Hayek’s Bastards: The Neoliberal Roots of the Populist Right
Quinn Slobodian, Allen Lane, £25

NEOLIBERALISM has had an enormous influence on the world, driving policy and governance at the national and international level, particularly since the 1980s, when it was championed by the Reagan administration in the United States and the Thatcher government in Britain. Its original think tank is the Mont Pelerin Society, founded in 1947 by the Austrian economist Friedrich Hayek, who used the term “neoliberalism” in the 1950s.

Author Quinn Slobodian suggests, however, that to understand neoliberalism as a “hypermarketization of everything” is “both vague and misleading.” His focus in Hayek’s Bastards is a “new strain of the neoliberal movement that crystallized in the 1990s” that he terms the “new fusionists.”

Then, when neoliberals might have been expected to be basking in the glory of having “routed their enemies, won the battle against communism, and conscripted international financial institutions to carry out their world-changing project.” Instead, he observes, they “seemed to fear the cold war had been lost.” The Soviet Union had collapsed and communism was defeated, yet “public spending continued to expand even as capitalism became the only surviving economic system.”

“In the democratic countries of western Europe, the US, and elsewhere,” wrote neoliberal economist Gary Becker, “government control and regulation of economic activities is expanding, not contracting.”

Neoliberals had initially viewed the European Union as promising: an institution with the potential to accelerate “competition between labour, product, and finance markets.” They came to view it as a “socialist Trojan horse.” It was, as German historian of science and Mont Pelerin Society member Gerard Radnitzky put it: “A European super-state … on the road to more government and more bureaucracy, to creeping socialism and hence to less freedom and less growth.”

Many neoliberals believed that, as Mont Pelerin Society member Charles Murray wrote in the 1990s: “The last 30 years represent an aberration which goes against human nature.” They thought that, as Slobodian puts it, “decades of ‘collectivism’ and state dependency — even in the capitalist world — had eroded the virtues of self-reliance.”

A painful transition out of the world of the social state was the only path to recovery.

Against this background, neoliberals and libertarians in the 1990s argued that “it was necessary to return to first principles, to open a wide-ranging discussion on the human condition and the prerequisites for market order.”

This involved a shift in focus, away from purely economic issues. As neoliberals sought to ground their arguments in “something beyond the social,” they looked for scientific support for their core view that egalitarian politics and the social state went against “human nature.”

Behind it, notes Slobodian, there was a political problem. The social movements of the 1960s and 1970s, the neoliberals believed, had “injected the poison of civil rights, feminism, affirmative action and ecological consciousness into the veins of the body politic.” They were “confounded by persistent demands for the redress of inequality.” They experienced this as an oppressive atmosphere of “political correctness.” They felt it created “a culture of government dependency” and “special pleading.”

In their view, such demands came at the expense of productivity, innovation, efficiency, stability and order. To combat them, intellectually and politically, they “turned to nature in matters of race, intelligence, territory and money.”

Proponents argued that certain cultures — and, for some, certain “races” — were “predisposed to market success.” Slobodian summarises their argument like this: “Some societies had developed the cultural traits of personal responsibility, ingenuity, rational action, and low time preference over long periods; others had not.”

Alongside this, many began to argue that “cultural homogeneity is a precondition for social stability, and thus the peaceful conduct of market exchange and enjoyment of private property.”

From this line of thinking sprang groups like the “closed borders” libertarians, who advocated free movement for capital and goods, but “drew a hard line against certain kinds of people.” Their demand for an ethno-state, writes Slobodian, was grounded in the demand for an “ethno-economy.”

They seized on what they believed was the “objectivity of race science.” Relying on fringe work on IQ science, many adherents divided humanity into “cognitive classes.” Intelligence, measured by IQ, “became a central category for the new fusionists.”

In their appeal to the “junk science yarns” about IQ and the “biological reality of race,” Slobodian’s neoliberals believed they had identified “a genetic basis for unequal capacity, unequal achievement and an explanation for the supposedly natural aversion of races to cohabitation.”

In 2015, more than one million refugees arrived in Europe. With them came “a new winning political hybrid that combined xenophobia with free-market values.” In Germany, the racist right’s position was crystallised in Thilo Sarrazin’s book Germany Abolishes Itself, which sold more than 1.5 million copies. Sarrazin made the case for “race differences in cognitive capacity.” His “synthesis of free trade, independent monetary policy and biological racism is the intellectual core of the insurgent Alternative for Germany (AfD) and Austrian Freedom Party.”

It is important to recognise, Slobodian emphasises, that these figures “did not propose the wholesale rejection of globalism but a variety of it, one that accepts an international division of labour with robust cross-border flows of goods and even multilateral trade agreements”, while “tightening controls on certain kinds of migration.”

The common view of neoliberals and the new right is scorn for “egalitarianism, global economic equality and solidarity beyond the nation. Both see capitalism as inevitable and judge citizens by the standards of productivity and efficiency.”

And yet, as Slobodian points out: “The parties dubbed as right-wing populist, from the US to Britain and Austria … offer few plans to rein in finance, restore a Golden Age of job security, or end world trade. By and large, the so-called populists’ calls to privatize, deregulate, and slash taxes come straight from the [neoliberal] playbook shared by the world’s leaders for the past thirty years.”

Christopher Pollard is an associate teaching fellow in sociology at Deakin University, Australia.

This is an abridged version of an article republished from TheConversation.com under a Creative Commons licence; the full text can be found here.