answer that the Right gives is to say, we are going to train people to discipline themselves and we are going to advocate for strong family life. What’s a strong family life?
It has to be a family life of a certain sort, headed by male patriarchs, women falling into line, children listening to their parents, and well-disciplined. Neoliberalism is very compatible with what I call a neo-Victorian form of politics, which is traditional values, people living in patriarchal, heterosexual households, with very conservative cultural politics—this kind of politics is necessary to enable people to enjoy the full fruits of their market freedom because we don’t want to regulate, we don’t want the government to regulate these people, but someone’s going to have to regulate these people. The best way forward is for people to regulate themselves.
From that point of view, you can see how neoliberalism is very compatible with a conservative set of values. First identified with Britain in the 19th century and during Queen Victoria’s reign. It was seen then, and seen in the 1980s and 1990s as a recipe for success for market freedom. You’ve got to match market freedom with well-disciplined individuals. That discipline has to come from strong family life of a certain sort. One of the most provocative, and I think controversial parts of the book is, how the Left deals with or spins a tale of market life compatible with their own sense of freedom.
This comes out of the new Left, one of the series of liberation movements that erupted in the 1960s and 1970s. They saw themselves as opponents of capitalism, but they also saw that government had gotten too powerful and there was a nexus of government and capitalism, the system, in the parlance of the day, and this was suffocating people’s opportunities, their freedoms, and their consciousness.
The goal of the new Left became to free oneself, and one’s consciousness, from the tyranny of the system. In many instances, the new Left arrayed itself not just against capitalism, but against the government. It turns out that there were many elements of the new Left hippies—Steve Jobs at Apple, Stewart Brand, the creator of the Whole Earth Catalog—who at one time clearly saw themselves on the Left, but for them Left politics means a dream of individual freedom and individual emancipation.
They are not interested in neoliberalism because it’s going to discipline themselves, they are drawn to the freedoms promised by neoliberalism because it’s going to allow for deeper exploration of the self, or extraordinary innovation of the sort that gets bound up with the PC, the personal computer and the revolution in technology. All the startups in Silicon Valley have a heavy hippie component to them.
Then this gets extended beyond just one’s personal freedom, but being drawn to a world where you’re being encouraged to interact with people of all faiths, cultures, religions, ways of living, various sexualities, a kind of urban life. The focal point for the neoliberal order becomes the global cities like New York, Toronto, Vancouver, Hong Kong, London, and Paris. A certain kind of cosmopolitan life takes root in these places. There’s a Left politics that gets very bound up with this dream of cosmopolitanism, that a world of diversity and encounters between diverse peoples, is taking shape. We love it.
We want to be a part of it. The Left that is engaging in this has trouble acknowledging that this has resonance with neoliberal principles, but whether they recognize it or not, you can see the convergence between a global world of free movement of people and cultures, and a world of diversity around race, ethnicity, sexuality that the Left comes to celebrate, especially after the fall of the Soviet Union and the collapse of the dream of communism between 1989 and 1991.
Because with that spectacular collapse, the core dream of the old Left dies, that the world can be reorganized and on a radical foundation. And so a lot more of the energy of the Left after 1990 gets poured into identity politics. Those identity politics are compatible with the neoliberal world that is taking shape. This moral code which values cosmopolitanism and the ability to change your identity, the celebration of diversity, this is anathema to the other cultural group that is fastened to the neoliberal order which thinks there’s one way to live one’s life and it needs to take place in a patriarchal family with reverence for God, the patriarch.
You have under the banner of neoliberalism two very different cultural camps. It, in the short-term, in the medium-term, I think strengthens the neoliberal order because it widens the base on which the appeal can be built, but if you’re saying that this was an inherent weakness in the neoliberal order that at some point was going to pull it apart, I think you’re right about that. Because it’s not as though these two twinnings of neoliberal cultural politics liked each other. They were engaged in furious cultural battles and at some point they were going to clash.
SEAN SPEER: A natural question from reading the book is what comes next? I was struck, for instance, that both the New Deal order and the neoliberal order were taking shape as intellectual movements long before their political ascendancy. What explains the lack of burgeoning intellectual movements during the twilight years of the neoliberal era? As you said, Gary, Donald Trump and Bernie Sanders were disjunctive figures, but they didn’t really represent credible alternative paradigms, did they?
GARY GERSTLE: I think they do. The one question is in terms of understanding the emergence of a new political order, where are we now in terms of the emergence of a new political order? Is this like the 1970s when the neoliberal order burst into being or is it like the 1930s or for the New Deal order, maybe it’s like the 19 teens where you had various ideas that would lead to the New Deal order percolating, but they hadn’t jelled yet and may be in relation to the neoliberal order, it’s more like the 1950s and ’60s. If we were focused on the ’50s and ’60s with regard to the neoliberal order, you’d probably be saying to me now, “I don’t really see much that’s there,” but it is there.
I think if we imagine that we’re at the beginning of the emergence of a new political order, and if we imagine that a new political order may not establish itself till the 2030s, not in this decade, but the next, that’s a useful timeframe for understanding that it may take some time for these new ideas to develop. I think the rebirth of the Left is a very significant development in American politics. I think even though there’s no other figure like Sanders, there’s no one to take his place, I don’t think, when he passes or retires, I think he has generated a movement that is advancing on multiple fronts in American society. I also think very significantly that Biden has incorporated Sanders and the Left into his administration.
What we’re seeing now is the dialogue that occurred in the 1930s under the New Deal, which is a very productive dialogue between the Left and the centre of the Democratic Party. It’s not an easy relationship, but the Democratic party has been strongest when that relationship has been engaged. I think there’s also been a very significant turn in Democratic Party politics and maybe in Republican Party politics as well and one can understand that turn in terms of rethinking the relationship of state to markets.
The neoliberal creed was markets above all else, states stay out of the way, and now through the industrial policy that Biden is putting forward, we have seen a turn toward reinserting the state into discussions of the economy. There are certain issues that governments have to take action on in economic terms for the sake of the well-being of their people. You see this in the CHIPS Act, you see it in the Inflation Reduction Act, which is really a climate act, you see it in the massive infrastructural bill.
Two of those pieces of legislation have drawn significant support from the Republican Party. One can see in this the outlines of a new progressive political order that hinges on rethinking the relationship of what is the role of government in regulating the economy. I’m in conversation with quite a lot of people on a number of fronts. A lot of this has not entered the newspapers yet or is not being highlighted because issues that grab all the attention are issues of culture and politics, but there’s a tremendous amount of conversation going on now.
I think we might regard this as the hidden phase of a new political order. In other words, there’s a period of time when there’s a lot of thinking going on, but it’s not visible to someone who’s not actively engaged in it. It’s like when you launch a development campaign for a university or an institution. I forget what the first phase of it is called. You’ll have the name for it. You don’t go public until you’ve got certain critical mass of donors. It doesn’t work quite that way with political ideas.
I think the idea is useful that a lot of this will be invisible to the general public, but it’s going on. Then suddenly when it bursts into full form, people will be surprised at how far along new thinking has advanced and how quickly politics can change. I think there is a new political order of that sort developing, but we also have to recognize that there’s a political order of the Right that is arguably in some respects further along. This is a political order built on authoritarianism on one hand and ethnonationalism on the other that’s very impatient with democratic politics that wants to vest incredible power in strong figures who can get things done and have a tribal orientation.
In a world where we’re going to be having tens of millions and then maybe a hundred million refugees, the appeal to tribe, and when the climate crisis hits, who are you going to save and who are you not going to save? The answer that the authoritarian Right gives is we’re going to save people who look like us or share our religion or share our ethnicity or share our race. If we need a strong leader to make the tough decisions that democracies are not capable of making, then so be it. This is not just Trump, of course, Trump is part of a worldwide movement of authoritarians who recognize themselves in each other. It’s Putin, it’s Bolsonaro, it’s Orban in Hungary. It’s Modi in India, it’s Xi in China.
There is that other formation out there. I think it’s certainly in development. I think the unanswerable question for me is not—I do think there will be a new political order that emerges—but the unanswerable question for me right now is which one is going to win: the progressive political order that I see developing in the Democratic Party in the United States in dialogue with the Left, or is it going to be the authoritarian ethnonationalist movement that Trump in the United States has come to embody? I think we just don’t know the answer to that at this point in time.
SEAN SPEER: Well, let me put one to you. I’ve observed in recent months some Left-Right convergence on the idea of a modern supply-side orthodoxy. It extends from say, New York Times columnist Ezra Klein to George Mason University economist Tyler Cowen, and various others in between. Does the idea of what’s been called by some “abundance agenda” that’s something of a hybrid between the mixed economy model and the neoliberal model hold out some potential to serve as a new political order? Or is it lacking in certain ways?
GARY GERSTLE: Well, I think it certainly holds the potential for offering a political economy that can serve as a basis for a new political order. You’re absolutely right, the amount of conversation going on now in both parties about how to think of the role of states and managing markets—and I would include supply chains as part of the task of managing markets. Can we as a society tolerate long supply chains? Do we have to shorten them? For which commodities do we have to shorten them? Which commodities can we not do without, so on and so forth?
I think that’s a very strong indication of how much thinking has changed. In the neoliberal era, you didn’t think this way because your principle was that the market was by far the most efficient distributor of resources. Anytime government got involved in that process, they were going to screw it up. That was the core principle of neoliberalism, and that’s no longer the case. The fact that these discussions are going on across such a broad range of political groups indicates how fundamental an inflection point we may be at right now.
There are complications, of course, if we think of industrial policy—for example, let me just identify two camps with quite different interests. Doesn’t mean they can’t ally, but which one comes out on top has got to have a huge impact on the character of the politics that we have. There are the Bidens and the Sanders who see industrial policy as a road to a social democratic order of governments serving the broad public in a meaningful way and are willing to regulate capitalism in the public interest in order to do that.
You also have another wing which is the nationalist or the national security wing which wants shorter supply chains, not because they believe in redistribution or social democracy. They want to hit China and they want to hit China hard. They’re not troubled at all about empowering a military-industrial complex for the sake of confronting China. A military-industrial complex is quite different from a social democratic industrial policy.
The question becomes, can a coalition be built out of these two wings or will they inevitably clash, or will a political or order demand that one be privileged over the other? There will be people who will strongly prefer a social democratic order and other people who are much more comfortable with a military-industrial complex national security order.
Those are not the same things. How those differences are worked out will have a tremendous bearing on the character and quality of politics. Another area where there’s a lot of discussion going on now that didn’t exist before is the revival of antitrust and the idea that monopolies are bad. Under the neoliberal era, again, the only question applied to monopolies was: were they efficient? Were they delivering goods at a cheap price to people?
The older anti-monopoly tradition in the U.S., and in Canada too, says no corporation getting too powerful and having too much control over its economic universe is good for anybody because that power becomes absolute and it corrupts absolutely. In both the Democratic and Republican parties now, there are strong movements to break up social media companies or to put them under some meaningful regulation.
The nonsense that’s happening with Twitter exposes the craziness of entrusting a medium of this importance to the fancy of an immensely rich but very limited private entrepreneur. In both the Democratic and Republican parties now, there are strong movements to put these social media companies, either to break them up or to put them under some meaningful regulation.
I think the question is, can the Josh Hawleys of the world get together with the Lina Khans of the world? She’s head of the FTC, he’s a senator. Can they get together and offer some meaningful political coalition on these matters that lead a broad cross-section of the American public to a place that it wants to go on these matters? That becomes, again, a really interesting political question for our time and going forward.
SEAN SPEER: I just have two final questions for you, Gary, that in a way come back to our earlier conversation about the interrelationship between ideas and politics. The 20th century was marked by a degree of intellectual gatekeeping because the marketplace of ideas was constrained by opinion page editors, academic journal editors, and so on. That ostensibly imposed a degree of rigour on the ideational process, but it also excluded heterodoxy and pushed in the direction of conformity.
In today’s democrat democratized marketplace of ideas in which there are essentially no gatekeepers standing in the way of good or bad ideas, is it possible to achieve the broad base intellectual consensus around political economy that’s reflected in the two political orders described in the book?
GARY GERSTLE: That’s a great question and I wish I could give you a good answer. The IT and social media revolution has changed the character of our politics. I think for a political order to thrive, you may well be right, that you have to do the dogged work of consensus building up to a point. It’s slow. It’s laborious. It requires institutions that are durable and, of course, one of the characteristics of our own age is the evanescence of so much of what we write and do and say. Where will this podcast be in three years or even six months? It’s in the ether. I would say that in the earlier era, even with all the institutions building consensus and with all the gatekeepers, it didn’t stop revolutions from happening. It didn’t stop economies from crashing.
It didn’t stop ideas that had been regarded as heterodox from escaping their marginality and entering the mainstream. Even in that era, one can point to enormous powerful changes. I think we have to hope that just as that earlier moment was not bereft of the possibility of change, I think we have to hope that in this new social media world, we are not bereft of the possibility of order.
The only thing I can say with certainty is that the social media world is a world we have. It’s not going away. We can’t escape it. We can’t go back to that earlier time, even if one wanted to do that. We have to build order and I mean that in a positive sense, not in a repressive sense. We have to build order out of the media and discussions and ecosphere of intellectual life and political life that is available to us.
In other words, there is no way to go but forward and we have to find a way of, just as we might say of the earlier era, that those who are constrained by order found a way to emerge from it and build something different, so too we must figure out a way to restrain some of our disorders so we can build enduring political projects that we really admire and that are essential to the future welfare of all of us.
Nowhere is this more clear than in the case of the climate emergency that we’re facing. It’s not really an answer to your question except the only insight I can have is that we must build a new sense of order out of the ingredients of our intellectual and political life as they exist now. We have to build this out of the new technology, not by ignoring or thinking we can escape the new technology and the new world we have built.
SEAN SPEER: It’s a great answer and a good segue to my final question. Gary, I’m grateful for the generosity of your time and your insights. In that vein, having carried out this work, do you have views on how ideas are transmitted from the intellectual world to the political world? Are there common conditions or approaches that saw, for instance, the ideas of Keynes or Hayek come to manifest themselves in a broad-based politics?
GARY GERSTLE: Ideas matter and they matter to everybody. This book of mine has generated a far greater interest among general readers than anything else I’ve published. I did not anticipate that when I was writing the book. These are complicated issues we’re discussing today. There’s a big cross-section of people I’ve engaged with for pushing these ideas forward and it’s an example of ideas that are developed within the academy moving out into a broader world. I’m actually very encouraged about the possibilities of discussion that are occurring now and that lie before us. I think also there are moments when prevailing paradigms break down.
This is such a moment that we’re living through and they are extraordinarily interesting moments because precisely there are heterodox possibilities. There are ways in these moments when paradigms break down that we are in some ways freer than we had been before to discuss possibilities for the future. I think we’re in such a moment now. The ability for ideas to travel depends not just on our skill as wordsmiths or what institutions we’re connected to. It also depends on the moment in which we’re living and what that moment affords.
We have to recognize this moment for what it is: as a moment of opportunity to think in new ways and develop new paradigms in that way. It’s an exceptionally free moment, I would say and we must take full advantage of it. Young readers of my book find a lot of hope in it, which has surprised me because I don’t think it necessarily concludes on a tremendously hopeful note. It lays out hopeful possibilities, but it’s also clear-eyed that we’re in a tough spot right now. When I quiz them about where they find the hope, I think it’s in part because they’ve been taught that the neoliberal project was so powerful it would never come undone. I’m telling them that it’s falling and it is.
I also think they take heart from the neoliberal ascendants over a 40-year period. People like Hayek, Milton Friedman in the 1940s, were totally irrelevant in the world of politics. Their ideas didn’t have a chance of gaining a popular hearing. They were not deterred. They worked for decades.
Give Ronald Reagan credit. I misunderstood him in the ’80s as did everyone in my generation on the Democratic or further Left side of the aisle. B movie actor, not skilled in anything, never read a book. This is wrong. This man is developing his own neoliberal ideas in the early ’50s. He’s reading Hayek on trains as he travels from one GE plant to another to give pep talks on free enterprise.
This is a man with a vision who’s stuck to that vision. You don’t have to like him. I don’t like his politics. I respect his set of political commitments. I think where the young people who read my book find hope is that in this band of people who were so out of favour in the 1940s and ’50s execute an intellectual revolution in the 1980s that transforms America and the world in a neoliberal direction.
They worked at it for 30 or 40 years, and they were diligent about building institutions and seeking connections and developing policies, and not giving up hope. I think there’s a very important message in that, and that some ideas are worth the fight, even if they take a generation or two. Sometimes you have to engage in the long march before you get where you want to go. That means developing ideas, not just at the moment, but over a decade, two decades, even three decades, for the sake of the world that might be.
SEAN SPEER: For listeners who want to understand that long march, I’d recommend they read The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era. Gary Gerstle, thank you so much for joining us at Hub Dialogues.
GARY GERSTLE: Thank you for having me. It’s been a pleasure.