Gary Gerstle: Where Did Neoliberalism Come From and How Did It Become So Influential?(Bristol Ideas)

Political historian Gary Gerstle looks at the rise and fall of neoliberalism and the lessons for political movements today.
Political historian Gary Gerstle looks at the rise and fall of neoliberalism and the lessons for political movements today.
The epochal shift toward neoliberalism that began in the United States and Great Britain in the late 1970s fundamentally changed the world. Today, the word ‘neoliberal’ is often used to condemn a broad swath of policies, from prizing free market principles over people to advancing privatisation programs in developing nations around the world.
In The Rise and Fall of the Neoliberal Order, Gary Gerstle engages with the full contours of neoliberalism: the fusing of ideas of deregulation with personal freedoms, open borders with cosmopolitanism, and globalisation with the promise of increased prosperity for all.
In this discussion with Andrew Kelly, Gerstle looks at how this worldview emerged in America and grew to dominate the world; how it was facilitated by the collapse of the Soviet Union and its communist allies; the nature of political order - how it is established and becomes embedded; and why and how President Clinton followed Ronald Reagan to create the full triumph of neoliberalism. They also discuss the neoliberal order’s fall, originating in the failed reconstruction of Iraq and Great Recession of the Bush years and culminating in the rise of Trump and a reinvigorated Bernie Sanders-led American left in the 2010s. Finally, they look at what the rise and fall of neoliberalism means for political movements today.
The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era by Gary Gerstle: uk.bookshop.org/a/11279/97801...
Presented by Bristol Ideas: www.bristolideas.co.uk/

[@spiritofgoldfish]

Neoliberal ideology has twisted the meaning of "free market" into the opposite of what the classical economists like Adam Smith intended. The classical economists defined a free market as free FROM economic rents (unearned income), extracted by feudal landlords. The classical role of government is to tax away economic rents and use it to lower the cost of production. This is done through subsidies for such things as public infrastructure, education, and health care, not raising the cost of living and therefore the cost of labor, as with neoliberal monopolistic privatization. Austrian and Libertarian neoliberals have no role for the government in the economy, leaving the market free FOR economic rents, extracted by monopolies and the banks (FIRE, finance, insurance, and real estate). Because the economy does not stay out of government, the result is rule by the rentier oligarchy, otherwise called feudalism.

[@spiritofgoldfish]

At the dawn of the twentieth century, the application of classical economics combined with advances in technology led people to believe that a golden age of human progress and prosperity was approaching. But the reactionary rentier class used its rentier fortunes to launch an economic “Counter-Enlightenment.” As Michael Hudson summarizes, To deter public regulation or higher taxation of such rent seeking, recipients of free lunches have embraced Milton Friedman’s claim that There Is No Such Thing As A Free Lunch. [. . .] The actual antidote to free lunches is to make governments strong enough to tax economic rent and keep potential rent-extracting opportunities and natural monopolies in the public domain. The point here, articulated by Orwell, is that technological progress in production and in economic planning should have ushered in a golden age of civilization. Instead, activist elites recognized the implications of this dynamic and responded by using their wealth and power to maintain the inequality and material insecurity that are preconditions for their continued dominance over society. Good, Aaron. American Exception: Empire and the Deep State (p. 180).

[@spiritofgoldfish]

The central planners aren't in the government. The rentier oligarchy at the top of wall street (the deep state) does central planning for their private benefit, and they are the employers of politicians. The job of the politician is to deliver voters to the oligarchy by campaigning on whatever gets them elected with oligarchy funding, then do whatever the oligarchy wants, and they are taken care of whether they are reelected or not. "Reagan’s election marked the ascension of deep political forces to a position of sovereignty. Practically speaking, what emerged was an exceptionist tripartite state comprised of (1) a feckless public state, (2) a sprawling security state, and (3) the anti-democratic deep state to which they are subordinated. This consolidation and institutionalization of top-down power was such that US governance could thereafter be described as a deep state system." Good, Aaron. American Exception: Empire and the Deep State (p. 260). If the US had majority rule, i.e., a democratic form of government, we would have a decent minimum wage, Medicare for all, free education, parental and sick leave, legal marijuana, workers on corporate boards, lower credit card interest, not allowing politicians to own stock or immediately graduate to becoming lobbyists, public funding of drug research for public drug patents, and some kind of green new deal, just at first glance at the polls. We have institutionalized opposition at best, not representation at all. The refugees at the southern border are fleeing rule by the same rentier oligarchy at the top of wall street that employs both political parties and is cannibalizing the homeland into debt peonage.

[@ajpend]

Yes.

[@ajpend]

When was Good’s book published?

[@enhancedutility266]

You should also look into Dr Michael Hudson he speaks on what you're referring to there's a lot of rent seeking going on

[@johnmaisonneuve9057]

Great interview. Gary’s books are a must read. American’s working class communities have been devastated. One reason (of many other reasons) of course is the great lost of jobs among the use-to-be employed. Good paying jobs, with good benefits, have been lost. And the double-whammy is lost of benefits tied to being employed. And lost of health benefits. No wonder the country has gone crazy. Then, the whammy from ‘hell’ - global warming. Eks! And it’s here.

[@karigrandii]

19:55 the neoliberals don’t want fully free markets and ”destruction” of the regularory state. They want a free market for the large corporations to function ”freely” and a state that bails them put whenever they fail. The neoliberal ideology deeply depends on a strong state that helps out the big corporations and thus the wealthy individuals to stay in power. That is the whole point of neoliberalism and how it differs from conventional classical liberalism.

[@lavs8696]

great convo

[@carriermaster1]

I am reading the book and loving it. So well written! Thank you much.

[@maxheadrom3088]

In Brazil it's illegal for employers to request information about convictions and voting rights are reinstated after the the person is released. Those are federal laws. There's a law that prohibits someone who was convicted in a collegiate tribunal (Civil Law here) from being a candidate to elected office. Unfortunately some of them (well, one of them) have found a workaround and even manage to become the President.

[@davidpeppers551]

Also, it was said that the internet would be a democratizing force! Oh, yeah? I thought? Will we the people own it and there will be free access for the user? We see how that went.

[@pabloandradeandrade8020]

I've just found out about this book. Fascinating reading, a great piece of contemporary history

[@b-rainwash410]

BGS sent me

[@simonsmatthew]

Really the elephant in the room that seems to be missing from these discussions is the link between neo-classical economics and neo-liberalism. Even left wing neo-cliassical economists like Samuelson, Sargent, Krugman, even Stiglitz view a society as an aggregation of individual optimsers. (You do not have to even bring in Friedman who in some ways ironically was more of an empiricist than Samuelson). But this is the link to Utilitarianism which is I think the fundamental philosophy underlying both neo-classical economics and neo-liberalism. Economists say they talk about market faliures, but these are seen as anomalies from a starting point of perfect competition. The main critique of neo-liberalism has to be its positivist methology and the view that mathematics is an appropriate means to understand human and social behaviour. The major critics, Adorno, Haberams, Horkheimer focus, I think rightly, on this aspect. Such a means of analysis cannot possibly understand capitalism or any social system. Just because something is mathmatical does not mean it is scientific and what neo-classical economists do is conflate mathematics with science and rigour. Left wing economists also argue that they are concerned about redistribution,and maintain that "winners must compensate the losers". But they simultaneously maintain that markets are the most efficient allocator of resources, and therefore almost universally condemn things like collective bargaining, prefering redistribtion to be achieved lhrough the welfare system. Evicence of long standing successful collective bargaining in non-Anglo Saxon European and Japanese social democracies is ignored. Despite all that neo-liberals say about personal freedom, the problem is that both the US and UK are variants of a form of technocratic state capitalism that does not actually empower labour, which should lead one to ask what freedom actually is.

[@davidpeppers551]

Neoliberals are also enamored with authoritarians and authoritarianism while claiming a neoliberal system means freedom. Words are cheap. LOOK what the system does.

[@ajpend]

I’m going to offer that as you describe them, those people are not “left-wing economists”. Maybe they are neo-liberal (or ‘liberal’) economists.

[@simonsmatthew]

​@@ajpend I think that would have some merit. An economist who is genuinely left wing would see some benefit in the direct intervention in resource allocation, such as credit rationing, industry policy, and in particular the labour markets through prices and incomes policies. But these have always been genuinely un-Anglo Saxon concepts, and the profession has always been dominated by first the British Empire, and secondly after 1945, the United States. Classical and Neo-classical economicsis a fundamentally Anglo-Saxon construct designed for its trade and foreign policy objectives. In both cases capital was very powerful and there was something of an antagonistic relationship between capital and labour and the latter do not have an inclusively representative role in production decisions. There is a fundamental lack of critical reasoning in neo-classical economics. Why there has been such an antagonistic relationship between capital and labour in Anglo-Saxon countries and why this is not necessarily found in other societies is a question that should be asked instead of just assuming that capital and labour will always act purely from a position of self-interest and not being explicit about what they are assuming and why.

[@TheCommonS3Nse]

I would really recommend checking out the work of Anwar Shaikh. His entire graduate level class is available for free on KZbin. He came from engineering and he was appalled at how the study of economics worked. He thought it was crazy that they started with a theory and then found evidence to support it. In engineering, you take all your measurements, find out what forces explain the results you are seeing, and you try to account for those forces. He took that same approach to economics. He studied over 100 years of economic data from around the world (he’s been at this for over 30 years) and then he looked at which economic theories explained what he was seeing in the data. He also weaves in the stuff that is taught in business school… because maybe they might have something to say about how the economy functions considering their entire goal is to utilize the market to make a profit. That’s how science should work. He definitely takes issue with the idea of perfect competition. How can you have perfect competition without perfect knowledge? I don’t know if or when my competitor is coming out with a new technology, or a price change. Shaikh argues that it is more like war. Firms will do whatever they can to increase market share. If that means dropping their price to something barely above a profitable rate of return, then they will do it if it means their competitor will go out of business.

[@F--B]

Curious that all the major critics you mentioned - Horkheimer, Habermas - were left wing. Evola, for instance, was also a key critic of market fundamentalism.

[@bobchannell3553]

Our government didn't handle the pandemic well or honestly. There's no reason that would have improved American's view of government.

[@MrMarinus18]

You would think that but actually it did. Because while it's handling was far from good the private sector did nothing at all. But more so the universal stay-at-home orders and mandatory masks created a sense of solidarity and public good that was embraced by some and resisted by others. But it was very clear that you need to look to the government for solutions and that looking to private companies will not get you anywhere.

[@towTruck42]

Patience & commitment like Gandhi!

[@zacoolm]

Gary, neoliberalism came out of the womb of liberalism. Your solution, Keynesianism?!

[@donedeal8385]

Yay, a history lesson on what drove the species to extinction.

[@kikolatulipe]

@33:34 yes s indeed , media , fox and Murdoch are doing a great job for promoting democracy

[@lonecandle5786]

How does the earned income tax credit fit into the liberal versus neo-liberal orders? Its goal seems to be to give everyone a fair income for their work, but it is supported by many neo-liberal advocates.

[@cyberpunkalphamale]

it's a corporate subsidy so they can avoid paying a higher wage. see the debate over the 1986 tax reform act

[@thehealthychefri]

Great presentation, just ordered the book!

[@Mrbobinge]

Wasn't Brexit a protest against Brussels' EU Neolibino (in name only).

[@belmiris1371]

It helps your cause when you have ALL the money in the world.

[@curtisblankinship2696]

You forgot all the un necessary wars with the wrong countries. State sponsorship of weapons corporations.

[@MrMarinus18]

Because that's actually not that relevant to the discussion. They are talking about public opinion and political movements here.

[@patrickvernon4766]

Neoliberalism doesn’t differentiate between “ here” and “there”

[@johncusson5703]

Bees are not disruptive, they have been producing the same way locally for millennia. Levers of enrichment and wealth transfer they do not know.

[@hannamakela6989]

Interesting to hear about Carter's neoliberal complicity, as I thought him to have been more left-leaning than he apparently was (I knew Ayn Rand hated him, for instance, which is something of a positive testimony of character ;)). He did, however, have a benign influence on the dictatorship in Haiti, albeit a fleeting one, as the Duvalier regime again tightened its grip the moment Reagan took office. Reagan was such a douche.

[@shannonm.townsend1232]

Perhaps "Sisyphiusian patience"

[@dr.edwardfreeman]

33:30. Media under state control is a good thing for democracy? How gullible does he think we are? How could any reasonable person hold this view in an age when virtually all fresh ideas are put forward via privately owned podcasts?

[@thomasjamison2050]

Well, its really all just a typing error. Somebody typed 'neo' when they should have typed "not".

[@F--B]

I'd say the most apt prefix is 'hyper'

[@thomasjamison2050]

@@F--BWell, of course you're going to say what you have been told to say.

[@F--B]

@thomasjamison2050 not you though Thomas. You're mummy's special prince.

[@prismbrandingrealestatebra6301]

They have turned what used to be careers into minimum wage jobs. Careers like truck driver, electrician, police officer, used to support a family of four. Now police officers qualify for food stamps and truck drivers have turned into lease to own operator contractors who after truck payments live pay check to paycheck. No one is mentioning how insurance on homes, businesses and vehicles have almost doubled since the pandemic.

[@itsme-nt2lj]

didnt list a single "progressive" change in detail of Bidrn

[@richardkut3976]

Racial tensions when compared to the '60s were not that bad under Reagan. Watts, Detroit, and others were very brutal.

[@amoore1505]

Just because you say so😂

[@gordondavies7773]

Central to the academic takeover of market fundamentalism and neo-liberalism: The Mont Pelerin Society (MPS) is a neoliberal international organization composed of economists, philosophers, historians, intellectuals and business leaders. The members see the MPS as an effort to interpret in modern terms the fundamental principles of economic society as expressed by classical Western economists, political scientists and philosophers. Its founders included Friedrich Hayek, Frank Knight, Karl Popper, Ludwig von Mises, George Stigler and Milton Friedman. The society advocates freedom of expression, free market economic policies and the political values of an open society. Further, the society seeks to discover ways in which the private sector can replace many functions currently provided by government entities.

[@F--B]

It's always necessary to parse a speaker's political bias when listening to a talk like this. Gerstle may at first appear to be an impartial analyst, but that's clealry not the case.

[@bbbl8910]

Has it fallen? For example IMF in Pakistan.

[@coopsnz1]

more taxes & regulations today how uk neoliberlism

[@kikolatulipe]

Did the guy heard of. 2007 global financial crisis!? Free market 😂

[@user-qk3sc8rq9r]

We need an update on Biden, a lot was happened.

[@breft3416]

Socialism for the rich by strategy.

[@AlternativeMediaJointCenter]

I wonder if he still thinks the same. To see the scene as so-called progressivism vs authoritarian is in itself so NEOLIBERALIZED that I doubt if he understood neoliberal globalism and that there is establishment vs at least 2 alternatives of which one is a real socialist one!

[@tsenotanev]

did he really somehow jump over who took over latin america's economy after all the coups in the 70s and instead drew attention to reagan ... instant classic say financial times ... what a joke ..

[@CCLilja]

I hate Neoliberalism, but also loathe Bourgeois Leftists. In both NZ and my native Sweden, there were the Labour Party and the Social Democrats, that went about reshaping their societies by Neoliberal reforms.

[@timfronimos459]

I listened until the 55 minute mark and when he mentioned that public television is designed to make reasonable discussion possible. I laughed. PBS has biased to the left since back in the late 1970s. I grew up on PBS and watched many programs that We're a positive influence that helped me to be educated and a critical thinker. Unfortunately p b s has gone the way of so many others downhill

[@riderpaul]

Also, i think Gary was too kind to the Clinton legacy. I think his motivation was how much money he would make after leaving his office. I'm pretty sure that was Obama's motivation. I can't imagine another motivation that could lead to the appointment of people like Larry Summers and Timothy Geithner.

[@riderpaul]

What i would like to see is a book on how to win. It's clearly not via a third party (math!). The big thing we need is more Bernie's in the political pipe line, i.e. politicians that are both honest and not influenced by money, who care about the public effects of their policies. We need to take over of the delegates in one of the parties and that needs to happen long before the primaries begin... Probably the Democrats, but the RNC may actually be an easier target. People like Jimmy Dore are a big problem that i don't see a real solution to, i.e. the cat herding problem on the left. The next ten years will be interesting as China dethrones the US and the Neo Liberal agenda. One can only hope that the supplanting of the Dollar by the Yuan occurs without a major war.

[@alvin8391]

I strongly disagree with Mr Gerstle in his views on the origins of "neoliberalim". It origin is not significant, because it differs in name only from what has been the political order or nature of the US since the second half of the 19th century. It is a new name for an old horse, which the American plutocracy has been riding for over 250 years, if not longer. That horse has trampled native Americans, Mexicans, Hawaians, Caribbeans, Philippinos, and many others well before the 1st WW and from the 2nd WW to date. It has trampled the rights of US farmers, miners, railroad and factor workers, immigrants and the entire middle-class of the US since that class became identified. Only for brief periods, the last of which was the "New Deal", was there a period of relief. As soon as victory in WW2 came into sight, State Department planners, George Kennan and others, laid the foundation of the "Grand Strategy" by which the US as the only prosperous survivor of the war would be the world's guiding hegemon. When the Soviet Union stood in the way of that achievement, it became the "enemy" that was seeking to dominate the world in contrast to the US, seeking only to spread democracy. Neoliberalism as the "free market" and "democracy" spreading as the foreign policy of the US are really covers for US imperialism and the neocons are those who would use military force to carry out the program. The victims are the American people as well as the people of the targeted foreign countries.

[@Skylark_Jones]

I totally agree with you. He also says the Neoliberal order falling was giving rise to movements on the left and the "right", well, sorry, but I thought Neoliberalism **was** a rightwing doctrine?? And the title, 'The Rise and **Fall** of Neoliberalism' - I live in the UK, the Neoliberal "experiment" as it's been called by some UK academics, is still in progress! It seems nobody has told our government that Neoliberalism has "fallen", because they're still carrying out its damaging policies! Britain is increasingly becoming a failing state, and it doesn't seem to bother them. Frankly I don't see an end to this shitshow. 🤦🏻‍♀️

[@carlas.pimentel2803]

O do not buy your theory on mass incarceration.

[@OghamTheBold]

England's prisons are now full - including one Australian journalist

[@virtualpilgrim8645]

mass incarceration is a result of the breakdown of traditional society and religion from the 1960s revolution of sex drugs and rock and roll.

[@amoore1505]

​@@virtualpilgrim8645 Were you listening to the author?!

[@virtualpilgrim8645]

@@amoore1505 the only minorities of significant size in the past were blacks and they were kept in line by Jim Crow. Since the government opened up immigration to the 3rd world there was an influx of other minorities which also contributes to the large number of incarcerations since the 1960s.

[@diegocabralrincon9069]

Where? From the minds of a bunch of knowledgeable psychopaths.Where if not.