The Age of Neoliberalism is Ending in America. What will Replace It?

tags: neoliberalism, political history, political economy

Gary Gerstle teaches at the University of Cambridge. He is writing The Rise and Fall of America’s Neoliberal Order (2022).

The neoliberal order that dominated American politics for 40 years is coming apart. This order prized the free movement of capital, goods and people. It celebrated deregulation as an economic good that resulted when governments were no longer allowed to manage markets. It valorized cosmopolitanism as a cultural achievement, the product of open borders and the consequent voluntary mixing of large numbers of diverse peoples. It hailed globalization as a win-win position: the west would be enriched but so would the rest – Latin American countries and Asian nations, large and small. There would be no losers in this global project – not among the working classes of the west nor among the peoples of the global south. Globalization and free markets would lift all boats. In America, the neoliberal order transcended party lines, compelling all those who wanted political power to subscribe to its core beliefs. Ronald Reagan was its most prominent architect, Bill Clinton its key facilitator, converting the Democratic party to its core precepts.

The promise of neoliberalism could not survive the economic wreckage of 2008-09. Millions lost jobs and homes. The economic inequality long characterizing the neoliberal world now widened further, as governments did more to bail out the investing classes than those who lived by wages alone. Many among the latter began to lose faith in neoliberalism and then in democratic government, the latter now accused of exploiting “the people”, either through gross economic mismanagement or through complicity in maintaining a system ostensibly committed to popular rule but in reality rigged to favor the “best” over the rest.

The fracturing of neoliberal hegemony opened politics to new voices. Donald Trump shocked the political establishment both with his crude style and with rhetoric that struck at the heart of neoliberal orthodoxy: free trade was a chimera that had done nothing for America’s working man; America’s borders had to be established, walls built, immigrants expelled and globalization reversed. Bernie Sanders’s rise on the left was equally astonishing, his influence on American politics greater than that any other American socialist save for Eugene Victor Debs himself.

The real estate huckster from Queens and the socialist shouter from Brooklyn were worlds apart on many political issues. But both attacked globalizing economic agendas, the privileging of free trade over the needs of America’s working men and women, the evisceration of American manufacturing, and the corruption of America’s political system by elites. Both men generated intense levels of support that convulsed the parties with which they were allied. Partisanship hardened during their rise, making politics both more exciting and more volatile, patterns that the Covid pandemic only intensified.

What lies ahead? If Trump gets his way, America may devolve into an authoritarian state in which the country’s democratic institutions are made subservient either to the decrees of “the great leader” or to an oligarchic Republican party able to manipulate electoral processes to keep itself in power even when a majority of Americans vote to oppose its rule. Such a regime would seek both to fire up America’s shrinking (and thus vulnerable) white majority with ethnonationalist appeals and enrich regime members by striking lucrative and mutually beneficial deals with capitalist elites. We know something about how these regimes operate: they were common in Latin America and Africa across the second half of the 20th century – and were endlessly castigated by US observers then for betraying democratic principles.

The Sanders road runs through Joe Biden who, ironically, long kept a healthy distance between himself and progressive causes. But now the new president, grasping the magnitude of the moment and understanding that this is likely to be his last tour of public duty, has decided to channel the spirit of Franklin Delano Roosevelt, America’s most successful Democratic president.

Read entire article at The Guardian

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