How Did The Neoliberals Pull It Off?

The first thing I did was make a mistake. I thought I had understood capitalism, but what I had done was assume an attitude—melancholy
sadness—towards it. This attitude is not correct.

—Donald Barthelme, “The Rise of Capitalism”

I have just surfaced from immersion in a small sea of newly released books, all with one concern: how to understand the rise of neoliberal ideas to dominance in the late 20th century. The experience did not prompt an attitude of melancholy sadness. “Cark” would be the sort of term Barthelme might use to characterize my vexed sentiment. The books’ authors seem to share another demeanor: sobriety. What accounts for the sudden billow of thoughtful and subdued reconstructions of the intellectual significance of neoliberalism? It’s not like the neoliberals are new on the scene. Although few of the authors say so, an unnerving contemporary phenomenon is at least in part responsible: neoliberal movements and ideas have come through the global financial crisis essentially unscathed throughout the Western world, a jaw-dropping fact that should leave us all scrambling to understand its force and resilience.

This is not the place to lay down the Ten Commandments of Neoliberalism, especially because the authors here surveyed display surplus unease about any simple or concise definition of the phenomenon. Suffice it to say that neoliberalism consists of a thoroughgoing reinvention of the classical liberal tradition, expanded to encompass the whole of human existence as a political animal and a knowing being. In this tradition, the market stands as the ultimate arbiter of truth; the pinnacle of achievement is to become an entrepreneur of the plastic self; there is no such thing as Society; and freedom is recoded to mean anything the market allows. It is generally conceded to have been initially stabilized by the members of the Mont Pelerin Society, a group founded in 1947 and that is still in existence today. Over the last four decades it has expanded to encompass a vast thought collective, ranging from high-profile economists like Friedrich Hayek and Milton Friedman to politicians like Margaret Thatcher and Ronald Reagan; from the Murdoch media empire to Astroturf movements like the Tea Party; from think tank denizens across the globe to the “shadow elite” described by Janine Wedel. Terms like “market fundamentalism” and “libertarianism” severely misrepresent the movement, as some of the current authors insist. Even here, one begins to glimpse just how difficult it will prove to write a conventional intellectual account of the movement.

Divided in approach, the authors come together in renouncing the knee-jerk accusation that attributes the rise of the phoenix to a crude materialism of class interests. Neoliberal ideas serve as little more, this story goes, than a cynical cover for an all-out counterassault on the working class. Once these authors decide that David Harvey’s account in A Brief History of Neoliberalism doesn’t really cut the mustard, and that reductionism by the Left has added to the problem, the prevailing tendency is to turn to intellectual history. Moving back through the lineage of ideas, these authors attempt to comprehend how neoliberalism constructed its unassailable thought-carapace while its opponents were distracted by their own theoretical disarray. Some, but not all, of this current group are professional historians; that camp has seen an explosion of interest in the modern history of conservatism and other right-wing formations.¹ But the current crop also includes sociologists (Medvetz) and geographers (Peck and Hackworth), such that the history of political economy is now unexpectedly flowering in the space abandoned by historians of economic thought.

Rather than recount a selection of the numerous virtues and sparse drawbacks of each individual volume, I would like to highlight a couple of issues that the books share in common. The first is the pervasive handwringing concerning the worry that “neoliberalism” doesn’t really exist, at least as a coherent analytical category. This anguish forms a primary trope of their analysis: that the conceptual framework that supports a political movement so cutting and powerful it has swept the political field dissolves under the touch. This worry has become a near cliché in studies of neoliberalism;² however the books under review differ in their modes of response to this predicament.

Jamie Peck represents one extreme of the continuum, the argument that there is no intrinsic essence to the doctrine, no definition to which one might appeal: “there is no neoliberal replicating machine. Rather, each experiment should be seen as a form of reconstruction … Neoliberalism defies explanation in terms of fixed coordinates.” More than once, he describes it performing the magic of lifting itself by its own bootstraps: “Neoliberalism … is a self-contradictory form of regulation-in-denial.” It purportedly accomplishes this by alternating phases of “rolling back” the state and then “rolling out” new forms of governance, all in pursuit of political power. Yet, barring all these qualifications and warnings, Peck still incongruously manages to construct a reasonably tight historical narrative around Friedrich Hayek, Milton Friedman, and some other denizens of the Mont Pelerin Society.

The continuum’s other end is represented by Thomas Medvetz, Jason Hackworth, and, to a lesser extent, Angus Burgin. They hint that they are interested only in a subset of what some call “conservatism” and others the New Right; but they never really explain why it is they end up focused on the smaller knot of usual Mont Pelerin suspects. For Medvetz, this materializes in the midst of a thesis concerning what should and should not qualify as a think tank, which he insists should not be defined by its organizational properties or essence, but rather as a space of intersection of academia, political parties, states, corporations, and the media. For Burgin, it appears instead in the form of an acknowledgement that Hayek and Friedman could not get along with supposed fellow travelers like William Buckley or Ayn Rand; he then inexplicably resorts to using the term “libertarian” without once describing the thought of any actual libertarian in good standing, such as Hans Hoppe or Murray Rothbard. Both Medvetz and Burgin are interested in what makes these right-wing innovations tick, but think they can get to the heart of the matter without once confronting the conundrum of the meaning and extent of neoliberalism as a movement.

There may have been internal contradictions in some of their cherished tenets, but that did not mean they had much trouble recognizing one another as comrades-in-arms.

Daniel Stedman Jones admits that figures such as Friedman did refer to their own program as “neoliberal” in the 1940s and early 1950s, but dropped the moniker later in the decade. However, the authors here reviewed do not recognize this as the significant piece of historical evidence that it assuredly is. Most of the Mont Pelerin crowd dropped the title in the 1950s, claiming in its stead a continuous, long, and hallowed heritage extending back to classical liberals like David Hume and Adam Smith. In fact, their own doctrines diverged dramatically from the tenets of the Enlightenment, and rejected much of the subsequent development of classical liberalism from Jeremy Bentham to John Stuart Mill to John Maynard Keynes. But no matter. The fake genealogy covered something up, something dark and not a little slippery. While loudly abjuring “conservatism,”³ they all set about taking over prior conservative movements. The practice was thus initiated of portraying different essences of neoliberalism for different audiences. There may have been internal contradictions in some of their cherished tenets, but that did not mean they had much trouble recognizing one another as comrades-in-arms; they willfully went about the business of boundary work to reify their shared political project.⁴

Jones offers a periodization for the history of neoliberalism which may provide some practical guidelines for dealing with the protean character of the doctrine. He divides its phases into a prehistory (1920s­–1950), an intellectual consolidation phase (1950­–1980), and the period of accession to political power (1980–present). The true genesis of neoliberalism, this timeline shows, can be found in the response to the Great Depression and the subsequent collapse of liberalism. Membership in the Mont Pelerin Society is a reliable Rosetta Stone for tracking its development throughout the second phase, an incubation period; the thought collective of the third phase represents a much more elaborate and distributed range of ideas and set of institutions. The dedicated neoliberal think tanks of this phase hold pride of place as staging grounds for neoliberalism to gain both power and elasticity. This, indeed, is why the Medvetz book is important, even if, perhaps, the author only sporadically glimpses the full implications of that proposition. This also explains why the Burgin book provides the most satisfying self-contained narrative of those here under review: it focuses intently on Mont Pelerin within the restricted ambit of the second phase. One reason writers like Peck doubt the existence of any fixed points for neoliberalism is that Mont Pelerin no longer constitutes the white-hot center of neoliberal thought. Indeed, today, the multicentered movement is now networked to (among others) the Kochtopus (a phrase coined by insiders), the Heritage–Republican Party nexus, the professional economist–finance complex, the Atlas Network of think tanks and NGOs, and more. Because the movement’s history involves concerted real-time revision of doctrine, there can be no straight line drawn from some fixed ideology to political programs over the history of “conservatism” or “free market fundamentalism” or any other such contemporary addled notions. Neoliberalism is real; but it does not wear its essence on its sleeve.

In addition to puzzling over neoliberalism’s essential qualities, these authors also share the feeling that theoretical resources should be available to adequately portray the relationship between ideas and power, or at minimum to offer some guidance on their critical questions—how changing concepts both prompted and depended upon changes in the economy, institutional structures, and raw politics. It is their great virtue that they all, to some extent, reject narrow internal histories of ideas: Jones spends a fair amount of time with the career politicians and journalists; Burgin defines the importance of ideologically driven philanthropy for the main thinkers; Peck describes how neoliberal doctrines played out on the streets of Manhattan and New Orleans; Hackworth does yeoman work revealing how neoliberalism is converted into morality through “prosperity theology” and faith-based mission organizations. However, each struggles with the problem of how to describe the multivalent relationship of ideas to practice.

Foucault is the obvious touchstone for these authors, not just because he repeatedly chewed on the bone he identified as power/knowledge, but also because in his late Collège de France lectures on biopolitics, he presciently identified neoliberalism as claimant to the governmentality of a new era, one which was dawning as he spoke. However, none of these authors here lean upon him for theoretical guidance, and rightly so, since Foucault himself ended up accepting an inordinate amount of the neoliberal worldview.⁵ Medvetz seems to think the sociologist Pierre Bourdieu is a better resource, but the book he has composed does not depend very crucially upon his teachings. Jones thinks there is a direct relationship between ideas and power, because “the core of transatlantic neoliberal politics was an economic argument. This was the monetarist critique of neo-Keynesianism.” Yet the true strength of neoliberalism was that it never allowed itself to be restricted to a narrowly economistic view of the world.

In the end, none of these authors advance a very solid notion of how ideas actually get cashed out in modern corridors of power. None have proved capable of immersing themselves in the neoliberal conception of the sociology of knowledge in the way that, say, David Foster Wallace was utterly immersed in the media-saturated irreality of modern life. Consequently, none of these books will ever attain the cult status of Infinite Jest. The history of neoliberalism requires scholars capable of scrutinizing the political technologies that mobilize consciousness, power, and institutions. Instead, a fascination with individual personalities, especially of Friedrich Hayek, Milton Friedman, Ed Crane, or Ed Feulner has dominated the inquiry. The allure of personalities as protagonists has proven harder to shed than the company of chronologists and paladins of the political can admit. Even Medvetz is more interested in sketching the character of the intellectual entrepreneur than in explaining why neoliberals believe “truthiness” is good for the economy and polity.

The eventual objective of the neoliberal long march is to render intellectuals superfluous, since the market (in their view) is simply more omniscient than any possible human being.

Burgin, Jones, and Medvetz all grapple with the dual movements of engagement and withdrawal (a Medvetz trope concerning their ambiguous relations with the public) that they encounter amongst the neoliberals. This resembles Janine Wedel’s notion of “flexians”—elite and powerful members of society who occupy so many roles simultaneously that no one can be sure whom or what they really represent. Burgin thinks he can divide the movement into those who favor  the reticence of Friedrich Hayek and those who align more with the cunning interventions of Milton Friedman. However, the division of intellectual labor within the neoliberal thought collective proves far more complex than that. The German Ordos, the public choice crowd, and the postmodern neoliberals all deserve more attention for opening up multiple strategic options for the neoliberal thought collective. For every Big Thinker surveyed by Burgin, Jones, and Peck, there were multiple wizards of entrepreneurial activity, from Antony Fisher to Paul Weyrich to Marvin Olasky (nicely covered in the Hackworth volume). Moreover, Hayek was always the more savvy organizer of neoliberal structures, from Mont Pelerin to the Atlas Economic Research Foundation, which, if anything, suggests he was a more sure-handed activist than Friedman, who primarily excelled at smearing his opponents one on one. Jones writes that “The technical contributions … were separate from the wholesale acceptance of market-based approaches to government and public policy.” This characterization should give readers pause, however, because it merely repeats the old Chicago fairy tale of the separation of the “positive” from the “normative,” a disingenuous division that wove convenient cover for the neoliberal blitzkrieg in the war of ideas and wars of position. Medvetz diagrams the wandering trajectory of these public intellectuals between public engagement and disengagement, but the book ends by arguing that the real achievement of modern think tanks is to have “blurred the separation between intellectuals and nonintellectuals.” The eventual objective of the neoliberal long march is to render intellectuals superfluous, since the market (in their view) is simply more omniscient than any possible human being.

This last point runs deep; precisely insofar as they regard themselves as writing intellectual history, these authors miss the fact that this category itself has been comprehensively reengineered by the neoliberal thought collective. Read together, these books demonstrate that neoliberalism cannot be understood simply as a “school of thought.” As Hayek wrote in 1935, “the hope that Economics will ever become something which the layman can comprehend without training is doomed forever to frustration.” The solution to this conundrum, at least for the neoliberals, was not to subject everyone to forced indoctrination via Econ 101 (although such “education” has indeed been offered as a remedy to the global credit crisis). They have straddled the fence when it comes to formal economic theory.

The thought collective was of two minds concerning orthodox neoclassical economics: Chicago and the Virginia public choice crowd—followers of James Buchanan and Gordon Tullock—were in favor, whereas the Hayekian Austrians and the postmodern neoliberals were opposed. The solution was instead for them to promulgate a new shared epistemology and a related set of double truths for their own true believers. Their philosopher’s stone maintained that everyone should be free to believe whatever florid nonsense caught their fancy because the vast mass of humanity was irreparably condemned to ignorance. This was not to be a counsel for despair because the market was deemed a greater information processor than any human being and the only reliable arbiter of truth. The market would do the thinking for us and guarantee the progress of civilization, just so long as we would let it. As long as their foot soldiers could occupy the government and ensure that everyone would prostrate themselves before the ineffable market, then the political project of neoliberals would necessarily succeed.

The neoliberals display a self-conception as brave and bumptious rebels raging against the machine, while somehow remaining oblivious to the conventional contours of their own mighty juggernaut.

This political program entailed subscribing to a number of oxymorons. First off, in public, the neoliberals tended to talk like their libertarian brethren, expressing contempt for all government. Amongst themselves, however, they would admit that their agenda was to take over existing governments, and maybe even make them larger, more intrusive, and more powerful, as long as they managed to implement explicitly neoliberal policies. Burgin and Jones especially tend to take their supposed libertarian tendencies at face value, and thus misjudge the old-school Leninist character of much of the neoliberal project. At one point, Jones calls Mont Pelerin a “kind of Neoliberal Internationale,” but underestimates the insight behind his joke. Neoliberals also wax lyrical about “freedom” and an “open society” of freethinkers; but the Mont Pelerin Society featured purges, intolerance, and exclusion, and the histories of the Cato Institute and the Heritage Foundation are not all that different. Consider, too, the recent meltdowns at Cato and FreedomWorks.⁶ In the neoliberal thought collective, you are only as free to think as the next paycheck. Hayekians praise “spontaneous order” to the skies, but there are few political movements more regimented than the neoliberal shock troops—from the conscription of the young through Liberty Fund conferences, to the nurturing of recruits through the finest graduate schools, to the congregations of the Tea Party. The neoliberals display a self-conception as brave and bumptious rebels raging against the machine, while somehow remaining oblivious to the conventional contours of their own mighty juggernaut.

The neoliberals also pride themselves on being the most astringent of rationalist thinkers, yet their main theorists preach the promotion of ignorance amongst the masses as a virtue. Hence this was not a “Great Persuasion” as Burgin’s title would have it. Education is too valuable to be wasted on the masses (which is one reason we should privatize all the universities). This constitutes perhaps their most stark double truth. Concerted programs like the promotion of global-warming denial, tobacco-cancer denial, or bank-failure denial are standard tactics in the neoliberal playbook, because the sowing of doubt and ignorance amongst the populace is both good business and a promotion of their own political ascendancy. Consequently, one encounters the unusual situation in Medvetz’s think tanks of a new breed of “anti-intellectual intellectuals,” or intellectuals who deny their own status as such, so as to be more flexible in adjusting their own behaviors to the market. Such people are not a mere manifestation of the clash of rival Bourdieu-style “fields,” as Medvetz would have it; instead, they are the vanguard of a new class of neoliberal activists. No wonder our authors have such difficulty making them conform to the old-fashioned strictures of intellectual history.