There have been a lot of books and articles written in the past few years on the flowering of pro-market, anti-government sentiment among economists in specific, and intellectuals more generally. Examples include Teles on the conservative legal movement, Phillips-Fein on the business response to the New Deal, Miroski and Plehwe’s edited volume on The Road from Mont Pelerin, and a newer edited volume about the rise of Chicago Economics, to name just a handful. In this growing field, Angus Burgin’s (2012) The Great Persuasion: Reinventing Free Markets Since the Depression stands out as a tight, well-argued, and entertaining intellectual biography of a few key players. That said, I was a little disappointed with the vagueness of the broader argument. What follows is a brief summary and some more detailed reactions.
The book is well-written and compact (~230 pages), while still covering a lot of ground. The first half of the book offers a very nice institutional history of the rise and fall of the Mont Pelerin Society (MPS) and an intellectual biography of Hayek. The treatment of a large schism within the MPS in the 1940s-1950s was fascinating, as was the discussion of the general problems of expanding a small, elite group of perhaps 40 to a meeting of several hundred, and how that changed the character and purpose of the MPS. There was also a nice discussion of the pre-WWII origins of the MPS in the “Colloque Lippmann.” Readers interested in a more detailed account of Hayek’s life and work in particular should check out Caldwell’s Hayek’s Challenge which covers much of the same ground, with more emphasis on Hayek’s 19th and 20th century precursors, and less details on the MPS as an organization.
The second half is much more novel, in exploring Milton Friedman’s trajectory over two chapters. This part was mostly new to me – I knew bits about Friedman’s past, but there’s actually been relatively little written about him, and Burgin does a nice job of tracing his intellectual evolution. In particular, the transition from Hayek to Friedman marks the moment when neoliberalism (a term neither fully embraced) went from being a moderated, updated form of liberalism (the original goal of the MPS) to being full-blown liberalism reborn (Friedman post-1940s).
Unfortunately, the book is a bit skimpy on the payoffs and theorizing. I mean, history is history, but I was expecting a bit more than “Keynes, Hayek, Friedman were all right that ideas have big political influence in the long-run” which is basically where it ends. I was hoping for at least a bit of speculation about, say, why was it that Hayek and Friedman in particular mattered so much? Additionally, the immediate political influence (or lack of influence!) of the MPS and Friedman were not emphasized much. There was a useful discussion of Friedman’s role as advisor to Goldwater, for example, but not too much else. So, we end up with a self-contained “history of economists” and not really much on how these ideas were consequential – if you didn’t already know the punchline (the rise of neoliberalism/market fundamentalism in the 70s-80s), the book would feel very undermotivated, and it loses a lot by not connecting the dots itself.
Another, related, issue is that Burgin spends little time on the content of Friedman and Hayek’s ideas. The main narrative is that the Chicago School Mark I (Viner, Knight, etc.) and the original MPSers were much more moderate – especially when it comes to anti-trust / market power, but also on the New Deal as a whole. This earlier group wanted to argue for capitalism but mostly argued against complete socialism. The Chicago School Mark II (Friedman, Stigler, etc.) was more radical in its libertarianism – they were on the offensive against the bits of socialism that had become entrenched rather than defensive of capitalism. Fair enough. Beyond that, tho, there’s only a scanty discussion of what any of these folks actually thought. The socialist calculation debate is mentioned as important, but there’s not really a good summary of what it was (see, for example, Caldwell above, or Dale’s biography of Karl Polanyi, or Cosma Shalizi’s incredible post on the topics for good treatments). Friedman and Stigler’s early pamphlet against rent control was apparently influential, but it’s mostly discussed in terms of the rhetoric and some conflicts they had with their funders about a paragraph on inequality (and how government should do something about it directly, rather than muck about with rent control) rather than the argument itself. And so on. So, again, a history of economists, not a history of economic ideas, nor of the direct impact of those ideas.
Finally, I found it really fascinating how much the 1930s-era Chicago school was worried about monopolies and big business and how post-1950s, the whole movement just abandons that line of thought. Friedman himself has a bit of conversion, and I wish Burgin had gone into more detail about it – Burgin himself only notes the changing ideas on monopoly as one example, but I think it might be more important than that. The 1930s folks believed market power existed and was a problem, and one that called for government intervention (most stridently, UChicago’s Henry Simon in A Positive Program for Laissez-Faire). The Law & Econ movement (Aaron Director especially) won over Friedman and Stigler in the 1940s-1950s, who then all agree that market power is not an issue, and that kills the legitimacy of the Galbraithian countervailing power argument among the neoliberal economists. We can (perhaps) imagine a counterfactual history where Hayek’s successor was not Friedman, but someone more in line with Simons, Viner, and Knight and who eclectically championed union busting and monopoly busting / pro-competitive regulation, instead of (or in addition to) eliminating the FDA and the negative income tax. It would be interesting to think what the consequences would have been. And that counterfactual exercise would have necessarily entailed a deeper reflection on the significance of Hayek and Friedman, and their networks.
Overall, The Great Persuasion makes a great starting point for learning about the Mont Pelerin Society, Hayek, Friedman, and trends in free market economic thought in the mid-20th century. If you go into the book looking for solid intellectual history, you will be rewarded. If you go in expecting deep insights into the political role of ideas (economic or otherwise), you will be a bit disappointed.