Neoliberalism has become a catch-all word, an empty signifier that means everything and nothing simultaneously. For those of us on the Left, we often use it as a pejorative term as we levy it against the defenders of capitalism. Neoliberalism is often used as a blanket, catch-all term to describe global capitalism since the late 1970s when free markets were untethered by constraints thanks to the policies of the Reagan-Thatcher era. We tend to paint the term with a rather wide brush, decrying the state of late-stage capitalism and its deleterious effects as being the fault of the neoliberals and their hyper-capitalist economic stranglehold on the global market. Yet, while the history of neoliberalism often focuses on the four centers of neoliberal thought (Chicago, London, Freiburg, and Vienna), less attention is paid to the development of neoliberalism in a melting pot city situated in Central Europe: namely, the Geneva School.

In his highly-lauded and riveting 2018 book, Globalists: The End of Empire and the Birth of Neoliberalism, Canadian historian and associate professor at Wellesley College Quinn Slobodian traces the development of neoliberal thought and action within the works and correspondence of the Geneva School thinkers and social scientists, such as Hayek, von Mises, Röpke, and more. By examining the development of neoliberalism through the perspectives of social scientists, rather than hard-nosed economists, Slobodian aims to reframe the development of neoliberalism as one primarily concerned with issues of law and statecraft, rather than economics, which works to encase and regulate an otherwise unknowable world economy. 

Context

(or, A Short Definition and Simplified History of Neoliberalism as it’s Commonly Taught):

Before we begin, some may be asking: what exactly is neoliberalism? As it’s been traditionally taught, neoliberalism finds its beginnings in the 1930s and 40s, when economists and leaders held meetings to discuss new forms of economic structures in the wake of the Great Depression (30s) and decolonization (late 40’s-onward). They took inspiration from classic liberal economics of the 19th century, such as privatization, deregulation, free trade, globalization, and the reduction of government spending in favor of the private sector. After the Great Depression, there was much debate surrounding the causes of this global economic crisis, and, much to the chagrin of the neoliberals, the post-war consensus did not rule in their favor. At this point, the dominant economic model of the global economy was built upon the theories of John Maynard Keynes (called Keynesian economics), which encouraged government intervention to keep productivity up and employment low. This post-war consensus also emphasized strong trade unions, high tariffs, high taxes, and a comprehensive welfare state. Hayek, Friedman, Buchanan, von Mises, and other neoliberal thinkers were critical of this economic model, but their ideas never really broke into the mainstream, at least not yet. 

As such, Keynesianism was the dominant mode of economic thinking in the Western world until the 1970s, when stagflation (stagnation + inflation) crippled markets, leading many economists and policymakers to return to the ideas of Hayek and the neoliberals. These neoliberal ideas were embodied most (in)famously by the Reagan and Thatcher administrations, and served as the basis for the creation of the World Trade Organization (WTO), replacing the General Agreement on Tariffs and Trade (GATT). These neoliberal policies, however, have been heavily criticized by those on the political and economic Left, especially after the financial crisis of 2008 and the COVID pandemic. Scholars in recent decades have attempted to provide a cogent history of the development of neoliberal thought and how it has shaped our current world. This is the context into which Slobodian’s work enters. 

Overview:

In this book, Slobodian constructs an intellectual history of the development of neoliberalism via the Geneva School, as compared to the more popular historical focus on Milton Friedman and the Chicago School. Whereas the proponents of the Chicago School were concerned with mathematical models, the Genevans were much more preoccupied with the establishment of institutions. Thinkers like Hayek thought that the world economy was much too complicated and ineffable to be captured in data and graphs. For the Genevan School neoliberals, the limits of human knowledge were cited as the reason that the world economy always eludes our comprehension. Although they claimed to never have the ability to fully understand the economy, the neoliberals nevertheless insisted on governmental institutions to regulate and encase this world economy. Thus, neoliberalism acts as a kind of negative theology, which views the world economy as sublime and unknowable, with only a small number of people enlightened enough to craft institutions that can encase this ineffable system.

As such, these thinkers looked back on the Hapsburg Empire with a sense of (misplaced) nostalgia, believing that the supranational organization of the empire helped to guarantee stability in the market order, as well as encouraged the free movement of capital and people. While initially concerned with lowering tariffs between Western powers to promote free-flowing trade, in the wake of the collapse of Western empires and the entry of previously colonized nations into the competitive global market, the Geneva neoliberals became much more invested in constructing supranational organizations that could ensure their continued dominance in the global economy (which manifested in the creation of the GATT and WTO). 

Thus, according to Slobodian, neoliberalism is a philosophy less of economics and more a doctrine of order, creating the institutions that provide for the reproduction of the totality. In the wake of decolonization disrupting the delicate balance of the neoliberal world order, they proposed iron-clad rules that precluded notions of social justice, redistribution of wealth, etc. In this reading, the goal of neoliberalism is not to raise the standard of living or to promote endless growth, but to create systemic interdependence of economies that depend on inequality. This is a much different idea than what we usually think when it comes to modern neoliberalism and free-market economies. For these neoliberals, the goal is not about setting the market free for the sake of individual liberty or freedom to choose. One is still free to choose, but only after a limited range of options left after the global market. Thus, neoliberalism is one form of regulation among others, rather than the opposition of regulation. 

As a result of this regulation, the Geneva neoliberals were not too keen on the promotion of democracy. According to Slobodian, rather than simply ignoring the antagonisms within capitalist logic, neoliberalism recognizes the contradictions of capitalism and seeks to defend it from threats, both from its internal tendency towards crises and external threats such as democracy. Far from a worldview that seeks to shrink the role of the state for the sake of a more democratic free market, neoliberalism, according to Slobodian, is concerned with restructuring the state to turn the world into a form of property. 

To facilitate the free flow of capital between national borders, the Geneva School neoliberals made a key distinction between imperium (the world of governments ruling over a land of people) and dominium (the world of property, such as money, goods, and land). For the Geneva neoliberals, striking the balance between these two worlds (political and economic) was of utmost importance. In the wake of decolonization, these neoliberals sought to create supranational organizations that would allow individual nation-states to rule over their people (imperium) while remaining subject to the international community and the organizations that oversee them (dominium). Essentially, nation-states could rule within their boundaries, but their economies would be regulated by external organizations to promote free-trade. In this sense, neoliberalism prioritizes the corporation over the nation. 

The Western nations feared direct democracy within these supranational organizations, as they were outnumbered by the recently colonized nations, and thus sought to curtail democracy for the sake of free trade. This was not without its hiccups, as the Global South countries insisted that they needed additional economic assistance in the wake of decolonization, namely through trade tariffs and special protections. For example, Global South countries used the language of protectionism and free trade simultaneously, utilizing the Haberler Report in an idiosyncratic and unexpected way, taking industrialized countries to task by demanding them to live up to their liberal principles (ie, the US still had protectionist policies and provided internal subsidies while preaching free trade to the colonized nations). Advocating a one-size-fits-all stance, neoliberals insisted on policies that would ultimately perpetuate the same inequalities that were present during the heyday of the imperial project. 

This aversion to democracy manifested itself in several ways throughout the twentieth century, particularly in the mixed response of the neoliberals to apartheid in South Africa (with Röpke completely on board and others giving more tepid responses). For the Geneva neoliberals, Empire never went away; it was simply rebranded as the “global market.” Neoliberalism was predicated on protecting private capital from democratic forces and the influence of individual nations by creating supranational organizations with little oversight to regulate and extract resources from the Global South, thus perpetuating the economic exploitation of Empire under the name of neoliberal free-trade. Neoliberals promoted democracy and individual freedom as merely a necessary function for increased output and productivity. Far from seeing democracy as intrinsic to global capitalism, the neoliberals conceded that “perhaps democracy may simply lead by its own logic to socialism...Thus, to fend off socialism and it’s becoming, in its fragmentation, the ‘prey’ of individual interest groups, and to defend the safety and mobility of capital, required an institutional fix” (252). Thus, according to Slobodian’s account, neoliberalism primarily concerned itself historically with building legal and administrative frameworks to protect the interests of private capital, rather than promoting deregulation and free markets. 

Commendations: 

Above all else, Globalists is an incredibly well-researched and intellectually rigorous recounting of the Geneva School of neoliberalism. While Slobodian is largely critical of the neoliberal movement, he is still remarkably even-handed in his treatment of the thinkers that comprise the Geneva School. During many of his presentations of the book, Slobodian often touts that even the followers of von Mises and Hayek their strands of economic thought praise the book as being an accurate portrayal of their thought. It’s not difficult to see why both critics and advocates of neoliberalism would find this book to be well worth their time, as Slobodian is consistently nuanced in his portrayal of these figures and of the intimate link between the development of legal codes and the promotion of a spontaneous market order. While Slobodian is ultimately writing an intellectual history of an ideology that he finds to be dangerous, he remains fairly even-keeled and factual throughout the book, only breaking from a neutral narration on a few occasions (particularly in the conclusion). He never engages in exaggeration, hyperbole, or proof-texting, but simply lays out what the Geneva School thinkers believed and how they articulated and enacted those beliefs through the MPS (Mont Pelerin Society) and other organizations. 

  Slobodian’s book is a rewarding read that covers the complex topic of neoliberalism both chronologically and thematically. He connects several dots across a wide expanse of time, spanning from the end of the Hapsburg Empire to the creation of the WTO and EU, showing the reader how neoliberals utilized law and statecraft to push for a globalized world economy. Slobodian also integrates an incisive reading of the role of race and decolonization and its ripple effects on the global economy, highlighting the anti-democratic sentiments of the Geneva School neoliberals such as Röpke, Mises, and Hutt. Here, the role of racism, which never truly disappeared from the days of empire, takes the center stage and serves as a much-needed corrective to the traditional retellings of neoliberalism’s historical development. It’s striking that these neoliberal ideas -- from the incomprehensibility and beauty of the free market to the role of racism and self-interest in crafting policy, organizations, and legal codes to protect private capital -- made a significant impact on right-wing conservatism in the United States, particularly in the work of William F. Buckley and the National Review. 

Particularly insightful was Slobodian’s account of the 1927 riots in Vienna, which arose after the ruling Social Democratic Party clashed with right-wing paramilitary forces. A veteran and an eight-year-old child were killed in the clash, and three members of the nationalist right-wing militia group were arrested and tried for their murders. The three men, however, were vigorously defended in court under the pretense of self-defense and were acquitted, which stoked incisive anger and a general strike. Several industrialists advocated for the use of military power to keep labor unions in check, and the Vienna chief of police, after failing to negotiate with the mayor, armed his troops with rifles and opened fire on the protestors, leaving five officers and eighty-nine protestors dead. It’s rather striking, that while von Mises, on one hand, railed against state intervention in economic matters, he had no qualms whatsoever about utilizing military power to quash labor unions in the interest of free trade and private property (30, 111). In the wake of the social unrest that we are currently experiencing at the beginning of 2021, it’s hard not to draw parallels between our social condition and the rise of militant far-right paramilitary groups, even if we are separated by nearly a century. 

Critique: 

There are a few slight critiques that are worth briefly mentioning. First of all, the book is a bit overly dense and can be rather dry in places, especially if you have no background in the history of neoclassical economic theory. While it’s an overall compelling and convincing read, the text dips in and out of going into incredible detail and listing minutiae that, while important, doesn’t make for the most exciting read at times. As the text goes on, Slobodian continues to add to an ever-growing roster of names and organizational acronyms, which can be difficult to keep track of at times. I found that these issues get easier to deal with as you go since Slobodian often goes back and refers to them often throughout the text, but it can make for difficult reading, especially toward the beginning. That being said, while it can be an uneven read in spots, it is still incredibly rewarding when you stick with it since Slobodian more often than not connects small, seemingly insignificant details and weaves them into his overall narrative. 

Additionally, while I understand that this is an intellectual history of Geneva School neoliberalism, we never dive deeply into the biographies of the thinkers, such as von Mises or Hayek. When a new figure is introduced, we get very quick snippets of information, mostly regarding how they are connected to other thinkers, but not much else. As such, we never really dig deep into why these thinkers thought that their way of organizing the world economy was superior to all others. We don’t get to see the motivations behind these men, and what drove them to build this ideological system (apart from a child-like nostalgia for the Hapsburg Empire). While not the central focus of the book, adding a little more humanity to these figures could have gone a long way in making this work all the more readable.

Furthermore, while this work is meant to focus on the understudied and oft-neglected Geneva School, there’s not a great deal of comparative work done against the Chicago School. We get the rough sketch that UChicago economists such as Freidman were focused on mathematical models and hard data, while Geneva School economists such as Hayek were averse to complex mathematical models in favor of crafting institutions, but we don’t get much beyond that. Throughout the book, I wondered how other economists (such as the Keynesians that dominated much of the mid-twentieth century) were responding to the developments in Geneva, and how they might’ve also supported the rise of international organizations to regulate the world economy. While this may have made the book a bit unwieldy in length, it also could have illuminated some of the differences between different strands of neoliberal thought. 

Conclusion:

Overall, Globalists is a fascinating and much-needed analysis of the historical development of neoliberal thought and how it shaped our current political and economic landscape. Thanks to Slobodian, we can see that neoliberalism is not simply a way of describing global capitalism since the 70s, or even thinking of ourselves as human capital, but rather a discreet (and sometimes contradictory) intellectual movement proposed by prominent thinkers and economists in the early twentieth century. Both critics and adherents of neoliberalism will find much to consider in this work, as it helps to clear the fog surrounding this often misused term. Slobodian makes the point that neoliberalism, far from being the only way to organize the world, is simply one option among many, and is just as historically conditioned as any other system. 

While we now live in a globalized world -- and it is impossible to close that Pandora’s Box -- it has also come at dire costs. Global wealth inequality has been drastically rising in the past few decades, condemning millions to live in poverty. The continual exploitation of natural resources (most notably egregious by Western powers in Global South countries) have exacerbated global warming and served as the primary catalyst for the current ecological crisis we are facing. If we are to survive as a species, we must find alternative ways of organizing ourselves. The COVID crisis has further revealed the deep cracks within the neoliberal order, and we have reached an inflection point in the world economy. Perhaps by understanding the birth of neoliberalism, we can also learn from its slow, but inevitable death to build a new and better world for us all, predicated in global coordination and cooperation, rather than competition and intentionally-designed inequality.