The Origins of Neoliberalism: Insights from economics and philosophy

219 Pages·2016·1.65 MB·English

by  Giandomenica Becchio, Giovanni Leghissa

The Origins of Neoliberalism
Neoliberalism is a doctrine that adopts a free market policy in a deregulated
political framework. In recent years, neoliberalism has become increasingly
prominent as a doctrine in Western society, and has been heavily discussed in
both academia and the media.
In The Origins of Neoliberalism, the joint effort of an economist and a
philosopher offers a theoretical overview of both neoliberalism’s genesis
within economic theory and social studies as well as its development outside
academia.Tracingthesourcesofneoliberalismwithinthehistoryofeconomic
thought, thebookexploresthedifferencesbetweenneoliberalism andclassical
liberalism.Thisbook’saimistomakeclearthatneoliberalismisnotanatural
development of the old classical liberalism, but rather that it represents a
dramatic alteration of its original nature and meaning. Also, it fights against
the current idea according to which neoliberalism would coincide with the
triumph of free market economy.
In its use of both the history of economics and philosophy, this book takes
a highly original approach to the concept of neoliberalism. The analysis pre-
sented here will be of great interest to scholars and students of history of
economics, political economy, and philosophy of social science.
Giandomenica Becchio is Assistant Professor of Economics at the University
of Turin, Italy.
Giovanni Leghissa is Assistant Professor of Philosophy at the University of
Turin, Italy.
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Insights from economics and philosophy
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The Origins of Neoliberalism
Insights from economics and philosophy
Giandomenica Becchio and
Giovanni Leghissa
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ORKYOR LONDOLNLOONNDDOONN
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Firstpublished2017
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Description:NewYork:Routledge,2017.|Includesindex.
Identifiers:LCCN2016018993|ISBN9780415732246(hardback)|
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Subjects:LCSH:Neoliberalism.|Economics--History.|Social
sciences--Philosophy.
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Contents
List of tables vii
Introduction: the counter-revolution of neoliberalism 1
This book’s contents 16
1 Foucault and beyond 28
1.1 Foucault’s distinction between liberalism and
neoliberalism 28
1.2 The neo-Marxist conception of neoliberalism 42
1.3 The relationship between state action and economy 52
1.4 Neoliberalism and the question of systemic complexity 59
2 The building of economics as a science 77
2.1 The revolution of marginalism: how political economy became
economics 78
2.2 General economic equilibrium and econometrics in the 1930s:
from Vienna to Chicago 86
2.3 The Americanization of the discipline: building mainstream
economics 90
2.4 The rise of neoliberalism in Chicago: the hegemonic role of
both neoliberalism and neoclassical economics 94
3 The building of individuals as rational agents 113
3.1 Economic rationality and homo oeconomicus: from Vienna
and Lausanne to Chicago 114
3.2 The theoretical and methodological distance between Vienna
and Chicago 119
3.3 Karl Polanyi’s critique of neoliberalism 126
vi Contents
4 Turning the world into a firm 146
4.1 Neoliberalism and the political role of the firm 146
4.2 The neoliberal theory of organizations 162
4.3 Institutions, evolution and the frame of individual choices: or,
farewell from the neoclassic nuts and bolts 172
Postscript: a new ethics for a new liberalism? 193
Index 201
Tables
3.1 Classical liberalism versus neoliberalism 125
3.2 Austrian versus Chicago school of economics 126
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Introduction
The counter-revolution of neoliberalism
Neoliberalism has been defined as a political doctrine that basically adopts a
free market in a deregulated political framework.1 Lately many publications
have been dealing with a rethinking of neoliberalism in abroader perspective
as a ‘collective’ thought (Mirowski 2009; Dean 2014) following what Weber
called ‘political oriented action’, i.e. the attempt to influence or seize power
(Weber [1922] 1968) by organized groups.2
WeconsiderneoliberalismastheWeltanschauungofthelatetwentiethcentury
whose roots are deeplygrounded in economic theoryas it has been developing
in the mid-twentieth century. Neoliberalism is not a ‘vision’ (according to
Schumpeter’sdefinition),whichshapesthe‘toolbox’,likeclassicalliberalism has
beenforpoliticaleconomyinthenineteenthcenturyorsocialismforMarxism
(Schumpeter 1954). Neoliberalism is either the marketing of neoclassical
economic theory or its propaganda. Neoliberalism is based on a relatively
simple principle: the interaction between the maximization of expected results
givenscarcemeansandrevealedpreferences.Inasocietyruledbyaneoliberal
system, economic rationality has reached primacy.3 This primacy has to be
intended neither as a Marxian ‘structure’ nor as a mere pursuit of getting
higher profits for capitalists. It is meant as the regular application of the logic
of economics as the only rational way of organizing private lives as well as
politics and the public sphere.
In this book both historyof economics and philosophy will be used to help
with a new interpretation of neoliberalism. This book’s aim is to show the
link between neoclassical economics (we will be using the terms ‘neoclassical
economics’ and ‘mainstream economics’ as synonymous throughout the
book) and neoliberalism as the most persuasive cultural doctrine of our time
(Mirowski 2013).
Numerous publications have appeared latelyon the nature of neoliberalism
spreading from academia to the press, involving social scientists as well as
journalists and opinion makers. The literature on the making of mainstream
economics is also quite vast, especially amongst economists and historians of
economics.Thisbookrepresentsatentativeapproachtohowtoconsiderneoli-
beralism as deeply rooted and developed within the process of emergence of a
particular way of thinking about political economy as a science (neoclassical