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Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown
At the onset of the Great Recession, as house prices sank and joblessness soared, many commentators concluded that the economic convictions behind the disaster would now be consigned to history. Yet in the harsh light of a new day, attacks against government intervention and the global drive for austerity are as strong as ever. Never Let a Serious Crisis Go to Waste is the definitive account of the wreckage of what passes for economic thought, and how neoliberal ideas were used to solve the very crisis they had created. Now updated with a new afterword, Philip Mirowski’s sharp and witty work provides a roadmap for those looking to escape today’s misguided economic dogma.
480 pages, Hardcover
First published January 1, 2013
47 people are currently reading
3000 people want to read
About the author
Philip Mirowski
29 books76 followersPhilip Mirowski (born 21 August 1951, Jackson, Michigan) is a historian and philosopher of economic thought at the University of Notre Dame (Carl E. Koch Professor of Economics and Policy Studies and the History and Philosophy of Science). He received a PhD in Economics from the University of Michigan in 1979, and is a Director of the Reilly Center for Science, Technology, and Values.
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Displaying 1 - 29 of 29 reviews
July 15, 2018
I going to start at the end of this one and with the question the author did answer and questions the author tells us the book didn’t answer. To quote:
“The purpose of this book has been to attempt to answer this question: Why did the neoliberals come through the crisis stronger than ever? Precisely for that reason, we have passed lightly over some other highly contentious collateral issues, such as:
What were the key causes of the crisis?
Have economists of any stripe managed to produce a coherent and plausible narrative of the crisis, at least so far? What role have heterodox economists played in the dispute?
What are the major political weaknesses of the contemporary neoliberal movement?
What is the current topography of the Neoliberal Thought Collective?”
What lessons should the left learn from the neoliberals, and which should they abjure?
What would a vital counternarrative to the epistemological commitments of the neoliberals look like?
Is there a coherent alternative framework within which to understand the interaction of the financialization of the economy with larger ebbs and flows of political economy in the global transformations of capitalism?”
These unanswered questions are pretty damn good questions, questions I would like to have liked to have had answered. All the same, the first question, which this entire book sets out to answer, is also pretty good too.
In a recent review I was criticised for using the term ‘neoliberal’, since it isn’t used by anyone to describe themselves today – interestingly, this book shows that many of those from the Mont Pelerin Society referred to themselves early on as neoliberals (including Milton Friedman, for instance), but they seem to have dropped this as their policies became more widely accepted as the received dogma.
In 2008, I wrote a review of Sowell’s Basic Economics – at the time I was keen to get a better understanding of economics and the book’s title seemed to promise just that. Reading it, I quickly found that it was written by someone who supported the kinds of policies that had gotten us into the mess of 2008 in the first place. It seemed reasonable to write a review pointing out what I took to be the obvious, you know, that the ideas in this book had just brought the world to the brink of a catastrophic collapse, so, maybe this wasn’t so much a ‘citizen’s guide to economy’ as an ideological tract of what were daily being shown to be incredibly dangerous ideas.
Still today, a decade later, when I see there has been a comment left on that review I cringe – assuming it will be yet another free market warrior telling me I am a fool and shouldn’t be allowed to review books at all.
A decade after the ‘great recession’ little has changed – neoliberal ideas have not been repudiated, the bankers that nearly brought the financial system undone are not in jail, rather they are even more highly remunerated today than they were before the crash. And rather than neoliberal ideas being a laughing stock, they remain the received dogma. So, how and why?
Neoliberal ideas are most often characterised as economic principles, but really they are sociological. Rather than being a model for how the economy works – they are normative and normalising structures that limit and condition how people engage with the world. As such, neoliberalism creates the humans needed to populate its own economic system – and it does this in multiple ways, all of which enforce ever more isolated, individualised and atomised people not only within the economic space, but in all senses. In the last four or five decades, we have increasingly moved away from being citizens to becoming selfish maximisers of our own benefits in what is increasingly becoming a war of all on each.
I was talking to a person a work recently about the role of education – not something I talk to people nearly as often as you might think given my reviews – and she said something that took me aback. With total confidence, as if she was merely stating the blindingly obvious, she said, “What schools ought to be teaching young people today is to become entrepreneurs”. I couldn’t have been more surprised if she had said schools should be teaching people to win the lottery.
Then a couple of weeks ago I went to a future of work summit and a panel of five ‘experts’ asked the audience if they thought, in the near future, everyone would be an ‘entrepreneur’. When the audience voted against this idea as being unlikely, the experts came about as close as is possible to being both polite and sneering at the same time. We, as an audience, had collectively let these experts down. But soon the world will prove us wrong and each and everyone one of us (and everyone else in society) will either embrace our entrepreneurial selves or we will find we have sink down into an underclass from which there is no escape other than entrepreneurialism. And, as with virtually all other aspects of neoliberal ideology, the response is TINA – There Is No Alternative – we must become an entrepreneur or remain nothing at all.
I want to focus this review on the contradictory aspects involved in the neoliberal idea of this entrepreneurial self we are all meant to adopt. An entrepreneur, of course, is someone who welcomes risk – at one point in this book people are quoted as saying entrepreneurs are all adrenalin junkies. Risk is the fundamental concept to the kind of person that is entrepreneurial and as such taking risks is the main attribute that needs to be developed in people if they are to become entrepreneurial.
One of the ways the author thinks this may have become apparent is in the remarkable growth of gambling in society. Australia is a particularly interesting example of this trend. We are far and away the world’s biggest gamblers. The only good news regarding Australian gambling is that it is now only growing at 4% a year, whereas it had been growing at nearly 8% in 2014-15. Still, given our GDP only grew 3% last year, this is still an impressive rate of growth, that is, it is still growing in real terms (double the inflation rate) and faster than the rest of the economy.
The question to ask is why is gambling growing so fast, despite Australia already being far and away the largest gamblers in the world per capita. Just to be clear, the average Australian spends $1,300 a year on gambling, the next closest is someone from Singapore who averages only $600 – that is, Australians gamble more than twice the average of the next highest gambling nation. So, why?
The author speculates that gambling is a kind of training for the entrepreneurial self. It is the kind of risk taking that serves two purposes that fit the neoliberal paradigm quite nicely. The first is that gambling is individualised risk, the gambler does not feel part of a socially constructed and normative experience, they see themselves as acting and choosing according to their own free will. The beauty of this is that if they lose, and lose they virtually must, given how the odds are grossly stacked against them, they will ultimately blame themselves for their own bad choices, rather than how society has encouraged them to behave in ways that directly benefit both the owners of the gambling facilities and state governments. The state I live in, for instance, is the most dependent in the country on the revenue it receives from various forms of gambling – and so, our governments only allow the most superficial anti-gambling measures.
That gambling provides funds for state governments fits nicely with the overall neoliberal project. Neoliberalism is opposed to progressive taxation, and gambling provides a near perfect source of funds. It is a self-imposed form of taxation, it is overwhelmingly paid by the poor, and the revenue generated is often shifted to providing services for the wealthy or for corporations.
Entrepreneurialism stresses notions of self-reliance – and so any failure is taken to be a personal failure, it is certainly not understood as a failure due to the structures of society that make such failure almost inevitable for a large proportion of ‘risk takers’ (in much the same way gambling is structured to ensure the failure of the majority of gamblers). This individualisation of failure, mirrored by the individualisation of risk taking, provides the system (that is, the system that provides risks that are beyond the ability of any individual to address using only their own resources) with the perfect get out of jail free card. If the risks you take do not pay off, do not lead to success, then clearly you took a bad risks. And so, when the system almost completely collapsed in 2008, it wasn’t because of excessive gambling in financial markets or of any other form of ‘market failure’ – markets simply can’t fail, by definition, since they are the ultimate information processing mechanisms. Rather, such failures are always due to either government interventions that distort the ideal market or to individual investors who have been overcome by the madness of their ‘animal spirits’ or their ‘irrational exuberance’ or to ‘predictable irrationality’ witnessed in a kind of failure in the otherwise ‘wisdom of crowds’. The point being that again market failure is not something that belongs to the system – it is the fault of individuals.
And so it goes. What happened in 2008? Well, it can’t have been that neoliberal policy positions were at fault. So, the blame needs to be laid at the feet of those crazy poor people who took out Ninja loans, or no docs loans. That is, people who borrowed more than they could afford to repay, who lied in doing so, and who nearly brought the world to the brink of collapse through their bad and risky behaviour. Individuals were to blame. Not, for instance, those whose lending oversight was so lax that they allowed someone with no job to have a housing loan. Not the bank representatives who went to Black churches in the US and got the local pastor to tell their congregation ‘Jesus wants you to be a home owner’ and to sign up on the dotted line. No, the system works by everyone having perfect information available to them, and if they act contrary to the dictate of that information, clearly they must have been irrational. The systemic forces that act to produce an outcome in favour of those already with the most to gain, those with the most power, those who always win – well, those forces can be ignored as irrelevant from the outset, since they explain nothing with considering. The system is premised on the free choice of all individuals in the game acting in their own best and self-interest. Systemic advantage – the whole cui bono question – never needs to be asked.
We are all neoliberals now, as George Monbiot amusingly says in a Guardian article, mirroring Friedman’s ‘we are all Keynesians now’. This story of the ideal self being an entrepreneur, of us all being gamblers and risk takers, of our failures (structured by the social structure itself to be virtually inevitable) being then personalised, where the individual becomes the sole social unit – all this is the vision splendid of the neoliberal project. This is the sociological ‘new man’ neoliberalism is predicated upon producing. And the victory of this project in creating a sociological common sense is nowhere made clearer than in the fact that the 2008 crisis passed and the neoliberal vision only strengthen.
“The purpose of this book has been to attempt to answer this question: Why did the neoliberals come through the crisis stronger than ever? Precisely for that reason, we have passed lightly over some other highly contentious collateral issues, such as:
What were the key causes of the crisis?
Have economists of any stripe managed to produce a coherent and plausible narrative of the crisis, at least so far? What role have heterodox economists played in the dispute?
What are the major political weaknesses of the contemporary neoliberal movement?
What is the current topography of the Neoliberal Thought Collective?”
What lessons should the left learn from the neoliberals, and which should they abjure?
What would a vital counternarrative to the epistemological commitments of the neoliberals look like?
Is there a coherent alternative framework within which to understand the interaction of the financialization of the economy with larger ebbs and flows of political economy in the global transformations of capitalism?”
These unanswered questions are pretty damn good questions, questions I would like to have liked to have had answered. All the same, the first question, which this entire book sets out to answer, is also pretty good too.
In a recent review I was criticised for using the term ‘neoliberal’, since it isn’t used by anyone to describe themselves today – interestingly, this book shows that many of those from the Mont Pelerin Society referred to themselves early on as neoliberals (including Milton Friedman, for instance), but they seem to have dropped this as their policies became more widely accepted as the received dogma.
In 2008, I wrote a review of Sowell’s Basic Economics – at the time I was keen to get a better understanding of economics and the book’s title seemed to promise just that. Reading it, I quickly found that it was written by someone who supported the kinds of policies that had gotten us into the mess of 2008 in the first place. It seemed reasonable to write a review pointing out what I took to be the obvious, you know, that the ideas in this book had just brought the world to the brink of a catastrophic collapse, so, maybe this wasn’t so much a ‘citizen’s guide to economy’ as an ideological tract of what were daily being shown to be incredibly dangerous ideas.
Still today, a decade later, when I see there has been a comment left on that review I cringe – assuming it will be yet another free market warrior telling me I am a fool and shouldn’t be allowed to review books at all.
A decade after the ‘great recession’ little has changed – neoliberal ideas have not been repudiated, the bankers that nearly brought the financial system undone are not in jail, rather they are even more highly remunerated today than they were before the crash. And rather than neoliberal ideas being a laughing stock, they remain the received dogma. So, how and why?
Neoliberal ideas are most often characterised as economic principles, but really they are sociological. Rather than being a model for how the economy works – they are normative and normalising structures that limit and condition how people engage with the world. As such, neoliberalism creates the humans needed to populate its own economic system – and it does this in multiple ways, all of which enforce ever more isolated, individualised and atomised people not only within the economic space, but in all senses. In the last four or five decades, we have increasingly moved away from being citizens to becoming selfish maximisers of our own benefits in what is increasingly becoming a war of all on each.
I was talking to a person a work recently about the role of education – not something I talk to people nearly as often as you might think given my reviews – and she said something that took me aback. With total confidence, as if she was merely stating the blindingly obvious, she said, “What schools ought to be teaching young people today is to become entrepreneurs”. I couldn’t have been more surprised if she had said schools should be teaching people to win the lottery.
Then a couple of weeks ago I went to a future of work summit and a panel of five ‘experts’ asked the audience if they thought, in the near future, everyone would be an ‘entrepreneur’. When the audience voted against this idea as being unlikely, the experts came about as close as is possible to being both polite and sneering at the same time. We, as an audience, had collectively let these experts down. But soon the world will prove us wrong and each and everyone one of us (and everyone else in society) will either embrace our entrepreneurial selves or we will find we have sink down into an underclass from which there is no escape other than entrepreneurialism. And, as with virtually all other aspects of neoliberal ideology, the response is TINA – There Is No Alternative – we must become an entrepreneur or remain nothing at all.
I want to focus this review on the contradictory aspects involved in the neoliberal idea of this entrepreneurial self we are all meant to adopt. An entrepreneur, of course, is someone who welcomes risk – at one point in this book people are quoted as saying entrepreneurs are all adrenalin junkies. Risk is the fundamental concept to the kind of person that is entrepreneurial and as such taking risks is the main attribute that needs to be developed in people if they are to become entrepreneurial.
One of the ways the author thinks this may have become apparent is in the remarkable growth of gambling in society. Australia is a particularly interesting example of this trend. We are far and away the world’s biggest gamblers. The only good news regarding Australian gambling is that it is now only growing at 4% a year, whereas it had been growing at nearly 8% in 2014-15. Still, given our GDP only grew 3% last year, this is still an impressive rate of growth, that is, it is still growing in real terms (double the inflation rate) and faster than the rest of the economy.
The question to ask is why is gambling growing so fast, despite Australia already being far and away the largest gamblers in the world per capita. Just to be clear, the average Australian spends $1,300 a year on gambling, the next closest is someone from Singapore who averages only $600 – that is, Australians gamble more than twice the average of the next highest gambling nation. So, why?
The author speculates that gambling is a kind of training for the entrepreneurial self. It is the kind of risk taking that serves two purposes that fit the neoliberal paradigm quite nicely. The first is that gambling is individualised risk, the gambler does not feel part of a socially constructed and normative experience, they see themselves as acting and choosing according to their own free will. The beauty of this is that if they lose, and lose they virtually must, given how the odds are grossly stacked against them, they will ultimately blame themselves for their own bad choices, rather than how society has encouraged them to behave in ways that directly benefit both the owners of the gambling facilities and state governments. The state I live in, for instance, is the most dependent in the country on the revenue it receives from various forms of gambling – and so, our governments only allow the most superficial anti-gambling measures.
That gambling provides funds for state governments fits nicely with the overall neoliberal project. Neoliberalism is opposed to progressive taxation, and gambling provides a near perfect source of funds. It is a self-imposed form of taxation, it is overwhelmingly paid by the poor, and the revenue generated is often shifted to providing services for the wealthy or for corporations.
Entrepreneurialism stresses notions of self-reliance – and so any failure is taken to be a personal failure, it is certainly not understood as a failure due to the structures of society that make such failure almost inevitable for a large proportion of ‘risk takers’ (in much the same way gambling is structured to ensure the failure of the majority of gamblers). This individualisation of failure, mirrored by the individualisation of risk taking, provides the system (that is, the system that provides risks that are beyond the ability of any individual to address using only their own resources) with the perfect get out of jail free card. If the risks you take do not pay off, do not lead to success, then clearly you took a bad risks. And so, when the system almost completely collapsed in 2008, it wasn’t because of excessive gambling in financial markets or of any other form of ‘market failure’ – markets simply can’t fail, by definition, since they are the ultimate information processing mechanisms. Rather, such failures are always due to either government interventions that distort the ideal market or to individual investors who have been overcome by the madness of their ‘animal spirits’ or their ‘irrational exuberance’ or to ‘predictable irrationality’ witnessed in a kind of failure in the otherwise ‘wisdom of crowds’. The point being that again market failure is not something that belongs to the system – it is the fault of individuals.
And so it goes. What happened in 2008? Well, it can’t have been that neoliberal policy positions were at fault. So, the blame needs to be laid at the feet of those crazy poor people who took out Ninja loans, or no docs loans. That is, people who borrowed more than they could afford to repay, who lied in doing so, and who nearly brought the world to the brink of collapse through their bad and risky behaviour. Individuals were to blame. Not, for instance, those whose lending oversight was so lax that they allowed someone with no job to have a housing loan. Not the bank representatives who went to Black churches in the US and got the local pastor to tell their congregation ‘Jesus wants you to be a home owner’ and to sign up on the dotted line. No, the system works by everyone having perfect information available to them, and if they act contrary to the dictate of that information, clearly they must have been irrational. The systemic forces that act to produce an outcome in favour of those already with the most to gain, those with the most power, those who always win – well, those forces can be ignored as irrelevant from the outset, since they explain nothing with considering. The system is premised on the free choice of all individuals in the game acting in their own best and self-interest. Systemic advantage – the whole cui bono question – never needs to be asked.
We are all neoliberals now, as George Monbiot amusingly says in a Guardian article, mirroring Friedman’s ‘we are all Keynesians now’. This story of the ideal self being an entrepreneur, of us all being gamblers and risk takers, of our failures (structured by the social structure itself to be virtually inevitable) being then personalised, where the individual becomes the sole social unit – all this is the vision splendid of the neoliberal project. This is the sociological ‘new man’ neoliberalism is predicated upon producing. And the victory of this project in creating a sociological common sense is nowhere made clearer than in the fact that the 2008 crisis passed and the neoliberal vision only strengthen.
August 9, 2020
I am going to give this 5 stars for the spectacular analysis of just beautiful nuggets of insight in the book, but overall, this is a very difficult read. It needed a lot of editing and more clear thinking and maybe a little less griping about all the econ idiots out there. Still, it's an excellent and intriguing theory, but you have to do a lot of work to unearth the nuggets.
March 23, 2014
A SERIOUS ANALYSIS GONE TO WASTE
My feelings regarding Mirowski's "Never Let A Serious Crisis Go To Waste" are decidedly mixed, on the one hand there is much fascinating information and analysis with regards to both Economists and the Financial Meltdown, on the other... well imagine Thomas Frank (of One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy & Pity the Billionaire: The Hard-Times Swindle and the Unlikely Comeback of the Right fame) mainlining a hefty load of hard-core academic jargon, and you have some idea of the style Mirowski writes in and the minor headache I developed from time to time while reading it.
Some of it is brilliant, Mirowski has read up on his Hayek and Friedman and the rest of the Mont Pelerin folks (spreading out to those with varying degrees of connections into what Mirowski terms the Neo-Liberal Thought Collective), and their thoughts and methods; his examination of the links between Macro Economists and the Federal Reserve and with Wall St throws much light on the reasons for the almost total lack of innovation in their responses to the Financial Meltdown. But even these insights have to be teased out from the heavy load of academic terminology that he has larded this book with.
This should have been (and perhaps will be if someone does a plain English translation) one of the best books written on the Financial Meltdown of 2007 onwards, and certainly the best one on Economists and the Meltdown, but instead Mirowski's raucous riff-a-rama of esoteric academic terminology means that he may as well have erected a 'Keep Out!' sign for the general reader.
My feelings regarding Mirowski's "Never Let A Serious Crisis Go To Waste" are decidedly mixed, on the one hand there is much fascinating information and analysis with regards to both Economists and the Financial Meltdown, on the other... well imagine Thomas Frank (of One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy & Pity the Billionaire: The Hard-Times Swindle and the Unlikely Comeback of the Right fame) mainlining a hefty load of hard-core academic jargon, and you have some idea of the style Mirowski writes in and the minor headache I developed from time to time while reading it.
Some of it is brilliant, Mirowski has read up on his Hayek and Friedman and the rest of the Mont Pelerin folks (spreading out to those with varying degrees of connections into what Mirowski terms the Neo-Liberal Thought Collective), and their thoughts and methods; his examination of the links between Macro Economists and the Federal Reserve and with Wall St throws much light on the reasons for the almost total lack of innovation in their responses to the Financial Meltdown. But even these insights have to be teased out from the heavy load of academic terminology that he has larded this book with.
This should have been (and perhaps will be if someone does a plain English translation) one of the best books written on the Financial Meltdown of 2007 onwards, and certainly the best one on Economists and the Meltdown, but instead Mirowski's raucous riff-a-rama of esoteric academic terminology means that he may as well have erected a 'Keep Out!' sign for the general reader.
August 23, 2015
The last time I had to read a book with a dictionary on my lap, my bicycle had a banana seat and sissy bar.
intercalated, defalcations, quantifornication, banjax, caliginous, peccadilloes, apophenia, ukases, hegira, hebetude ... you get the picture.
Beyond this awesome vocabularic (I know, I made that word up) spectacle, the book is amazing. Though I thought David Harvey's book on neoliberalism was very good when it was published - this one better captures the insidious rot that is this modern political economy.
Mirowski has the game figured out: encouraged ignorance, fostered doubt, practiced "murketing" (i.e., appealing to the rebellious with a wink, thereby still assimilating them into market relationships), immunized to paradox, and a well-honed, full-spectrum plan to capitalize on crisis, whether economic or environmental.
"The shrewd strategy of simultaneously conducting both a short game and a long game, superficially appearing to the uninformed to be in mutual conflict but united behind the scenes by overarching theoretical aims, is probably the single most significant explanation of the triumph of neoliberal policies during a conjuncture where their opponents had come to expect their utter refutation" (p.332).
And as for us, Goodreads labourers:
"websites that aggregate the voluntary unpaid contributions of bloggers are then capitalized and sold to information conglomerates. A little appeal to vanity has been leveraged into massive appropriations of unpaid labor time in the online world" (p.143).
intercalated, defalcations, quantifornication, banjax, caliginous, peccadilloes, apophenia, ukases, hegira, hebetude ... you get the picture.
Beyond this awesome vocabularic (I know, I made that word up) spectacle, the book is amazing. Though I thought David Harvey's book on neoliberalism was very good when it was published - this one better captures the insidious rot that is this modern political economy.
Mirowski has the game figured out: encouraged ignorance, fostered doubt, practiced "murketing" (i.e., appealing to the rebellious with a wink, thereby still assimilating them into market relationships), immunized to paradox, and a well-honed, full-spectrum plan to capitalize on crisis, whether economic or environmental.
"The shrewd strategy of simultaneously conducting both a short game and a long game, superficially appearing to the uninformed to be in mutual conflict but united behind the scenes by overarching theoretical aims, is probably the single most significant explanation of the triumph of neoliberal policies during a conjuncture where their opponents had come to expect their utter refutation" (p.332).
And as for us, Goodreads labourers:
"websites that aggregate the voluntary unpaid contributions of bloggers are then capitalized and sold to information conglomerates. A little appeal to vanity has been leveraged into massive appropriations of unpaid labor time in the online world" (p.143).
June 15, 2014
The end of truth as narrated by the Proust of economic thought
[Through my ratings, reviews and edits I'm providing intellectual property and labor to Amazon.com, Inc., listed on Nasdaq, which fully owns Goodreads.com and in 2013 posted revenues for $74 billion and $274 million profits. Intellectual property and labor require compensation. Amazon.com, Inc. is also requested to provide assurance that its employees and contractors' working conditions meet the highest health and safety standards at all the company's sites.]
Ah, the sociology of knowledge. As if neoliberalism were not already despicable enough in its operations and effects. Come and see how despicable it is in its 'theorizing'.
The occasion - or kairòs, to be more in keeping with Mirowski's baroque style - for this foray in middle brow territory is offered by the task of finding an answer to the down-to-earth question: "How is it possible that mainstream economics survived the crisis without even going through the motions of reform?".
The author goes to the trouble of opening for us the can of worms of neoliberal deception tactics - from double truth to 'blame it on the victims' - naming and shaming the perpetrators of these intellectual sins. If knowledge, in the mainstream disappointing definition, is a 'true justified belief', it is clear that neoliberal doctrines and their academic spin-off, economics, have nothing to do with it. Can a machine, a mechanism, a piece of infrastructure, ever be true (or false, for that matter)? Hayek defined himself as a social engineer and engineering is not concerned with truths but with delivering work. Machines are not true or false: they work well or not. The book shows how and how well the neoliberal ideological machinery works. And Mirowski's findings are shockingly true.
But like the narrator in Proust's Réchèrche , Mirowski needs a few more volumes of investigation before being able to tell us the whole story about his Guermantes. The reason why the neoliberal ideology emerged stronger and healthier from the crisis lies not so much in its relentless activism, as in the root cause for this activism, i.e. - in pure neoliberal spirit - in the incentives that drive it. And these incentives are not merely the cash, appointments and prestige that corporations and elites lavishly distribute to compliant economists.The real incentive is the rent thst the neoliberal machinery - of which economists are clogs - continues to relentlessly extract out of society. During crises rent extraction becomes more urgent because the cake gets smaller and therefore your relative slice has to be bigger. This is also why corruption soars during recessions. Mirowski however stops short of looking at how noeliberalism creates inequality, hinders development and impoverishes the poor. He conducts his inquiry in the gilded world of finance and academia and does not venture beyond those boundaries.
If neoliberal 'knowledge' is a ruthless rent extraction device, getting to know it means tracing the flows of money back to their origins. Mirowski lacks this courage and dismisses the attempts of others in this direction as 'benighted'. Doesn't this type of sociology of knowledge risk becoming a theory to end more profound theories?
[Through my ratings, reviews and edits I'm providing intellectual property and labor to Amazon.com, Inc., listed on Nasdaq, which fully owns Goodreads.com and in 2013 posted revenues for $74 billion and $274 million profits. Intellectual property and labor require compensation. Amazon.com, Inc. is also requested to provide assurance that its employees and contractors' working conditions meet the highest health and safety standards at all the company's sites.]
Ah, the sociology of knowledge. As if neoliberalism were not already despicable enough in its operations and effects. Come and see how despicable it is in its 'theorizing'.
The occasion - or kairòs, to be more in keeping with Mirowski's baroque style - for this foray in middle brow territory is offered by the task of finding an answer to the down-to-earth question: "How is it possible that mainstream economics survived the crisis without even going through the motions of reform?".
The author goes to the trouble of opening for us the can of worms of neoliberal deception tactics - from double truth to 'blame it on the victims' - naming and shaming the perpetrators of these intellectual sins. If knowledge, in the mainstream disappointing definition, is a 'true justified belief', it is clear that neoliberal doctrines and their academic spin-off, economics, have nothing to do with it. Can a machine, a mechanism, a piece of infrastructure, ever be true (or false, for that matter)? Hayek defined himself as a social engineer and engineering is not concerned with truths but with delivering work. Machines are not true or false: they work well or not. The book shows how and how well the neoliberal ideological machinery works. And Mirowski's findings are shockingly true.
But like the narrator in Proust's Réchèrche , Mirowski needs a few more volumes of investigation before being able to tell us the whole story about his Guermantes. The reason why the neoliberal ideology emerged stronger and healthier from the crisis lies not so much in its relentless activism, as in the root cause for this activism, i.e. - in pure neoliberal spirit - in the incentives that drive it. And these incentives are not merely the cash, appointments and prestige that corporations and elites lavishly distribute to compliant economists.The real incentive is the rent thst the neoliberal machinery - of which economists are clogs - continues to relentlessly extract out of society. During crises rent extraction becomes more urgent because the cake gets smaller and therefore your relative slice has to be bigger. This is also why corruption soars during recessions. Mirowski however stops short of looking at how noeliberalism creates inequality, hinders development and impoverishes the poor. He conducts his inquiry in the gilded world of finance and academia and does not venture beyond those boundaries.
If neoliberal 'knowledge' is a ruthless rent extraction device, getting to know it means tracing the flows of money back to their origins. Mirowski lacks this courage and dismisses the attempts of others in this direction as 'benighted'. Doesn't this type of sociology of knowledge risk becoming a theory to end more profound theories?
July 1, 2022
It is not difficult to point out the flaws in this book.
Most of all, it could have used a bit of editing - it's too long for its own good, and at times Mirowski gets himself lost in his own (impressive) knowledge of the technical esoterics of neoclassical economics and contemporary financial-sector wizardry. Additionally, he doesn't even make an effort to hide his disdain for the leading lights of the Neoliberal Thought Collective (NTC) (his term) and the movement's enablers in, especially, the economics and media professions. Sarcasm almost dripping off the pages. Some will find this bias in his treatment of the subject off-putting.
Thing is, though, he has a point.
This is far and away the best account of neoliberalism that I have read. First and foremost, Mirowski manages to settle the matter of why we need this neologism; why plain old "liberalism" won't do. The neoliberals may not like their label but it fits, hand in glove.
Mirowski's starting point is the puzzling fact that neoliberalism, a political ideology and elite power play, and neoclassical economics, its supporting academic cadre, seem to have weathered the storm of the 2008 financial crisis and its aftermath without much of a problem. In fact, they are standing taller than ever, discretely dominant and unquestioned in contemporary political discourse across most of the party-political spectrum in most countries. This despite their major responsibility for making the calamity possible (among other past, current and future disasters).
This aspect of the book makes it a valuable and interesting contribution to historical analysis but I found his general conceptual analysis of the inner workings of the NTC particularly interesting. Essentially, he argues that Friedrich Hayek et al. have turned the market into a modern deity. The Market, this unknowable, infinitely superior, self-organizing information processing machine, always knows best. The cognitive powers, volition and moral striving of humans as individuals and collectives are pathetically insufficient to achieve anything.
So, succumb to The Market; praised be The Market, in eternity.
Mirowski convincingly shows that this is an ideology shot through with contradictions. He talks of its "double truth":
The exoteric truth of neoliberalism is for public consumption: it is the fictitious story of continuity with the classical liberalism of Adam Smith; a story of freedom and liberty, of renouncing centralized political power and leaving citizens free to pursue each their vision of the good life.
The esoteric truth of neoliberalism, however, is the battle cry of the clandestine meetings of Hayek's Mont Pèlerin Society since 1947: state power must be grabbed, held and ruthlessly used in the interest of The Almighty Market (and its leading operators), even when 'market outcomes' seem to erode market competition (as in, monopoly formation; economic power concentrated and converted into political power converted into more economic power concentrated and... etc.). Who are you to question The Market in its divine, mysterious ways?
Additionally, it is an esoteric neoliberal truth that the ignorance of the plebs is a good thing. Dumb them down, keep them busy surviving, following the Kardashians, striving for the next positional good. Here, Mirowski talks of the NTC's "agnotology"; its concerted and determined efforts to pollute public discourse with simplistic and wrongheaded soundbites (like, "the financial crisis was caused by corrupted, semi-governmental Fannie Mae and Freddie Mac"). He uses conservatives' and neoliberals' well-documented (and ongoing) fight against meaningful climate change action through obfuscation, propaganda, and lies as a pertinent metaphorical example.
In 2018, the pseudo-Nobel Prize in economics was awarded to William Nordhaus, a neoclassical economist specializing in the economics of climate change. In his acceptance speech, he argued that we should do just enough climate change mitigation (i.e., reductions in GHG emissions) to keep global warming at +4 degrees Celsius in 2150 (you don't believe me? See for yourself). If you know the first thing about contemporary climate science you know that this is an absurd, even idiotic proposal (see chapter four in Our Final Warning: Six Degrees of Climate Emergency). In reality, the presciptions of Nordhaus and his neoclassical friends invite us to join a neoliberal suicide cult. Of course, the Captains of neoliberalism expect to be able to shield themselves and their loved ones from the ravages of the monsters they are willingly setting free. This belief is in all likelihood sorely mistaken.
Most of all, I read this book as an appeal: let us call their bluff and expose their self-contradictory claims. Let's dare to think and talk about an entirely different kind of society than the inhuman, disaster-bound monstrosity exposed in Mirowski's excellent book.
Most of all, it could have used a bit of editing - it's too long for its own good, and at times Mirowski gets himself lost in his own (impressive) knowledge of the technical esoterics of neoclassical economics and contemporary financial-sector wizardry. Additionally, he doesn't even make an effort to hide his disdain for the leading lights of the Neoliberal Thought Collective (NTC) (his term) and the movement's enablers in, especially, the economics and media professions. Sarcasm almost dripping off the pages. Some will find this bias in his treatment of the subject off-putting.
Thing is, though, he has a point.
This is far and away the best account of neoliberalism that I have read. First and foremost, Mirowski manages to settle the matter of why we need this neologism; why plain old "liberalism" won't do. The neoliberals may not like their label but it fits, hand in glove.
Mirowski's starting point is the puzzling fact that neoliberalism, a political ideology and elite power play, and neoclassical economics, its supporting academic cadre, seem to have weathered the storm of the 2008 financial crisis and its aftermath without much of a problem. In fact, they are standing taller than ever, discretely dominant and unquestioned in contemporary political discourse across most of the party-political spectrum in most countries. This despite their major responsibility for making the calamity possible (among other past, current and future disasters).
This aspect of the book makes it a valuable and interesting contribution to historical analysis but I found his general conceptual analysis of the inner workings of the NTC particularly interesting. Essentially, he argues that Friedrich Hayek et al. have turned the market into a modern deity. The Market, this unknowable, infinitely superior, self-organizing information processing machine, always knows best. The cognitive powers, volition and moral striving of humans as individuals and collectives are pathetically insufficient to achieve anything.
So, succumb to The Market; praised be The Market, in eternity.
Mirowski convincingly shows that this is an ideology shot through with contradictions. He talks of its "double truth":
The exoteric truth of neoliberalism is for public consumption: it is the fictitious story of continuity with the classical liberalism of Adam Smith; a story of freedom and liberty, of renouncing centralized political power and leaving citizens free to pursue each their vision of the good life.
The esoteric truth of neoliberalism, however, is the battle cry of the clandestine meetings of Hayek's Mont Pèlerin Society since 1947: state power must be grabbed, held and ruthlessly used in the interest of The Almighty Market (and its leading operators), even when 'market outcomes' seem to erode market competition (as in, monopoly formation; economic power concentrated and converted into political power converted into more economic power concentrated and... etc.). Who are you to question The Market in its divine, mysterious ways?
Additionally, it is an esoteric neoliberal truth that the ignorance of the plebs is a good thing. Dumb them down, keep them busy surviving, following the Kardashians, striving for the next positional good. Here, Mirowski talks of the NTC's "agnotology"; its concerted and determined efforts to pollute public discourse with simplistic and wrongheaded soundbites (like, "the financial crisis was caused by corrupted, semi-governmental Fannie Mae and Freddie Mac"). He uses conservatives' and neoliberals' well-documented (and ongoing) fight against meaningful climate change action through obfuscation, propaganda, and lies as a pertinent metaphorical example.
In 2018, the pseudo-Nobel Prize in economics was awarded to William Nordhaus, a neoclassical economist specializing in the economics of climate change. In his acceptance speech, he argued that we should do just enough climate change mitigation (i.e., reductions in GHG emissions) to keep global warming at +4 degrees Celsius in 2150 (you don't believe me? See for yourself). If you know the first thing about contemporary climate science you know that this is an absurd, even idiotic proposal (see chapter four in Our Final Warning: Six Degrees of Climate Emergency). In reality, the presciptions of Nordhaus and his neoclassical friends invite us to join a neoliberal suicide cult. Of course, the Captains of neoliberalism expect to be able to shield themselves and their loved ones from the ravages of the monsters they are willingly setting free. This belief is in all likelihood sorely mistaken.
Most of all, I read this book as an appeal: let us call their bluff and expose their self-contradictory claims. Let's dare to think and talk about an entirely different kind of society than the inhuman, disaster-bound monstrosity exposed in Mirowski's excellent book.
November 13, 2013
It's indisputable that Mirowski knows how to pick his subjects; his earlier work Machine Dreams is a really interesting history of the influence of Cold War institutions and fields of study like cybernetics on the development of much of modern economics, far-reaching in its subject material and insightful on almost every page. For this work, the subtitle promises an analysis of how neoliberal economics (more on what that is in a bit) managed to outlast the financial crisis and ensuing recession in the advanced nations - in theory both an enlightening and useful work, whether the reader wanted to figure out a new path forward for economics in light of the aftermath, or simply gain a better understanding of the high-level debates going on within the profession. However, this work is immensely frustrating to read. To borrow Mirowski's title for one of his previous books, his arguments here are almost entirely more heat than light, sustained polemics of contempt for the entire profession without attempting much more than a cursory nod in the direction of any positive path forward. I like a good rant as much as the next guy, but given that the world could definitely use a clear, well-documented, useful guide to how so many economists were able to give such bad advice to world governments after the financial crisis, this book's flaws make it more than usually disappointing given how smart Mirowski is.
Much like Karl Marx, he's bit difficult to comprehend quickly or to summarize easily, and often stronger on the sentence level than the paragraph level. That's not because he's necessarily unclear - in fact, he easily connects many ideas with good insight, clever metaphors, and a powerful sense of irony - it's that he's got so many subtleties, sub-points, and qualifiers connecting in all directions that extracting the central pith of his arguments to try to summarize them leaves them curiously drained. Additionally, the torrents of venom he unleashes are paired with a habit of introducing neologisms like "Neoliberal Thought Collective" that will raise red flags for tendentiousness, partisanship, or simple bias, making it difficult to tell if his rendition of his subject is really all he says it is. The term "neoliberal" itself is a perfect example - though I've heard the word countless times, I was never very clear on its exact definition. I've been under the impression that "neoliberalism" was a hazy euphemism for something like "try to accomplish the goals of activist New Deal/Great Society liberalism via more market-oriented means". However, discussion on economics blogs often tends to conclude that the term, when used derogatorily, simply has no meaning other than "This person opposes the goals of New Deal/Great Society liberalism". Clear definitions of terms are vital to have a productive discussion of anything, but Mirowski is not much help. At great risk of wildly oversimplifying to the point of changing his meaning, I'm going to attempt to paraphrase his extended definition of neoliberalism, his Thirteen Commandments in the "Short Course in Neoliberal Economic Doctrine" section:
1. The vision of society inherent in neoliberalism isn't "natural" in the sense that libertarians claim that markets are "natural", it's got to be consciously built by people.
2. The definition of "market" is unclear, although what markets do - i.e. aggregate price information Hayek-style - is mostly unchallenged by neoliberals.
3. Even though market society isn't natural (see point 1), neoliberals like to pretend it is, in the manner of Margaret Thatcher proclaiming "there is no alternative", though they handwave away things like externalities or market failures.
4. Neoliberals don't actually hate the state, they just want to change it to make citizens more like customers or consumers by, e.g., outsourcing its functions to private actors, as in ratings agencies like Standard & Poor's that perform a quasi-public task.
5. Neoliberals have issues with democracy and like to treat political problems as essentially synonymous with business opportunities and citizens as synonymous with customers.
6. To that end, neoliberalism separates labor from the question of value and treats people completely as economic agents, which separates neoliberalism from Locke-style classical liberalism in that it changes debates over the nature of property and justice.
7. "Freedom" is a tricky subject for neoliberals, but it can either be seen as Isaiah Berlin-style "negative freedom", split into economic, social, and political freedom (with economic freedom being the most important), or can be summed up by Hayek as something that helps "to provide both the opportunity and the inducement to insure the maximum use of knowledge that an individual can accrue.
8. Capital's movement across borders should be as free as possible, although labor's shouldn't.
9. Neoliberals think that inequality is not only natural but a positive good insofar as it helps the market work; attempts to "correct" the market are doomed to fail and can only result in misery.
10. The market is always right, and even things like monopolies or oligopolies that classical liberals like Adam Smith were skeptical of are actually good.
11. The solution to market failures is more markets; emissions permits can solve pollution externalities, problems with public education due to wealth disparities can be fixed with vouchers, and bankers are the best people to solve financial crises.
12. Neoliberals really like the prison-industrial complex, as in Richard Posner's quote that "The function of criminal sanction in a capitalist market economy, then, is to prevent individuals from bypassing the efficient market".
13. Neoliberals made allies with right-wingers by conflating market logic with morality, as in Hayek's quote "All that we can say is that the values we hold are the product of freedom, that in particular the Christian values had to assert themselves through men who successfully resisted coercion by government, and that it is to the desire to be able to follow one's own moral convictions that we owe the modern safeguards of individual freedom. Perhaps we can add to this that only societies which hold moral values essentially similar to our own have survived as free societies, while in others freedom has perished."
That's a complex doctrine, which one might rightly suppose that few people subscribe to completely. I guess "agrees with Milton Friedman" might be as good a bullet point précis as any. Is this an accurate description of a real ideology or a strawman? To some extent it seems fair. In Machine Dreams, Mirowski emphasized that much of the modern economics literature in subfields like game theory, efficient markets, rational actor theory, etc., which were often used by right-wingers to justify "freedom", were actually developed by Cold War researchers pursuing some of the most anti-"freedom" goals imaginable, such as global thermonuclear war. Likewise here, he spends a lot of time talking about the Mount Pelerin Society, which was Hayek's extremely influential gathering of like-minded economist-philosophers, dedicated to pursuing the Popperian "Open Society" while being closed-off to outsiders. This is of course a classic paradox of change: many revolutionaries have struggled with the notion that their non-violent utopia seemed to require violence to be constructed, Popper himself noted that a democracy might decide to vote to abolish democratic institutions, and it's a staple in undergrad classes to present the conundrum of how exactly a society committed to free speech and tolerance should handle individuals who are not. Mirowski presents several examples of committed neoliberals puzzling at the idea that markets, which were supposed to be natural and spontaneous, might require un-natural and un-spontaneous action from themselves in order to prosper. An ideology which celebrated the individual and disdained the expert had to be developed and promoted by an ideologically rigid collective of experts.
Neoliberalism in practical terms comes down to extending the logic of market activity to as many parts of life as possible. This could be seen as a benefit to a more capitalist sort of person, as that increases the amount of opportunities there are for people to turn a profit or choose from a wider menu of options, or it could seem a hazard to the opposite sort of person, as systems of control, dominance, and exploitation are erected by those with more power or money. Mirowski leans heavily towards the latter opinion, using the theories of Foucault to discuss ways that he feels that neoliberalism has transformed society. Not knowing much about Foucault, I can't comment much on Mirowski's discussion of him. However, I can say that he chooses some questionable examples of neoliberalism's effects on contemporary American society; let's take his description of gambling's comeback in recent decades.
I know several people from widely varying walks of life who love to play poker or gamble in general, and while I suppose it's possible that they are merely pawns of the subtle infiltration of neoliberalism into everyday life ("heroically abjectly submitting to risk", even), absent from this analysis is the possibility that gambling is a nearly universal human activity that has existed for thousands of years, and its recent resurgence is due less to the rise of neoliberal ideology than to a recognition of the limits of prohibitionist attitudes and the needs of cash-strapped governments for new sources of revenue. Certainly none of my gambler friends them has ever thought of themselves as a hero, beyond the status that any successful poker player might have, and while it's possible that some people out there do, the example as a whole seems fairly tangential (a while later in the book Mirowski quotes Krugman referencing Keynes' famous line about "When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.", but he doesn't bother to more than nod towards a possible connection between the rise of hold 'em and any trends on Wall Street). I have the same skeptical attitude towards Mirowski's description of Facebook as a neoliberal tool.
He has a mixture of the true (Facebook does indeed makes money off its users and people do sometimes use it to monitor their employees/lovers/children), false (Facebook doesn't "force participants to regularly change and augment their profiles" at all), and nearly meaningless old-person-isms (what do "destabilizes your identity" and "distills the persona down to a jumble of unexplained tastes and alliances" mean?). I'm perfectly willing to listen to criticisms of Facebook's business model, but it's important to separate the technology behind internet-based personal interaction from the human behaviors that happen to use that technology. Tom Standage's The Victorian Internet had a lot to say about how similar the reaction to the internet is to that of the telegraph in the 19th century, so I think it's unlikely that Facebook is emblematic of a new trend in the ways he's alleging, although of course many people dislike Facebook for perfectly sensible reasons. And finally, his take on video games is comical at best: "Computer gaming used to be about triumphs of virtuosity; now, as in Grand Theft Auto, it is all about debasement of the losers." I agree in general with him that in some ways America seems like a worse society because of cheap, greedy, venal Reaganism, as shown in excellent works like Mark Ames' Going Postal, which documents the recent climb to near-ubiquity of school and workplace shootings; all the same, that's an absurdly oversimplified analysis of that game in particular and of video games in general.
He's on much firmer ground a bit later when he criticizes the self-serving attitudes of professional neoliberal economists. Anyone who saw Inside Job knows the infuriating Glenn Hubbard types in the economics profession, who actively pushed for more deregulation of derivatives and not only insisted that financial markets were capable of self-regulation but also, as in Hubbard's case, actively provided assistance to floundering corporations like Countrywide that were trying to appear more solvent than they actually were. Mirowski spends a lot of time tracing all the various ways in which the economics profession is riddled with conflicts of interest, including those at the Federal Reserve, the Bush and Obama administrations, the private sector banks, and so on. He spends a while anatomizing "agnotology", his word for the way that those types of economist shills sought to muddy the waters of debate during the crisis by either equivocating or pushing discredited theories behind what the problems or solutions were. This corruption of the economics profession itself made me think of P.J. O'Rourke's line about legislators, though in this case if buying and selling were encouraged by Econ profs, the first things to be bought and sold were Econ profs. Anyone who reads Yves Smith will enjoy this section. After discussing that, he sets out his aim in chapter 5: "It will suggest that the paltry ineffectual intellectual amendments to neoclassical macroeconomics prompted by the crisis exist, in part, serve the agnotological purposes of the NTC."
The three intellectual amendments mentioned are "(1) behavioral economics; (2) repudiation of the efficient-markets hypothesis; and (3) fixing the DSGE macro model." Without delving too deeply into every nuance of his critiques of the critiques of those three items, this section is an example of another irritating thing Mirowski sometimes does: act like seemingly every economist in the world, even the ones who strongly disagree with each other, are either part of this "Neoliberal Thought Collective" or are enabling them in some way. For their efforts to oppose neoliberalism, liberal economists like Joseph Stiglitz, Paul Krugman, or Robert Solow get at best grudging backhanded compliments, and at worst are accused of carrying water for the neoliberalism they've spent so much time and energy to publicly reject. Time and again, Mirowski will implore economists like that trio to reach out to more heterodox influences, which outside of some mentions of Keynes are rarely enumerated, while summing up their efforts thusly: "Behavioral economics, divestment of the EMH, and tinkering with the DSGE have all been abysmal failures. Yet something agnotological was achieved: the blogosphere was set all a-twitter on irrelevant pointless topics, while journalists were set off on wild goose chases." So... what should have been done? Who should have been listened to? What kinds of models should be used? I don't think it's necessarily the job of a historian like Mirowski to do economists' jobs for them, but it's frustrating to read perceptive criticisms of the way that the "villains" of the story duped the public in the cases of TARP, Fannie Mae/Freddie Mac, and Financial Crisis Inquiry Commission side by side with glib dismissals of seemingly everyone who was trying to do anything to stop them.
It's with glib dismissals that he begins the final chapter of the book, openly mocking groups like Occupy Wall Street for their actions. It's fine to offer valid criticisms of OWS - that they didn't achieve the impact their near-twin the Tea Party did can be chalked up to poor tactics, a lack of the kind of Koch money that the Tea Party had, a failure to take over the Democratic Party the way that the Tea Party did the Republicans, insufficient alliances with established organizations like unions, and so on. Many people I know sympathized with the movement but were turned off by its seeming aimlessness and lack of a plan, which can in large part be chalked up to its deliberately weak leadership structure. Mirowski's analysis has some good stuff:
"But more to the point, the Tea Party was consciously organized to give its recruits things to do and upbeat political identities to inhabit, all revolving around the commercialization of protest. All OWS offered were endless feints toward an oxymoron of an anarchist powwow, complete with tents. It was a murketing ploy, only bereft of anything to sell. OWS did not sufficiently appreciate the topography and extent of its opponent's political organization coupled with its cultural scripts, and for that reason made no coherent attempts to craft and supply an alternative. Or, to phrase it more cruelly, Occupy believed in the bedtime stories of the power of spontaneous order welling up from below, but was in the dark about the realpolitik of the modern privatization of protest."
The "murketing" he refers to is a form of commoditized marketing of social justice issues that's heavy on irony, image, and coolness (think Adbusters), and it's fair to note that OWS attracted its share of dilettante protestors that made a sharp contrast to the implacably dedicated true believers in the Tea Party. But hold that thought about their failure to "supply an alternative", because after an interesting discussion of how neoliberal-championed projects like geoengineering have come to dominate the discussion of potential responses to climate change, he ends with... whatever the opposite of a flourish is:
"The purpose of this book has been to attempt to answer this question: Why did the neoliberals come through the crisis stronger than ever? Precisely for that reason, we have passed lightly over some other highly contentious collateral issues, such as:
What were the key causes of the crisis?
Have economists of any stripe managed to produce a coherent and plausible narrative of the crisis, at least so far? What role have heterodox economists played in the dispute?
What are the major political weaknesses of the contemporary neoliberal movement?
What is the current topography of the Neoliberal Thought Collective?
What lessons should the left learn from the neoliberals, and which should they abjure?
What would a vital counternarrative to the epistemological commitments of the neoliberals look like?
Is there a coherent alternative framework within which to understand the interaction of the financialization of the economy with larger ebbs and flows of political economy in the global transformations of capitalism?"
Great questions! Maybe someone should write a book that tries to answer them! I'd read it, and probably so would lots of other people! This book, however, seems to be targeted at someone else - the kind of reader who's less interested in answering questions than raising them, who's less interested in proposing solutions than in mocking those of others, who wouldn't keep an enemy closer than a friend because no one's a friend, who doesn't think the good is the enemy of the perfect because everything's bad. In short, Mirowski has written this book for himself. It's a shame - I agree with him completely that politics has become much less responsive to people who aren't on top, and that even periods of relatively good government like the one right after 2008 still left much to be desired. The economics profession is in real need of reform. But even though much of the history in here is interesting, and even useful, such as the parts about the influence of the Mount Pelerin Society, there are just too many passages in here that read like HUAC testimony from the 50s with the word "Communists" crossed out and "neoliberals" inserted instead. It's been a while since a book raised my hopes so much and then failed to meet them so spectacularly.
Much like Karl Marx, he's bit difficult to comprehend quickly or to summarize easily, and often stronger on the sentence level than the paragraph level. That's not because he's necessarily unclear - in fact, he easily connects many ideas with good insight, clever metaphors, and a powerful sense of irony - it's that he's got so many subtleties, sub-points, and qualifiers connecting in all directions that extracting the central pith of his arguments to try to summarize them leaves them curiously drained. Additionally, the torrents of venom he unleashes are paired with a habit of introducing neologisms like "Neoliberal Thought Collective" that will raise red flags for tendentiousness, partisanship, or simple bias, making it difficult to tell if his rendition of his subject is really all he says it is. The term "neoliberal" itself is a perfect example - though I've heard the word countless times, I was never very clear on its exact definition. I've been under the impression that "neoliberalism" was a hazy euphemism for something like "try to accomplish the goals of activist New Deal/Great Society liberalism via more market-oriented means". However, discussion on economics blogs often tends to conclude that the term, when used derogatorily, simply has no meaning other than "This person opposes the goals of New Deal/Great Society liberalism". Clear definitions of terms are vital to have a productive discussion of anything, but Mirowski is not much help. At great risk of wildly oversimplifying to the point of changing his meaning, I'm going to attempt to paraphrase his extended definition of neoliberalism, his Thirteen Commandments in the "Short Course in Neoliberal Economic Doctrine" section:
1. The vision of society inherent in neoliberalism isn't "natural" in the sense that libertarians claim that markets are "natural", it's got to be consciously built by people.
2. The definition of "market" is unclear, although what markets do - i.e. aggregate price information Hayek-style - is mostly unchallenged by neoliberals.
3. Even though market society isn't natural (see point 1), neoliberals like to pretend it is, in the manner of Margaret Thatcher proclaiming "there is no alternative", though they handwave away things like externalities or market failures.
4. Neoliberals don't actually hate the state, they just want to change it to make citizens more like customers or consumers by, e.g., outsourcing its functions to private actors, as in ratings agencies like Standard & Poor's that perform a quasi-public task.
5. Neoliberals have issues with democracy and like to treat political problems as essentially synonymous with business opportunities and citizens as synonymous with customers.
6. To that end, neoliberalism separates labor from the question of value and treats people completely as economic agents, which separates neoliberalism from Locke-style classical liberalism in that it changes debates over the nature of property and justice.
7. "Freedom" is a tricky subject for neoliberals, but it can either be seen as Isaiah Berlin-style "negative freedom", split into economic, social, and political freedom (with economic freedom being the most important), or can be summed up by Hayek as something that helps "to provide both the opportunity and the inducement to insure the maximum use of knowledge that an individual can accrue.
8. Capital's movement across borders should be as free as possible, although labor's shouldn't.
9. Neoliberals think that inequality is not only natural but a positive good insofar as it helps the market work; attempts to "correct" the market are doomed to fail and can only result in misery.
10. The market is always right, and even things like monopolies or oligopolies that classical liberals like Adam Smith were skeptical of are actually good.
11. The solution to market failures is more markets; emissions permits can solve pollution externalities, problems with public education due to wealth disparities can be fixed with vouchers, and bankers are the best people to solve financial crises.
12. Neoliberals really like the prison-industrial complex, as in Richard Posner's quote that "The function of criminal sanction in a capitalist market economy, then, is to prevent individuals from bypassing the efficient market".
13. Neoliberals made allies with right-wingers by conflating market logic with morality, as in Hayek's quote "All that we can say is that the values we hold are the product of freedom, that in particular the Christian values had to assert themselves through men who successfully resisted coercion by government, and that it is to the desire to be able to follow one's own moral convictions that we owe the modern safeguards of individual freedom. Perhaps we can add to this that only societies which hold moral values essentially similar to our own have survived as free societies, while in others freedom has perished."
That's a complex doctrine, which one might rightly suppose that few people subscribe to completely. I guess "agrees with Milton Friedman" might be as good a bullet point précis as any. Is this an accurate description of a real ideology or a strawman? To some extent it seems fair. In Machine Dreams, Mirowski emphasized that much of the modern economics literature in subfields like game theory, efficient markets, rational actor theory, etc., which were often used by right-wingers to justify "freedom", were actually developed by Cold War researchers pursuing some of the most anti-"freedom" goals imaginable, such as global thermonuclear war. Likewise here, he spends a lot of time talking about the Mount Pelerin Society, which was Hayek's extremely influential gathering of like-minded economist-philosophers, dedicated to pursuing the Popperian "Open Society" while being closed-off to outsiders. This is of course a classic paradox of change: many revolutionaries have struggled with the notion that their non-violent utopia seemed to require violence to be constructed, Popper himself noted that a democracy might decide to vote to abolish democratic institutions, and it's a staple in undergrad classes to present the conundrum of how exactly a society committed to free speech and tolerance should handle individuals who are not. Mirowski presents several examples of committed neoliberals puzzling at the idea that markets, which were supposed to be natural and spontaneous, might require un-natural and un-spontaneous action from themselves in order to prosper. An ideology which celebrated the individual and disdained the expert had to be developed and promoted by an ideologically rigid collective of experts.
Neoliberalism in practical terms comes down to extending the logic of market activity to as many parts of life as possible. This could be seen as a benefit to a more capitalist sort of person, as that increases the amount of opportunities there are for people to turn a profit or choose from a wider menu of options, or it could seem a hazard to the opposite sort of person, as systems of control, dominance, and exploitation are erected by those with more power or money. Mirowski leans heavily towards the latter opinion, using the theories of Foucault to discuss ways that he feels that neoliberalism has transformed society. Not knowing much about Foucault, I can't comment much on Mirowski's discussion of him. However, I can say that he chooses some questionable examples of neoliberalism's effects on contemporary American society; let's take his description of gambling's comeback in recent decades.
I know several people from widely varying walks of life who love to play poker or gamble in general, and while I suppose it's possible that they are merely pawns of the subtle infiltration of neoliberalism into everyday life ("heroically abjectly submitting to risk", even), absent from this analysis is the possibility that gambling is a nearly universal human activity that has existed for thousands of years, and its recent resurgence is due less to the rise of neoliberal ideology than to a recognition of the limits of prohibitionist attitudes and the needs of cash-strapped governments for new sources of revenue. Certainly none of my gambler friends them has ever thought of themselves as a hero, beyond the status that any successful poker player might have, and while it's possible that some people out there do, the example as a whole seems fairly tangential (a while later in the book Mirowski quotes Krugman referencing Keynes' famous line about "When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.", but he doesn't bother to more than nod towards a possible connection between the rise of hold 'em and any trends on Wall Street). I have the same skeptical attitude towards Mirowski's description of Facebook as a neoliberal tool.
He has a mixture of the true (Facebook does indeed makes money off its users and people do sometimes use it to monitor their employees/lovers/children), false (Facebook doesn't "force participants to regularly change and augment their profiles" at all), and nearly meaningless old-person-isms (what do "destabilizes your identity" and "distills the persona down to a jumble of unexplained tastes and alliances" mean?). I'm perfectly willing to listen to criticisms of Facebook's business model, but it's important to separate the technology behind internet-based personal interaction from the human behaviors that happen to use that technology. Tom Standage's The Victorian Internet had a lot to say about how similar the reaction to the internet is to that of the telegraph in the 19th century, so I think it's unlikely that Facebook is emblematic of a new trend in the ways he's alleging, although of course many people dislike Facebook for perfectly sensible reasons. And finally, his take on video games is comical at best: "Computer gaming used to be about triumphs of virtuosity; now, as in Grand Theft Auto, it is all about debasement of the losers." I agree in general with him that in some ways America seems like a worse society because of cheap, greedy, venal Reaganism, as shown in excellent works like Mark Ames' Going Postal, which documents the recent climb to near-ubiquity of school and workplace shootings; all the same, that's an absurdly oversimplified analysis of that game in particular and of video games in general.
He's on much firmer ground a bit later when he criticizes the self-serving attitudes of professional neoliberal economists. Anyone who saw Inside Job knows the infuriating Glenn Hubbard types in the economics profession, who actively pushed for more deregulation of derivatives and not only insisted that financial markets were capable of self-regulation but also, as in Hubbard's case, actively provided assistance to floundering corporations like Countrywide that were trying to appear more solvent than they actually were. Mirowski spends a lot of time tracing all the various ways in which the economics profession is riddled with conflicts of interest, including those at the Federal Reserve, the Bush and Obama administrations, the private sector banks, and so on. He spends a while anatomizing "agnotology", his word for the way that those types of economist shills sought to muddy the waters of debate during the crisis by either equivocating or pushing discredited theories behind what the problems or solutions were. This corruption of the economics profession itself made me think of P.J. O'Rourke's line about legislators, though in this case if buying and selling were encouraged by Econ profs, the first things to be bought and sold were Econ profs. Anyone who reads Yves Smith will enjoy this section. After discussing that, he sets out his aim in chapter 5: "It will suggest that the paltry ineffectual intellectual amendments to neoclassical macroeconomics prompted by the crisis exist, in part, serve the agnotological purposes of the NTC."
The three intellectual amendments mentioned are "(1) behavioral economics; (2) repudiation of the efficient-markets hypothesis; and (3) fixing the DSGE macro model." Without delving too deeply into every nuance of his critiques of the critiques of those three items, this section is an example of another irritating thing Mirowski sometimes does: act like seemingly every economist in the world, even the ones who strongly disagree with each other, are either part of this "Neoliberal Thought Collective" or are enabling them in some way. For their efforts to oppose neoliberalism, liberal economists like Joseph Stiglitz, Paul Krugman, or Robert Solow get at best grudging backhanded compliments, and at worst are accused of carrying water for the neoliberalism they've spent so much time and energy to publicly reject. Time and again, Mirowski will implore economists like that trio to reach out to more heterodox influences, which outside of some mentions of Keynes are rarely enumerated, while summing up their efforts thusly: "Behavioral economics, divestment of the EMH, and tinkering with the DSGE have all been abysmal failures. Yet something agnotological was achieved: the blogosphere was set all a-twitter on irrelevant pointless topics, while journalists were set off on wild goose chases." So... what should have been done? Who should have been listened to? What kinds of models should be used? I don't think it's necessarily the job of a historian like Mirowski to do economists' jobs for them, but it's frustrating to read perceptive criticisms of the way that the "villains" of the story duped the public in the cases of TARP, Fannie Mae/Freddie Mac, and Financial Crisis Inquiry Commission side by side with glib dismissals of seemingly everyone who was trying to do anything to stop them.
It's with glib dismissals that he begins the final chapter of the book, openly mocking groups like Occupy Wall Street for their actions. It's fine to offer valid criticisms of OWS - that they didn't achieve the impact their near-twin the Tea Party did can be chalked up to poor tactics, a lack of the kind of Koch money that the Tea Party had, a failure to take over the Democratic Party the way that the Tea Party did the Republicans, insufficient alliances with established organizations like unions, and so on. Many people I know sympathized with the movement but were turned off by its seeming aimlessness and lack of a plan, which can in large part be chalked up to its deliberately weak leadership structure. Mirowski's analysis has some good stuff:
"But more to the point, the Tea Party was consciously organized to give its recruits things to do and upbeat political identities to inhabit, all revolving around the commercialization of protest. All OWS offered were endless feints toward an oxymoron of an anarchist powwow, complete with tents. It was a murketing ploy, only bereft of anything to sell. OWS did not sufficiently appreciate the topography and extent of its opponent's political organization coupled with its cultural scripts, and for that reason made no coherent attempts to craft and supply an alternative. Or, to phrase it more cruelly, Occupy believed in the bedtime stories of the power of spontaneous order welling up from below, but was in the dark about the realpolitik of the modern privatization of protest."
The "murketing" he refers to is a form of commoditized marketing of social justice issues that's heavy on irony, image, and coolness (think Adbusters), and it's fair to note that OWS attracted its share of dilettante protestors that made a sharp contrast to the implacably dedicated true believers in the Tea Party. But hold that thought about their failure to "supply an alternative", because after an interesting discussion of how neoliberal-championed projects like geoengineering have come to dominate the discussion of potential responses to climate change, he ends with... whatever the opposite of a flourish is:
"The purpose of this book has been to attempt to answer this question: Why did the neoliberals come through the crisis stronger than ever? Precisely for that reason, we have passed lightly over some other highly contentious collateral issues, such as:
What were the key causes of the crisis?
Have economists of any stripe managed to produce a coherent and plausible narrative of the crisis, at least so far? What role have heterodox economists played in the dispute?
What are the major political weaknesses of the contemporary neoliberal movement?
What is the current topography of the Neoliberal Thought Collective?
What lessons should the left learn from the neoliberals, and which should they abjure?
What would a vital counternarrative to the epistemological commitments of the neoliberals look like?
Is there a coherent alternative framework within which to understand the interaction of the financialization of the economy with larger ebbs and flows of political economy in the global transformations of capitalism?"
Great questions! Maybe someone should write a book that tries to answer them! I'd read it, and probably so would lots of other people! This book, however, seems to be targeted at someone else - the kind of reader who's less interested in answering questions than raising them, who's less interested in proposing solutions than in mocking those of others, who wouldn't keep an enemy closer than a friend because no one's a friend, who doesn't think the good is the enemy of the perfect because everything's bad. In short, Mirowski has written this book for himself. It's a shame - I agree with him completely that politics has become much less responsive to people who aren't on top, and that even periods of relatively good government like the one right after 2008 still left much to be desired. The economics profession is in real need of reform. But even though much of the history in here is interesting, and even useful, such as the parts about the influence of the Mount Pelerin Society, there are just too many passages in here that read like HUAC testimony from the 50s with the word "Communists" crossed out and "neoliberals" inserted instead. It's been a while since a book raised my hopes so much and then failed to meet them so spectacularly.
October 8, 2014
[apologies for the length] It does not take a long memory (or even a particularly good one) for many of us to remember that the latter half of 2008 and much of 2009 saw what seemed to be a surprising mainstream interest in Marx and Marxist economic analysis which might have been surprising in and of itself, but was even more given the way much of that same mainstream had, not many years before, broke out the garlic, crosses and holy water at the mere mention of the word ‘capitalism’. This was not, of course, Marx the revolutionary, the political activist who sought the destruction of that self-same capitalism in favour of a communist world order or even Marx the historian/sociologist/anthropologist/political economist who brought a sharp analytical eye and mind to the political and social struggles of his era. This was, most surprisingly it seemed, Marx the economic analyst who highlighted the fundamental contradictions of capitalism – of the long term tendency of the rate of profit to fall – but without its effects – such as the one about capitalism producing the agent of its own destruction, an educated working class.
The extent of the discussion and seeming rehabilitation of Marxist analyses and concepts in economic discussions seems to show three key things (to my mind at least): the extent of economic illiteracy beyond the technicist and mathematical notions derived from neo-classical models of marginal utility that have provided the basis for economic discussions for most of the 20th century; the lack of conceptual social and political thought related to economic analyses during the same era, and especially since the marginalisation of Keynesian approaches; the extent of shock or panic associated with the global economic crisis (the thing we used to call the ‘credit crunch’). The corollary of this revival of Marxism, even in publications as hostile as Time magazine or the Financial Times, was a growing feeling that neo-liberalism had been exposed: there was, in this time of shock, a sense that the model that gave us the crisis could not survive the crisis; remember the sight of Alan Greenspan, the neo-liberal poster boy from the US Federal Reserve, admitting that he’d (well, they’d) got it wrong. Before we all rush off to the view that Greenspan’s mea culpa, conditional as it was, is a sign that orthodox economics was off looking for new ways of thinking, remember also the collectivist defence of the great and the good of the UK’s economics world when they answered The Queen’s ‘how-did-you-not-see-it-coming?’ question. With the benefit of hindsight, it is easy for us to see that, like Mark Twain, the reports of neo-liberalism’s death were greatly exaggerated: not only has it survived but it has survived with a vengeance.
Enter, Philip Mirowski. Since 2008 there seem to have been many dissections of the crisis, many of which centre on an explanation of the events trying to piece together a causal sequence, others focus on the character of the financial instruments (credit default swaps and the like) that contribute to instability of the financial system leading to causes being found in the irresponsibility of traders, the greed of bankers or the foolishness of those who took out mortgages they could not afford to replay. The (re)turn to Marx has been curiously absent from most of these analyses, although we find the explicitly Marxist in arguments such as David Harvey’s that the crisis is the result of an accumulation crisis (I admit, that is a crudely simplified version of Harvey’s case). Some analysts, but not many, have noted that neo-liberal ideologies seem now to be more powerful than they were before the crisis began, some noting that an effect is that the rich had their debts socialised. Few note that there has been some sleight of hand so that the problem became not private debt but public debt, debt that grew as a result of the banking bailout (the socialisation of the debts of business) and that must now be reduced via spending reductions and tax cuts for the rich (those tax cuts stimulate more investment leading to enhanced economic growth and greater tax revenues leading to reduction in the public sector deficits – or so the neo-liberal ideal holds, except it is not happening). All manner of commentators, the journalistic, the activist and the academic, with all manner of political outlooks have traversed these issues but few have focussed on the question of the greater strength of neo-liberalism (few have focussed even on its survival). Mirowski does, and does so from a powerful positon as a historian and philosopher of economic thought; so this is a resolutely academic book, and although packed with informative narrative and representative detail that illustrates the case there is a careful and necessary deployment of the technical language of economic and political economy.
There are two major elements to his argument. Although it might be tempting to focus in on the dominant but mundane, taken for granted, role of neo-liberal understandings in both discussions of and responses to the crisis (and this discursive mundanity is important) this is not the most important aspect of the case. The first key element of the argument is that Mirowski treats neo-liberalism as if it were a social movement with a range of different faces and levels. The second is what he calls everyday neo-liberalism, not as part of the way we talk about an economic crisis, but as the way we make sense of the social world and how we should and do operate in it.
Mirowski’s view of neo-liberalism as a social movement turns on his presentation of the Neoliberal Thought Collective, as he calls it, as a form of Russian doll with tiers of engagement and forms of participation, but at its core is the Mont Pèlerin Society, a broad group of diverse neo-liberal thinkers working together since 1947. The MPS is not some kind of secret cabal or society conspiring to inflict their views on the world – this most definitely is not a conspiracy theory – but is a group of academics, intellectuals and practitioners working to debate and refine their outlook, their scholarship and their sense of the way the issues they deal with play out in practice. In this sense, they are not that different from many other intellectual and academic networks. Although the MPS may be intellectual core of the Neoliberal Thought Collective, other groups within the wider NTC include bankers, public and private sector economists, business leaders, journalists and other opinion formers and economic practitioners. Whereas it is common in explorations of the growth and power of neo-liberalism to point to origin moments in, for instance, Barry Goldwater’s campaign for the US Presidency in 1964, Mirowski has pointed to an earlier formation, the MPS, as a key factor in the coherence of the neo-liberal ideas that campaign espoused.
This is not to say that Mirowski suggests that there is some kind of unitary or monolithic neo-liberalism: he is careful to note the differences within the MPS (and NTC more widely), highlighting the differences between the supporters of Milton Friedman and of Friedrich Hayek. Amid all this, however, he makes one key and forceful argument: all too often neo-liberalism is seen as promoting free market economies (this is true, but it is not the distinctive thing about them) when the thing they have in common is a promotion of individuals in competition. Crucially, he highlights the gap between anti-state libertarians and neo-liberals whose programme requires a strong state that protects markets and maintains competition and in doing so maintain everyday neo-liberalism as common sense (I am using that term in the manner Gramsci intended it) reinforced by the million small acts everyday where we act in a manner consistent, or seen as consistent, with neo-liberal orthodoxy and the financialisation of everything.
These strands of the argument then come together to allow Mirowski to reach six conclusions about how neo-liberalism survived despite the continuing economic crisis (summed up on pp 356-7):
1: the presentation of contrary evidence did not change individual neo-liberals views, consistent with theories of cognitive dissonance;
2: after a brief period of uncertainty, the NTC reasserted its place in the economics profession from a position of already existing institutional strength;
3: this period of uncertainty meant that immediate responses to the crisis by journalists and politics drew on commonplace and everyday understandings of economics, understandings based in the experiences of everyday neo-liberalism;
4: the NTC has adopted a strategy of agontology (as seen in approaches or demands for instance that we ‘teach the controversy’ with fair treatment of ‘both sides’, even those with almost no support or credibility), that is, the manufacture of doubt similar to that seen in cases of the tobacco industry or of global warming, centred in part on the admission of some errors but the assertion of the overall credibility of neo-liberal approaches and weaknesses in the evidence or understanding of critics;
5: the NTC has co-opted or built protest movements (such as the Tea Party) that combine top-down leadership with bottom-up commercialisation and privatisation of protest activities;
6: in line with the agontologic approach (Mirowski explores this issue in great depth and builds powerful parallels with global warming/climate change) the NTC develops a range of responses to the crisis including short-term denial, medium term market-based solutions and longer term approaches that recruit entrepreneurs and thinkers to develop models to transform human relationships suggesting a range of sources of ideas all of which have the effect of maintaining individually competitive ways of operating in the social world.
Running through all of this is a sense that the Left has abandoned much of the field of economics to neo-liberals and forms of neo-Keynesian thought: Mirowski never says this explicitly, but in his conclusion he suggests (well implies really) that we on the Left must get much better at building economic alternatives that are not backward looking but do appeal to the principles of justice that shaped much of left-liberal 20th century thought. He is explicit though that we on the Left need to quickly develop a concerted common(ish) outlook presenting a comprehensive shape of a new economic order complete with cultural support institutions (which is what the NTC has done): he is clear that in his view this cannot be a new New Deal or welfare state consensus.
This is a demanding book that takes us a long way from the simplistic outlook of the crisis being caused by banker greed or the triteness of arguments from politicians that we must cut public spending in the same way as a household must balance its books. This is a potent exploration of the forces at play in our political, social and cultural worlds that are shaping the ways our economic life is framed, built, understood and developed. I have barely scratched the surface of its richness and complexity and cannot praise it highly enough, not because it is in all aspects correct, but because it is the best and most challenging to the simplicity and/or obscurantism of much of the analysis I have seen so far (you might need you dictionary in some places though).
The extent of the discussion and seeming rehabilitation of Marxist analyses and concepts in economic discussions seems to show three key things (to my mind at least): the extent of economic illiteracy beyond the technicist and mathematical notions derived from neo-classical models of marginal utility that have provided the basis for economic discussions for most of the 20th century; the lack of conceptual social and political thought related to economic analyses during the same era, and especially since the marginalisation of Keynesian approaches; the extent of shock or panic associated with the global economic crisis (the thing we used to call the ‘credit crunch’). The corollary of this revival of Marxism, even in publications as hostile as Time magazine or the Financial Times, was a growing feeling that neo-liberalism had been exposed: there was, in this time of shock, a sense that the model that gave us the crisis could not survive the crisis; remember the sight of Alan Greenspan, the neo-liberal poster boy from the US Federal Reserve, admitting that he’d (well, they’d) got it wrong. Before we all rush off to the view that Greenspan’s mea culpa, conditional as it was, is a sign that orthodox economics was off looking for new ways of thinking, remember also the collectivist defence of the great and the good of the UK’s economics world when they answered The Queen’s ‘how-did-you-not-see-it-coming?’ question. With the benefit of hindsight, it is easy for us to see that, like Mark Twain, the reports of neo-liberalism’s death were greatly exaggerated: not only has it survived but it has survived with a vengeance.
Enter, Philip Mirowski. Since 2008 there seem to have been many dissections of the crisis, many of which centre on an explanation of the events trying to piece together a causal sequence, others focus on the character of the financial instruments (credit default swaps and the like) that contribute to instability of the financial system leading to causes being found in the irresponsibility of traders, the greed of bankers or the foolishness of those who took out mortgages they could not afford to replay. The (re)turn to Marx has been curiously absent from most of these analyses, although we find the explicitly Marxist in arguments such as David Harvey’s that the crisis is the result of an accumulation crisis (I admit, that is a crudely simplified version of Harvey’s case). Some analysts, but not many, have noted that neo-liberal ideologies seem now to be more powerful than they were before the crisis began, some noting that an effect is that the rich had their debts socialised. Few note that there has been some sleight of hand so that the problem became not private debt but public debt, debt that grew as a result of the banking bailout (the socialisation of the debts of business) and that must now be reduced via spending reductions and tax cuts for the rich (those tax cuts stimulate more investment leading to enhanced economic growth and greater tax revenues leading to reduction in the public sector deficits – or so the neo-liberal ideal holds, except it is not happening). All manner of commentators, the journalistic, the activist and the academic, with all manner of political outlooks have traversed these issues but few have focussed on the question of the greater strength of neo-liberalism (few have focussed even on its survival). Mirowski does, and does so from a powerful positon as a historian and philosopher of economic thought; so this is a resolutely academic book, and although packed with informative narrative and representative detail that illustrates the case there is a careful and necessary deployment of the technical language of economic and political economy.
There are two major elements to his argument. Although it might be tempting to focus in on the dominant but mundane, taken for granted, role of neo-liberal understandings in both discussions of and responses to the crisis (and this discursive mundanity is important) this is not the most important aspect of the case. The first key element of the argument is that Mirowski treats neo-liberalism as if it were a social movement with a range of different faces and levels. The second is what he calls everyday neo-liberalism, not as part of the way we talk about an economic crisis, but as the way we make sense of the social world and how we should and do operate in it.
Mirowski’s view of neo-liberalism as a social movement turns on his presentation of the Neoliberal Thought Collective, as he calls it, as a form of Russian doll with tiers of engagement and forms of participation, but at its core is the Mont Pèlerin Society, a broad group of diverse neo-liberal thinkers working together since 1947. The MPS is not some kind of secret cabal or society conspiring to inflict their views on the world – this most definitely is not a conspiracy theory – but is a group of academics, intellectuals and practitioners working to debate and refine their outlook, their scholarship and their sense of the way the issues they deal with play out in practice. In this sense, they are not that different from many other intellectual and academic networks. Although the MPS may be intellectual core of the Neoliberal Thought Collective, other groups within the wider NTC include bankers, public and private sector economists, business leaders, journalists and other opinion formers and economic practitioners. Whereas it is common in explorations of the growth and power of neo-liberalism to point to origin moments in, for instance, Barry Goldwater’s campaign for the US Presidency in 1964, Mirowski has pointed to an earlier formation, the MPS, as a key factor in the coherence of the neo-liberal ideas that campaign espoused.
This is not to say that Mirowski suggests that there is some kind of unitary or monolithic neo-liberalism: he is careful to note the differences within the MPS (and NTC more widely), highlighting the differences between the supporters of Milton Friedman and of Friedrich Hayek. Amid all this, however, he makes one key and forceful argument: all too often neo-liberalism is seen as promoting free market economies (this is true, but it is not the distinctive thing about them) when the thing they have in common is a promotion of individuals in competition. Crucially, he highlights the gap between anti-state libertarians and neo-liberals whose programme requires a strong state that protects markets and maintains competition and in doing so maintain everyday neo-liberalism as common sense (I am using that term in the manner Gramsci intended it) reinforced by the million small acts everyday where we act in a manner consistent, or seen as consistent, with neo-liberal orthodoxy and the financialisation of everything.
These strands of the argument then come together to allow Mirowski to reach six conclusions about how neo-liberalism survived despite the continuing economic crisis (summed up on pp 356-7):
1: the presentation of contrary evidence did not change individual neo-liberals views, consistent with theories of cognitive dissonance;
2: after a brief period of uncertainty, the NTC reasserted its place in the economics profession from a position of already existing institutional strength;
3: this period of uncertainty meant that immediate responses to the crisis by journalists and politics drew on commonplace and everyday understandings of economics, understandings based in the experiences of everyday neo-liberalism;
4: the NTC has adopted a strategy of agontology (as seen in approaches or demands for instance that we ‘teach the controversy’ with fair treatment of ‘both sides’, even those with almost no support or credibility), that is, the manufacture of doubt similar to that seen in cases of the tobacco industry or of global warming, centred in part on the admission of some errors but the assertion of the overall credibility of neo-liberal approaches and weaknesses in the evidence or understanding of critics;
5: the NTC has co-opted or built protest movements (such as the Tea Party) that combine top-down leadership with bottom-up commercialisation and privatisation of protest activities;
6: in line with the agontologic approach (Mirowski explores this issue in great depth and builds powerful parallels with global warming/climate change) the NTC develops a range of responses to the crisis including short-term denial, medium term market-based solutions and longer term approaches that recruit entrepreneurs and thinkers to develop models to transform human relationships suggesting a range of sources of ideas all of which have the effect of maintaining individually competitive ways of operating in the social world.
Running through all of this is a sense that the Left has abandoned much of the field of economics to neo-liberals and forms of neo-Keynesian thought: Mirowski never says this explicitly, but in his conclusion he suggests (well implies really) that we on the Left must get much better at building economic alternatives that are not backward looking but do appeal to the principles of justice that shaped much of left-liberal 20th century thought. He is explicit though that we on the Left need to quickly develop a concerted common(ish) outlook presenting a comprehensive shape of a new economic order complete with cultural support institutions (which is what the NTC has done): he is clear that in his view this cannot be a new New Deal or welfare state consensus.
This is a demanding book that takes us a long way from the simplistic outlook of the crisis being caused by banker greed or the triteness of arguments from politicians that we must cut public spending in the same way as a household must balance its books. This is a potent exploration of the forces at play in our political, social and cultural worlds that are shaping the ways our economic life is framed, built, understood and developed. I have barely scratched the surface of its richness and complexity and cannot praise it highly enough, not because it is in all aspects correct, but because it is the best and most challenging to the simplicity and/or obscurantism of much of the analysis I have seen so far (you might need you dictionary in some places though).
March 5, 2016
This book is like an ice-cold glass of water after running a marathon. It takes one question as its focus: why (the hell) has the neoliberal system/structure/policy/trope/theory survived the Global Financial Crisis? How could the system that brought the world to the worst economic meltdown since the Great Depression survive - seemingly without critique?
This masterful book answers this question. Mirowski has configured the ideal tone for this book. Tongue firmly in cheek, ironic lens firmly in place, he demonstrates how and why this system has continued.
Most powerfully, he offers fresh interpretations of the complex and difficult dichotomy of culture and economy. He demonstrates how the hyper-fixation on the self since 2008 - through the rise in social media, hyper consumerism and focus on self self self self self above all other concerns - has meant that community-building critique has been killed at birth.
An amazing book. A joy to read. A strong argument to consider and apply.
This masterful book answers this question. Mirowski has configured the ideal tone for this book. Tongue firmly in cheek, ironic lens firmly in place, he demonstrates how and why this system has continued.
Most powerfully, he offers fresh interpretations of the complex and difficult dichotomy of culture and economy. He demonstrates how the hyper-fixation on the self since 2008 - through the rise in social media, hyper consumerism and focus on self self self self self above all other concerns - has meant that community-building critique has been killed at birth.
An amazing book. A joy to read. A strong argument to consider and apply.
June 12, 2021
This was the first Philip Mirowski book I read via ebook. It encouraged me to back track and read the earlier books he wrote.
2nd time rereading after having read earlier mirowski books: a lot more of this made sense especially the references to his earlier works science mart and more heat than light.
2nd time rereading after having read earlier mirowski books: a lot more of this made sense especially the references to his earlier works science mart and more heat than light.
January 25, 2015
Interesting guy, but needs an editor.
December 22, 2022
The title gives the book’s mission. The text endeavours to fulfil it.
For those who lived and worked in finance and / or academics through this episode, the book is probably best given a pass, as there is little truly new and insightful. For the rest, not a bad interpretation of the what, why and how.
For those who lived and worked in finance and / or academics through this episode, the book is probably best given a pass, as there is little truly new and insightful. For the rest, not a bad interpretation of the what, why and how.
March 1, 2018
I thought his more recent one, about knowledge and information, made the epistemological case of his enemies wayyyy clearer than this did, but this does a good job of showing how that epistemological case, like all really vibrant philosophies, radiates out into every aspect of lived experience.
April 19, 2019
A very good revisionist history of the 2008 financial crash and its aftermath. Made me quite angry at times but insightful balanced and uncovered a lot of interesting evidence and perspectives.
May 19, 2019
This was a somewhat dense, and at times overly loquacious, work of political economy dissecting exactly what the title says - how neoliberalism survived the financial crisis of 2007 onwards. It does so by looking at the “Neoliberal Thought Collective”, the ideological cadre developing the core tenants of neoliberalism; and how they’ve captured the broader fields of the economics profession, regulatory analysis of the crisis, and various elements of pop and protest culture. Some pieces of the text felt a little out of my depth of knowledge, but overall I felt like I was able to keep up and learn many new things about neoliberalism writ large, and some key responses to the most recent global financial crisis in particular.
April 16, 2021
One of the best books I've ever read.
March 17, 2022
Buen libro, aunque a veces se hace bastante pesado de leer y algo tedioso 3.5/5
September 18, 2022
Very helpful in understanding the political tactics and strategies of those who seek to make the "market" the center of truth and thought.
January 4, 2025
Truly incredible book! Fantastic analysis of orthodox economists impact on the 2008 crisis, the Mount Pelerin Society, and how neoliberalism has affected everyday behavior.
December 17, 2025
needed to look up the definitions of words often for this book bc lots of new words. but once you get past that the book is pretty digestible. its got some nice graphs
April 10, 2023
The writing in this book is INSANE
September 27, 2021
If there's one book that you read about the crisis, make it this one. Mirowski builds the history of neoliberalism into a 'neoliberal doctrine' which he frequently refers back to, he uses this framework to explore society-spanning phenomena such as agnotology and the failure of the Occupy Wall Street movement. Oft-spouted causes for the crisis such as the role of Freddie-Mac/Fannie-Mae and the failure of the DSGE model are repudiated with finesse. The role of the academic economics profession in the proliferation of neoliberal ideology is explored as well, including references to the disdain of modern economics for its own philosophy and history.
I almost took a star off because the author uses unnecessarily complicated prose; on the plus side my vocabulary builder on the kindle has doubled in size.
I almost took a star off because the author uses unnecessarily complicated prose; on the plus side my vocabulary builder on the kindle has doubled in size.
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August 26, 2016A book of this nature deserves a serious examination by a critic, and to do that, one must begin with the title itself, because even the title arouses controversy. "Never Let a Serious Crisis Go To Waste" positively reeks of dispassionate opportunism: and like it or not, the willingness to seize opportunity in a crisis is always seen as heartlessness, regardless of the later benefits to society that such "opportunism" might create. (Imagine people in New York City, in the immediate aftermath of 9/11, running around to telecom providers, asking if they can get a new cellphone number with a revered 212 area code, now that almost 3,000 people have died and no longer need those numbers.) The quote is most often attributed to Rahm Emmanuel, a Democratic party strategist in the Clinton administration who currently serves as the Mayor of Chicago. But this book argues that the mercenary thinking embodied in the title is the property of the Wall Street financial elite, and not the social justice crusaders of the left.
It is obvious from the title alone, that both the left and the right, in America at least, are locked in a heated debate over who is to blame for the Great Financial Crisis following the collapse of Fannie Mae, Freddie Mac and Lehman Brothers. (It is telling that I have only found one commentator in the blogosphere willing to call it the Great Depression Two.)
It is obvious from the title alone, that both the left and the right, in America at least, are locked in a heated debate over who is to blame for the Great Financial Crisis following the collapse of Fannie Mae, Freddie Mac and Lehman Brothers. (It is telling that I have only found one commentator in the blogosphere willing to call it the Great Depression Two.)
This entire review has been hidden because of spoilers.
October 8, 2015
Prof. Mirowski described a nesting doll structure of Neoliberal thought which he calls the Neoliberal Thought Collective. He goes into far more details as to what is Neoliberalism and where it came from in his other books.
It looks like the Neoliberal Thought Collective is the driving force behind the Neoliberal Market Fundamentalism which dominates the field of economics and the professional journalistic organizations which purport to cover economics and our economy.
My skepticism of economic beliefs were further heightened after reading all this. I knew there must be some good scientists and mathematicians who have debunked Neoliberal faith-based economic beliefs.
It looks like the Neoliberal Thought Collective is the driving force behind the Neoliberal Market Fundamentalism which dominates the field of economics and the professional journalistic organizations which purport to cover economics and our economy.
My skepticism of economic beliefs were further heightened after reading all this. I knew there must be some good scientists and mathematicians who have debunked Neoliberal faith-based economic beliefs.
January 21, 2014
good view of why the neoliberals survived the crisis. maybe too US centric and could use simpler language to tell same story.
January 10, 2016
Mirowski has forgotten more about economics than Friedman either Milton or Thomas have ever known.
March 31, 2015
First book I've ever added myself ... "to neoliberals of all parties"
March 25, 2017
What's good in this isn't new and what's new in it isn't good.
That wouldn't be such a problem if it wasn't for the authors sneering tone, not aimed only at neoliberal theorists, neoclassical economists, but also at any one who hasn't read everything writing by any one involved in the MPS.
He gets one star for his breath of neoliberal knowledge (although The Road to MP is also over rated) and another star because he does write well. The problem is with tone and content rather than delivery.
That wouldn't be such a problem if it wasn't for the authors sneering tone, not aimed only at neoliberal theorists, neoclassical economists, but also at any one who hasn't read everything writing by any one involved in the MPS.
He gets one star for his breath of neoliberal knowledge (although The Road to MP is also over rated) and another star because he does write well. The problem is with tone and content rather than delivery.
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