Patrimonial Capitalism: Peter Hall on Trump, Orbán & Other Pitchfork-Wielding Plutocrats

Peter Hall (0:00)

Hello.

Andrew Keen (0:01)

My name is Andrew Keen. Welcome to Keen On America, the daily interview show about the United States.

Hello, everybody. One of the great questions of our age is what comes after what? My old friend, Gary Gerstle, has been on the show many times, calls neoliberalism. Gary is the author of a very successful book, The Rise and Fall of the Neoliberal Order, America and the World in the Free Market Era. Gary and others suggest that the last 100 years has been made up in historical terms. First, maybe think of it as the New Deal Age, then the neoliberal age, and then something that comes after neoliberalism. In fact, a couple of years ago, Gary was on the show, identifying the outlines of what we call post-neoliberal age. A man who's given a great deal of thought both to the history of capitalism and democracy and what comes next is my guest today.

Peter Hall has been teaching at Harvard University for many years, and he's the author of an intriguing new book, Governing Growth, The Postwar Transformations of Capitalism and Democracy. Peter is joining us from Massachusetts. Peter, congratulations on the new book. Do you agree with Gary's? I know you're very familiar with Gary's work. You may even be a friend of yours. Gary's argument in The Rise and Fall of the Neoliberal Order is first we had, shall we say, the New Deal democracies, then we had the neoliberal age of Margaret Thatcher and Ronald Reagan, and now we're not quite sure where we are.

Peter Hall (2:10)

I think that's right. I mean, when I think about how the American economy, the American political economy has changed, my terms for that are a little bit different. I think of the first era as an era of modernization, partly because I'm also thinking about European countries where the issue of how to reconstruct after the war, how to modernize their industry to compete with American firms was preeminent. Then I think by the 1980s, we do get what I would call an era of liberalization, very much in the terms in which Gary is describing it.

I think a lot of people think we're still in that era, but my own view is that around the turn of the 21st century, we entered a new era, what I call the era of knowledge-based growth. Because I think that the way I think about these things is in terms of what I call growth regimes. Growth regimes are constituted by a combination of firm strategies, on the one hand, public policies, on the other that are at least to some degree mutually reinforcing. I think that we see significant changes in firm strategies, and also to some degree in corresponding public policies around the turn of the 21st century, around late 1990s, early 2000s. I think that takes us beyond what you might think of as a neoliberal age.

Andrew Keen (3:41)

Could you give me some more concrete examples of how this manifested itself? Most people, of course, see the great recession of 2008-9 as a hinge moment. Is this your argument or did all this happen around 9-11 or what Francis Fukuyama used to describe as the end of history? What exactly happened and who are some of the participants in this shift, Peter?

Peter Hall (4:13)

Well, if you think about the neoliberal era and the terms that Gary and others describe it, we think of course of Margaret Thatcher, Ronald Reagan. And I would say from the point of view of firm strategies, and I want to emphasize that-

Andrew Keen (4:30)

Well, sorry, I'm jumping in here. I sometimes get into trouble for interrupting, but you say firm strategies. You're talking about corporations.

Peter Hall (4:38)

I'm talking about corporations. I think that a lot of people, when they look at these developments in the political economy, they think unsurprisingly, largely in terms of public policies.

But I think that there are two agents of adjustment in the political economy, responding to economic shocks, secular economic developments. Governments, democratic governments are certainly one of those agents. But private companies are the other agent. You know, if you think about it, people's employers have as much impact on their lives as the federal government does in most instances.

My life is in some ways much more affected by the practices of Harvard University than it is by what happens in Washington, although both matter. So I think that when we think about how these political economies change, yes, we should look at public policies, but we also need to look at how the strategies of large companies change as well. And you know, in this era of liberalization in the 1980s and 1990s, we of course saw a shift towards an emphasis on shareholder value. In keeping with that, we saw companies focus on their core competencies. This was an era when Warren Buffett aside conglomerates largely were wound down as companies sort of focused on their most profitable enterprises. And this was also an era of outsourcing, as many firms took tasks that they performed in-house and moved them out to subcontractors who could often hire cheaper labor. And you know, some of that certainly remains relevant. Shareholder value is still a central maxim in the corporate world. But I think we see a shift in firm strategies around 2000 You know, who would we associate that with? Well, you know, basically the rise of the apples of this world, the Steve Jobs of this world, Mark Zuckermans of this world.