The Great Persuasion: Reinventing Free Markets since the Depression

The Great Persuasion: Reinventing Free Markets since the Depression

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by Angus Burgin
     
 

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Just as today's observers struggle to justify the workings of the free market in the wake of a global economic crisis, an earlier generation of economists revisited their worldviews following the Great Depression. The Great Persuasion is an intellectual history of that project. Angus Burgin traces the evolution of postwar economic thought in order to

Overview

Just as today's observers struggle to justify the workings of the free market in the wake of a global economic crisis, an earlier generation of economists revisited their worldviews following the Great Depression. The Great Persuasion is an intellectual history of that project. Angus Burgin traces the evolution of postwar economic thought in order to reconsider many of the most basic assumptions of our market-centered world.

Conservatives often point to Friedrich Hayek as the most influential defender of the free market. By examining the work of such organizations as the Mont Pèlerin Society, an international association founded by Hayek in 1947 and later led by Milton Friedman, Burgin reveals that Hayek and his colleagues were deeply conflicted about many of the enduring problems of capitalism. Far from adopting an uncompromising stance against the interventionist state, they developed a social philosophy that admitted significant constraints on the market. Postwar conservative thought was more dynamic and cosmopolitan than has previously been understood.

It was only in the 1960s and '70s that Friedman and his contemporaries developed a more strident defense of the unfettered market. Their arguments provided a rhetorical foundation for the resurgent conservatism of Barry Goldwater and Ronald Reagan and inspired much of the political and economic agenda of the United States in the ensuing decades. Burgin's brilliant inquiry uncovers both the origins of the contemporary enthusiasm for the free market and the moral quandaries it has left behind.

Editorial Reviews

Publishers Weekly
Johns Hopkins economic historian Burgin tells the story of free market theory in a masterful intellectual history that covers the 1930s to the 1970s. Keynes and the Keynesians declared laissez-faire over and done in the 1930s, Burgin observes, but 50 years later, free market economics had revived and in fact “debates in the Anglo-American public sphere were permeated” with the idea; Keynesianism was a “relic.” Burgin traces the development of the principles that challenged Keynes and statism—and still do—dwelling on the profound impact of Friedrich von Hayek and Milton Friedman. He describes the astonishing and unexpected popular success of Hayek’s The Road to Serfdom and traces Milton Friedman’s role in popularizing free market economics. Friedman identified not with conservatives or the investor class but with small business. In contrast to Hayek, he moves beyond academic circles, writing for Newsweek and Playboy to broaden the reach of his ideas. Burgin covers a complex subject clearly and free of cant. This thoughtful and well-researched study proves once again, as Keynes himself said, that we are all slaves of defunct economists. (Oct.)
Daniel T. Rodgers
A brilliant rereading of the history of modern conservative thought, which casts each of its key protagonists in new light. The line from Friedrich Hayek to Milton Friedman was no straightforward unfolding of constant neoliberal premises, but a crooked path full of contradictions, contention, and unexpected contingencies.
Bruce Caldwell
Burgin has written a marvelous account of the role of the Mont Pèlerin Society in transforming public discourse concerning the role of markets in society. His meticulously researched, clear-eyed, and nuanced treatment is a compelling and well-told story.
David A. Hollinger
The Great Persuasion is an exemplary work of intellectual history showing how a small circle of theorists played a huge role in the triumph and persistence of market-centered political conservatism. Burgin renders refreshingly dynamic the notoriously dreary ideas of economists as he narrates two generations of calculated networking, skillful popularization, and political organizing.
Samuel Moyn
John Maynard Keynes famously insisted that ideas, not interests, matter in history. In this tremendously accomplished study, Burgin shows how a few men and their ideas exploded Keynes's own welfarist orthodoxy. And yet perhaps even Keynes would welcome the results, for ultimately Burgin suggests that no ideology, including the romance of the free market that rules today, is invulnerable to those who insist that it is wrong.
Wall Street Journal - Kenneth Minogue
Offers a concise account of how F.A. Hayek and later Milton Friedman disseminated the virtues of free markets and enlivened conservatism in Britain and the United States, culminating in the triumphs of Margaret Thatcher and Ronald Reagan.
New Republic - Robert M. Solow
One of the great merits of Burgin's book is to show how the character and the content of the free-market ideology changed when the flag passed from Hayek and Company to Friedman and Company. Despite the efforts of a small band of the faithful, the Tea Party is, and is likely to remain, more Friedman than Hayek: harder-line, more brashly confident, less concerned with getting things quite right, and without sympathy for losers.
American Spectator - Daniel McCarthy
A riveting cultural-political history of the free-market revival that began even as depression and world war threatened to quench the last embers of laissez-faire. Burgin--an insightful scholar rather than an apologist--pays special attention to the role of the Mt. Pelerin Society in the postwar conservative and classical-liberal story.
New York Journal of Books - Robert Teitelman
Burgin never reveals whether he personally thinks Mises, Hayek, or Friedman were intellectually right or wrong (Mises, he insists, was tactically a little rigid and extreme). Instead, he focuses on how they built (or failed to build) relationships, networks, and institutions; how they funded and organized projects like the Mount Pelerin Society, which lies at the heart of his story; and how personality, ideas, even geography drew confederates closer together, then blew them apart. Burgin is a quiet connoisseur of the ironic shift, the subtle change in ideas under new conditions, the intellectual difference exposing larger conflicts...He understands and outlines the often complex interplay of ideas in rarefied academic centers, how ideas cross-fertilize and mutate as generations pass and conditions change. This book would be valuable if only for his careful dissection of ideas by mostly forgotten Chicago economists like Jacob Viner and Frank Knight in the decades before Friedman...Burgin offers intellectual biographies of many of the key members of Mount Pelerin, from the society's contentious early administrator Albert Hunold to luminaries such as Karl Popper, Michael Oakeshott, Michael Polanyi, and George Stigler."
Bookforum - Christopher Caldwell
Many people, cheerleaders and detractors alike, have made careers flapping their mouths about the meaning of postwar conservatism without bothering to acquire half the understanding of it that Burgin has...He loves economics and its arguments and rivalries enough to have mastered a pile of minutes, monographs, and personal correspondence and turned it all into a great ideological drama. He has written a terrific book. Original and judicious, it never loses sight of the philosophical arguments economics conceals, sometimes accidentally, sometimes on purpose.
Prospect online - James McAuley
The most significant achievement of [this] remarkable book is to confirm that neoliberalism exists in a context, and is bounded by a beginning as well as an end. For now, however, that end is nowhere in sight.
Choice - R. B. Emmett
[A] new history of neoliberalism that provides more nuance and depth to an understanding of the reemergence of classical liberal ideas in the latter half of the 20th century...The Great Persuasion introduces readers not only to F. A. Hayek and Milton Friedman, but also to the central roles that the new European and American conservatives played, as well as the background to developments that occurred in Chicago in the 1930s. Burgin has produced a book that is essential reading for students and researchers at all levels regarding postwar intellectual history.
Times Literary Supplement - Duncan Kelly
[A] fluid, intellectually supple book. It tells the story of how Friedman and the Friedmanics captured the language of neoliberalism, showing how otherwise frankly utopian mantras about smart markets versus dumb governments were in fact the culmination of a whole series of earlier intramural arguments about the moral and conceptual underpinnings of capitalist societies that began in the aftermath of the First World War.
The Nation - Kim Phillips-Fein
Capacious and quietly ambitious, offering a dramatic retelling of the intellectual history of the postwar revival of free-market ideas, and it is an excellent example of what can be gained when intellectual history doesn't focus exclusively on individuals...Burgin's account of the evolution of the Mont Pelerin Society is a study of the complexity of ideological change, of the ways that ideas conceived in one context can acquire a very different hue over time. It is an immensely rich, careful and thoughtful history that captures the range of opinion within a group of people who are too often seen as having marched in lockstep.
Dissent - Timothy Shenk
An intellectual historian by training, Burgin has a gift for integrating careful textual exegeses with panoramic surveys of the political scene, using a wide-angle lens to highlight what matters in specific texts while deploying close readings to revise the big picture...Burgin, in one of his greatest contributions, draws attention to the many issues--both superficial and substantive--that divided [Hayek and Friedman]...As a piece of the richer history of the twentieth century that will emerge once fables of a lost golden age are dispensed with, The Great Persuasion is invaluable...Brilliantly executed...The Great Persuasion is filled with astute evaluations of how economists, especially Friedman, assumed their new role as public intellectuals.

Product Details

ISBN-13:
9780674058132
Publisher:
Harvard
Publication date:
10/31/2012
Pages:
320
Product dimensions:
6.20(w) x 9.30(h) x 1.20(d)

Read an Excerpt

Chapter 5: The Invention of Milton Friedman


On a warm evening in the late spring of 1962, Milton Friedman rose to address a group of dinner companions at the University of Chicago’s Quadrangle Club. They had been summoned by the student members of the Intercollegiate Society of Individualists in order to honor Friedrich Hayek before his impending departure from the university. With superior financial prospects available at the University of Freiburg, Hayek had recently, and reluctantly, decided to bring his time at Chicago to a close. Friedman—who was in the midst of the final manuscript preparations for his first mass-market book, Capitalism and Freedom—took the opportunity to reflect on the challenges that Hayek had long faced and that he was preparing to confront. Hayek was notable, Friedman informed the room, because of “the extent to which he has succeeded in straddling two kinds of worlds”: the act of “spreading ideas among the public at large” was “very seldom combined with thorough, deep, and profound scholarly work that can influence the course of science.” The scholarly world was not friendly to those who used positions of academic authority to expound minority views to the public, and Hayek’s exemplary performance as both academic and advocate had forced him to endure difficulties that were too rarely acknowledged. Such an observation might easily have been a prelude to expressions of frustration, but Friedman was adept at finding inspiration where others saw grounds for despair. Discouragement from colleagues was “a very good thing,” he concluded, “because it means that those of us who hold our views have to be better to get recognized than people who hold the other views. And in the long run, what matters is the quality of people who propose the ideas and not their number and not their position.” Friedman maintained a relentless faith in the ability of unpopular ideas to gain recognition and, over the course of decades, to effect political change.

Hayek was a living testimonial to Friedman’s confidence. The participants in the dinner recognized him as one of very few intellectuals whose career had spanned the trajectory between initial expressions of dissent and derivative signs of political change. He was, George Stigler remarked, “one of three or four economic philosophers who have had a noticeable influence on his times.” Even Hayek acknowledged that the ideas espoused in The Road to Serfdom were on the ascent. “Many who denounced the book without reading are now beginning to read it,” he told the attendees. “The top layer of intellectual leaders, those whose opinions will be effective a generation later, now have a more genuine belief in liberty than they had before.” With Hayek’s return to Europe, America was losing its most prominent and distinguished public advocate of free markets. He was departing with some lingering frustrations and uncertainties, but no little sense of satisfaction at the increasing public acceptance of his ideas.

This was a moment of transition. Hayek’s departure for Freiburg signified that his public career was beginning to draw to a close. He had been disappointed by the sales of his magnum opus, The Constitution of Liberty, following its publication in 1960. The book was not reviewed by Time or Life, and Reader’s Digest had resisted his entreaties to condense it. He was nearing a conventional age for retirement, and his retreat across the Atlantic consigned him to a peripheral role in the American academic and political spheres. By the end of the decade, he was wrestling with a personal depression and diminished productivity that further distanced him from the intellectual communities he had helped to create. Friedman, on the other hand, was on the verge of a personal and professional renaissance. In the half-decade following his remarks at the Quadrangle Club dinner, his reputation as an economist would be solidified with the publication of A Monetary History of the United States, 1867–1960 (co-written with Anna Schwartz) and an election to the presidency of the American Economic Association, and his popular profile would rapidly expand with the publication of a bestselling book and a prominent advisory role in the Goldwater campaign. He had grown into a leadership role within the Mont Pelerin Society as well.

Meet the Author

Angus Burgin is Assistant Professor of History at Johns Hopkins University.

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