It seems only natural that one cannot see at this stage the contour of the new economic order. As G.W.F. Hegel wrote, “The owl of Minerva takes flight only at dusk.” In other words, any given phase of history can be understood only in retrospect — after it’s over. However, the stress on the nexus between the rise of the New Deal Order and that the Neo-Liberal Order, respectively, with the rise and fall of international communism, suggests another possible reading. Capitalism, in an uneasy marriage with democracy, represents the ‘end of history’ (to borrow again from Hegel’s philosophy of history). Events such as the rise and fall of communism are shocks that can inflect, but not ultimately change, the essence of history’s end. While the US may not lack geopolitical or even civilisational rivals, none of them seems to exert any hold on the minds of the intellectuals and the public remotely comparable to that of communism in the past. The culture wars that agitate the US and the other Western countries are completely domestic in nature and in fact are deepening the divide between such countries and the rest of the world, as documented eg by value surveys. According to this reading, in spite of the decline of the Neo-liberal order, the position of capitalism is as safe as ever.
A little nitpick- you say, "While the US may not lack geopolitical or even civilisational rivals, none of them seems to exert any hold on the minds of the intellectuals and the public remotely comparable to that of communism in the past."
But which intellectuals, whose public? It's clear from what you say that you're referring to the public and intellectuals of the US (and I assume also the West generally), but you seem to implicitly conflate this with "the" public.
I'm not getting at you, I just think it shows an interesting underlying assumption that for history to happen, it needs to happen in the West- there is no politics without a public, and the West is "the" public.
But with this in mind, something else you say later (which I think is absolutely correct and right on the money) appears in a different light: "The culture wars that agitate the US and the other Western countries are completely domestic in nature and in fact are deepening the divide between such countries and the rest of the world, as documented eg by value surveys."
Following the thread of your argument, you appear to be moving from a statement that history has ended because the public (as in the Western public) are no longer seriously influenced by ideas from geopolitical or civilisational rivals as they were by communism in the past, to a further statement that the culture wars that seem so historically important to us in the West are mere navel gazing, and the proof of this is that this culture war mania is not shared by publics and intellectuals outside the West. Thus history is no longer happening, and the thing that appears to us as historical (culture wars) are purely inward looking domestically focussed obsessions that keep our minds occupied at the end of history.
But what if we flip that, maybe if history does not seem to be happening in the West anymore, it's not because we are at the end of history, but because the West is no longer the agent of history that it once was? What if the evidence you point to of diverging values between the West and the Rest is not the sign that history is over, but that a truly epochal shift is occurring?
Don't get me wrong, I'm not saying this means that capitalism is finished, not by any means- but what I think it does indicate is that liberal democratic capitalism is losing its legitimacy outside of the West. This form of life is so intimately tied to Western history, and to a period of history in which Western ideas were the ruling ideas, that if it is true that the West is starting to look inward and that those outside the West are diverging from Western assumptions, then a major historical shift is in the works.
For now the position of capitalism seems safe, but its specifically Western form, of liberal democratic capitalism, is slipping from its ascendant position.
Thank you for reading so carefully my sparse reflection. You are right. As the book originating the discussion is about the US and arguably by extension the West, my reflections focused exclusively on the US and the West. In his famous essay on the End of History Francis Fukuyama seemed to imply that what I call the uneasy marriage between capitalism and democracy would be the end-state not just for the West but for the world at large, or at least those parts of the world that mattered in a Weltgeschikte perspective. I am afraid I am guilty of the same generalisation, which more than thirty years from the essay is less forgivable. I guess that China is the big question that at least should be addressed.
China's governance model is by far the most successful and popular. Any system that is not competitive will be swept off the board, as we are currently seeing.
The government there is successful and very popular with its citizens. It also enjoys high trust with the populace as do the media there, as confirmed eg. by the Edelman Trust Barometer 2024. These are things that cannot be said about Western governments. Surveys tell us, that eg. US Congress nowadays only enjoys junk bond type rating by the US citizenry. Morally and materially supporting genocide does not help the Western countries.
I lived as a child under one-party authoritarian rule. We truly loved our leader. It was a wonderful childhood.
Contrary to widespread belief in democracies, dictatorships are very popular among their subjects. Especially if dictatorships are connected with nationalistic enthusiasm. No doubt that Stalin or Mao would have won any fair election with a 95 % result. NSDAP reached barely 30% in democratic elections, their popularity surged to quasi 100% as soon as they proclaimed the dictatorship. Having a monopoly over media doesn't hurt either.
I want to say that popularity of a ruling government is poor measure of their political legitimacy. But this is true for democracies as well.
Yongshun Cai says in Collective resistance in China that in Europe, politicians get legitimacy through elections, after which they can say "you elected us, blame yourself". In China, politicians have to earn legitimacy the hard way, to give people what they want.
And they have – few countries have improved the lives of the majority so fast.
Of course, there will be a revolution of rising expecations in China too. It seems have begun, I have heard reports that urban middleclass youth aren't as fascinated by all the gadgets they can buy with all the money they can earn as the party politicians would like. We'll see.
The definition of "order as the ruling ideology" seems ill defined for me - to my understanding Ideology is not an order, it can but it doesn't have to correlate with the political order. If an order represents a current real-politic equilibrium of interests and powers of actual players. Ideology would today not be the necessary fundament (as in post-revolutionary societies) but rather a contingent cultural layer, the ethical/aesthetic model - Marxian Überbau of a post-modern society.
In real life the order can even be orthogonal to official ideology. Very often I have heard (from my frustrated compatriots in real-existing socialism) that the best implementation of socialism actually took place in capitalist Scandinavia. In our eyes Sweden had the wrong ideology but superior order while we embraced the best ideology but failed to produce a competitive order. The Chinese metamorphosis (all the revolutions and counterrevolutions) through very different economic systems happened under unchanged state ideology. The French Republic retained the well developed royal bureaucracy - it radically changed official ideology and political form, but not the ancient tools of the political order. And so on
I see similar ambiguities when talking about neoliberal quality of our Western order. In the sense that I could not tell if China's political order is more neoliberal than Germany's or Argentina's. Is Saudi Arabia a New-deal kind of economy?
In any case, today's World is too complicated and multidimensional to be explained in any ideological dichotomy such as New-Deal vs Neoliberal economy: would the World now look very different without Thatcher, Blair and Clinton? In one of his very entertaining documentaries, British political analyst Adam Curtis blamed the individualism of punk auteur Patty Smith for the rise of Neoliberal order in the 1970s. But was she the cause or the product of the neoliberal zeitgeist?
But I just want to say in defense of Gary that when he speaks of these two orders, he speaks of them only within the United States. I mentioned that in my review. It is not a shortcoming of the book as such: one has to limit one's attention to a manageable task. But surely. neoliberalism applies to many more places than the US.
I think (and this is my interpretation) that it goes as follows: ideology => dissemination of that ideology => espousal by some political organization and parties => implementation => acceptance of the main principles by the opposition. Then, the whole thing becomes an order.
I have indeed missed the point by ignoring that the book concerns US only. There the term ideology would represent some kind of constrained common sense, a space for sensible political action. In some sense, influencing this space is the real political work - Gramsci would call it cultural hegemony - the rest is administration.
In Europe the discourse about ideologies is still led along the rigid coordinates from the Cold War - which is even more peculiar, since also here the democratic process leads to very similar administration, independent of the "ideology" of the governing party.
Presidents Clinton and Obama became very rich for their services rendered, so did Tony Blair (probably the illegitimate love child of Milton Friedman and Maggie Thatcher). Most retired US flag officers (generals, admirals) found 7-digit employment within the armaments industry after their retirement. A paper from Princeton demonstrates reasonably well, that policies that are found desirable by the common voters are few and merely incidental. The whole thing reminds me more and more about a company going bust and the staff is kind of aware of that: people are ransacking the stationery cabinets, the little sideboard disappears and somebody "borrows" the tv set.
The economies of allies of the US, which are getting more and more reduced to unincorporated territories (kind of bigger Guams with Britain starring as Mega-Guam and Australia as Giga-Guam), are increasingly preoccupied with finding ever more money to satisfy US demands for orders to its arms industries.
It's a pity that Gerstle only looks at the issue from a narrow national viewpoint, because it is also global. I don't think one can understand it without knowing both.
Alice Amsden talks about two eras of US hegemony – a comparatively benevolent one from 1945 to 1975, and an intensively egotistical one after that (Escape from empire, 2007). They can easily be translated into first, the Keynesian, developmentalist world order, and then the neo-liberal one.
In the first period the US, and the industrial world in general, were sure of their supremacy and could afford being generous (well, comparatively generous). But as soon as competitors appeared, the old industrial core – the Quad as we in the Global Justice Movement used to call them – began to insist in a market-ruled world, believing that the absence of protection is the best protection for the already strong.
Of course they calculated wrong. With the absence of binding rules for capital, capital grew increasingly rentierist and lazy, and outsourced its production capacity to the Asians. Who gratefully accepted.
That is true - one of Carters final acts was the liberalisation of air-travel regulations enabling a fierce competition. There is no doubt that in his hypothetical second term Carter would be tempted/forced to liberalise more industries including finance in order to revitalise US economy.
The politics is sometimes independent of proclaimed ideology of a party or the personality of an election candidate. It is difficult to imagine that today, but the only US president that contemplated about a sort of unconditional basic income was Nixon in the early 1970s. If ideas are in the air - they will be implemented by anyone.
It seems that, in fact, we all are in a kind of threshold of a new politicam and economics order. Somo authors, such Varoufakis, claims that capitalism is under mutation, resulting in a new feudocapitalism lead by the Big Tech comoanies and the rise of rentals as income sources.
It seems only natural that one cannot see at this stage the contour of the new economic order. As G.W.F. Hegel wrote, “The owl of Minerva takes flight only at dusk.” In other words, any given phase of history can be understood only in retrospect — after it’s over. However, the stress on the nexus between the rise of the New Deal Order and that the Neo-Liberal Order, respectively, with the rise and fall of international communism, suggests another possible reading. Capitalism, in an uneasy marriage with democracy, represents the ‘end of history’ (to borrow again from Hegel’s philosophy of history). Events such as the rise and fall of communism are shocks that can inflect, but not ultimately change, the essence of history’s end. While the US may not lack geopolitical or even civilisational rivals, none of them seems to exert any hold on the minds of the intellectuals and the public remotely comparable to that of communism in the past. The culture wars that agitate the US and the other Western countries are completely domestic in nature and in fact are deepening the divide between such countries and the rest of the world, as documented eg by value surveys. According to this reading, in spite of the decline of the Neo-liberal order, the position of capitalism is as safe as ever.
Totally agree.
As the author of "Capitalism, Alone" you certainly should!
;-D
A little nitpick- you say, "While the US may not lack geopolitical or even civilisational rivals, none of them seems to exert any hold on the minds of the intellectuals and the public remotely comparable to that of communism in the past."
But which intellectuals, whose public? It's clear from what you say that you're referring to the public and intellectuals of the US (and I assume also the West generally), but you seem to implicitly conflate this with "the" public.
I'm not getting at you, I just think it shows an interesting underlying assumption that for history to happen, it needs to happen in the West- there is no politics without a public, and the West is "the" public.
But with this in mind, something else you say later (which I think is absolutely correct and right on the money) appears in a different light: "The culture wars that agitate the US and the other Western countries are completely domestic in nature and in fact are deepening the divide between such countries and the rest of the world, as documented eg by value surveys."
Following the thread of your argument, you appear to be moving from a statement that history has ended because the public (as in the Western public) are no longer seriously influenced by ideas from geopolitical or civilisational rivals as they were by communism in the past, to a further statement that the culture wars that seem so historically important to us in the West are mere navel gazing, and the proof of this is that this culture war mania is not shared by publics and intellectuals outside the West. Thus history is no longer happening, and the thing that appears to us as historical (culture wars) are purely inward looking domestically focussed obsessions that keep our minds occupied at the end of history.
But what if we flip that, maybe if history does not seem to be happening in the West anymore, it's not because we are at the end of history, but because the West is no longer the agent of history that it once was? What if the evidence you point to of diverging values between the West and the Rest is not the sign that history is over, but that a truly epochal shift is occurring?
Don't get me wrong, I'm not saying this means that capitalism is finished, not by any means- but what I think it does indicate is that liberal democratic capitalism is losing its legitimacy outside of the West. This form of life is so intimately tied to Western history, and to a period of history in which Western ideas were the ruling ideas, that if it is true that the West is starting to look inward and that those outside the West are diverging from Western assumptions, then a major historical shift is in the works.
For now the position of capitalism seems safe, but its specifically Western form, of liberal democratic capitalism, is slipping from its ascendant position.
Thank you for reading so carefully my sparse reflection. You are right. As the book originating the discussion is about the US and arguably by extension the West, my reflections focused exclusively on the US and the West. In his famous essay on the End of History Francis Fukuyama seemed to imply that what I call the uneasy marriage between capitalism and democracy would be the end-state not just for the West but for the world at large, or at least those parts of the world that mattered in a Weltgeschikte perspective. I am afraid I am guilty of the same generalisation, which more than thirty years from the essay is less forgivable. I guess that China is the big question that at least should be addressed.
China's governance model is by far the most successful and popular. Any system that is not competitive will be swept off the board, as we are currently seeing.
By China's governance model, do you mean a one-party authoritarian rule?
The government there is successful and very popular with its citizens. It also enjoys high trust with the populace as do the media there, as confirmed eg. by the Edelman Trust Barometer 2024. These are things that cannot be said about Western governments. Surveys tell us, that eg. US Congress nowadays only enjoys junk bond type rating by the US citizenry. Morally and materially supporting genocide does not help the Western countries.
https://www.hks.harvard.edu/publications/quality-governance-china-citizens-view
https://www.edelman.com/trust/2024/trust-barometer
I lived as a child under one-party authoritarian rule. We truly loved our leader. It was a wonderful childhood.
Contrary to widespread belief in democracies, dictatorships are very popular among their subjects. Especially if dictatorships are connected with nationalistic enthusiasm. No doubt that Stalin or Mao would have won any fair election with a 95 % result. NSDAP reached barely 30% in democratic elections, their popularity surged to quasi 100% as soon as they proclaimed the dictatorship. Having a monopoly over media doesn't hurt either.
I want to say that popularity of a ruling government is poor measure of their political legitimacy. But this is true for democracies as well.
Got it. It is indeed good if China does not support genocide anywhere in any shape or form.
Yongshun Cai says in Collective resistance in China that in Europe, politicians get legitimacy through elections, after which they can say "you elected us, blame yourself". In China, politicians have to earn legitimacy the hard way, to give people what they want.
And they have – few countries have improved the lives of the majority so fast.
Of course, there will be a revolution of rising expecations in China too. It seems have begun, I have heard reports that urban middleclass youth aren't as fascinated by all the gadgets they can buy with all the money they can earn as the party politicians would like. We'll see.
The definition of "order as the ruling ideology" seems ill defined for me - to my understanding Ideology is not an order, it can but it doesn't have to correlate with the political order. If an order represents a current real-politic equilibrium of interests and powers of actual players. Ideology would today not be the necessary fundament (as in post-revolutionary societies) but rather a contingent cultural layer, the ethical/aesthetic model - Marxian Überbau of a post-modern society.
In real life the order can even be orthogonal to official ideology. Very often I have heard (from my frustrated compatriots in real-existing socialism) that the best implementation of socialism actually took place in capitalist Scandinavia. In our eyes Sweden had the wrong ideology but superior order while we embraced the best ideology but failed to produce a competitive order. The Chinese metamorphosis (all the revolutions and counterrevolutions) through very different economic systems happened under unchanged state ideology. The French Republic retained the well developed royal bureaucracy - it radically changed official ideology and political form, but not the ancient tools of the political order. And so on
I see similar ambiguities when talking about neoliberal quality of our Western order. In the sense that I could not tell if China's political order is more neoliberal than Germany's or Argentina's. Is Saudi Arabia a New-deal kind of economy?
In any case, today's World is too complicated and multidimensional to be explained in any ideological dichotomy such as New-Deal vs Neoliberal economy: would the World now look very different without Thatcher, Blair and Clinton? In one of his very entertaining documentaries, British political analyst Adam Curtis blamed the individualism of punk auteur Patty Smith for the rise of Neoliberal order in the 1970s. But was she the cause or the product of the neoliberal zeitgeist?
But I just want to say in defense of Gary that when he speaks of these two orders, he speaks of them only within the United States. I mentioned that in my review. It is not a shortcoming of the book as such: one has to limit one's attention to a manageable task. But surely. neoliberalism applies to many more places than the US.
I think (and this is my interpretation) that it goes as follows: ideology => dissemination of that ideology => espousal by some political organization and parties => implementation => acceptance of the main principles by the opposition. Then, the whole thing becomes an order.
I have indeed missed the point by ignoring that the book concerns US only. There the term ideology would represent some kind of constrained common sense, a space for sensible political action. In some sense, influencing this space is the real political work - Gramsci would call it cultural hegemony - the rest is administration.
In Europe the discourse about ideologies is still led along the rigid coordinates from the Cold War - which is even more peculiar, since also here the democratic process leads to very similar administration, independent of the "ideology" of the governing party.
Presidents Clinton and Obama became very rich for their services rendered, so did Tony Blair (probably the illegitimate love child of Milton Friedman and Maggie Thatcher). Most retired US flag officers (generals, admirals) found 7-digit employment within the armaments industry after their retirement. A paper from Princeton demonstrates reasonably well, that policies that are found desirable by the common voters are few and merely incidental. The whole thing reminds me more and more about a company going bust and the staff is kind of aware of that: people are ransacking the stationery cabinets, the little sideboard disappears and somebody "borrows" the tv set.
The economies of allies of the US, which are getting more and more reduced to unincorporated territories (kind of bigger Guams with Britain starring as Mega-Guam and Australia as Giga-Guam), are increasingly preoccupied with finding ever more money to satisfy US demands for orders to its arms industries.
How does one call such an era?
Late Empire.
It's a pity that Gerstle only looks at the issue from a narrow national viewpoint, because it is also global. I don't think one can understand it without knowing both.
Alice Amsden talks about two eras of US hegemony – a comparatively benevolent one from 1945 to 1975, and an intensively egotistical one after that (Escape from empire, 2007). They can easily be translated into first, the Keynesian, developmentalist world order, and then the neo-liberal one.
In the first period the US, and the industrial world in general, were sure of their supremacy and could afford being generous (well, comparatively generous). But as soon as competitors appeared, the old industrial core – the Quad as we in the Global Justice Movement used to call them – began to insist in a market-ruled world, believing that the absence of protection is the best protection for the already strong.
Of course they calculated wrong. With the absence of binding rules for capital, capital grew increasingly rentierist and lazy, and outsourced its production capacity to the Asians. Who gratefully accepted.
I have heard claims that Carter rather than Reagan was the first neoliberal president -- perhaps his appointment of Volcker supports this thesis.
That is true - one of Carters final acts was the liberalisation of air-travel regulations enabling a fierce competition. There is no doubt that in his hypothetical second term Carter would be tempted/forced to liberalise more industries including finance in order to revitalise US economy.
The politics is sometimes independent of proclaimed ideology of a party or the personality of an election candidate. It is difficult to imagine that today, but the only US president that contemplated about a sort of unconditional basic income was Nixon in the early 1970s. If ideas are in the air - they will be implemented by anyone.
I appreciate so much this kind of articles.
It seems that, in fact, we all are in a kind of threshold of a new politicam and economics order. Somo authors, such Varoufakis, claims that capitalism is under mutation, resulting in a new feudocapitalism lead by the Big Tech comoanies and the rise of rentals as income sources.