The 1938 Paris Conference and the Road from Serfdom#
In 1938, a small group of delegates met at a conference in Paris to coin the term “neoliberal”. Among them were Ludwig von Mises and Friedrich Hayek, two Austrian exiles who viewed social democracy and the New Deal as dangerous expressions of “collectivism”. They feared that any attempt to prioritize society’s interests over the individual would lead inevitably to the totalitarianism of the Nazis or the Communists. In 1944, Hayek published The Road to Serfdom, arguing that the welfare state would eventually mutate into absolute control. This message found a receptive, and extremely wealthy, audience.
The Thesis of Manufactured Orthodoxy#
Neoliberalism did not win the battle of ideas through a natural intellectual evolution but through a lavishly funded, decades-long campaign of persuasion. By building an “International” network of think tanks and academic departments, a small elite successfully “reputation laundered” their financial interests into a global political program that captured both the right and the left.
The Infrastructure of the Invisible Backers#
The Architecture of the Think Tank#
The neoliberal program was bankrolled by some of the world’s richest individuals and corporations, including DuPont, General Electric, and the Koch brothers. These backers hired economists and PR specialists to create a network of “think tanks” with respectable names like the Cato Institute and the Heritage Foundation. While these institutions presented themselves as independent sources of dispassionate opinion, they functioned as corporate lobbyists, refining Hayek’s elite anthem into a viable political platform. They utilized cutting-edge psychology and public relations to spread the doctrine, even rebranding Laura Ingalls Wilder’s children’s books as celebrations of self-sufficiency and limited government.
The Capture of the Academic Crucible#
To ensure the long-term survival of the ideology, the network underwrote academic departments at the University of Chicago and the University of Virginia. These departments acted as laboratories for neoliberal ideas, providing a veneer of scientific objectivity to a program of empowering the rich. The William Volker Fund, for instance, helped underwrite Hayek’s salary at Chicago for over a decade. This academic patronage established the University of Chicago as a crucible of the doctrine, allowing it to export neoliberal advisors to regimes like Pinochet’s Chile, where the population was used as a laboratory for “shock therapy”.
The Paradox of Political Pollution#
The “Pollution Paradox” explains why our politics is dominated by the most damaging industries: those that are the dirtiest and most antisocial have the greatest incentive to invest in politics to avoid regulation. Fossil fuel companies, tobacco giants, and junk food manufacturers spend the most on changing political outcomes because they have the most to lose from democratic scrutiny. This investment creates a cycle where the voices of oligarchs are interpreted by the media as the “voice of the people”. This allows corporations to sue sovereign states in offshore courts if environmental or labor laws “diminish the value of investments,” effectively placing capital above democracy.
Synthesis: The Triumph of the “Third Way”#
The real triumph of the Neoliberal International was not just capturing the right-wing parties of Reagan and Thatcher, but the subsequent colonization of the left. Leaders like Bill Clinton and Tony Blair, lacking a narrative of their own, adopted a “Third Way” that triangulated social democracy with neoliberal forces. Clinton’s proclamation that “the era of big government is over” signaled the total capitulation to market forces, leading to the repeal of the Glass-Steagall Act and the deregulation of finance. This convergence narrowed the political spectrum, leaving voters with no real alternative and paving the way for a “democratic recession”. We must recognize that the “invisible hand” is often a “hydraulic pump” designed to transfer wealth from the poor to the rich.
