A bundle of books from Amazon, Mirowski More Heat than Light: Economics as social physics, Mirowski’s essays on science studies The Effortless Economy of Science and The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective, eds Mirowski and Plehwe., Harvard Uni Press, 2009.
You probably thought that Pete Boettke and Steve Howwitz and their colleagues are just some regular guys with an eccentric take on economics and politics but you need to be warned that they are a part of “the most important movement in political and economic thought in the second half of the twentieth century”. (426). In other words, they are IMPORTANT and they are a worry! The Mont Pelerin Society provides the thread to organise the mass of intricate historical detail that the authors have compiled on the activities of the “neoliberal thought collective” and precursors such as a group associated with Walter Lippmann in France.
Dieter Plehwe wrote the introduction. Keith Tribe – the movement in Britain from 1930 to 1980. Ralf Ptak – the ordoliberal foundations of the social market economy. Rob Van Horn and Philip Mirowski – the rise of the Chicago School of Economics. Yves Steiner – confronting the trade unions. Rob van Horn – on the Chicago attack on the law and economics of trust-busting. Dieter Plehwe on the origins of the neoliberal economic development discourse. Kim Phillips-Fein on the role of business conservatives. Karin Fischer on the influence of the neolibs in Chile before, during and after Pinochet. Jennifer Bair on the new international order. Timothy Mitchell on urban property rights in Peru. Postface, Mirowski defining neoliberalism.
Mirowski starts with a critique of “Wayward Wikipedia” which he suggests is an example of the neoliberal “open market” agenda, playing out in the world of ideas, “appealing to the vanity of nonspecialists and autodidacts who are convinced that their lucubrations deserve as much attention as that accorded to recognized intellectuals”. p 424
From the Wiki interlude we get the idea of the “double truth”. While Wiki is open to all it ends up conservative and authoritarian due to the editorial influence beind the scenes. The Mont Pelerin Society is supposed to be dedicated to freedom and spontaneous order, but “neoliberals are simulteneously elitists: they do not in fact practice what they preach” p 425. When they organise things, “the cosmos collapses to a taxis”…”something like the double truth doctrine holds for neoliberal theories of democracy…it also holds for the notion of a ‘constructivist’ approach to social reality”. p 426 One of the main impressions of the book is the way the authors wear their ideological orientations on their sleeves and it is clearly no part of the agenda to provide any deep analysis of neoliberal programs that could explain why apparently intelligent and reasonable people like the Petes and Steve and Dave have got involved in this movement.
He offers a list of eleven tenets of neoliberalism. Some of them are very strange. 1. “The starting point of neoliberalism is the admission, contrary to classical liberal doctrine, that their version of the good society will triumph only if the becomes reconciled to the fact that the conditions for its existence must be constructed and will not come about ‘naturally’ in the absence of concerted political effort and organization”.
This is supposed to hint at contradiction but laissez faire liberalism did not preclude state action in the form of “construction’, meaning piecemal experiments and instiutional reforms to control the use of force and fraud, to adminster police systems, courts and the laws of the land. It is like the no brainer that Hayek was opposed to planning, so he had to explain that planning is something that people do all the time, the objection is to holisistic or collectivist planning by the state.
Another pervasive confusion is the idea that the market is a big agent or person, he has not got hold of the idea that a market is something that happens when people buy, swap and sell things. So when someone says that the market will decide the value of my house or car, it just means that the price will be set (subject to negotiation) by the people who turn up and make offers.
7. Neoliberals begin with a presumption that capital has a natural right to flow freely across national boundaries (The free flow of labour enjoys no similar right).” Absent the welfare state and there would cease to be a serious issue about the movement of people.
8. “Neoliberals see pronounced inequality of economic resources and political rights not as an unfortunate byproduct of capitalism, but as a necessary functional characteristic of their ideal market system”. So before capitalism there was no pronounced inequality of economic resources and political rights?
The “European miracle” (Radnitzky) was narrowing inequalities but at the same time the phenomenon of inequality suddenly became a huge issue and, as Hutt pointed out, the system that was emancipating the masses, by a perverse turn of reasoning, was blamed for the suffering of the poor.
9. “Corporations can do no wrong or at least they are not to be blamed it they do”. ?
Freedom and the Double Truth of Neoliberalism
Mirowski has not got hold of the fact that there is no answer to the problem of sovereignty (Who shall rule?) and settles for the “majority rule” theory of democracy so everyone can (in theory) participate in the political process. Of course the tyranny of the majority (or of the interest groups who end up representing the “majority”) is no better than any other tyranny and the most appropriate response, articulated by liberals from Hume to Popper, is to aim for institutional and traditional controls, checks and balances on the rulers (with no guarrantee of success).
It seems that the simple minded idea of majority rule is on the rise and a US schoolteacher who blogs under the name “Conservative Teacher” has sent a warning based on his reading of pupils essays. It seems they the students generally accept that the outcome of elections signals that the winners are “in charge” and the losers have no ground for complaint “suck it in, you guys lost!”.
Consequently Mirowski can only see limited government as a device to disenfranchise the masses. He manages to trace a line from Adolf Hitler’s crown jurist Carl Schmidt to Hayek (p 443-4). He suggests that Hayek owed more to Schmidt than he realised and so “For Hayek and the neoliberals, the Fuhrer was replaced by the figure of the entreprenneur, the embodiment of the will to power for the community, who must be permitted to act without being brought to rational account.” From that point of course it is only a skip and jump to support Pinochet in Chile.
Enough of Mirowsiki, what about some of the other chapers? Because the chapters are mostly historical narratives, reporting who said what to whom, when and where, objections to neoliberalism mostly emerge in the form of side comments and innuendo, and by leaving out a lot of background information that might put the neolibs in a more sympathetic light.
Keith Tribe wrote, regarding Peter Bauer “Like Jewkes, the forcefulness of his critique of state and economy is inversely proportional to its substantive merits.” (p 86) And “Neoliberal economism increasingly domianted the public domain, a discourse on markets and liberty whose lack of intellectual credibility was no obstacle to its propagation and execution.” (p 90)
In the chapter on trade unions there is a lot on the differences of opinion within the movement, between the Continental approach to get the unions “inside the tent” compared with those who saw a need to confront and control the “strike threat system”. The author lists a paper by Hutt at the MPS but did not cite any of his major works on the fallacies of collective bargaining, the special pleading of the Webbs and other historians of the labour movement, and the way the unions subverted the rule of law and indeed the democratic process, and the damage inflicted on the unempoyed and the community at large.
Simarly the chapter on the “Third World” and development issues makes much of the differences of opinion in the movement, and the complications introduced by the process of decolonisation against the backdrop of the Cold War and the objective of keeping the new nations aligned to the West if possible. Peter Bauer emerged as the most important contributor to the dialogue, and to the rejection of the general statist/socialist consensus on the need for state planning, foreign aid for industrial development etc. Admirers of Bauer will be perplexed by Plehwe’s comments like “Bauer eventually used Rodan’s work (if disengenuously) as witness to government ineffectiveness” (p 264) and “He was not shy (if disingenuous again) to cite Karl Marx as a witness…” ( p 265).