In 1945, Antony Fisher visited the neoliberal economist Friedrich Hayek at the London School of Economics. Fisher, an old Etonian who worked in the City, shared the Austrian’s belief that the nascent postwar welfare state would eventually lead to totalitarianism. Fisher wanted Hayek’s advice. Should he go into politics? No, the professor said, something like a thinktank would have far more “decisive influence in the great battle of ideas”.
Fisher went on to found the Institute of Economic Affairs (IEA), the outfit widely credited, among other things, with incubating Liz Truss’s disastrous premiership. Fisher later moved to the US, where he set up the Atlas Network, an umbrella organisation that now covers more than 450 thinktanks, including influential groups such as the Cato Institute and the Heritage Foundation. Many are charities. Few name their donors.
Neoliberalism has come a long way since Hayek’s days at the LSE. The belief in the primacy of the free market, deregulation and globalisation has been political orthodoxy for the past 40 years. Embraced by Democrats and Republicans, Conservatives and Labour, neoliberalism is simultaneously all-encompassing and seldom, if ever, explicitly named.
Guardian columnist George Monbiot and film-maker Peter Hutchison have set out to lift the veil on this “invisible doctrine”. The result is a passionate, informed polemic that is short but packed with detail and incisive analysis.
The term “neoliberal” was coined at a conference in Paris in 1938 but properly took off six years later, with the publication of Hayek’s The Road to Serfdom. The grandfather of neoliberalism argued that individuals acting in their own self-interest was the only bulwark against tyranny. The ultra-rich were, he said, heroic “independents”, staking out new territory beyond the reaches of nefarious governments.
Such arguments had little impact on the postwar consensus but would go on to inspire Ronald Reagan and Margaret Thatcher. The success of Hayek’s ideas owed much to the invisible hand not of Adam Smith’s market forces, but the clandestine grip of dark money and hidden influence. DeWitt Wallace, the anti-communist co-founder of Reader’s Digest, published a condensed version of The Road to Serfdom for his 8 million subscribers (among them Antony Fisher). Hayek’s arguments were repackaged in serialised cartoons and children’s books.
Over the next three decades, a transatlantic “neoliberal international” of academics, journalists and business people refined and promoted the doctrine. Some of the world’s wealthiest companies and people poured money into lobby groups whose branding suggested they were impartial research institutes.
Neoliberalism’s big break came in the 1970s. With the oil crisis and the collapse of Keynesianism, governments around the world were desperate for a new economic model. In the words of Hayek’s disciple Milton Friedman, “when the time came, we were ready … and we could step right in”. Taxes were cut, trade unions crushed, public services privatised and outsourced, markets deregulated.
The neoliberal era has brought with it huge disparities between rich and poor. In the United States, the richest 1% now own almost a third of the nation’s wealth. But even on its own terms, neoliberalism has not delivered: over the past 40 years, growth has been slower globally than it was for much of the postwar period. Oligarchs have redesigned capitalism in their image, replete with offshore tax havens and captured politicians.
Intriguingly, those who most closely cleave to the tenets of neoliberalism often reject the label, dismissing it as a pejorative catch-all used by their political opponents. But even this rhetorical sleight of hand can be seen as a sign of ideological supremacy, the ultimate vindication of sociologist Will Davies’s astute characterisation of neoliberalism as “the disenchantment of politics by economics”.If, as Monbiot and Hutchison suggest, “we are all neoliberals now”, what is the alternative? Not the nativism of Trump, Orbán and Modi, or rose-tinted visions of postwar social democracy built on the profits of empire. Instead, the authors propose a “politics of belonging”, a call for participatory democracy in the age of climate crisis that owes much to ecologist and anarchist Murray Bookchin, as well as Ingrid Robeyns’s recent book Limitarianism: The Case Against Extreme Wealth.
The Invisible Doctrine contains more concrete proposals, too. “The first, most urgent and important” is to campaign for finance reform to stop the rich buying political outcomes. Unfortunately, there is little sign of this in the UK. Last year, Rishi Sunak’s government changed electoral laws to increase spending limits and reduce donor transparency. Record sums will be spent in this election. And what of the thinktank Fisher set up under Hayek’s counsel? Last year, the IEA’s accounts recorded more than 5,000 “media hits” and registered half a dozen meetings with government ministers. It does not name its funders.
• Peter Geoghegan is the author of Democracy for Sale: Dark Money and Dirty Politics. The Invisible Doctrine: The Secret History of Neoliberalism (& How it Came to Control Your Life) by George Monbiot and Peter Hutchison is published by Penguin (£12.99). To support the Guardian and Observer, order your copy at guardianbookshop.com. Delivery charges may apply.
