"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%

Everyone Combines Strengths and Blind Spots. We Can Learn From Both

  

Jon Meacham’s "American Lion: Andrew Jackson in the White House" brings alive as well as any biography I’ve ever read the reality that great men (and women), in this case Andrew Jackson, bring together great strengths and virtues with blind spots which as we see the world today, make us cringe.  For Jackson, those blind spots were slavery and the treatment of Native Americans. 

 

Meacham's book gave me a new appreciation of Jackson’s strength of character and how he held the Union together during the Nullification crisis of 1830-31 which came close to seeing South Carolina secede from the Union.  But he held it together.  And he fought the “good fight” for the small man as he battled the consolidated financial interests of the National Bank.  As Meacham says, Jackson “proved the principle that the character of the President matters enormously.”  

 

“Jackson had many faults,” said Theodore Roosevelt, “but he was devotedly attached to the Union and he had no thought of fear when it came to defending his country. The course I followed regarding the Executive is subject only to the people…it was substantially the course followed by both Andrew Jackson and Abraham Lincoln.” 

 

“He wanted sincerely to look after the little fellow who had no pull and that is what a President is supposed to do,” Truman said of Jackson.

 

Meacham writes.  “The great often teach by their failures and derelictions.  The tragedy of Jackson’s life is that a man dedicated to freedom failed to see liberty as a universal, not a particular, gift.”  Meacham was, of course, referring to Jackson’s repeated assault on Native Americans, abrogating treaty after treaty, pushing them west, feeling that, in my words, they were a breed apart.  He also refers to his support for the institution of slavery, being a slave owner himself, and fighting the abolitionists during the 1830s, including their fight against the Gag Rule in Congress.

 

“The triumph of (Jackson’s) life,” Meacham continues, “is that he held together a country whose experiment in liberty ultimately extended its protections and promises to all—belatedly, it is true, but by saving the Union, Jackson kept the possibility of progress alive, a possibility that would have died had secession and separation carried the day.”

In many ways, this commitment--preserving the Union and finding a way to strengthen it--is what has characterized the great leaders in Procter & Gamble’s history.  The intent has always been the same:  building on the strengths of the past, responding to the exigencies and opportunities of the present, not only adhering to our values but finding a fuller way to live them, and, in all ways, seeking to make Procter & Gamble a more successful and vibrant institution in the future.

The Miracle of the Human Face

 

One of the many times when I have been mesmerized by simply looking at the faces of people passing by occurred  almost 20 years ago.  I was being treated for bladder cancer at the Sloan Kettering  Hospital,  observing passers by from a window in the restaurant where my wife, Francie, and I were having dinner.   I looked at them, one by one, as they walked by, grateful for and taking pleasure from the health and joy I saw in their faces. 

 

Eight years ago, I recall standing in a circle holding hands with about 30 fellow parishioners before taking Communion at my church.  As I wrote then, “I looked at the faces of the children, women and men around me. I only knew a few of them personally but I knew that virtually every one of them faced challenges beyond those I will never know.  Looking at them, individually, made me appreciate once more the miracle of the human face.  The individuality of each one of us in what a face conveys and what remains hidden".

 

This short experience, no more than 2-3 minutes, reminded me that we are all in this together on the journey of life, each in our own individual ways yet, as we held hands together, we were affirming even if silently that we do it together and, in doing that, hold the opportunity, and indeed the responsibility, to help one another on that journey of life whenever and wherever we can.

 

 

In Search of Heroes--George H.W. Bush--"Does Character Count?"--A Cherished Talk I Gave 25 Years Ago

 

Sat, Jun 1 at 3:42 PM

Jean Becker’s book, “Character Matters,”is a treasure-trove of stories which bring to light, in an incredibly luminous way, President George H.W. Bush's uniquely courageous, decent, and kind leadership.

It would be impossible to pick out the favorite stories; in a way, you don’t need to:  there is such a consistency in how people experienced the President.  He was the same with everybody—empathetic, considerate, involved personally, yet never losing his decisiveness and stature that he recognized went with the office.

There was one compelling story that impacted me personally.  On Friday, January 12, 1990, we were honored to welcome President Bush in Cincinnati to recognize the Cincinnati Youth Collaborative as a “point of light” and give a talk to the Chamber of Commerce.  I wrote in my journal that I “briefed him at lunch, all too briefly, but it went well and, needless to say, it was a great honor.  He did a great job with the children, talking to about 20 of them in a library, and then addressing all the Taft students in the auditorium.”  I am sure they will never forget it.

Little did I know that something else was happening that day.  The President's chief of staff, Andy Card tells the story in Jean Becker’s book.  Before the trip, Card noted a letter from the Cincinnati zip code sent by a woman who might approach the President.  She wanted to meet with him to call him a murderer to his face because her son had been killed in Panama.  He was told not to do that.  He disagreed and met with her.  The story that follows is spine-tingling. It made me choke up as  the President read the a letter the boy's mother gave him. He had written it before going into battle. He told his mother he wanted her to know he volunteered because he loved his country. 

The President and his mother cried together.

Oh, how we miss President Bush and his qualities of leadership. 

I can’t recall a time when the stories illuminating that “character matters” are as urgent and timely as today.  I don’t need to provide my emphasis to that.  

It is ironic that 25 years ago, I was asked to give a talk to students at Miami University.  I asked, “What topic would you like me to address?”  The answer was:  “Does character count?”  My initial response was, “That’s too obvious a question to address.  The answer is clear.”

The response I received surprised and alarmed me.  “No, it’s an issue on our campus.”  I can only imagine that issue being even greater today given the absence of character in so many of our leaders, including our former President.  I’m including a copy of the talk I gave on that occasion.  It is lengthy and some  of the examples are dated, but the principal points it makes stand as tall and true today as they did then. 

Oh, how we miss President Bush and his qualities of leadership. 

 I pray for our families.  I pray for our nation. I pray that we honor the mandate: "without character, nothing counts". 

 

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Democracy as a Force for the Common Good

 

In a short 250 or so pages James Miller makes clear in hjs book, Can Democracy Work?  A Short History of a Radical Idea from Ancient Athens to our World  that the efforts that have been made to put in place “pure democracy,” meaning that theoretically every person is involved in a decision, has too often led to perverse outcomes, denying the stated purpose of its pursuit.

 

While democracy is said to have been operative in ancient Athens, the fact remained that a large percentage of the population in so-called democratic Athens were slaves.  Many could not vote.   

The success and failure and the tension that rests within each attempt at democracy has been impacted by many human tendencies and instincts:  the desire for power, for money; the inherent conviction by most people, that some people (meaning “we”) are better than others. 

 

The creation of our own Constitution in 1781 reflected the inherent distrust of the capacity of ordinary citizens to make decisions.  There was the belief that had been reflected in previous political arrangements that decisions need to be made by a “meritorious elite who would govern on behalf of all, with a dispassionate regard for the common good.”

 

Of course, what people view as the “common good” has varied and always will vary.  Therein lies the source of conflict.

 

Communism, brought to reality by the 1917 Revolution in Russia, was premised on the idea that everyone is equal and should have a say in what the government should do.  It didn’t take long for that to devolve into Lenin’s and other leaders’ deciding that they needed to decide what was right for the common people.  Greed and the quest for power took over.  The same thing happened in the French Revolution.  It started as quest for everyone to be involved in decision-making; it quickly descended into chaos and then the creation of an autocratic dictatorship. 

 

We see these same instincts in our own democracy today.  Differences in what people see as the common good.  The drive by officeholders to stay in office. The reversion to autocratic methods.

 

Robespierre centuries ago captured the reality in addressing the Convention debating the French Constitution.  The challenge faced by every great legislator, he declared, is to “give to government the force necessary to have citizens always respect the rights of citizens and to do it in such a manner that government is never able to violate these rights itself.”  Rarely had this challenge been met, Robespierre said, because history was generally a story of “government devouring (individual) sovereignty” and of the rich exploiting the poor. 

 

This deep-seeded conviction that the “common man” is not able to decide individually or in the aggregate what the right thing to do is has been prevalent throughout history, to this very day.  Walter Lippmann wrote almost 100 years ago, “The individual man does not have opinions on all public affairs.  He does not know how to direct public affairs.  He does not know what is happening, why it is happening, what ought to happen.”  As a result, the common interests, he concludes, “can be managed only by a specialized class,”  by informed commentators (like Lippmann himself, in Lippmann’s haughty opinion) with an in-depth knowledge of the facts pertinent to formulating reasonable public policies.  This attitude, driven by self-interest yet, to some degree, the recognition of reality has been the governing force in the development of political systems everywhere over time. 

 

Joseph Schumpeter, in the 1940s, said it only a bit differently:  “Democracy in modern societies like America, as it has come to actually exist, involves voters selecting the least objectionable of the available candidates chosen by rival political priorities to rule over them.”  Here again, this greatly oversimplified view of reality captures an uncomfortable degree of truth. 

 

Certainly it has been proven that it is unrealistic and undesirable to attempt to rule totally by consensus.  Ultimately, there needs to be a structure of decision-making.  That is true in business and it’s true in political life, but at the same time, I insist, that it is possible for business or government to reflect, if not perfectly, largely the common good. 

 

Our experience with participatory democracy teaches the limits of any regime of consensus, which risks silencing disagreements over alternatives that are important to debate openly, I believe.  I am convinced that modern  institutions can do more to appeal to an engaged people’s capacity for reflection and collective deliberation.  As one American philosopher wrote, “We sometimes expect too little” from our democracies “precisely because” we prematurely give up on an “aspirational theory,” one that realistically faces the question “of whether more can realistically be expected.” 

 

I believe this line of thought permeates the Purpose of  the where I spent my career, Procter & Gamble.  It recognizes the need for balance in the stakeholders whom we serve and in how we carry out the responsibility we have to these stakeholders.  It does this with the humility of recognizing while we won’t ever achieve perfection, we can and must continue to learn how to do better.

 

I return, as Miller does and as I always have, to Vaclav Havel who, as much or more than any other philosopher, guides my thinking.  He posits that the view that democracy “is chiefly the manipulation of power and public opinion and that morality has no place in it” means the unacceptable loss of “the idea that the world might actually be changed by the force of truth, the power of a truthful word, the strength of a free spirit, conscience and responsibility—with no guns, no lust for power, no political wheeling and dealing.”

 

When Havel wrote his essay in 1991in “Summer Meditations,” he was overseeing Czechoslovakia’s reformation as its first freely elected president.  “I am convinced,” he remarked, “that we will never build a democratic state based on rule of law if we do not at the same time build a state that is—regardless of how unscientific this may sound to the ears of a political scientist—humane, moral, intellectual and spiritual and cultural.”  “The best laws and best conceived democratic mechanisms will not in themselves guarantee the legality or freedom or human rights—anything in short, for which they were intended—if they are not underpinned by certain human and social values.”  He concludes as I do:  “I feel that the dormant good will in people needs to be stirred.  People need to hear that it makes sense to behave decently and help others, to place common interests above their own, to respect the elementary rules of human coexistence.”

I hope and pray this conviction will guide the majority of the American public as it chooses its next president in November, 2024.

  

The Last Bastion to Protect Our Democracy--The Judgement and Common Sense of the American People

  

I have often remarked, somewhat naively in retrospect, that our democracy would be protected by a number of factors, including the balance of power.  I was referring here to the distribution of responsibility between the states and the national government and the distribution of power among the executive, legislative and judicial branches of the government. 

 

These are meaningful checks and balances, but I have come to realize that they are no guarantee of preserving democracy. 

 

For many years, I looked to the Supreme Court as a reliable final arbiter to preserve our democracy. In recent years, there has been the gnashing of teeth among a large part of the population including me about many of the decisions of the Supreme Court. 

 

Most recently, there is the Supreme Court’s apparent decision to kicking the question of former President Trump’s immunity from prosecution down to lower courts, meaning that any court case deciding that issue will not be decided until after the election Not long before that came the decision to overturn Roe v. Wade, which had been in place since 1973, turning the decision on abortion over to the individual states.  The proposition offered by some Justices at the time that this would result in taking the issue out of the courts was preposterous from the start and has been proven absolutely wrong, as the court cases continue to unfurl. I see no intellectual basis for the court's failing to establish a national standard defining what constitutes a legally permitted abortion.  This is a national issue.

 

A few years before that came the decision on Citizens United v. FEC which now perversely allows unlimited corporate spending for elections

 

And the notion, which I once held i that the Supreme Court would reach decisions rising above contemporary political sentiment, is denied by history.  Supreme Court decisions have always been influenced by the temper of the times, including the impact that temper had on individuals chosen for the Court.

 

The Dred Scott decision of 1857, which ruled that African-Americans were not citizens and carried no rights, which Whites were required to respect, grew out of the pro-slavery sentiment that existed at the time. 

 

The decision, Plessy v. Ferguson in 1896, upholding racial segregation under the “separate but equal” mantra was also a product of the time. It led to institutionalized racism for decades until it was struck down by Brown v. Board of Education in 1954. 

 

There were decisions early in the 20th century in which the Court said that restricting bakery hours to a 10-hour day violated their right to contract for their own work hours.  In 1918, the Court ruled that federal restrictions on child labor violated states’ rights to regulate production.  Five years after that (1923), the Court ruled that it was illegal to set a minimum wage for women, regardless of whether or not they were earning enough to live on. All an outgrowth of a "laissez-faire" philosophy of the times which influenced the decisions of the justices. Another mind-bending example: in 1927, the Court allowed forced sterilization of the “feeble-minded people,” embracing the now utterly discredited theory of eugenics.   

 

Perhaps the point I’m making is too obvious to even justify elaboration.  However, it is a fact that there is no guarantee that the separation of powers will guarantee a continuation of democracy.  No, and this is my point--that will ultimately depend on the choice the American people make as they elect their president and other key offices including at the state level. In these choices the American people will decide and express how they want to live. 

 

Circumstances will influence this, of course.  The Depression of the 1930s put a lie to the "laissez-faire" , free-for-all policies that had prevailed in the early part of the century.  It provided the conditions which made the election and policies of Roosevelt possible. 

 

We now face the most consequential presidential election in my lifetime. The choice between Joe Biden and Donald Trump. It is now apparent that no court case or Supreme Court decision will bar Trump as the Republican nominee. If you believe as I do that the future of democracy is on the line, you will see that it will be the values, sentiment and common sense of the Amercan people who will decide our future. And so should it be.

  Looking back over history, I take heart from the fact that the American people eventually have “rejected” the hateful rhetoric and call of leaders like George Wallace and Joe McCarthy.  I have felt, incorrectly, that the American people would have long since reached the point of rejecting what Donald Trump stands for:  his lack of character, his meanness, his cruelty.  I have been wrong.  There have been underlying conditions leading large segments of our population to understandably feel that they were not being recognized and given respect they deserve. Similar sentiments have provided the fuel for other autocrats donning the mantle of victimhood, personally and on behalf of the people they say they represent. Trump follows in the footsteps of Hitler, Mussolini and other autocrats.  But eventually, the truth came out; the pretense folded.

 

Will that happen again in 2024 with our national election?  I personally think it will.  I hope and pray so. 

 

There have been many elections which we have asserted represent a  binary existential  choice  But never has there been an election where that binary choice is as striking as the one we will face six months from now.  My hope rests on the American people as the last bastion of our democracy.

 

The Need for a Unifying Vision

 

In an essay in  The Atlantic, titled “After Babel:  How Social Media Dissolved the Mortar of Society and Made American Stupid,” Jonathan Haidt argues that social media are at the root of the corrosive decline over the past decade in trust and a sense of unity.  It has decimated our country and indeed the entire world by the fragmentation of just about everything:  our Parties, debates within Parties, life on college campuses and the concern about speaking up, etc. Haidt has now turned this essay into a full-fledged book which is on the NYT best seller list. 

 

While I believe Haidt overrates the unique importance of social media, it, and the associated fragmentation of media, have certainly played an enormous role. 

 

I turn here to a particular aspect of the issue which pertains to our nation and every organization: the importance of having a unifying Vision.

 

Haidt observes that “social scientists have identified at least three major forces that collectively bind together successful democracies:  social capital (extensive social networks with high levels of trust), strong institutions and shared stories.”  He argues that social media has weakened all three.  He is right.  Other elements have weakened it, too; the decline of religion being one of them in my opinion.

 

I go on to identify two things:  

 

1.          A result of this and a cause of the issue is the lack of a unifying vision of what our nation should be.  We have had that vision expressed in words but we have not seen it lived in our politics.  By that I mean, Joe Biden expressed an inspiring unity of purpose for the nation as he advocated recovering “the soul of America.”  But he did not appoint a non-partisan cabinet nor implement an administrative agenda (excepting the infrastructure bill) truly geared to achieve that.  I’ve argued for years we need such a vision and we need to see it responsibly executed.  We don’t have it now.  We need a leader who can do it.  I’m not sure that Biden can recover to do it now with mid-term elections looming, 2024 not far behind and Republicans out for blood. Cooperation is not high on their mind. But Biden must lead the way if he can.

 

2.          I want to underscore the strength of the role an organization or company like Procter & Gamble can play.  What do I mean by this?  Procter & Gamble has a unifying vision and purpose that just about every employee signs on to.  It is service oriented.  It’s not partisan. It is committed to excellence, It recognizes the need for diversity of views and inclusion to carry it out.  It invites debate. 

 

It also benefits from “extensive social networks with high levels of trust.”  I can’t overemphasize this.  The Year-End Meetings, the physical (not just virtual) development courses,  the structure of the organization into discrete units providing dispersed responsibility and accountability, the adherence to a merit-based system--all of these are vital to the continued nurturing  of the culture and the business success of the institution.  

 

And there is also the important element of “shared stories". We must never forget to tell stories about what has worked and what hasn’t, about values being lived and, in some cases, not.  We transmit our values by actions and by telling stories about those actions.

 

I pose the question:  How can we take what we’re doing reasonably well in P&G, something we must never take for granted, and extend it to larger forms of organization?  More precisely, can we apply the success factors employed at the corporate level, as I believe P&G and some other companies have, to other organizations including the government. 

 

I have seen it being done today in some non-profits, universities, hospitals (Memorial Sloan Kettering for example) and in some smaller governmental entities. However, we are far from achieving this at the Federal level. Our polarized state is preventing it. The task to change that is prodigious. I don't know if it can be done short of contending with a threat like WWII. But I hope we won't fail to pursue this as a goal.  One thing for sure. It will. depend on a uniquely wise and inspiring leader and that will require a good dose of luck.