Q&A with Prof. Gary Gerstle
The Rise and Fall of the Neoliberal Order: America and the World in the Free Market era
(Oxford: Oxford University Press, 2022) (available in paperback in September 2023)
We talked with Gary Gerstle, Paul Mellon Professor of American History Emeritus, Paul Mellon Director of Research in American History, and Fellow of Sidney Sussex College, about his recent book, the accolades it won in and beyond academia, and how it resonates in our current moment.
Photo (C) Elena Moses
Hi Gary. Could you give us a rough idea of the argument of the book and tell us a bit more about how you came to write it?
My book focuses on neoliberalism, a flawed programme of political economy promising growth and prosperity to every nation willing to ‘free’ capitalism from its regulatory ‘shackles’. The doctrine believes that markets, left to their own devices, can produce the greatest economic growth and thus the greatest economic good. It is a creed that prizes the free movement of capital, goods, information, and people across all borders. It aspires to globalize capitalism and deregulate economies. It prizes innovation and disruption. It acknowledges that capitalism unbound will increase inequality, but that such inequality will be tolerable because ‘all boats will rise’.
This neoliberalism became the basis for what I call a political order—a regime so influential that it structured the entire US political landscape across the 1990s and 2000s, Democratic districts as well as Republican ones. It suffocated the voices of those for whom neoliberal economics had brought much more hardship than gain, allowing grievances to fester and ultimately to explode, as they did in the decade after the Global Financial Crash of 2008-2009.
This political order is now disintegrating. My book offers a history of how that order came to be and why, now, it is coming apart.
I have been interested in political orders as a tool for explaining American politics since I published The Rise and Fall of the New Deal Order, 1930-1980 in 1989. The twin shocks of 2016—Brexit and Trump—signalled to me that the successor order to the New Deal order was breaking up. It was time, I thought, to perform another historical autopsy.
The FT's Rana Foroohar called your book an "instant classic." How do you explain this interest in your book and its argument beyond academia?
I have been surprised by the international reach of the book into Europe, East and South Asia, and Latin America, and also by the variety of readers it has drawn, ranging from financiers and the IMF on the one hand to Jacobin readers and Russell Brand acolytes on the other. I think these varying communities of readers share a conviction that the world stands at a historic point of inflection, and that my book has something to say about how we got here and where we might be going.
Historians are no futurologists of course. But are we witnessing the end of globalization as we know it?
Neoliberalism always aspired to be a global project, unshackling capitalism everywhere. We are retreating from that world. Total international trade in merchandise actually peaked in 2008. In 2016, Donald Trump on the right and Bernie Sanders on the left rejected the mantra of ‘free trade’ as a dogma injurious to American working people; since that moment those advocating for a neoliberal world without borders have become the targets everywhere of populist ire. Corporations, meanwhile, have been rethinking the value of earth-encircling supply chains that they once regarded as sacrosanct. And governments, in the wake of the pandemic and the Russian invasion of Ukraine, have felt compelled to identify goods they cannot do without—food, petroleum, protective gear, computer chips, rare minerals, and so on—and to intervene in markets to ensure their availability. Conversations about ‘industrial policy’, a phrase meant to signal that a fundamental rethinking of the proper relationship of states to markets is underway, are going on everywhere, from the academic districts we inhabit to the IMF, Davos, think tanks, the Biden Administration, the EU, and so on. Friedrich Hayek and Milton Friedman are out as guiding political economists, Karl Polanyi and John Maynard Keynes are back in. Talk abounds about the need for a new ‘Washington Consensus’ to replace the neoliberal one of the 1990s that has failed.
Moments of transition are perilous, as Putin’s mind-boggling miscalculation with regard to Ukraine has demonstrated. But the resurgent threats to peace and democracy do not mean that we are heading toward another state of world war and autarky, the catastrophic consequence of the crack-up of an earlier era of globalization (1870s-1914). The current retreat from globalization aims to be strategic rather than wholesale, with governments weighing the benefits of globalization against other political and economic imperatives. There are reasons to hope that a good balance can be struck.
How might this retreat from globalization shape the writing of history across the next few decades?
Interesting question. Perhaps the retreat from globalization will impel a younger generation of historians to challenge the privileging of transnational perspectives that has been such a cardinal principle of historical writing these past twenty years. Historians always respond to external stimuli. In an age shaped by Brexit and Trump, will an emphasis on the local, the regional, and the national begin to resurge? Will thinkers and movements that opposed globalization and transnationalism receive more attention? And will political economy come to occupy a more central place in the thinking of the historical profession?