Published by EH.Net (November 2013)

Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics. Princeton, NJ: Princeton University Press, 2012. xii + 418 pp. $25 (hardcover), ISBN: 978-0-691-15157-1.

Reviewed for EH.Net by Edward Nik-Khah, Department of Business and Economics, Roanoke College.

In recent years policy historians, political theorists, political insiders, and a handful of historians of economics have taken up the challenge of explaining the seemingly improbable rise of the postwar New Right. Daniel Stedman Jones’s Masters of the Universe provides an accessible introduction to many of the historical topics addressed by this literature, and provides a few novel contributions of its own. Masters endeavors to explain how Friedrich Hayek, Milton Friedman, George Stigler, think-tankers such as Antony Fisher and Leonard Read, sympathetic journalists such as Samuel Brittan, and politicians such as Enoch Powell crafted a reconstituted form of economic liberalism (hence “neo”-liberalism) and endeavored to put it into practice. This book operates not as a conventional history of economics, but as an intellectual history of a political movement, covering economic and political ideas as they circulate in the polity and, in some cases, as they inform the construction of important knowledge-producing institutions.

The basic historical narrative is this: stagflation led to the discrediting of the post-World War II economic policy consensus (for Jones, this basically amounts to “Keynesianism”); neoliberals stood at the ready with a set of scientific ideas (in the first instance, monetarism; later, deregulation and a host of others); these ideas provided cover for a certain kind of free-market ideology that linked political freedom to economic freedom in a potentially objectionable way; over time, this ideology came to be regarded by public and policymakers alike as commonsense, leading to the enactment of all sorts of harmful policies and ultimately the present global crisis. Jones insists it could have been different.

An important reason it wasn’t different was that the “transatlantic” nature of neoliberalism buttressed its adherents’ political aspirations. A standing network of like-minded thinkers communicated between the U.S. and Britain a sense that the two nations shared similar political problems, a language for framing potential solutions, and lessons from attempts to put these solutions into practice. Jones takes inspiration from Daniel Rodgers’ Atlantic Crossings, a history of Progressive and New Deal era attempts to provide adequate housing for city dwellers, income security for the working poor, and reasonable protection from monopoly power, developed within a transnational “social politics” movement. In selecting that well-received book for a model, Jones has made an excellent choice, but the comparison does reveal an interesting disjunction. Jones’s “transatlantic” area (really, U.S.-plus-Britain) constitutes a much smaller area than Rodgers’ “Atlantic economies” (which includes the U.S., Britain, France, Germany), a choice that has the (possibly inadvertent) effect of making Hayek, Friedman, Fisher, and the rest appear less cosmopolitan than Rodgers’ progressives. Given previous historical work on neoliberalism in countries ranging from Germany to Peru (and, yes, Chile), one suspects this is an artifact of how Jones chooses to frame his historical account. That said, Jones’s book stands as evidence of the value of attending to neoliberalism’s international transactions.

Crucial to the success of these borrowings, and therefore the realization of neoliberal political aspirations, was the formation of the FEE, AEI, IEA, IHS, an alphabet soup of think tanks. Jones draws upon archival work and interviews to discuss their activities Together these think tanks formed a network, held together by participation of the “ideological entrepreneurs” who ran them in the Mont Pelerin Society (MPS). This portion of the argument is complementary to the edited volume The Road from Mont Pelerin (reviewed on EH.Net in September 2010). By the 1970s, one could make a living as “a catalyst between the businessmen and the academic world” (p. 136), as Fisher would come to view himself. Hence, businesspersons formed a crucial part of the network. During the post-1970 era, think tanks became formidable intellectual actors – interdisciplinary, poised for the targeted political strike, and remarkably successful in attracting financial support.

As for the figures singled out in the book’s subtitle, Masters credits them with creating and synthesizing a “neoliberal policy program and political strategy” (p. 4). In the case of Hayek, this meant drawing lessons from the successes of the Fabian socialists and using these lessons to form a counter-Fabian/Keynesian/New Deal liberalism politico-intellectual movement (a motivation previously noted by Richard Cockett, and given elaboration by Dieter Plehwe and Bernhard Walpen, among others). Friedman became the most successful proselytizer of (Chicago) neoliberal ideas; colleagues at Chicago and Virginia reinterpreted the meaning of politics and the appropriate role of the state. Here Jones rightly distinguishes the monetarism of Friedman from, say, Stigler’s economics of politics and regulation. But he fails to note the significance of this distinction for their (divergent) views of how best to mobilize ideas to effect social change. (Friedman and Stigler disagreed about the possibilities for and limitations of their own influence; one gets a sense of the depth of this disagreement from Stigler’s disparagement of popularizations – including Friedman’s – as “preaching.”) This leaves us with an interesting unanswered question: how could incompatible views of politics inform a political strategy that was so devastatingly effective?

Masters is a good read. There are instances of acute foresight and shrewd political calculation, but also serendipity, hubris, and plans come to naught. At times, the economists were well ahead of the politicians; at others, politicians worked out economic ideas in advance of the think tanks and academics. Jones’s acknowledgement of accident, unintended consequences, and the sheer complexity of history will please historians. However, some of Jones’s framing choices get in the way of understanding this complex history. Consider his choice of title. Who exactly were the “masters of the universe?” The book opens by citing the passage with which Keynes closes his General Theory, wherein he assigns priority to “the ideas of economists and political philosophers” over “the vested interests,” and the subtitle mentions Hayek and Friedman by name. So, fine: the “masters” were Hayek and Friedman. But, wait: Jones argues that neoliberals sought to develop policies that would “work with the grain of vested interests” (p. 165), and draws attention to instances of the “insidious influence” of funders over academic content (p. 92). Should we add the vested interests to our roster of masters? What about the think-tankers? Then, there is the cover itself, which displays images not only of Friedman and Hayek, but also of Reagan and Thatcher. Should we also include the politicians? And returning to the Keynes passage, who then were the “practical men?” Who were the “madmen?”


Cockett, Richard. 1995. Thinking the Unthinkable: Think-tanks and the Economic Counter-revolution, 1931-83. London: Harper Collins.

Mirowski, Philip and Dieter Plehwe, editors. 2009. The Road from Mont Pelerin. Cambridge, MA: Harvard University Press.

Plehwe, Dieter and Bernhard Walpen. 2006. “Between Network and Complex Organization.” In Dieter Plehwe, Bernhard Walpen, and Gisela Neunhöffer, editors, Neoliberal Hegemony: A Global Critique. New York: Routledge: pp. 27-50.

Edward Nik-Khah is an Associate Professor of Economics at Roanoke College. He has written on the development of the postwar Chicago School and the political economy of market design. Current research of his focuses on the historical development of neoliberal pharmaceutical science.

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