A new ideology . . . must give high priority to real and efficient limitation of the state’s ability to, in detail, intervene in the activities of the individual. At the same time, it is absolutely clear that there are positive functions allotted the state. The doctrine that, on and off, has been called neoliberalism and that has developed, more or less simultaneously in many parts of the world . . . is precisely such a doctrine . . . But instead of the 19th century understanding that laissez-faire is the means to achieve this goal, neoliberalism proposes that competition will lead the way.28
Friedman was still flirting with something like the label as late as 1961, in an early draft of what later became Capitalism and Freedom:
This use of the term liberalism in these two quite different senses renders it difficult to have a convenient label for the principles I shall be talking about. I shall resolve these difficulties by using the word liberalism in its original sense. Liberalism of what I have called the 20th century variety has by now become orthodox and indeed reactionary. Consequently, the views I shall present might equally be entitled, under current conditions, the “new liberalism,” a more attractive designation than “nineteenth century liberalism.”
In another historical phenomenon that I feel has not received sufficient attention, soon after many of the neoliberals renounced the label, opponents to their right began to resort to it in order to be provocative. Murray Rothbard, from a more libertarian perspective, began to excoriate Friedman for his position. Later classical liberals, dissatisfied specifically with the evolution of the Mont Pèlerin Society, would resort to the term to contrast the position of Ludwig von Mises with what they considered the debased version found in Friedrich Hayek and elsewhere.29 The question of why the target group in and around Mont Pèlerin invoked a self-denying ordinance in using the label is interesting in its own right, and we will return to it in the next section. But for the nonce, I trust everyone can accept that the nominalist position is flawed: the term was and sometimes still is used in a sensible way on both the left and right, and moreover, the roster of people and institutions referenced is fairly stable over time: members of the Mont Pèlerin Society and their close associates. To a first approximation, the MPS will serve as our Rosetta Stone: any idea or person with membership or strong ties to the organization will qualify as “neoliberal.” With further research, we can expand the purview to encompass outer orbits of the Neoliberal Thought Collective.
Anyone who has made a study of politics realizes that the conventional left-right continuum needs to be splintered into numerous subsets and offshoots in order to make any intellectual sense of the cacophony of argumentation to be found therein. This admonition needs repetition in the current context, because of the ubiquitous confusion over the referent and meaning of the term “liberal” in America, even at this late date. Every historian of the New Right in America acknowledges that it is a fractious coalition of groups who may not share much in the way of doctrinal overlap: classical liberals, cultural conservatives, theocons, libertarians, old-school anticommunists, anarchists, classical Burkean traditionalists, ultranationalist neoconservatives, strict construction federalists, survivalist militias, and so forth. A standard narrative of historians of the modern right is that a number of these different factions declared a tentative truce from the 1970s onward under the rubric of “fusionism,” and that this détente was a major factor in their resurgence from a low point after the Great Depression.30 Rather than plow old furrows, we shall provisionally accept this basic account for our own purposes, primarily to insist that “neoliberals” should be approached as one individual subset of this phalanx. Hence we seek to characterize a relatively discrete subset of right-wing thought situated within a much larger universe, although it does tend to stand out as the faction most concerned to integrate economic theory with political doctrine. For that reason alone, it is directly germane to a wider purview of the economic crisis.
Much pandemonium concerning the existence of neoliberalism derives from the fact that outsiders often confuse it with libertarianism or classical liberalism; and this, in turn, is at least partly due to the fact that many key neoliberal figures themselves often conflated one or another alternative position with their own. For instance, Friedrich Hayek notoriously pioneered the notion that his own ideas could be traced in a direct line back to classical liberals such as David Hume and Adam Smith.31 Combined with his statement concerning Mont Pèlerin, “I personally do not intend that any public manifesto should be issued,”32 we can begin to detect a concerted policy to blur the boundaries between factions, itself part of the larger move to impose détente. This becomes more obvious in instances when we witness someone like Milton Friedman interacting with other factions on the right:
REASON In seeing yourself harkening back to 19th-century liberalism, you never became a system-builder like Rand or Rothbard . . .
FRIEDMAN Exactly. I’d rather use the term liberal than libertarian.
REASON I see you occasionally use the word libertarian.
FRIEDMAN Oh, I do.
REASON As a concession to accepted usage?
FRIEDMAN That’s right. Because liberal is now so misinterpreted . . . My philosophy is clearly libertarian. However, libertarian is not a self-defining term. There are many varieties of libertarian. There’s zero-government libertarian, an anarchist. There’s a limited-government libertarianism . . . I would like to be a zero-government libertarian.
REASON Why aren’t you?
FRIEDMAN Because I don’t think it’s a feasible social structure.33
No wonder tyros and outsiders get so flummoxed, when it proves hard to get a straight answer from many neoliberals, even when you profess to be on their side. And the more you become familiar with their writings, it often only gets worse: for instance, it would be a long, thankless task to attempt to extract actual libertarian policy proposals from Friedman’s corpus—a complaint one encounters in some actual libertarian writings. They have to avert their eyes from Friedman quotes such as, “You can have a high degree of social freedom, and a high degree of economic freedom without any political freedom.”34 Strident demonization of some bugbear entity called “the government” is not at all the same as rejecting “The State” tout court.35 That is because mature neoliberalism is not at all enamored of the minimalist night-watchman state of the classical liberal tradition: its major distinguishing characteristic is instead a set of proposals and programs to infuse, take over, and transform the strong state, in order to impose the ideal form of society, which they conceive to be in pursuit of their very curious icon of pure freedom. I agree with Wendy Brown that neoliberalism became a “constructivist” project, no matter how much it was a term against which Hayek often railed.36 That neoliberalism turned out to be very nearly the polar opposite of libertarian anarchism is something that has taken a long while to sink in, but is now becoming widely accepted in circles concerned with political economy.37 That is why “neoliberalism” is not only a historically accurate designation of a specific strain of political thought, but it is descriptively acute as well: most of the early neoliberals explicitly distanced themselves from what they considered the outmoded classical liberal doctrine of laissez-faire.38 They sought to offer something newer, and less passive. Later members like James Buchanan were even more frank regarding the neoliberal attraction to the state, at least when addressing the closed meetings of the MPS:
Among our members, there are some who are able to imagine a viable society without a state . . . For most of our members, however, social order without a state is not readily imagined, at least in any normatively preferred sense . . . Of necessity, we must look at our relations with the state from several windows, to use the familiar Nietzschean metaphor . . . Man is, and must remain, a slave to the state. But it is critically and vitally important to recognize that ten per cent slavery is different from fifty per cent slavery.39
Similar sentiments were expressed at other comparable conclaves. For
instance, John MacCallum Scott proposed to the 1956 meetings of the Liberal International, “Liberty, too, must be limited in order to be possessed”; the British economist Arthur Shenfield pronounced in a speech to the 1954 MPS conference, “It does no service either to liberalism or to democracy to assume that democracy is necessarily liberal or liberalism is necessarily democratic.”40 Thenceforth, for neoliberals, “freedom” would have to change its connotations.
Thus there are at least two imposing obstacles confronting anyone seeking a deeper understanding of neoliberalism: the fog thrown up around the term “neoliberalism” and attendant doctrines by the participants themselves, in pursuit of their own political unification ambitions and projects with other movements on the right; and the fact that the tenets of neoliberal doctrine evolved and mutated over the postwar period.41 The ten-plus commandments of neoliberalism were not delivered complete and immaculate down from the Mont in 1947, when the neoliberals convened their first meeting of the MPS. Nor can one reliably reconstruct it from a small set of “Hayekian encyclicals,” as Jamie Peck so aptly puts it. In fact, if we simply restrict ourselves to Mont Pèlerin itself (and this is unduly narrow), there rapidly precipitated at least three distinguishable sects or subguilds: the Austrian-inflected Hayekian legal theory, the Chicago School of neoclassical economics, and the German Ordoliberals.42 Hayek himself admitted this in the mid-1980s, when he warned of “the constant danger that the Mont Pèlerin Society might split into a Friedmanite and Hayekian wing.”43 An impartial spectator could observe ongoing tensions between them, but also signs that they eventually cross-fertilized each other. It takes a rather bulky Baedeker to keep it straight; another thing that surely wards off the merely curious outsider.
It is reasonable to wonder what could have held neoliberalism together under the centrifugal forces threatening to fragment it into factionalism. David Harvey propounds the Marxist position that it is straightforwardly a class project masked by various versions of “free market” rhetoric. For him, the ideas are far less significant than the brute function of serving the interests of finance capital and globalized elites in the redistribution of wealth upward. Michael Howard and James King proffer what they term an historical materialist reading, fairly similar to Harvey, one that “stresses the importance of the contradictions inherent in the institutions prevalent in the postwar era, and the crises these contradictions spawned in the 1970s.”44 Daniel Stedman Jones divides neoliberalism into three phases characterized by dominant political practices: the prehistory up to the first meeting of Mont Pèlerin, a second phase up to the ascendancy of Reagan and Thatcher consisting of a monetarist critique of neo-Keynesianism, and a modern phase since the 1980s.45 Jamie Peck gives greater weight to ideas, suggesting that the fragmentation is real, but still offset by a shared commitment to an unattainable utopian notion of freedom. Nevertheless, he credits success in infiltrating the state as permitting wide latitude in divergent component theories: “Only with the capture of state power could immanent critique become rolling autocritique.”46 Peter-Wim Zuidhof suggests that the fragmentation is part of a conscious program of rhetoric to empty out any fixed referent for the term “market.”47 Without denying the force of any of these explanations, there are also a few rather more pedestrian considerations of the actual structure of the MPS and its attendant satellite organizations.
I would suggest that the Mont Pèlerin Society evolved into an exceptionally successful structure for the incubation of integrated political theory and political action outside of the more conventional structures of academic disciplines and political parties in the second half of the twentieth century. Perhaps, one day, it will come to be studied as something new in the sociology of knowledge in the twentieth century. It was a novel framework that served to confine any tendencies to intellectual dissolution, holding the three subguilds in productive tension. Hayek in 1946 initially promoted a vision of the MPS as “something halfway between a scholarly association and a political society,”48 but it evolved into something much more than that. The main reason the MPS should serve as our talisman in tracking neoliberalism is because it exists as part of a rather special structure of intellectual discourse, perhaps unprecedented in the 1940s, one I would venture to propose to think of as a “Russian doll” approach to the integration of research and praxis in the modern world. The project was to produce a functional hierarchical elite of regimented political intellectuals; as Hayek wrote to Bertrand de Jouvenel, “I sometimes wonder whether it is not more than capitalism this strong egalitarian strain (they call it democracy) in America which is so inimical to the growth of a cultural elite.”49 Neoliberals found that Mont Pèlerin was an effective instrument to reconstruct their hierarchy, untethered to local circumstances. Henceforth, I will use the term “thought collective” to refer to this multilevel, multiphase, multisector approach to the building of political capacity to incubate, critique, and promulgate ideas.
The Neoliberal Thought Collective was structured very differently from the other “invisible colleges” that sought to change people’s minds in the latter half of the twentieth century. Unlike most intellectuals in the 1950s, the early protagonists of the MPS did not look to the universities or the academic “professions” or to interest-group mobilizations as the appropriate primary instruments to achieve their goals. Those entities were held too in thrall to the state, from the neoliberal perspective. The early neoliberals felt, at that juncture with some justification, that they were excluded from most high-profile intellectual venues in the West. Hence the MPS was constituted as a closed, private members-only debating society whose participants were hand-picked (originally primarily by Hayek, but later through a closed nomination procedure) and which consciously sought to remain out of the public eye. The purpose was to create a special space where people of like-minded political ideals could gather together to debate the outlines of a future movement diverging from classical liberalism, without having to suffer the indignities of ridicule for their often blue-sky proposals, but also to evade the fifth-column reputation of a society closely aligned with powerful but dubious postwar interests. Even the name of the society was itself chosen to be relatively anodyne, signaling little in the way of substantive content to outsiders.50 Many members would indeed hold academic posts in a range of academic disciplines, but this was not a precondition of MPS membership. The MPS could thus also be expanded to encompass various powerful capitalists, and not just intellectuals.
One then might regard specific academic departments where the neoliberals came to dominate before 1980 (University of Chicago Economics, the LSE, L’Institut Universitaire des Hautes Etudes Internationales at Geneva, Chicago Law School, St. Andrews in Scotland, Freiburg, the Virginia School, George Mason University) as the next outer layer of the Russian doll, one emergent public face of the thought collective—although one rarely publicly acknowledging links to the MPS. Another shell of the Russian doll was fashioned as the special-purpose foundations for the education and promotion of neoliberal doctrines; in its early days, these included entities such as the Volker Fund, the Earhart Foundation, the Relm Foundation, the Lilly Endowment, the John M. Olin Foundation, the Bradley Foundation, and the Foundation for Economic Education. These institutions were often set up as philanthropic or charitable units, if only to protect their tax status and seeming lack of bias.51 Some of these foundations were more than golden showers for the faithful, performing crucial organizational services as well: for instance, the Volker Fund kept a comprehensive “Directory” of affiliated neoliberal intellectuals, a list that had grown to 1,841 names by 1956.52 The next shell would consist of general-purpose “think tanks” (Institute for Economic Affairs, American Enterprise Institute, Schweizerisches Institut für Auslandforschung [Swiss Institute of International Studies], the Hoover Institution at Stanford) and satellite organizations such as the Federalist Society that sheltered neoliberals, who themselves might or might not also be members in good standing of various academic discipline
s and universities. The think tanks then developed their own next layer of protective shell, often in the guise of specialized satellite think tanks poised to get quick and timely position papers out to friendly politicians, or to provide talking heads for various news media and opinion periodicals.53
To facilitate mass production in a transnational setting, neoliberals actually concocted a “mother of all think tanks” to seed their spawn across the globe. The Atlas Economic Research Foundation was founded in 1981 by Antony Fisher to assist other MPS-related groups in establishing neoliberal think tanks in their own geographic locations. It claims to have had a role in founding a third of all world “market oriented” think tanks, including (among others) the Fraser Institute (Canada), the Center for the Dissemination of Economic Information (Venezuela), the Free Market Center (Belgrade), the Liberty Institute (Romania), and Unirule (Beijing).54 Atlas provided, among other services, one convenient conduit to launder contributions from such corporations as Philip Morris and Exxon to more specialized think tanks promoting their intellectual agenda. Later on, the thought collective began to consolidate a separate dedicated journalistic shell to more efficiently channel the output of inner layers of the Russian doll outward, such as Rupert Murdoch’s News Corporation,55 Bertelsmann AG, and a wide array of Internet blog and social networking sites.
When addressing their venture capital angels, the entrepreneurs of the Russian doll would admit that this interlocking set of institutions should be regarded as an integrated system for the production of political ideas. For instance, Richard Fink, one of the primary protagonists in building up George Mason University as a neoliberal outpost, by linking it directly to the Koch Foundation, of which he later became president, informed his prospective funders:
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