Imperialism revisited

The war in Ukraine has surfaced many of the ideological weaknesses of the left, including the Marxist-friendly, pro-socialist left. With the decline of many Communist Parties and the fascination of so-called “Western Marxism” and the few remaining academic Marx scholars with rethinking, reimagining, or otherwise reinventing Marxism, it is no wonder that today’s Marxist “theory” often seems to lack a mooring in either precedent theory or actual practice. This weakness is apparent in the writing and thinking on imperialism of many friends and comrades, including in their views on the Ukrainian conflict.

In March, I argued that debates over whether Russia-- a belligerent in the war in Ukraine-- was an imperialist country were neither productive of any useful conclusions nor sanctioned by an understanding of V.I. Lenin’s account of imperialism as expressed in his influential pamphlet, Imperialism: The Highest Stage of Capitalism.

Rather than describing a club of wealthy states that met a strictest of membership criteria, Lenin sought to explain a stage of capitalism that emerged after the extensive, expansive, competitive growth of capitalism reached its zenith and begin to be replaced with intensive, concentrated growth typified by the monopolization or cartelization of industries.

The new stage, beginning in the 1870s, sprang from the logic of capitalism, most importantly the rise of monopoly, the domination of the economy by extremely large enterprises: “…the formation of international capitalist monopolies which share the world among themselves.”

Lenin enumerates other features of the new stage-- imperialism-- including the complete division of the world “among the greatest capitalist powers…” For Lenin, writing in 1916, and others like John Hobson, Rosa Luxemburg, and Rudolf Hilferding, the world was divided into the greatest capitalist powers [the colonizers], the semi-colonies, and the colonies.

No one in Lenin’s time seriously questioned that the late-nineteenth century saw a rapidly completing division of the world, especially Africa, with tensions growing enormously between the “great powers” over their territorial acquisitions. This was commonly dubbed the “new imperialism” to separate it from the earlier empires constructed in the inappropriately named “age of discovery,” a time when Britain, France, Spain, Portugal, and the Netherlands conquered the new world.

In Hobson’s famous 1902 study, Imperialism, A Study, he documents 38 distinct regions in Asia, Africa, and even Europe that were “acquired” by a European Power between 1871 and 1901.

He also charts 13 Great Powers, 3 of which are non-European, and one-- Russia-- that is Euro-Asian, all of which held over half a billion people in colonial subjugation.

By 1916, Lenin additionally noted the rise of Japan into a great power, a country that defeated Russia in the interim and acquired Korea and other lands. 

Where Hobson counted China and Turkey as great powers with colonies, Lenin viewed them (and Persia) as semi-colonies because they were nominally “independent” but “subordinate” to the dictates of finance capital. It is well worth noting that this status-- specified by Lenin in 1916-- became the dominant form of imperialism in the post-colonial era. What we might call “neo-colonies,'' following Nkrumah, were called “semi-colonies” by Lenin. Imperialism today is determined by the dominance of economic and financial relations and more rarely by out-and-out subjugation and physical occupation.

It is even more noteworthy that the semi-colonial countries in 1916-- Turkey, China, and Persia-- themselves held colonies. That is, they participated in the imperialist system as both colonies (by means of their economic domination by greater powers) and as small-time colonizers. Lenin does not paint a simple, naive picture of solely state-victims and state-victimizers. Instead, the victimizer is capitalism in its final, imperialist stage. It is the system that generates the international monopolies that drive their home countries to expand and capture markets, secure the safety of capital export, and guarantee the availability of raw materials. Capitalism is the driving force behind the various states’ division of the world, according to Lenin.

Lenin’s contemporary critics debated on two fronts. First, they took issue with the theorem that imperialism was fundamentally based upon economic factors. Rather than economic self-interest, they suggested that imperialism sprang from national aggrandizement, innate human instincts, personalities, global insecurities, missionary zeal, etc.

Second, they disagreed that imperialism was linked to capitalism. And if it was linked, it was not intrinsically linked, as Lenin argued, and not a logical outcome of a specific stage of capitalism.

Joseph Schumpeter, later a prominent professor of economics at Harvard University, wrote an essay in 1919 that argued, contra Lenin, that capitalism, in fact, was actually antagonistic to imperialism-- capitalism as anti-imperialism! Paradoxically, this obscure paper was edited by socialist Paul Sweezy and republished in English in 1951 (Imperialism and Social Classes) in the high Cold War and the beginnings of rapid decolonization, no doubt as an answer to Leninism.

Bourgeois academic apologists for capitalism clearly saw, and see today, that the essence of Lenin’s theory of imperialism is that capitalism, in its monopoly stage, breeds imperialism. They grasp that the force of Lenin’s argument is directed at the economic system of capitalism and not at providing a criterion for states to gain membership in the imperialist club.

It is commonplace for liberals to attack the link between economic self-interest, capitalism, and imperialism by pointing out that individual empire-hungry nation-states participated in the imperialist system in spite of their economic shortcomings. For example, the once-prominent professor and economic advisor, Eugene Staley, writing in 1935, noted that Tsarist Russia, once a great predatory power by everyone’s estimate, “had no ‘surplus capital’ in any reasonable sense of that term; Russia had very little capital at all and borrowed heavily from abroad.” (War and the Private Investor. A Study in the Relation of International Politics and International Private Investment).

Were he alive, Lenin would not dispute this claim about Russia's economic backwardness, he would no doubt point out that it was irrelevant to his thesis. The point is that imperialism is the economic imperative forced upon all capitalist countries in the era of monopoly capitalism, whether it springs from weakness or strength. Whether a capitalist country is expanding or defending its economic interests, it must participate in the imperialist system. It matters little whether we wish to call one capitalist country imperialist, another imperialist, or all imperialists, it is the capitalist system that generates systemic imperialism. And it is that system that generates war in the age of monopoly capitalism. It is the system that is the target of Lenin’s pamphlet, Imperialism.

Yet, some comrades and friends try to enlist Lenin’s writings in support of Russian Exceptionalism. For the most part, they do not deny that Russia is a capitalist country. Nor do they deny that Russian capital has international objectives and global interests. Nor can they deny that in the short time since the demise of the Soviet Union, Russian capital has become remarkably concentrated.

Still, they believe that Russia’s relatively new and junior status in the capitalist pantheon excepts Russia from the imperialist architecture. They contend that Russia is not enough of a capitalist power to participate in imperialism. Both Stan Smith and Stewart McGill (Communist Review 104, Is Russia an Imperialist Power?) recently marshaled an impressive amount of evidence to show that Russia falls far short of other advanced capitalist countries in exhibiting the features that Lenin maintains are characteristic of the imperialist system. But that in no way shows that Russia stands outside of the imperialist system looking in.

Smith and McGill believe that relative economic backwardness disqualifies a state, even a capitalist state, from imperialism. But as the liberal, Eugene Staley, showed, Tsarist Russia-- though a paragon of great power imperialism by everyone’s estimation-- nonetheless, fails to measure up to those same features that Smith and McGill mistakenly believe define state-driven imperialism. A great power in the imperialist system need not be an economic great power to pursue imperialist ends. Moreover, ascribing this view to Lenin does a disservice to his views as expressed in Imperialism. Calling out “imperialist” countries by name was not Lenin’s project.

The tendency to see Russia as a non-participant in the imperialist game is somewhat understandable, but mistaken. Russia has, in recent years, commendably resisted US imperialism, sided with others resisting US imperialism, and offered aid to victims of US imperialism. But one would expect a rival great power to resist another great power and seek allies.

Neither Lenin’s analysis nor the events-of-the-day support a case for Russian exceptionalism. Andrew Murray, in a recent letter to the UK Morning Star (August 20), underscores the point succinctly:

[Lenin] wrote that “in its essence imperialism is monopoly capitalism.” It was not necessary for a state to be “advanced” to be under monopoly control. That was the case in the tsarist empire of Lenin’s time – definitely backward and replete with feudal hangovers, but also definitely imperialist.

 Capitalism in Russia had developed late and fast on a monopoly basis. To assert that “Russia is not and never was an imperialist state” to Lenin flies in the face of his writings.

 Is today’s Russia monopoly capitalist? Comrades seeking to deny that Russia is imperialist never offer a political economy of the country for fear of what they might find.

In fact, Russian capitalism is monopolist to a very high degree, with a huge percentage of key industries and banking in the hands of a very few oligarchic groups. Again, this despite the country’s relative backwardness. A later-arriving capitalist power, as it was in the 19th century, Russian monopoly is driven by the demands of competition, nationally and globally.

So Russia is a monopoly capitalist regime with a leader who seeks to emulate Peter the Great and who denies the principle of self-determination. If it walks like a duck and quacks like a duck, it might actually be a duck.

Whatever kind of a “duck” Russia may be, it has not escaped the dangerous capitalist game of great-power rivalry. That is the point that should not be lost.

Greg Godels
zzsblogml@gmail.com

No, to a New Cold War

Few people alive today would remember, first-hand, the ugly origins of the first Cold War. But surely events must have proceeded much as they are unfolding today.

Within the highest echelons of the US government, factions feared that they were losing control over global developments after World War II. The burgeoning credibility of the Soviet Union and the various Communist parties was earned by serving as the bulwark against fascism. Accordingly, they were seen as posing a challenge to the US and other capitalist powers. To many in the Washington centers of power, Communism conjured a far greater existential threat to the capitalist world order in the post-war era.

Those fears spread like a wildfire to all other elite factions. Fear of a threat --or fear of appearing to be “soft” towards that perceived-- threat captured commitment from the entire US ruling class. Those who embraced or tolerated Soviet anti-fascism were summarily cowed into submission, joining the broad consensus.

A compliant, lapdog media accepted the consensus and swung into line. Newspapers, radio and television stations parroted the Cold War line far and wide.

Cold War fear permeated every nook and cranny of social and institutional life.

Of course, some factions sought to turn a Cold War into a hot one. Still others sought to conduct a hotter war through proxies and covert actions. For some, the long-term benefits of profits from a war economy alone justified the Cold War. Many different goals, but a common purpose.

When the first Cold War ended, the defense spending of the US for the war’s entirety was conservatively estimated by one source to be 13 trillion in 1996 dollars (24 trillion today), with well over 100,000 US deaths, and with the deaths of untold millions elsewhere. With non-direct military spending added (the nuclear weapons r&d, the nuclear weapons industry, veterans’ benefits, other associated government expenses), the dollar cost would be much, much higher. Further, the lost incomes, benefits, and welfare from the investment of military funds which could have been invested into more productive and socially useful areas is incalculable. Few of us who are today absorbed with the environmental impact of Styrofoam cups have stopped to calculate the real and potential damage of the forty-plus years of Cold War environmental destruction and pollution by the belligerents.

We are now embarking on a new Cold War. It is not a matter of speculation or foretelling. The new Cold War is happening now.

The fear driving the new Cold War is unquestionably rooted in the rise of The People's Republic of China (PRC) and the defiance of a number of other independent countries, loosely or relatively more closely aligned with the PRC. Whether Western hostility, common interests, or some commitment to anti-imperialism drives them closer to each other, they are perceived by the US and its closest allies as threatening to the existing global balance of power, a balance arranged by and maintained by the US.

It doesn’t matter that none of the countries said to “threaten” the US pose any real military threat to the integrity or sovereignty of the US or its NATO allies; rather they are portrayed as outlaws-- as representing systems inconsistent with what are touted as historically validated Western values.

That these so-called values are neither historically validated nor appropriate for different social and cultural experiences is never considered. Instead, they are simply assumed, though they are largely founded on myth and arrogance. Despite the many hundreds of foreign military bases, the regular and frequent covert and overt intervention in nearly every country’s affairs, the economic and physical sanctions, the frivolous “terrorist” designations, and boundless sanctimony, the US and many of its European allies feel qualified to serve as judge and jury on the behavior of the world’s diverse states. Add hypocrisy to the list of Western sins.

It takes incredible hubris to abuse the political system of capitalist Russia as “undemocratic” when it mimics Western bourgeois democratic institutions, shares their flaws, and ill-serves the people in exactly the same manner as the corrupted, corporately owned “democracies” in the US and Europe.

Where Putin is portrayed as a “dictator,” though elected by the same flawed pseudo-democratic mechanisms employed in the West, the PRC government earns even harsher condemnation, earning the ultimate Cold War insult of “totalitarian” governance-- a charged, but fatally ambiguous memento of mindless anti-Communism. Cynically, NO high-paid courtier of the capitalist commentariat has ever noted that even Western opinion polling shows the PRC government to be more trusted, more highly approved than any of its Western counterparts. Apparently, the peoples of the PRC wholly embrace “totalitarianism.” Therefore, the people sorely need Western liberation offered by governments with little popular trust and minimal approval!

In the post-war period, fear of Communism soon reached hysterical levels. No claims about the Soviet Union were too ridiculous to make. No policy toward its government was too risky to take.

Some say that US and European vitriol aimed at the PRC today is unprecedented. That would be to belie the horrors of the rabid anti-Communist crusade of the 1950s.

Yet, events are moving quickly in that direction.

Professors, think tankers, and media pundits are stepping on each other in a rush to paint Peoples’ China as an aggressor, a danger, an existential threat.

A recent lengthy article in the weekend edition of The Wall Street Journal gives a foretaste of just how ugly things can get. Two academics and think-tank fellows, Hal Brands and Michael Beckley, charge that “Mr Xi’s China is fueled by a dangerous mix of strength and weakness. Faced with profound economic, demographic and strategic problems, it will be tempted to use its burgeoning military power to transform the existing order while it still has the opportunity.”

To any casual observer of global politics, this description seems to capture Mr. Biden’s US better than it does Mr. Xi’s China. Mr. Biden’s US is mired in a nagging stagflation that only exacerbates a huge, fast-growing income and wealth gap. Racial, class, and political divisions pose challenges to a dysfunctional, discredited political system. Internationally, Mr. Biden’s US holds its allies together with a tenuous dollar-diplomacy that is failing to guarantee both the unity and stability of its capitalist allies. More than ever, fear of the US and its sanctions drives their allegiance.

The PRC, on the other hand, has just completed a campaign to eliminate extreme poverty, has tightened the screws on corruption, and consistently enjoys economic growth at least two percentage points greater than the US does. The PRC has few foreign military bases and has engaged in no major military action for decades, while the US has hundreds of foreign bases and has been at constant war over those same decades.

Do Brands and Beckley have the two countries confused?

The authors continue with further exaggerations, fables, and distortions.

Take this wild claim, supported by nothing and worthy of the most extreme Cold Warriors:

They want to absorb Taiwan, make the Western Pacific a Chinese lake and carve out a vast economic empire across the global south-- all part of the “national rejuvenation” that will return China to its former place as the most powerful country on Earth.

Like the fear-mongering of the first Cold War, these writers want us to see a benign PRC as an aggressor biding its time until it takes over the world-- an utterly ridiculous projection based on no historical evidence whatsoever.

But the real danger that these two distinguished professors pose comes from their zealous prescription of more US aggression, more weapons, more provocation-- in short, their irresponsible war-mongering.

They advise:

The US also needs to ensure that its military doesn’t have a glass jaw [incredible!]... the US must scatter those forces across dozens of small operating sites in East Asia. The few big bases that remain must be outfitted with hardened shelters, robust ballistic missile defenses and fake targets to absorb Chinese missiles… a ramping up production of key munitions, so that America has adequate stockpiles and active production when the shooting starts [my emphasis]…

No doubt these acts would be received well by the Communist Party leadership in the PRC.

They go on:

If Taiwan doesn’t pick up the pace [of military spending], there is nothing the US can do to save it. If Taiwan redoubles its efforts, however, then America should provide money, hardware and expertise to make the island a tougher target… The US can help by donating ammunition and sensors, subsidizing Taiwanese procurements of missile launchers and mine layers, matching Taiwanese investments in vital military infrastructures and expanding joint training on crucial defense missions [and on and on…]

No doubt Brands and Beckley’s recipe for Taiwan’s “defense” will be met gleefully by the weapons industry. No doubt the rest of us will see chicken hawks meeting Dr. Strangelove.

Brands and Beckley’s book, Danger Zone: The Coming Conflict with China, is to be published on August 16. We can expect the mass media to fawn over the new book, adding even more fuel to the New Cold War.

With war raging in Ukraine, the escalating New Cold War against the People’s Republic of China manufactured by the US and its allies raises the risk to peace and raises the likelihood of global war to levels unseen in decades.

The absence of a mass antiwar movement further increases the risk of catastrophe.

Greg Godels
zzsblogml@gmail.com

Lessons Unlearned

Karl Marx knew a thing or two about politics.

Writing over a century-and-a-half ago, he studied the aftermath of the 1848 revolutions that sought to drive a stake in the vitals of the European monarchies and consolidate the rule of the emerging bourgeois classes.

Contrary to his critics-- especially the dismissive scholars-- he applied his critical historical theories with great nuance and subtlety, surveying the class forces, their actions, and their influence on the outcomes. While Marx conceded that the revolutions were suppressed in the short run, he was able to show how they importantly shaped the future.

Many would argue that Marx’s account of the aftermath of the rising in France, The Eighteenth Brumaire of Louis Bonaparte, is the finest example of the application of the Marxist method-- historical materialism (fn 1)-- to actual events.

It is said that Hugh Trevor-Roper, the British author, who was a colleague in British intelligence of Soviet spy Kim Philby and a notorious windbag, was once asked if he ever suspected Philby, if Philby left any clues to his loyalties. After a pause, Trevor-Roper said that Philby had on an occasion insisted that The Eighteenth Brumaire was the greatest work of history ever written.

More than a clue, and Philby may have been right.

The Eighteenth Brumaire sought to explain a great mystery: How a country undergoing a profound historic transition from one socio-politico-economic order (feudalism) to another (capitalism), could go from the popular overthrow of a monarch to a constituent republic and back again to the establishment of an emperor, Louis Bonaparte, in a few short years.

Marx couldn’t help but find a bitter irony in the fact that the coup installing Napoleon Bonaparte’s nephew as emperor mirrored the uncle’s ascension to emperor after the French Revolution. With equally bitter sarcasm, Marx amended the old saw about history repeating itself with the phrase “the first time as tragedy, the second time as farce.” Where Napoleon I tragically hijacked the revolutionary process, Napoleon III brought the farcical maneuvers of a dysfunctional bourgeois parliament to a farcical end by creating a farcical empire.

At a time when our own political processes-- executive, legislative, and judicial-- resemble a crude farce, at a time when opinion polls confirm the popular disdain for these institutions, we may well find Marx’s analysis to be of some use.

Consider ex-President Trump, for example. He, like Napoleon III, represents a mediocrity, only known for his pretensions and his rank opportunism. Trump likes to portray himself as a great president who arose as a savior, an agent for the restoration of US greatness. 

Based on nostalgia for his uncle, Napoleon I, the nephew ruled France with the promise of an expanding empire to be feared and admired for its spreading of enlightened ideas; Louis Bonaparte promised to restore the unity of France, lead it towards greatness, and stability.

But are Trump and Bonaparte unique individuals who pushed themselves onto the stage of history? Are they historical accidents? Larger-than-life personalities?

Marx would argue that, in fact, Bonaparte succeeded because he enjoyed the support of a class, specifically the conservative peasantry, “the peasant who wants to consolidate his holdings… those who, in stupefied seclusion within this old order, want to see themselves and their small holdings saved and favored by the ghost of the empire.” Bonaparte’s supporters seek to save what they have and relive an earlier moment. In short, they want to make France [the Empire] great again. He answered the moment.

Marx explains:

In so far as there is merely a local interconnection among these small-holding peasants, and the identity of their interests begets no community, no national bond and no political organization among them, they do not form a class. They are consequently incapable of enforcing their class interests in their own name, whether through a parliament or through a convention. They cannot represent themselves, they must be represented. Their representative must at the same time appear as their master, as an authority over them, as an unlimited governmental power that protects them from other classes and sends them rain and sunshine from above… Historical tradition gave rise to the belief of the French peasants in the miracle that a man named Napoleon would bring all the glory back to them.

It must be noted that Marx is neither mocking nor condemning the conservative French peasantry for its support of the election of Louis Bonaparte (1849) or his coup (1851). Instead, he is explaining how and why Bonaparte could manage to rule, both legitimately and illegitimately, even after France had declared its second republic. The peasantry was, by far, the largest class. The peasantry had not yet recognized its existence as a class; it could not yet express its grievances, its interests, or its latent power in class terms; it could not produce its own class leaders. And it turned instead to a caricature, a small man with big aspirations, a toy Napoleon.

Like Napoleon III, Trump enjoyed class-based support: segments of both the petty bourgeoisie and the working class. The professionals and small business people who saw “elites” -- typically urban elites-- as threatening their way of life, culturally and economically, were drawn to Trump over the conventional corporate Republican leaders. Similarly, working-class voters victimized by deindustrialization, twenty-first-century economic crises, insecurity, rising costs of healthcare, etc., looked for someone “as an authority over them,” to send “them rain and shine from above,” that is, a modern-day Napoleon. They could not find that with the Democrats. They thought that they found it in Donald Trump.

Workers in the US have lost what the French peasant had yet to achieve in 1851: “...no community, no national bond and no political organization among them…They are consequently incapable of enforcing their class interests in their own name.” Nearly eighty years of red-baiting, business unionism, and Democratic Party supplication after a rich history of class struggle have left the US working class with little class consciousness, with little ability “to form a class.” It is no wonder that Make America Great Again resonated with so many.

Both Louis Napoleon and Trump have their camp followers and thugs. Marx designated Louis Napoleon’s lumpen proletariat group of mischief-makers the Society of December 10 for the role they played in stirring the pot after his election. Trump has his ultra-nationalist, racist trouble-makers as well.

Marx saves his derision for the “so-called social-democratic party,” founded as a coalition of the petty-bourgeoisie and the workers. With the militant revolutionary workers killed, imprisoned, or exiled after the June, 1848 rising waged to establish a social and democratic republic, the workers accepted compromise and the parliamentary road. In Marx’s words:

A joint programme was drafted, joint election committees were set up and joint candidates put forward. From the social demands of the proletariat the revolutionary point was broken off and a democratic turn given to them; from the democratic claims of the petty bourgeoisie the purely political form was stripped off and their socialist point thrust forward. Thus arose the Social-Democracy… The peculiar character of the Social-Democracy is epitomised in the fact that democratic-republican institutions are demanded as a means, not with doing away with two extremes, capital and wage labour, but of weakening their antagonism and transforming it into harmony… This content is the transformation of society in a democratic way, but a transformation within the bounds of the petty bourgeoisie.

“…within the bounds of the petty bourgeoisie.” This description of the limits of an incipient social democratic party in 1849 could be applied fairly to the aspirations of the small left wing of the US Democratic Party today. A little more than one hundred fifty years later, workers are still being herded into a party that seeks, at best, the weakening of the antagonism between capital and labor and transforming it into harmony [paraphrasing Marx]. The Democrats assume the votes of the working class and the most oppressed, while intensely courting the support of the urban and suburban upper strata super-voters and super-donors. This has been their strategy since the loss of the reactionary South to the Republicans.

In nineteenth-century France, the proletariat/petty bourgeoisie alliance was short-lived. Faced with a blatant violation of the constitutional limits of presidential action, the alliance allowed its threats of militant action to melt away when Bonaparte called its bluff, revealing a paper tiger.

Marx identified the folly of workers uniting with the petty bourgeoisie:

…instead of gaining an accession of strength from it, the democratic party had infected the proletariat with its own weakness and, as is usual with the great deeds of democrats, the leaders had the satisfaction of being able to charge their “people” with desertion, and the people with the satisfaction of being able to charge its leaders with humbugging it… No party exaggerates its means more than the democratic, none deludes itself more light-mindedly over the situation.

Not to be taken lightly for its defeat at the hands of Bonaparte and the bourgeois party, the petty-bourgeois took consolation with “the profound utterance: But if they dare to attack universal suffrage, well then-- then, we’ll show them what we are made of!”

If this sounds eerily like the empty threats of the Democratic Party before the brazen actions of Trump, his friends, and the Supreme Court, then lesson learned!

If we see parallels with the politics of nineteenth-century France and the twenty-first-century US, then we surely are reminded of Marx’s quip that history repeats itself, the first time as tragedy, the second time as farce. Surely, only an allergy to history, a blindness to past tragedies, can account for the continuing allegiance of workers and their leaders to a spineless Democratic Party that continually betrays the interests of working people.

Surely, we can do better. Marx thought so…

(fn 1)  These reflections were inspired by a recent encounter with Jonathan White’s excellent 2021 book, Making Our Own History, A User’s Guide to Marx’s Historical Materialism, especially chapter 6..

 Greg Godels
zzsblogml@gmail.com

Towards a New Political Order

Of course, Putin had not manufactured Trump or his Make America Great Again movement. Trump was the homegrown product of a political order that, in the eyes of majorities of Americans, on the left and right, had failed. A neoliberal order prizing global free markets and free movement of people had left too many people behind. It had favored Wall Street over Main Street; tolerated extreme levels of inequality; ignored the problem of mass incarceration and the massive loss of wealth experienced by minority homeowners in the wake of the Great Recession; legitimized a war on Iraq that America had no business fighting and then a reckless stab at reconstruction that failed in Iraq and that spread additional misery to much of the Middle East. Distress in America had been palpable years before Trump seized America’s political stage. That a master manipulator of grievance and resentment would arise in this moment hardly seems surprising. The Rise and Fall of the Neoliberal Order

Professor Gary Gerstle, Paul Mellon Professor of American History Emeritus and Paul Mellon Director of Research at the University of Cambridge has an important new book, The Rise and Fall of the Neoliberal Order.

This is not a review of the book, however, but a critical discussion of the interesting theory elaborated in the book and the implications of that theory.

Gerstle is no Marxist. In fact, his book exhibits a common, vulgar anti-Communism and anti-Sovietism of the odious variety of Timothy Snyder and his ilk.

But Gerstle, nonetheless, takes the data of history-- revealed contemporary history-- and constructs a credible account of how these events weave together into an explanatory fabric. He proposes a theory that develops a historical thread-- liberalism-- that, should we follow it closely, will take us from the US bourgeois revolution of the late 1700s to the rise of Trump and Sanders.

This theory takes a throw-away word “neoliberalism” -- a word abused by left and right to denote a dark era of unhinged capitalism or a life-saving revival of capitalism-- and gives it both a definite meaning and a status as a politico-socio-economic order.

Where others saw neoliberalism as a disposition, a policy, or a philosophy ushered in by political change, Gerstle proposes that we view it as a definite, enduring shift based on “a distinctive program of political economy.” For Gerstle, this means that neoliberalism, as a political order, transcends the mere changes between election cycles, the shift in popular tastes, or the adoption of intellectual fashions.

The ideal-types of his theory are the twentieth-century orders of what might be called laissez faire that precede 1930, the New Deal order enduring from 1930 until 1970, and the Neoliberal Order beginning in 1970 and lasting until 2020. Gerstle is well aware that the dates are inexact markers and the transitions are not discrete, but continuous. Moreover, the dimensions of these orders are somewhat fuzzy and the transitions are uneven; neither fact detracts from the theory as a first approximation.

Insofar as the scope of Gerstle’s theory of successive political orders is primarily focused on the transition between the New Deal Order and the Neoliberal Order, his discussion of the preceding order (what he calls laissez faire) is sketchy, only sufficient to explain the conditions that gave rise to the New Deal-- that is, that necessitated a new order.

Prior to the New Deal, the dominant order celebrated free, unfettered markets, marginally regulated by a minimalist government removed from economic matters. This was the era of recovery from the First World War and its immediate post-war economic disruptions. While Europe struggled to achieve stable growth, the US became the leading industrial power. Innovative industrial organization, new marketing and financial schemes, and intensifying concentration made the US the driving force of this order. Perhaps unfairly, this era is associated with the fulsome, but ultimately misplaced optimism of US President Herbert Hoover.

The New Deal Order

Of course, the fragility of this order was brought forward by the stock market crash in the fall of 1929. The story of the subsequent Great Depression is often told and Gerstle adds little to it. But he does frame it as the factor bringing the old order down and paving the way for a new one. The instability, the hardships, the uncertainties spawned by an unparalleled economic crisis called the laissez faire order into question, rocking the very foundations of capitalism. Moreover, the example of an emerging, but radically different order-- socialism-- loomed threateningly over the shaken foundations.

The rise of a new order answering to the failure of the previous one came through the vehicle of the Roosevelt administration, though Gerstle would acknowledge that the leaders, ideas, and movements driving the new order were incubating far earlier.

The features of the New Deal order are well known. Most importantly, it assigned a central role to the government. That is, the government was unleashed to design programs, fund initiatives, employ the unemployed, initiate projects and enterprises, goad, regulate, and discipline business, and intercede in virtually every other aspect of life.

The construction of the new order was far more complex than a change of administration. It involved vital, militant movements in labor, agriculture, small business, and political forces beyond the two parties. It was shaped over time, with setbacks and retreats.

Gerstle does not fear designating events as cardinal in the transition from one order to another:

General Motors capitulated in March 1937, as did the Supreme Court, which voted by the slimmest of margins (5-4) to uphold the constitutionality of the congressional act that created the new system of labor relations. At that moment (March 1937), laissez-faire in America lost whatever was left of its moral and jurisprudential hold on American politics.

A key ideological building block of the New Deal was the idea that government was an anchor for shaping economic life with a role in conditioning social life as well. While this is today often associated with the economic doctrines of John Maynard Keynes, Gerstle recognizes that the New Deal was crafted before Keynesianism was deeply rooted.

After World War II, the New Deal order consolidated. For Gerstle, the final ascension of a new order is established when its opponents-- the former advocates of the old order-- embrace it. Gerstle finds that victory embodied in the administration of Dwight Eisenhower. While Eisenhower paid lip service to the old Republican vérités of laissez faire, he and the majority of his party ruled in step with the principles of the new order (many astute historians note that governance during the Nixon years were likewise more “liberal” than during the subsequent rule of later Democratic Party liberals).

The dynamic of this mature version of the New Deal order was driven by the fear of Communism, just as its rise was forged by fear of the Communist alternative to the 1930s collapse of capitalism. Gerstle sees anti-Communism as the gravity pulling political parties together in a common crusade.

The post-war reorganization of the New Deal paralleled the Cold War. In Gerstle’s words: “The Cold War, then, secured the New Deal order.”

The purging of the Communist left and its Popular Front allies from political and social life was an essential element in establishing the New Deal consensus.

For labor, a trade-off was constructed-- labor surrendered militancy, internationalism, and social justice while embracing business unionism and, in return, capital granted wage and benefit growth commensurate with productivity increases, job protection, and longer contracts. A template for this consensus was the UAW’s so-called treaty of Detroit.

To combat the Cold War over racism and colonialism, the New Deal consensus began to set the conditions for the dismantling of US segregation and the worst features of its apartheid racial regime. Gerstle does a thorough and able job of explaining these profound changes in terms of the competition with Communism. Brutal US race policies were a constant embarrassment to the US ruling class in an era of decolonization.

Anchored in the government’s support of Brown versus Board of Education, the New Deal order sought to build a new image of racial harmony that in some ways encouraged, but could not contain the popular movement for civil rights and against racism.

Likewise, the New Deal order coalesced around militant anti-Communism in foreign relations, aggressively meeting, overtly or covertly, Communist gains anywhere and everywhere in the world. The demands of a domestic war on poverty, especially Black poverty, and policing the world against Communism would prove too much of an economic burden for the order, a burden that would play a big role in the fall of the New Deal Order.

The 1970s proved to be the fatal decade for the New Deal order. A particularly pernicious species of economic crisis-- stagflation-- plagued the era. The unprecedented combination of stagnant, even slacking economic growth and high inflation overwhelmed the Keynesian tools favored by the New Deal order.

Intense competition from countries devastated by World War II-- earlier weaned from left-wing influence by the Marshall Plan and other aid packages-- now pressured US corporate profit rates with their technologically superior, cost-savings industries. US monopolies found their home market invaded with cheaper, often superior products. Thus, the economic crisis hurt corporations as well as working people. Mills and plants closed, stripping workers of good paying jobs, especially in the Midwest.

The decade also brought social and political crises with the defeat of the US military in Vietnam and the scandals associated with President Richard Nixon’s criminal actions and forced resignation.

The Neoliberal Order

The fatal decade ended with the election of Jimmy Carter, a relatively unknown Southerner, who Gerstle considers to be a transitional figure towards a new order-- Neoliberalism. Carter did indeed anticipate Reagan with his distrust of government and urge to deregulate. In perhaps one of the more controversial of Gerstle’s claims, he locates the roots of Carter’s departure from New Deal policies in his association with Ralph Nader. Both viewed the government “not as a tool for restoring democracy but as an instrument of corporate domination and bureaucratic drift.” Given the penetration of capital into every nook and corner of the state-- what Marxists call “State-Monopoly Capitalism” -- the Carter/Nader thesis is not far-fetched. Gerstle sees this as the beginnings of left-neoliberalism, a theme that he returns to again and again.

Gerstle suggests three critical reasons that the commanding corporate heights-- including many capitalists who had made their peace with the New Deal-- were ready for a new order, an order to be realized beginning with the election of Ronald Reagan:

1. “First, the American economy performed poorly for much of the 1970s, its reputation for global preeminence now tarnished, the instruments in the Keynesian toolkit stiff and rusty.” The blow to profitability in key industries long dominated by US monopolies challenged capital to find new answers.

2. “Second, the sharp escalation of foreign goods invading the US marketplace made many in corporate ranks less willing to tolerate the power of organized labor.” The intense competition with low wage, modernized industries in West Germany and Japan brought class peace-- secured by compromises like the Treaty of Detroit-- to an end. Henceforth, capital would be on the offensive against labor.

3. “...unhappiness about the steady creep of government regulations that neither the recession of the 1970s nor the political leadership of America… seemed capable of stalling or reversing.” New Deal regulation was meant to protect capitalism from itself by dampening insurrectionary waves through the enhancements of the welfare state and by stifling capital’s self-destructive impulses. By the 1970s, the Great Depression and the system’s collapse seemed far off and improbably recurring to the captains of industry.

As with the New Deal and its identification with the Roosevelt election, the Neoliberal order became identified with the Reagan election, but the ideas and movements associated with Neoliberalism incubated much earlier.

Gerstle points to the post-war creation of the Mt. Pelerin society, a proto-think tank of free-marketeers who helped shape and popularize the ideology of Neoliberalism. Their members brought the idea of extending markets to all aspects of life. Further, they subscribed to a fetish-like ascription of personal freedom to every question.

He overlooks the contemporaneous development of a new social science based upon Kenneth Arrow’s pioneering work and the Rand Corporation’s application of it to strategic and military matters. Rational Choice theory and Game Theory became the intellectual foundations for Neoliberalism, a development brilliantly developed by S. M. Amadae in her neglected work, Rationalizing Capitalist Democracy.

In the 1970s, an infamous memo circulated by future Supreme Court justice, Lewis Powell, served to alarm corporate leaders to the new “dangers” posed to capitalism by the New Deal order.

Since the debacle of the Goldwater campaign in 1964, an ideologically fueled series of think tanks had risen to construct alternatives to New Dealism. Funded by right-wing figures like Joseph Coors, John M. Olin, and the Koch brothers, these institutions substituted intellectual gravitas for the previously conventional ultra-right rants and conspiracy theories. Figures like Paul Weyrich, George Gilder, and William Simon carried the messages forward. Thus, was built a Neoliberal intelligentsia to counter the New Deal establishment. Gerstle explains:

The constituent parts of this order-- the capitalist donors, the intellectuals, the think tanks, the politicians, the media, and the personal networks linking them together-- were all visible in the 1970s. The speed with which the neoliberal order implanted itself on politics in the 1980s is inconceivable without what we might call the “silent phase” of its construction.

Reaganism quickly implemented and shaped the rudiments of a Neoliberal order, laying waste to the existing regulatory regimen and dismantling the progressive-tax structure. The Reaganaut attack on the judiciary laid the foundation for the rigid “original intent” silliness that dominates the courts today.

The overthrow of the media’s Fairness Doctrine in 1987 removed the last vestige of the media’s pretense to political impartiality and opened the door to the further influence of wealth and power.

Despite the rhetoric, Reaganism was not about budget busting or small government. Government spending for the military grew at an unprecedented peace-time rate. Federal debt reached new heights.

And the roots of the carceral state-- the filling of the jails with poor, often Black youth-- are to be found in the Reagan years and became a signature feature of Neoliberalism.

The fall of the Soviet Union in 1991 further consolidated Neoliberalism. Gerstle recounts the results of the end of Soviet power:

One result of communism’s fall is obvious: It opened a large part of the world… to capitalist penetration… capitalists and capital poured into Eastern Europe… After 1991, no country or movement in the world was in a position… to challenge the capitalist way of organizing economic life. Perhaps, then, there was no longer a need for capitalists to purchase insurance against such challenges by paying American workers the high wages that the New Deal order demanded. To the contrary, high wage insurance policies could be dropped and labor protests against wage cuts ignored or met by threats to ship production abroad. The defenders of this hyper-globalized capitalist order argued that whatever American workers lost in wages would be counter-balanced by falls in the cost of consumer products now manufactured abroad for a fraction of their former costs…It is hardly surprising that economic inequality rose sharply in these circumstances, to pre-New Deal levels.

Gerstle understands a consequence of the fall of the Soviet Union upon the left-- the real left, the radical left-- that few acknowledged then or now:

The collapse of communism… shrank the imaginative and ideological space in which opposition to capitalist thought and practices might incubate, and impelled those who remained leftists to redefine their radicalism in alternative terms, which turned out to be those that capitalist systems could more, rather than less, easily manage. This was the moment when neoliberalism in the United States went from being a political movement to a political order. [my emphasis]

By the mid-1980s, many Democrats had gravitated towards Neoliberalism. A beachhead was firmly planted in the Democratic Party with the founding of the Democratic Leadership Council. Prominent Democrats like Paul Tsongas, Gary Hart, Bill Bradley, Michael Dukakis, Al Gore, and Bill Clinton were drawn into the arms of Neoliberalism (old New Dealers like Tip O’Neill and Ted Kennedy were less easily seduced).

If Eisenhower’s presidency signaled the Republican surrender to the New Deal order, then Clinton’s presidency did the same for the Democrats' surrender to Neoliberalism.

Certainly, the victory of Bill Clinton in the 1992 presidential election sealed the capture of the Democratic Party, but the process began earlier. Market-based solutions to social problems attracted some Democrats engaged in “The War on Poverty.” Gerstle, again, locates left-wing roots of Neoliberalism in the Nader campaign for “consumer sovereignty” and the frustration with regulation as a solution to corporate abuse.

Of course, part of the Democratic Party surrender was pure opportunism-- Reagan’s revolution held power for twelve years, so they felt that they must give up the fight and join them.

Gerstle recognizes another factor: “the giddiness that accompanied the information technology (IT) revolution.” Infatuated with “tech hipsters,” the Democrats saw the new tech industry titans-- often libertarians and free marketeers-- as creators of a new market-based era. The pundits of the new era-- Esther Dyson, George Gilder, George Keyworth, and Alvin Toffler-- preached a renewal of “the American Dream.” Toffler “framed the revolution in terms of ‘Third Wave’ innovation.”

The seduction of these techno-libertarians and futurists was pervasive. This wedded the Democrats to Wall Street investors backing the tech phenomenon and moved politicians like Al Gore towards a reinvented, less intrusive government which would be more agreeable to a “third wave” economy.

The Telecom Act of 1996 completed the liberation of media and communication from non-partisanship and diversity, as media consolidated into the hands of a few mega-corporations that are producing the vulgarity, sensationalism, and conformity that exists today.

The Clinton era’s Gramm-Leach bill performed a similar function, liberating the financial industry from restrictions imposed in the 1930’s, enabling the economic crises of 2000-2001, 2007-2009, and that of today.

Despite unanimity on the core values of Neoliberalism, the two parties split on social values. Nonetheless, as Gerstle explains: ”The contrasting cultures embraced by the two parties-- cosmopolitanism in the case of the Democrats, neo-Victorianism in the case of the Republicans-- were both compatible with the ascendant political economy.” With consensus on political economy, culture-- including identity issues-- became the battleground for political discourse in the twenty-first century.

The Clinton decade was the triumphant highpoint of Neoliberalism; its decline began in the early years of the twenty-first century.

Neoliberal foreign policy became a disaster with military adventures in the Middle East and elsewhere. The idea that the US was the international police and responsible for imposing Neoliberal values, free markets, cultural and political values-- in other words, a Neoliberal civilizing mission-- fell apart before resistance in Afghanistan, Iraq, and elsewhere. Gerstle writes of US “hubris” -- a proper term for the US’s Neoliberal missionary role in imposing the order’s infrastructure on the entire world.

Nothing exhibits its failure better than the two-decade-long war in Afghanistan, a failure that pitted history’s greatest military against a guerilla army of a pariah movement rooted in feudal social and political ideologies.

Nothing demonstrates the arrogance of Neoliberalism more than the failure to remake Iraq in the Neoliberal image.

Gerstle tells these familiar stories well.

Likewise, Neoliberal hubris was demonstrated domestically. The first two decades of the new century were rocked by two serious economic crises, a devastating, poorly managed viral pandemic, and a third unfolding economic crisis. Neoliberalism’s response to all four was devastating to millions of people, yet the political order sheltered-- even enriched-- the wealthy and powerful. Hubris, indeed.

Credibly, Gerstle sees the political rise and election of Barack Obama as Neoliberalism’s last political hurrah. Obama may have been perceived as a champion of the people with new ideas, but he was, in fact, a fireman for the Neoliberal order charged with extinguishing the greatest economic challenge since The Great Depression. Insofar as he did so, he did it with the partisans and tools of that now-shaky order.

Gerstle writes:

In the aftermath of the Great Recession, globalization and neoliberalism could no longer be promoted as policies that lifted all boats. Techno-utopianism could no longer hide the truth that serious structural imbalances in the global economy threatened not to collapse economies but to rend the social fabric of nations. The economic hardship and distress caused by the crash would linger for years. Political anger would smolder for a time and then erupt into a series of whitehot insurgencies. The neoliberal order would not be able to stand the heat.

The group that had benefited most from the New Deal order-- whites in the small Midwestern towns and in the industrial pockets spread across the US became big losers with the Neoliberal order. Premature deaths, alcoholism, suicide, drug addiction-- the usual afflictions of the poor and neglected-- were now the common afflictions of the unemployed, underemployed, discouraged workers that had loyally celebrated and trusted capitalist rule.

Gerstle chose a 2012 study of a largely white Philadelphia neighborhood to illustrate the despair wrought by Neoliberalism, despite the fact that its author, Charles Murray, would likely be the last person to blame the order for the plight of those in Fishtown.

Of course, the Neoliberal order was even less kind to the Black working class, a demographic that always was the first and hardest hit with the economic crises. African American home ownership and household wealth were devastated in the aftermath of the 2007-2009 crisis.

The Neoliberal answer to despair was the imprisonment of more people proportionally than any other country, a harsh solution that fell especially hard on Black people because of the racist criminal justice system.

Perhaps the statistic most telling of the end-state crisis of Neoliberalism is life expectancy. The average US life expectancy dropped for the first time in the four-year period between 2014 and 2018. Of course, the drop is even greater for Blacks and Latinas/Latinos.

And of course, inequality in the US has reached levels unseen since the Great Depression.

Gerstle recounts the emergence of popular movements against Neoliberalism, both left and right. The Tea Party marked a backlash against the Neoliberal, corporate Republicans who lead the party. Wealthy rightwingers like the Koch brothers used their financial might to channel the movement into cultural directions and away from any serious economic critique, but its core attraction remained a hazy anti-elitism.

The left had its own uprising with the unexpected rise of the Occupy Wall Street movement. Undoubtedly, its surprising appeal sprung from its direct and unambiguous outrage at inequality expressed by the attack on the 1%. Gerstle explains: “In the short term, organizational chaos and indecision resulted from the movement’s anarchist-inflected resistance to having formal leaders.” Nonetheless, the experience led to hordes of young people entering electoral politics in protest, most eventually nesting in the Bernie Sanders campaign to convert the Democratic Party into the social democratic vehicle that it never really was.

Sanders garnered considerable support in both his runs for the US presidency. Given the growing dissatisfaction with the Neoliberal order, it should come as no surprise that he did well in the Democratic primaries, where his outlier counterpart, Donald Trump, also did well, given their common vocal rejection of the Neo-liberal order. But the dominant Democratic Party Neoliberals were successful in knee-capping Sanders in both campaigns.

Trump was more successful, shocking everyone that he emerged as a candidate, shocking everyone that he won the primary, and further shocking everyone that he actually won the election in 2016.

Putting aside Trump’s checkered, volatile rule during his four years, Trump exists as the product of rejectionist populism. And whether voters understand the essence of what they are rejecting, the political and economic substratum spurring that rejection is Neoliberalism. Whether Trump, an ideological slippery creature, represents any commonality with the grievances of most of his electoral supporters, he stands against something and he has convinced many that it is what they are against as well.

Like Sanders, whose supporters think they understand how he will secure the changes needed, Trump is the standard bearer for a movement looking to defeat the old order.

The new order is yet to emerge.

The New Deal order sold a large majority of Americans that a strong central state could manage a dynamic, but dangerous capitalist economy in the public interest. The neoliberal order persuaded a large majority of Americans that free markets would unleash capitalism from unnecessary state controls and spread prosperity and personal freedom throughout the ranks of Americans and then throughout the world. Neither of these propositions today commands the support or authority that they once possessed. Political disorder and dysfunction reign. What comes next is the most important question the United States, and the world, now face. The Rise and Fall of the Neoliberal Order

Assessing Gerstle’s Theory

Like the celebrated academic wealth and income expert, Thomas Piketty, before him, Gerstle is not a radical in any sense. Piketty’s empirical work unintentionally revealed what Marxist theory had long deduced: the tendency, over time, for capitalism to produce and reproduce inequality-- it is in its DNA. His results, upon further study, moved him leftward, though he remains distant from being a Marxist.

Gerstle, an academically esteemed historian, has made a uniquely thorough study of the political, social, and economic history of the United States in the modern era. Like any good historian, Gerstle searches for patterns, commonalities, and trends when he places the facts of history next to each other. Despite his solid mainstream credentials, his review of the last hundred years of US history surfaces a theory of the evolution of US capitalist society that is strikingly similar to what a Marxist might accept.

1. Gerstle sees history unfolding between 1930 and today as a dynamic process of different regimes trying to manage the US economy by establishing a widespread consensus around a specific capitalist ideology, a set of policies, and a core constituency. These regimes, when successful, become a political order.

2. Insofar as the practice of the new order stabilizes capitalism, promotes the advance of capital, and sustains or raises the profitability of capital, it is widely accepted and retains the loyalty of elites. In the case of the US, the elites voice their consensus through the subscription of the two major parties.

3. When capitalism becomes unstable, the existing order comes into question.

4. In the face of crises, pre-existing factions within the old order question the existing consensus and shift their allegiance to another political order.

5. A vigorous struggle ensues to determine a successor order to the failed one, usually decided in the electoral contests.

6. The winner enjoys the opportunity to stabilize US capitalism and establish a new order.

As competently as Gerstle organizes and establishes this sequence of events into a coherent theory of political motion, he hesitates to attribute it to the inherent instability of capitalism. He clearly finds the US unstable to the point that-- every thirty or forty years-- the old political order decays and necessitates rescue by a new order. He clearly sees that the new order, while initially enjoying some success, carries the seeds of its own demise. Yet he never asks why this instability arises so frequently and what might be its cause.

This failure to seek ultimate causes is peculiar because Gerstle shows that he is fully aware of the significance of Communism as “capitalism’s most ardent opponent.” He acknowledges: “Generally missing from studies of the international roots and reach of neoliberalism… is a reckoning with the Soviet Union and communism more generally. And yet, this book argues, the Soviet Union and international communism cannot be ignored. Few international events in the twentieth century matched the Russian Revolution of 1917 in importance.”

While Gerstle sees successive political orders as threatened by Communism, he fails to concede that the credibility of that threat is precisely because capitalism is inherently unstable, therefore potentially unpopular, and ripe for rejection. His anti-Communism blinds him to take that step.

While Gerstle affirms that “no other single political force [than Communism and anti-Communism] had a comparable influence on the world or American politics across the twentieth century,” one must wonder if he really understands the full consequences of this affirmation. The construction of US anti-Communism as a veritable religion stains virtually every aspect of life and thought in the US to this day, including the building of alternatives for the creation of a new political order.

Since Gerstle confines his study mostly to the US, he fails to recount how the US political orders he exposed-- laissez faire, The New Deal, and Neoliberalism-- spread like a virus throughout the capitalist world in their time. Margaret Thatcher-- considered a co-henchwoman of Neoliberalism with Ronald Reagan-- has only two brief references in the book.

But the very fact that these political orders became a feature of global capitalism and not limited to individual states surely demonstrates that their dynamic is generated from capitalism and not anything peculiar to the US or the UK. The Neoliberal political order, like its antecedents, was adaptive in the Darwinian sense, for the survival of global capitalism.

Gerstle’s theory suggests a weak, but definite sense of irreversibility-- the laissez faire order of the early twentieth century was spent; it could not solve the contradictions of the 1930s; nor could it return to solve the contradictions of the 1970s (though it shared features with Neoliberalism).

The New Deal order of the 1930s was also spent; it could not solve the contradictions of the 1970s; nor can it solve the contradictions of Neoliberalism (though elements of it may appear in Neoliberalism’s successor).

And Neoliberalism-- as we know it-- will not return in the future, but, if we fail to break the cycle with socialism, an order may emerge with some of its features.

Of course, this is neither inevitability nor fatalism. As Engels reminds us-- and it is particularly apt today-- another option is that society could simply perish. But within the bounds of twenty-first century capitalism, Gerstle is arguing that Neoliberalism is spent and its replacement as a political order is yet to be decided. He leaves no doubt of his conclusion when he ends his book with the charge that determining the next political order “is the most important question the United States, and the world, now face.”

But political orders do not arise from nothing; nor do they prevail arbitrarily. Gerstle shows in his narrative of the rise and fall of orders that antagonistic political currents percolate in the recesses of the existing order, preparing to vie for succession when the dominant political order falters. The balance of social and political forces determines the successor political order, typically fought out on the electoral field-of-play in the advanced capitalist countries.

Despite the neat dynamic of Gerstle’s theory, one senses that we have arrived at a crossroads. Certainly, the theory accounts for the rise of Trumpism (and its global right-wing, populist counterparts in the UK, the Baltics, Poland, Hungary, India, etc.) as a logical development from the decline of the Neoliberal order and a desperate attempt to establish a new counter-Neoliberal order. But what are the other alternatives?

Absent from Gerstle’s account is the widespread collapse of the center-left and center-right parties that historically resolved the transition to a new order. In most advanced capitalist countries, they have been electorally marginalized or racked with division and factionalism. They no longer serve as the guarantee of transitional moderation, nor have they escaped the clutches of Neoliberalism.

For the US, Gerstle only projects Bernie Sanders and his quasi-New Dealism as both a response to Neoliberalism and an alternative to Trumpism. However, Sanders refuses to break with the solidly Neoliberal Democratic Party, a party that has twice demonstrated its obstinate refusal to accept Sanders' program.

Thus, at this moment, from the perspective of Gerstle’s theory, the only viable alternative that has emerged to Neoliberalism is the right-wing populism associated with Trump. Sadly, Gerstle, like much of our left, cannot imagine escaping the succession of political orders that strive to rescue and manage capitalism.

“…the most important question… [we] now face.”

It was not so long ago that Rosa Luxemburg’s famous comment-- “Bourgeois society stands at the crossroads, either transition to Socialism or regression into Barbarism” -- resonated with millions of people, including many in the Western capitalist countries. Today, that is not so.

Gerstle explains why this has come to be. The setback to international socialism that came with the demise of the Soviet Union in 1991 ushered in an era when leftists would “redefine their radicalism in alternative terms, which turned out to be those that capitalist systems could more, rather than less, easily manage.” [my emphasis]

With some high drama, he adds: “This was the moment when neoliberalism in the United States went from being a political movement to a political order.”

With this, Gerstle is astonishingly insightful, though the Neoliberal order has blocked his imagination as well. Neoliberalism has effectively stunted the radical imagination, leaving the vision of socialism to a small, but determined minority.

In place of politics driven by a vision of socialism-- the end of the exploitation of labor and its attendant injustices-- Neoliberalism has cultivated an era of political cynicism and overwrought moral outrage. As Gerstle observes, what counts as leftism today fits neatly into what capitalism allows: reforms that fail to challenge not only the relations between capital and labor, but even the balance of power between the capitalists and the rest of us; a fetish of capitalist democratic procedure which projects that-- should all the obstacles to popular participation be removed-- the interests of the people will magically be recognized and satisfied by the ruling apparatus; and an absorption with an adolescent notion of freedom that celebrates the individual not of the collective, but outside of it.

Today’s left, coloring inside the lines of what capitalism allows, would be aghast at the idea of revolutionary socialism. Better to talk of local politics, humanizing the Democratic Party, small-scale cooperatives, human rights campaigns, non-profit corporations, foundations, expanded welfare, democracy promotion projects, networks of progressive interest groups, etc., etc. All relatively inoffensive to the Neoliberal order and unthreatening to capitalism.

Today’s left makes angry noises about the threat of fascism, dangers to “our” democracy, and the rise of right-wing populism without acknowledging that all are the children of capitalism. It is, and has been, capitalism that fears the rising of the people and seeks to disable the tools that enable the people to rise. Defending capitalism from itself will not secure a bright future for working people.

Let us suppose that Gersle is right-- and I think he is-- that we are at a crossroads where one political order is dying and another is yet to take its place. What does that mean for the left?

In past transitions from one order to another, the specter of Communism was a decisive factor in shaping the new political order, as Gerstle concedes. The New Deal would not have taken the form it did without a powerful left formed around militant working-class organizations, especially the Communist Party. A workers’ state did not ensue, but a political order that conceded far more to working people than it would have without the socialist alternative looming.

In the transition to Neoliberalism, the specter played a negative role. The advances of Communism-- victories in Asia, Africa, and even in Latin America, with Communist Parties enjoying greater influence in global politics-- shocked capitalist elites and rocked the economically shaky New Deal order, hastening the rise of Neoliberalism.

Today, the lack of a militant left committed to advancing socialism stunts any attempt to establish a new political order that will both rival the hollow posturing of left and right populism and answer the unprecedented challenges facing the world today.

As insightful as Gerstle’s theory is, it suffers a failure of imagination. Understandably, he and many others fear what will succeed Neoliberalism. The prospects of managing capitalism are growing dim. It's time to look beyond rescuing a failing, rotten system; it’s time to build a movement for socialism.

Greg Godels

zzsblogml@gmail.com

Out of the Wilderness

As the Soviet Union and our historical memory of it disappear in the rear-view mirror, ideological clarity about socialism disappears with it. It is not that the Soviet Union had a monopoly on socialist thinking-- there were certainly contributors from within and without the then-existing socialist world who reflected different times, different circumstances, and different traditions-- but the Soviet Union represented a historical constant, an evolving constant that connected the rise of revolutionary Marxism in the early twentieth century to later socialist thought.

One didn’t have to agree with Soviet socialist theory in the late twentieth century, but one had to reckon with it; one had to locate one’s thinking longitudinally and latitudinally from that pole.

Because it served as a frame of reference for other leftist movements-- purported Communist, non-Communist, and anti-Communist leftism-- there was a certain logic to the politics of the global left, best expressed by the division between the Communist, revolutionary left and the social-democratic, reformist left. These two trends captured left politics, with various wrinkles and departures playing a lesser role.

Subsequent to the demise of the Soviet Union, left ideology became unhinged. Social democracy retreated to applying a modest, slightly more human face to capitalist triumphalism, reaching full-expression with the self-described Third Way of Clinton, Blair, and Hollande. Without competition from the historical legacy of revolutionary Marxism (Marxism-Leninism), a rightward swing was inevitable.

Within the Marxist-Leninist movement, frustration and disappointment led to bitter fights, splits, and retreat to what Lenin described so well as “the years of reaction” after the defeat of the 1905 Russian revolution:

All the revolutionary and opposition parties were smashed. Depression, demoralisation, splits, discord, defection, and pornography took the place of politics. There was an ever greater drift towards philosophical idealism; mysticism became the garb of counter-revolutionary sentiments… It is at moments of need that one learns who one’s friends are. “Left-Wing” Communism: An Infantile Disorder

Many academic Marxists-- theorists whose ideas never took root in the working class, but who commanded much influence, nonetheless-- abandoned revolutionary socialism for social criticism, spurred on by a shiny new intellectual toy, postmodernism. The ideology that coalesced around the idea of class was shattered into the politics of individual identities and varied interests. Too often this thinking seeped into left-wing politics, confusing younger comrades, by nature, enthralled with the new.

Other academics believed that they had found a more rigorous foundation for Marxism in the neo-positivism of optimized choice, self-interest, and individualism, the growing intellectual consensus of bourgeois social science. After sterile debates-- often couched in formal language-- proponents concluded that the most interesting, most original ideas in Marxism could not be reduced to statements about isolated individuals maximizing their self-perceived, narrow, immediate interests. So Marxism must be abandoned to preserve the beloved method, a patent absurdity!

In the last decade of the 20th century, a process of soul searching had begun in major sections of the left, especially in the West. Both the centrality of class politics and the legacy goal of constructing socialism receded in the newly minted approaches of the broad left.

In the wake of the 2007-2009 global economic crisis, the idea of class reemerged, albeit in a simplistic, primitive way. In 2011, activists, organizing around the slogan “Occupy!”, introduced the dichotomy of the 1% and the 99% as an expression of the great and growing inequalities of wealth and income in the US. Lacking any grasp of the complexities of class and strata, the slogan “the 99%” was bound to conjure an illusory unity of the supposed have-nots that was naive and unattainable. And the idea of “the 1%” reduced the historically evolved power and rule of the capitalist class to a mere actuarial number.

The retreat from class (as Ellen Meiksins Wood so aptly characterized it) continued unabated. And the retreat from any real advocacy of socialism accompanied it.

Dissatisfaction with a soulless Democratic Party increasingly catering to a more affluent, petty bourgeois base, revived an interest in social democracy in the US. This new interest grew from the campaign of independent Democrat Bernie Sanders who refused to renounce the moniker “socialist.” Young people, in particular, were drawn in great numbers to a ‘legitimized’ socialism, energizing a number of leftist organizations and electoral campaigns.

Ironically, this new social democratic moment occurred in the US when social democracy in Europe-- its traditional address-- was discredited and marginalized.

While acceptance of the word “socialism” in the US was welcome, it was attached to a tepid, incremental socialism deeply embedded in the Democratic Party and virtually indistinguishable from its 1930s New Deal precedent.

Certainly, this leftish turn was welcome, and the freeing of the word “socialism” from its Red Scare chains marked progress.

But so-called democratic “socialism” was not socialism by any measure, but a brand associated with the left-wing of the Democratic Party.

The retreat from the real-- real-existing and real-theoretical-- socialism and the abandonment of the tool of class analysis disables and disarms the left in every way, leaving it vacillating between accommodating capitalism with patchwork reforms and surrendering the socialist project all together until a time off in the distant future.

My own advocacy of socialism has often been met with the patronizing dismissal: “Sure, but tell us how we get there from here.”

But we can’t get anywhere unless we settle on where we want to go. And surely, we must choose our route collectively.

The signs that our left has abandoned the goal of socialism, along with class partisanship abound… unfortunately.

The contradiction-- and the Marxist term is most appropriate-- between surging inflation and shrinking growth has capitalist policy makers in a bind. Their consensus-- and their consensus follows from bourgeois theory-- is that spending must be retarded. The conventional way to do this is through restraining economic activity, exactly what the Federal Reserve’s interest-rate increases are meant to do.

Given that a hard braking of the economy will inevitably produce widespread and deep pain on an already struggling working class, one would think that this would be a powerful, unassailable argument for socialism. Given that this moment in US history presents a seemingly intractable problem for the ruling class with only two possible and disastrous outcomes-- escalating inflation or a deep recession-- that the left would lay the portended disaster at the doorstep of capitalism.

But, no, that is not happening.

Instead, the left is blaming the Federal Reserve or searching vainly for ways to save capitalism from its dilemma.

● A headline in Jacobin-- a journal of “socialism”-- and reposted in Portside states ominously: To Fight Inflation, The Fed is Declaring a War on Workers. No, it is not the Federal Reserve declaring war on workers. The Federal Reserve is a capitalist institution. It is always at war with workers-- that’s its job. It is-- as it always is-- capitalism that is at war with workers. Say it! C-a-p-i-t-a-l-i-s-m…

The article ends by suggesting how capitalism could “forge” an alternative path to reducing inflation-- a brief suggestion unrelated to the dilemma that capitalism finds itself facing, but having the merit of evading the elephant in the room.

● Then there is Michael Hudson’s response to the Federal Reserve's interest-rate action, The Fed’s Austerity Program to Reduce Wages, found on numerous websites from Counterpunch to TeleSur. Hudson commands a huge following, despite having no history or connection with the organized left aside from apparent youthful happenstance with Trotskyism. His long history as a financial industry insider and his loquaciousness seem, somehow, to bolster his popularity.

Again, it is not capitalism that is responsible for the mess facing working people, but “neoliberalism,” “the tunnel vision of corporate managers and the One Percent,” and “Biden’s Cold War.” Hudson punches the explanation up by invoking his two favorite bêtes noires: debt and the rentier-class. But not capitalism.

I have no quarrel with the term “neoliberalism” if it is shorthand for the socio-politico-economic adjustment made by and for capitalism during the 1970s stagflation crisis and after the failure of Keynesian solutions. But today it is used far too often and with zeal to conjure an evil malignancy that attacks otherwise stable and enduring capitalism and imposes onerous conditions on a disgruntled, but somewhat-satisfied-with-capitalism working class.

This is sheer nonsense, of course, but it is the latent assumption behind the obsession with neoliberalism held by most left punditry. If only we could expel neoliberalism… Again, capitalism as an all-determining socio-economic formation gets a free pass.

● Professor Richard Wolff is an impressive expositor of many Marxist ideas. He is the go-to interview when center-left media, like Democracy Now!, wants to hear from Marxism. But Professor Wolf is no Marxist. Nor is he a socialist, though he might challenge this claim. While he is unquestionably dedicated and earnest, it is not to socialism that he is dedicated. Instead, he advocates for a snail's-pace assault on capitalism through small-business-like consumer and producer cooperatives, a persisting utopian strategy of nipping away at the edges of capital. That strategy has no answer for monopoly capitalism, the capitalism of our ages.

Like so many others, Wolff demonstrates an aversion to locating capitalism as the material, formal, efficient, and final cause of today’s crises, preferring to find the reparable flaws in capitalism and to search for a fix.

In his Three Anti-Inflation Alternatives to Raising Interest Rates appearing in Economy for All, In These Times, Popular Resistance, and other places, Wolff signals more interest in finding a way to manage the inflation-stagnation crisis than attacking its cause.

Wolff proposes not one, but three alternatives available to capitalism to escape the clutches of inflation.

First, he proposes a wartime solution: ration cards. One can only imagine how that would be received by a citizenry already divided by masks, vaccines, and lockdowns, not to mention guns. Indeed, this proposal might unwittingly be a stealth spark for further misunderstanding and mindless conflict.

Second, Wolff revives the Nixon-era tactic of the wage-price freeze. Like rationing, a freeze-- including Nixon’s brief wage-price freeze-- freezes injustices as well and merely temporarily bottles up the growing, deep-seated inflationary pressures. In Nixon, Ford, and Carter’s case, those pressures exploded for the rest of the decade to no relief or benefit to working people. Like rationing, price freezes give the impression of action, while leaving the cause of economic distress-- capitalism-- untouched and unspoken.

While not mentioning socialism, Wolff’s third “alternative” invokes its spirit with the possibility of “[t]the socialization of private capitalist enterprises…” But before one can anticipate Marx’s call in The Communist Manifesto for “the abolition of bourgeois property,” Wolff dashes our hopes. He is not calling for the end of “the exploitation of the many by the few” but something else entirely. Instead, he says, let’s borrow from the history of public utility commissions that have failed so miserably to protect consumers from fraud, unjustifiable price increases, and other abuses:

Across the United States, insurance, utility, and other public commissions limit private capitalist enterprises’ freedom to raise their prices in the markets they regulate. Private capitalists in such markets cannot raise prices without the permission of those commissions to do so. A government could establish all sorts of commissions in all sorts of markets with criteria for granting or refusing such permissions. Suppose, for example, that some or all food items were socially (democratically) deemed to be basic goods, such that no producer or seller could raise its prices without approval by a federal food commission. Fighting inflation could be among the approval criteria in this case (just as that is a criterion now for the Fed’s monetary policies).

Is this less utopian, less fabulist, less unrealistic, more promising than the call to abolish bourgeois property? Is championing socialism a more remotely possible solution than establishing “commissions” that would regulate capitalist prices and, accordingly, profits? Wolff simply issues a fanciful wishlist to address an impending disaster.

A survey of the various “solutions” to the contradiction of exploding capitalist prices and slowing economic activity offered by prominent left thinkers shows that they have no solution at all. Moreover, the offered “solutions” all portend to manage capitalism better than its bourgeois managers. They all seek to improve capitalism, to make it friendlier, to tame its “excesses” while guiding it through its internally generated crises.

If today’s left refuses to seriously discuss socialism, deferring it to another time and place, it consigns the people to eternal wandering in the biblical wilderness.

It is not another half-hearted attempt at reformist or utopian change (after centuries of disappointing attempts), but a commitment to revolutionary socialism that will deliver the working class “out of the hands of the [capitalists], and to bring them up out of that land unto a good land and a large, unto a land flowing with milk and honey…” (with apologies to Exodus 3:8).

The working class deserves better than another thirty years of wandering through the wilderness of misdirection, muddled ideas, and fear of socialism.

Greg Godels
zzsblogml@gmail.com

Sinking in the Economic Quicksand

In late November of last year, I wrote of the dangers of stagflation-- stagnant or declining growth and price inflation-- suggesting that the global economy was heading for a history-repeating reckoning: “The crisis of the 1970s bears some similarities with today’s turmoil.”

In January, I explained the source and persistence of inflation, thusly:

…the Federal Reserve engaged in a massive inflation of financial assets to fend off the deflationary pressures inherited from the 2007-9 catastrophe, presenting investors and bankers with the gift that kept on giving: perpetual asset inflation and an assurance that the Fed would always have their back… It is a misconception to see inflation as only arising in 2021. The first signs of fast-rising consumer inflation were indeed in 2021, but artificially induced asset inflation had preceded this for nearly a decade.

At the end of May, I wrote that these projections were proving to be accurate and ominous and the available tools placed policy makers in a tenuous situation:

 

The raging inflation that emerged late in 2021 places the masters of the capitalist economic universe in a policy vice. To stem inflation, they must raise interest rates, which invariably dampens economic growth. But economic growth has already slowed-- indeed, turned negative in the US for the first quarter of this year. With so many economic indicators declining or going negative, rising interest rates will only accelerate the slowdown of consumer spending, productivity, wage growth, investment, and social spending, while increasing debt and its costs.

Since then, Jamie Dimon, the head of the US’s largest bank and a celebrity financial pundit, has declared before investors and analysts that it is time to prepare for an economic “hurricane”: “That hurricane is right out there down the road coming our way. You just have to brace yourself.” His counterpart at Goldman Sachs, David Solomon, sees a reasonable risk of a recession. And Solomon’s predecessor at Goldman Sachs and Elon Musk also joined in pointing to the growing danger of recession. Talk of a “soft landing” -- avoiding a deep recession-- has dissipated.

It’s fair to say that today a majority of economists, politicians, even TV stock market cheerleaders expect continued inflation and likely recession-- a cruel brew for all, but especially the working class.

As mid-year approaches, the foretold crisis appears even more inevitable and more severe.

While the growth figures for the second quarter won’t be in for several weeks, the Atlanta Federal Reserve optimistically projects US Gross Domestic Product (GDP) to grow by a mere .9% (annualized). Couple that with the 1st quarter drop of 1.5% and we technically already are in recession.

Both the Organization for Economic Cooperation and Development (OECD) and the World Bank have recently drastically lowered their global growth estimates for 2022, by a third and more than a quarter, respectively.

Stock markets continue to deflate, losing trillions of dollars in nominal value. US equity markets have lost value for ten of the last twelve weeks. As of Monday, June 13, the Standard and Poor’s market index fell 21% from its January high, officially becoming what investors call a bear market, associated with recessions. Equity losses affect most those who are farther up the economic ladder; they create a negative wealth effect, discouraging spending on the part of the upper income, wealthiest sector. A bear market also applies pressure on middle and lower strata retirement funds, especially for those employed in the public sector.

Inflation continues to rise unabated, hitting another four-decade high with a May annualized growth of 8.6%. Prognosticators thought that the slight drop in April might signal a peak, but the May acceleration put an end to their wishful thinking.

Galloping inflation again took a big bite out of real average hourly wages, with the average dropping .6% from April to May, or 3% for the last twelve months. The 3% May-to-May comparison actually amounts to a 3.9% drop in real average weekly earnings, given a drop in the hours worked.

For the first time this year, consumer spending is down, dropping .3% from April to May. Consumer spending-- by far the largest component of total national economic growth-- was the last bastion of optimism available to the few remaining academic and media pollyannas.

The first signs of a deteriorating housing market are appearing, with mortgage demand at the lowest level in 22 years. For the week of June 5th, applications for home mortgages were down 7%, and 21% against the same week in 2021. And refinancing was down 75% against the same week a year ago.

A revealing, but seldom explored, set of statistics addresses the US economy from the perspective of the capitalist or the investor. Non-farm business sector labor productivity dropped 7.3% in the first quarter, the most since the 3rd quarter of 1947. And unit labor costs increased 12.6%, the highest increase since the 3rd quarter of 1982.

These two results describe the costs of the commodity--labor-- in terms of how much the capitalist pays for that commodity relative to what the capitalist acquires from the use of that commodity, a rough measure of the rate that labor is exploited. Further, taken together, they are an indicator of profit expectations when taking account of the cost of the commodity, labor. Put simply, when labor productivity drops and the cost of labor to the capitalist rises, profits are expected to drop.

In the first quarter of 2022, even though workers worked 5.4% more hours, they produced 2.3% less (reflected in the 7.3% productivity decline). At the same time, their hourly compensation, not adjusted for inflation, rose 4.4%.

So, capitalists paid workers more, worked them longer hours, while the workers produced less. This is not a happy result for the capitalist class.

How could this happen?

With an extremely tight, competitive labor market, capitalists are paying more to acquire and retain workers-- they are hoarding labor, just as they might any other commodity-- even though they are getting less production from them. This has and will result in lower profits.

The Wall Street Journal notes on June 13 (Weaker Earnings Pose New Threat to Markets): “...recent days have cast doubt on the durability of corporate profit growth, further darkening the outlet for stocks. Companies from Target to Microsoft Corp. have warned that their results will be lower than expected, while analysts have trimmed earnings forecasts across industries.”

As in previous downturns with sinking labor productivity, the capitalist class will respond with layoffs in an attempt to discipline labor, to squeeze more from the workers. The resulting unemployment, absent a fighting labor movement, will undermine labor's bargaining power, tend to restore the rate of exploitation, and increase capital’s share of the economic product.

Forced unemployment will surely be the coming corporate response to falling profit.

Though the strategy will remain behind a veil of official obfuscation, the captains of industry and the lieutenants of capital understand the mechanism. A revealing article in the June 14th edition of The Wall Street Journal tells us that: “Federal Reserve officials are beginning to signal that higher unemployment rates might be a necessary consequence of their efforts to damp inflation by raising interest rates.”

A commentator cited in the article advised his clients: “We should prepare ourselves for projections intended to communicate the Fed’s resolve to reduce inflation by targeting a higher level of unemployment.”

Once again, pundits are discussing the mythical “natural rate” of unemployment. The WSJ reminds us that a decade ago, the “natural rate” was seen as between 5 and 6% (it currently is 3.6%). Prepare for more unemployment!

So workers are working more for less, with their wages eaten away by galloping inflation. A recession is here or looming on the near horizon. They have depleted their savings and are maxing out their credit cards. And rising unemployment is imminent.

In the US, neither political party offers any relief for workers. The Republicans preach the ugly, stale, and counterproductive sermon of austerity. The Democrats pretend that everything is or will soon be better.

Both parties obsess over symbols, cultural choices, and manners, while the material foundations of social life rapidly deteriorate. Both parties worship at the altar of individualism and herald the singular value of free choice, while the conditions necessary for informed choices and wise decisions are swept away by a cynical, corrupted capitalist media. Both parties place the claims of capital ahead of the urgent needs of the working masses and oppressed peoples.

With economic storms battering the people for the third time in twenty-two years, as inequality continues to expand, as the quality of life is threatened and vulgarized, as stresses erupt in violence and nihilism, as war continues to be the constant of daily life, one must wonder if this is the time for new ideas, new approaches-- out with the old, in with the new.

Are the dominant political parties and organizations in the capitalist world up to these challenges? Are the old social democrats or their new incarnations addressing these catastrophic crises? Do the rising populists of the right or left offer solutions or distractions?

Time is running out.

Greg Godels
zzsblogml@gmail.com