Abstract
Gary Gerstle and Steve Fraser’s “political orders” concept, first introduced in their essential 1989 edited volume The Rise and Fall of the New Deal Order, 1930-1980, has offered a novel and enduring approach to periodizing history. Viewing the New Deal as more than a bundle of policies implemented by Roosevelt during the 1930s and 1940s, the New Deal political order underscores the “dominance that the New Deal and the Democratic Party exercised in American politics” for the middle of the twentieth century. Understanding the New Deal as a political order also explains its resilience and why Republican presidents such as Eisenhower and Nixon came to accept major elements of the Democratic Party’s agenda. Perhaps more importantly, the concept sheds light on the economic vision and ideology undergirding that agenda.
In this new volume, The Rise and Fall of the Neoliberal Order, Gerstle revisits and extends the core commitments of the 1989 volume. Broadly, he reminds us, Roosevelt and New Dealers in Congress were able to amass a powerful coalition of working- and middle-class workers in the North, white Protestants in the South, and Black voters across the nation, behind a shared belief that “unfettered capitalism had become a destructive force” and that the resulting inequalities required political action. The political solutions were guided by Keynesian economic theory, which saw large federal expenditures (and deficits) as a viable strategy for economic growth and redistribution. And finally, Gerstle argues that the New Deal order reflected a new set of moral commitments—venerating the public good over private rights and imagining the state as the “instrument through which public good would be pursued and achieved.”
In addition to recounting arguments from the 1989 volume, Gerstle offers a few notable and useful additions to his account of the New Deal order, including an important interpretation of the political consequences of the Cold War. Gerstle challenges the common explanation from the past several decades of scholarship and analysis that argued that the threat of communism served to limit or derail New Deal liberalism. Instead, Gerstle argues that the imperative to fight communism led to greater concessions for workers and, rather than limit New Deal liberalism, drove the Republican Party to the left. The viable threat presented by an anti-capitalist left provided employers with more incentive to bargain—leading to a class compromise more favorable to labor and forcing more significant concessions from conservatives and the Republican Party than from New Deal Democrats.
But the core of the book is Gerstle’s extension of the concept of political orders to explain the rise and fall of neoliberalism. As he has done for the New Deal, Gerstle brings neoliberalism—a notoriously murky and elusive concept—into sharper relief, building on important recent scholarship that captures the contours and complexities of the political developments from the 1970s to the present day. Such an addendum is necessary, Gerstle argues, because his and Fraser’s view that the 1940s was a period of retrenchment and a last gasp of a “spent ideology” of conservativism failed to grasp the significance of those efforts to challenge the New Deal order and the rise of neoliberalism. Neoliberalism, according to Gerstle, does not have a singular meaning, but it is better described as a variety of different “strategies for reform.” The first strategy was to build and maintain free markets in both the domestic and international spheres. A second strategy was to extend the logic of markets beyond the free market into the “private realm of family and morality.” And finally, neoliberalism sought to resurrect “the utopian promise of personal freedom embedded in classical liberalism.”
Gerstle effectively situates the development of domestic U.S. neoliberal policies within the broader global context, a highly valuable contribution to scholarly work on neoliberalism. He argues that the neoliberal spark was grounded in efforts to respond to stagflation in the 1970s by rolling back New Deal economic regulations, which conservatives thought were stifling the free market. However, the challenges facing domestic industries also stemmed from costly business decisions made in the 1940s and 1950s (like the decision to provide employer-based health insurance) during a time when domestic industries faced very little international competition. As global competition increased, however, neoliberal stalwarts increasingly endorsed free trade agreements as solutions to global and domestic economic problems.
While the political order concept usefully explains why Republican Presidents Eisenhower and Nixon accepted key components of the New Deal political agenda, the formulation serves a slightly different purpose for the neoliberal order. Initially ushered in by Ronald Reagan and his new conservative majority, neoliberal ideas and policies were not only accepted but also expanded and entrenched by Democratic President Bill Clinton. He was even more than the neoliberal order’s “Democratic Eisenhower”—Clinton was in fact a primary architect of many of the policies that have constituted the neoliberal order. For example, regional free trade zones emerged as a Reagan-era response to the fall of Communism and stepping stones toward a unified global economy, but garnered opposition among Republicans (most notably during the 1992 primary contest between George H.W. Bush and the populist, anti-free trader Pat Buchanan). Ultimately, it was President Clinton who resurrected the idea and brought the North American Free Trade Agreement (NAFTA) to life.
It is in part this emphasis on the bipartisan or trans-partisan character of political orders that leads Gerstle to draw parallels between political and intellectual leaders throughout the book, building to the final pairing of Bernie Sanders and Donald Trump, who, he argues, mark the end of the neoliberal order. In many ways, these parallels advance and elucidate the political orders thesis, helping to explain how political orders develop and transcend partisan lines and presidential administrations. But in other cases, these comparisons may narrow the potential conclusions to be drawn from Gerstle’s political and historical analysis and flatten political distinctions that are, in fact, quite meaningful. A case in point is Gerstle’s analysis of President Eisenhower and Senator Robert Taft in the 1940s. Gerstle argues that the differences between these two figures best demonstrate the “capitulation of Republicans to the New Deal.” According to Gerstle, Taft’s failure to “restore laissez-faire and small government” led the Republican Party to put its faith behind Eisenhower, who was willing to support the New Deal order, most centrally the key principles of Keynesian fiscal and monetary policy.
But here, Gerstle’s emphasis on presidential ascendancy obscures important political developments. While it is true that Taft failed to take the reins of the party and also that Eisenhower was more willing to capitulate to the New Deal order, Taft-led policy initiatives in Congress had an enormous impact on shifting postwar liberalism, particularly for workers and employment policy. The most significant of these, made possible by landslide conservative victories in the 1946 midterm elections, were the defeat of the Full Employment Bill and the passage of the Taft-Hartley Act. Viewed in this light, Eisenhower’s acquiescence was to a New Deal order that had, in fact, been quite radically and substantially altered by figures such as Taft. This analysis is consistent with accounts highlighting the important changes in the postwar liberal consensus and the instability of this political order, which do more than hint at the later ascendance of conservativism and neoliberalism.
In the final illustration of a left-right alignment within the neoliberal political order, the book presents Bernie Sanders and Donald Trump as the twin symbols of the disintegration of the neoliberal order. Gerstle rightly identifies commonalities between the two, most notably their campaigns’ ability to tap into a populist, anti-elite sentiment among broad swaths of the country. Furthermore, Gerstle very usefully highlights a significant point of overlap between their policy and political agendas: both emphasize the negative impact of trade agreements like NAFTA on the American economy. This is a critically important observation and one that the neoliberal consensus in both political parties has been reticent to embrace. However, Gerstle pays far less attention here than he does elsewhere in the book to other core pillars of neoliberal economic policy—deregulation and taxation—which underscore fundamental divergences between the two. The Trump administration’s key achievement was a massive tax package that, despite his populist posturing on the campaign trail, created loopholes, exemptions, and breaks for the wealthy and corporations. Furthermore, his 2017 Executive Order, requiring that regulators eliminate two existing regulations for every new regulation they sought to create, was both a symbolic and substantive attempt to further deregulate. Sanders’ bid for president was ultimately unsuccessful, which makes it difficult to compare his populist campaign promises with performance in office. However, Sanders’ most recognizable proposal, Medicare for All, would mean a massive expansion of the federal regulatory state, rather than a contraction. And his proposal for funding that program, in addition to other planks of his platform, called for a return to the kinds of progressive taxation principles that were destroyed over decades of neoliberal policy-making.
Ultimately, Gerstle’s conclusion that the neoliberal order is in decline does not require that Trump and Sanders represent identical forces from the right and from the left. Instead, and in line with the strengths of the book, his broader conclusion is rooted in his charting of the core commitments to economic policies under neoliberalism. He concludes that while “vestiges of the neoliberal order will be with us for years,” the neoliberal order is fundamentally broken and is no longer a driving force in shaping “the core ideas of political life.” However, paying heed to Gerstle’s reflection that he and Fraser underestimated the persistence of conservatism in the 1940s, perhaps we would also do well at this juncture not to underestimate the resilience of neoliberalism.
Footnotes
Acknowledgements
I would like to thank Emma Teitelman for her helpful comments on an earlier draft.
