Monday, September 13, 2010

Neoliberalism: Distracting Intellectuals with Double Truth

In an interesting draft paper available here, one of the editors of the Road from Mont Pelerin argues that one aspect of neoliberalism, founded by intellectuals like Hayek, Friedman and Mises, is that it is distinctly anti-intellectual, that the double truth doctrine of neoliberalism was designed in part to ensnare and indoctrinate intellectuals, who might otherwise encourage the masses to question the validity of their version of neoliberal truth:

We shall set out our approach to the issue of the neoliberal debt to reactionary modernism here by focusing exclusively upon the work of Friedrich Hayek, and in particular, strive to highlight the ways in which Hayek resembled Morgenthau in broad philosophical orientation. Clearly we cannot do justice to the whole range of Hayek’s thought, nor even fully take into account the distinct ways in which he changed his fundamental philosophical stance at least twice in his career. Neither can we document a rich intellectual interplay between the contemporary positions of Hayek and Morgenthau, because it seems there was very little personal interaction, although they did overlap on the Chicago faculty; and they almost never cite one another in their writings.

Nevertheless, we shall propose that examination of Hayek’s predicament helps us situate Morgenstern’s role in the formation of IR (and his participation in the 1954 conference) in an entirely different light. In particular, we want to stress the way that the both of them (by different paths) came to advocate the proposition that politics was not reducible to “reason”, and yet, against all odds, both fostered the development of ‘epistemic communities’ that would develop their insights. Precisely because they were both steeped in the RM tradition, it was taken as given that the masses and the intellectuals could not be trusted to act rationally, and therefore social theory had to relinquish its Pollyanna liberalism and forge special doctrines that would ensure what each considered to be rational political action. Neither ever mistook ‘voting’ for ‘democracy’. In the RM tradition, both were vocal anti-positivists, and yet managed to appeal to “Nature” in the course of promoting what they insisted was ‘science’, after both going through an early phase of denouncing ‘scientism’. Both felt that political activities of the liberal state had to be restrained by the arm’s-length intervention of experts, who would themselves nonetheless maintain their disengagement from sordid politics. Both were staunchly opposed to utilitarianism, although for very different reasons. And in a quest most characteristic of RM, both sought the solution to the crises of liberalism that they saw all around them in their own particular vision of a strong state, often intimately informed by the doctrines of Carl Schmitt; although one must concede that the outlines of that ideal state subsequently diverged fairly dramatically between the realists and the neoliberals.

Perhaps the quickest way to begin to understand Hayek as an RM theorist is to comprehend how he came to believe that the intellectuals serving as high priests of reason had become a fifth column undermining freedom from within, and that his solution involved a species of authoritarian control over a peculiar version of irrationalism . . .

While resident in Vienna, this lurking contradiction might not chafe so insistently, but what was a minor irritation in Vienna became a debilitating syndrome once he moved to London to accept a chair at the LSE in 1932. There, the issue was not so much the dominance of abstract positivism as a philosophical position, as it was the almost ubiquitous association of the ‘scientific method’ with socialist ambitions. Many of Hayek’s formative political activities in this period were not aimed at Marxists per se as they were at scientists who were promoting socialism as the logical extrapolation of a scientific world-view. Among other activities which I would cite as pivotal, there was Hayek’s participation in the founding of the “Society for Freedom in Science”, and his attempt to ally himself with Michael Polanyi to argue for an entirely different portrait of the operation of science (McGucken, 1984). It was in this period that an RM-inflected hostility to positivism became characteristic of his work.

This period has been identified by Bruce Caldwell (2004) as ‘Hayek’s Transformation’ and is bookmarked by his oft-quoted ur-text “Economics and Knowledge,” which coincides with his “Abuse of Reason” project. There, Hayek had recourse to a cobbled-together “philosophy of the ineffable” to try and square his ambition to be a scientist, his hostility to socialism, the ambition of many natural scientists to portray socialism as scientific, and the failure of his previous forays into ‘Austrian’ macroeconomic theory. It was from this point forward that Hayek entertained many RM themes. From thenceforth, Hayek argued that the market was no longer a set of pipes channeling capital though roundabout channels, but rather an information processor, organizing and conveying the appropriate information to the relevant actors, by an instrumentality that could not be fully comprehended or manipulated by any central planner. Just as he began to assert in this period that the mind could not come to an adequate understanding of its own operations, he also wanted to assert that “Reason” could not on its own devices fully comprehend why markets are the superior format of social organization. This was the fons et origo of Hayek’s own version of the “anti-intellectualism of the intellectuals” . . .

Since his conception of Nature informed him that the masses will never understand the true architecture of social order, and intellectuals will continue to tempt them to futile intervention and otherwise mucking up the market, then Hayek was led to propound as the central tenet of neoliberalism the standard refrain of RM, viz., that a strong state was necessary to neutralize what he considered to be the pathologies of democracy. The notion of freedom as unhindered exercise of personal participation in political decisions was roundly denounced (1960, p.13). Paraphrasing Walter Benjamin, citizens must learn to forget about their ‘rights’ and instead be given the opportunity to express themselves through the greatest information conveyance device known to mankind, the market. This was not the night watchman state of the classical liberals, however; rather, the neoliberals, through the instrumentality of the strong state, sought to define and institute the types of markets that they (and not the citizenry) were convinced were the most advanced. In this, they were merely echoing Schmitt’s position that “Only a strong state can preserve and [NB!-PM] enhance a free-market economy” and “Only a strong state can generate genuine decentralization, [and] bring about free and autonomous domains” (quoted in Christi, 1998, pp.31, 34fn7). This was echoed (without attribution) by Hayek: “If we proceeded on the assumption that only the exercises of freedom that the majority will practice are important, we would be certain to create a stagnant society with all the characteristics of unfreedom” (Hayek, 1960, p.32).