At 75 years old, neoliberalism has lived long enough
The economic ideas of the Mont Pelerin Group, convened by free market advocate Milton Friedman, center, became the ideology of conservative and liberal politicians by the 1980s. Right-wing leaders like Ronald Reagan in the U.S. and Margaret Thatcher in the U.K. were the most enthusiastic adopters of neoliberal policy. | Friedman photo: Friedman Foundation for Educational Choice / Reagan and Thatcher photos: AP / Illustration: PW

April this year marks the 75th anniversary of the first meeting of the Mont Pelerin Society. This was convened by the infamous economist Friedrich von Hayek, who wanted to bring together a range of thinkers to oppose the advance of socialism and social democracy.

Few will recognize any names of members of this illustrious gang, except perhaps its founder Hayek or Milton Friedman, advisor to both Ronald Reagan in the U.S. and Margaret Thatcher in the U.K.

But the global elites know them well and have honored at least nine of them with Nobel prizes in economics.

University economics departments throughout the world knelt at their altar and created a new orthodoxy of free-market fetishism and, in the name of liberalism and tolerance, purged vaguely Keynesian, let alone Marxist, academics from their ranks.

Neoliberal professors gathered in their covens, stirring up potions so hallucinogenic students no longer needed to be hippies. They could become stock market traders instead. The free market in economic ideas became a monopoly of neoliberalism unregulated by any antitrust commissions or bodies.

Yet the funny thing was that there was nothing really new about it. It represented capitalists, mainly in the West, and mainly as embodied by Reagan and Thatcher, pissed off that they had lost so much in the Depression and postwar years and seeking to get revenge.

It was classical liberalism resurrecting itself in the postwar period when communism and various forms of socialism were on the rise.

It was a time of a new “class settlement” in much of the Western world—public ownership, planning, state intervention, the welfare state, the development of free health care systems in many countries—and of the liberation from colonial domination in many others.

This was all a bit too much for the liberals. Things were freeing up, and liberals hate freedom. The world was becoming a testament to the failure of the liberal capitalism they had espoused.

So they thought in the light of the failure, it was best to have another go and repeat their mistakes even more spectacularly next time. And of course, when they did fail in 2008, they went running to governments to bail them out.

Neoliberalism was the invention of the exhausted and defeated and clapped-out capitalists. Their mission was nothing less than dismantling the progressive postwar settlement and all that the people had fought for and were building up to socialize economics.

And in this, despite their decrepitude and bankruptcy, they were remarkably successful.

You might say that slash-and-burn, voodoo economics is easy to launch against the people—and in one sense it is. You can understand how the top 1% would adore it, but one of the big problems was that there was insufficiently deep and informed intellectual opposition to it. Economics, like history and politics, disappeared from the trade union education agenda.

The neoliberals took the long view right from their very first meeting in 1947. No instant quick-fix big bang, no sudden counter-revolutionary coup after Chile, which had been their first experiment.

They chipped away. Slowly but surely, they sidled up to leading politicians throughout the world and persuaded them that only a small state and a big free market and loads of money in very few pockets could save mankind. Wealth, they said, would trickle down—the 99% would benefit!

Ironically, they had to use the state to introduce a new authoritarianism and particularly aim state forces and legislation against the “tyranny” of trade unionism and publicly owned services and utilities.

The value of wages in relation to gross domestic product was systematically reduced by around 10%. A better strategy for them than reversing every bit of progressive reform in every country was to find means whereby the national, regulatory parliaments of independent nations could be overridden by supranational entities like, for example, the International Monetary Fund or the European Union.

And the results of all of their conniving and lectures, Nobel prizes and seminars, ever-so-clever papers and policy proposals?

Well, we all know that—from profit burning up the planet to private energy companies freezing pensioners in winter, from food banks to shadow banks concentrating wealth taken from the people in so few hands, the world seems sometimes actually run by a few arch-megalomaniacs.

If someone was to set up a learned institution to train burglars, there would be an outcry. But this is what the world has tolerated in the Mont Pelerin Society and its close cousin, the Bilderberg Group, whose meetings even some deluded trade unionists have attended.

There are many brilliant books and videos on how the neoliberal agenda has influenced world developments and key politicians. The Democratic Party in the U.S. under Bill Clinton and the Labour Party in the U.K. under Tony Blair swallowed the elixir of extremism.

But nothing lasts forever. Yesterday’s gurus are tomorrow’s cranks.

The only way COVID has been tackled has been through state intervention, big government, planning, government expenditure, through public service providers organizing clinical and preventative measures, and researching developments, modeling statistics, and investing public funds into vaccine development.

COVID-19 has been therefore been curtailed in capitalist countries by adopting socialist measures of social protection and improvement, central coordination and planning.

Where countries would describe themselves as taking an overt socialist or communist path, COVID has been very effectively managed, in great contrast to capitalist nations.

No wonder the Mont Pelerin Society is looking forward to its conference this year in Oslo in October to fire a few volts into its life support machine.

The world’s gone mad and had to start looking after people again and invest in science and technology and plan vaccination programs, so Frankenstein must, the Society thinks, be jolted into life—and vaccine production and circulation must be left to its second-hand car-dealing pals.

But the most important gatherings this year will be all those celebrating and discussing the policies needed to replace the dead hand of neoliberalism. The General Federation of Trade Unions and our friends will be meeting, not in Switzerland, but closer to home where workers gather, to popularize a new economics for the people.

2022 is the year to begin the end of neoliberal economics, and we should not be squeamish about its demise.

As with all op-eds published by People’s World, this article reflects the opinions of its author. This is an edited version of an article that originally appeared in Morning Star.


Doug Nicholls
Doug Nicholls

Doug Nicholls is a writer in the U.K. Now retired, he was formerly the general secretary of the General Federation of Trade Unions (GFTU), a national trade union center in Britain.