2024

Gary Gerstle on The Ezra Klein Show: Are we on the Cusp of a new Political Order?

In terms of domestic policy, Truman endeavored to implement social reforms, particularly in the healthcare system, under the slogan Fair Deal (in reference to the New Deal of his predecessor Franklin D. Roosevelt), but his initiatives were only partially accepted by Congress.
So there's been this conventional story of the New Deal era, which is that the fear of Communism, the fear of being painted as soft on Communism or soft on socialism, leads progressives to trim their sails, moderates the sort of left flank of New Dealism. You argue that that story misses what's happening on the right. You say, “If we look carefully at the politics of the late 1940s and early 1950s, we could see that the imperative of fighting the Communists caused Republicans to make even larger concessions than the Democrats did.”
Beginning in 1950, Republican U.S. Senator Joseph McCarthy became the most visible public face of a period in the United States in which Cold War tensions fueled fears of widespread communist subversion.
In the 1950s, it was not clear whether the Soviet Union or the United States could provide a better life for its average citizen.

And America had to prove that it had the better system, and that meant you could not return to unrestrained American capitalism — you had to regulate it in the public interest. Eisenhower understood that in order to win the ideological struggle of the Cold War — which was not simply an American-Soviet struggle, but it was a global struggle to convince all the peoples of what was then called the Third World to come with the capitalist way, to come with the American way. In order for that to happen, America had to demonstrate that it could give its ordinary citizens a good life. And that meant taking money from the rich and redistributing it, narrowing the inequality between rich and poor. It meant supporting powerful labor movement and not trying to roll back the Wagner Act, which the labor movement regarded as its Magna Carta, a very strong piece of federal legislation that gave it unambiguous rights to organize and obligated employers to bargain collectively with them. He felt that this had to be the way that America went. Maintenance of Social Security — really all the key New Deal reforms — he ended up maintaining because he thought this would be a critically important instrument for convincing not just ordinary Americans but people around the world that this would prove the superiority of the American way. That is why he acquiesced to the New Deal order.

And the thing that allows the Republican Party to get on board with a lot of that is this idea that if you don't do that, well, the Soviets are going to do it, and they're going to have the highways, or they're going to have the technological or scientific superiority, they're going to make it to the moon, etc., and then America is going to be left behind.
The national security argument is crucial to getting large segments of the Republican Party on board. For them, the greatest threat, both internationally and domestically, was the Communist threat. And thus, they were willing to extend themselves beyond a point where they otherwise would have gone.
All want to remain real players in American politics, it compels them to acquiesce and to come aboard the other political parties' platform.
Every political order also has not only an ideology but a vision of a good life in America. What constitutes a good life? Because that becomes really important in terms of selling the virtues of that political order to a mass base, which is something that has to be won and sustained in American politics in order for a political order to exist and thrive.

The Soviet Union was still doing quite well in the 1950s. There was an extraordinary debate that occurred in Moscow in 1959. Vice President Nixon debated Nikita Khrushchev about who could deliver better kitchens to their consumers. And the Americans imported all the most recent household appliances from the United States, reassembled them on a stage in Moscow, and Nixon and Khrushchev went at it — including a dishwasher for the first time, when it wasn't a common feature of American homes. What was this about? This was the United States admitting that the Soviet Union was a serious rival not simply militarily but economically, as well. And America had to prove that it had the better system, and that meant you could not return to unrestrained American capitalism — you had to regulate it in the public interest.

It's the obligation of the government to deliver goods to its citizens. But the scale of this would not have reached the point that it did without getting a lot of Republicans on board. And the critical argument for them was national security, and a critical event was Sputnik, when Soviet Union shocks the United States by putting into orbit a satellite before the United States had done it.
And that is a shocking moment: Oh, my God, America is falling behind.
We must bend every muscle to beating the Soviet Union in every way, and that requires tremendous investments because of satellite technology; that also becomes the foundation of what is going to become the I.T. industry and the I.T. revolution
— also a product of the Cold War. I just want to draw out some pieces of the theory here that maybe flesh out the political order. I think people have in their minds: You have the Great Depression, you have a big government response, but then you have the acquiescence of Eisenhower and the Republican Party to both the premises of the New Deal, which is a much more expansive government, regulating the market, trying to create a better life for workers and building a stronger national security state, and you have the continued pressure of the Soviet Union, which kind of keeps holding this in place. How does that order end? There are three factors that pull this order apart. The first is race, the second is Vietnam, and the third is the major economic recession of the 1970s.

It's the obligation of the government to deliver goods to its citizens. But the scale of this would not have reached the point that it did without getting a lot of Republicans on board. And the critical argument for them was national security, and a critical event was Sputnik, when Soviet Union shocks the United States by putting into orbit a satellite before the United States had done it. And that is a shocking moment: Oh, my God, America is falling behind. We must bend every muscle to beating the Soviet Union in every way, and that requires tremendous investments because of satellite technology and R. and D., and also that becomes the foundation of what is going to become the I.T. industry and the I.T. revolution — also a product of the Cold War.
>I just want to draw out some pieces of the theory here of the political order. You have the Great Depression, you have a big government response, but then you have the acquiescence of Eisenhower and the Republican Party to both the premises of the New Deal, which is a much more expansive government, regulating the market, trying to create a better life for workers and building a stronger national security state, and you have the continued pressure of the Soviet Union, which kind of keeps holding this in place. How does that order end? There are three factors that pull this order apart. The first is race, the second is Vietnam, and the third is the major economic recession of the 1970s.

How does that order end? There are three factors that pull this order apart.
The first is race, the second is Vietnam, and the third is the major economic recession of the 1970s. There's a movement inside of liberalism. There's the New Deal Democratic order, but you develop this New Left, and there is a movement of liberals against big government — young liberals for reasons of self-expression, for reasons of civil rights , for reasons of this feeling that they're being fed into a bureaucracy and giant soulless organizations and eventually into the meat grinder of Vietnam, older liberals who are angry about the sort of reckless growth and the poisoning of streams and the building of highways through their communities and the sort of ticky-tacky rise of these suburbs. And this predates Reagan. Yes, the New Left erupts on university campuses in the 1960s, and the two primary issues in the beginning are race and Vietnam. But they also quite quickly develop a critique of the established order. What was called at the time the system. It's hard to believe that the system could do so much work, such an anodyne term. But it was a powerful term that was thrown around in the 1960s and '70s. And what was the system? The system was large American corporations who were no longer under control. And one reason they were no longer under control is they were being aided and abetted by a large federal state that was supposed to manage them in the public interest. And thus the system was meant to identify not just the corporations who were doing ill in America, but it was meant to identify a federal state that was birthed in the optimism of the New Deal and had been corrupted.

And what was the system? The system was large American corporations who were no longer under control. And one reason they were no longer under control is they were being aided and abetted by a large federal state that was supposed to manage them in the public interest. And thus the system was meant to identify not just the corporations who were doing ill in America, but it was meant to identify a federal state that was birthed in the optimism of the New Deal and had been corrupted. So you have this fissure within the Democratic Party itself. The other element of this is this profound search for personal freedom and autonomy that was intensely felt by members of the New Left. The personal computer movement was born on — as part of the New Left. Steve Jobs, Stewart Brand imagined a personal computer that would be free of the IBM mainframe, free of big corporations, big corporate power — that it would be the authentic voice of only every individual who would be using that machine. It was a profound expression of a desire for personal autonomy, individuality, expressiveness — unconstrained by larger structures. This cry, or cri de coeur, came from the left. It was a very powerful part of the New Left, but one can see how it might suit the purposes of a rising neoliberal order because the rising neoliberal order was also intent on deregulating, freeing individuals from the grip of large institutions and allowing them to go their own way.

“Neoliberalism” is a slippery term. It's often just an epithet. How do you define what its tenets are? What do you need to believe to be a neoliberal of the period you're talking about? Neoliberals believe that the best economic program is one that frees capitalism from its shackles, that allows people to truck, barter and exchange goods, that gets the government out of economic life. And the only role for government is to ensure that markets can function freely and robustly. So it runs opposite to the New Deal. If the core principle of the New Deal was: Capitalism left to its own devices would destroy itself. The core principle of neoliberalism: Remove the shackles from capitalism. That will bring us the most productive and freest world we can imagine.

The collapse of the Soviet Union between 1989 and 1991 is one of the most stunning events, I think, of the 20th century and arguably much longer. What were its consequences? First, it opened up the whole globe to capitalist penetration, to a degree that had not been available to capitalism since prior to World War I. And this generates a tremendous amount of belief and excitement and expansion and a good deal of arrogance and hubris within the capitalist citadel, which is the United States. These were the core ideas of neoliberals, which have been incubating for decades. And now suddenly these ideas seem to be vindicated. This is the moment of free market triumph.