The decades roughly separated by Reagan’s 1980 victory and the financial collapse brought a greater respect for markets and growing interest in libertarianism. The financial crisis, in contrast, led to a rejection among many of market-oriented doctrines and a revival of Keynes (in Robert Skidelsky’s words, it marked “The Return of the Master”).* According to Michelle Goldberg (h/t Marginal Revolution) it has also brought renewed interest in Marx. One quote:
After the financial crisis, “you didn’t need to be Karl Marx to see that people were getting kicked out of their homes,” says Gessen. And privileged young people—particularly the kind of who are inclined to read and write essays about political theory—haven’t just been spectators to immiseration. Graduating with student debt loads that make them feel like indentured servants, they’ve had a far harder time than their predecessors finding decent jobs in academia, publishing, or even that old standby law and are thus denied the bourgeois emollients that have helped past generations of college radicals reconcile themselves to the status quo.
I am not certain that one can generalize from Goldberg’s piece. While my experience may not be representative, it suggests that she is on to something. During the 1990s, there was e a growing fascination among a subset of my students with the works of Ayn Rand. Once the bottom fell out, the appeal of objectivism dissipated and I have seen a growing curiosity with Marx’s basic arguments regarding the intrinsic flaws of capitalism and greater support for socialism. Given the power of postmodernism, my guess is that students will bypass classical Marxism and head toward the New Left’s take on Marx (e.g., Marcuse’s synthesis of Marx and Freud) or some combination of Marx and postmodern theory. Whether this can be translated into a political program remains an open question.
This raises some interesting questions: Has the Great Recession undermined the demand for classical liberalism? Will the financial collapse be the event that shapes the ideological orientations of a generation? What are the political implications?
*Note: the empirical record does not support the contention that the Reagan administration marked some wholesale return to the market—the rhetoric was rarely translated into policy. Similarly, the empirical record does not support the argument that the financial collapse was simply a product of a zealous embrace of deregulation and free markets. Nonetheless, these are the popular interpretations and they likely carry a good deal of weight among those who do not have the time or inclination to delve deeply into political economy.