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Three considerations of Gary Gerstle‘s important new book, The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era: First Robert Kuttner ponders why Democratic presidents embraced an economic credo that annihilated their own public philosophy and its appeal to the electorate…

Beginning with the presidency of Jimmy Carter, a succession of Democratic presidents joined Republicans in turning away from the New Deal model of regulated capitalism toward what has come to be known as neoliberalism. The neoliberal credo claims that markets work efficiently and that government attempts to constrain them via regulation and public spending invariably fail, backfire, or are corrupted by politics. As public policy, neoliberalism has relied on deregulation, privatization, weakened trade unions, less progressive taxation, and new trade rules to reduce the capacity of national governments to manage capitalism. These shifts have resulted in widening inequality, diminished economic security, and reduced confidence in the ability of government to aid its citizens.

The Republican embrace of this doctrine is hardly surprising. Given the lessons learned about the necessity of government interventions following the 1929 stock market collapse and the success of the Roosevelt administration as a model for the Democratic Party, the allure of neoliberalism to many Democrats is a puzzle worth exploring.

The term “neoliberalism” itself is confusing, because for at least a century “liberalism” in the United States has meant moderate left, not free-market right. Neoliberalism in its current economic sense draws on the older meaning of liberalism, which is still common in Europe and which holds that free markets are the counterpart of a free and democratic society. That was the claim of classical liberals like Adam Smith and Thomas Jefferson.

Only in the twentieth century, after the excesses of robber-baron capitalism, did modern liberals begin supporting extensive government intervention—the use of “Hamiltonian means” to carry out “Jeffersonian ends,” in the 1909 formulation of Herbert Croly, one of the founders of The New Republic. This view defined the ideology of both presidents Roosevelt and was reinforced by the economics of John Maynard Keynes. In Britain, the counterpart in the same era was the “radical liberalism” of social reform put forth by the Liberal prime minister David Lloyd George.

The term neoliberalism also gets muddled because some on the left use it as an all-purpose put-down of conservatism—to the point where one might wonder whether it is just an annoying buzzword. But neoliberalism does have a precise and useful meaning, as a reversion to the verities of classical economics, with government as guardian of unregulated markets…

“Free Markets, Besieged Citizens“

Brian Kettenring worries (with Gramsci, as quoted in this post’s title above) that the transition to what’s next could be treacherous…

In a contest among global models, one option is the state-authoritarian capitalist model represented by China. A second one would be a neoliberalism retooled for the 21st century. But because neoliberalism has failed on its most central promise (growth) and other important tests (climate, inequality, and race), it is increasingly marginalized, if still persistent in the public imagination and the structures of important national and international institutions. A third option—which seems ascendant—is the ethno-nationalism of Trump, Viktor Orbán, Jair Bolsonaro, and company. The economic track record of ethno-nationalism in power has often proved anti-neo-liberal—especially on trade, but often on public investment, the social safety net, and even industrial policy—but that hasn’t foreclosed tax cutting or deregulation. And while the racialist and exclusionary politics of ethno-nationalism are disqualifying, its record of governance is, with some exceptions, poor.

None of these geopolitical arrangements will serve America or the world well in the third decade of the 21st century. For those who share Gerstle’s critique of neoliberalism, the task is to chart a fourth way that is inclusive, sustainable, and consonant with strong democratic governance and pluralistic societies. At present, this fourth way appears to be the harder road. That said, Rise and Fall offers guidance for how it might still win the day. 

Gerstle reminds us that geopolitics can have unpredictable economic side effects. The war in Ukraine has accelerated inflationary dynamics in the global economy, increasing the price of everything from energy to wheat. It’s too soon to assess the long-term consequences of the Russian invasion. Still, one optimistic reading of the potential by-products of the war might be accelerated investments—at least in Europe—in the green energy sector…

“Neoliberalism Is Dying. What Comes Next?“

And L. Benjamin Rolsky considers the moral– and spiritual– baggage that it carries…

… A moral code accompanied the neoliberal order to protect itself against its worst excesses and moral failures. Many Americans were perfect matches for neoliberalism’s entrepreneurial politics, its promises of unbridled freedom once remade in the image of homo economicus; many were not. For Gerstle, the neoliberal order produced two interrelated modes of citizenship within the body politic: conservative neo-Victorianism and liberal cosmopolitanism. The former encouraged self-discipline in the name of market austerity and the proverbial Christian family. The latter privileged diversity, self-expression, and socioeconomic mobility. As Gerstle describes, “It celebrated the cultural exchanges and dynamism that increasingly characterized the global cities — London, Paris, New York, Hong Kong, San Francisco, Toronto, and Miami among them — developing under the aegis of the neoliberal order.” This much is most certainly true circa 1975: the beginnings of neoliberalism’s deregulatory ascent.

Within the same moment, however, neoliberalism would also help give birth to additional forms of religiosity including the “Prosperity Gospel,” replete with global communication networks, acts of spiritual exuberance, and larger-than-life television personalities. While this tradition of health and wealth dates back to the late 19th century, it found its domestic stride in the United States within the postindustrial conditions of the neoliberal order in the 1980s and 1990s. The fact that prosperity gospel healer Paula White-Cain has rekindled her relationship with former president Donald Trump’s communications team speaks to the intimate relationship between neoliberal success, political freedom, and spiritual prosperity in American political life — especially in 2022.

The rise and fall of the neoliberal order has curtailed some religious ideals and formulations in the name of neo-Victorian morality, but it also cultivated equally powerful forces that promised to liberate true believers from their respective experiences of spiritual captivity. Until such forces of neoliberal freedom are understood and diagnosed as complex forms of economic captivity themselves, there is no telling how much longer the neoliberal order can remain fractured yet deeply informative of our collective political imaginations…

“Religion of the Market: On Gary Gerstle’s “The Rise and Fall of the Neoliberal Order”

How neoliberalism rose, fell, and what might replace it: @rkuttnerwrites, @bkettenring, and @LBRolsky on a powerful new book by @glgerstle.

* Antonio Gramsci, Prison Notebooks

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As we compose our selves for change, we might recall that it was on this date in 1965 that Bob Dylan was booed off stage at the Newport Folk Festival during his first public performance with electric instruments (and a band that included Michael Bloomfield and Al Kooper)… The cat-calling began with his opening number, “Maggie’s Farm,” and continued through three more songs, after which Dylan left the stage. As a peace offering to Pete Seeger and other aggrieved organizers, Dylan returned later to do two acoustic numbers… but the die was cast; thereafter, his career was electrically-powered… and both folk and rock music were forever changed.

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