Reinventing liberalism : early neoliberalism in context, 1920-1947

Abstract

The thesis is a close study of a transnational group of intellectuals, mainly economists, who met in Paris in 1938 and at Mont Pèlerin in 1947 with the explicit aim to create a new liberalism for the modern world. At times they would use neoliberalism as a description of the creed they were developing, later they would opt for classical liberalism, in a bid to highlight continuities in their approach to political philosophy. Was their liberalism classical or was it new? The verb to reinvent is used frequently in modern academe, but its meaning is somewhat unclear. In the history of political thought, however, and especially the history of liberalism, the term can become a useful tool for enquiry. One way or the other, all new creeds build on previous ones, but the intellectuals in question were involved in a conscious, explicit attempt to change liberalism. This involved restating certain aspects of what they perceived as “true liberalism” and updating these to a different social and historical context, while also purging liberalism of all they felt was wrong with it. The contextualization of the many layers of interpretation involved in making these arguments is the main topic of this thesis. The intellectuals in question argued that “economic planning” was what had led to the rise of dictatorships in Europe. They included the communist dictatorship in Russia and the fascist dictatorships in Germany and Italy as part of the same phenomenon, totalitarianism, and further claimed that democracies like the USA, Great Britain and France were headed in the same direction. In this way, other, tangential movements to reinvent liberalism under labels such as new liberalism or social liberalism also came under attack, as it was argued that they were taking society in a totalitarian direction through collectivism and economic planning. The latter concept was defined loosely as any government “intervention” in the economy or, more precisely, attempts at subverting the mechanisms of markets in order to improve on their outcomes, redistribute wealth or counter business cycles. This strong criticism of economic planning did not lead these thinkers to advocate a position of “laissez-faire”. On the contrary, the second major plank of their intellectual project was an attack on the ideas of laissez-faire liberalism, a creed they claimed was rigid and outdated. Their internal debates can be seen as an attempt to incorporate a theory of states into right-wing liberalism, and focused on how to use states to spread, protect and foster what they still saw as a largely self-regulating mechanism. The first part of the thesis traces this dual argument to books, articles, lectures and correspondence by and between the intellectuals involved, from the German language socialist calculation debates in the 1920s, to the first meeting of the Mont Pelerin Society in 1947. The second part of the thesis uses some of the tools of micro history to conduct an in-depth study of this ten-day meeting in the Swiss alps. In the conclusion I argue that neoliberalism is best understood as a theory of modernity arising out of the historical conjuncture of Europe in the 1920s, 30s and 40s. This theory was based on a novel conceptualization of markets as mediators of modernity, the only mechanism through which order and prosperity could be achieved in a modern mass-society. Neoliberals took this new understanding of markets and combined it with an embrace of state power as legitimate within a theory of liberalism when put to use in concordance with what was believed to be logic of markets. The work may contribute to a deeper understanding of neoliberalism, whether this is seen as a philosophy inspiring a political movement, a political rationality, or some sort of combination of the two.