|Author(s):||Burgin, Angus |
|Reviewer(s):||Emmett, Ross B. |
Published by EH.Net (December 2013)
Angus Burgin, The Great Persuasion: Reinventing Free Markets since the Depression. Cambridge, MA: Harvard University Press, 2012. v + 303 pp. $30 (hardcover), ISBN: 978-0-674-05813-2.
Reviewed for EH.Net by Ross B. Emmett. James Madison College, Michigan State University.
Neo-liberalism has had several histories written recently. Daniel Stedman Jones (2012) linked the stories of F.A. Hayek and Milton Friedman to the rise of Margaret Thatcher and Ronald Reagan, crossing intellectual history with political history. Phil Mirowski and Dieter Plehwe (2009; see also Mirowski, 2013) provided us with the account of a unitary social movement – a “thought collective” as they called it. Stedman Jones’ account fell short because he lacked a clear understanding of how ideas are translated into institutions and rules via political entrepreneurship (see Leighton and López, 2012 for one model of how political entrepreneurship works). His account both underestimated the subtleties of the ideas of theorists in their academic setting, and overestimated the role of political leaders in translating ideas into the political realities. Mirowski and Plehwe brought the social movement emerging from Mont Pelerin to life. But all too often in the essays included in their volume the ideas and actions of the individuals within the movement were evaluated solely in terms of the outcomes of the movement as a whole – outcomes that were perceived to be threats to all good things; like democracy, human welfare, freedom and the like.
Angus Burgin also sets a lofty objective; but he gives us a much more subtle and nuanced history than either of two accounts mentioned above. “The history of the Mont Pèlerin Society (MPS) can, and to some extent should, be read as an extended plea for the relevance of the history of ideas to the history of politics” (p. 224), he tells us in his conclusion. Agreed. Yet, unlike the one-dimensional, and uni-directional, studies cited above, the historical “relationship between theory and praxis” among members of MPS that he narrates for us reveals the nuanced subtleties of “the dynamic nature of a historical transformation” (p. 224); a transformation in the way we configured the relationship between the state and markets during the latter half of the twentieth century. In Burgin’s account, living, breathing human beings communicate, argue, negotiate, pontificate, and yes, even conspire in their efforts to encourage and preserve “capitalist modes of social organization” (p. 225).
What “capitalism” meant was itself a question. Frank Knight, one of the contributors to the discussion who rightly figures in Burgin’s narrative as a key participant in the early years, never used the word “capitalism” in his little textbook The Economic Organization (2013). Yet Knight’s book did much to revitalize acceptance among the future members of MPS of the benefits of social organization via the price mechanism in an “exchange system” (Knight, 2013, p. 23-24). One of the reasons Knight (in contrast, say, to Ludwig von Mises) figures so prominently in Burgin’s account is that he could never settle on a simple account of the complex relationship among the political, social, economic, and even moral aspects of a society which decided (consciously? or simply as a result of accepting other things like the rule of law, family control of property, certain social customs, etc.) to allow markets to play a central role in social organization (see p. 112-122). Knight’s concerns were shared, to a greater or lesser extent, by other MPS members: Bernard de Jouvenel, Wilhelm Röpke, and Albert Hunold (who served as secretary for the Society in its early years, but eventually left it) for example. And even Hayek, whose intellectual leadership is central to Burgin’s account, reconfigured his understanding of the relation between markets, the state, and various forms of social organization several times.
If anyone is the “hero” in Burgin’s narrative, it is Milton Friedman, who took over leadership of the MPS at the moment when conflict over the relation between capitalism defined narrowly in market terms, and capitalism defined in terms of individual liberty, came to a head. It was to Friedman that Jouvenel wrote his famous letter of resignation from the Society, and it was Friedman that wrote the polemic Capitalism and Freedom (2002) that replaced Hayek’s Road to Serfdom (1994) as the call-to-arms for the next generation of MPS members. Interestingly, Capitalism and Freedom was originally published in the same year that Hayek left Friedman’s lair in Chicago for retirement back on the continent, at the University of Freiburg. Capitalism and Freedom articulated a liberal social philosophy that was “less conflicted than those of the leading figures in the early Mont Pèlerin Society” (p. 177). Unlike his predecessors, who wrote general accounts of the benefits of a liberal society, “Friedman’s consistent preference for unconstrained markets combined with his methodological orientation toward empiricism to inspire him to propose an astonishing range of specific alterations to governmental practice” (p. 178). Among conservative policy-makers in America and Europe, the MPS had been held at arms-length, admired at a distance, and kept away from the practice of policy making. Friedman changed all that. His academic reputation and willingness to engage the public in their own terms “made him a formidable figure in the conservative intellectual world.” But he also possessed a toolbox equipped with novel, explicit ideas “that were clearly derived from and representative of a singular worldview” (p. 184). The combination of these qualities provided him with the means to change the public debate over markets in America, and eventually around the world.
As important as Friedman’s ideas became, and as narrowly focused on the efficiency gains from adopting market-based solutions to social problems the MPS became, there were always those who asked the Society to recall the broader dimensions of social and moral inquiry that had so animated its early members. Burgin spends the penultimate chapter of the book on this debate over the moral capital of the Society, concluding that the Friedman shift – dare I call it a version of the Samuelson’s “F-Twist” (1963)? – may have captured the spirit of an age, but it left a Society that had abandoned the very “questions of value that Hayek had established [it] to address” (p. 213).
Earlier I said that, in Burgin’s account, we see human beings communicating and acting to encourage society’s re-engagement with capitalism. And yet, as I walk away from the book, it is his account of those human beings’ thinking that most captivates me. Thinking in the midst of praxis, I’m tempted to say, because it is not thought leading to action; nor action leading to thoughts. It is both together, and more. Burgin ends by urging modern MPSers to return to the critical openness of the early MPS to engagement with a broader understanding of capitalism in all its dimensions. Can modern proponents of capitalism engage the discontent with liberalism that troubled Knight and Jouvenel, Michael Oakeshott and Röpke? “We have accepted the virtues of markets but failed to determine how to integrate them into life as we wish it to be” (p. 226).
Friedman, M. (2002). Capitalism and Freedom: Fortieth Anniversary Edition. Chicago: University of Chicago Press.
Hayek, F. A. (1994). The Road to Serfdom: Fiftieth Anniversary Edition. Chicago: University of Chicago Press.
Knight, F. H. (2013). The Economic Organization. New Brunswick, NJ: Transaction Publishers.
Leighton, W. and López, E. (2012). Madmen, Intellectuals and Academic Scribblers: The Economic Engine of Political Change. Stanford, CA: Stanford University Press.
Mirowski, P. (2013). Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown. London: Verso.
Mirowski, P. and Plehwe, D. (Editors) (2009). The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective. Cambridge, MA: Harvard University Press.
Samuelson, P. A. (1963). “Problems of Methodology – Discussion,” American Economic Review, Vol. 53, No. 2 (Papers and Proceedings): 231-36.
Stedman Jones, D. (2012). Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics. Princeton, NJ: Princeton University Press.
Ross B. Emmett’s publications include Frank Knight and the Chicago School in American Economics, Routledge (2009).
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|Subject(s):||History of Economic Thought; Methodology|
|Time Period(s):||20th Century: WWII and post-WWII|