What Does 'Neoliberalism' Really Mean?

Globalists: The End of Empire and the Birth of Neoliberalism, by Quinn Slobodian, Harvard University Press, 400 pages, $35

The word neoliberal is academia's most reviled poltergeist. The term's definition is notoriously fluid, though it usually involves a litany of tropes about globalization and "market ideology" leaving a destructive trail of exploitation and inequality around the world. The scholarly literature on neoliberalism is as vast as it is vacuous, typically deploying its subject as a pejorative stand-in for free market economics. But neoliberalism isn't much more than a ghost of an ideology—or at least it doesn't have many claimants. There are no self-identified neoliberal schools of thought today, excluding minor attempts to appropriate the phrase.

A small group of academics, among them Ludwig von Mises and F.A. Hayek, did briefly bat the term around in the late 1930s as they tried to carve out a place for free market ideas amid the Depression and Europe's growing clouds of illiberalism. The name never really stuck, though. Its closest cousin today comes not from Mises or Hayek but from the lesser-known German "ordoliberal" school that developed after the war—essentially a rule-based blend of market principles, conservative central banking, and a fiscally disciplined social safety net. Yet for reasons of both intellectual interest and ideology, modern theorists point to the Mises-Hayek group as an origin story for their poltergeist.

Globalists: The End of Empire and the Birth of Neoliberalism is a thoroughgoing attempt to develop a historical link between the classical liberal economists of the interwar period and the posited ascendance of neoliberalism in our time. The author, Wellesley historian Quinn Slobodian, contends that the "neoliberal" institutions of today—by which he means the World Trade Organization (WTO), the World Bank, and an assortment of international trade conventions—are the progeny of the aforementioned classical liberals of the early 20th century. The twist, Slobodian contends, is that maintaining an international capitalist norm requires deviation from the precepts of laissez faire. Thus we arrive at a neoliberal institutional structure today that trumps not only national sovereignty but alleged manifestations of popular will, particularly those that might "collectively" appropriate private wealth.

Several elements of this book are impressive. Slobodian digs deep into the archives to map out his subjects' intellectual network, dubbing them the "Geneva School" in the process. But his excavations are processed from a heavily ideological vantage point that is almost completely adversarial toward his subject matter. Globalists is awash in fascinating content, but its author is often adrift at interpreting the important material he has accumulated.

This problem manifests in two related ways. The first is a basic unfamiliarity with economics as a scholarly discipline. Many subjects Slobodian presents as idiosyncratic characteristics of free market ideology are, rather, matters of common economic consensus. His presentation of the history of trade liberalization as a distinctively neoliberal project is symptomatic.

Although Slobodian focuses on European contributions to the General Agreement on Tariffs and Trade (GATT) and its successor, the WTO, you cannot contextualize this story accurately without discussing the collapse in global trade following the United States' disastrous Smoot-Hawley tariff of 1930. But it wasn't an overlooked school of economists in Geneva who reversed this course. It was mainly President Franklin Roosevelt and the Reciprocal Trade Agreements Act of 1934. This measure inaugurated a global paradigm shift away from legislative tariff-making and toward the diplomacy-centric model we know today.

This New Deal angle is missing from Slobodian's story, although there is no shortage of trying to retrofit neoliberal thinkers into the deep background of today's global trade institutions—even as he concedes that there was "little or no input from the neoliberals themselves" at key political moments in the processes.

This is not to suggest that Slobodian's Geneva School was absent from trade debates. Quite the contrary. Gottfried Haberler, for example, was one of the leading mid-century trade economists and applied his influence to reducing trade barriers. Twentieth-century trade liberalization is simply a much broader and more politically diverse story than the one Slobodian tells.

A second and perhaps more serious problem is the author's ideological myopia. Slobodian carries with him the training of a scholar steeped in critical theory, power asymmetries, and the "Global South" of postcolonial solidarity movements. These tools are not necessarily unsuited for the subject, but they add several eccentricities to the analysis. Thus, Mao Zedong is introduced to the reader as simply an "anticolonial intellectual," while the very concept of property rights is presented as another "neoliberal" convention.

The author's myopia extends to the heart of his attempt to coin a distinctively neoliberal Geneva School of economic thought. The designation comes from the Graduate Institute of International Studies, Mises' Geneva-based academic home in the late interwar period, which served as a point of connection for nearly all the figures in Slobodian's account. The conservative economist Wilhelm Roepke relocated there in 1937, and a slew of visiting appointments and conferences brought Hayek, Haberler, Lionel Robbins, and the German ordoliberals to its campus.

The institute did indeed play an important and neglected role as an academic waystation for several camps of free market thought. But Slobodian struggles to identify the commonality that brought so many prominent figures to such a small and relatively obscure institution at this point in time. He offers elaborate theories to this end, including a Depression-era crisis of method that shook market theory loose of its laissez faire precepts, a shared contempt for democracy, even an element of pining for the dissipated remnants of the Habsburg empire. The elephant in the room is that these scholars congregated in Geneva as they fled Hitler's persecution campaigns.

To economic liberals, anti-fascist conservatives, and ethnically Jewish academics, Switzerland was the life raft of the German-speaking world. Yet aside from a few passing references to a flight from Vienna because of "the coming fascist wave," the Nazi threat is largely missing from Slobodian's account. This is no small oversight, as Hayek's seminal Road to Serfdom (1944) and Mises' lesser-known Planned Chaos (1947) grappled directly with this totalitarian upheaval.

Slobodian does not just miss this; he offers frequent asides that imply subtle affinities between the Geneva School and Nazism. Thus we're told that only the raising of tariff walls soured certain "neoliberal" perspectives on fascism; that the Geneva School acquired its "global imaginary" from the ex-Nazi legal philosopher Carl Schmitt; that Hayek's conceptual distinction between law and legislation was "shared" with Schmitt (though Hayek was more apt to link this distinction to Enlightenment antecedents); and that certain selectively curated statements of Mises and Roepke evinced fascistic sympathies. The most charitable thing that can be said of these swipes is that they simplify a complex context (e.g., the ordoliberals did engage with Schmitt's work; Hayek wrote that Schmitt "regularly came down on what to me appears both morally and intellectually the wrong side"). But they also omit their subjects' adversarial relationships with Nazi ideology. One might have noted, for example, that in the 1920s, Mises stood as a rare academic voice against eugenically tinged immigration restrictions and population control measures.

Slobodian similarly imposes an ideological lens onto mid-century geopolitics. The problem of communism, a central preoccupation of market liberals, is relegated to a peripheral concern, while the decolonization of the Global South—a subject closer to the author's own training—assumes center stage. Decolonization is an important issue, and one of Slobodian's more interesting chapters contains a biting critique of Roepke's retrograde racial views in the context of South African apartheid. The evidence that Slobodian develops leaves a considerable mark on the conservative economist's legacy, and it shows the ethical tensions at play in the fight against communism. Less examined is Roepke's bitter falling out with Hayek and his eventual departure from the pro-market Mont Pelerin Society—a missed opportunity, since this episode reveals pronounced internal disagreement among a group of scholars who too often are casually lumped under that broad neoliberal label.

While Slobodian asserts a direct lineage "from the end of the Habsburg Empire to the foundation of the World Trade Organization," that final step is the weakest part of the evidentiary trail. Finding a conspicuous absence of direct Geneva School representation inside the WTO, Slobodian must instead argue that its intellectual influence seeped into the institution's administrative ranks. He shows that a handful of formative players in the GATT's evolution used Hayek in their work, crossed paths with Mont Pelerin members, and believed in free trade. He seems to forget that Hayek attained high stature in economics and an accompanying level of citations, or that trade economists interact professionally with other trade economists. What he presents as intellectual genealogy looks awfully similar to routine scholarly exchanges around an influential figure, or to a widely shared consensus belief of the profession.

A sympathetic reader of Globalists might reply that this citation pattern and economists' free trade doctrines offer their own evidence of neoliberalism's triumph. And Slobodian has made a reasonable case that his subjects' ideas extend well into the economic mainstream, albeit asymmetrically. That finding is intriguing in its own right, when it is not lost in the chaos of an ideological ghost hunt.