Gary Gerstle: Is the Neoliberal Era Over?Historians in the News
tags: neoliberalism, political history, political economy
The term “neoliberalism” is often used to condemn an array of economic policies associated with such ideas as deregulation, trickle-down economics, austerity, free markets, free trade, and free enterprise. As a political movement, neoliberalism is seen as experiencing its breakthrough 40 years ago with the election into office of Ronald Reagan and Margaret Thatcher. And since the 2007–08 financial crisis, an explosion of academic work and political activism has been devoted to explaining how neoliberalism is fundamentally to blame for the massive growth in inequality.
Yet Gary Gerstle—in his new book, The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era—argues that this understanding of neoliberalism struggles to explain why it has exerted such a profound influence on both the left and the right. Gerstle—a professor of American history at the University of Cambridge—thinks neoliberalism should be understood as a worldview that promises liberation by reconciling economic “deregulation with personal freedoms, open borders with cosmopolitanism, and globalization with the promise of increased prosperity for all.”
Such a vision. as Gerstle relates, was able to attract such strange bedfellows as Steve Jobs and Barry Goldwater, Ralph Nader and Ronald Reagan, and Bill Clinton and Newt Gingrich. When seen as a worldview, Gerstle contends, neoliberalism can trace its origins just as much to the left, and in particular the New Left, as to the right. People across the political spectrum, including those aforementioned bedfellows, had a common goal: the end of a bureaucratized world.
Gerstle’s book explains the rise of the neoliberal order by placing it against the backdrop of the New Deal. He also explores the relationship between neoliberalism’s rise and the collapse of the Soviet Union. And he provocatively argues that, on account of the Iraq War, the Great Recession, a revitalized socialist movement, and the Trump presidency, the neoliberal order is crumbling.
But how does Gerstle’s understanding of neoliberalism stack up against rival interpretations of it? How are we to make sense of how the Democratic Party became captive to neoliberalism? And is the neoliberal age really coming to an end? The Nation spoke with Gerstle about these and other questions. This conversation has been edited for length and clarity.
DANIEL STEINMETZ-JENKINS: Over the last decade, few topics on the left have received more attention and stirred more debate than the subject of neoliberalism. Unlike some critics, you believe that neoliberalism is still a legitimate term of scholarly analysis in regard to understanding contemporary politics—rather than a pejorative, catch-all term others have deemed it. Why do you believe this is the case, and, in a nutshell, how do you define it?
GARY GERSTLE: Neoliberalism is a creed that prizes free trade and the free movement of capital, people, and information. It celebrates deregulation as an economic good that results when governments are removed from interfering with markets. It valorizes cosmopolitanism as a cultural achievement, the product of open borders and the consequent voluntary mixing of large numbers of diverse people. It hails globalization as a win-win proposition that both enriches the West and brings an unprecedented level of prosperity to the rest of the world. It tolerates economic inequality and justifies the weakening of labor movements, welfare policies, and other “impediments” to free market capitalism in the name of economic growth robust enough to lift all boats. These core principles deeply shaped American politics across the last 50 years.
The label “conservative” is often attached to the aforementioned beliefs. But conservatism, in the classical sense of the term, connotes respect for tradition, deference to existing institutions, and the hierarchies that structure them, and suspicion of change. Neoliberalism, on the other hand, calls for unleashing capitalism’s power, along with entrepreneurialism and other forms of risk-taking, and eliminating institutions that stand in the way.
Invoking neoliberalism allows us to shift the focus somewhat away from narratives that have dominated so much history writing—white southerners, for example, seeking to maintain racial privilege in the era of civil rights, or evangelicals pushing back against women’s, gay, and sexual liberation movements—and toward equally important stories that focus on venture capitalists, Wall Street “modernizers,” and information technology pioneers. That shift in emphasis, my book suggests, is overdue.
In my chapter on the 1990s, I discuss only briefly the culture wars that dominated headlines during the Clinton presidency but dissect at length the major legislative packages of those years that fundamentally restructured America’s information/communication systems and Wall Street. The Telecommunications Bill of 1996, for example, has profoundly shaped contemporary political economy. Yet the nature of that bill and the mechanisms facilitating collaboration between the hostile Clinton and Gingrich camps required to pass it are still shrouded in mystery. A focus on neoliberalism can help us to bring the economic transformation of the 1990s more into focus and to give it the kind of careful examination it deserves.