Neoliberalism is a concept by which we measure our pain — say it again.
– toilet stall wall Wall Street gym
I was thinking about The Shining recently. Every writer could use a hit of its bong. All play and no work makes for a very naughty boy. If you have an ax to grind, put it away until some other day. And for chrissakes, don’t let her read the early drafts; it’ll negatively influence her regard for your craft if she sees, to her horror, nothing but page after page of rocking chair tropes. But that’s not the scene I’m alluding to. Mine’s the sex scene between Ringo Starr, dressed as the dog from Magical Mystery Tour, and the owner of the Overlook Hotel, which suddenly struck me as a depiction of the proletariat on their knees before the Elites from the Reagan Era on. Voodoo economics, Trickle Down largesse — call it what you will.
It’s been a game of Us and Them for a long time. I could tell you tales that would shake your heart, and you could tell me tales of Paine that try men’s souls right back at me. And we’d be shaking together in the bubbled artificial snowstorm on Skid Row, sharing Christmas toasts like little unintentional Commies around a barrel fire, a brown bag containing our open secret — Thunderbird’s ‘good medicine’. Hi, how are ya?
And it’s been a story of derailed trains of thoughts, smoke pouring out of boxcar doors, as the Bard from Duluth would say, and catastrophes of piled up depression, folks walkin’ round in loco-motion, dazed and confused (op. cit.), believing in things they should have known better about, ending up where they started, not knowing for the first time, as TS Eliot posits, but in front of the same carnival barker they experienced in the aptly-named Erie, Pennsylvania — a name that itself conjures up property ownership (Penn’s Woods). Fuck it, you’ll say around the fire; it’s all a racket. L’chaim, bottom’s up.
That’s kind of how I felt reading to review Gary Gerstle’s new book, The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era. This is an instance where the title does pretty much tell you what the book is about. The book is divided into Part 1: The New Deal Order, 1930-1980, and, Part 2: The Neoliberal Order, 1970-2020. It starts with Herbert Hoover and the Depression that began almost from the onset of his administration, when the freewheelin classical liberalism days crashed the system. It moves through the glory days of FDR’s New Deal liberalism. Gerstle does a good job detailing how tensions caused by communism helped workers secure important compromises from policy-makers who feared its influence (mostly abroad; domino effect thinking). It covers the Nixon years and dropping the gold standard. And then the rise of neoliberalism in earnest with the Ronald Reagan era and beyond. He closes with speculation on an open-ended future head.
‘World’ is a problem for many Americans, a goodly number who say America First and who may desire a return to global pacifism — away from the Empire-building that has been going on largely without their consent for decades.. I mean, we don’t have a clue, even though for the last 100 years we’ve spent considerable time Over There killing significant numbers of Them to make lives there more like the American way ‘here’, which They start out hating but end up accommodating. We keep on plugging them, until like the ‘terrorists’ at Gitmo they are broken by our waterboardings and bad taste in heavy metal and begin writing poetry against their will. Hell, there was even a volume of their rhymed screams put out, which, as a poet, I enjoyed immensely. Who knew iambs had such versatility?
Gary Gerstle’s Rise and Fall is a fairly straightforward tracing of historical, economic, and societal events from the Hoover through Franklin Delano Roosevelt’s New Deal Era and through the neoliberal era starting with ‘There You Go Again’ Reagan, who pissed on the hoi polloi for 8 years, turned the working class on the busking activists who had their hardhat Marxist progress through history in mind (at least in the songs I heard), and gave us the Clintons handing back lots of the New Deal in exchange for blowjobs in the White House, and prepared the nation for the Security State and Endless War and cruise missiles anywhere you please that it would become after 9/11. Ouch.
And then Alfed E.Neuman, broken bad, as president for 8 years; and then the Hoper Roper Doper handing out TARP taxpayer funds to winky bankers who had gambled away the global economy, leading to the desperation of electing a pussygrabbin’ cartoon distraction figure, as if comic book Richie Rich grew up and turned into Tony Salvo, and made some of the masses lose their fuckoid minds and wear Viking gear and hate on their fellow citizens so much that they were willing to pull a comedy coup to keep a birther, who won’t show us his tax returns, and whose small hands mean Rachmaninov will never feel the terror in his grave of Trump having at the first piano concerto, the orchestra made up of his Trump’s MAGA dogs — Oh-nos, buffoons, violence, tuba-la belles, slide-you’re-out trombones, harpies, cattle drums, clashing symbols, cracked cornets (h/t Eliot), yellow celloes, and xenophones. Think the 1812, played backwards (I buried John, said Paul, that’s how I sleep, mofo). It’s Russian. Like him. (But wait, so’s Ed Snowden, who betrayed our trust, isn’t he?)
Gerstle’s Rise and Fall is a heaving heavy ocean of insight into the failed tide that lifts all boats. I was trying to come up in my mind with a model to parallel his book’s thesis that tension and crisis establish an Order that superimposes itself on mere partisan politics; that sees the master narrative and the slave’s demands resolved in an Order that synthesizes their systemic needs — for awhile. I came of age — my bildungsroman period — was in the 70s, and when I wasn’t studying elite texts, I was enjoying TV culture, Rockford Files, Maverick, and Star Trek, and always, though, a heapin’ helpin’ of All in the Family that seemed to sum up the fissures we felt so much in the wake of Tricky Dick Nixon’s resignation. We questioned ourselves some. Jimmy Carter was our answer. Go figure.
A lot of people of my generation coming of age out of ‘60s and into the ‘70s, with all of the turbulence of a fin de siecle, got our kicks watching the tensions of racism, class, nascent feminism, and social inequality play out on TV in Norman Lear’s All in the Family. Today, we hear expressions like “neo-liberal” and “neo-conservative,” and aren’t always sure which is which, given the results we see, but it was plain when the conservative Archie Bunker addressed “Meathead,” the liberally-educated boyfriend of her feminist daughter, Gloria (allusion to Steinem, and her Playboy months?). Archie calls his sweet but mentally unfatigued wife, “Dingbat.” And when Lionel Jefferson comes to visit, Archie is bigotry incarnate.
It’s a dynamic ensemble, and yet, nostalgic, as summed in the song that Archie and Edith sing before each episode:
Didn’t need no welfare state. / Everybody pulled his weight
Gee, our old LaSalle ran great. / Those were the days
And you knew where you were then / Girls were girls and men were men.
Mister, we could use a man like Herbert Hoover again.
Such nostalgia seems at the heart of the MAGA movement now. In the context of the All in the Family worldview — simple liberal versus conservative. And, at first, this is where you think Gerstle’s ideas of “neo-liberal” and “neo-conservative” come from? And you wonder: Could we use a man like Herbert Hoover again?
But for Gerstle, Paul Mellon Professor of American History Emeritus and Paul Mellon Director of Research at the University of Cambridge, while the allusion to All in the Family is a useful, basic starting point for understanding the clashes and tensions that lead to new Orders, the distinctions and origins of the divide between ‘liberal’ and ‘conservative’ are more nuanced. Gerstle sees the Order that the Archie Bunkers lived under and experienced as the Classical Liberalism championed by Hoover. But he notes that Hoover’s Classical Liberalism benefited private interests; the liberalism referred to free markets and minimum regulation. Gerstle writes:
Classical liberalism (born in the eighteenth century) discerned in markets extraordinary dynamism and possibilities for generating trade, wealth, and a rising standard of living. It sought to liberate markets from encumbrances: monarchy, mercantilism, bureaucracy, artificial borders, and tariffs. It sought, in other words, to release the economy from the heavy hand of the state in its various guises.
But Gerstle continues that “classical liberalism, had led to unbridled, unmanaged, capitalism that created huge amounts of wealth, but also created a lot of poverty, a lot of booms and busts and economic cycles so that great periods of suffering followed great periods of growth.” Delusions settled in. Classical Liberalism had its flaws — indeed, it led to the Great Depression. As Gerstle puts it:
Campaigning as the Republican nominee for president in 1928, [Hoover] declared that “we in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us.”
Lamest fast words. Optimism that would not be heard again for almost a hundred years — until desperate pressures gave America Barack Obama and his Hope shuffle. Just months after Hoover’s inauguration, in October 1929, the Stock Market crashed and destroyed countless lives and livelihoods overnight. We wouldn’t see such desperation again until the 2008 Wall Street crash came and devastated the global economy that brought on the crisis of trust that underwrote American exceptionalism with all its privileges, including the vaunted global reserve currency. Gerstle sums up the damage:
Between October and December 1929, the market lost 50 percent of its value. By 1932, the worst year of the Great Depression, the market had fallen by another 30 percent.
Such devaluation led to a degradation of commodities and markets. Gertster recalls the absurd and cruel wastage that followed:
The specter of farmers slaughtering their livestock as millions of undernourished Americans lined up at soup kitchens for a dollop of thin gruel seemed to underscore both the irrationality of America’s capitalist system and the incompetence of its political class.
The desperation of the times is succinctly summed up in a snippet from the PBS broadcast of Ken Burns’s The Roosevelts. Here is historian William E. Leuchtenberg sassin’ out the drear:
Hoover’s final triumph over poverty would have to wait. And Archie and Edith Bunker harken back to those false days of seemingly limitless opportunity ahead — Mister, we could use a man like Herbert Hoover again — although, as Gerstle points out, Archie was not totally averse to FDR’s New Deal government organized around the principle of wealth redistributed for the public’s, rather than private, interest in mind. But Archie just abhorred what he saw were the excesses of pluralism and multiculturalism, Gertster avers.
Gerstle does a reasonable job summing up aspects of the Hoover years, and his classical liberal approach to economics, as he makes his way through the pivots of Orders that define American eras that seemingly flim-flam between public-centric and private-centric, but he might have included more European background to the American adaptation of classical liberalism, to include, perhaps, references to, say, E. P. Thompson’s The Making of the English Working Class, which has striking similarities to the American way forward, with class structures more pronounced than Gerstle’s approach. But then, the English class system had been, until more recent decades, more explicitly pronounced than in America.
The Rise and Fall of the Neoliberal Order spends some good time discussing the competing tensions that lead to new Orders, sometimes ones overlooked in contemporary discussions and, yet, more relevant than ever. The role of Communism in leading to and shaping the eventual New Deal Order is an example. For Gerstle, that tension is not only a catalyst but when resolved in the seeming resolution of the Capitalist-Communist global battle as manifested by the collapse of the Berlin Wall and the Soviet Union soon thereafter (McDonald’s in Moscow by early 1990; replaced by a Russian knock-off in 2022), but also a return to the old battle between usurious dominator and debt slaver.
Gerstle writes of this Hegelian tension with some vigor. Verily, it is arguably his main thesis here:
Communism had a potent message: deliver the poor of the world from their oppression; turn the vast productive system developed under capitalism to public purpose; substitute intelligent planning for market chaos; eliminate all manifestations of inequality. Its striving to create a society in which everyone could be freed from want and domination shared a good deal with its ostensible opponent, classical liberalism. Both communism and liberalism traced their origins back to a common moment of eighteenth- century revolution, with the former tying itself to the French Revolution and the latter to the American. Both camps saw themselves as freeing humanity from old, encrusted social orders marked by privilege, inequality, and widespread misery. Both camps believed in the universalism of their message and sought to carry it to every portion of the globe.
As he shows in later chapters, the seeming triumph of capitalism , with its subsequent shameless victory lap that has gone decades now, is merely a pause in the dialectic, the historical moment before synthesis emerges and new order arrives.
The New Deal, announced during FDR’s speech accepting the Democratic nomination for the presidency on July 2, 1932, was a dramatic rebuttal of the failed policies of Hoover’s classical liberalism which led directly to the Great Depression and no sound remedies. As FDR noted in the speech, his administration would offer “a new deal” for “the forgotten man.” (Check out the speech on YouTube beginning about 4 minutes in.) The New Deal quickly helped put people back to work through the establishment of the Works Project Administration (WPA) and the Civilian Conservation Corps (CCC). Beginning in 1935, industry received a boost through the establishment of the National Recovery Administration (NRA). Banking was reformed:
The Federal Deposit Insurance Corporation (FDIC) granted government insurance for bank deposits in member banks of the Federal Reserve System, and the Securities and Exchange Commission (SEC) was established in 1934 to restore investor confidence in the stock market by ending the misleading sales practices and stock manipulations that had led to the stock market crash. [Britannica]
The reversal of such reforms helped lead to the brazen meltdown of 2008.
FDR was a hugely popular Democrat. He was the last president to hold office for three full terms (1933 -1945) and be elected for a fourth (he died in office, not long after his inauguration in 1945). The success of the New Deal was so overwhelming that it absorbed Republican pushback. As Gerstle queries,
Why did the GOP under Eisenhower acquiesce to the New Deal? It had far less to do with Eisenhower the man than with the geopolitical situation in which the new president and his party had been thrust. The Cold War was on. The Soviet Union had to be stopped. Partly this had to be accomplished through military means. But partly it had to be done through domestic policy. The leader of the “free world” had to demonstrate that he could take better care of his ordinary citizens than the leaders of Soviet communism could provide for theirs.
In short, Ike had to address the tension. Later, he would warn of the “military-industrial complex” and its supra-political influence on the eventual re-shaping of the New Deal Order.
If Hoover’s era represented a European-style liberalism that was focussed on loosening all hindrances to industry’s growth and profit motivation, then FDR’s New Deal era began with the inclusion of the term “liberal” seen as applying to the common citizen. As Gerstle points out elsewhere, in an unpublished interview,
Roosevelt’s key idea was that Capitalism — this very dynamic but also destructive system — had to be managed in the public interest and needed a strong central government to manage the booms and busts to redistribute some of the wealth that was being created. And he pitched this idea, which in Europe and maybe Australia would have been called socialism or a Labour Party ideal, managing capitalism in the public interest, redistributing some wealth. He interpreted it to mean the continuation of American freedom. And what did he mean by that? In order for people to be free, they need security. They need a certain level of wealth. They need to be able to take care of their family and the government is going to manage capitalism to allow that to happen.
Certainly, we see this “tension” of unfulfilled needs at work today in America.
Arguably, communism’s “work” in forcing a tension that led to the New Deal reforms began to be undermined by Republicans, most notably by the outrageous circus fascism display at Joseph McCarthy’s House Un-American Committee (HUAC) hearings. Gerstle writes,
The magnetism exerted by the red star of communism— the belief that this movement would extinguish the brutalities of capitalism— was simply too strong for many of those in its force field to escape. This belief in a communist future was never as strong in the United States as elsewhere, but it was significant. Communist supporters were present in US labor unions, in Hollywood …The promise of communism gripped the imaginations of quite a few Americans of talent, ambition, and commitment, eager to see a harsh and downtrodden world revolutionized and transformed.
If you leaned too far Left you got huacked. There was a lot of huacking off during the lip-doodling McCarthy era. Though the Senator’s paranoia-for-political-purposes was later repudiated, his work helped Republicans put a rein on “excessive” socialistic practices, and begin the return to corporate-centric policies that got the fat cats and snorkel porkers all morbidly obese again in the coming Neoliberal Order.
There was one last gasp at rejuvenating the New Deal Order as it sputtered that came under the Jimmy Carter administration. In this interesting section Gerstle brings in Ralph Nader and the work he and his army of devotees offered up to the Carter administration. According to Gerstle, Nader helped guide Carter from a citizen-centric policy arc to one that favored the “consumer” and his or her rights. Gerstle writes,
Consumers were at the center of Nader’s vision of popular democracy; they, not workers, were the ones whom he wanted to empower…This meant attacking corporate oligopoly, on the one hand, and excessive and counterproductive government regulation, on the other. Their shared goal was to make consumers sovereign in the marketplace. In Nader’s thinking, and in his policies, we can detect a point of origin for neoliberalism on the left.
Nader was a darling on the “left” until he ran for president in 2000 and disenfranchised about 57,000 Black “felons” in Florida whose votes weren’t counted. W. ended up winning the state his brother was governor of by 537 votes. Fucking Nader.
Gerstle notes the beginning of real push back against the New Deal Order in the rise of “great” communicators William F. Buckley, Ronald Reagan (actor and governor of the elector-rich state of California) and Henry Hazlitt of Newsweek (and former editor for The Nation) who railed against the economics that underwrote the New Deal Order (“We are all Keynesians now,” wrote Hazlitt), says Gerstler. Stuff happened to alter the trajectory of the New Deal Order. Gerstle writes,
Every political order contains within it tensions, contradictions, and vulnerabilities that at a certain point become too difficult to maintain. A political order can also be destabilized by an event exogenous to the order itself, such as war or economic crisis, that reveals limitations to its repertoire of governing strategies that few had previously grasped. Either a political order finds a way to adapt or it loses authority and then hegemony…These three forces— race, Vietnam, and economic decline— battered the New Deal order in the 1960s and 1970s beyond a point where it could repair itself.
Enter the dragon: Reagan, and his voodoo economics that stuck it to the man, the common man.
If Hoover’s classically-trained liberalism was Freedom for mass producers at the expense of the masses, and FDR’s New Deal reversed the polarity and place Will Rogers and family at the center of his policy-making, then Reagan’s era initiated return the deposed king of commerce and all his captains of industry to the throne. While former CIA head George Herbert Walker Bush, running for president against Reagan, whined about wanting “a kinder, gentler nation,” the cowboy from California said into a hot mic, “The bombing begins in five minutes,” causing alcoholic Russkies in early warning Siberia to go on full alert. Fuck kinder and gentler, and the nation, at least on the Right, went enthusiastically nuts. (Dylan released Infidels in protest. Not really.)
Neoliberalism came in a rush with the Trickle Down Years of Reaganomics and his union-busting and his conversion of Archie Bunker working class Democrats to his cause, who proceeded to piss down on the Lefties who had always sang their causes in ballads and impassioned speeches outside the campus pubs. Take that, Meathead, they seemed to say. For many Americans, Reagan was a return to Hoover’s conservatism. But what’s more, he was divisive, writes Gerstle, and he led the paradoxical “the spread of unfreedom amid the advance of market freedom.”
Gerstle reminds the reader that what’s called neoliberalism today has “messier” roots and that it co-opts earlier versions. He writes,
Neoliberalism had to contend from the very beginning with an inconvenient fact: namely, that it was not the first “new liberalism” to appear on the historical stage, but the second. The first new liberalism was the New Deal liberalism of FDR, declaring (as neoliberalism wanted to claim for itself) that it offered a novel third way between laissez-faire on the right and collectivism on the left.
In fact, one could argue that Nader’s so-called consumer-driven democracy had been co-opted by Lefty elites and turned into Corporate-centric anti-democratic principles. Gerstle goes further in locating the beginnings of neoliberalism, returning to Europe and the Continent and ideas of Friedrich Hayek.
Most histories of neoliberalism locate its origins in Europe in the interwar years, specifically in Vienna, the cosmopolitan capital of a once- great Austro- Hungarian empire brought to its knees first by its World War I defeat and then by revolutionary movements of the left and right that ripped through its streets. Neoliberalism’s key founders, most notably economists Friedrich Hayek and Ludwig von Mises, were distressed by revolutionary movements of the left, and by the collectivism that “Red Vienna”— the left’s Austrian incarnation— sought to impose on their country’s economic and political life.
These ideas then found their way into America in the 40s and 50s, most notably at University of Chicago, where Hayek came to teach his philosophy.
The paradox of “the spread of unfreedom amid the advance of market freedom” has only increased and widened. We live in a Surveillance State, watched over by military and industrial (corporate operatives) that suck up our personal data, place it in fusion databases, and evaluate and profile our personal and consumer lives. We live in a democracy weakened by the privatization of government without our informed consent. Neoliberalism has devolved into global intervention whose purpose often appears to be creating debt slave states. Arguably, America is itself built upon paper debt (IOUs) and is the world’s largest debt slave and deadbeat. Gerstle, while seeing an end to the value of neoliberalism, isn’t sure about what’s coming next. His nod to Bernie’s democratic socialist leanings and to Biden’s credibility is not convincing. He admits as much in the end:
American politics has a rich history of leaders, ideas, policies, coalitions, and elections defying the pundits and oddsmakers. But establishing a new political order is never a simple or easy task. Americans thus must reckon with the possibility that they will be living amid the ruins of a once vaunted neoliberal order for a long time to come.
The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era is a good historical account. I recommend it.