Tapping into the unrealized futures of the past: QUINN SLOBODIAN with Pavlos RoufosQuinn Slobodian’s recent book Globalists: The End of Empire and the Birth of Neoliberalism (Harvard University Press, 2018) is a brilliant exposition of the widely contested concept of “neoliberalism.” Slobodian situates the concept in its historical context, urging a reconsideration of the term on both those who reject its significance and those who continue to misuse it. I met Quinn in Berlin this July for a conversation concerning neoliberalism, its contemporary populist offshoots, and other current developments.Pavlos Roufos (Rail): You have made the argument that the often-repeated narrative that pits contemporary populists against so-called “globalist neoliberals” is historically inaccurate. Right-wing populism is neither exploiting anti-immigration/anti-Islamist tendencies in order to hide its essentially neoliberal agenda (as some on the Left argue), nor is social conservatism at odds with neoliberal policy (as some “globalists” would claim). Perhaps to situate your position properly, it would make sense to start with your definition of “neoliberalism.”
Quinn Slobodian: The way I understand neoliberalism comes from the work of the people who called themselves neoliberal. The term itself was coined in 1938, by a group of economists, journalists, and politicians who gathered in Paris, people like Friedrich Hayek, Ludwig von Mises, Wilhelm Röpke, Walter Lippmann, Louis Rougier, and others. They were looking at the Great Depression and asking themselves: how can capitalism survive despite its internal tendency to self-destruct? And they were quite clear that if you simply let capitalist interests govern by themselves, there will eventually be a counter-reaction and a mobilized population would overthrow capitalism. A fully unregulated and a fully untamed capitalism would lead to an opposition which would inevitably be communist or socialist. Thus, they realized that it was necessary to think anew about the state, in a way that would protect capitalism from the threat of overthrow by the masses. For capitalism to survive, they concluded, it needed a strong state.
This group of people assembled again after the Second World War to form the Mont Pèlerin Society. By following this group, you can see an evolving set of conversations which, from the 1930s to the 1990s, revolved around designing institutions that would constrain sovereign nation-states from doing things that were outside of the interest of the reproduction of the capitalist world economy. If you think about the way that nation-states were embedded in new institutions such as GATT (which became, in 1995, the WTO), the IMF, the European Union, you see that these were institutions with many purposes, but one of their most important ones was to prevent the subversion of capitalist exchange between nation-states.
The 1990s looked like an absolute triumph of the neoliberal project. Within a couple of years, you had the Eurozone, NAFTA, the WTO. After the end of the Cold War, it looked like a complete victory for a vision of capitalism which sees the free movement of goods and money as basic values that humans need to protect. And yet, at that very moment in the 1990s, when it looked like neoliberalism had defeated all its opponents and the supranational institutions to protect capitalism had been perfected, some of these neoliberals themselves (e.g. particular group of actors around the Mont Pèlerin Society, including a still living Hayek (he died in 1992), Ralph Harris, Pascal Salin, Antonio Martino, Roland Vaubel, Gerard Radnitzky, and others), started to worry that these very institutions were going to become a new means for taking socialism to the next level.
Rather than the hoped-for neoliberal Europe, Europe appeared to the neoliberals themselves as a “Social Europe,” under the leadership of Jacques Delors. There was a fear that the French would effectively take over. Instead of controlling social demands, the EU would start catering to social demands through transfers and structural funds etc. Thus, at that very moment, some key neoliberals started to say that these supranational institutions are not trustworthy guardians of the economic constitution and that we actually need to rethink the basis for protecting capitalism. In this context, the nation-state began to be seen as ultimately more trustworthy than something larger like the EU, the WTO, or NAFTA. So there was a return to the nation by so-called far right populist parties like the Austrian Freedom Party (FPÖ) and others.
Rail: To many, it is clear that there is a natural bond between neoliberalism and the state. In typical left-wing discourse, however, neoliberals are seen as against the state.
Slobodian: I don’t know why that is the case. One often hears this argument, made in a sophisticated or less sophisticated manner, namely that neoliberalism is “anti-statist.” But the best way to overcome this misconception is by reading anything written by actual neoliberals. And one will see then that it is explicitly a project about redesigning the state. It is finding, as one scholar put it, a “better shell” for capitalism. Hayek is often used as a prime example for this misconception, but if you look at his books, you will see that he wrote a book called The Constitution of Liberty (1960), which is concerned with designing a constitution for a new state, and the “Law, Legislation, Liberty” trilogy, which provides very clear guidelines on how to design a state, and so on.
The question is one of tweaking, fixing, and modifying what will be the best container for accommodating democracy, without however letting democracy overtake the prime directive, which is the survival of capitalism. From the point of view of the neoliberals, the 1990s represent a classic moment of a crisis of the state.
Rail: Would you trace the trajectory of the far right AfD (Alternative for Germany), which has experienced recent electoral success, along a similar path?
Slobodian: Indeed. Some of the neoliberals rediscovering the nation, including here in Germany, started to take a very public oppositional stance to the introduction of the Euro in the 1990s. The AfD began as an anti-Euro party. And that mobilization started already in the mid-1990s, when there were small splinter parties, including Bund freier Bürger for example, allied with economic professors, such as Joachim Starbatty (later a member of the Mont Pelerin Society), who lodged a constitutional complaint in Karlsruhe against the introduction of the Euro. There is the real sense among some neoliberals that Europe is the problem not the solution, that the Euro (the currency) is going to be taken over by left-leaning central bankers (from France in particular), and thus it won’t be a means of imposing austerity. So, there is a recovery of nationalism as a positive force.
The critique comes from the monetary perspective first, but in parallel you see the argument that for monetary sovereignty to work, you need a certain set of cultural qualities and virtues. And this is joined by the proposal that perhaps such virtues are only rooted in certain people, that Germans might not have a monopoly on these virtues, but certainly a strong inventory of such virtues as prudence, long-term thinking, and discipline. So a highly dubious cultural anthropology and psychology becomes a complement to the monetary policy perspective.
Having said that, though, one must add that the AfD announced a new program at the end of June 2018 in which they have explicitly distanced themselves from a lot of clearly neoliberal policies that were part of the previous program. Their current tactic is to focus even more on personalized attacks on the supposed criminality of migrants, call for accelerated deportation procedures while emphasizing the need for measures to support the social state. Whether this is a long-term position remains to be seen. Their continued calls for fiscal discipline and budget-cutting while also opposing new taxes suggests that, should they gain a measure of power, many of the “social” promises would be sacrificed. However, other right-wing nationalist parties with neoliberal roots (the Front National in France, for example) have transformed over time into more national “social” formations so this is not out of the question.
Rail: How would you explain this “cultural turn” that some economists took at the time?
Slobodian: In a sense, the newly nationally-minded neoliberals were following the trend of the time. Accelerated by the end of communism, you have the emergence of comparative economic systems as a field within economics. A lot of economists were asking what the necessary cultural conditions were for responsible activity within the market. Maybe the most famous of these is Douglass North, who won the Nobel Prize in economic sciences in 1993. He pioneered what was called the New institutional economics, which asked the question: why does capitalism seem to function better in some parts of the world than others, and in some periods of history rather than others? What were the secrets of economic success in Western Europe and later North America? Quite often these people were historians, so they went back to the Middle Ages and further to ask how institutions such as the rule of law, forms of contract and exchange have developed over the centuries. Their conclusions tended to be that institutions take a very long time to develop and it’s quite hard to “import” one way of organizing an economy into the Soviet Union or Botswana or wherever from one day to the next. This perspective fit well with a larger pessimism about development economics, a pessimism about the post-communist transition, and a return to the idea that economic changes must happen very slowly. It put the spotlight back on culture as the key to prosperity or poverty—some societies have the right culture, some do not. The neoliberal intellectuals who began to be skeptical about European integration and multilateral institutions like the WTO expressed the view that certain cultures may be more hardwired to follow economic rules and rationality than others. They turned the insights of New institutional economics to the political right to support the necessity of the nation and the futility of both foreign aid to the Global South and attempts to integrate cultures they saw as very different such as Northern and Southern Europe under the single currency of the Euro.
Rail: Would you use a similar approach to explain Trump or Brexit?
Slobodian: One can indeed make the argument I have made about the rise of the AfD or the FPÖ to locate the intellectual origins of Brexit. Margaret Thatcher gave a famous speech in Bruges in 1988, in which she said that “we have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed again at a European level with a European super-state exercising a new dominance from Brussels.” Immediately after that, Ralph Harris, who was the general director of the Institute of Economic Affairs [1957-1988] (the first neoliberal think tank), started the Bruges Group, which became the first Eurosceptic think tank. In turn, this spawned the Centre for the New Europe, based in Brussels. These were exclusively run by Mont Pèlerin Society neoliberals. And they feared exactly the same thing as those neoliberals who started these small Eurosceptic parties in the 1990s, namely that Europe was taking a wrong turn toward greater redistribution from richer to poorer countries, centralized control, and social transfers.
The first person to argue that the right to secession must be added to the Maastricht Treaty of the E.U. was James M. Buchanan, the Nobel Prize-winning economist from the US. Through the 1990s, neoliberals gathered around something called the European Constitutional Group here in Berlin which was consistently arguing for the same thing. By the late ‘90s, people in this group were in fact starting to say that the EU should dissolve—not only the Euro should go, but the European Union itself. It is hard to explain why they would think that it had been taken over by socialists, but that is what they believed. The Institute of Economic Affairs in London ran a lead editorial three months before Brexit claiming that “Hayek would have been a Brexiteer.” Nigel Farage of the UKIP was also involved with the Bruges Group, publishing a paper with them in 2001 condemning the “People’s Republic of Europe.” Today, the Bruges Group website boasts that it “spearheaded the intellectual battle to win a vote to leave the European Union.”
If you look at the explicit program of the Brexiteers, it was not economic isolationism, nor was it really economic nationalism. It was a turn away from the regulated European market back to a global market; this is what was meant with all the talk about global Britain.
