Liberalism and its Discontents, by Francis Fukuyama, Profile Books, 192 pp, £16.99, ISBN: 978-1800810082
The Rise and Fall of the Neoliberal Order, by Gary Gerstle, Oxford University Press, 272 pp, £21.99, ISBN: 978-0197519646
Disorder: Hard Times in the 21st Century, by Helen Thompson, Oxford University Press, 384 pp, £20, ISBN: 978-0198864981
The jittery state of the world today has produced a large crop of books trying to explain what’s happening and how we got to where we are, but the gravity of the situation is underlined by most authors’ reticence about offering any concrete solutions. I want to examine three of these publications; Francis Fukuyama’s Liberalism and its Discontents, Gary Gerstle’s The Rise and Fall of the Neoliberal Order, and Helen Thompson’s Disorder: Hard Times in the 21st Century. As might be expected there is much overlap here, but the authors approach the problems confronting the world from different perspectives. Fukuyama adopts a philosophical approach, Gerstle’s is more political and Thompson uses a global economic lens.
Fukuyama’s is the most useful starting point because in spite of its brevity, just over 150 pages of text, it provides the most concise account of the origins of liberalism, the breadth of its philosophical thought, how its original ideals have become distorted and how they might be put right. Liberalism originated as a broad range of principles; individualistic, egalitarian, universalist, meliorist, in the seventeenth century as a response to decades of religious wars that had ravaged the European continent. It was closely allied to the growth of democracy but it is a much broader concept, aimed at limiting the powers of governments and protecting the rights of individuals. It is designed to lower the temperature of politics, promote tolerance, regulate violence and allow diverse populations to live peacefully. There is also a moral imperative to protect human dignity and in particular human autonomy and finally it facilitates economic growth because it protects property rights and promotes trade.
Many of these principles and practices have become frayed over time, however, and dangerous policies and practices have started to break through the cracks on the political right and left. Perhaps the most dangerous is the emergence of an extreme form of liberalism on the right: neoliberalism. Conceived in the intellectual ferment of 1930s Vienna by economists von Mises and Hayek it advocated free markets and minimal state intervention. The plot was formulated in the fateful Mont Pelerin conclave of 1947, where plans were laid to establish think tanks to devise strategies, secure positions in third level education and ultimately to infiltrate the political system. Following the successive oil crises of the 1970 conditions were ripe for change and politicians like Ronald Reagan and Margaret Thatcher were all too willing to lead a revolution on fiscal austerity, flexible exchange rates, deregulation, privatisation and strict control over domestic money supplies.
Fukuyama argues that the revolution went too far, forgetting that markets, particularly financial markets, only function efficiently when strictly controlled by the state and the revolution came crashing to a halt in the Great Recession of 2008. Meanwhile the Left, in the absence of a credible economic alternative, was forced into mitigating the effects of the more extreme neoliberal measures while also taking ideological comfort in what became known as identity politics and involving itself in campaigns seeking gender, race and sexual equality. Fukuyama contends that the extremes of neoliberalism and identity politics were at variance with key tenets of the classical philosophy of liberalism: tolerance, moderation and egalitarianism. Large sections of the population were alienated from their societies, economically by the harsh reality of unfettered capitalism and socially by the extent to which traditional societal norms were overturned by identity politics. He also points out that the new social media platforms of the digital age accentuate these problems by dividing societies into partisan groups feeding off extremist commentators and media organisations. The resulting divisions are further exacerbated by the moral relativism which asserts the subjectivity of all value systems, ending up with fake news and alternative facts. Today the problems of classical liberalism are beginning to erode commitment to democratic politics. Another problem highlighted by Fukuyama is the downplaying of national identity by both left and right.
Given the deep-seated nature of the problems facing the liberal ideal it’s not surprising that Fukuyama doesn’t have any magic solutions other than a general plea for a renewal of our liberal and democratic vows, including the need for active government, an acknowledgement that economic growth cannot be the sole measure of societal wellbeing, a commitment to freedom of speech, privacy and individual rights and greater recognition of the continuing human desire for a positive vision of national identity.
Gary Gerstle is equally preoccupied by our current discontents but takes a political and almost exclusively American perspective to explain our dilemma. But given that the twentieth century was in effect the American century his analysis is relevant to the rest of the world. He begins with a definition of a political order; a constellation of ideologies, policies and constituencies that shape politics in ways that endure over a twenty- or thirty-year period. There were two such “political orders” in the last century: the New Deal, lasting from the early 1930s to the early 1970s and neoliberalism from the late 1970s to the early twenty-first century. At the heart of the New Deal was the belief that capitalism couldn’t be left to its own devices; the invisible hand of the market required strong guidance from the visible elbow of government. Democrat president Franklin Roosevelt, who presided over the New Deal, introduced controls over the financial system, separating commercial from investment banking, committing to progressive taxation, a range of social welfare measures to benefit the poor and a new communications act declaring the airways to be the property of the people and not of private enterprise. Following the Roosevelt and Truman administrations the new Republican presidency under Eisenhower acquiesced to the New Deal. Gerstle refers to this as “losers’ consent”, a factor which he regards as a critical component of liberal democracies. The economic upheavals of the 1970s, which included the Arab oil crises and the demise of the post-war Bretton Woods agreement following President Nixon’s withdrawal in 1974, ushered in a new order, neoliberalism.
In describing this new order Gerstle covers the same ground as Fukuyama but emphasises more strongly just how far-reaching the new order has been. Not content to transform macro-economic policy, the high priests of neoliberalism sought to create a society in which all aspects of human existence are brought into economic discourse; marriage, family, sport, morality. The individual was expected to become an “entrepreneur of the self”, looking to balance inputs and outputs to maximise their capital facilitated by social media platforms whose data could be used to measure their progress. This put further pressure on an already alienated and demoralised society, but more dangerously this type of thinking was behind the disastrous Iraq war which was infused with neoliberal ideology; it was assumed that democracy could be introduced at gunpoint and that outsourcing a war to private enterprise defence contractors and builders was a good idea. It wasn’t: the result was fiasco and apart from the needless loss of life it caused irreparable and permanent damage to the reputation of the US. Gerstle also details the pernicious power of US elites who use their vast wealth to manipulate the political system in favour of their own extreme right-wing views through think-tanks and third level educational establishments to devise the necessary policies and legislative programmes and then funding appropriate politicians’ campaigns for office.
If the Iraq war revealed some serious design flaws in the neoliberal order the Great Recession of 2008 suggested that the entire edifice was beyond repair, leaving large cohorts of the population sullen and resentful in the absence of any credible alternatives. The Left could only offer to help ameliorate some of the worst excesses but failed to come up with convincing policies to match those of the New Deal. The election of President Obama offered a brief progressive respite but his failure to take tougher action against the bankers responsible for the crash showed a lack of resolve for any coherent new order though the institutional racism of the US, which would flair up once again in the 2010s would inevitably nullify any measures he was likely to propose. Gerstle sees some hope in the Occupy Wall Street protests and the electoral successes of avowedly left-wing politicians like Bernie Sanders, but the election of Trump in 2016 and the success of other ethnonationalists around the world leads him to a depressing conclusion: “Americans must count on the possibility that they will be living with the ruins of the neoliberal order for some time.”
Helen Thompson’s Disorder opens with a familiar comment about the pervasive sense of democratic fragility that has been gathering momentum over the past decade but immediately proceeds to argue that the roots of the problem go back much further and can best be understood as a struggle for energy dominance between the major powers. Coal was the most important energy source in the nineteenth century, enabling European countries to lead the world up to the beginning of the twentieth century. It is no coincidence that when oil took over from coal as the key source of energy America was in the ascendant and remained so for the rest of the century. Oil will continue to remain the critical energy resource for some time but renewable green energy is likely to take over during the twentieth century and China is well positioned to take the lead. Thompson believes that “energy has gone largely unrecognised as an important cause of geopolitical and economic fault lines” because structural changes in energy and finance will always have tumultuous geopolitical consequences. She demonstrates the ruthless behaviour of the Western powers, first Britain and then America, in maintaining oil supplies with callous disregard for the sensibilities and sovereignty of oil-producing nations. The casual removal of Iran’s democratically elected prime minister Mohammad Mosaddegh in a CIA-engineered coup in 1953 was a classic example of Western interference in the Middle East whose reverberations still echo today. But Thompson regards the 1970s as the time when the seeds of today’s discontent were sown; the OPEC oil embargo, Nixon’s abandonment of the Bretton Woods agreement, the US losing the Vietnam war and the Soviet Union becoming the biggest oil producer.
Some of these events combined to produce the financialisaton of the global economy as governments became, in the author’s words, “more dependent on international capital markets and less on their citizens”. This is one of the prime causes of the current distrust of government, but Thompson offers no solutions, believing that we are reverting to a world where a number of “empires”, the US, China and Russia, now joined by India, battle for control, with energy at the centre of the battle. Europe is noticeably absent from the list. The book concludes with the suggestion of a question rather than a solution: “How democracies can be sustained as the likely contests over climate change and energy consumption destabilise them will become the central political question of the coming decade.” An interesting point to note in Disorder is that although the book was published before the Russian invasion of Ukraine, the country is frequently mentioned as a critical energy faultline and its strategic importance in this context shows that the invasion was as much a crude appropriation of a valuable resource as a misguided atavistic fantasy.
Thompson’s thesis is the most radical offered in the three books reviewed here and at times its depth and complexity leaves the reader a little confused as we try to keep up with the flow of her arguments, but the addition of energy and empire adds to our understanding of what’s going on out there despite offering not even a glimmer of hope.
Although Ireland suffered more than most from the Great Recession of 2008 the country managed to recover reasonably well. We performed creditably during the pandemic and seem to have avoided the scourge of ethnonationalism that has scarred so many democracies. But it would be very shortsighted of us to ignore the contents and conclusions in these books. In spite of increasing divisions, the world is too interconnected for anyone, least of all a country as globally involved as we are, to opt out.
If we were to take one lesson from each book, I would suggest we consider Fukuyama’s exhortation to renew our liberal and democratic vows. Previous generations were more aware of why we fought to control our own destiny in an independent democratic state. We have managed to maintain a cohesive community spirit but it needs continual nourishment and a more conscious attempt to re-examine the recommendations of the 2006 Taskforce on Active Citizenship should be considered. Liberalism today lacks optimism and self-confidence; we need to be more vociferous in its defence. The most practical lesson from Gerstle’s conclusion would be to pay close attention and ideally contribute to whatever new “political order” seems to be emerging. It is very difficult to discern any clear pattern at the moment but it is likely to be economically more left of centre that we have been used to, more nationalistic than was fashionable during the neoliberal era and coping with climate change is likely to mean less emphasis on material success. The most difficult decisions we will face arise out of Thompson’s bleak forecast of continuing conflict between rival “empires”. We are now more embedded in the EU so the Boston/Berlin question doesn’t arise but the evidence from recent international opinion surveys suggests that on a range of issues we have moved closer to the position of the Nordic countries and away from our previous slavish following of the Anglo-American imperative. Maybe Boston versus Bergen would be a more appropriate question. However, we still have important economic and political interests in maintaining close ties with the US and the UK. We have used the US diaspora well and benefit hugely from their foreign direct investment. We haven’t sufficiently exploited our equally significant diaspora in the UK. Balancing these three axes of power and influence will be our most critical task in the immediate future. A close study of these three books will help.
John Fanning teaches branding and marketing communications at the Smurfit Business School. His new book, The Mandarin, The Musician and the Mage: T K Whitaker, Sean O’Riada and Thomas Kinsella and the Lessons of Ireland’s mid-Twentieth Century Revival, has been published by Peter Lang.