Quinn Slobodian – Globalists

I’ve been promising a piece on Quinn Slobodian’s fantastic intellectual history of neo-liberalism in the international arena, Globalists: The End of Empire and the Birth of Neoliberalism. Here it is. The short version: if you have any interest in these topics, you should buy it. The long version is below the fold.

Slobodian’s book aims both to provide a crisp account of what neo-liberalism is, and to correct Polanyi. Many modern accounts of neo-liberalism begin, consciously or unconsciously, from a Polanyian understanding of the world. In The Great Transformation, Polanyi argues that the great upheavals of his age can in large part be attributed to `disembedded’ markets, which managed in turn to separate themselves from society, and to begin to devour it, replacing social bonds with atomized relations. This, in turn, gave rise to a counter-reaction from society – Polanyi’s famous ‘double movement,’ which had both malign and benign manifestations. This way of thinking is naturally attractive for people wanting to understand what is happening today in the way of globalization – both the turn towards more or less nasty forms of nationalist demagogy, and the possibilities of escaping both them and the all devouring market. For more on all of this, see here see here.

Slobodian thinks that this is mistaken. In his account, markets have not become disembedded from national societies and states so much as they have become re-embedded in international institutions. Neo-liberalism as manifested in the thought of Hayek and his European followers is the political project of looking to recreate state structures outside the grasp of democratic and non-democratic states. Far from thinking that markets are natural, neo-liberals accept that they are “products of the political construction of institutions to encase them.” (p.7) Instead of a double movement, we have a ‘double world’ of imperium, political rule exercised through nation states, and dominium, the world of economics and business, and a deliberate political effort to insulate the latter inside its own steel-hard casing against the depredations of the former. Neo-liberals then, look to an `interdependent’ world and a single global economy as a realm that should be held inviolate from national states, and the demands their people put upon them. This, as they came to realize over time, requires them to build their own quasi-constitutional structures at the international level, in order to fend off the persistent efforts of national states to shape and control competitive forces and economic flows that are better left alone.

Under this account, the most crucial dynamics of neo-liberalism did not involve the glamorous public clash of ideas between intellectuals. Instead, they were duller, more relentless and in the end, more effective – the persistent efforts of neo-liberals to argue through new kinds of international institution and to push back against organized efforts to make global markets more accountable to national authorities. Mont Pelerin was important – but so too were the International Chamber of Commerce and a multitude of boring seeming meetings and negotiations.

As Slobodian describes it (p.95), “[t]he realization of the 1930s for neoliberals was that the self-regulating market was a myth.” There was no international infrastructure of institutions to support international markets. Even worse, the twin pressures of national planning in the industrial economies and decolonization elsewhere threatened to subvert whatever autonomy international markets maintained. This led some neo-liberals to start dreaming of international federations that could mitigate the economic dangers of nationalism, and prevent national borders from blocking economic exchange. In the 1930s and the 1940s, Hayek was an advocate of world federation – he writes about it in the final chapters of The Road to Serfdom. Mises too proposed supranational federation, without any constraining “democratic world government.” The nation state was an adversary to be thwarted. “For [Mises], the real war was not between individual nations or empires but between the world economy and the nation as forms of human organization.” (p.109). Roepke argued that the “old formulas of parliamentary democracy have proven themselves useless. People must get used to the fact that there is also presidential, authoritarian, yes even – horribile dictum – dictatorial democracy.” (quoted p. 116).

These ideas were given practical weight after the war by neo-liberals who sought to bring them to the post-war arguments over how to craft an international trading order. Michael Angelo Heilperin played a key role in shaping debate through his role at the International Chamber of Commerce, pushing back against “economic nationalism” and efforts to aid the “transposition of democracy into international relations.” (p. 130). Instead, he advocated for a “militant globalism” that would trammel national sovereignty in favor of free global economic exchange. Philip Cortney looked to frame the interests of investors in free capital movement and protection from expropriation in terms of human rights rather than property. Their efforts saw long term success in the later development of modern bilateral investment treaties with their ISDS clauses. Neoliberals initially mostly deplored European integration because it worked against the dream of truly global markets represented by the GATT. However even though the Treaty of Rome was a compromise rather than a neo-liberal triumph, it pointed in hopeful directions for them. European Treaties, once the Court and the Commission began to press their logic properly, provided a compelling way of subordinating domestic regulations to a cross-national (though surely not global) market. A group of European constitutionalists, trained as lawyers rather than economists, saw the possibility for creating a truly international economic constitution that would underpin “undistorted competition.”

As Hayekians started to try to protect the GATT from developing countries’ efforts to reshape the global economic order, they started to frame a grander ambition of building a “rules-based system for the world economy.” (p.245). Just as Hayek had grounded his thought about markets in constitutional theory, lawyers at the GATT hoped to create the beginnings of a global constitutional order to restrain the ambitions of nation states and an “electoral takeover” by developing countries. This would further strengthen states against internal forces of populism. Binding rules would “protect” national sovereignty against “internal erosion,” by the paradoxical means of “subjection to the forces of the world market.” (p.250 – last quote Slobodian’s precis of the underlying logic of the argument). The intellectual seeds planted by these neo-liberals may have come to blossom in the WTO.

Slobodian’s book is excellent history. That it is blurbed by Bruce Caldwell as well as Angus Burgin and Mark Blyth suggests that his mirror is not a distorting one. While his own leftwing politics are not hidden, he is careful in sticking to the facts, and in trying to present the neoliberals’ own understanding of their project fairly, even as he also makes his own opposition to it perfectly clear. He has a big story, which does indeed shed important light on neoliberalism. If we think of it as a project of anti-democratic statebuilding at the international level, we come to see and understand many things that would otherwise be obscure. Many other people’s work makes better sense when considered through this lens, including, for example, Kathleen McNamara’s and Harold James’ accounts of European monetary union (James, who is no-one’s lefty, has a lot to say about the influence of Hayek on central bankers). Slobodian says, unusually for a historian, that much can be learned from political scientists, who have studied some of these questions with greater intensity than historians. I’ll return the compliment and note that the book ought to be assigned regularly on international relations syllabi. He exploits sources and synthesizes historical developments over decades in a way that political scientists stand to learn a lot from. It is an exciting book and deserves to do very well indeed.

That’s not to say that the book’s account is perfect or comprehensive. As noted, Slobodian is scrupulous in his use of sources, and in the conclusions he derives from them. Thus, for example, he notes that while neoliberal ideas went into the Treaty of Rome, he acknowledges that other and quite different ideas went in there too. Like any institution the EEC/EC/EI was a compromise. The WTO too is not, as he acknowledges, a simple product of the ideas of lawyers within it, even if these lawyers may have been quite influential. It was forged in negotiations between states, whose representatives likely had their own understandings of the world.

Put differently, the strength of the book and its limitations both run in the same direction. It offers a fresh and exciting new vantage point on an important set of global developments, drawing on important and under-utilized archival resources. It also implicitly pushes back at the romanticism of ideas that is core to the standard story of neo-liberalism. In this account, the less celebrated hewers of wood and drawers of water, who read and engaged with Hayek and Mont Pelerin, but had day jobs in international associations and institutions were quite as important as the Hayeks and Lippmanns of the world with their grand and airy plans for global federations and the like. By translating these ideas into practical politics, they made them important and relevant, embedding them in international discussions long before the much heralded ideological transformations of the 1980s.

Yet this perspective, however new and important, is radically incomplete if it is taken (as some less-careful readers might take it) as a complete history of globalization, and as evidence that international institutions represent in their totality some kind of grand neo-liberal plot. It would be better to say that they are in part the product of neo-liberal plotting – but also of the plots and plans of Keynesians, empire building bureaucrats, business lobbyists with narrowly defined interests and a myriad of other actors. Slobodian shows, comprehensively that one can’t understand neo-liberalism without understanding its focus on, and understanding of internationalism. One can use his evidence to build the beginnings of a case that one can’t understand internationalism without understanding the priorities and understandings of neo-liberalism. But it’s only the beginnings of that case – Slobodian’s work challenges other historians – and political scientists, economic sociologists and others – to begin to figure out how far it can be developed.