The Road To Serfdom (1944) is Hayek’s most famous book, still a bestseller in the US, and definitely a neoliberal classic. It could be argued that Hayek reaches a more advanced understanding of his own project in his later books The Constitution of Liberty (1960) and Law, Legislation and Liberty (1973), but it is nonetheless useful to read this book to see where it’s all coming from. The main message is very clear and runs through every single one of the (quite repetitive) sixteen chapters of the book: Economic planning is very, very, very bad. The reason for this is that it leads to socialism, which leads to totalitarianism, and this is written in 1944. The economics of the argument are apparent in some parts of the three assigned chapters and they derive from Ludwig von Mises and Hayek’s own interventions in what was known as the socialist calculation debates in the 1920a and 30s. In these debates Mises and Hayek argued that the market mechanism was the only possible mediator of modern social life because a planning authority could never have all the knowledge automatically embedded in the price mechanism. There is also another, more overlooked aspect of this book and of early neoliberalism, which is evident in some of these chapters: Hayek was also quite clear that laissez-faire was useless as a political program in the modern world. He endorsed a social safety net, and also insisted on a separation between planning for and against competition. I would argue that the tension between claiming categorically that all planning leads to totalitarianism, but at the same time admitting the futility of laissez-faire liberalism and the necessity of some planning, lies at the heart of much early neoliberal thought. People like Hayek, Röpke, Rüstow, Lippmann and Robbins didn’t necessarily want a smaller state, but a different state, somehow in the service of the market mechanism.

Capitalism and Freedom (1962) is Milton Friedman’s most famous book, and again, probably not his best or most important one. A Monetary History of the United States (1963), which he co-wrote with Anna J. Schwartz, is a very important book of economic history that makes a rather convincing argument about the relation between monetary policy and The Great Depression (they argued it was all the state’s fault). Essays in Positive Economics (1953) is also very influential, and famously the only methodology paper most contemporary economists have ever read. It argues that the unrealism of economists’ assumptions aren’t important, as long as the models predict “well”. Either way, Capitalism and Freedom is much more famous in the public eye, and it could be argued that this was also Milton Friedman’s main contribution to neoliberalism. He was a public intellectual who wrote countless op-eds and even made a TV series, all with one very clear message: States are bad, markets are good. This is a somewhat different and more banal message than that of Hayek. The Chicago School insistence on a rational actor at the core of all their models is also very much at odds with an Austrian libertarian view of individuals in the modern world as always having incomplete knowledge and therefore having to operate in the market mechanism. Still they managed to work quite well together, and it could be interesting to discuss the reasons for this.

A Treatise on the Family (1991) by Gary Becker has lots of maths in it that Liam will have to explain to us, but it pretty much builds on the program set out in The Economic Approach to Human Behaviour (1976), also attached. Becker is the father of the phrase “human capital”, and when Foucault discussed neoliberalism in 1979 he saw the replacement of labour with human capital as one of neoliberalism’s most ground-breaking inventions. Becker argued that economists had the tools to understand also other aspects of reality than what had up to then been referred to as “the economy”. We now call this “economics imperialism”, and it would be interesting to discuss the ways in which this confidence of economists is based on Hayek’s insistence on the market as a sort of repository of truth: Governments can’t plan economies, because they cannot possibly have all the knowledge about social life that is embedded in the market, thus similarly sociologists can have as many theories about the family as they like, but as long as they don’t realize the essential truth of the market and analyse social life as market processes, they are fumbling in the dark. It is also interesting to note that Gary Becker was the mentor of Stephen Levitt, the man behind the enormously popular Freakonomics series, which essentially argues the same point.

Both Hayek (1947 – 1961), Friedman (1970 – 1972) and Becker (1990 – 1992) were presidents of the Mont Pèlerin Society, a closed organization which still exists and stands at the centre of a maze of various activities, including the ATLAS foundation which coordinates over 500 think tanks in some 80 countries.