On glory and markets – David Runciman in LRB:

“The Mont Pelerin Society was set up in 1947 with the aim of ensuring that the apparent triumph of freedom over fascism in the Second World War should instead be understood as a defeat. Inspired by its founding father, Friedrich von Hayek, whose rallying call The Road to Serfdom had been published three years earlier, the organisation believed that the price of victory had been too high. Democratic Western societies – notably the United States – had won the war by aping the economic tactics of their geopolitical rivals, including the Soviet Union: central planning, market controls, massive government spending and extensive social and economic engineering. Once the fighting was over this translated into promises of continued government spending to fund extensive welfare programmes as a reward for the sacrifices that had been made, which in turn ensured that the social and economic engineering would continue. A total war had required a monster state to prosecute it. The monster was now threatening to devour the peace as well. The task at hand was to dismantle that state in the name of liberty. This was the basis of postwar neoliberalism, and the Mont Pelerin Society became its intellectual clearing house.”

(…)

“ Hayek had understood that persuading any society to accept the rigours of capitalist freedom was never going to be easy. Capitalism is scary because it is so uncertain: the whole point of market logic is that no one knows what’s going to work until they have discovered whether or not people are willing to buy it. But that for Hayek was also its glory. The free exchange of goods and ideas produced wonders beyond imagining because the market could see things that no human being could. As a result, the neoliberal prospectus had to be carefully handled. Too much forthrightness about the great unknown that is market wisdom would spook people and have them reaching for familiar comforts. They needed grounds for retaining some kind of faith in the future. Religion might help, Hayek thought. So too would a minimal social security net.”

(…)

“As a result, Hayek suspected that nothing about the vindication of neoliberalism was likely to be straightforward. Some magical thinking would be needed to leaven the mix. Hayek wanted elites properly educated in the virtues of free-market economics but he also wanted them alive to the ways people might recoil from the experience of living under such a system. Quite a few of the educated elite might recoil from it too. They would need to be given something else to believe in to keep their fear of the unknown at bay.
For a time this strategy of freedom by stealth appeared to be paying dividends, but the problem for many members of the Mont Pelerin Society was that it had been too successful. Just when the market seemed to have won, Western elites were no longer satisfied with it. They wanted something like the market-plus: capitalism, for sure, but with greater cohesion, more integration, fewer injustices. They also wanted less risk of ecological catastrophe, once it became clear that the unleashing of human productive potential might threaten the viability of our natural habitat. So they embarked on new projects of global governance, ecological regulation and capitalist co-ordination. This was the danger of magical thinking: it’s hard to know where to stop. By the end of the 1990s it had produced, among other things, the Eurozone, which looked like just the sort of grand scheme of political and economic engineering that Hayek had spent a lifetime warning against. The Mont Pelerin Society was not in triumphant mood at the turn of the century. It was thoroughly spooked.”

(…)

“Neoliberalism morphed into paleolibertarianism: free markets plus primitive racial, sexual and political hierarchies. Hayek had celebrated dynamic entrepreneurs and free-thinking intellectuals. Hayek’s bastards were into cavemen.
By revealing this twist, Slobodian wants to show that the politics of the alt-right – all that wildly orchestrated chest-beating for alienated kids, for men who just want to be actual men, for whites who don’t want to watch endless goodies being parcelled out to undeserving Blacks – is not a repudiation of neoliberal globalisation on behalf of the people who lost out, as is often assumed. This is not a revolt of the left-behinds. It is an attempt to rescue neoliberal capitalism from globalisation, inspired by a bunch of pointy-heads who came to believe that globalisation had become a stalking horse for social engineering on the most extreme scale. Essentially, they thought Hayek had horribly miscalculated. He had believed that allowing for some human solidarity was a price worth paying for global capitalism. Instead, it turned out that the other side was willing to pay the price of global capitalism for the sake of some human solidarity. Globalism turned into the thing that bleeding-heart liberals did. Davos man was either too stupid to know he had been played or too devious to let on that he was playing everyone else. So there was only one thing for red-in-tooth-and-claw neoliberals to do. They had to explode the whole fateful bargain.”

(…)

“Despite these handicaps, the new version of neoliberalism had two things going for it. There were plenty of people buying what these people were selling: if you’re in the race prejudice business, you aren’t going to have to look too hard for customers. Some of the buyers had money to burn and so the next-gen neoliberals got funding: they were able to set up a new network of think tanks and talking shops, they could spread the word through their newsletters and websites and YouTube channels and podcasts, and they found that someone – Charles Koch, for instance – was usually willing to pay them to keep pumping it out. They also discovered it was possible to make good money on the side peddling apocalypticism. On those websites and YouTube channels a message of impending catastrophe was invariably accompanied by ads for the things that might hedge against it: pills and protein powders to get you ready for a world in which only the fittest will survive, books and videos to explain what was at stake, and, above all else, gold – buy it! trade it! hoard it! (gold has long been the financial refuge of the terrified racist). These were the twin pleasures of being on the alt-right.”

(…)

“There are early hints of the craziness to come. Trump’s preoccupation in 2024 with dog and cat-eating Haitian immigrants (‘I’ve seen people on television!’) can probably be traced back to the scare stories about Haitian immigrants with Aids that he will have been familiar with in the 1990s. That same decade, Brimelow was already channelling his inner Bertolt Brecht to complain that US immigration policy meant the federal government ‘is literally dissolving the people and electing a new one’, which is more or less how Trump thinks Biden stole the 2020 presidential election (dead people and illegals on the electoral rolls). It’s fun watching the cheerleaders of the new right having to turn themselves inside out to keep up. In the 1990s the Wall Street Journal was noting with approval that the only people calling for literal open borders were hardcore neoliberals who believed that all barriers to freedom of movement were a constraint on the efficient workings of the international labour market. Now that the Trumpian right thinks the defenders of open borders are communists and traitors, the Wall Street Journal has somewhat changed its tune.”

(…)

“Slobodian has an interesting thesis about the way Hayek’s ideas got turned inside out, but it feels overdetermined and undertheorised. Hayek’s Bastards is a short book – 176 pages – yet it has 52 pages of notes and a 38-page bibliography. Something is out of whack here.
There’s also something missing. Slobodian spends a bit of time tracking the alt-right back to Silicon Valley, where warped ideas of racial and intellectual hierarchy have long had a home. Stanford University, as he points out, was established by a eugenicist. But he doesn’t have much to say about the place of ideas of technology in the war over Hayek’s legacy, even though this is probably where the deepest schism on the new right is to be found. Hayek himself thought technological innovation was the key demonstration of the virtues of market economics, and many of his followers would agree. The problem with planned societies, in their view, is that they get stuck recycling what already exists. Free-market societies stumble across a future no one could have foreseen. The Soviet Union ended with exploding TVs, cars that looked like toys and Chernobyl. The United States, meanwhile, created the internet. Hayek’s disciples have sometimes wanted to frame this difference in evolutionary terms.”

(…)

“The point of the market was to allow us to fulfil our potential. If there are non-human entities who do better under market conditions than we do, might that not be a good reason to shut the market down? The other tension in Hayek’s legacy is more directly visible on the new right itself. Did the market actually build the internet? After all, its true origins can be traced back to the Cold War, when massive US government spending on technology – much of it wasteful, some of it downright paranoid – hardly conformed to Hayek’s template for innovation (this tale began with Hayek wanting states to stop behaving in peacetime as though the wartime economy were a permanent state of affairs). More significant, state spending continues to play a big part in many Silicon Valley success stories. Look at SpaceX, Alphabet, Amazon Web Services (the cloud computing wing that drives the company’s profitability): they all do much of their business off the back of government contracts, and also benefit from extensive subsidies. Have the new tech giants ever truly weaned themselves off government support or are they really just bloated receptacles for taxpayers’ handouts?”

(…)

“What does Trump think? God knows. But these people are all Hayek’s bastards in their different ways and it’s not hard to imagine them eventually ripping each other’s throats out.”

Read the article here.

Undertheorized or not, the book appears to be interesting.

Hayek is misunderstood. That’s the fate of most thinkers.

Yes the WSJ had to change its tune when globalism and open borders became the enemy instead of the friend of free market-believers.

The people or many people were willing to accept global capitalism “for the sake of solidarity.” Some aspects of global capitalism became dirty in the eyes of those who despise all kinds of solidarity.

In the end people will be at other people’s throats, nit because this is how nature works, but because this is how ideology works.

And if the free market is the inly true innovator remains an open question.

I’m afraid not, because the truly free market doesn’t exist. Governments make the market possible with all kinds of secret and not so secret subventions.