Since Hayek’s original point had been that no one “rationally” adopts a kosmos, here was where his construct broke down. Either the dividing line between kosmos and taxis was bright and clear, and the MPS was an example of a taxis, which was thus illegitimate by his own lights, or else kosmos and taxis were hopelessly intertwined, but then there was no dependable way in his system to separate “government” from “market,” and the politics of the NTC would threaten to become unintelligible. The Hayekian wing of the thought collective has never been able to square this circle, so it has to resort to double-truth tactics. For outsiders, neoliberal thinkers are portrayed as plucky individual rebel blooms of rage against the machine, arrayed against all the forces of big government and special interests, and in a few hyperbolic instances, even against the “capitalists.”134 They are neither sown nor cultivated, but are like unto dandelions after a spring rain, pure expressions of the kosmos. But once initiated into the mysteries of the thought collective, only the organization men rise to the top, and they know it. The Richard Finks, Leonard Reads, and Antony Fishers of the world are the true movers and shakers of the neoliberal movement, not some blogger in a basement. Salarymen are the purest expression of taxis, but must not say so.
In my opinion, the most perceptive and honest attempt to address the straddle between spontaneous order and calculated politics was the legacy of a rather less-cited MPS member (although another winner of the Bank of Sweden Prize), George Stigler. The oral tradition at Chicago had long acknowledged that Stigler’s approach to the ultimate purpose of economics was different from that of the others:
MILTON FRIEDMAN: There’s no problem [between their respective approaches]. It’s true, that George wanted to change things.
AARON DIRECTOR: But he preferred to study them, not to change them.
MF: He preferred to say that he preferred to study them . . . It was partly a long-running difference between him and me . . . And he liked to stress, “I just want to understand the world and Milton wants to change it.”135
Stigler’s self-denying ordinance was not, however, the conventional instance of the reticence and humility of the temperate scholar. He was directly responding to the contradiction lodged in the NTC identified in this section. Stigler understood that the Audacity of Intervention was a consequence of an asymmetry in the neoliberal theory of politics:
As I mentally review Milton’s work, I recall no important occasion on which he has told businessmen how to behave. . . . Yet Milton has shown no comparable reticence in advising Congress and the public on monetary policy, tariffs, schooling, minimum wages, the tax benefits of establishing a ménage without benefit of clergy, and several other subjects. . . . Why should businessmen—and customers and lenders and other economic agents—know and foster their own interests, but voters and political coalitions be so much in need of his and our lucid and enlightened instruction?136
Stigler was a true believer in the marketplace of ideas, a neoliberal notion if ever there was one. The public buys the information it wants, and adopts political positions based upon optimal ignorance.137 For Stigler, there was no necessary historical trend or telos toward the neoliberal market. In his books, Friedman’s (and Buchanan’s) quest to educate and edify the unwashed was a miserable waste of time and resources, if one were to believe the neoliberal characterization of the market, and of politics as a market phenomenon. But then, what was the putative function of the Neoliberal Thought Collective? Stigler’s answer was profound: it was to capture the minds of the crucial elites by innovating new economic and political doctrines that those elites would recognize as being in their interest once they were introduced to them (presumably by the outer shells of the neoliberal Russian doll). The MPS was that most noble protagonist, an intellectual entrepreneur; it came up with products before the clientele even knew they wanted them; and what it sold were the tools for those poised to infiltrate the government and immunize policy from the optimally stupid electorate. Technocratic elites could intently maintain the fiction that “the people” had their say, while reconfiguring government functions in a neoliberal direction. These elite saboteurs would bring about the neoliberal market society far more completely and efficaciously than waiting for the fickle public to come around to their beliefs.138 Friedman and Buchanan had sailed too close to the wind in not holding democracy in sufficient contempt; what the neoliberal program counseled was a coup, not a New England town-hall meeting. Stigler did want to change the world, but in a manner more Machiavellian than his peers.139 His was the instruction manual for neoliberals to occupy government, not merely disparage it.
I think that Stigler’s construction of the meaning and purpose of the Neoliberal Thought Collective was the version that won out after the 1980s, in part because it openly embraced the double-truth doctrine, rather than uneasily squirming around it, as Friedman had done. The MPS offered its elite recruits one thing, and the outer shells of the Russian doll another. The exoteric knowledge of the spontaneous order of the market was good enough for Fox News and The Wall Street Journal; the esoteric doctrine of reengineering government to recast society comprised the marching orders of the NTC. Friedman was the public face, Stigler the clan fixer. For the former, the MPS was just another debating society; for the latter, it was the executive committee of the capitalist insurgency.
3. The MPS as a Society of Rationalists promoting ignorance as a virtue.
Many observers have seen fit to comment that the MPS was not a very open society, in the Popperian sense, and that its regimented character may have appeared a bit incongruous given its professed beliefs; but in my opinion, most analysts have fallen down when it comes to this third straddle140. That is a shame, because it will transpire that this particular “double truth” is far and away the most important of the three for understanding how the NTC managed to come through the crisis relatively unscathed.
Hayek is noteworthy in that he placed ignorance at the very center of his political theory: “the case for individual freedom rests chiefly on the recognition of the inevitable ignorance of us all.”141 Most commentators tend to interpret this as an appeal to ignorance as some kind of primal state of mankind; but I think they need to expand their horizons. The distinction begins to bite when we take note that Hayek harbored a relatively low opinion of the role of education and discussion in the process of learning, and notoriously, an even lower opinion of the powers of ratiocination of those he disparaged as “the intellectuals.” These, of course, were the mirror image of his belief in the market as a superior information processor:
Nor is the process of forming majority opinion entirely, or even chiefly, a matter of discussion, as the overintellectualized conception would have it . . . Though discussion is essential, it is not the main process by which people learn. Their views and desires are formed by individuals acting according to their own designs . . . It is because we normally do not know who knows best that we leave the decision to a process we do not control.142
For Hayek and other advocates of “emergent” social cognition, true rational thought is impersonal, but can occur only between and beyond the individual agents who putatively do the thinking. As he wrote in The Constitution of Liberty, “to act rationally we often find it necessary to be guided by habit rather than reflection.” As Christian Arnsperger so aptly put it, for Hayek, “rational judgment can only be uttered by a Great Nobody.”143 That may seem odd in someone superficially tagged as a methodological individualist supporter of freedom; but it just goes to show how far ignorance has become ingrained in American political discourse. The trick lies in comprehending how Hayek could harbor such a jaundiced view of the average individual, while simultaneously elevating “knowledge” to pride of place in the economic pantheon:
Probably it is true enough that the great majority are rarely capable of thinking independently, that on most questions they accept views which they find ready-made, and that they will be equally content if born or coaxed into one set of beliefs
or another. In any society freedom of thought will probably be of direct significance only for a small minority.144
For Hayek, “Knowledge is perhaps the chief good that can be had at a price,” but difficult to engross and accumulate, because it “never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.” You might think this would easily be handled by delegating its collection and winnowing to some middlemen, say to academic experts, but you would be mistaken, according to Hayek. He takes the position that all human personal abilities to evaluate the commodity are weak, at best. And this is not a matter of differential capacities or distributions of innate intelligence: “the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant.” Experts are roundly disparaged by Hayek, and accused of essentially serving as little more than apologists for whomever employs them.145 On the face of it, it thus seems somewhat ironic that Hayek would be touted as the premier theorist of the New Knowledge Economy. But the irony dissolves once we realize that central to neoliberalism is a core conviction that the market really does know better than any one of us what is good for ourselves and for society, and that includes the optimal allocation of ignorance within the populace: “There is not much reason to believe that, if at any one time the best knowledge which some possess were made available to all, the result would be a much better society. Knowledge and ignorance are relative concepts.”146
What purportedly rescues Hayek’s system from descending into some relativist quagmire is the precept that the market does the thinking for us that we cannot. The real danger to humanity resides in the character who mistakenly believes he can think for himself:
It was men’s submission to the impersonal forces of the market that in the past has made possible the growth of civilization . . . It does not matter whether men in the past did submit from beliefs which some now regard as superstition . . . The refusal to yield to forces which we neither understand nor can recognize as the conscious decisions of an intelligent being is the product of an incomplete and therefore erroneous rationalism. It is incomplete because it fails to comprehend that co-ordination of the multifarious individual efforts in a complex society must take account of facts no individual can completely survey. And it also fails to see that . . . the only alternative to submission to the impersonal and seemingly irrational forces of the market is submission to an equally uncontrollable and therefore arbitrary power of other men.147
There you have Hobson’s choice: either the abject embrace of ignorance or abject capitulation to slavery. The Third Way of the nurturing and promotion of individual wisdom is for Hayek a sorry illusion.148 The Market works because it fosters cooperation without dialogue; it works because the values it promotes are noncognitive. The job of education for neoliberals like Hayek is not so much to convey knowledge per se as it is to foster passive acceptance in the hoi polloi toward the infinite wisdom of the Market: “general education is not solely, and perhaps not even mainly, a matter of the communication of knowledge. There is a need for certain common standards of values.” Interestingly, science is explicitly treated in the same fashion: if you were to become an apprentice scientist, you would learn deference and the correct attitudes toward the enterprise, rather than facts and theories. Of course, Hayek rarely capitalizes or anthropomorphizes the Market, preferring to refer instead to euphemistic concepts like “higher, supraindividual wisdom” of “the products of spontaneous social growth.” Formal political processes where citizens hash out their differences and try to convince one another are uniformly deemed inferior to these “spontaneous processes,” wherein, it must be noted, insight seems to descend out of the aether to inhabit individual brains like the tongues of the Holy Ghost: this constitutes one major source of the neoliberal hostility to democratic governments. But the quasi-economistic language testifies that the nature of the epiphany is not otherworldly but more mundane and pecuniary: “civilization begins when the individual in pursuit of his ends can make use of more knowledge than he himself has acquired and when he can transcend the boundaries of his ignorance by profiting from knowledge that he does not himself possess.”149
This language of “use and profit from knowledge you don’t actually possess” might seem a bit mysterious until we unpack its implications for ignorance as a status to be produced rather than a state to be mitigated. I second the analysis of Louis Schneider that Hayek should be read as one of a long line of social theorists who praise the unanticipated and unintended consequences of social action as promoting the public interest, but who take it one crucial step further by insisting upon the indispensable role of ignorance in guaranteeing that the greater good is served.150 For Hayek, the conscious attempt to conceive of the nature of public interest is the ultimate hubris, and to concoct stratagems to achieve it is to fall into Original Sin. True organic solidarity can obtain only when everyone believes (correctly or not) they are just following their own selfish idiosyncratic ends, or perhaps don’t have any clear idea whatsoever of what they are doing, when in fact they are busily (re)producing beneficent evolutionary regularities beyond their ken and imagination. Thus, ignorance helps promote social order, or as he said, “knowledge and ignorance are relative concepts.”
The major point to be savored here is that individual ignorance fostered and manufactured by corporations, think tanks and other market actors is suitably subservient to market rationality, in the sense that it “profits from the knowledge that the agent does not possess.” Paid experts should behave as apologists for the interests that hire them: this is the very quiddity of the theory of self-interest. As Schneider explains, “Organic theorists hold that while actors may cojointly achieve important ‘beneficent’ results, they do so in considerable ignorance and in ignorance of the socially transmitted behavior they are reproducing contains accumulations of ‘knowledge’ now forgotten or no longer perceived as knowledge.”151 Burkean conservatism revels in the preservation of tradition, the great unconscious disembodied wisdom of the ages. This is why cries of “teach the controversy” in the schoolroom, “sound science” in the courtroom, and stipulations of “balance” in the news media are sweet music to neoliberal ears. That is why, as we shall repeatedly observe in subsequent chapters, and especially chapter 6, neoliberals and economists have served to sow confusion and falsehoods about the causes and consequences of the crisis. Neoliberals strive to preserve and promote doubt and ignorance, in science as well as in daily life; evolution and the market will take the hindmost.
The second salient implication is that, from the neoliberal vantage point, “science” does not need special protection from the ignorant, be they the partisan government bureaucrat, the craven intellectual for hire, the lumpen MBA, the Bible-thumping fundamentalist, the global-cooling enthusiast, or the feckless student. In an ideal state, special institutions dedicated to the protection and pursuit of knowledge can more or less be dispensed with as superfluous; universities in particular must be weaned away from the state and put on a commercial footing, dissolving their distinctive identities as “ivory towers.” Science should essentially dissolve into other market activities, with even its “public” face held accountable to considerations of efficiency, profitability, and subservience to personal ratification. “Competition” is said to ensure the proliferation of multiple concepts and theories with the blessing of the private sector. The only thing that keeps us from enjoying this ideal state is the mistaken impression that science serves higher causes, or that it is even possible to speak truth to power, or that one can rationally plan social goals and their attainment.152 Despairing of extirpation of these doctrines from within the university in his lifetime, Hayek and his confederates formed the Mont Pèlerin Society and then forged a linked concentric shell of think tanks to proselytize for the neoliberal idea that knowledge must be rendered subordinate to t
he market. Little did he suspect just how successful his crusade would be after his death.
Hayek is sometimes portrayed as a postmodern figure who did not believe in Truth; but again, I don’t think that really gets to the heart of the matter. Equally misguided would be the interpretation that Hayek would only promote the production of instrumentally useful knowledge: “Science for science’s sake, art for art’s sake, are equally abhorrent to the Nazis, our socialist intellectuals, and the communists. Every activity must derive its justification from a conscious social purpose.”153 Instead, I believe he initiated an important neoliberal practice as advocating a double-truth doctrine: one for the masses, where nominally everything goes and spontaneous innovation reigns; and a different one for his small, tight-knit cadre of believers. First and foremost, neoliberalism masquerades as a radically populist philosophy, one that begins with a set of philosophical theses about knowledge and its relationship to society. It seems at first to be a radical leveling philosophy, denigrating expertise and elite pretentions to hard-won knowledge, instead praising the “wisdom of crowds.” The Malcolm Gladwells, Jimmy Waleses, and James Surowieckis of the world are its pied pipers. This movement appeals to the vanity of every self-absorbed narcissist, who would be glad to ridicule intellectuals as “professional secondhand dealers in ideas.”154 But of course it sports a predisposition to disparage intellectuals, since “knowledge and ignorance are relative concepts.” In Hayekian language, it elevates a “kosmos”—a supposedly spontaneous order that no one has intentionally designed or structured because they are ignorant—over a “taxis.”
Sometimes people are poleaxed by some of the astounding things neoliberals have said (in public, in the media) about the crisis: that it was all the fault of Freddie Mac and Fannie Mae, that China made us do it, that it all was due to a “deficiency of economic literacy” on the part of the lower classes, that investors rationally factored in the threat of the Obama administration taking office by going on an investment strike from 2008 to 2010, that the greatest contraction since the Great Depression is solely to be laid at the door of government debt—and I am not making these up; they will be documented herein. How could people of moderate intelligence and goodwill say and write such things? Here the double-truth doctrine bites hard. The major ambition of the Neoliberal Thought Collective is to sow doubt and ignorance among the populace. This is not done out of sheer cussedness; it is a political tactic, a means to a larger end. Chapter 6 makes the argument: Think of the documented existence of climate-change denial; and then simply shift it over into economics. Of course, they can’t seriously admit it in public; but years of evidence since 2007 and the esoteric theory of ignorance recounted above unite to buttress the case that this has been one of the main tactics by which the NTC has escaped all obloquy for the crisis. The double truth is: as an insider, you realize that this is a good thing, since it fosters defeat of political opponents, the health of the kosmos, and the victory of the neoliberal market society.
Never Let a Serious Crisis Go to Waste Page 11
