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Local food

With a cachet that reaches far beyond typical political circles, localism has recently come to dominate discussions of the production, distribution and consumption of food. Most influential here have been the interlinked movements known as ‘slow food’ and ‘locavorism’ (eating locally). The slow-food movement began in the mid 1980s in Italy, partly as a protest against the ever-increasing encroachment of fast-food chains. Slow food, as its name suggests, stands for everything McDonald’s does not: local food, traditional recipes, slow eating and highly skilled production.⁷³ It is food that offers the most visceral embodiment of the benefits of the slow lifestyle, overcoming the vicissitudes of fast-paced capitalism by returning to an older culture of savouring meals and traditional production techniques.⁷⁴ But even its proponents admit that there are difficulties involved in living the slow-food lifestyle: ‘Few of us have the time, money, energy or discipline to be a model Slow Foodie.’⁷⁵

Without an assessment of how our lives are structured by social, political and economic pressures that make it easier to eat pre-prepared food than embrace the slow-food lifestyle, the end result is a variant of ethical consumerism with a hedonistic twist. It is patently correct that taking one’s time to enjoy a well-prepared meal can be a pleasurable experience. Paying attention to a meal recasts the experience from one of pure utility into a more social and aesthetic experience. But there are structural reasons why we do not choose to do this often – reasons that are not the result of any individual moral failing. The structure of work, for example, is a primary reason why many of us are unable to enjoy slow eating, or meals prepared according to the ideals of the slow-food movement. Slow food might not always require money, but it always requires time. For those who have to work multiple jobs to support their families, time is at a premium. What is more, the gender politics of slow food are problematic, given that we live in patriarchal societies where the majority of food preparation is still presumed to be the task of wives and mothers.⁷⁶ While ‘fast’ food or pre-prepared meals might be unhealthy, their popularity enables the freeing up of women to live lives that are less marked by the everyday drudgery of feeding their families.⁷⁷ As innocent as it may at first seem, the slow-food movement, like many other forms of ethical consumerism, fails to think in large-scale terms about how its ideas might work within the broader context of rapacious capitalism.

Closely linked to the slow-food movement are locavorism and the ‘100-mile diet’ – a food politics that emphasises eating locally. Locavorism holds that locally sourced food is not only more likely to be healthy, but is also a vital component of our efforts to reduce carbon outputs, and hence our impact on the environment. It situates itself, therefore, as a response to a global issue. Moreover, locavorism claims to be one way to overcome the alienation of our relationship to food under capitalism. By eating food grown or produced in our locality, so this logic runs, we will be able to get back in touch with the production of our food and reclaim it from the dead hands of a capitalism that has run amok.⁷⁸ Compared to the slow-food movement, locavorism positions itself more explicitly, and politically, against globalisation. In doing so, it appeals to a constellation of folkpolitical ideas relating to the primacy of the local as a horizon of political action, and of the virtues of the local over the global, the immediate over the mediated, the simple over the complex.

These ideas condense often complex environmental issues into questions of individual ethics. One of the most serious (and intrinsically collective) crises of our times is thus effectively privatised. This personalised environmental ethic is exemplified in localist food politics – in particular, in the moral (and price) premium placed on locally grown food. Here we find ecologically motivated arguments (for reducing energy expenditure by reducing the distances over which food is transported, for example) combined with class differentiation (in the form of marketing designed to promote identification with organic food). Similarly, complex problems are condensed into poorly formulated shorthand. For instance, the idea of ‘food miles’ – identifying the distances that food products have travelled, so as to reduce carbon outputs – appears a reasonable one. The problem is that it is all too often taken to be sufficient on its own as a guide to ethical action. As a 2005 report by the UK’s Department of Agriculture and Food found, while the environmental impacts of transporting food were indeed considerable, a single indicator based on total food miles was inadequate as a measure of sustainability.⁷⁹ Most notably, the food-miles metric emphasises an aspect of food production that contributes a relatively small amount to overall carbon outputs. When it is simply assumed that ‘small is beautiful’, we can all too easily ignore the fact that the energy costs associated with producing food locally may well exceed the total costs of transporting it from a more suitable climate.⁸⁰ Even for the purpose of assessing the contribution of food transportation, food miles are a poor metric. Air freight, for example, makes up a relatively small portion of total food miles, but it makes up a disproportionately large slice of total food-related $\mathrm { C O } _ { 2 }$ emissions.⁸¹ The energy consumption involved in putting food on our plates is important, but it cannot be captured in anything as simple as food miles, or in the idea that ‘local is best’. Indeed, highly inefficient local food production techniques may be more costly than efficiently grown globally sourced foodstuffs. The bigger question here relates to the priorities we place on the types of food we produce, how that production is controlled, who consumes that food and at what cost.

Localist food politics flattens the complexities it is trying to resolve into a simplistic binary: global, bad; local, good. What is needed, by contrast, are less simplistic ways of looking at complex problems – an analysis that takes into account the global food system as a whole, rather than intuitive shorthand formulae such as food miles, or ‘organic’ versus non-‘organic’ foods. It is likely that the ideal method of global food production will be some complex mixture of local initiatives, industrial farming practices, and global systems of distribution. It is equally likely that an analysis capable of calculating the best means to grow and distribute food lies outside the grasp of any individual consumer, requiring significant technical knowledge, collective effort and global coordination. None of this is well served by a culture that simply values the local.

Local economics

Localism, in all its forms, represents an attempt to abjure the problems and politics of scale involved in large systems such as the global economy, politics and the environment. Our problems are increasingly systemic and global, and they require an equally systemic response. Action must always to some extent occur at the local level – and indeed some localist ideas, such as resiliency, can be useful. But localism-as-ideology goes much further, rejecting the systemic analysis that might guide and coordinate instances of local action to confront, oppose and potentially supplant oppressive instances of global power or looming planetary threats. Nowhere is the inability of localist solutions to challenge complex global problems more apparent than in movements towards localised business, banking and economics. Since the 2008 financial crisis, there have been a number of trends on the broad left towards reforming our economic and monetary systems. While much of this work is useful, one prominent strand has focused on transforming economic systems through localisation. The problem with big business, so the thinking goes, is not so much its inherently exploitative nature but the scale of the enterprises involved. Smaller businesses and banks would supposedly be more reflective of the local community’s needs.

One popular recent campaign, the ‘move your money’ movement, centred on the idea that, if it was the scale of banks that was to blame for the financial crisis, then customers ought to move their funds collectively to smaller, more virtuous institutions. Ethical-consumerist campaigns like this offer a semblance of effective action – they provide a meaningful narrative about the problems of the system and indicate the simple and pain-free action necessary to resolve it. As with most folk-political actions, it has all the appearances and feeling of having done something. Major banks are positioned as the bad guys, and individuals can supposedly produce significant effects just by moving their money into smaller, local banks and credit unions. What this model neglects is the complex abstractions of the modern banking system. Money circulates as immediately global and immediately interconnected with every other market. In any situation where a small bank or credit union has more deposits than it is able to profitably reinvest within its locality, it will inevitably seek investments within the broader financial system. Indeed, a reading of the accounts of smaller banks in the United States reveals that they partake in and contribute to the same global financial markets as everyone else – investing in Treasury, mortgage or corporate bonds while often participating in socially destructive lending practices that equal those of the major banks.⁸² While clearly a reformist measure, ‘move your money’ might at least have been expected to lead to some transformations in the composition of the US banking system. However, as of September 2013, total assets held by the six largest US banks had increased by 37 per cent since the financial crisis. Indeed, by every available measure the big US banks are larger today than at the beginning of the crisis, holding 67 per cent of all assets in the US banking system.⁸³ And while legislative efforts across the world have made some attempts to impose restraints on the activities that led to the crisis (requiring increased capital asset ratios and regular ‘stress tests’ designed to avoid further bailouts), risky lending continues,⁸⁴ and risky derivatives holdings remain at staggeringly high levels.⁸⁵

If localist efforts to constrain the size of the largest banks appear doomed to failure, what are we to make of alternative campaigns to replicate some of the local banks that make up much of the continental European banking system? For example, 70 per cent of the German banking sector consists of community or smaller-sized banks.⁸⁶ German and Swiss community banks, their proponents argue, pool risks collectively and are mutually owned, with high degrees of autonomy to take advantage of local knowledge, and as a result generally remained profitable throughout the financial crisis.⁸⁷ It is also argued that local banks of this type are more likely to lend to small businesses than the larger institutions that are more common in the United States and the UK. There are advantages to some local banking models, but their stability is often overstated. For example, despite being highly localised and under community control, Spain’s community banks (the cajas) took significant risks in the property market and other speculative investments in the 2000s, necessitating thoroughgoing financial restructuring after the 2008 crisis. Though under the alleged control of boards with community representation, investment decisions were effectively taken with little proper oversight. Localisation here meant the politicisation of allegedly disinterested governance boards, turning some cajas into platforms for local government investment in speculative property schemes, as a culture of cronyism took hold.⁸⁸ With the worst of Spain’s banking crisis centred on the local banks, restructuring meant the merging of local banks to form larger institutions. Even in Germany, often touted as having the best localised banking system in the world, there were issues with some regional banks. The Landesbanken, for example, were heavily invested in structured credit products that performed particularly poorly during the financial crisis.⁸⁹ The lesson to draw from this is that there is nothing inherent in smaller institutions that will enable them to resist the worst excesses of contemporary finance – and that the idea of cleanly separating the local from the global is today impossible. Political capture, the need to seek profitable investments beyond those available in the local area, and simply the high returns of more risky investments, are all factors leading local banks to participate in the broader financial system. Even mutual ownership is no guarantee of financial probity, as demonstrated by the recent travails of the UK’s Co-operative Bank, which almost collapsed entirely following an ill-conceived takeover of a building society in 2009.⁹⁰ The systemic problems of the financial system can only be properly dealt with by taking apart financial power, whether by means of broad regulation (as was briefly achieved under postwar Keynesianism) or more revolutionary methods. Fetishising the small and the local seems to be a means of simply ignoring the more significant ways in which the system could be transformed for the better.

RESISTANCE IS FUTILE

A folk-political sentiment has manifested itself in both radical horizontalist and more moderate localist movements, yet similar intuitions underpin a broad range of the contemporary left. Across these groups, a series of judgments are widely accepted: small is beautiful, the local is ethical, simpler is better, permanence is oppressive, progress is over. These kinds of ideas are favoured over any counter-hegemonic project – a politics that might contend with capitalist power at the largest scales. At its heart, much of contemporary folk politics therefore expresses a ‘deep pessimism: it assumes we can’t make large-scale, collective social change’.⁹¹ This defeatist attitude runs amok on the left – and perhaps with good reason, considering the continued failures of the past thirty years.

For centre-left political parties, nostalgia for a lost past is the best that can be hoped for. The most radical content to be found here consists of dreams of social democracy and the so-called ‘golden age’ of capitalism.⁹² Yet the very conditions which once made social democracy possible no longer exist. The capitalist ‘golden age’ was predicated on the production paradigm of the orderly factory environment, where (white, male) workers received security and a basic standard of living in return for a lifetime of stultifying boredom and social repression. Such a system depended on an international hierarchy of empires, colonies and an underdeveloped periphery; a national hierarchy of racism and sexism; and a rigid family hierarchy of female subjugation. Moreover, social democracy relied on a particular balance of forces between classes (and a willingness for compromise between them), and even this was only possible in the wake of the unprecedented destruction caused by the Great Depression and World War II, and in the face of external threats from communism and fascism. For all the nostalgia many may feel, this regime is both undesirable and impossible to recover. But the more pertinent point is that even if we could go back to social democracy, we should not. We can do better, and the social democratic adherence to jobs and growth means it will always err on the side of capitalism and at the expense of the people. Rather than modelling our future on a nostalgic past, we should aim to create a future for ourselves. The move beyond the constraints of the present will not be achieved through a return to a more humanised capitalism reconstructed from a misty-eyed recollection of the past.

While nostalgia for a lost past is clearly not an adequate response, neither is today’s widespread glorification of resistance. Resistance always means resistance against another active force. In other words, it is a defensive and reactive gesture, rather than an active movement. We do not resist a new world into being; we resist in the name of an old world. The contemporary emphasis on resistance therefore belies a defensive stance towards the encroachments of expansionary capitalism. Trade unions, for instance, position themselves as resisting neoliberalism with demands to ‘save our health system’ or ‘stop austerity’; but these demands simply reveal a conservative disposition at the heart of the movement. According to these demands, the best one can hope for is small impediments in the face of a predatory capitalism. We can only struggle to keep what we already have, as limited and crisis-ridden as it may be. Even in left-leaning Latin America this trend is visible, with the most significant successes largely around efforts to impede transnational corporations, particularly in relation to mining.⁹³ In many circles resistance has come to be glorified, obscuring the conservative nature of such a stance behind a veil of radical rhetoric. Resistance is seen to be all that is possible, while constructive projects are nothing but a dream.⁹⁴ While it can be important in some circumstances, in the task of building a new world, resistance is futile.

Other movements argue for an approach of withdrawal, whereby individuals exit from existing social institutions. Horizontalism is closely linked to this approach, being predicated on the rejection of existing institutions and the creation of autonomous forms of community. Indeed, the recent history of activism has tended towards such approaches.⁹⁵ Often these approaches are explicitly opposed to complex societies, meaning that the ultimate implied destination is some form of communitarianism or anarcho-primitivism.⁹⁶ Others suggest making oneself invisible in order to evade detection and repression by the state.⁹⁷ At the extreme, some argue for what amounts to a left-wing survivalism: civilisation is in catastrophe,⁹⁸ and we should therefore become invisible,⁹⁹ retreat to small communes,¹⁰⁰ and learn how to grow food, hunt, heal and defend ourselves.¹⁰¹ If left at the level of survivalism, these kinds of positions, while perhaps unappealing, would at least have some consistency. They at least have the virtue of being open about their implications. However, arguments for withdrawal and exit too easily confuse the idea of a social logic separate from capitalism with a social logic that is antagonistic to capitalism – or, in an even stronger claim, that poses a threat to capitalist logics.¹⁰² Yet capitalism has been and will continue to be compatible with a wide range of different practices and autonomous spaces. The Spanish town of Marinaleda offers a useful example of this. Over the course of three decades, this small community (pop. 2,700) has built up a ‘communist utopia’ that has expropriated land, built its own housing and co-operatives, kept living costs low, and provided work for everyone. Yet the limits of such an approach for transforming capitalism are quickly revealed: housing materials are provided by the regional government, agricultural subsidies come from the European Union, jobs are sustained by the rejection of laboursaving devices, income still comes from selling goods on wider capitalist markets, and businesses remain subjected to capitalist competition and the global financial crisis.¹⁰³ Marinaleda is but one example of how the project of withdrawing, escaping or exiting from capitalism is still contained within a folk-political horizon, within which defending small bunkers of autonomy against the onslaught of capitalism is the best that can be hoped for. Yet we would argue not only that more can be hoped for (and achieved), but that, in the absence of broad and systematic contention, even those

ALL POLITICS IS LOCAL?

Horizontalism, localism, nostalgia, resistance and withdrawal all embody, to greater or lesser degrees, folk-political intuitions about how to do politics. And they all remain inadequate for the task of transforming capitalism. But this is not to say that they should be rejected in their entirety. As the rest of the book will make clear, there are a number of important elements to retain from these approaches. Rather than being intrinsically malign, folk politics is simply partial, temporary and insufficient. Various horizontalist approaches, for example, have raised important questions about power, domination and hierarchy – but they have not developed adequate responses to them. Folk politics as a tendency retreats from the difficulty of these problems by attempting to dispel them from the outset. Yet, in a world where dominance, power, hierarchy and exploitation are imposed upon us, such questions must be confronted directly, rather than retreated from.¹⁰⁴ Likewise, in a banal sense, all politics is local. We act upon things in our immediate vicinity in order to change larger political structures. We cannot simply reject the local. But today’s folk-political tendencies invoke a stronger sense of local politics: a retreat into the local in order to avoid the problems of a complex and abstract society; an assumption about the authenticity and naturalness of the local; and a neglect of scalable and sustainable practices that might go beyond the local. While all politics begins within the local, folk politics remains local.

In the end, a significant part of the problem with folk politics lies less in the particular tactics and practices it tends to adhere to than in the overarching strategic vision into which it is placed. Protests, marches, occupations, sit-ins and blockades all have their place: none of these tactics in themselves are fundamentally folk-political. But when they are marshalled by a strategic vision that sees temporary and small-scale changes as the horizon of success, or when they are extrapolated beyond the particular conditions that made them effective, they are inevitably going to be bound up within folk-political thinking. If the tactic of occupation, for example, is employed in order to create exemplars and temporary spaces of non-capitalist social relations, it will inevitably fail to achieve substantial change. If, on the other hand, it is understood as a mechanism to produce solidarity networks and mobilise them for further action, then it may still have use within broader counterhegemonic strategies. But this sort of strategic reflection about the virtues and limits of any particular action is what is absent from too much of the left today. The numerous protests and marches and occupations typically operate without any sense of strategy, simply acting as dispersed and independent blips of resistance. There is far too little thought given to how to combine these various actions, and how they might function together to collectively build a better world. Instead we are left with actions that sometimes succeed but which rarely have an overarching eye to how this contributes to medium-and long-term goals.¹⁰⁵ In the next chapter, we look at how the right undertook such strategic reflection and orchestrated a situation in which neoliberalism became the dominant common sense of our time.

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Why Are They Winning? The Making of Neoliberal Hegemony

We are all Keynesians now.

Milton Friedman

If our era is dominated by one hegemonic ideology, it is that of neoliberalism. It is widely assumed that the most effective away to produce and distribute goods and services is by allowing instrumentally rational individuals to exchange via the market. State regulations and national industries are, by contrast, seen as distortions and inefficiencies holding back the productive dynamics inherent to free markets. Today, this vision of how economies should operate is what both its critics and proponents take as a baseline. Neoliberalism sets the agenda for what is realistic, necessary and possible. While the economic crisis of 2008 has upset the blind belief in neoliberalism, it nevertheless remains an entrenched part of our worldview – so much so that it is difficult even for its critics to picture coherent alternatives. Yet this ideology of neoliberalism did not emerge fully formed from the minds of Milton Friedman or Friedrich Hayek, or even the Chicago School, and its global hegemony did not arise inevitably from capitalism’s logic.

In its origins, neoliberalism was a fringe theory. Its adherents found it difficult to gain employment, were often untenured, and were mocked by the Keynesian mainstream.¹ Neoliberalism was far from being the world-dominating ideology it would eventually become. The question this chapter will focus on is: How did a small band of neoliberals manage to reshape the world so radically? Neoliberalism was never a given, never a necessary endpoint of capitalist accumulation. Rather, it was a political project from the beginning, and a massively successful one in the end. It succeeded by skilfully constructing an ideology and the infrastructure to support it, and by operating in a non–folk-political manner. This chapter aims to show that neoliberalism functioned as an expansive universal ideology. From humble beginnings, the universalising logic of neoliberalism made it capable of spreading across the world, infiltrating the media, the academy, the policy world, education, labour practices, and the affects, feelings and identities of everyday people. This chapter therefore focuses primarily on how neoliberal hegemony was constructed, rather than on the specific content of neoliberalism. What is of greatest interest is how it was able to transform the ideological and material fabric of global society.

What standard histories of neoliberalism often neglect is the ways in which the main components of this ideological architecture were systematically and painstakingly set in place in the decades prior to the 1970s.² It is in this prehistory of the neoliberal era that we can discern an alternative mode of political action – one that evades the limits of folk politics. This is not to say that this prehistory provides a model for any future leftist programme simply to copy; rather, it is an instructive case study in how the right was able to move beyond folk politics and create a new hegemony. The history of neoliberalism has been one of contingencies, struggle, concentrated action, patience and grandscale strategic thinking. It has been a flexible idea, actualised in various ways according to the specific circumstances it encountered: from Germany in the 1940s, Chile in the 1970s and the UK in the 1980s, to post-Hussein Iraq in the 2000s. This versatility has made neoliberalism a sometimes contradictory project, but one that succeeds precisely by transforming these contradictions into productive tensions.³

Chapter 3

These tensions and variations have led some to believe that the term ‘neoliberalism’ is meaningless and should be relegated to polemics. But the term has some validity, even if it is often used loosely. In popular perception, neoliberalism is usually identified with a glorification of free markets – a position that also entails a commitment to free trade, private property rights and the free movement of capital. Defining neoliberalism as the veneration of free markets is problematic, however, because many ostensibly neoliberal states do not adhere to free-market policies. Others have argued that neoliberalism is predicated upon instilling competition wherever possible.⁴ This makes sense of the drive towards privatisation, but it fails to explain the debates within neoliberalism about whether competition is an ultimate good or not.⁵ Some take into account these tensions within neoliberalism and recognise it as the political, rather than economic, project of a particular class.⁶ There is certainly some truth to this claim, but, taken at face value, it cannot explain why neoliberal ideology was rejected for so long by the capitalist classes that purportedly benefit from it.

Our view is that, contrary to its popular presentation, neoliberalism differs from classical liberalism in ascribing a significant role to the state.⁷ A major task of neoliberalism has therefore been to take control of the state and repurpose it.⁸ Whereas classical liberalism advocated respect for a naturalised sphere supposedly beyond state control (the natural laws of man and the market), neoliberals understand that markets are not ‘natural’.⁹ Markets do not spontaneously emerge as the state backs away, but must instead be consciously constructed, sometimes from the ground up.¹⁰ For instance, there is no natural market for the commons (water, fresh air, land), or for healthcare, or for education.¹¹ These and other markets must be built through an elaborate array of material, technical and legal constructs. Carbon markets required years to be built;¹² volatility markets exist in large part as a function of abstract financial models;¹³ and even the most basic markets require intricate design.¹⁴ Under neoliberalism, the state therefore takes on a significant role in creating ‘natural’ markets. The state also has an important role in sustaining these markets – neoliberalism demands that the state defend property rights, enforce contracts, impose anti-trust laws, repress social dissent and maintain price stability at all costs. This latter demand, in particular, has greatly expanded in the wake of the 2008 crisis into the full-spectrum management of monetary issues through central banks. We therefore make a grave mistake if we think the neoliberal state is intended simply to step back from markets. The unprecedented interventions by central banks into financial markets are symptomatic not of the neoliberal state’s collapse, but of its central function: to create and sustain markets at all costs.¹⁵ Yet it has been an arduous and winding path from neoliberalism’s origins to the present, in which its ideas hold sway over those injecting trillions of dollars into the market.

THE NEOLIBERAL THOUGHT COLLECTIVE

The origins of neoliberalism are disparate, both geographically and intellectually. Elements of what would become the neoliberal project can be found in 1920s Vienna, 1930s Chicago and London, and 1930s and 1940s Germany. Throughout these decades, national movements worked on the margins of academia to maintain liberal ideas. It was not until 1938 that these independent movements were to gain their first transnational organisation, resulting from the Walter Lippmann Colloquium held in Paris just before the eruption of World War II. For the first time, this event brought together the classical liberal theorists, the new German ordoliberals, the British LSE liberals, and Austrian economists such as Friedrich Hayek and Ludwig von Mises. It focused on the historical ebbing of classical liberalism in the face of rising collectivism, and it was here that the first steps were made in consolidating a group of new liberal thinkers. Out of this event a new organisation – Centre International d’Études pour la Rénovation du Libéralisme – arose with the explicit aim of developing and spreading a new liberalism. The outbreak of World War II quickly put an end to the ambitious aims of this organisation, but the network of people involved would continue to work towards developing a neoliberalism. The seeds of the global neoliberal infrastructure had been planted.

It was an idea of Hayek’s that ultimately mobilised this infrastructure into a ‘neoliberal thought collective’ and inaugurated the slow rise of the new hegemony.¹⁶ Since the Walter Lippmann Colloquium had been buried in the onslaught of World War II, the transnational infrastructure of an incipient neoliberalism had to be reconstructed. A chance meeting with a Swiss businessman in 1945 gave Hayek the financial means to put his ideas into action.¹⁷ Thus was born the Mont Pelerin Society (MPS): a closed intellectual network that provided the basic ideological infrastructure for neoliberalism to ferment.¹⁸ It is no exaggeration to say that almost all of the important figures in the postwar creation of neoliberalism were in attendance at its first meeting in 1947, including the Austrian economists, the UK liberals, the Chicago School, the German ordoliberals and a French contingent.¹⁹

From its beginnings, the MPS was consciously focused on changing political common sense and sought to develop a liberal utopia.²⁰ It explicitly understood that this intellectual framework would then be actively filtered down through think tanks, universities and policy documents, in order to institutionalise and eventually monopolise the ideological terrain.²¹ In a letter to those he had invited, Hayek wrote that the purpose of the MPS was

to enlist the support of the best minds in formulating a programme which has a chance of gaining general support. Our effort therefore differs from any political task in that it must be essentially a long-run effort, concerned not so much with what would be immediately practicable, but with the beliefs which must gain ascendance if the dangers are to be averted which at the moment threaten individual freedom.²²

The Society thus made a ‘commitment to a long-run war of position in the “battle of ideas” Privatized, strategic, elite deliberation was therefore established as the modus operandi.’²³ Opening the ten-day event, Hayek diagnosed the problem of the new liberals: a lack of alternatives to the existing (Keynesian) order. There was no ‘consistent philosophy of the opposition groups’ and no ‘real programme’ for change.²⁴ As a result of this diagnosis, Hayek defined the central goal of the MPS as changing elite opinion in order to establish the parameters within which public opinion could then be formed. Contrary to a common assumption, capitalists did not initially see neoliberalism as being in their interests. A major task of the MPS was therefore to educate capitalists as to why they should become neoliberals.²⁵ In order to achieve these goals, the vision of effective action was one of operating on the invisible framework of political common sense that was formed by the ideas circulating in elite networks. From its origins, the MPS eschewed folk politics by working with a global horizon, by working abstractly (outside the parameters of existing possibilities) and by formulating a clear strategic conception of the terrain to be occupied – namely, elite opinion – in order to change political common sense.

Behind this set of goals there lay a consistent but highly flexible account of what was new about neoliberalism. Divisions arose, in particular, over the role of the state in maintaining a competitive order; some argued that intervention was necessary to sustain competition, and others that intervention was the source of monopolies and centralisation.²⁶ There were less divisive arguments over other particular policy positions, indicating that this was far from a homogeneous or unified group. In many ways, the common element was simply the social network itself, with its commitment to building a new liberalism.²⁷ Yet this inbuilt plurality allowed neoliberalism to foster and mutate as it spread around the world, giving it hegemonic strength in its adaptations to the particularity of each space.²⁸ Its flexibility as an ideology allowed it to excel in carrying out its hegemonic function of incorporating different groups into an overarching consensus.²⁹

These debates also extended to questions of strategy. Many members and financiers of Mont Pelerin were impatient with Hayek’s long-term approach and wanted to start producing books and other publications immediately, in order to influence the public.³⁰ In the midst of Keynesian dominance, stable growth and low unemployment, Hayek keenly recognised the unlikelihood of changing public opinion. The Society’s strategy was self-consciously long-term, and Hayek’s view eventually won out within its meetings. Outside these meetings, the networks surrounding the MPS began actively to construct an extensive transnational infrastructure of ideological diffusion. Hayek had been planning since at least the mid 1940s to establish a system of think tanks propounding neoliberal ideas, while at the same time working to place Society members in government positions (a strategy that eventually produced three heads of state and a large number of cabinet ministers).³¹ It was the 1950s, in particular, that saw the proliferation of think tanks allied to the Society, and the subsequent diffusion of neoliberal ideas into the academic and policy worlds.

In the UK, the aims of the MPS were pursued by a network of think tanks and other organisations, such as the Institute of Economic Affairs, the Adam Smith Institute, the Centre for Policy Studies, and an array of smaller groups. Members of the MPS were to enter into US politics, first via think tanks like the American Enterprise Institute, and then through more formal positions such as Milton Friedman’s role as economic advisor to Barry Goldwater in his presidential run. Yet it was in Germany that neoliberalism would first achieve both organisational and policy success.

NOT SO TENTATIVE STEPS

In the wake of World War II, the world was primed for significant changes in economic ideas. Yet it was Germany that faced a unique set of economic difficulties – both the well-known hyperinflation problems of the Weimar Republic and the arduous post–World War II reconstruction effort. While most of the world adopted Keynesian policies, Germany took a different pathway, guided by some of the same neoliberals who had convened at the Walter Lippmann Colloquium. Given the utter collapse of the German state, the problem facing postwar reconstruction planners was how to reconstitute the state – specifically, how to produce legitimacy without having a functional state infrastructure already in place. The answer was found in the ideas propounded by the early ordoliberals: establish a space of economic freedom. This in turn generated a web of connections between individuals which produced the legitimacy of a nascent postwar German state. Rather than a legal legitimacy, the state was seen to derive its legitimacy from a well-functioning economy.³² It was this idea that would provide the grounding for neoliberalism’s first policy experiments.