Yves here. Get a cup of coffee. There’s a lot of meat in this piece, as well as some wonderful barbs. If you are time pressed, be sure to read section 3, “Neoliberalism and the Orthodox Economist.”
By Philip Mirowski is Carl Koch Chair of Economics and the History and Philosophy of Science, and Fellow of the Reilly Center, University of Notre Dame. Originally published at the Institute for New Economic Thinking websit
My paper ” The Political Movement that Dared not Speak its own Name” started out as an address to a conference of historians of the social sciences, but seems to have touched a nerve with some economists, judging from many responses of my colleagues and interlocutors. Alas, I lack the rhetorical skills (and a few points in IQ) compared to a David Foster Wallace, and therefore it seems I have not been able adequately alert them to the translucent outlines of a well-organized and semi-coherent political movement all around them, nearly as invisible as water, in particular, it appears, to many of those of a leftish persuasion.
In the context of this symposium, all of my commenters concede that neoliberalism at least exists, thankfully, unlike the great majority of the chattering classes. Nonetheless, I feel the need to bring up this resistance one more time, if only to raise some issues concerning sources of confusion concerning neoliberal doctrines. One such exemplary instance was a recent newspaper column describing Neoliberalism by George Monbiot (2016) in the Guardian: highly simplified, a little superficial, but nonetheless a reasonably faithful summary for the uninitiated. In particular, Monbiot takes the Left to task for not having anything comparably powerful or profound to replace it. Predictably, the blogotariat were roused from their twitchy slumbers to (once again) denounce the very idea of Neoliberalism.[2] This was one telling example:
What do they have in common? It’s certainly not free market ideology. …Ben’s claim that neoliberalism is happy with a big state fits this pattern; big government spending helps to mitigate cyclical risk.
All this makes me suspect that those leftists who try to intellectualize neoliberalism and who talk of a “neoliberal project” are giving it too much credit – sometimes verging dangerously towards conspiracy theories. Maybe there’s less here than meets the eye. Perhaps neoliberalism is simply what we get when the boss class exercises power over the state. [3]
The problem that presents itself here is not so much the apparent contradiction between advocacy of the virtues of the “free market” and active takeover of government structures; it is rather the conviction that all neoliberalism amounts to is yet another in a sequence of random concoctions of bald apologetics for capitalists, so that the ideas themselves really don’t matter. If they subscribe to some version of Historical Materialism (in either it’s Marxist or less rigorous HisMat forms), then all that idealist stuff in the superstructure is just superfluous; the only thing that matters politically for them is raw class power. Given their own political predilections, these bloggers are not likely to be inclined to actually read and study what their opponents preach and do; a quick glance at Wikipedia or a YouTube clip from Free to Choose suffices to convince them they already know their enemies.[4] Another symptom of this latent HisMat is a conviction that everything ‘really’ just boils down to economics, and that one can ignore anything else as just ‘fluff’.[5] Yet I believe it is precisely this disdain for political ideas and simplistic appeals to ‘capitalism’ that has crippled the Left in its search for something substantial with which to challenge the palpable dominance of neoliberal discourse in everyday life, as well as in political mobilizations.
The situation is similar, but not exactly parallel, in the case of the economic orthodoxy. Another person to pronounce on what ‘Neoliberalism’ really is in reaction to Monbiot is Simon Wren-Lewis, a macroeconomist at Oxford University. [6] Like so many other economists, Wren-Lewis reads one historical thing by peripheral members of the Neoliberal Thought Collective, and then confidently proceeds to tell everyone else why they are ‘confused’. He starts off in the usual untutored manner: “I know what I mean when I (occasionally) use the term neoliberal. Neoliberalism is a political movement or ideology that hates ‘big’ government, dislikes any form of market interference by the state, favours business interests and opposes organised labour.” That is not a promising start; but it seems the more glaring error is to counterpose the beliefs of orthodox economists, who judiciously accept or reject various doctrines on the basis of their empirical relevance without bias, to those of the Neoliberals, grounded as they are in an impetuous ‘ideology. [7] Having spent a term at All Souls, I don’t recognize the Oxford he thinks he lives in. Just for starters, I would suggest the NTC enjoys a much larger representation in the modern economics profession than Wren-Lewis imagines. [8] The role that HisMat performs for the nostalgic Marxist, neoclassical microeconomics purportedly mediates for the orthodoxy. “More generally, it is a huge error to think that because neoliberalism invokes a highly selective and distorted view of basic economics, the left must therefore oppose mainstream economics. It is a huge error because using mainstream economics is an excellent way of challenging neoliberal ideas.” Wren-Lewis conjures a Philosopher’s Stone for separating base metal from the right stuff; the only problem is, he cannot point to a single instance in the modern world where this actually is happening. Perhaps the more pertinent narrative is the Sorcerer’s Apprentice.[9]
My current commentators clearly do care deeply about ideas and their consequences; where we may differ is how one should make use of history and conceptual analyses in order to buttress an opposition to neoliberal politics. Each rejects a reductionist HisMat, but each have different perspectives on how the war of ideas might be prosecuted. Alessandro Vercelli wants to take up neoliberal appeals to ‘liberty’ as the entry point; Kari Polanyi Levitt and Mario Seccareccia [L&S] argue that the work of Karl Polanyi can clarify the relationship of the Neoliberals to classical liberalism; and Matías Vernengo asserts that for political purposes, the Neoliberals can be equated with the neoclassical orthodox economics profession. Although many bloggers will reject this as intellectual hair-splitting, I believe each of these theses would require further clarification, not provided in my original paper.
1. Freedom
Alessandro Vercelli seeks to install the distinction between ‘positive’ and ‘negative’ liberty, first promoted by Isaiah Berlin (1958), as the key to understanding the divergence of Neoliberalism from what is sometimes called classical liberalism. (Further confusion arises from card-carrying neoliberals calling themselves ‘classical liberals’, as explained in the original paper.) I recognize this argument well, since I have been known to use it myself as a shorthand in lectures to general audiences, particularly to discomfit those who believe that the words ‘liberty’ and ‘freedom’ are so blatantly self-evident that they need no definition. However, if we are to take history seriously, the first thing we would have to concede is that Berlin was not writing about the neoliberals, even though he was a contemporary of their first generation. His major thesis was a bit of Cold War legerdemain: in caricature, he sought to comprehend that communists and totalitarians could equally appeal to ‘freedom’ for their masses – something that sounded so incongruous to Western ears – if one construed their preferred referent as ‘positive’ liberty as opposed to ‘negative’ liberty, which was the true bedrock of Western ideology . The aspect which rendered his essay so very popular in the Cold War context was his prescription that negative liberty was congruent with democracy, whereas positive liberty was not, since it generally led down a slippery slope to totalitarianism. This sounds vaguely similar to Friedrich Hayek’s own slippery slope thesis in Road to Serfdom; but in practice, they were very different.
Berlin the intellectual historian was mostly concerned with various Enlightenment and counter-Enlightenment figures, and thus his primary materials never directly addressed 20 th century political thought.[10] Furthermore, he never really demonstrated that negative liberty wouldn’t morph into its antithesis—he merely asserted that it did not happen. Leftists had been making arguments that negative liberty might easily undo itself—think, for instance, of supposed free market competition resulting in monopoly power—but Berlin was conveniently antiquarian, and did not feel any compunction to confront the challengers to the coherence of negative liberty. In fact, the economic and the sociological played almost no role in Berlin’s tragic narrative; the dominant binary on his stage was democracy/totalitarianism. The Neoliberal Thought Collective, by contrast, was extremely skeptical of the virtues of democracy as a political framework,[11] so their political analyses were effectively pitched at cross-purposes to those of Berlin. If anything, the positive/negative binary was a holdover from the classical liberal problematic of a night-watchman state cordoned off from the civic sphere. The Neoliberals were having none of that.
What I am suggesting is that Berlin’s binary is a poor astrolabe with which to triangulate the political project of the Neoliberal Thought Collective [NTC]. This argument has been made before, primarily by political theorists such as Raymond Plant (2010). In short, there is no doubt that every neoliberal trumpets “liberty” as the premier political virtue; but when one actually enquires what they mean by it, two strange things become evident: (A), there is very little agreement on definitions from one neoliberal to the next; and (B), their personal favored definition often diverges rather starkly from more commonplace vernacular connotations of ‘freedom’. Furthermore, none of them accepts Berlin’s framing of the positive/negative dichotomy.
The thesis that freedom is a many-splendored inconsistent thing for the Neoliberal Thought Collective would deserve a long historical examination in itself; but let me just point to a few instances here. One could start with the star of the NTC, Friedrich Hayek. In his Constitution of Liberty, Hayek spends as much time stipulating what freedom is not as he does trying to pin down what it is. Freedom is not ‘metaphysical’ or Kantian freedom where individual autonomy dictates reason governs emotional or intellectual impulses (2011, p.64). The motive behind this rejection is that Hayek’s psychology suggests hardly anyone is capable of exercising those faculties: freedom is not a power or capacity. Hayek also walls off personal liberty from political liberty; this is the skepticism towards political participation mentioned above. Instead, personal freedom is defined as an absence from “coercion by the arbitrary will of another” (2011, p.58). Ignoring the obvious drawbacks of defining something by a negative, Hayek than spends pages further defining what counts as ‘arbitrary’ and what counts as ‘coercion’. I would especially highlight the idiosyncratic definition of ‘coercion’ as having control over “the essential data of an individual’s action” (2011, p.206). I fear we have probably lost the attention of all the feisty libertarians in the audience at this juncture. One comes to appreciate that, for Hayek, you can only begin to understand freedom if you accept his idiosyncratic definition of what a ‘market’ is: namely, the greatest information processor known to mankind. Only then does it make sense to write the following statement: “the chief aim of freedom is to provide both the opportunity and the inducement to ensure the maximum use of knowledge that an individual can accrue.” Or to translate: no market activity can ever be deemed coercive. I submit that is a very tortured referent for what most people think they mean by ‘freedom’.
Or let us take an important representative of a significant wing of the NTC, the Ordoliberal School, Wilhelm Röpke. In his Humane Economy (2014), he distinguishes two types of freedom: moral freedom and economic freedom. The former he defines as the “opposite of compulsion by others”, but treats this as obvious, and spends little time on it. The thorny freedom he lavishes all his effort on is the latter, which has to be reconciled with the Ordo prescription of a strong state. Röpke’s Shangri-La is a totally autarkic world of isolated self-sufficient farmers; but since that is impossible in a modern society with markets, certain concessions must be made. His ideal for freedom is therefore a state-structured regime of market “competition” in most areas of life; he claims (with little argument) that this ‘competition’ gets modern society closest to the behavior of the ‘self-sufficient peasant’ (2014, p.103). I doubt most people realize that the freedom Ordos want them to enjoy looks like the dull imperatives of the isolated farm.
Let’s not leave out the American members of the NTC. One might here briefly consider James Buchanan, of the Virginia School of public choice. Buchanan admits up front he does not entirely endorse Hayek’s version of freedom. Instead, he distinguishes between individual freedom and collective freedom. The former smacks of the ‘don’t fence me in” attitude of the autarkic situation, but Buchanan spends very little time on that. Rather, most of his work aims to describe “process stability” (hardly the commonplace notion of liberty), which cashes out as a two-level structure for the making of laws, which he elaborates as his constitutionalist-contractarian approach. In effect, Buchanan wishes democratic governments to be severely hamstrung when it comes to making changes in governance—a forced attempt to marry a Hobbesian social contract with a solipsistic rational choice theory. The net consequence is that ‘liberty’, such as it is, seems confined to a rather desiccated repertoire of market purchases.
I could keep going, but I hope the reader gets the trend. Freedom assumes some rather mutant formats in the hands of the NTC. Because Neoliberals privilege the strong state, the stylized libertarian conception of unfettered self-directed Being is never really in the cards. If anything holds the NTC together, it is the inevitable prescription that activity in “The Market” (whatever that may be) is the very pinnacle of “being free”, although the sequence of arguments that get us there are diverse. Little of this maps easily into Berlin’s tendentious dichotomy, which is why I would suggest Vercelli’s intervention does not do the political work he anticipates.
2. Karl Polanyi’s Double Movement
Kari Polanyi Levitt and Mario Seccareccia [L&S] write that it is surprising that I don’t mention Karl Polanyi in the article which is the subject of this symposium. In particular, they stress the origins of the neoliberal movement came in attacking the “double movement’ described by the elder Polanyi. I didn’t want to raise the issue there (an address to a general audience), but they are perceptive to realize that the relationship of Polanyi to the early neoliberals certainly deserves consideration, something I attempted in a lecture to the 2014 Sydney conference on Polanyi and Hayek. [12]
The place to start, as usual, was Vienna. It has been de rigueur amongst historians to note that a fierce critique of classical liberalism was happening around the time of Red Vienna, with all manner of thinkers seeking to unearth the internal contradictions of the laissez faire sensibility. One such critique that was developed in that intellectual hothouse was a notion that laissez faire was an ignis fatuus, in the sense that it posited a political state that could never actually exist. Karl Polanyi’s most important political contribution was to import those arguments into the English language context, in the guise that suggested all attempts to impose a market free of all governmental intervention was self-refuting:
Just as, contrary to expectation, the invention of labor-saving machinery had not diminished but actually increased the uses of human labor, the introduction of free markets, far from doing away with the need for control, regulation and intervention, enormously increased their range. Administrators had to be constantly on the watch to ensure the free working of the system. Thus even those who wished most ardently to free the state from all unnecessary duties, and whose whole philosophy demanded the restriction of state activities could not but entrust the self-same state with the new powers, organs and instruments required for the establishment of laissez faire.[13]
Let us call this the “unintended consequences” argument: all attempts to demote the state to night-watchman status end up augmenting the power and size of the state with respect to the market. On the same page, Polanyi indicts liberals “Spencer and Sumner, Mises and Lippman” for perceiving the incongruity, but blaming it all upon “impatience, greed, and shortsightedness” of the politicians, rather than anything specific about the free market itself, which is upheld as some sort of Platonic natural ideal. In other words, according to Polanyi, his opponents all realized that something paradoxical had happened to their political comrades when they sought to institute their program of free markets, but they dismissed it as adventitious, all written off to accidents and weakness of will. Less frequently do modern Polanyites acknowledge that Karl himself pressed the critique one step further, pushing home the irony:
This paradox was topped by another. While laissez faire economy was the product of deliberate state action, subsequent restrictions on laissez faire started in a spontaneous way. Laissez-faire was planned; planning was not.[14]
Let us call this the **reverse English** argument: it upends the usual implications of the opponents’ presuppositions. Reverting to his tendency to equate the unintentional with the Natural, Polanyi therefore combines two arguments: one, unintended consequences, that liberal political attempts to actuate their vision of the market protected from the state just ends up making the state stronger; and two, **reverse English**, that this also sets in motion a ‘Natural’ rejection mechanism of political mobilization in the larger populace to restrict the market expansion. Notice how Polanyi is gratified that he can seemingly invert the commitments of his opponents, who identify the spontaneous with the Natural, but then knock them askew by claiming natural provenance for his own political position of market skepticism and revanchist regulation. However, parenthetically, I would like to point out that there is very little specific empirical evidence cited to support these propositions, especially the second one.
What is intriguing and unexpected is the extent to which Hayek accepts much of this Viennese two-step. This, I believe, is a different way of coming to comprehend the sketch of the evolution of classical liberalism provided in L&S’s Table 1. Of course, one must acknowledge that large swathes of Hayek’s later writings are taken up with a convoluted and rather boring series of attempts to insist there really is something called “spontaneous order’ in history, and that it looks a lot like the market; but those castles in the air have very little to do with the practical political precepts that have been subsequently developed within the Neoliberal Thought Collective. It is not some ‘spontaneous order’ that is conjured at Heritage Action or the Fraser Institute or the Institute of Public Affairs. If Hayek really was so supremely confident in the inherent spontaneity of the market, there would be no rational earthly motivation behind the elaborate political mobilization theorized and then implemented by the neoliberals, especially from the 1970s onwards. [15] Indeed, it is primarily in taking this contradiction to heart that the neoliberals have distinguished themselves from the earlier classical liberals. The confession already rears its head in Road to Serfdom: “In no system that could be rationally defended would the state do nothing. An effective competitive system needs an intelligently designed and continuously adjusted legal framework” (1944, p.39). Hayek’s opponents interpreted these lines as concessions to their belief in the inevitability of the ‘mixed economy’, but they were sadly mistaken.[16] In effect, first Hayek, and then to a more elaborate extent the later neoliberals, affirmed the first half of Polanyi’s Viennese two-step—although without crediting him personally in any manner. “The neoliberals recognized early on that the creation of new markets is a political process, requiring the intervention of an organized power” (Rodrigues, 2012, p.1008). History taught them that the political will to impose “good markets” resulted in a strong state and elaborate regulation; then, so be it. The neoliberals would accept the unintended consequences argument, but rather than taking it as a refutation of their ambitions, they would absorb it as a blueprint for achieving their ultimate ends, by intentional embrace.
The state would necessarily need to expand in economic and political power over time; the only codicil to the trend would be that the neoliberals themselves would need to seize state power, and rewrite the regulations so that they could create the kind of market society they believed was progressive. The unintended consequences of expansion of state power would be overcome through redoubled intentionality, political organization, and conscious intervention. Ideal markets had to be imposed; they wouldn’t just happen. Hayek at certain junctures in his career ranted against the evils of the ‘constructivist’ mentality, but it is difficult to regard this neoliberal embrace of the strong state as anything other than a willful constructivist program. This frame tale is now widely accepted as the correct interpretation of 80 years of the history of the Neoliberal Thought Collective. [17]
How about the second half of the Viennese two-step, the **reverse English** argument? Hayek realized that the great democratic masses might not accept the imposition of the New Neoliberal Order from above; especially in a democracy, neoliberal gains might be quickly reversed at the ballot box. Hayek often complained that the socialists thought they knew what was best for the masses, often absent their consent, but in this regard, effectively, the neoliberals were no different. [18] The one place where Hayek and the NTC diverged from Polanyi was that they could never ever allow that the blowback from markets could ever be considered a ‘natural’ response of the masses. At various points, Hayek would blame the recalcitrance of the populace to ‘market reforms’ on the scurrilous class of intellectuals, or on the self-interest of the politicians, or even upon the fundamental ignorance of the populace about the consequences of their preferences. But, contrary to Polanyi, they took that pushback into account. Polanyi, so besotted with the trope that opposition to encroachment of the market was ‘natural’, never entertained the notion that it, too, could be manipulated. The eventual solution favored by the bulk of the neoliberal thought collective was to render democracy so hamstrung and ossified that it would never prove capable of neutralizing neoliberal market structures erected by the strong state.[19] Their strong state had to come cladded with strong defenses against the will of the governed. “I doubt whether a functioning market has ever newly arisen under an unlimited democracy, and it seems likely that unlimited democracy will destroy it where it has grown up.” [20] This became the watchword of the later Hayek, of Bruno Leoni, of James Buchanan and the Virginia public choice school, of the ‘Washington consensus’, and the architects of the WTO and the European Union and the independence of central banks.
What lesson might we draw from this brief detour into the work of Karl Polanyi? I think that we should come to see there is nothing so very ‘natural’ about the supposed ‘double movement’, once a political project embraces a profound constructivism concerning markets.
3. Neoliberalism and the Orthodox Economist
One thing that has impressed itself over the course of my career is the incredibly blinkered and inadequate understanding of politics amongst many trained economists. I have repeatedly insisted that the rise of the Neoliberal Thought Collective cannot possibly be understood narrowly as an offshoot of ‘economics’ as such; rather, it is a general philosophy of politics and the meaning of life. [21] Reading Professor Vernengo, I despair of ever really managing to get this across to trained economists.
I feel like I have spent my entire life attempting to uncover the actual history of neoclassical economics: its origins in 19 th century physics; it’s curious revulsion from indeterminist currents in the natural sciences; its mutations on both the left and the right; its hybridization with the military and operations research; its symbiosis with the computer; and lately, its conversion to a theory of “information” and an engineering set of ambitions. If there is anyone who appreciates the shape-shifting character of this hybrid ‘orthodoxy,’ it is me. So in one corner, we have this mutant which stridently denies its own hybrid character, and pretends to a fake unified political heritage dating back to Adam Smith. On the other, we have the rise of the NTC, itself an amalgam of three or more individual schools of thought—the Austrians, the Ordoliberals, and the American Chicago School. Now, if anyone wants to make strong reductionist statements about this squirming warring mass of doctrines, to the effect that any conceptual differences don’t matter, then they are welcome to risk their reputation as a serious thinker. In the current climate, where not just doctrinal history but even economic history is banished from the economics curriculum, nothing I can do or say can prevent the further debasement of economic discourse.
However, I agree with Professor Vernengo that the question of the relationship of neoclassical economics to the NTC is both fascinating and important, for many reasons. My response to his own classification is that a little attention to history reveals that most of the early members of the Mont Pelèrin Society ranged from skeptical to outright hostile to neoclassical economics as it existed in the 1930s-50s. Vernengo says few thinkers I cite qualify as non-neoclassical; yet in this short paper alone I have cited Wilhelm Röpke, Friedrich Hayek, Ludwig von Mises, Alexander Rüstow and Bruno Leoni: renunciators all. [22] The major exceptions were the Chicago Boys and Lionel Robbins; but even then Chicago was engaged in pitched battle with the rest of the profession as to what ‘good’ orthodoxy encompassed. Therefore, I think it is fair to say that early neoliberalism arose almost entirely separate from the prior neoclassical tradition, in part because they had become extremely suspicious of the political options prevalent amongst neoclassical economists back then, and in part because of their origins in continental traditions opposed to neoclassical economics. However, as the NTC grew more powerful and numerous, I have argued elsewhere that characteristically neoliberal doctrines came to be increasingly absorbed within the heartland of neoclassical microeconomics.[23] Professor Vernengo seeks to support his theses concerning the unity of neoclassical and neoliberal economics in reference to macroeconomics, but the problem there is that even economists in good standing tend to admit that modern macro is just a sequence of faddish enthusiasms, displaying little continuity or intellectual substance.[24] The real key to understanding modern economics is the absorption of the central tenet of markets as superior information processors within the heartland of cutting-edge microeconomics. By the turn of the millennium, the economics orthodoxy had become palpably more neoliberal, even though they themselves had little comprehension of that fact. This goes far to explain why some on the Left reflexively equate the economic orthodoxy with neoliberalism, in order to pronounce a pox on both their houses. Equally, it can begin to explain the obliviousness of someone like Simon Wren-Lewis.
This tendency to conflate the two has the unintended side effect of severely restricting the range of political options in modern discourse. George Monbiot (2016) has captured some of the impasse bequeathed by modern economics:
Every invocation of Lord Keynes is an admission of failure. To propose Keynesian solutions to the crises of the 21st century is to ignore three obvious problems. It is hard to mobilise people around old ideas; the flaws exposed in the 70s have not gone away; and, most importantly, they have nothing to say about our gravest predicament: the environmental crisis.
Although the NTC has denounced Keynes as the Devil Incarnate in the past, that does not mean that Keynesianism constitutes any sort of currently viable theoretical position to counteract the neoliberal onslaught. Keynes was the exemplary Classical Liberal of the interwar period; the neoliberal ascendancy has effectively neutralized that political position in a thousand ways in the interim. The Loyal Keynesian Opposition has therefore been a disaster within 21st century economics. Post-Keynesians and other heterodox factions seem not to grasp that effective political mobilization requires a thoroughgoing alternative to the neoliberal definition of what a market is, comprehension of how diverse markets work, and appreciation for what it means to participate in a market society. Endless denunciations of “capitalism” do little more than evoke a thoroughly superseded HisMat, which lacks all relevance to the modern situation. Just as the inspiration for the Neoliberal Thought Collective did not originate within the economic orthodoxy of the 1930s-50s, it seems likely that opposition to neoliberalism will not arise from within modern economics, either.
References
Bagus, Philip. 2016. “Why Austrians are not Neoliberals,” at: https://mises.org/library/why-austrians-are-not-neoliberals
Blanchard, Olivier; Rajan, Raghuram, et al., eds. 2016. Progress and Confusion: The State of Macroeconomic Policy. Cambridge: MIT Press.
Brown, Wendy. 2015. Undoing the Demos: Neoliberalism’s Stealth Revolution. New York: Zone Books.
Caldwell, Bruce. 2004. Hayek’s Challenge. Chicago: University of Chicago Press.
Cherniss, Joshua. 2013. A Mind and its Time: The Development of Isaiah Berlin’s Political Thought. Oxford: Oxford University Press.
Foucault, Michel. 2008. The Birth of Biopolitics. Trans Graham Burchell. London: Palgrave Macmillan.
Hayek, Friedrich. 1944. The Road to Serfdom. Chicago: University of Chicago Press.
Hayek, Friedrich. 1948. Individualism and Economic Order. Chicago: University of Chicago Press.
Hayek, Friedrich. 1979. Law, Legislation and Liberty. Chicago: University of Chicago Press.
Hayek, Friedrich. 1988. The Fatal Conceit. Ed. W.W. Bartley III. Chicago: University of Chicago Press.
Hayek, Friedrich. 1994. Hayek on Hayek. Ed. Stephen Kresge & Leif Wenar. Chicago: University of Chicago Press.
Hayek, Friedrich. 2011. Constitution of Liberty. Chicago: University of Chicago Press.
Lash, Scott & Dragos, Bogdan. 2016. “An Interview with Philip Mirowski,” Theory, Culture and Society,
McPhail, Edward & Farrant, Andrew. 2013. “Hayek and the Sorcerer’s Apprentice: Wither the Hayekian Logic of Intervention?” American Journal of Economics and Sociology, (72):966-982
Migone, Andrea. 2011. “Embedded Markets: a dialogue between FA Hayek and Karl Polanyi,” Review of Austrian Economics, (24):355–381.
Mirowski, Philip. 2009. “Defining Neoliberalism” in Mirowski & Plehwe, eds., The Road from Mont Pelèrin. Cambridge: Harvard University Press.
Mirowski, Philip. 2013. Never Let a Serious Crisis Go to Waste. New York: Verso.
Mirowski, Philip. Forthcoming. “Polanyi vs. Hayek?” Globalizations,
Mirowski, Philip & Nik-Khah, Edward. 2016. The Knowledge We have Lost in Information. New York: Oxford University Press.
Mirowski, Philip; Plehwe, Dieter & Slobodian, Quinn, eds. Forthcoming. More Roads from Mont Pelèrin.
Monbiot, George. 2016. “Neoliberalism—the ideology at the root of all our problems,” Guardian, 15 April, at: http://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot
Peck, Jamie. 2010. Constructions of Neoliberal Reason. New York: Oxford University Press.
Plant, Raymond. 2010. The Neoliberal State. Oxford: Oxford University Press.
Polanyi, Karl. 1957 [1944]. The Great Transformation. Boston: Beacon Press.
Prügl, E. 2015. ‘Neoliberalising Feminism’, New Political Economy, 20 (4), pp. 614-31.
Rodrigues, Joao. 2012. “Where to Draw the Line between State and Markets?” Journal of Economic Issues, (46):1007-1033.
Rodrigues, Joao. 2013. “The Political and Moral Economies of Neoliberalism,” Cambridge Journal of Economics. (37):1001-1017.
Röpke, Wilhelm. 2014. A Humane Economy. Wilmington, Del.: Intercollegiate Studies Institute.
Schnyder, Gerhard & Siems, Mathias. 2012. “The Ordoliberal Variety of Neoliberalism,” in Sue Konzelman & Marc Fovargue-Davies, eds., The Faces of Liberal Capitalism. London: Routledge.
Shearmur, Jeremy. 1996. Hayek and After. London: Routledge.
Footnotes
[1] David Foster Wallace, “This is Water” Kenyon College Commencement Address, 2005, at: http://bulletin.kenyon.edu/x4280.html
[2] The online version attracted almost 4000 comments in a week, until it was shut down.
[3] Chris Dillow at: http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/04/over-estimating-neoliberialism.html . For another example, consult the comments section of: http://crookedtimber.org/2016/04/29/neoliberalism-a-quick-follow-up/ .
[4] Perhaps the reader will pardon a reminder that I started my (2009) with a demonstration of the utterly misleading nature of Wikipedia as a crib sheet for political theory. The Internet is a fetid swamp of misinformation, something that Neoliberals actually praise as a good thing. See (Mirowski & Nik-Khah, 2016).
[5] Getting people to realize economics is not the final determinant in the Neoliberal movement was the contribution of Foucault (2008). Also, here I must apologize for an error in the “Political Movement” paper. On page 10, the person who coined the term “Vitalpolitik” was Alexander Rustow, not Walter.
[6] See http://mainlymacro.blogspot.com/2016/05/neoliberalism.html.
[7] “Economists would just say that both are potentially true and it all depends, which is one reason why many economists find it hard to talk about ideologies that involve their own discipline.” (Wren-Lewis, ibid.)
[8] This argument is made in detail in my (Mirowski & Nik-Khah, 2016).
[9] See (McFail & Farrant, 2013).
[10] For further qualifications, see (Cherniss, 2013), who argues Berlin did not hold to any definitions consistently.
[11] See, for instance, (Brown, 2015).
[12] A somewhat revised version will appear as (Mirowski, forthcoming). This section is excerpted from that paper.
[13] (Polanyi, 1957, pp.140-141).
[14] (Polanyi, 1957, p.141).
[15] This is documented in (Mirowski, 2013). “Hayek [is] much closer than Mises to Polanyi’s (1944) characterization of the paradoxical relation between the state and markets in capitalism: the development of markets demands an expanding state with the power to impose the rules that markets require” (Rodrigues, 2013, p.1007).
[16] One example of this can be found in (Rodrigues, 2012); another in (Caldwell, 2004).
[17] (McPhail & Farrant, 2013; Peck, 2010; Mirowski, 2013; Rodrigues, 2013; 2012; Shearmur, 1996).
[18] The similar stance of Hayek and the socialists is repeatedly stressed in (Shearmur, 1996, p.62, 103, 104).
[19] See (Brown, 2015). One might also suggest they sought to offset the hostility to their program by rendering neoliberalism as a cultural default: see (Mirowski, 2013, chap.3).
[20] (Hayek, 1979, p.77).
[21] See, in particular, (Mirowski & Plehwe 2009; Mirowski, 2013; Mirowski, Plehwe & Slobodian, forthcoming) and (Schneyder & Simes, 2012; Prügl, 2015).
[22] The situation is further complicated by the existence of Austrians who seek to secede from the NTC: see (Bagus, 2016).
[23] See (Mirowski & Nik-Khah, 2016).
[24] For those who find such an assertion intemperate, I would ask them to consult (Blanchard et al., 2016).
57 comments
Comments are closed.
Empires are always psych ops burning energy to no fruitful end, because fundamentally you cannot motivate someone to be something they are not. Now that you are surrounded by a population of fools creating their own demons, led by experts amplifying self destruction, what do you do?
You watch parents plan their children’s future, and the result at every level aggregated is ugly, and there is always some snake oil salesman offering a cure for the disease, central planning. Don’t create your own demons and the empire amplifier disappears. They methylate themselves trying to artificially produce scarcity, with artificial intelligence, easily replaced.
If you know nothing about children, you know far more than the experts, because each child is different, and every effort to herd them into a psych box for thousands of years has failed. All those resources poured into Silicon Valley, as the example to be copied globally, and what did you get for infrastructure with all that debt, which the kids with functioning brain cells have already repudiated?
Do you really think that there are no Teslas walking on this planet right now, looking at Tesla Motors and laughing?
You learn by living, outside the psych ops box. The experts in efficiency always roll into R&D, thinking that they finally have the technology they need to control the demons, of their own creation. Kidnappers printing debt as money to pay themselves to kidnap your children is not an economy.
They have replaced nutrition with cardboard, science with peer pressure political mythology, and energy with artificial scarcity. You don’t have to do anything. From personal experience I can assure you that Grace will overwhelm any number of fools aligned against her.
“They have replaced nutrition with cardboard, science with peer pressure political mythology, and energy with artificial scarcity.”
Nutrition with cardboard: I can buy that as a metaphor.
Science with peer pressure political mythology: where the heck did you ever get that idea? Except possibly for string theory and its descendants, that’s patently false.
Energy with artificial scarcity: again, where the heck did you ever get that idea?
I can’t speak for ke, but I agree with the accuracy of his “science with peer pressure political mythology”.
In field after field, genuinely new thinking is not welcome and is spat out. The constraints of “acceptable” new materials are tightly drawn. New discoveries are stomped out–even when carried out by top people in their field. I’ve seen it too many times in too many fields–it is blatant. If you want to do a PhD or want a PostDoc, you will know that the most interesting areas of inquiry are not open to you.
If you want just one example, consider Halton Arp, the best observational astronomer of his kind, who was ostracized by the scientific community after he discovered that 2 galaxies with very different redshifts were actually “next door” and in a clear relationship–not to mention the quantization of redshifts, which shouldn’t exist if redshifts indicate distance. No one wanted to consider the implications that maybe many of our distance calculations are all wrong, or that whatever is going on doesn’t fit the consensus model, or that some redshift is intrinsic.
This is one small example in one field.
Have some faith in the kids with functioning brain cells, and everything else takes care of itself. Grace always emerges from the black hole. But don’t watch if you don’t have the stomach.
Wow. That helped crystalize some thoughts, like seeing section 2 within Lambert’s “because markets.”
True education enables people to tell what is shit and what is not. Neoliberalism is an extreme form of Fascism, the most perfect form of Fascism, and the deadliest form of Fascism.
Is he paid by the word? This is not exactly the soul of brevity.
This is what happens when philosophers talk to each other. It takes a long time for the not philosophers to sort it out.
Thanks
And Firedoglake became Fired dog lake. I miss Massiccio.
Had one comment disappear into ether but will try another.
If you weren’t sure what this post is getting at, read the paper referenced up top: ”The Political Movement that Dared not Speak its own Name.” The author’s general claim is that neoliberalism is something very real, to be distinguished from neoclassical economics (though they overlap in the Chicago School) and best thought of as a “thought collective,” which is apparently a real history of science concept:
Because of this, the author argues both that actual neoliberalists are able to distract attention from their political program by claiming that there is no such thing (no canonical author or text) and that opponents are forever mischaracterizing what it is because they skim one or a handful of authors/texts and then claim they know what it is. One important end result has been a lazy conflation of neoliberalism with orthodox neoclassical economics, when nothing could be further from the truth (the latter is theoretically small-state, the former is very much big state). Another has been the lazy conflation (by leftists) of neoliberalism with capitalism. Perhaps most importantly, all this misdirection has made it very hard to counteract the neoliberal political project or to develop coherent, realizable political alternatives.
Another major point in trying to tie all this back to the Mont Pelerin Society is to provide a counter-argument to the increasingly widely held view that the modern right can be traced back to the Powell Memo of the early 1970s. The problem with this view is that is does nothing to explain the rise of neoliberalism in Thatcher’s Britain or elsewhere around the globe. Whereas tracing the spawn of MPS finds one in all the same US think tanks (Heritage, AEI), societies (Federalist), universities (Chicago, Stanford, George Mason) and foundations (Olin, Bradley, Koch) as well as in their counterparts overseas.
I think it is a mistake to assume the rise of Neoliberalism can be traced back to economists in MPS. Economists are merely a tool of the ruling class – people willing to provide the correct propaganda as cover for the real project which consolidates power and wealth. The NTC is mostly made up of those willing to serve the ruling class either because its goals parallel their own ideology (economic religion) or from a desire to rub elbows with power. I think the roots of the neoliberal project can be traced back much farther to the rise of the first think tanks like the Council on Foreign Relations. I think Larry Shoup’s book, “Wall Street’s Think Tank” provides better insight into the origins of this project.
I don’t know too much about MPS but the author seems to suggest it is not just economists. That said, one point I’m still not too clear on, that gets to the claim that neoliberalism is not simply modern global capitalism, are the political motivations of the key actors. I tend to stick to the basic dichotomy that people are motivated either by self-interest or ideological belief. If neoliberals are the former, I’m not sure the distinction with modern capitalism holds. If it’s the latter, then one might expect to find a more coherent, justifiable neoliberal “ideology” than the author suggests exists.
I haven’t read Wall Street’s Think Tanks but I presume the suggestion is self-interest is the motivation. Is the global, imperial part of the project then simply a way to keep making money?
I don’t think it is about money per say – it’s about power and protecting the ruling class. Money clearly plays a role, but it is more about class interests which go far beyond money. The key is to control the rule making, the laws and treaties, to protect the ruling class. Part of this is to impose “market-based” solutions rather than democratic solutions. Free-markets are justified by the “invisible hand” (or TINA) instead of the “hand of God” as was done in feudal times. Think tanks and corporate media are for creating the illusion (and propaganda) that free-markets produce better results than democracy or social programs (like social security) or collective ownership of the commons (like parks and schools). Market-based solutions naturally lead to the concentration of wealth and power by corporations and the ruling class without overt theft and/or totalitarian actions (although both are still used). Neoliberalism is about protecting the property rights of the ruling class no matter how inequitable and unjust the world becomes, or how unlivable climate change makes it. Public ownership of the commons must not be allowed under neoliberal rules – all collectivism must be crushed. Imperialism (US and NATO) is the global enforcement tool of last resort when governments resist neoliberal free-market economic policies – i.e. when bribery fails, or coups are not possible. Neoliberalism is zombie capitalism – a monomaniacal hunger that stumbles forward destroying all in its path. And a key to understanding neoliberalism is to recognize that neoliberals despise democracy – that “so-called” free markets are more important to their ideology than democracy.
“some of the problems of the governance in the United States today stem from an excess of democracy” Samuel P. Huntington
“Personally I prefer a liberal dictator to democratic government lacking liberalism.” Hayak on Pinochet.
“Is there some society you know that doesn’t run on greed?” Milton Friedman
+1
@ left in Wisconsin – regarding your statement:
“people are motivated either by self-interest or ideological belief”
I think you forgot about compassion, altruism, and a host of other emotions that are innate to social animals like humans. There is much evidence that these better emotions are the primary reason for our survival as a species. Most humans are not homo-economicus (sociopaths) nor are they ideologically brainwashed automotons (although many approach the latter listening to fox news and right-wing spin machine – there is a new documentary on this – “The Brainwashing of My Dad”).
Well, he did not suggest that ideological belief was necessarily wrong. Thus, one could group your “better emotions” into the “ideological belief” montage. Why would a person have compassion, altruism, etc.? Yes, there is the philosophical heritage of our species. Yes, one could suggest that “survival of the species” might even belong in the “self-interest” mode.
So, when one is looking at comparisons of self-interest and ideological belief, one needs to know what definitions the author assigns to these rather broad concepts.
“I tend to stick to the basic dichotomy…..
Many people are motivated by curiosity. I know I am.
There must be more things.
It seems like dichotomy is an organizational construct used to attempt understanding by
categorizing and reducing the chaos of information.
I would go much further than that. In Merrie olde England :D near the beginning of the industrial revolution, they passed the Enclosure Laws, eliminating the Commons and driving people into ghetto existence working in the new-fangled factories for a pittance. The saying amongst the upper classes was that “There are fewest poor where there are fewest Commons”.
Never mind that these people were even poorer off, if that were possible, in the very factories that these same upper classes owned. It is this Big Lie and this hypocracy that infuriates so much. The practice was perfected in the USA with the company store etc. and in modern US economics.
The end result was Charles Dickens and the Labour party.
Under the “know your opponent” (or enemy) approach to counteracting the neoliberal political project, one might start with Larry Shoup’s book “Wall Street’s Think Tank”.
Right on. That has confused me for some time now, too. If by ‘neoliberalism’ we mean ‘the ruling orthodoxy in DC’, why would leftists conflate that with markets? TPTB hate markets, both in the practical nuts and bolts of ensuring competition and in the underlying philosophy of individual rights and decentralized decision-making and so forth. Markets require (rough) equality among the participants, the very antithesis of the authoritarian mindset that says the Serious People are above the law and the point of public policy is to pick individual winners and losers rather than referee the game.
I think the author would argue, I’m sure I’m oversimplifying, that neoclassical economists fetishize hypothetical markets while neoliberals fetishize actual markets, with all the power relations and inequality they imply.
And that’s the part where I diverge a bit from some of the other leftist criticism. I think the ruling class doesn’t care about markets. They employ some of the language for PR purposes, but it’s only for optics, not substance. Their actions are quite different.
The power relations and inequality they desire are utterly dependent upon public policy. Markets do not deliver the kind of centralized authority and control they crave.
I’ve read Mirowski’s Never Let A Serious Crisis go to Waste, and wrote about it at FDL This is an accurate view of his major thesis, I think.
I’d add this. Mirowski conceives of the NTC as the center of an onion of thought and thought leaders. The layers close to the center have a clearer understanding of the entire project, and as you move to the outer layers, you get people who don’t understand the purposes or the tactics, but for whatever reason buy into the ideas produced at the center. I doubt HRC would approve of the purposes or goals as outlined by Mirowski, but she and the Clinton/Third Way crowd are excellent practitioners of the ideas.
I don’t recall much discussion by Mirowski of the role of the funders of the movement. Hayek himself is a project of some right wing rich people looking for a respectable alternative to Keynes. Hayek seems to have thought he was in charge, with his little group and his sinecure at the London School of Economics, but the rich do what they do, they took the ideas and used them to make money for themselves, and screw the lovely theory. In the end, it won’t be the pseudo-intellectuals in the NTC who form the new version of the State, it will be the filthy rich.
Hi Ed. Mirowski talks with Sam Seder about this a bit on a Majority Report. Maybe you’ve heard it. The word “behoove” comes up. Are the funders just funding something that will behoove them in the regulatory approach they want for their businesses, say? Is the NTC just starting with the end goal of developing a theory that will behoove their patrons, and then connecting whatever dots will get you there? If I am paraphrasing PM correctly, he says no, NTC is not disingenuous, they “really believe this stuff,” and they want to change the patrons’ thinking. How does this fit into the big picture.. dunno yet……
Think of the very large TISA, TPP. TTIP treaties…
“If Hayek really was so supremely confident in the inherent spontaneity of the market, there would be no rational earthly motivation behind the elaborate political mobilization theorized and then implemented by the neoliberals, especially from the 1970s onwards.”
The Powell Memo is the outline of this mobilization.
This article is going to help me a lot with recent and likely future grapples I’m having. Just yesterday I was trying get across the point that if we had a free market, the state would not have intervened and prices would have fallen, there would be less income disparity, rent would be cheaper, etc. I went on to say ACA is an example of the state imposing a market on the population, a penalty for not participating in a free market. Now I know I need to start from the strong state argument as the dirty little secret that belies it all. I think my punch line is going to be “if we could only redesign the flag somehow so it could capture the power of the state mixed with the vast productivity of he nation…hmmm…I know! A hammer and a sickle!”
I this this one paragraph truly explains what neoliberalism is. At its core, its little more than a long list of ad-hock “theories” and concepts to try an excuse itself from its own past failures. The ideas themselves truly do not matter. What really matters is realizing the intended outcome of its finical sponsors.
As a result, neoliberalism is constantly changing. Its nearly never the same thing twice. So I can see while trying to pin it down is nearly futile.
Rather, what needs to be done here is to look at the interests that it represents, and look for patterns there.
Here, the core is rather obvious – the new ruling moneyed classes and their relentless desire for accumulating wealth and power. Not just the means of building on corporate or even market power. These are really little more than the means to the end. It’s no longer the trappings of Royalty involving thrones and Cassels. Today it’s the trappings of the CEO, the corner office, the chair at the head of the corporate boardroom. Find out what they want – and only then do you find out what neoliberalism is.
I think you are correct in the claim that there is lots of trial and error public theorizing. But the author argues:
1. that there is a political/intellectual core to neoliberalism, even if it is the product of a “thought collective” as opposed to canonical authors or texts; and
2. much of the public face of neoliberalism is deliberately misleading, if not outright false, pap for the plebes. Best example is Grover Norquist’s “small government” crusade, when neoliberal governance is never about, and never leads to, smaller or weaker government. Where neoliberal governance is apparently weak (think “do-nothing Congress), that is by design.
Hmmm. I may have to take a closer look. Did Yyes slip us a Where’s Waldo piece when we weren’t looking?
But what is a “thought collative” if not a collection of texts from canonical writers? If there is nothing to examine – then how can you say such a thing exists. Ideas, even wrong ones, can only exist in media that we can examine.
See my first comment above for author’s description of the concept of “thought collective.” It’s not that there is nothing to examine. It’s that the authors and texts require deep examination and comparison with actual political action/behavior to determine what is essential/true and what is misdirection.
Here is another excerpt from the referenced article:
There is the possibility that a collective understanding of issues might condense around a psychological mindset but pass for intellectual doctrine. This would be characteristic of something like propaganda, for example, where feelings are inculcated without anyone explicitly knowing origins that can be articulated. Can anyone, for instance, explicitly describe the ideology of patriotism evoked by a flag? Yet that sort of “ideology” is common, and vigorously defended without its adherents clearly understanding what it is.
In economics, after so many decades of inculcating the moral rectitude of competitiveness, the nobility of the freedom associated with laissez-faire economics, and the reassuring inevitability invoked by TINA, those who are edified by these viewpoints might come to think they have a real ideology, especially if they’re surrounded by other true believers trained in the same narrative.
Such impressionistic worldviews can collapse when scrutinized dispassionately and honestly, as intellectual analysis exposes the conceptual vacuum. The avalanche of theological reformation brought by the works of Aquinas and other rationalist theologians is an example of how an impressionistic system is vulnerable to conscientious scrutiny. But the main bulwark is the refusal of the community at large to entertain ideas outside the psychological milieu of the times (Galileo). Here Ash conformity comes into play, and critical thought can be safely denigrated as “far out” conspiracy theory so it won’t be considered too seriously. Consider the level of Krugman’s arguments against those of Gerald Friedman, or Steve Keen.
Neoliberalism is a very slippery term to begin with and by making these important– but rather inside baseball– distinctions I worry it will become even slipperier for the layperson. The problem I have with using the term is that in arguments I generally don’t like to label people with a word they wouldn’t readily apply to themselves– because what I’ve seen happen is the terms’ definitions get watered-down, and then the argument descends into ad-hominem.
If I use the term neoliberal in an argument I may have a good idea of what I’m referring to, as verbosely broken down by Mirowski here, but if my interlocutor is actually a neoliberal in her thoughts, she will never acknowledge it: because it is an orthodox framework that neoliberals assume. Trying to talk to a neoliberal about neoliberalism is like going to China and asking for Chinese food– to them it’s just food.
The other day (don’t remember where) Yves spoke about the neoliberal experiment nearing the end of it’s 35 year run. I am not sure how I feel about this assessment (although I certainly hope she is right). If Yves is correct, it means first that neoliberalism has entity: ie, it is distinct from laissez faire mercantilism (as Mirowski claims); and second that it has a start point and (hopefully) an end point. I’m not sure what evidence she sees for it reaching the end of its cycle, but I am convinced that there must be a way to communicate its entityness to its victims– much in the way Occupy was able to communicate the concept of 99% vs 1%. But for now, even armed with Mirowski’s insight here, it’s still a term I avoid.
Think of it as a “regime of accumulation,” a phrase I’m borrowing from the French regulation theorists. The neoliberal regime of accumulation was all about looting the prior Fordist regime of accumulation, which– by comparison– was more about production and wealth creation than looting, or redistributing upward, the wealth that had been created. I’m inclined to agree we may be nearing the end of “its” useful life cycle because the parasite has seriously damaged the host.
The parasites themselves– or for that matter the pension** funds– don’t know where to look “to invest.” Go take a look at something like, oh I don’t know, MarketWatch or something. Negative interest rates in Europe are symbolic and more than symbolic of this. Petrol states are collapsing. The whole economy is being sucked into a financial black hole.
I don’t know what will emerge next, but I don’t think it’s the return to the 1950s everyone seems to hope for. (Although women of many economic classes are being turned into sex dolls at a rapid clip, so never say never).
**But this is precisely the problem: financial players and working classes alike have been rendered parasitic on the private sector economy under neoliberalism’s “market based solutions,” and the productive elements of the economy are squeezed to provide for this.
It’s actually ironic.
What I find most impressive in the Mirowski analysis is his critique of lazy and totally inadequate left thinking:
“Yet I believe it is precisely this disdain for political ideas and simplistic appeals to capitalism that has crippled the Left in its search for something substantial with which to challenge the palpable dominance of neo-liberal discourse in everyday life, as well as in political mobilization.”
“Polanyi, so besotted with the trope that opposition to encroachment of the market was “natural” never entertained the notion it too could be manipulated. The eventual solution favored by the bulk of neoliberal thought was to render democracy so hamstrung and ossified that it could never prove capable of neutralizing neoliberal market structures erected by the strong state. Their strong state had to come cladded with strong defenses against the will of the governed.”
“Post-Keynesians and other heterodox factions seem not to grasp that effective political mobilization requires a thoroughgong alternative to the neoliberal definition of what a market is, comprehension of how diverse markets work and appreciation for what it means to participate in a market society. Endless denunciations of capitalism do little more than evoke a thoroughly superseded HistMat.”
“The problem that presents itself here is not so much the apparent contradiction between advocacy of the virtues of the “free market” and active takeover of government structures; it is rather the conviction that all neoliberalism amounts to is yet another in a sequence of random concoctions of bald apologetics for capitalists so that the ideas themselves really don’t matter.”
“Another symptom of this latent HisMat is a conviction that everything “really” just boils down to economics, and one can ignore anything else as just “fluff.”
This is not to say that Mirowski has indicated a way out or that he has really confronted more sophisticated HistMat perspectives.
Mirowski observes that “The one place where Hayek and the NTC diverged from Polanyi was that they could never ever allow that the blowback from markets could ever be considered a ‘natural’ response of the masses”
The markets have gotten to the point of impoverishing and leaving behind more and more people.
Very good interview of Noam Chomsky by Abby Martin.
https://www.youtube.com/watch?v=YUc8ukdVtMs
He makes the point that the lower 70% of the population on the economic scale are disenfranchised. As an example the majority of people want a single payer/national health care program but the press keeps saying that it is ‘politically’ impossible. That is, it doesn’t matter what the public wants. The pharmaceutical and insurance companies don’t want it.
Mirowski is a sharp but testy writer. I think some of the difficulty we’re having with his argument is that the organizing locus of neoliberalism is not a coherent theory of political economy, but rather the needs of a political offensive against a variety of state interventions in the market that, in turn, exist in a variety of societies in which ideological options differ. In different societies different emphases take shape, and to try to integrate them into a ideas that are shared supranationally, as it were, is hard. This seems to draw Mirowski into making some rather discerning points about contradictions in theoretical statements that seem to be of little relevance to what’s been happening on the ground.
For example, ordoliberalist trends in neoliberalism, of the sort that Mark Blyth associates with Germany, would regard some of the free market enthusiasm in the US as simply insane, manic. The Greenspanian anti-regulatory claim that malfeasance in markets will eventually be counteracted by knowledge of malfeasance and the shunning of malfactors, something Yves discussed in Econned, utterly contradicts the ordoliberal principles, not to mention the reality of information asymmetries. Yet both groupings share an interest in undercutting the institutional and theoretical foundations of welfare capitalism.
The idea of a “Neoliberal Thought Collective” is kinda sprawling, but it does get at the reality of how ideological hegemony works. Mirowski’s criticisms of the lack of differentiation in thinking about capitalism by left thinkers is puzzling to me, though, because the writers I’m familiar with, like Blyth or Kotz, are very careful to not portray “capitalism” as a transhistorical system that can only be thought of terms so abstract as to lose any sense of local permutations and innovations.
If you’re interested, here’s a interview with Mirowski but Doug Henwood. You’ll note he also objects to his windyness and a tendency to belittle opponents
http://shout.lbo-talk.org/lbo/RadioArchive/2013/13_08_22_16.mp3
“I think some of the difficulty we’re having with his argument is that the organizing locus of neoliberalsim is not a coherent theory of political economy…”
If you take the time to look carefully a Mirowski, I would argue that he does have a coherent theory of neoliberal political economy.
As he himself has stated “philosophically sophisticated neoliberals believe “We must seize power and use all the tools of government to get the government to impose the ideal market on a recalcitrant populice.” (See Mirowski, The Political Movement that Dared not Speak its Name: The Neoliberal Thought Collective Under Erasure,: Sept. 2014).
Or Mirowski quoting a Davies definition of neoliberalism as “…the dependence upon the strong state to pursue the disenchantment of politics by economics.” (Same source as above).
The question of what is now happening on the ground may partially revolve around how the emergent alternative political/economic groupings view the future role of the state and their belief or non-belief in democracy.
Neoliberalism (Clinton/Ryan etc) may be evolving into a type of Sectarian state/party formation, which is willing to go to any length to remain in power in the U.S.
Does the Trump political/economic grouping represent an alternative sectarian state/party formation?
Is the social democratic politics of Sanders a potential pluralist counter movement to the Sectarian state/party formation of neoliberalism and possibly Trump or are there currents within the Sanders movement that would ultimately support their own sectarian/state/party formation from a more Lennist left perspective?
To me, that is not a theory, but rather a strategic plan. Their theoretical formulations regarding the role of the state in relation to the economy tend to the sort of contradictions he discusses because contexts vary. In his book Never Let a Crisis Go to Waste he discusses their work in Straussian terms, using the difference between ideas propagated to the masses and the ideas of the elite. The line sold to the masses has to have some links to theory, thereby generating tensions that are continually papered over to generate a TINA-think that covers for technocratic control. The elite line is relatively insulated from those tensions, but since the ideological conjurers are not themselves insulated from the economic and political elites they cater to, that can lead to another set of problems.
One example of Mirowski’s unwarranted snark. Does he really want to claim that Polanyi was that politically naive? Polanyi made an argument that,, within the fluctuating constraints of a gold standard-bound capitalist economy, when people are treated like dispensable labor inputs, they tend to rebel. He did not claim that their response would not inevitably be channeled and deflected, something which he would have seen plenty of in the 30s.
Appreciated the allusion in the title to David Foster Wallace’s analogy of fish in water who don’t know they’re in water. As he has said, the point of the fish story is that the most obvious, important realities are often the ones that are hardest to see.
https://www.1843magazine.com/story/david-foster-wallace-in-his-own-words
IMO neoliberalism is merely part of an increasingly visible portion of an intentionally obfuscated ideological iceberg that is a longstanding dream of some global elites. That dream is of a world state based on monetary control by a central bank, global financial markets, centralized control of law (through agreements such as the TPP, TTIP and TiSA) and those who control large transnational corporations.
Further, those who subscribe to this political philosophy either fail to recognize or simply don’t care that the only system of government that enables institutional improvements over time without violence and bloodshed is liberal democracy.
Just my interpretation of events.
+1
+1 more
As a neophyte who learned microeconomics from McConnell 35 years ago, I find the wholescale dismissal of Keynes a bit disturbing. My view of Keynes and Keynesians like J.K. Galbraith was not to worship “the market” as a god truth-teller that should be allowed free reign (lasssez faire – the neoliberal view), but as a tool to be harnessed by governance to accomplish desired “goods.” My read of Keynes is that post crisis he would have encouraged high deficit spending to capture idled productivity. The only Keynesian response I would not agree with would be a loose monetary policy (ZIRP), but I suspect that had Lord Keynes been the Fed chair instead of Bernanke, that joyride would have ended much sooner, given the actual outcomes. What I perceive as needed isn’t a full-blown alternative theory to which we could conform fiscal and monetary policy, but a scheme of actions and outcome monitoring, leading to feedback, new actions, monitoring, etc. I might suggest gaming such actions with models first because outcomes could be adverse, but I fear the existing models have neoliberal roots that would negate the effort. At any rate, nice piece, with a reading list appropriate for a graduate seminar. Thank you Professor Smith.
The reason Michael Hudson is the greatest living economist is because he presupposes the government is a criminal enterprise. Being a nonpareil scholar on the history of debt, he makes a crucial distinction between neoliberalism and other economies that collapsed from debt. Neoliberalism was formally structured in the seventies for globalism to feudalize the world. It required floating currencies intersecting with inverted tariffs via Tokyo GATT in 1974.
Many NC readers know this; I created my own epistemic narrative based upon the first principle of neoliberal suite thuggery being an inverted political economy. When debt expansion via finance replaced wealth expansion via production, disaster capitalists leveraged debt via liquidity production to make every problem into a profit motive. Economic enervation via debt engenders more for-profit problems, more corporate takeover terrain, more grabitization from differential accumulation, more mass enslavement via neofeudalism.
Larry:
Do you have any citations from Hudson to support your argument that Hudson presupposes the government is a criminal enterprise?
My sense is that Hudson argues that every economy is planned and the question becomes who does the planning. He certainly doesn’t like banks doing planning but I see him as extremely sympathetic to some form of democratic governmental planning.
.
Hayek is in direct reaction to the mobilization of Western economies during WWII by the centralized planning of the state. Before the Nazi’s were even defeated, he was worried about the implications of a state directed economy and the populace falling in line to the tune of a Kafkaesque bureaucracy. The individual would not so much be reduced to an amalgamated undifferentiated mass of humanity as a witless follower of arcane directions to please take a number and wait your turn when someone will be available to see you. All of the fabled tales of individual alienation from all manner of social relations, traditions, and even national identities were being swept away in the single minded pursuit of military victory. And explosive economic productivity, not caused from any market demand for worldwide death and destruction, showed that the politician, not the business man or even the marveled inventions of Edison, Bell and Tesla could bring a new world of material goods out the disheveled ruins of a global economic depression.
The moral equivalent of war, during peacetime, did bring cars, interstate highways, a building boom, and education boom in universities, and space travel to the moon, and safely back the likes of which the world had never seen. And all of these accomplishments, planned by government agencies, funded publicly showed that markets did not naturally drive the economy, but that the government could set goals with equally productive results as any captain of industry, such as Ford or Carnegie.
In my reading of Hayek’s “Road to Serfdom”, I saw little more than a squeemish fear of the state taking over free will from the individual, as if the problems of anyone amounted to more than a hill of beans in this world. As if you could exist for one second outside of a pre-existing social order that you had no say in what so ever when born, and you could not even think or write about without massive socialization that transmitted language and critical thinking skills for you to even create some social fiction of an individual identity in the first place. Repeating over and over freedom, liberty, the state this the state that, did not give the force of argument to Hayek enabling him too conquer hearts and minds with his Neo-Liberal position. It was the 1 million copies of a Readers Digest insert, a shorter version to be sure, but a widely distributed political tract, a post WWII pamphleteer that enabled a ideological message to pre-emptively strike in the gathering places of small town America to blunt the 4 term FDR juggernaut of massive government programs that did not exist in the size or extent before the New Deal.
Capitalism did not save the world, the US Government did so by directing all of the labor and materials at the disposal of both the public and private sectors together at the same time in a planned market free social order. So much so, that Robert Dalek comments on JFK’s decision to enter politics. Kennedy saw that the world had changed from the time of his father, where a rich business man would make the important decisions about how the government would be run, who would be in the office to run it, and who would have power in society at large over the population as a whole. John Kennedy wanted to be an elected government official because that is where the power is, and where it would continue to be, not in the business world. If you wanted to be the man who got what he wanted, how he wanted it, and when he wanted it, you ran for office because WWII showed him that is where the power now resided.
The NTC also saw this and mobilized against it and won. And it isn’t some fresh, new ideas that we need, what we need are new young warriors to march off to take power away from the Neo-Liberal Washington consensus. Power is not about better ideas, it is about forcing your ideas. The fact that economics has been debunked by it’s failure to see its own collapse coming and prevent it does not invalidate its power to hold on to its privileged position. Its power to hold onto its privilege is not based on scientific validity, but the political takeover staged as a reaction to the New Deal and Great Society programs, which was diminishing the power of the wealthy by rendering them irrelevant. If a democratically controlled republic can wage global war and win and then convert that productive capacity to the highest standard of living the world has ever seen for the masses and then begin to wipe out poverty, what the fuck do we need rich people laying around doing nothing for?
Enter the NTC.
Nice Synopsis. Thanks.
With the David Foster Wallace allusion (“This Is Water”) and the de rigueur dismissals of class politics (Marx) and the welfare state (Keynes), this read like a post-graduate seminar circa 1992. Post Modernism to the max (headroom)!
Meanwhile, the rest of us are seeing our lives go to ruin, and the perpetrators of this disaster are as apparent as Boss Tweed in a Thomas Nast cartoon. Items such as class privilege/domination and better living conditions/more power for working people may be crudely reductive and unfashionable for some, but vitally relevant from where I’m sitting.
This article provides an excellent forum for testing one’s skills at recognizing propaganda techniques – wiki has a great listing of these techniques.
The scary part of this post is in part 2. Polanyi offered a ray of hope in what Mirowski calls the double-movement. He said that when the demands of the market got to be too disruptive society at large would demand change. Here Mirowski argues that that can’t happen. That’s scary.
Thanks for this post and comments.
The NTC purpose is to redefine the notion of the common good. They have succeeded in equating individual wealth accumulation with the common good, an amazing feat. Great effort is expended to suppress any notion that the productivity of human labor can and should be distributed in an equitable manner. It is never mentioned that human labor can be directed toward building public spaces of utility and spiritual purpose.
Neoliberalism gained power by turning the motivating elements of a just society on its head. Notions of honesty, loyalty, and working together for the common good were subverted to enrich the few. When those in power can lie with impunity, the social fabric will unravel. It is unstable at the very least.
A society must grow. It is a super organism. The decay and atrophy clearly present demands a response.
Ever since I read “Never Let” last summer, I have pretty much ate, slept and drank more Mirowski for the whole subsequent year. Highly recommend all of his five or six lectures sitting on youtube as a gateway drug into reading NLSCGW and everything else after that. If you don’t know what ‘quiddity’, ‘tyro’ or ‘ukase’ means, you will learn some vocabulary as well!
The NTC is at heart a psychological disposition. Link, for example, that roughly 1 in 10 women suffer from post-natal depression and the effects on their children with the evolutionary anthropologist Michael Tomasello’s “Interdependence Hypothesis” and you are beginning to get somewhere:-
“Two key steps in the evolution of human cooperation: The interdependence hypothesis.” 2012
http://www.eva.mpg.de/psycho/staff/tomas/index.html