Review of Philip Mirowski: Never let a serious crisis go to waste: how neoliberalism survived the financial meltdown (Verso, 2013)
Philip Mirowski addresses the left, very broadly defined - "people who have taken it as a fundamental premise that current market structures can and should be subordinate to political projects for human improvement" - but with "a simple message: Know Your Enemy before you start daydreaming of a better world".
He dismisses most already-circulating "better world" schemes as helpless against the dominance of neoliberalism.
He quotes Paul Krugman - "I am quite fanatical about defending the relevance of standard economic models" - Joseph Stiglitz - "fortunately we don't need to rewrite the textbooks" - and Krugman again - saying that "basic, sensible macro" is fine - to argue that the apparent mainstream left critics of neoliberalism are really well within its ambit. Leftish writers like Kenneth Arrow, Amartya Sen, and John Rawls are "virtually as neoliberal" as the hard-nut contract-everything-out "zealous advocate of the market order" James Buchanan.
When Mirowski dismisses "those benighted few, these Revenants of the Economic Rapture, who were certain that only complete and utter breakdown of capitalism would pave the way for a transition to the political ascendancy of the proletariat", or the "thin and insubstantial" character of the case for a "return to Marx", I think he means to talk about us, in caricature.
His critique of the Occupy movement is acute, though sneering in tone. He indicts the "absence of any sort of theoretical guidance and hierarchical organisation of short to longer-term goals"; the "disdain of close ties to trade unions"; the "mimicry of media technologies as opposed to concerted political mobilisation"; the acting as if "their primary role in life was to express themselves, especially with cameras nearby, rather than to work patiently for a thought-out political project".
Neoliberalism, he says, ranges much wider than neoclassical economics. I see three strands in his depiction of neoliberal hegemony.
First (and this is an idea often discussed on the left of late), "neoliberalism as world view has sunk its roots deep into everyday life, almost to the point of passing as the 'ideology of no ideology'." It has come to dominate "everday life in the first few decades of the new millennium", with "the story of an entrepreneurial self equipped with promiscuous notions of identity and selfhood, surrounded by simulacra of other such selves.
"It tags every possible disaster as... the personal fall-out from making 'bad choices' in investments... A world where competition is the primary virtue, and solidarity a sign of weakness".
It has "so addled the populace that they end up believing that adoption of neoliberal notions constitutes wicked rebellion against the powers that be".
Everyday neoliberalism had so "taken root in the culture" by 2008 that it "provided a bulwark until the active mobilisation of the Neoliberal Thought Collective could mount further responses" to the financial crash.
Second, that sociologically the neo-liberal cadre is deeply embedded in established structures of power, so much so that "when and if the crunch comes, [the neoliberals] end up controlling 'both sides' of any momentous debate".
Economics professors in US universities now get paid 41% more than professors of English literature, a greater premium than any other subject except law. They are highly-valued by university bosses because they bring in the outside dollars more than almost anyone else. Almost all of them combine their academic careers with well-paid positions with banks and hedge funds, or in or around government and the Fed.
With the development of "economics imperialism" by writers like Gary Becker and James Buchanan, i.e. the use of rational-choice calculi taken from neo-classical economics to construct theories about politics, social policy, etc., the economists have wide influence.
This explains well why few economists have wanted to propose discomforting the bankers since 2008, why different variants of neoliberalism have been able to command the terrain of public debate, and why economic thought is systematically homogenised towards what will bring in the outside dollars and connections to universities.
The third dimension to neoliberal hegemony in Mirowski's one is a more "Gramscian" one, though Mirowski, I assume deliberately, does not use the word hegemony or anywhere refer to Gramsci.
In Gramsci's account, hegemony is not so much a state of affairs as an activity, an active relation with wider sections of the population by a particular cadre of what he calls (equivalently, and, I think, wanting us to learn something from the odd-at-first-sight equivalence) intellectuals and organisers. They may be activists of a working-class revolutionary party, or the rural-origin officials and lawyers who mediated for fascism, or the local worthies and journalists who transmitted the leadership of the bourgeois "Moderates" of late 19th century Italy, but they are a "hegemonic apparatus", a more or less cohesive network.
Mirowski writes not of a "hegemonic apparatus", but of "the Neoliberal Thought Collective". He identifies that with the Mont Pèlerin Society.
MPS is an international discussion club of a few hundred members. Friedrich Hayek started it in 1947, with a few dozen members, and remained its president until 1961. Other prominent figures have included Milton Friedman, Ralph Harris of the Institute of Economic Affairs in Britain, and Eamonn Butler of the Adam Smith Institute, who is also its current secretary.
Through the work of Antony Fisher, a British businessman who made a fortune from battery chickens, the MPS has had a link to the setting-up of think-tanks like the IEA and the Adam Smith Institute in many countries. Fisher's grand-daughter, Rachel Whetstone, has worked for the Tories and is married to David Cameron's aide Steve Hilton.
Some readers, writes Mirowski, will object that "there are no Wizard behind the curtain orchestrating the ballet mécanique" of neoliberal discourse. He insists that there is indeed "a standard-issue Neoliberal Playbook". Diversity among neoliberal responses shows only that the Neoliberal Thought Collective "promulgates ineffectual 'revisions' to core doctrine and keeps people distracted"; that it seeks to cover every issue by a "full-spectrum" response of diverse neoliberal ploys; and that it deliberately throws sand in our eyes, fostering artificial debate about side-issues and adding confusion which thickens popular ignorance and bewilderment. "Economists swooped in to pump more doubt into an already baffling predicament". He describes the "Neoliberal Thought Collective" as a set of "Russian dolls".
Mirowski emphasises that neoliberalism is different from 19th century laissez-faire. "The prescription for market failure is always more markets; however, that prescription can only be reliably and successfully imposed by a strong state". The populace have no choice but to "adjust to what to [them] must seem the blind forces of the social process" (as Hayek put it, arguing that the only alternative is incipiently-totalitarian and blundering control by commissar); the neo-liberal elite meanwhile design, adjust, and tweak the markets to which the rest of us must adjust. Deliberate promotion of social ignorance, and of feelings of ignorance, is thus a core activity for the neoliberals.
Mirowski's picture of the Neoliberal Thought Collective as all-pervasive rests on sliding to and fro between two definitions of neoliberalism. In one definition, Krugman, Stiglitz, Rawls and the like are as neoliberal as it comes; in another, neoliberalism is identified with the full-on markets-for-everything types, the Mont Pèlerin core.
A comment Mirowski himself makes in his denunciation of the Fed-Wall-Street-economics-faculty nexus undermines his picture of the "Wizard behind the curtain". The professors, he reports, have "summarily expelled both philosophy and history" from the university economics curriculum, in favour of "still more mathematics preparation, more statistics, and... a boot camp regimen consisting of endless working of problem sets, problem sets, and more problem sets", based on "articles from journals with a half-life of five years".
As Timothy Shenk points out (Dissent, Fall 2013), "Hayek was philosophically oriented and prone to fatalistic musings on the futility of his project", where Friedman was "practical, empirical, and optimistic". Friedman argued (The Methodology of Positive Economics, 1953) that the "assumptions" of neoclassical economics were admittedly not "realistic", and that didn't matter as long as they could be used to construct models that worked empirically. Friedman was still an eloquent populariser of basic ideas; but neither the philosopher Hayek nor the popular agitator Friedman has much of a successor among their technicality-absorbed followers.
Thus, when in 2013 economics students at some universities, notably Harvard and Manchester, protested publicly about the narrowness of their courses, the academics' response was not a take-the-higher-ground defence of a philosophy and a method. It was a puzzled or fake-puzzled protest that a wide range of views can be found within neoclassical economics, spiced by a sneering suggestion that the students were protesting because they found the maths in the established courses too hard.
Thomas Sargent, one of the main figures of hard-line neoliberal economics, responded to the crash by saying that models based on his sort of theory are just "designed to describe aggregate economic fluctuations during normal times... they are not designed to be theories of financial crisis". His comrade Robert Lucas said: "We are not going to have, now or ever... a set of models that forecasts sudden falls in the value of financial assets". Eugene Fama: "We don't know what causes recessions... We've never known".
The neoliberals were diverse and vague in their quick responses to the crash not because of clever coordination by a wizard behind the curtain, but because they didn't know. They had no adequate apparatus of intellectuals and organisers to take a world-view into the pores of society. The Financial Times responded to the crash of 2008 by launching in early 2009 a series on "The Future of Capitalism", with the preamble: "The credit crunch has destroyed faith in the free market ideology that has dominated Western economic thinking for a generation". It was not that the Financial Times was too defeatist for capitalism: it was that the left was too weak in pushing alternatives (beyond "no cuts", "one-day general strike", etc.) to consolidate the destruction of faith.
Mirowski makes much of Hayek's 1944 book The Road to Serfdom getting back on to the Amazon best-seller list after a plug by a right-wing talk show. Hayek's book is still no.2 in Amazon's "Economic Theory" category, but no.3670 overall, while Piketty's leftish and pricey Capital in the 21st century is at no.205. (No, I don't know why Amazon classifies The Road under "Economic Theory" and Capital not).
The neoliberals are not as dominant as they seem now; and they were not as isolated in 1947, when the Mont Pèlerin Society was founded, as their self-serving narrative had it. Hayek had been a professor in Lionel Robbins's LSE economics department since 1931, and Robbins accompanied him to Mont Pèlerin. Hayek's The Road had been a best-seller, further popularised by Reader's Digest putting out a condensed version which General Motors then distributed for free as a pamphlet. The Tories wanted to do a new print-run of The Road for mass circulation in the 1945 general election, and failed only because they could not organise it in time.
Walter Eucken, the prime theorist of ordoliberalism, the version of neoliberalism which dominates in Germany to this day, was also at Mont Pèlerin. Ludwig Erhard, economics minister or Chancellor in West Germany continuously from 1949 to 1966, was a Mont Pèlerin member. Arguably, he, a figure from long before modern neoliberalism, represented the closest the Mont Pèlerin hard core have ever come to the centres of power.
Erhard's "social market economy" did not look much like modern neoliberalism, and nor did the regime of the Hayek-enthusiast Tories when they returned to office in 1951. Why? Because canny bourgeois politicians then reckoned that the labour movement was too powerful for them to risk putting the harsher implications of the theory into action; and high growth rates and prosperity meant they had no need to take that risk.
By 1979-80 the capitalist world had moved on so that politicians like Thatcher and Reagan represented a large body of bourgeois opinion who thought that the labour movement was fragile enough that they could take the risk of confronting it, and capitalism was disarrayed enough that they must take that risk. There were shifts along the way, first to bourgeois politicians like Macmillan and Butler in Britain who had "internalised" the need to compromise with the labour movement and demands for welfare, and then back to those willing to take risks to break that compromise; but mainly it was a shift in class relations rather than a switch of behind-the-curtain "Wizards". People in the Thatcher and Reagan administrations would applaud the elderly Hayek and Friedman, but there was no special concentration of Mont Pèlerin insiders at the tops of those administrations.
The "wizard behind the curtain" has not really been pulling all the strings of bourgeois politics; rather, the shift in bourgeois politics has let a number of wizards come more to the front of the stage.
Categorising all mass politics as mere play-debates within neoliberalism also dissolves specifics too much. If the "mainstream" debate on economic policy in the USA were between Paul Krugman and Ben Bernanke, rather than between Ben Bernanke (who, as Mirowski accurately says, is a thoroughly orthodox follower of Milton Friedman) and those who find him not right-wing enough, it would still in a general way be "within" neoliberalism, but the openings and opportunities for socialists to get a hearing would be greater. Or if the "mainstream" debate in the UK were between the Tories' cuts and even mild "fiscal stimulus".
I doubt also Mirowski's claim that the wizard has injected neoliberal attitudes into becoming "the unremarkable furniture of waking life".
There are some carriers of neoliberalism into everyday life: managers, financial advisers and similar, administrators and sometimes teachers in the education system.
Mirowski makes a telling point against Thomas Frank, an informative writer about right-wing politics in the USA. In What's the Matter with Kansas? How Conservatives Won the Heart of America (2004) Frank argued that the right was using "cultural" issues (abortion, school prayer) to mobilise grass-roots conservatives around "values" with durable political power, and then using the support thus gained to do something different (neoliberal economic policies). By the time he wrote Pity the Billionaire: The Unlikely Comeback of the American Right (2012), Frank had to record that the Tea Party was winning plebeian support (with much funding from big business, and much "astro-turfing", but winning support) with an openly economic-focused programme ("Your Mortgage Is Not My Problem") and deliberately downplaying the "cultural" issues.
Some changes in everyday language also give limited aliment to Mirowski's argument. The word "job", for example, is often these days replaced by the word "role". Partly this is the old wish of the bureaucrat never to use a short, clear word when a clumsier one can be found, the same approach which gives us "learning resource centres" (libraries) and "senior leadership teams" (bosses) in schools. But there is a bit more. You do a job. You play or act a role. You enter into it. You redefine yourself according to what the scriptwriter and the director want.
But then there is the word "struggle". Until recently, to struggle to do something was to battle against odds to accomplish it. Now it often means the opposite. "I'll struggle to complete that task" means "I don't deny it's desirable, but it looks so difficult I won't even try".
That change suggests a beaten-down, atomised sensibility, not Mirowski's archetypal "entrepreneurial self". The carriers of neoliberalism are far short of a Mont Pèlerin cadre.
To assess what "the populace" thinks is hard. Most people have a contradictory assortment of different ideas. Their answers to political questions depend on how they are asked, who asks them, and when. A mass working-class party, active across society in times of class-struggle effervescence, can with skill and care make good assessments of the development of political awareness, through and in the course of its work to change what it assesses. But for a small socialist group in times when most people most of the time don't talk about politics, it's hard.
By objective measures (what parties or political movements people vote for or support, what causes they mobilise for, and so on) there has surely been a shift to the right. The bubbling of left-wing outrage created by the 2008 crash, reflected in the Occupy movement and other ferment, has subsided, at least for now. Bourgeois society organically, through the workings of commodity fetishism, pushes us towards seeing market mechanisms as "objective" and normal. The labour-movement agitation, education, and organisation which could consolidate disruptions to that normality has been weak because of defeats of and failures by the left.
That is less "full spectrum", and less of an all-embracing blockage to mobilisation and questioning, than Mirowski's picture. For him, the wizard has got so far inside our heads (sometimes it seems Mirowski is saying: inside everyone's head but his own) that we just live the wizard's ideas day to day with no thought that we are doing anything but "expressing ourselves".
Mirowski cites self-help books about constantly reinventing oneself for the market. They no more define the whole social universe than did Norman Vincent Peale's Power of Positive Thinking and Dale Carnegie's How to Win Friends and Influence People in their days.
Mirowski defines Facebook as "the neoliberal technology par excellence". And indeed, on Facebook many people create another self, an "online persona", slicker and sassier than their face-to-face self (https://books.google.de/books?id=iqTKFylfhakC). But that is more tuned to everyday narcissism than smoothly adjustable to the market. A survey of 6000 people found one in ten had been "turned down for a new job because of photos or comments on Facebook, Twitter, Pinterest" or other sites. (https://ondeviceresearch.com/blog/facebook-costing-16-34s-jobs-in-tough-economic-climate.)
Bosses in 2014 constantly want you to "reinvent" yourself for the jobs market; but advertisers of consumer goods encourage you in the idea that consumption can and should be adapted so it happens "your way". They foster narcissism rather than adaptability. (https://books.google.de/books?id=itkOHXlZui0C).
For now people see few feasible ways of rebelling against the rules of the market; but plenty of them are open to rebellion if we, the left, can initiate and organise it well enough. And once they rebel, even with lots of neoliberal ideas in their thinking, ideas start fermenting.
Far-right groups like Ukip and the French Front National, which have gained support recently, fundamentally conform to neoliberalism, and offer surprisingly little social demagogy. But they do not appeal to the ultra-flexible neoliberal "entrepreneurial self" depicted by Mirowski, but rather to a backward-looking and reactive search for a more stable collective "self".
To some degree we have been drawn into constructing neoliberalism, through some of our everyday transactions, rather than just submitting to it; but the wizards of neoliberalism lack a hegemonic apparatus, equipped with an elaborated world-view, able to reach down so far that neoliberalism will seem to us to come from the inside.
We on the left also lack that collective enterprise, for now. But we can start building it and operating it now, so long as we do not let ourselves be overwhelmed by the feeling that neoliberalism surrounds us so much, on all sides, that it is unbreachable.
