OTR—Neoliberalism
Today On The Radar explores Neoliberalism. So that you know…
Many scholarly articles, critiques, and apologetics have been written about Neoliberalism; the subject has received extensive attention.
A noteworthy book not discussed here is The Invisible Doctrine: The Secret History of Neoliberalism (and How It Came to Control Your Life) by George Monbiot and Peter Hutchison. I highly recommend you read it.
In my talks and posts, I often mention Neoliberalism and Neoconservatism. As with all "isms," it's essential to understand what they mean and stand for. Where did these ideas come from, how did they take shape, who inspired, developed, and championed them, and to what end?
What is the Neoliberal agenda, and how does it affect ordinary working people?
One's emotional reaction to terms does not increase one's ability to make lucid choices in the interest of one's family, community, or complex, evolving living systems. Life begets life. All hail nature! Big Nature is more important than Big Business in every possible way.
"The economy is a wholly-owned subsidiary of the environment, not the reverse." — Herman Daly
This post focuses on Quinn Slobodian's book Globalists: The End of Empire and the Birth of Neoliberalism, which argues that Neoliberalism emerged not from a singular US-based movement but rather from an intellectual circle in Geneva in the 1930s and 40s known as "the Geneva School." This school, influenced by the collapse of the Austro-Hungarian Empire, sought to create a global order dominated by free markets and shielded from the disruptive forces of national politics. The book traces the development of this neoliberal vision through various institutions, including the League of Nations, the International Chamber of Commerce, and the European Economic Community, and argues that it ultimately shaped the current world order, with its emphasis on individual rights, free trade, and the promotion of global capital.
We will explore critical aspects of Slobodian’s thesis by asking several questions. Although this may seem repetitive, each frame expands our understanding.
The Geneva School
The Geneva School played a pivotal role in shaping the trajectory of neoliberal globalization by promoting a globalist vision designed to safeguard capital and its movement worldwide, significantly influencing the current economic landscape.
The Geneva School envisioned a world divided between imperium and dominium. Imperium represented the world of national politics and the people, while dominium symbolized the global realm of capital and property. This unique perspective is a fascinating aspect of the school's ideology. The Geneva School emerged in the 1930s and 1940s, centered around the Graduate Institute of International Studies (HEI) in Geneva. Ludwig von Mises, Wilhelm Röpke, Gottfried Haberler, and Friedrich Hayek were crucial figures.
The Geneva School promoted its neoliberal vision through the International Chamber of Commerce, the International Studies Conference, and the Mont Pèlerin Society.
The Geneva School's globalist project was informed by its experiences in the decaying Austro-Hungarian Empire and its observations of "Red Vienna," which led it to seek an order in which the global market could flourish without interference from national politics.
The Geneva School actively worked to establish a legalistic regime that favored capital and discouraged economic nationalism. Their efforts are evident in constructing the post-war order, particularly in their advocacy for a global neoliberal project based on moral superiority and utility.
The Geneva School successfully campaigned against the establishment of an International Trade Organization. Instead, it promoted the General Agreement on Tariffs and Trade (GATT), eventually leading to the formation of the World Trade Organization (WTO). This strategic influence is a testament to the school's power in shaping global market policies. The Geneva School's influence extended to US conservatives, contributing to the rise of two powerful visions of globalization.
One vision, often labeled neoliberal, envisions nation-states fading into cultural spheres, giving way to global markets' dominance.
The other vision, perhaps closer to the Geneva School's original vision, proposes a world divided into two spheres: one where capital flows freely and the other where nation-states act as containers of human agency, preventing a global push for equality, democracy and the promotion of human rights—both political and socio-economic.
Therefore, the Geneva School's globalist project significantly shaped the trajectory of neoliberal globalization by promoting a world order that prioritizes the free movement of capital and limits the influence of national politics and democratic demands.
The "Encasement" of Economic Structures
Quinn Slobodian argues that rather than seeking to "free" the market, Neoliberalism aimed to "encase" economic structures, shielding them from democratic demands. This concept is central to Slobodian's analysis of the Geneva School and its role in shaping neoliberal globalization.
The Geneva School sought to create a world order in which capital could move freely across borders while protected from the potential interference of national democratic policies.
They believed that national governments, influenced by popular demands, threatened the free functioning of global markets.
To counter this threat, they advocated for creating international institutions and legal frameworks limiting states' ability to intervene in the economy, essentially "encasing" the market within a protective legal structure.
Examples of this "encasement" strategy include the Geneva School's successful campaign against an International Trade Organization and its promotion of the General Agreement on Tariffs and Trade (GATT), the precursor to the World Trade Organization (WTO).
These institutions aimed to separate economic and political spheres by institutionalizing global market policies and limiting the scope for national economic intervention.
Slobodian argues that this "encasement" strategy has ultimately led to the current crisis of legitimacy in economic globalization. By isolating economic structures from popular democratic control, neoliberal globalization has fuelled a backlash from those who feel excluded from its benefits and lack the power to shape its rules. This backlash has manifested in the rise of populist movements that challenge the perceived dominance of global institutions and demand greater national sovereignty.
Depicting Barriers and Demands
In their efforts to construct a global economic order, the Geneva School of Neoliberalism, which prioritized the free flow of capital, sought to portray tariff barriers and unionized labor demands negatively. They framed these elements as obstacles to the efficient functioning of the global market.
The Geneva School actively worked to portray tariff barriers as "walls." This evocative imagery underlined their belief that such barriers hindered the natural flow of goods and capital across national borders.
Similarly, unionized labor demands were also presented as impediments to the desired economic order. These demands were seen as interfering with the free market's ability to regulate labor conditions. While the sources don't explicitly state how unionized labor demands were depicted, the overall argument suggests that they were likely portrayed as disruptive forces that distorted market mechanisms.
The broader context of the Geneva School's ideology helps to understand these portrayals. The sources highlight the group's emphasis on dominium, the realm of capital and property, which they sought to protect from the perceived intrusions of imperium, the domain of national politics, and popular demands. This suggests that tariff barriers and unionized labor demands, both products of national political processes, were seen as expressions of imperium encroaching upon the desired global dominium.
The Geneva School's efforts to shape the narrative surrounding these economic elements were part of their larger project to advance a globalist vision that prioritized the free movement of capital and limited the influence of national politics and democratic demands. By framing tariff barriers and unionized labor demands as "walls" and disruptive forces, they aimed to build support for their vision of a global economic order that would be less susceptible to the perceived whims of national governments and labor movements.
Conceptualizing the Global Economy
The neoliberals, particularly the Geneva School, attempted to conceptualize the global economy to prioritize the free movement of capital and minimize the influence of national governments and popular demands. They saw the global economy as a complex, interconnected system that operated best when shielded from political interference.
The neoliberals believed in a global free market's inherent moral and practical superiority. They argued for an international economic order that would facilitate the free flow of goods, services, and capital across national borders, envisioning this as the key to prosperity and progress.
They conceptualized the global economy as "unknowable" and beyond human comprehension. This idea discouraged economic planning and promoted the concept of legalistic frameworks as the only valid tools for regulation. This view sought to limit the role of government intervention in the economy and reinforce the perceived supremacy of market forces.
The neoliberals' conception of the global economy was deeply rooted in their distinction between imperium and dominium. They viewed the world as divided between national politics, popular sovereignty (imperium), and the global domain of capital and property (dominium).
They saw imperium as a threat to the free functioning of the global market. They feared that national governments, driven by popular demands for social welfare and economic regulation, would erect barriers to the free movement of capital and disrupt the natural equilibrium of the market.
The neoliberals aimed to protect dominium from the intrusions of imperium. They sought to create a global economic order where capital would be free to move and accumulate without interference from national governments or labor movements. This was reflected in their efforts to establish international institutions and legal frameworks that would limit the ability of states to intervene in the economy, essentially "encasing" the market within a protective legal structure.
Neoliberals' conceptualization of the global economy had a lasting impact on globalization's trajectory, contributing to the rise of institutions like the WTO and the dominance of free trade ideology. It also laid the groundwork for the backlash against globalization in recent years. By prioritizing the free movement of capital and sidelining concerns about social welfare and economic equality, the neoliberals' vision of the global economy contributed to growing inequality and a sense of disenfranchisement among many, ultimately fuelling the rise of populist movements that challenged the neoliberal consensus.
Comparing Visions: Neoliberalism vs. Social Democracy
The neoliberal vision, as championed by the Geneva School, prioritized the free movement of capital and the minimization of governmental interference in the market. They saw the global economy as a complex system best left to regulate itself, with legal frameworks (The Capital Code) serving as the primary tools for regulation. They believed in the inherent efficiency and moral superiority of the free market. They sought to create a global order where capital would be shielded from the perceived disruptions of national politics and popular demands.
The social-democratic vision, in contrast, emphasizes a more significant role for the government in regulating the economy and promoting social welfare. The social-democratic perspective generally advocates for policies that promote social justice, reduce inequality, and protect workers' rights. This often involves government intervention in the market to ensure fair labor practices, provide social safety nets, and redistribute wealth.
The neoliberals' critique of "Red Vienna" as a site of strikes and social confrontations suggests their opposition to the social-democratic model, often associated with strong labor unions and robust social welfare programs. The neoliberals saw such policies infringing on the free market and hindering economic growth.
The neoliberals sought to counter social-democratic visions and Keynesian macroeconomic ideas. Keynesian economics, often associated with social democracy, advocates for government spending and intervention to stimulate demand and manage economic cycles. The neoliberals, however, favored limited government intervention and believed that market forces were best equipped to allocate resources and drive economic growth.
Neoliberals' attempts to "encase" economic structures within a protective legal framework further underscore the contrast with social democracy. Social democracy limits the ability of national governments to implement policies that might interfere with the free market, such as capital controls or regulations on labor practices. Social democracy, on the other hand, would likely view such policies as necessary tools to protect workers and ensure a more equitable distribution of wealth.
In essence, the neoliberal vision of the global economy differed from the social-democratic vision in their respective roles for government and their approaches to managing the market. While Neoliberalism championed a hands-off approach, prioritizing the free movement of capital and minimal government intervention, social democracy advocated for a more active role for government in regulating the market and promoting social welfare. This fundamental difference in perspectives continues to shape debates on globalization and economic policy.
Quinn Slobodian's Two Key Theses in "Globalists"
Firstly, Slobodian traces the genealogy of Neoliberalism, focusing on its European origins. He challenges the US-centric narrative that often centers Neoliberalism around the University of Chicago in the mid-1970s; instead, Slobodian points to Geneva as the "neoliberal hotbed," where critical intellectuals like Ludwig von Mises, Wilhelm Röpke, Gottfried Haberler, and Friedrich Hayek congregated around institutions like the Graduate Institute of International Studies (HEI) in the 1930s and 40s. He calls this group the "Geneva School," highlighting its enduring influence as a social and intellectual circle that promoted a neoliberal vision through institutions like the International Chamber of Commerce, the International Studies Conference, and the Mont Pèlerin Society.
Secondly, Slobodian presents Neoliberalism as a political ideology with a distinct global agenda. He argues that the Geneva School's vision was shaped by their Central European imperial and post-imperial experiences, particularly their formative years in the Austro-Hungarian Empire and their witnessing of the rise of "Red Vienna," a site of social and political upheaval. Slobodian argues that these experiences led them to seek an order where the global market could operate without interference from national politics. They saw this as a global political project, not merely a national economic one. Citing Carl Schmitt's distinction between imperium (the world of national politics and popular demands) and dominium (the global realm of capital and property), Slobodian argues that the neoliberals aimed to protect dominium from imperium. They sought to establish an institutional order safeguarding capital and its global movement. This globalist project aimed to "solve the riddle of the post-imperial order" by ensuring the unimpeded operation of the global market.
These two theses provide the framework for Slobodian's exploration of the origins and development of Neoliberalism. He examines how the Geneva School constructed a powerful narrative and employed specific strategies to advance its globalist vision. This includes their depiction of tariff barriers and unionized labor demands as "walls" obstructing the free flow of capital and their efforts to conceptualize the global economy as something "unknowable" that should be governed by legal frameworks rather than political intervention.
Redefining Neoliberalism: Origins and Nature
Unveiling the Role of Ideas and Narratives: Slobodian emphasizes the significance of ideas and narratives in the rise of Neoliberalism. He shows how the Geneva School meticulously crafted arguments, employed evocative imagery and developed a specific language to advance their vision. For instance, they portrayed tariff barriers and unionized labor demands as "walls" obstructing the natural flow of capital, effectively framing them as impediments to global economic prosperity. They also conceptualized the global economy as something "unknowable," arguing against economic planning and promoting legal frameworks as the primary tools for regulation. This strategic use of language and imagery reveals the sophisticated efforts undertaken by the Geneva School to shape public perception and promote its globalist agenda.
Connecting the Past to the Present: Slobodian demonstrates the lasting impact of the Geneva School's ideas on the trajectory of globalization. He traces the influence of their thought on the development of institutions like the World Trade Organization (WTO), arguing that these institutions reflect the neoliberal vision of a global order where capital enjoys significant freedom of movement, often at the expense of national sovereignty and democratic control. By connecting the intellectual history of the Geneva School to the contemporary world order, Slobodian sheds light on the historical roots of present-day debates about globalization, free trade, and the power of international institutions. His work reveals how the ideas of a relatively small group of intellectuals operating in a specific historical context could have such a profound and enduring impact on the global political and economic landscape.
In summary, Slobodian's "Globalists" redefines Neoliberalism by:
Shifting the focus from a US-centric narrative to highlight the crucial role of the "Geneva School" in shaping neoliberal thought.
Presenting Neoliberalism as a political project with a globalist agenda aimed at protecting "dominium" from "imperium."
Unveiling the strategic use of ideas, narratives, and language by the Geneva School to advance their vision.
Tracing the enduring influence of the Geneva School's ideas on the development of global institutions and the trajectory of globalization.
Presenting a Morally Superior Project: The Geneva School's Arguments
Championing Individual Liberty and Limiting State Power
Promoting a Global Order Based on Law and Rules (The Code of Capital / The Rules-Based Order)
Highlighting the Efficiency and Impartiality of the Market
Constructing a Powerful Narrative of "Walls" and "Signals"
Slobodian offers a nuanced and comprehensive account of neoliberalism's rise to global prominence and its enduring influence on the world order.
We should also examine concepts of currency, markets, commodification, and governance through the lens of ecological, material, and energy overshoot. The On The Radar project explores the depth or shallowness of our understanding of ideas that shape our worldview to understand better the challenges we face and what we must do to meet them.
“Many of the social and environmental failures of the global economy trace to the flawed and outdated maps of the egoʹ-nomics currently taught in our most prestigious universities as scientific truth and echoed daily in the media. Those failures are so significant that they pose an existential threat to the survival of the human species. Recognizing that ego-nomics shields economic predators from moral responsibility, private financial interests use their financial power to relentlessly promote the maps of ego-nomics through media, education, government, and even religion.” — David Korten
