#126 - Gary Gerstle - The Iran War Is Ending The Global Economy As We Know It & What Comes Next

Gary Gerstle is Paul Mellon Professor of American History Emeritus at the University of Cambridge and the author of The Rise and Fall of the Neoliberal Order — one of the most clarifying accounts written of how a set of economic assumptions came to dominate Western politics, and how they are now collapsing. He is currently Kluge Chair of American Law and Governance at the Library of Congress, working on his next book, Politics in Our Time: Authoritarian Peril and Democratic Hope in the Twenty-First Century, forthcoming from Penguin Press.

The neoliberal order is over — the set of ideas that captured both Reagan and Clinton, both Thatcher and Blair. Gary Gerstle on what that means for Britain, America, and the communities the order hollowed out — and whether what comes next is a swing of the pendulum or a rupture of a different kind. He ends the conversation by calling liberty a fragile flower. Draw your own conclusions.

Find Gary Gerstle's work:

• The Rise and Fall of the Neoliberal Order: https://amzn.to/4u7wWIA9780197519646 
• Books: https://amzn.to/3Rp07bG

About Thinking Class: Thinking Class is a long-form interview podcast exploring the cultural, historical, and moral forces shaping England, Britain, and the wider Western world. Hosted by John Gillam, the show features serious conversations with thinkers, historians, and commentators grappling honestly with the condition of our civilisation.

▶ YouTube: https://www.youtube.com/@ThinkingClass
✍️ Substack: https://thinkingclass.substack.com
🎧 Spotify: https://open.spotify.com/show/37vvzrlxpo8eORDoTDRtbH
🐦 X: https://x.com/thinkingclasses

New episodes every week.

Transcript

SPEAKER_02 0:00

Hello, classmates, and welcome to Thinking Class. I'm John Gilliman, and in this episode I'm speaking with Gary Gerstel. Gary Gerstel is Paul Mellon Professor of American History Emeritus at the University of Cambridge, where he received his BA from Brown and his MA and PhD from Harvard. The author, editor, and co-editor of more than 10 books. Gary is currently Klug Chair of American Law and Governance at the Library of Congress, but he is working on his next book, Politics in Our Time, Authoritarian Peril and Democratic Hope in the Twenty First Century, forthcoming from Penguin Press. He was most recently Joy Foundation Fellow at the Harvard Radcliffe Institute, and he resides in Cambridge, Massachusetts. In this episode, Gary and I think out loud about what a political order actually is and why the neoliberal one is over, what Brexit was really a vote for, and why Britain has struggled to answer that question, how the Iran war and the blockade of the Strait of Ormuz marked the end of something that the global economy marked the end of something that the global economy had taken for granted for seventy years, whether what comes next is a swing of the pendulum or a rupture of a different order, and whether the fragility of republics, which the American founders understood very clearly, is a thing that should be concentrating the Americans' minds right now. If you find this conversation valuable, subscribe to Thinking Class on YouTube, Spotify, Apple Podcasts, and Substack. Enjoy the show, classmates, and now Gary Gerstel. It seems we've been living on the assumption that goods would always be cheap, global supply chains would always hold, and that we, outside of the United States, would always be protected by the American security umbrella. The neoliberal order was built on a set of ideas that seemingly in the end captured both the left and the right, whether Margaret Thatcher and Tony Blair or Ronald Reagan and Bill Clinton, all different faces of ultimately the same project, which now appears to be fracturing in front of our eyes. This isn't a left-wing critique, but an observation that conservatives should be alarmed by too, because that order also consumed the values and conditions for genuine conservatism, like the self-governing citizen, the rooted community, and even the nation's obligation to its own people. So you, as Paul Mullen, professor of American history at Cambridge, and as author of the book The Rise and Fall of the Neoliberal Order, one of the most clarifying accounts I've read of how we got to this point, perhaps can help us understand what comes next if the neoliberal order is now over. So before we get into that, let's address something directly. When people hear neoliberalism criticize, many on the right will immediately think, oh, this is a boring left-wing critique and a complaint. But the argument that you make is different, and I think it's more uncomfortable for both sides. So perhaps you can explain what we mean by political order and why the capture of both parties and both nations of ours by the same set of assumptions is the thing that really matters here.

SPEAKER_01 3:27

Well, let me uh address the question of political order first, and then we can do some definitional work on uh neoliberalism if uh if if if you'd like. So much attention in the US, and I think this is true in the UK as well, gets focused on elections. So much political attention gets focused on elections with understandable reason. Uh they are important, they involve the transition of power, they are referenda on the success or failure of existing governments, and they also perform democracy in a very powerful way. They give give people a chance to vote. And in the United States, so much attention is focused on the two, four, and six-year election cycles, and that's fine as far as it goes, but there are elements of politics and political economy that can't be understood within those short intervals that have longer lives. And the concept of political order arose when a colleague of mine many years ago now, 1980s, we were looking for a way to understand phenomena that don't fit in neatly into uh electoral cycles, and we came up with the concept of political order, and it's meant to connote a political movement that becomes so powerful, so entrenched, that it compels the opposition to play on its turf. Uh and uh usually it means winning three elections in a row, and one of those elections has to be a massive victory because it's not easy to convince the your opponents to play on your turf. And it's a major project that has to develop uh stable constituencies, uh constellations of donors who give a lot and are reliable, usually associated with one or two great leaders. You need think tanks to turn rough ideas into actionable policies. So political orders are um are uh projects that advance across a broad front and that don't happen very often. And in the book that you refer to, I talk about two political orders in the United States. The first is the New Deal Order, which uh arose in the 1930s and 1940s, crested in the 50s and 60s, and fell apart in the 70s, and what I call the neoliberal order, which arose in the 1970s and 80s, crested in the 1990s and first decade of the 21st century, and then fractured in the decade in the aftermath of the global financial crisis of 2008-2009. At the core of each of these orders, as I conceive and write about them, is a principle of political economy that structures a great deal of what that political order is going to try to do when it's in power. Under the New Deal, the core political economic principle was that capitalism, left to its own devices, was too chaotic, too volatile, too subject to booms and busts, creating, generating too many casualties of the industrial order, industrial accidents, uh unemployment, people losing their jobs, people lacking security, uh, a great engine of economic growth and development, but also leading to vast inequalities between rich and poor. So the central political economic principle of the New Deal order became that uh a strong central state was necessary to manage capitalism in the public interest. And the New Deal is really the American version of what became social democracy in Europe or what became for many years the Labor Party synthesis in the UK. It's a political movement of the Democratic Party led by Franklin Roosevelt in the 1930s and 40s. It does not become, in my telling, a political order until the opposition party is persuaded by the principles of the New Deal movement to get on board. And the key figure for me is Dwight Eisenhower, who is the first Republican president elected in the United States in 20 years? He is elected in 1952. There's been no Republican president elected to since 1928. That is an eternity in Democratic entities. And so the big question is what is Eisenhower going to do when he when he brings the Republican Party back into power? Is he going to roll back much of what the New Deal did, a welfare state, granting uh power to labor, a highly progressive taxation system, a commitment to narrowing the gap between rich and poor? You would have expected a Republican president after so much time to have rolled all that back. But Eisenhower actually does none of that. He uh affirms the power that labor has been granted. He keeps the welfare state, most notably the Social Security Act, which gave pensions to those over 65. And in some ways, the most telling act that he engages in, he takes on a reform of the tax system in the 50s. And America entered its period of mass taxation in World War II for understandable reasons. The needs of the federal government to fight the war were extreme. The question is how progressive would that tax system be? Well, in the 1940s, the uh highest rate on the in the highest marginal category reached 91 percent, uh. A profoundly un-American act. So the question for Eisenhower of would he keep that or would he discard that? And you certainly would expect Eisenhower to have discarded that high a progressive tax rate on the rich, but he does not. He keeps it and he builds it into the new tax code that he signs into law. And for me, that is a signal of Republican acquiescence to Democratic Party principles having to do with political economy. It's not as though Eisenhower in his heart loved that progressive taxation rate, but he felt to make the Republican Party relevant and uh capable of winning elections and getting the support of majorities of citizens, he had no choice but to get on board with this. And thus the New Deal movement becomes a political order that structures American life through the 50s and 60s and only cracks apart in the 70s. Uh there are internal domestic fights over Vietnam, over civil rights, and then there is the Great Recession of the 1970s, uh, which is tied to two factors. One, the recovery of Europe and Asian industrial power that competes and in some ways super does better what the U.S. corporations have been doing. And then the first instance of profound renegotiation over control of natural resources between the global north and the global south. It's the moment when OPEC is formed and when nations of the global south want to strike better deals in charging for the resources that they are selling to the global north. Suddenly the uh the techniques that the uh New Dealers had used to manage the economy are no longer working. Uh it seems that the economy is over-regulated, economic growth is too sluggish, and this opens the door to neoliberals, and their key figure is got to be Ronald Reagan, whose mantra is deregulate the economy, free people from the constraints of regulation, let capitalism be capitalism. This is the way in which we're going to achieve the highest economic growth. And he becomes a very popular president, winning two terms. His vice president then wins a third term, so you have your three elections in a row. And then it comes to Bill Clinton in 1992, the first Democrat to win since Jimmy Carter in seven not 1776, but 1976. That's a long time to be out of office. And the big question is Clinton got to roll back the deregulation, is he got to restore the New Deal? And in my telling, he becomes even more of a deregulator than Reagan himself had been. He he ensures that the high-tech industry, which is taking off at this time, is going to be free of all public regulation, even though the United States had a very vigorous tradition of regulating media in the public interest. He deregulates Wall Street, he shrinks the welfare state. He engages in all kinds of activities that are in accord with uh Reagan's dream of what America would become. And so it's at that point that neoliberalism becomes not just a movement by one political party, but a political order. And again, it's not as though Clinton and the Democrats and their best of all possible possible worlds would have chosen this future for themselves, but they feel they have no alternative but to be serious players in American politics. And this structures American politics for Republicans and Democratic Democrats alike until the global financial crash of 2008-2009. I consider Obama to be the net the last neoliberal president, even though the neoliberal order is fracturing. The political turmoil is not going to affect elections until 2016, at which point suddenly in the U.S. uh Trump on the right and Bernie Sanders on the left become the two most important players in American politics. And it's no it's not accidental that this is also the year of Brexit of force in American politics that uh sorry, in uh British politics that completely upends politics in the UK as they're being upended in the US. And this is for me the moment when the neoliberal order crashes and and the both countries begin a pursuit of a different political future. I haven't got to neoliberalism yet, but let me pause there just to see what questions you have about that.

SPEAKER_02 13:42

Well, it's more the the fracturing element. So um I'm actually wondering whether whether in some cases I can actually see that, yes, what Trump then heralded was the beginning of uh reshoring, for example, and more uh American protectionism. Perhaps he didn't manage to get too much of that done in his his first term, but it was certainly a sharp divergence from what had come before. Whereas in in Britain it feels like we actually just tried to hold on as best we could to that neoliberal order. So the Brexit vote came, but there still was an attempt to try and just keep people and capital and all the rest of it moving, hence uh we we had large uh immigration flows. Um we're also pretty fixed on outsourcing um much of what we're doing. We didn't start making any moves to bring jobs back, really. A couple of um a couple of deals with Nissan perhaps to carry on in Sunderland without getting too bogged down in the specifics. And having spent a lot of time in the corporate world, I've always noticed that the the United Kingdom Inc. has always been very, very concerned with just keeping supply chains going no matter what. There are always new um there are always new initiatives to make sure that there was supply chain due due diligence to just keep the whole thing moving. It felt like it was a it doesn't really matter what the populace has tried to move away from, we're just going to carry on. Whereas America certainly seems to, or the US seems to have have continued on that path, and obviously Trump being re-elected has gotten there. Um and I'm sure we'll get to what we might think could be the terminal event to all of it in a while. But um would you would does it does that make sense to you? Do you think that Britain did just ca carry on on the same path? I know you lived here once and uh it was only really America that started to properly move away from it, and we just hoped it would carry on?

SPEAKER_01 15:46

Well, I think there were different streams flowing into Brexit as as I understand it. And and one stream is what I call the Singapore stream, that Britain would be the Singapore of of of the West, this um this free trade Mecca that uh would sustain Britain as a center of global trade and global finance. Uh and I know that that some of the Brexiteers that was their the future that they imagined. Uh but there's another way of viewing Brexit and there are other streams flowing into Brexit. Uh Brexit depended a lot on the anti-immigration vote. And I think you could also uh see Britain's withdrawal from the EU as effectively a renunciation of not necessarily a global market, but its most important regional market. Uh and so the withdrawal from that uh and the implementation of all kinds of barriers of trade between Britain and Europe to me is a sign of the cracking up of uh of the neoliberal order. When a uh when a neoliberal order cracks, uh it allows different ideas that have been on the periphery and had been regarded as r hopelessly or ridiculously heterodox to flow into the mainstream. So you expect in a moment of fracture different ideas to come into play. And it's gonna take some time for those ideas to shake out to see which are going to dominate uh over the long term. One way of thinking about uh neoliberalism is um what I sometimes call the four freedoms. These are not the uh four freedoms of Franklin Roosevelt of the 1940s, which were social democratic freedoms, but these are uh these are f freedoms uh associated with uh globally free capitalist marketplace, free movement of capital, free movement of goods, free movement of people, and free movement of information. And I think you can see Brexit as a strike at at least two of those elements of the of the neoliberal order is a strike at the free movement of people and a strike at the free movement of goods. So even as Britain some in the Brexit camp were imagining um a Singaporean future, uh I'm not sure that ever had a broad popular base uh in Britain, and the popular base for Brexit came from blocking free trade, uh uh and you know, and a dream of recovering lost glory. And here I'm thinking not necessarily of lost imperial glory, but lost manufacturing glory, what right, what the what the northern part of Britain represented from Manchester or even Birmingham up up th up through Scotland and Northern Ireland, this industrial colossus that had just been arguably ruined by by Thatcherism and and the decline of uh of of of industry. And there there was a longing for the regaining of not so much of glory, but just of of jobs, of security, of a sense of future for oneself and one's family. So I see in that a rejection of what the global neoliberal order allegedly brought to Britain. So I I I see this in parallel terms to the United States. The manifestations are not the same. Uh also uh Britain was much more, you know, under the Tories was much more concerned with with enforcing austerity. America had quantitative easing. I mean, clearly in retrospect, quantitative easing, I think, was the way was was was the way to go in terms of the better way to go in terms of uh recovery. But I think it's characteristic of a crack up that different ideas are gonna come into play and they're gonna be tried. And it's gonna be a process of trial and error and who's gonna succeed and who's gonna fail before things settle into something that might resemble a new political order. And I think we still have not settled into a new political order in the United States, even though one can identify characteristics that are enduring and probably will be characteristic for what comes next.

SPEAKER_02 20:16

Understood. And I I would agree it seems like a new order is uh uh awaiting to be birthed here in my own country, but but certainly nothing seems to be taking shape yet. So uh that was me jumping in with a couple of uh questions, but you were you were going to continue with the neoliberalism um explanation after your your New Deal intro.

SPEAKER_01 20:42

Yes. So um uh neoliberalism uh uh fundamentally I think can be understood as a commitment to f freeing capitalism from constraints out of the belief that the greatest economic good and the greatest economic development and the greatest economic growth uh will develop if constraints are removed. And in my own thinking, neoliberalism has a great deal to do with classical liberalism, and here I'm thinking of Adam Smith's classical liberalism, writing in 1776, The Wealth of Nations, um, and riding in a world of barriers to trade. And he one of the most important lines in that book is that people have a I'm paraphrasing here, but it's pretty close. People have a propensity to truck, barter, and exchange. And the world will be a better place if we just let people get on with the business of um trucking, bartering, and exchanging and trade. And he encountered a world where there were all kinds of barriers to that. Um production was for the crown, um, not just in Britain, but in in the and other places. You had to fill the palaces with gold bars. It wasn't uh a system oriented toward toward freeing trade. It was A system oriented to controlling trade and the interests of the monarch rather than the interests of the people as a whole. And Smith was convinced that if you got rid of mercantilism, the doctrine of monarchical control, if you got rid of monarchs, if you got rid of aristocrats, if you got if you loosened up borders, if you if you gave opportunities not just to people but to nations to trade freely with each other, that the world would be a better and freer place and you'd see all kinds of economic growth occurring. And this becomes the foundational moment of classical liberalism, which has a strong life in 19th century Britain and a strong life in America. And the growth that occurs through the freeing of capitalist enterprise from constraints is in fact astounding, but it's also bringing serious problems with it. The instability of capitalism on the one hand, the cycles of boom followed by cycles of bust, and also the inequalities are becoming extremely steep. And so there's a movement among people who had once been free market liberals, and also liberalism carries with it the promise not just of economic freedom, but political freedom, and it's closely associated with the expansion of the franchise to until the point where it becomes a universal franchise in both the United States and Britain and other countries as well. So it's a profound message of freedom. But many in these liberal camps begin to think that this is not enough, that you need to reform capitalism, that you need some kind of state regulation, and when they are slow to act, you have the rise of socialism, you have the rise of the Labor Party, you have the rise of communism. And so in the 20th century, it becomes incumbent upon those people who had this liberal frame of mind to reorient liberalism into becoming something different and something able to address more directly the flaws of capitalism. And in the United States, the key figure in this respect is Franklin Roosevelt and his New Deal. And he carries off one of the great terminological heists of the 20th century in the sense that he takes liberalism, which had been a Smithian construct, and makes it into social democracy in the American vernacular. And his explanation for this is sort of follows what Isaiah Berlin, the political theorist, was arguing. Once Berlin argued it was freedom meant freedom from. You wanted to release people from constraints, from monarchies, from aristocracies, from various forms of domination. But that proved insufficient in a capitalist world, and you had to provide freedom for, not just freedom from, uh freedom to get a job and have security in that job, freedom to have some income security in your retirement, uh, provision of welfare to ease the burden of economic downturns, provision of education to allow people to invest themselves fully in the development of their own freedom and their own personal character. And so Roosevelt defines liberalism as uh giving people the tools and security they need to enjoy their freedom, and that involves building a strong, large regulatory state to constrain capitalism and manage it in the public interest. And then come along people who still thought of themselves as liberals in the Smithian sense and said, what are we gonna they don't like what the New Deal is doing. They see it as being on the path to collectivism and some kind of socialist or communist tyranny, and they want to reinject freedom into the economy and they want to release capitalism from constraints. What are they gonna call themselves? Uh Milton Friedman, the great uh ideologue of neoliberalism in the United States, says, I'm a liberal. I'm a 18th-century Adam Smith free market liberal, but I can't call myself that. So I could call myself a radical, which I believe I am, but no one's gonna believe me. So he ends up calling himself a conservative. Friedrich Hayek, the Viennese economist who becomes a key architect of neoliberal thought, goes through a similar process of thinking, what am I gonna call myself? I am a liberal, I can't call myself a liberal. So they invent the new term neoliberal, which simply means new liberal, to talk about refashioning liberalism into what it once was. In America, the people who fall into this camp call themselves conservative. And many people in America think of free market liberalism as being conservative, but I've never accepted that argument because conservatism to me means a respect for hierarchy, a respect for tradition. If you're going to engage in change, you have to engage in change slowly, organically, with proper respect for the institutions and traditions that you have inherited. Freeing capitalism from constraints is not orderly. It's not respectful of tradition. It's profoundly dangerous to tradition. It is disruptive. It's creating different worlds, it's creating something very, very different in the world. And so I thought that neoliberal as a term captures this desire to free capitalism from constraints much better than conservatism does. That's not to suggest that conservatism didn't exist in the U.S. Those who thought the civil rights revolution was progressing too quickly, not sufficient respect for traditions in the South that were 100, 150, 200 years old, they are genuinely conservative. Those who want to stop the liberation movements of women, of gays, and so on and so forth, fall into a conservative camp. But those who want to free capitalism from constraints are are not in that conservative world. And for me, neoliberal is a better descriptor to describe them. What's interesting to me about the history of neoliberalism is that it's built, and you referred to this briefly in your introductory statement. I'm heterodox in this way. I differ from many other people who study neoliberalism, but I see it as a project not just of the right, but of the left, of a certain left. And this is the new left of the United States in the 1960s and 70s. And that new left were, they were critics of capitalism to be sure. But they were also create critics of states that had gotten too large, too powerful, and that they saw as crushing the human spirit. And in the 60s and 70s, new leftists used to refer to what they called the system, not a very precise analytic term. But the system was useful in its vagueness because it referred to a coalition of corporations and state agencies that were in concert with each other to suppress individuality and individual freedom. And so the new left s has in its sights not just dismantling corporate capitalism, but dismantling the uh states that have been captured by corporations, a central government that have become too powerful, too bureaucratic, too inimical to human freedom. And one of the areas in which you see this most profoundly and most pronounced is in those people who are going to create the personal computer who see IBM as the great enemy and the these massive centralized computers that can occupy buildings as just forcing people to become their appendages. And they were imagining one's having one's own personal computer as being an expression of one's personal view and will and and soul. This was Steve Jobs' aspiration. This was Stuart Brand's aspiration in the 60s and 70s, and it was a profound expression of the desire to advance human freedom. Now, it's not quite the way in which the computer revolution worked itself out in the early decades of the 21st century, but this aspiration was dear to the heart of earlier pioneers of the personal computer revolution. These people thought of themselves as being on the new left side of things, as freeing the individual from hierarchy, oppression, uh control. And while they were not happy, many of them where the neoliberal revolution ended up, many of them were unwittingly contributors to taking apart the strong regulatory state that permitted neoliberal policies and a neoliberal regime and ultimately a neoliberal order to thrive. As you might imagine, I've gotten plenty of plenty of pushback from old new leftists about this argument, and also from many of people, younger people who write about neoliberalism, who insist that neoliberalism is a project of elite domination meant to undermine the democratic rights of the masses. That element of neoliberalism certainly exists among certain thinkers. But I think you can't understand its popularity and the way it swept so many parts of the world without understanding that it encompassed and embodied a profound aspiration for individuality and freeing the individual from the control of large institutions, be they public or private.

SPEAKER_02 32:14

Well, that's a good segue, actually, into exploring the impact on the working class through the rise of the neoliberal order, because uh anyone on the lift-left has typically at least pronounced their own um solidarity with those who are working class. And um I'd like to get into self-government and self-governance a little bit, because it seems that neoliberalism not only economically damaged the working class over time, but it also destroyed the conditions that made self-governance possible. So, for example, uh lots of these small-scale institutions were set about through the agency of the working classes, so whether it was unions, mutual aid societies, whether it was local political parties, any institutions that might actually give people leverage but also allow them to self-actualise in their own way. I'm thinking about um, and I've referenced this so many times in in recent interviews because it was genuinely an eye-opener, uh, a book by Professor Jonathan Rose called The Intellectual Life of the British Working Classes, and it is 2,000 diary entries of people of all sorts of uh different stations in the working class. And it is genuinely remarkable the autodidact life that uh was lived communally uh and that grew organically, that no middle class has told them to do. Occasionally there's middle class patronage, but otherwise people were chipping together to make sure they could read read the classics because they knew it was a way of helping raise their dignity, and you know, future Labour prime ministers like Ramsay MacDonald um learned how to debate through these societies and read and uh become literate and all the rest of it. And and yet it seems that uh many of these communities that built up over time, I'm I'm near some of the ex-mining towns that were were destroyed in the 70s, which are they they've all got their own order. Uh they they had uh churches and working man's clubs and all of these things that made them rich communities. If you look at videos in archival footage from the 20s, 30s, even the 60s, when the the Charlton brothers from Ashington, the the famous English footballers, are walking amongst very well-dressed, well-comported people, uh, but all of the working class, it's a totally different scene today because we're 50, 60 years on from that project. So uh my my question after that long preamble is does d were these people the casualties of the order? Were these ideas and these institutions the casualties of the order or the preconditions for it? Could the order ever have been able to work without people who were already capable of self-governing? And now that they appear to have been casualties of it, has that also set about the destruction of the neoliberal order in some way because so many people are unable to provide because they've been casualties of it?

SPEAKER_01 35:21

Yes, well the the neoliberal order has as um uh on its clearest level has been devastating to the industrial manufacturing districts of of the glob of the global north. Um so the the I would say the biggest devastation to the world that you're describing is the loss of work and income and the organizations coming out of work, uh arguably most importantly uh labor unions, um which were uh profoundly local and embedded in local communities in very powerful ways, and in many instances sustained and nourished the local worlds that you're describing, even as they also broadened the horizons of that world by connecting local labor struggles or local labor units to um labor movements that were national in scope and that aimed to gain gain power in in Parliament. So the and the same is true in the in in the United States and uh and many of Brexit's supporters come from these regions, many of Trump's supporters come from uh regions hollowed out in in the U.S. The opioid epidemic in the U.S. devastated executed its worst devastations in districts of Ohio and Indiana and Illinois and other Midwestern states that suffered the brunt of the hollowing out of the manufacturing districts. The promise of neoliberalism was that even though inequality would increase in the world as a whole, it would lift all boats that all people would benefit in some form, and the people in these areas experience neoliberalism as a as a profound betrayal. Uh and it just becomes much harder to sustain a community life of any sort when these communities have been stripped stripped of their jobs. The young people leave to go elsewhere or else they spiral into a a world of without work, without hope, um increasingly a resort to drugs to to uh to to ease their pain. Uh so the destruction of work and the inability of of these countries to come up with reasonable uh policies that could ease these pain, this pain. And just providing welfare is not sufficient, right? It doesn't welfare doesn't provide meaning, it doesn't provide purpose, it does not on its own instill uh the ability to become self-activating. Uh it doesn't prevent people from self-activating, but it does not instill self-activation in terms of helping people take charge of of of their own lives. Now there are a couple other elements to the story that that factor into where where it ends up. One is that a neoliberalism to succeed has to be a global project, uh because capitalism to reach its full potential has to be deregulated everywhere, so to speak, or fashioned by China into a way that allows for market freedom to prevail, even though the country's still being run by a Leninist organization. That's an interesting story, which we can get on to uh later if you want. But because it's so global in orientation, and because corporations that are thriving in the neoliberal period themselves become so global without national attachment and can move anywhere in the world and want to move frequently move anywhere in the world to produce, to sell, they become less attached to nations and they also become less controlled by national legislatures. Part of the world you're describing worked because people believed that parliament could be an effective regulator of the private sector and could make sure that the public interest was taken care of. And this becomes much harder for national legislatures to do, not just for parliament. It's true of Congress, it's true of the National Assembly in France, it's true of Bundestag in Germany. These just become much less effective instruments because they are instruments of national regulation and the forces they're contending with are global. Arguably, what you need is a global government to settle all this, but there'll never be a global government of that sort. We had one and it didn't work very well. It's called the United Nations, and we have another one which aspires to a kind of global government which Brexit supporters also doesn't think very works very well, and that's the European Union. There are problems with locating sovereignty beyond the nation-state. There is a need for some effective sovereignty beyond the nation-state, but no good way that we have discovered for building that sovereignty. So something that your the people that you're talking about relied on, which have been at one point very effective as an instrument of regulation and ensuring the integrity of local communities is not working anymore. And then there's the cultural element of this, um, which has to do with the reconfiguration of where economic power and opportunity lies. There's plenty of economic opportunity in the global world being created, but it resides in global districts, it resides in global cities, it resides in London, it resides in New York, it resides in Paris, it relies, it resides in Frankfurt and Berlin. It does not reside to nearly the same extent in the countryside. And uh and these the the areas where economic power resides increasingly see themselves as global in their culture. They embody the world, people from all over the world are residing there. They do develop a culture which is profoundly cosmopolitan and that celebrates cosmopolitanism. And what does cosmopolitanism celebrate? It celebrates a mixing of cultures, uh, it is excited by the possibility of diversity, it believes in hybridity, it accepts pluralism profoundly, uh, not just in terms of cultures, but in terms of sexuality. And this cosmopolitanism is experienced in the countryside or the metaphorical countryside as a profound threat to values they hold dear, um, that there is a gender binary that's dictated by the Bible, that uh there is a virtue in national belonging, uh, that there are elements of British culture which are better than other people's cultures, and that ought to be cultivated and and and preserved. The people you're talking about were probably reading um a lot of British authors over the hundreds of years, and what a literary culture Britain produced, right? It's one of the country's most extraordinary uh achievements. And so the unhappiness gets transmuted, and the anger and resentment gets transmuted into the cultural realm as well, and that begins to describe the world in which we live today, in which there's a profound dichotomy and divergence between the global cities and those districts of countries, not just Britain, but just about everywhere, that are are don't feel part of this global world and don't want to be part of it, want to want a different different culture for themselves, but see their ability to protect that culture ebbing away.

SPEAKER_02 43:35

Because we have been talking about d the collapse of the neoliberal order, uh let's try to determine whether um and I know we've talked about there are some new orders starting to birth and they've not quite taken shape with the fracturing, but let's bring it into the present. So we know right now, time of recording, and it was certainly much earlier on in the the conflict so to speak when I first emailed you but the Iran war uh we have seen the Strait of Hormuz uh it is it's it's effectively blockaded by all sides at this point uh during the the US-Israeli uh bombing of Iran and the Iranians blockading too um and we've had oil above a hundred dollars we've got the International Energy Agency saying this is probably the greatest security challenge in history or energy security challenge in history. And so it doesn't appear that it's just a normal geopolitical crisis um but maybe it's the the integrated global economy uh showing that it is disintegrated, that there's almost no putting it back together. Do you do you think this is a b the burial of an order or or was the order already dead and this is just the the final the final nail so to speak?

SPEAKER_01 44:58

Well I think the um the world has been moving away from the neoliberal order for some time really since twenty I would I for me the critical date is twenty sixteen. There are different elements to this let's start with trade. If if you were a protectionist in America before 2016 you had no chance of succeeding in politics. Free trade was the coin of the realm and this was true of as much of Democrats and as Republicans and this dictated the approach to China before twenty sixteen and the idea was you bring uh China into the global marketplace and you enhance market relations there and pretty soon the people who have market freedom are going to want political freedom and so they're gonna dismantle their Lenin estate and they're gonna become a functioning democracy. They're gonna become like us. Well that turned out to be a profound miscalculation. I mean markets have been flourishing in China but not for freed not political freedom or political democracy. And this combined with that was a realization that so many people in so many countries were not benefiting from the global neoliberal world. These were the northern areas of England, these were the industrial areas of the U.S. uh places to which for which free trade had become a disaster and if you listen to Trump and Bernie Sanders on the left, the socialist on the left and Trump on the right if you listen to if you read their speeches from 2016 in places like Pittsburgh which is used to be the steelmaking capital of America and that that that history is and that production is gone, if you if you just read their speeches, sometimes you don't know whether you're reading Bernie Sanders or Donald Trump because they say free trade has been a lie. What we need is protectionism. What we need is fair trade. What we need to do is to take care of our own people first and this and and and and um Trump put into place tariffs against China. Interestingly when Biden came into office in 2021 he did not remove those tariffs he did not add a lot of additional ones but he was accustoming the United States to a world in which tariffs would play some role and now we've seen in in Trump's case of a vast acceleration of the imposition of tariffs and if a Democrat is to win in 2028 I think you can expect some of them to be removed but not all of them and this we see continuity in other words between 2016 and 2026 and this and we're moving against a world of free trade. We are also the the um another push in this regard is the war in Ukraine when suddenly there was Ukraine was a great you know uh Europe was not getting its natural gas from Russia. A lot of countries in the global south were not getting their wheat from the Ukraine. So countries and national governments began to ask what do we have to do to ensure that goods that are absolutely essential to the operation of our economy continue to arrive to make sure we have food, to make sure we have oil. And so we see states intervening in economies in ways they had not done for a very long time to ensure the flip flow of critical civilian and strategic materials that they need and this applies to computer chips as well an effort to by governments to reshore manufacturing to guide trade to say what can be exported and what can cannot be exported. These are all violations of the neoliberal order. And so this has been going on since 2016 and I I think we can see the Iran war as being a continuation of trends that began at that time. And what we see so strikingly in the Iran war is now a move against the freedom of the seas, which had been such an essential part of the neoliberal order that people didn't even conceive of it as a freedom. They just thought of it as a natural attribute of the world in which we live of course there would be freedom of the seas. Well in the world in which Adam Smith lived there was no freedom of the seas we should encourage everyone to go watch master and commander of um of um of a of a British ship pursuing a French ship on the other side of the world there was a sense that you needed powerful navies to to to guarantee your trade and you were not going to let the French trade as they wished you were going to defeat them. So we see most strikingly in in the Strait of Hormuz uh a choking off of freedom of the seas and I don't expect the complete freedom of the Strait of Hormuz ever to come back or not in it's not in my lifetime and maybe uh maybe not in yours. And this is another indication that we're moving away from the global neoliberal order. The question then becomes what are we moving to? We are clearly moving to a world of three or four hegemons or maybe five hegemons in the world each protective of their territory and each allowed a certain freedom of action in territory that is either internal or borders on their borders and the U.S. will clearly be one Russia will be a second China will be a third maybe the EU will be a fourth I hope so actually and then there are other you know a few other countries will contend will contend for a a fifth position on that. Maybe Brazil maybe India maybe a collection of petrostates in the Middle East if they can ever they would have to have a unified military command which they may never be able to do I mean excluding Iran from this. One of the we are clearly moving to that world and one of the characteristics of that world or let me let me back up for a moment the movement from one global order to another global order is a is a perilous time because the various countries are no longer sure of what governs international relations. They're no longer sure of their power in the international arena they sense opportunities into the international arena that had not been there before but they don't know if they can successfully execute those opportunities successfully. So if we look at what Putin did in Ukraine I would say that was an overreach and he's mired in a war that he did not expect to go on for nearly this long. I would also say that the United States and Israel have overreached in Iran but rather seeing this simply as the result of stupid moves on the part of leaders who should have known better, I would see these as characteristic elements of a world in which the boundaries of one's own power are no longer clear and the ability to exert one's power in a world that is rapidly changing are also not clear. And that creates the opportunity for missteps and miscalculations in 30 or 40 years we will be in a different world order and it will be a multipolar world order and the world can exist in a multipolar world order. It did in the 19th century but we have the world has not lived in a multipolar world order in like 150 years and we don't really know how to do it and we're not clear where the boundaries of one hegemon end and the and the and the power of another hegemon begins. And so until these matters are settled we can expect an increase in conflict of mistakes and also an increase in violence and war. And that's the position I think we find ourselves in now. Just as an addendum to that you notice I didn't mention Britain as one of the hegemons in the world this is a acute problem for Britain outside the outside the EU and it cannot be it doesn't have the industrial power or the naval military power to become a hegemon on it in its own right and so one of the pressing questions for Britain in this new world is where does it fit?

SPEAKER_02 54:03

Huge question uh d do we pivot towards the Anglosphere former dominions all the rest of it or towards the Commonwealth or towards the EU and um I don't think anyone's really tried to fathom out the answer at the political level yet. It's uh try and throw our lot in with a everyone that we can but uh not too far in one direction not too far in the other so yes we uh we seem to be in a pickle to put it mildly um on that note I appreciate the question I'm about to ask isn't necessarily saying that I expect this pendulum to swing back to this buccaneering global free trade within uh America Britain for example because the macro environment um would need to uh allow that but the question that I want to put to you actually is more anthropological so um uh Alan McFarland's work one of your former colleagues at the University of Cambridge on the origins of English individualism and David Hackett Fisher's Albion Seed which is the argument that the different English folk ways that took root in the American colonies produced genuinely different moral codes and modes of government and there was a also a tension in that between the love of liberty and the demand for government and so it's not an accident of American politics but something that's built into it because it's from an English inheritance from which the the nation was made and I suppose the question I've got is this oscillation between the New Deal and the neoliberal order I wonder if this is a constant we could find throughout history with in different expect expressions amongst the English speaking peoples rather than it being a peculiarity of the 20th century. And so I suppose my question is is um a terminal rupture um maybe but perhaps even a a swing of the same pendulum and actually we end up with a counterreaction um I suppose more towards protectionism as you're talking about but you can also imagine a future is once that order starts to fracture because we have these cultural seeds planted that it'll be no we're back to the love of liberty and then this new expression of this age-old feeling um comes about again. Does that seem plausible to you?

SPEAKER_01 56:23

No I mean I think it's a I think it's an important it's an important question to ask. I think the the the most interesting version of your question is is is this is this a normal swing of the pendulum or is are we facing a a more profound rupture? I don't think we know the answer to that question yet, but I what I what I fear is that we are at a moment of profound rupture. That doesn't mean that free trade won't come back in some way. I I see the profound rupture more in terms of the decline of democracy and if we're gonna invoke history here let's invoke and since the U.S. is approaching its 250th anniversary of the Declaration of Independence let's revisit uh for uh uh a moment what the founders of the American Republic good Brits we might add in in many ways great Brits uh what their view of um republics was they they didn't think democracy they didn't think about because democracy was the rule of the mob they wanted r republics were had more limited polities and were more protective of liberty but as they cased the world from the ancient times through the Italian republics of the early modern period um they were struck by how fragile republics were and that none of them lasted very long because uh republics would always degenerate into one of three forms of government, none of which they liked monarch monarchy, uh aristocracy or democracy, which was which was the rule of the mob. And um so they part of the design of the American system of government was to try and set up a system that would preserve this republic for a much longer period of time. And we could say from that point of view they were outstandingly successful. The U.S. is operating under the same constitution uh that uh uh accompanied its founding in the in the late 18th century it's lasted almost 250 years. Uh I think the founders would regard that as a success, but and they would not be surprised that democracy is now under siege because that is the way of the world. So if we take a longer view, a much older view than just the history of Britain, but the history of republics since the ancients, they would say republics come and go and and part of what we have to think about is whether democracies come and go and whether we are coming to um a period when democracy is clearly on the defensive and may in the twenty first century come to be seen as life on life support with the predominant form of governments being um authoritarian governments. And here to put what's going on in the US in a global context if we see like minded aspirations of Trump uh Orban um I was gonna say Pence but not Pence, Putin uh Erdogan, Netanyahu, Modi in India, uh Xi in China, Bolsonaro in Brazil, we see this is an international movement of people who think strong men are the way to go and most of these, with the exception of China, most of these strongmen are being put into power by elections. They're not simply seizing power and then preventing elections from happening, although Putin's pretty close to that. And so my concern is that we are at a we may be at a rupture point in which for a variety of reasons autocrats have the upper hand over the Democrats because democracies are be are seen as being too slow and sluggish and and um compromised in terms of addressing the problems that people feel need to be addressed. And so if we take that point of view we may be at a moment of rupture rather than simply a swing of the pendulum. But let me hasten to add that I am a historian and not a futurist and so my predictions about the future you can regard as as as being those of someone who studies the past and has no special crystal ball for the future. So we don't know. I do think that the urge to democracy and the urge to protect liberty and the urge to establish republics that protect liberty is irrepressible. So that even if we are entering a century of authoritarianism or even if we are in a century of authoritarianism, I do believe there will be democratic resurgence and efforts on the part of many, many people to be self-governing, to be sovereign in their own lands and to reestablish what they feel has been taken away from them. So even if authoritarianism is the flavor of the century, it doesn't mean that it's the case for all time. But I do think it's important to recognize 18th century designers of America's concern that republics were difficult to sustain, that liberty was a fragile flower and we may be we are living through a period when liberty is in fact a fragile flower.

SPEAKER_02 1:02:07

I I agree I I also have a fervent hope that as people start to feel the um desire for liberty and self-governance once more, that it it it comes through in a way that properly counters the atomized consumption oriented world that we've found ourselves in. You know, we we've been largely stripped of local loyalties and communal obligations and we've become all too hunched over our own algorithmic reflections. And so you know even in my own living memory I know there was an ordinary life with shape and dignity and uh you know there was a there was a way of going about things which uh seems to have unraveled quite quickly I think even in in my life and uh particularly given both of our civilizations, arguably the same one has been built on uh the written words uh in many different ways both classical and Christian but besides that highly literate uh first amongst the elites and then everyone else is uh it is a big concern that both um in fact we've we've just had a telegraph survey produced that suggests that even the the most educated people in the country read uh actually less than some of the the the mid-educated uh so those in the the higher classes so there's certainly there's certainly work to be done to build the cultural and moral resources to build the next thing back better whatever it is um because at the moment uh they they feel like they're they're running on fumes um I appreciate I've kept you uh for quite a while Gary but I do have one more question which is the standard uh thinking class close uh so what have you changed your mind on during the course of your life perhaps a political conviction it might be about how history works it could be something specific to your scholarship or a moral absolute and and what was it that made you think differently well in doing the rise and fall of the neoliberal order um it was interesting for me to implicate my origins lie on the outskirts of the new left and so for me to implicate the new left into a in in the construction of a political order that I am critical of required some serious rethinking of first postulates on my part.

SPEAKER_01 1:04:29

And also in the course of doing that book I I ch I I had to change my views about particular politicians. I had to take Ronald Reagan much more seriously when I lived through his uh presidential terms in the eighties I thought he was foolish and um and a lightweight and not serious and now I see him as the most important president of the twentieth century other than Franklin Roosevelt himself. And also I had to um diminish the significance of Obama's presidency in my in my thinking. In an earlier work I treated him as as what we thought he was at the time a transformational president. And it was hard for me to write the chapter in the neoliberal order book on Obama because I now see him not as a transformational president but as the uh the last president of the neoliberal order and the transformational presidents are Trump and Biden not the not the charismatic Obama. And so I elevated Reagan and diminished Obama's stature and neither of those were particularly easy for me to do but n necessary steps. And that's you know that's part of the learning process and if one encounters the past on its own terms, one has to recognize that one comes to the past with preconceptions that sometimes need to be revised. And I think think over the course of my my life and career um uh as a historian uh I've been become much more attuned to the role of unintended consequences and irony and and and paradox in writing history. Uh people who read my work know where can sort of fix where I am politically. But um uh all my work now is laced with paradox and irony and unintended consequence. Um when I uh it took some while for me to adjust to teaching American history uh to to British students who had no organic connection to American history um because they're not American. And uh so I began to ruminate more how do I teach America to a group of foreigners and how do I how do I reach them? And uh and the formula I settled on uh was you know when I would welcome them into my classes I would say America is a strange place and one has to understand and appreciate its its its strangeness and by strangeness I meant it's a place of contradiction, paradox, irony. And I think a young Gary Gerstel would not have did not teach American history in in in those terms. And so it's um even as my ambition has grown in terms of what I try to explain in my history my humility in terms of of of approaching past historical actors has increased and uh under s and and uh understanding that no one is fully in control of the destiny that they want to forge for themselves. And um I think that's made me a a better and more interesting historian and thinker.

SPEAKER_02 1:08:05

Well there's an incredibly important lesson in there for for all of us. I mean we all go through periods of our lives where we're pretty certain we have the contours of things figured out and uh and you can live in that uh epistemic region for well epistemological region for a uh a while thinking yeah I think I think I've sussed it and then all of a sudden new information new events it's shaken and it's like sitting in the opticians and they're getting your next pair of glasses putting a different lens in oh now it looks totally different. So it's uh it it it's definitely possible and actually I think it's it's better to be suspicious of those who have always had the same contours through which they they see the shape of the world than those who have changed over time, I think. Not over time we should go and be suspicious of all of our nearest and dearest if they've been a committed ex all the time but I think I think there's something in that and um it certainly happened to me several times already um so who knows where I'll I'll end up. Gary, you you've talked about your work. I know you are now you you Cambridge forces their professors into retirement at an age younger than they should and you've clearly got so much more to offer and we've talked about some of your work already what else can we expect from you and where can we find your work?

SPEAKER_01 1:09:30

Well for those listeners of yours who are not familiar with my last book um it's called The Rise and Fall of the Neoliberal Order America and the World in the Free Market Era and it's available from Oxford University Press. Independent booksellers have not been good about stocking the book but there's a vigorous trade on Amazon so if you're interested in me and what I have to say go find that book. And a lot of people from different points of the political spectrum have found it quite interesting. I'm currently writing a successor volume to that called Politics in Our Time Authoritarian Peril and Democratic hope in the 21st century which tries to analyze the history of our time in a meaningful way and touches on some of the subjects that you and I discussed over the last hour. I'm about halfway through that book uh and hope to finish it by January 2027 and if things go well it will appear in late 2027 and uh I hope it will help I hope that it will help illuminate uh the extraordinarily complex and uncertain uh moment in which we are living we are clearly heading in new directions and this book tries to ascertain what those new directions are while uh while giving full play to the volatility and uncertainty that we all experience living in this moment on a daily basis.

SPEAKER_02 1:11:07

Well I will leave a link in the comments to the book we've been speaking about today and I hope we can speak again when your new book is ready to hit the shelves. Gary it's been an absolute pleasure to speak to you today. Thanks for being so generous with your time and keep fighting the good fight. I've enjoyed it thank you very much for having me on. Thanks Gary