Quinn Slobodian,Globalists: The End of Empire and the Birth of Neoliberalism

Reviewed by: Jack Copley, University of Bath, UK

While it was once common to equate neoliberalism with the retreat of the state in the face of globalizing markets, a well-established body of literature has demonstrated that neoliberals in fact advocate a strong state that can create and police the institutional framework within which economic competition takes place (see Bonefeld, 2016; Gamble, 1994, 1996; Peck and Tickell, 2002). Globalists covers this well-trodden ground; yet, it also makes very significant contributions to this literature. Slobodian examines how the ideas and political advocacy of a specific strand of neoliberal thought – the Geneva School – evolved in reaction to several world-historical shifts during the 20th century. In doing so, he reveals how the key tenets of Geneva School neoliberalism were forged as anxious liberals struggled to defend the global operation of the price mechanism from the threats of mass democracy, the disintegration of the European empires and attempts to map and consequently plan the world economy. Globalists is an essential text for anyone interested in the principles and history of neoliberal thought.

While many of the characters studied in this book worked in various international bodies, the city of Geneva served as a common anchor for them. The Geneva School, which counted Ludwig Von Mises, Friedrich Hayek, and Wilhelm Röpke among its most important figures, was greatly influenced by the governance model of the Habsburg Empire. This empire spanned across Central Europe until 1918, drawing the various nationalities of this region into a common framework of free trade under the umbrella of the Habsburg monarchy (see Miller-Melamed and Morelon, 2019). Inspired by this experiment in uniting a multinational political territory under the rule of market competition, the Geneva School thinkers were characterized by their attempt to create binding rules at the global scale to enshrine market mechanisms. This set them apart from the nationally-oriented German ordoliberals, leading Slobodian (2018: 12) to term the Geneva School’s project as one of ‘ordoglobalism’.

The Geneva School scholars developed this ordoglobalist position in reaction to developments in the international political economy after the First World War, which they observed with extreme trepidation. The Gold Standard’s mechanism of strict economic adjustment, which had been protected domestically by the limitation of the democratic franchise and internationally by the might of the British Empire, had come apart at the seams. In its place, as the Geneva School saw it, the various factions that made up bourgeois civil society began clambering to win political power and wield the state as an instrument for the advancement of their particular interests. Consequently, these states turned away from the discipline of the world market, erecting trade barriers. The neoliberals watched with disquiet as the global free exchange of commodities became stymied by a growing ‘world of walls’ (Slobodian, 2018: 27).

A perhaps even more troubling development, from the perspective of the Geneva School, was presented by the process of decolonization. In postcolonial Eastern Europe, Africa, Asia and Latin America, the neoliberals feared that newly independent countries would take the dangerous step from political sovereignty to economic nationalism. In the middle of the 20th century, Global South nations began to use their membership of international organizations – such as the United Nations Conference on Trade and Development – to push for the reworking of the international framework of global economic competition so as to allow poorer countries to meet certain development goals. While Global South nations began to identify relations of ‘dependency’ as a condition to be escaped in favour of national economic autonomy, the neoliberals understood nations’ dependence on and subordination to the economic whole to be the essence of liberal order.

Some neoliberals saw direct parallels between the politicization of the economy in the Global North and South, and consistently opposed both. As Mises observed in 1952: ‘If it is right for the British to nationalize the British coal mines, it cannot be wrong for the Iranians to nationalize the Iranian oil industry’ (Slobodian, 2018: 139). Others, like Röpke, split from their former colleagues by conceptualizing the threat to global capitalism entailed by decolonization in explicitly racist terms. Röpke understood the struggle over apartheid in South Africa as a battle between the civilized, entrepreneurial subjects of global capitalist order – embodied by the White population – and their backwards Other – embodied by the Black population. In a jarring passage, Röpke’s correspondent, sociologist Helmut Schoeck, wrote to him that Western intellectuals’ refusal to confront African inferiority was a reflection of their own guilt that they had ‘failed to intervene … in Hitler’s persecution of the Jews’ (Slobodian, 2018: 171). Yet, one ‘cannot bring six million Jews back to life’, he lamented, by ‘putting cannibals in their place’ (Slobodian, 2018: 171).

While the Geneva School saw mass democracy and decolonization as an obvious danger to the system of global market competition, they also became wary of a seemingly more banal historical development: the rise of economic accounting. The 1929 Crash set off a synchronized global economic downturn, demonstrating the incontrovertible existence of a single, integrated world economy. Slobodian argues that this provoked the economics discipline to seek to visually represent the business cycle and chart the dynamics of the global economy. While Geneva neoliberals were intimately involved in these research initiatives, they later came to reject them as naïve and dangerous. If the world economy could be seen, then it could be intervened upon by political authorities, perfected, planned. Business cycle research ‘fostered fantasies of management’, which could pave the way for central planning (Slobodian, 2018: 89). As Slobodian shows, this threat reared its head again in the 1970s, as economists sought to use computer simulation to model capitalism’s trajectory – exemplified by the Club of Rome’s 1972 Limits to Growth report. Ironically, economics was ‘the least important disciplinary approach’ for this neoliberal tendency, as it risked serving as the intellectual scaffolding for interventions to correct the market (Slobodian, 2018: 87).

Faced with the perceived perils of mass democracy, decolonization and economic planning, the Geneva School mounted a sophisticated defence of capitalism and set out an ‘ordoglobalist’ political framework for securing it. Hayek rejected the possibility that anyone could attain comprehensive knowledge of the world market, and instead insisted that the price mechanism’s beauty was precisely in the manner that it coordinated the fragmented information scattered across the planet. Slobodian writes that he depicted the global economy ‘as an enormous information processor beyond the capacity of the human mind to either manufacture or comprehend’ (Slobodian, 2018: 226). The ideal global order was a state of perpetual flux, in which market participants continually adjusted their activities according to the movement of world market prices. Yet, this delicate system would not naturally reproduce itself. Rather, in order to prevent the sclerosis of the market by the forces of politicization, the Geneva School proposed ambitious legal fixes. These schemes ranged from the creation of international federations that would undermine national economic sovereignty by locking governments into a system of free competition, to the use of international economic law to protect the ‘human right’ to capital flight, to the forging of economic constitutions that would inoculate nation states against the disease of protectionism.

Slobodian does not make grand claims about the influence of the Geneva School’s ideas upon state policy. Globalists charts many decades of neoliberal political activism – from the battle against interwar protectionism to the creation of the World Trade Organization – some of which was relatively successful, and some of which amounted to very little. This distinguishes Globalists from other studies of neoliberalism, such as Mirowski (2013) and Stedman Jones (2014), which both place more emphasis on the power of neoliberal ideas to determine state policy. In some ways, this puts Slobodian closer to Bonefeld (2016), who rejects the straightforward claim that ordoliberal ideas lie behind the European Union’s politics. Yet, while Bonefeld provides a sophisticated theorization of ordoliberalism as an articulation of the political principles necessary to reproduce capitalist society, Slobodian eschews a sustained conceptualization of the relationship between neoliberal ideas and the concrete practice of capitalist governance.

Where Globalists is strongest is in tracing the twisting evolution of this most peculiar strand of liberal thought through different historical contexts. While Keynesianism insisted that world market order could only be maintained by strategically violating the very rules of its operation, to prevent popular revolt (Mann, 2018), the Geneva School advanced the utopian argument that people’s needs and aspirations could really be subordinated to the impersonal judgements of the world market, so long as the right legal frameworks were in place. Perhaps naively, they believed that this system of relentless competitive adjustment, backed by the force of law, was compatible with democracy. Yet, as Röpke put it, people may have to ‘get used to the fact that there is also presidential, authoritarian, yes even … dictatorial democracy’ (Slobodian, 2018: 116).