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Review: Gary Gerstle Argues the Pandemic Killed the Neoliberal Era (But Democrats Don't Know It Yet)

If you ever find yourself in the unusual circumstance of needing to start a fight among scholars of American politics, ask them when the New Deal era ended. In the ensuing chaos of competing dates, one thing will stand out: Nobody claims it is still ongoing. Despite a clear lack of consensus on when it ended, we all know it’s over. Only with the perspective afforded by time can we try to pinpoint when.

Does the “when” matter? Arguably it does not; declaring the moment when a particular political order died is the kind of thing that only interests academics. For other purposes, it can be extremely enlightening simply to tease out the significance of the change, the what and why if not the when. That’s the spirit to bring to Gary Gerstle’s The Rise and Fall of the Neoliberal Order, which makes the ambitious assertion that the 2020 Covid pandemic signaled the death knell of neoliberalism as the defining political-economic framework of our world. If he’s right, the significance of such a shift can’t be understated.

Neoliberalism, which rose to intellectual, political, and economic prominence in the 1970s as a response to both socialism and the welfare state liberalism exemplified by the New Deal, preached a message of free markets and disdain for government regulation and spending, both of which stifled innovation and growth. Gerstle walks us through how the promises of neoliberalism—boundless economic growth, globalization, greater individual liberty, widely shared prosperity, private-sector innovation solving problems where bureaucratic meddling could not—have gone unfulfilled for too many people for too long. The past decades of spiraling inequality, expanding poverty and economic precarity, and failures of markets to solve collective problems like climate change have disillusioned too many for neoliberalism to recover. The jig is up, in other words, and no promises or soothing words can convince people to have faith in the old nostrums again.

Whether neoliberalism ended specifically in 2020 or we are still living through its death throes, Gerstle makes an all but indisputable case that neoliberalism has had its lamentable time in the sun. The question that remains is: What comes next? As things stand at present, you’re probably not going to like it.

A political order is an extended period of time in which one vision of political economy reigns. One dominant political party (in a two-party system, at least) rises as its champion, and, crucially, the opposing party is forced to concede to survive. After Democrats ushered in the New Deal era, Dwight Eisenhower signaled Republican acquiescence to the basics of the welfare state (Ike famously predicted any party that tried to end old-age pensions and farm subsidies would cease to exist). Similarly, after Ronald Reagan’s rise signaled neoliberalism’s victory over the liberalism of the Great Depression and World War II era, Bill Clinton reconciled Democrats to its basic elements: free markets, globalization, smaller government, deregulation, and cultural cosmopolitanism as an extension of the free movement of ideas, people, and capital.

Read entire article at The New Republic