The Road from Mont P?lerin: The Making of the Neoliberal Thought Collective

Published by EH.NET (September 2010)

Philip Mirowski and Dieter Plehwe, editors, The Road from Mont P?lerin: The Making of the Neoliberal Thought Collective. Cambridge, MA: Harvard University Press, 2009. vi + 469 pp. $55 (hardcover), ISBN: 978-0-674-03318-4.

Reviewed for EH.Net by Bruce Caldwell, Department of Economics, Duke University.

In April, 1947 thirty-six liberals from Europe and the United States gathered in Mont P?lerin, Switzerland for a ten-day conference convened by the Austrian economist Friedrich A. Hayek.? Discussion centered on reconstituting, elaborating, and defending the general principles of a new liberal economic, social and political order in an age in which liberalism had become a dirty word. The Mont P?lerin Society was born.? Fifty years later, the Soviet bloc had disintegrated and ?neoliberalism? was apparently rapidly emerging as the reigning economic and political philosophy worldwide. What did the intellectual movement that was launched in 1947 have to do with the change? That question motivates the collection of papers in The Road from Mont P?lerin.?

The set-up of the book is straightforward.? Editor Plehwe provides an introduction and editor Mirowski a ?Postface.? There are three sections, one on the variety of national neoliberal traditions (French, British, German, and American),? a second on the evolution of their views on various policy topics (unions, monopoly, economic development, and the relationship of the Society to conservative business funders), and a final one on putting ideas into action (the critique of a U.N.-sponsored initiative titled the New International Economic Order, the urban property rights project touted by Hernando de Soto, and, of course, Chile).? A recurring theme, well illustrated in the chapters in the first two sections of the book, is that neoliberalism is diverse both in its geographical origins and in its intellectual commitments. The neoliberal thought collective, as Dieter Plehwe puts it, is neither parochial nor a ?pens?e unique? (p. 1-3).

The great strength of this collection is the skillful use that some of the authors make of archival materials. For example, in her nuanced chapter on ?Business Conservatives and the Mont P?lerin Society,? Kim Phillips-Stein makes extensive use of the correspondence between Hayek, Harold Luhnow, Jasper Crane, Loren Miller, and others to tease out the frequently uneasy, sometimes even strained, relationships between the intellectuals and their funders.? Rob Van Horn, both in his chapter on the evolution of the views of Aaron Director, Milton Friedman, and Edward Levi on antitrust policy, and in that with Philip Mirowski on the role of Director, Hayek, and Henry Simons in the creation of the Chicago School of economics, uses letters and other documents to bring the stories to life. The archives of the Mont P?lerin Society meetings are used effectively by Yves Steiner in his fascinating paper on the diversity of views exhibited by Mont P?lerin members on the role of unions, and by Dieter Plehwe in his equally informative paper on how various protagonists approached the problem of development.? The editors are also to be commended for their individual contributions at the beginning and end of the book. Plehwe?s social network analysis of the connections among the various members of the Society, and Mirowski?s valiant attempt in the face of the cacophony of definitions currently on offer (which he displays, using Wikipedia to great advantage) to provide a summary of the essential tenets of neoliberalism, are both valuable and, in the latter case, frequently highly entertaining.
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The great weakness of this collection is the attempt by some of the authors in various ways, some subtle, others not, to associate their subjects with authoritarian regimes and thinkers, with fascism, and with hucksterism. Carl Schmitt, the German legal theorist of the Nazi state and critic of parliamentarian democracy, is brought up by no fewer than four contributors (Tribe, Ptak, Plehwe, and Mirowski). Ptak makes sure to alert us to ?the obscure authoritarian tendencies that were operating just beneath the surface of many neoliberals,? of their ?weaknesses for repressive regimes,? and of Ludwig von Mises? ?sympathies for Italian fascism? (!) (pp. 119, 130).? In his treatment of unions, according to Steiner, Hayek opted ?for contempt? (p. 195). Milton Friedman, according to Mirowski and Van Horn, was ?proud? to be ?an intellectual for hire? (p. 168), and Hayek found himself after having gotten involved with the Volker Fund forced ?to do everything for money? (p. 165).? Some of these claims are risible, others are in the process of being responded to (see, e.g., Caldwell on the claims made in Mirowski and Van Horn, and Shearmur on the alleged influence of Carl Schmitt on Hayek). Once such claims are out there, though, they very quickly get picked up by what Hayek would call second-hand dealers in ideas: witness the recent New York Times Book Review commentator who, in a breezy piece on the brief rise of Hayek?s The Road to Serfdom to top seller on Amazon.com in June, could not resist adding a slur about Hayek?s ?sunny view of the Chilean dictator Augusto Pinochet? (Schuessler 2010, p. 27).

The volume raises at least two fundamental questions, one historiographical, the other substantive, and we will take them in turn.? Editor Plehwe says of the neoliberals that ?they recognized the paramount importance in political action of rewriting history, and in this recognition, the authors assembled here concur? (p. 26).? Is the writing of history, especially the history of a group like the Mont P?lerin Society, inevitably a political act?? Is being an economist one?? When one writes from a particular point of view, how should one do it? In his review of The Road to Serfdom, Joseph Schumpeter noted that it was a political book (Hayek had admitted as much on its opening page), but also ?a polite book that hardly ever attributes to opponents anything beyond intellectual error? (Schumpeter, 1946, p. 269). Schumpeter thought that Hayek was too polite, but the authors of a number of papers in this volume could perhaps learn something from him: a little Austrian politesse is a nice prophylactic against stridency.
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The second question has to do with the potency of intellectuals to shape world events or, more narrowly, even economic and social policy. It is evident that members of the Mont P?lerin Society, for all of their diversity, still preferred some form of liberalism (I am among those who are constitutionally unable to use the word ?neoliberalism,? principally because I feel it has no referent) to other ways of organizing economic and political affairs.? But how important were they in the emerging global consensus that began in the 1980s in favor of trade liberalization and privatization?? Were not, for example, the dismal performance of Keynesian demand management policies in the United States, Britain, and elsewhere in the 1970s; the heavy-handed actions of the trade unions in Britain during the ?Winter of Discontent?; the sclerotic performance of countries like India who had embraced a modified version of the planning model for their own; and, of course, the patent economic and political failures of the East Bloc, far more important in turning the tide, however briefly, towards globalization?? Was not George Stigler (himself a founding member of the Society) right in his comment about economists that ?our influence appears to be powerful only when we support policies ripe for adoption? (Stigler 1987, p. 11)? The question is the elephant in the room, and to close with the usual benediction of the academic reviewer, it is one that requires further study.

References

Bruce Caldwell, ?The Chicago School, Hayek, and Neoliberalism,? in Rob Van Horn, Philip Mirowski, and Thomas Stapleford, eds. Building Chicago Economics: New Perspectives on the History of America?s Most Powerful Economics Program. Cambridge: Cambridge University Press, forthcoming.

Jennifer Schuessler, ?Hayek: The Back Story,? New York Times Book Review, July 11, 2010, p. 27.

Jospeh Schumpeter, ?Review: The Road to Serfdom,? Journal of Political Economy, vol. 54, June 1946, pp. 269-70.

Jeremy Shearmur, ?The Devil?s Disciple?? Friedrich Hayek and Carl Schmitt,? manuscript.

George Stigler, ?Bookshelf: Economic Thought over 1000 Years,? Wall Street Journal. October 2, 1987, p. 1.

Bruce Caldwell is a Research Professor of Economics and the Director of the Center for the History of Political Economy at Duke University. He is the General Editor of The Collected Works of F. A. Hayek, published jointly by the University of Chicago Press and Routledge.?

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