The translation of ideas into action requires the development of intellectual raw materials, their conversion into specific policy products, and the marketing and distribution of these products to citizen-consumers. Grant makers, Fink argued, would do well to invest in change along the entire production continuum, funding scholars and university programs where the intellectual framework for social transformation is developed, think tanks where scholarly ideas get translated into specific policy proposals, and implementation groups to bring these proposals into the political marketplace and eventually to consumers.56
Although the language dealt in terms of “markets” and “consumers,” the reality was a vertically integrated set of operations, whose outlines were apparent by the 1980s. The expansion of the think-tank shell proceeded apace with the expansion of the MPS presence, as revealed in Figure 2.1. One can appreciate the amount of groundwork that had preceded the “breakout” decade of the 1980s for the neoliberal project described by Fink from this and other indicators of the activities of the thought collective.
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Figure 2.1: Growth of MPS-Affiliated Think Tanks
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Source: Walpen, Die offen Feinde und ihre Gesellschaft
Further outer shells have cladded and been augmented around the Russian doll as we get closer to the present—for instance, “astroturf” organizations consisting of supposedly local grass-roots members, frequently organized around religious or single-issue campaigns.57 Some aspects of the so-called Tea Party in the U.S. reveal how the practice of astroturfing has had direct impact upon reactions to the crisis. “FreedomWorks say they hope to turn the inchoate anger of the Tea Party into a focused pro-Hayek movement.”58 Fostering the appearance of spontaneous organization was often just as important for neoliberals as the actual political action that the astroturf organization was tasked to accomplish. Outsiders would rarely perceive the extent to which individual protagonists embedded in a particular shell served multiple roles, or the strength and pervasiveness of network ties, since they could never see beyond the immediate shell of the Russian doll right before their noses. This also tended to foster the impression of those “spontaneous orders” so beloved by the neoliberals, although they were frequently nothing of the sort. Moreover, the loose coupling defeated most attempts to paint the thought collective as a strict conspiracy. It was much beyond that, in the sense it was a thought collective in pursuit of a mass political movement; and in any event, it was built up through trial and error over time. It grew so successful, it soon became too large to qualify.
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Figure 2.2: MPS Founding Meeting, 1947
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The MPS edifice of neoliberalism was anchored by a variety of mainly European and American keystones, progressively encompassed a variety of economic, political, and social schools of thought, and maintained a floating transnational agora for debating solutions to perceived problems, a flexible canopy tailored with an eye to accommodating established relations of power in academia, politics, and society at large. It was never parochial, and was globally oriented before “globalization” became a buzzword. Max Thurn captured this aspect in his opening remarks to the 1964 Semmering MPS meeting:
Many of you have been to Austria before. There is little I can tell them about the country that they do not know already. Others have come for the first time. They may like to get a general idea of what this country was and what it is now before the meeting begins. What I can say on this subject has of course nothing to do with the topics of this programme. As members of the Mont Pèlerin Society we are not interested in the problems of individual nations or even groups of nations. What concerns us are general issues such as liberty and private initiative.59
This division of labor between the global thought collective and the parochial political action rapidly proved a transnational success; and by capping formal membership at five hundred, became another exclusive mark of distinction for famous right-wing aspirants. The global reach of its membership is displayed in the two maps of membership: at its inception, and then in 1991.
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Figure 2.3: MPS Membership, 1991
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The unusual structure of the thought collective helps explain why neoliberalism cannot be easily inscribed on a set of three-by-five cards, and needs to be understood as a pluralist entity (within certain limits) striving to distinguish itself from its three primary foes: laissez-faire classical liberalism, social-welfare liberalism, and socialism. Contrary to the dichotomies and rigidities that characterized classical liberalism with regard to its proposed firewalls between economics and politics, neoliberalism has to be understood as a flexible and pragmatic response to the previous crisis of capitalism (viz., the Great Depression) with a clear vision of what needed to be opposed by all means: a planned economy and a vibrant welfare state. Contrary to some narrow interests of some corporate captains (including some in the MPS), neoliberal intellectuals understood this general goal to imply a comprehensive long-term reform effort to retat the entire fabric of society, not excluding the corporate world. The relationship between the neoliberals and capitalists was not merely that of passive apologists. Neoliberals aimed to develop a thoroughgoing reeducation effort for all parties to alter the tenor and meaning of political life: nothing more, nothing less.60 Neoliberal intellectuals identified their immediate targets as elite civil society. Their efforts were primarily aimed at winning over intellectuals and opinion leaders of future generations, and their primary instrument was redefining the place of knowledge in society, which also became the central theme in their theoretical tradition. As Hayek said in his address to the first meeting of the MPS:
But what to the politicians are fixed limits of practicability imposed by public opinion must not be similar limits to us. Public opinion on these matters is the work of men like ourselves . . . who have created the political climate in which the politicians of our time must move . . . I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.61
The Russian doll structure of the Neoliberal Thought Collective would tend to amplify and distribute the voice of any one member throughout a series of seemingly different organizations, personas, and broadcast settings, lending it resonance and gravitas, not to mention fronting an echo chamber for ideas right at the time when hearing them was most propitious. Not without admiration, we have to concede that neoliberal intellectuals struggled through to a deeper understanding of the political and organizational character of modern knowledge and science than did their opponents on the left, and therefore present a worthy contemporary challenge to everyone interested in the archaeology of knowledge.
Of course, neoliberalism should not then or now be reduced to the MPS and the roster of related think tanks—that would be a travesty of the history.62 My stress on the MPS and the Russian doll serves to counter the tendency on the left to regard neoliberalism as a hopelessly diffuse and ill-defined movement. In subsequent chapters we will explore how neoliberal ideas have become rooted in the economics profession, as well as in many facets of everyday life, which of course extends outside the narrow circumference of MPS activities. And then there are the consequences of transformation of political parties on the right and left, which tend to occupy much more attention in the existing literature. Nevertheless, at least until the 1980s—when the advance of neoliberal ideas, and thus the success of the original neoliberal networks, led to a rapid multiplication of pretenders to the title of progenitors of neoliberalism—the MPS network can be safely used as cipher to decode with sufficient precision the neoliberal thought style in the era of its genesis.
Of course, such considerations do not have the same salience once we get to the current economic crisis. While the detailed research is yet to be conducted, outsider perceptions of the modern MPS suggest that it no longer serves as the cornucopia of blue sky
thinking and rigorous debate which then gets conveyed to the outer shells of the Russian doll in the ways that it did during the 1950s and 1960s. Part of the problem seems to have been that, as neoliberals savored political success, membership in the core MPS came to be just another “positional good” especially prized by the idle rich with intellectual pretensions. As the composition of the membership skewed in the direction of the sort of persons more often found at Davos or the Bohemian Grove, the actual role of the core as a high-powered debating society has tended to ossify. That function, it seems, tended to migrate to outer layers of the Russian doll, such as certain key university centers and the larger established think tanks. When the crisis hit, the first tendency was to attempt a reversion to the older model of a Grand Conclave of the Faithful; but as we observed in chapter 1, the best that was mustered was a reiteration of doctrines developed a half-century previously. However, in chapter 6, we moot the possibility that the outer shells themselves have developed a generic full-spectrum pattern of political response to dire crises. If true, it means that neoliberalism has become more coherent in the face of the crisis, not more diffuse, as some authors maintain.
A Short Course in Neoliberal Economic Doctrine
Throughout the second half of the twentieth century, the neoliberal project stood out from other strains of right-wing thought in that it self-consciously was constituted as a multitiered sociological entity dedicated to the continued transnational development, promulgation, and popularization of doctrines intended to mutate over time, in reaction to both intellectual criticism and external events. It was a movable feast, and not a catechism fixed at the Council of Trent.63 Much of the time the litmus test was shared political objectives inculcated through prolonged internship in the thought collective; but infrequently, even that was open to delicate negotiation. Nevertheless, it was a sociological thought collective that eventually produced a relatively shared ontology concerning the world coupled with a more-or-less shared set of propositions about markets and political economy. These propositions are, of necessity, a central focus of a book on the relationship of neoliberals to the crisis. It should be very important to have some familiarity with these ideas, if only to resist simple-minded characterizations of the neoliberal approach to the crisis as some evangelical “market fundamentalism.”
Although it is undeniably the case that all manner of secondhand purveyors of ideas on the right would wish to crow that “market freedom” promotes their own brand of religious righteousness, or maybe even the converse, it nonetheless debases comprehension to conflate the two by disparaging both as “fundamentalism”—a sneer unfortunately becoming commonplace on the left. It seems very neat and tidy to assert that neoliberals operate in a modus operandi on a par with religious fundamentalists: just slam The Road to Serfdom (or if you are really Low-to-No Church, Atlas Shrugged) on the table along with the King James Bible, and then profess to have unmediated personal access to the original true meaning of the only (two) book(s) you’ll ever need to read in your lifetime. Counterpoising morally confused evangelicals with the reality-based community may seem tempting to some; but it dulls serious thought. It may sometimes feel that a certain market-inflected personalized version of Salvation has become more prevalent in Western societies, but that turns out to be very far removed from the actual content of the neoliberal program.
Neoliberalism does not impart a dose of that Old Time Religion. Not only is there no ur-text of neoliberalism; the neoliberals have not themselves opted to retreat into obscurantism, however much it may seem that some of their fellow travelers may have done so. You won’t often catch them wondering, “What Would Hayek Do?” Instead they developed an intricately linked set of overlapping propositions over time—for example, from Ludwig Erhard’s “social market economy” to Herbert Giersch’s cosmopolitan individualism, from Milton Friedman’s “monetarism” to the rational-expectations hypothesis, from Hayek’s “spontaneous order” to James Buchanan’s constitutional order, from Gary Becker’s “human capital” to Steven Levitt’s “freakonomics,” from Heartland’s climate denialism to AEI’s geoengineering project, and, most appositely, from Hayek’s “socialist calculation controversy” to Chicago’s efficient-markets hypothesis. Along the way they have lightly sloughed off many prior classical liberal doctrines—for instance, opposition to corporate monopoly power as politically debilitating, or skepticism over strong intellectual property, or disparaging finance as an intrinsic source of macroeconomic disturbance—without coming clean on their reversals.64
Acknowledgment of neoliberalism as a living, mutating entity makes it hard for people who are not historians to wrap their arms around the phenomenon, and prompts those seeking a three-by-five-card definition to throw up their hands in defeat. Disbelievers and skeptics often scoff when they hear about the mutable character of neoliberal doctrine, but I think they ought to pay a little attention to science studies, which seems quite comfortable tracking functional identity-within-change by combining institutional data with a rotating yet finite roster of protagonists, with an old-fashioned history of ideas. For instance, what did it mean to be “doing quantum physics” in the 1960s and ’70s? It wasn’t just big teams working on solid-state devices plus a few geniuses in pursuit of a Grand Unified Theory. It even extended to hippie communes and New Age consciousness. Or, in another case, the pursuit of cosmological theories has a colorful coherent history, even though it repeatedly transgressed the boundaries of existing sciences, and sometimes had trouble deciding if the object of its attentions typified stark stasis or dramatic metamorphosis.65 As long as we possess similar multiple markers of participation and discernment of designated doctrines for the Neoliberal Thought Collective, from exclusive organizations like the MPS and certain designated think tanks, to denumerable membership lists to vade mecum texts covering keynote ideas and theories, to archival reflections of the principals, then a working characterization of neoliberalism is perfectly possible.
Quite a few perceptive historians of the NTC have worried that this Protean entity might be a little too variable to underwrite serious intellectual analysis.66 “There may therefore be a certain degree of truth in what might otherwise seem to be a sloppy and unprincipled claim, that neoliberalism has become omnipresent, but it is a complex, mediated and heterogeneous kind of omnipresence, not a state of blanket conformity. Neoliberalism has not simply diffused as a (self-) replicating system.”67 Granted, the ectoplasmic theory of mind control is usually a poor way to contemplate analysis of politics; yet the point remains that the neoliberal ground troops seem to be fully capable of recognizing kindred spirits, fostering intellectual interchange among allies, and more to the point, funding and organizing political movements with stable objectives and repetitive arguments even in the face of the global economic crisis. Here we point to bellwether phenomena to be addressed, from the demonization of Freddie Mac and Fannie Mae to the neutralization of financial reform at both national and international levels, the promotion of class warfare against public employees by “populist” right-wing politicians to the total control over framing the problem of global warming, from the best-sellerdom of The Road to Serfdom to the astroturfing of the Tea Party, and, most notably, the pronounced shift of public attention from the culpability of banks and hedge funds to the predominant conviction that the crisis has been attributable to governmental fiscal irresponsibility. These suggest a degree of coherence and stability deriving from both continuity of intellectual tradition and persistence of community boundary work, the sum total of which is capable of supporting analytical generalizations about the movement.
Clearly, neoliberals do not navigate with a fixed static Utopia as the astrolabe for all their political strivings. They could not, since they don’t even agree on such basic terms as “market” and “freedom” in all respects, as we shall observe below. One can even agree with Brenner et al. and Naomi Klein that crisis is the preferred field of action for neoliberals, since that offers more latitude
for introduction of bold experimental ‘reforms’ that only precipitate further crises down the road.68 Nevertheless, Neoliberalism does not dissolve into a gormless empiricism or random pragmatism. There persists a certain logic to the way it approaches crises; and that is directly relevant to comprehending its unexpected strength in the current global crisis.
Under that supposition, we endeavor here to provide a telegraphed and necessarily non-canonical characterization of the temporary configuration of doctrines that the thought collective had arrived at by roughly the 1980s. It transgresses disciplinary boundaries, in precisely the ways the neoliberals have done. Furthermore, the Thirteen Commandments below are chosen because they have direct bearing upon unfolding developments during the period of the crisis from 2007 onwards. To elide issues of who said what to whom, in and out of Mont Pèlerin, we provide the tenets in an abridged format of stark statements, without much individual elaboration or full documentation.69
[1] The starting point of neoliberalism is the admission, contrary to classical liberal doctrine, that their vision of the good society will triumph only if it becomes reconciled to the fact that the conditions for its existence must be constructed, and will not come about “naturally” in the absence of concerted political effort and organization. As Foucault presciently observed in 1978 “Neoliberalism should not be confused with the slogan ‘laissez-faire,’ but on the contrary, should be regarded as a call to vigilance, to activism, to perpetual interventions.” The injunction to act in the face of inadequate epistemic warrant is the very soul of “constructivism,” an orientation sometimes shared with the field of science studies, and the very soul of the Neoliberal Thought Collective. Classical liberalism, by contrast, disavowed this precept. As Sheldon Wolin once wrote, classical liberalism “conceived the issue as one of reconciling freedom and authority, and they solved it by destroying authority in the name of liberty and replacing it by society.” The neoliberals reject “society” as solution, and revive their version of authority in new guises. This becomes transmuted below into various arguments for the existence of a strong state as both producer and guarantor of a stable market society. As Peck puts it, “Neoliberalism was always concerned . . . with the challenge of first seizing and then retasking the state.” “What is ‘neo’ about Neoliberalism . . . [is] the remaking and redeployment of the state as the core agency that actively fabricates the subjectivities, social relations and collective representations suited to making the fiction of markets real and consequential.”70
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