"The Rise and Fall of the Neo-Liberal Order" by Gary Gerstle--An Incisive Sobering Picture of the Decline in Trust

 The Rise and Fall  of the Neo-Liberal Order: America and the World in the Free Market Era overviews in a fresh and convincing way the history of the past 100 years, 1920-2022 in less than 300 pages.  Deeply researched and fluidly written, the story reveals dimensions of this history that I found incisive and in many ways new, despite having lived through most of it. 

 

Gerstle channels his story on the foundation of two movements which he describes as:  the New Deal, implemented on the run by FDR following the Great Depression.  It lasted through the 1960s and 1970s, brought down eventually by a combination of the Vietnam War (which split the Democratic Party), race relations and the economy, which went into a steep decline in the 1970s.  From that sprang the second movement, Neo-Liberalism, propelled along by the peaceful demise of the Soviet Union and the opening up of China and the rest of the world to commerce.  Neo-Liberalism, a broad term often used in a dismissive and derogatory way today, embraced a belief in open markets, individual initiative, de-regulation of finance (elimination of Glass-Steagall; growth of mega-banks), communication (elimination of "fairness doctrine," creation of Fox News, MSNBC, etc., Twitter, etc.), businesses (opening the road to creation and expansion of tech giants like Google; Facebook and consolidation of businesses like airlines) and education.  Like the New Deal, it captured the support of both Republican and Democratic administrations (including, for example, Eisenhower who continued many of the policies instituted by FDR). 

 

Neo-Liberalism turned out to be a defining and unifying order of political economy, which was embraced by Republicans and Democrats from Reagan, Bush, Clinton and Obama. 

 

Its breakdown has been caused by a tremendous decline in trust and polarized cultural relationships in the United States including among the political parties.  These differences have morphed into moral differences in their character, not just differences in policy. The decline in trust from a level of 75% of the public trusting the government "to do the right thing all or most of the time" in 1958 to 20% in May 2022 traces to many factors, including the disclosure of Nixon's break-in of the Democratic Headquarters and subsequent resignation (trust declining to 36% at the end of his presidency) and then further declining due to the misbegotten invasion of Iraq (declining to 25% at the end of G.W. Bush's administration). 

 

I believe two other causes of the breakdown in public trust and confidence trace to 1) the adversarial, non-stop denigration in broadcast and print media and on social media platforms of the motives, efficacy and moral worth of the opposition, and 2) from the breakdown of the makeup of the family.  Gerstle marshals sobering statistics to demonstrate this. Nationally, a staggering 30% of babies are now born into single-parent homes, up from only 10% in 1965. *

 

The decline of trust in every institution (other than the military) has been well documented and I won’t rehearse the data here.  However, I would state that my two greatest concerns about this country--concerns that I find the hardest to to overcome—are the decline of trust in our institutions* and in each other and in the breakdown of the American family.

 

 

While Gerstle makes the case compellingly that the two parties have been united in their view of the right "political economic order,”  he fails to provide enough emphasis on the nuances of their differences on cultural issues. For example, how Democrats placed greater emphasis on a spirit of cosmopolitanism, open borders and an attachment to diversity compared to a greater attachment among Republicans to family, patriotism, religion and other so-called traditional values. 

 

I also believe he should have brought more emphasis to how dramatic geo-political changes post-2000 have fractured the free trade, cosmopolitan ethos that prevailed in the immediate post-1990 spirit of Neo-Liberalism.  The passage of MFN for China, the WTO, all were premised on China’s adopting the practices of the Free World to a far greater degree than is obviously happening. And the spirit of democracy which in 1990 showed signs of animating much of what was developing in Russia has disappeared at this moment.

 

I also wish Gerstle had spent more time addressing the totality of what was happening on the global front and, as part of that, recognized that our illusory belief post the fall of the Soviet Union that the world was aligning almost as one behind our view of the right political-economic order led us to retreat in the commitment to forge better diplomatic understanding with our potential adversaries, Russia and China in particular.   Instead, we pretty much put aside what their future interests and fears might be. 

 

Finallym  Gerstle’s treatment of the last 40 years should have put more emphasis on the importance of human agency.  He does emphasize, correctly, the decisive role of Gorbachev.  But he doesn’t touch on the importance of the different roles played by Chinese leaders, from Deng Xiaoping and Zhu Rongji to now President Xi or to President Putin in Russia .

 

*Another sobering set of data showing the decline in spirit of the American public emerges from this recent WSJ-NORC poll. The percentage of people who say these values are important to them, have declined from 1998 to 2023 as follows:

 

Patriotism: 70%-38%

Religion: 62%-39%

Having Children: 59%-30%

Community Involvement: 47%-27%