LIAT SPIRO: How did you transition from your first book, Foreign Front: Third World Politics in Sixties West Germany (Duke University Press, 2012), a transnational history of student movements in West Germany, to writing a global history of economic thought?
QUINN SLOBODIAN: It comes out of my abandoned first dissertation project. There are these funny things in Germany—political foundations, the Adenauer Foundation, the Naumann Foundation, the Ebert Foundation—which are set up at an arm's reach from the German federal government, but they're funded entirely through the federal government. They allow German political parties to operate a sort of parallel foreign policy. I thought it would be interesting to look at the foundations through the varieties of capitalism literature, which was especially big when I was in grad school in the early 2000s, to think about the age of decolonization as inhabited by German political entities representing different "economic imaginaries of Cold War capitalism," as my dissertation project was originally titled. So you'd have the Adenauer Foundation promoting a sort of subsidiarity, Christian solidaristic model of capitalism in places like Chile, supporting the Christian Democrats; you'd have the Social Democratic Ebert Foundation promoting a competing political party in the same country; and the liberal Naumann Foundation cooperating with a more free-market, big business party of large land-owners and oligarchs. My first dissertation idea was to look at these competing versions of Cold War capitalism playing out during decolonization to break the notion of the hegemony of modernization theory in the postwar decades.
SPIRO: What's interesting about the connection to the varieties of capitalism literature is that you offer more of an intellectual history, whereas the varieties of capitalism research by political scientists (such as Peter Hall, David Soskice, and Kathleen Thelen) is more historical institutionalist. How does your project address this view in political science?
SLOBODIAN: I see what you're saying, but of course the other big inspiration was Peter Hall's edited collection on The Political Power of Economic Ideas, which was very much idea-driven. One of the chapters in that book--by Christopher Allen--was about the late uptake of Keynesianism in West Germany. When I was beginning to write the dissertation, there was a lot of excitement about new histories of development but I thought there was a rather homogenous notion of what the political economic imaginary of the '50s and '60s was--that it was all Rostovian modernization theory tinged with exporting the social democratic model globally. Here the West Germans were interesting because they represented a minority position. The ordoliberal model of the social market economy was a different variant of postwar capitalism, that was actually more hostile to the idea of labor unions and more devoted to an ideal of free market competition. Following the German story would be a way to crack open what was turning into a repetitive trope within the new development history.
Unfortunately, to my dismay, the political foundations have no requirement to open their archives. This is one of the pluses of being at arm's length from the government, which means they're able to act a bit like corporate archives. So in the process of trying to do this "neoliberal capitalism versus social democracy at the moment of decolonization" project, I found myself hitting an archival impasse. But in the process of doing that, I started coming across these Iranian students in the streets, Arab students in the streets in the late '50s, early '60s, and I didn't know what they were doing there—they weren't "supposed to be there" according to the story we had.
SPIRO: So the particular blockages of one archive pushed you toward doing a more social and cultural history, from the bottom up, than you had intended originally.
SLOBODIAN: Right, and one less about Germans overseas and more about non-Germans in Germany. So that became the first book, which was about reframing internationalism and the storyline of '68 in Germany from one about Germans discovering the Third World to one of Third World actors discovering Germans as a political resource to help amplify their claims for civil liberties, revolution, and development in their home countries.
SPIRO: In Globalists you look at the opponents of this. You mention the Freiburg School and ordoliberalism. A central point in this book is the nexus of law and economics. I wondered whether something is lost in translation in the term "economic constitution" [Wirtschaftsverfassung].
In English, it sounds very dry and legalistic. In German, it sounds more like the way we use "constitution" to mean the organic composition or make-up of something. Do you see the law and economics nexus being comparable in a transatlantic frame, between the Freiburg School and its spinoff in Geneva on one hand and the American neoliberal thinkers on the other?
SLOBODIAN: The problem with translating the concept is that there's such a fetishization of the American Constitution in the U.S. that the word "constitution" immediately takes you to the document. But the German ordoliberal Franz Böhm wasn't even particularly interested in the West German constitution, the Basic Law. It didn't seem to him like a strong enough declaration, in the sense of a Schmittian decision, about what the market order should look like. So I think that is a hurdle for the reader to get over. But if you sit with the idea of constitution, we have those other meanings in English, too, when you think about bodily constitution and health, or the constitution of a representative assembly, which isn't the written document but the moment of coalescing.
It is also true that the equivalent of ordoliberalism in the United States—thinking about the Virginia School of Public Choice and James Buchanan, about which a lot has been written recently, both in defense of and attacking Nancy MacLean's book Democracy in Chains—when you think about that strain of neoliberal thought in the United States, it's very much focused on the project of literally designing constitutions, writing constitutions. Whereas when the ordoliberals, as you say, talk about economic constitutions, they're often talking more about the assertion of a particular kind of sovereign decision upon a complex social landscape, rather than the legalistic project of putting pen to paper.
SPIRO: Carl Schmitt haunts this narrative. Why do you think his critique of parliamentary democracy was so important to the neoliberals you study, and how did they amend and extend it?
SLOBODIAN: He shows up most frequently in a way that I did not anticipate but that I think is actually a contribution to the ongoing conversation about Schmitt and the neoliberals. This is his development of the notion of imperium—the world of states--and dominium—the world of property--as two spheres that divide the globe, not East and West or North and South, but, as I say in the book, like the pith and the peel of an orange. Schmitt saw the division as one of the outcomes of the triumph of liberal political economy in the nineteenth century, which needed to be overcome by a new reassertion of national sovereignty. The interesting thing is that he's presenting the supremacy of private property as a sort of negative outcome but the German ordoliberal Wilhelm Röpke reviews Schmitt's book The Nomos of the Earth (1950), and says, "this is exactly what we want!" What Schmitt sees as a constraint on national sovereignty is presented by Röpke as a mandate for the nation-state itself. People like Röpke, Böhm, and Eucken believed that the state must maintain and actively produce the salutary division between private property and public law—what I follow them in calling the "economic constitution"--against the forces that always tried to corrode it.
The interesting thing is that both Schmitt and the ordoliberals saw the same foundational threat to this economic constitution—popular sovereignty. In the 1930s, Eucken and Böhm not only agree with but borrow the exact terminology of Schmitt, to say that you need a moment of sovereign decision to prevent the state falling prey to special interests, and the many proliferating demands of a democratic population. The strong state is necessary to adjudicate those claims, or to prevent those claims from swamping the system of government and turning it into a "total state" or a totalitarian state. Ironically Schmitt saw the need for what was effectively a fascist state as a way to prevent the rise of totalitarianism, which is paradoxical, but there it is. The ordoliberals saw it a different way. A strong state, a liberal capitalist government was a necessity to prevent the rise of a totalitarian state through the proliferation of popular demands. The thing that I track in the book that I think is new is the way that the domestic concern gets internationalized or globalized after the Second World War. This allows me to talk about the attempt to produce an economic constitution of the world.
SPIRO: Yeah, I was thinking about that. I was trying to think about whether your narrative, from the 1920s to the 1980s, on the attempt to imagine a world for the free flow of goods and capital, but not necessarily people, and the universalization of a particular form of property rights regime—this vision of imperium and dominium—was at odds with what Vanessa Ogle has conceived of as "archipelago capitalism": the creation of differential regimes, and the sort of arbitrage that capital-holders can play with? Or is this confirming to the vision you're describing in the sense of tax havens or special economic zones offering the sorts of "xenos rights" or extraterritoriality that your neoliberals were so interested in achieving?
SLOBODIAN: I think that the narratives can definitely work together. I have thought a fair amount about how they can. The secret is to see the core of the neoliberal project as being what they call competitive federalism. As I mention throughout the book, the real important right is the right to leave, not the right to stay. If capital can preserve exit rights, then that means that a strong global legal structure protecting those capital rights can allow for a space of evolutionary competition, as someone like Hayek would think about it. The very things that critics would call the "race to the bottom" would be seen as evolutionary adaptive complexity by its champions. So the proliferation of zones of escapes in tax havens and SEZs, and low-tax jurisdictions of all kinds might appear to be efforts to undermine an international economic legal order but, depending on how one sees the higher mandate of that legal order, they could also work with it, not against it.
SPIRO: But how would the intellectual property rights regime advocated by the World Trade Organization (WTO) fit into this evolutionary "race to the bottom" framework?
SLOBODIAN: Well, that's a good question. That is something I've written about. It will be coming out soon. I write about intellectual property rights as a basic point of contradiction between what neoliberal intellectuals write and what comes into existence in the international political economy. And I'm glad you raise it because one of the perceptions that I try to work very hard at dispelling in this book is the notion that I'm describing a one-to-one transposition of blueprints from the pages of Hayek or Haberler or whomever to reality in some unmediated or direct way.
SPIRO: In the book, you refer to a "business international" of capitalists supporting these intellectual enterprises. How unanimous do you see the interests of capital in the global North being, and how consonant do you think their ideas were in this period with the neoliberal thinkers you study? You could certainly see certain industries being very interested in War Keynesianism or other forms of political economy.
SLOBODIAN: For sure. When I use that term the "business international" or the "businessman's international," I'm using it as a direct synonym for the International Chamber of Commerce.
The ICC is a discrete actor that takes positions over time, which I describe. This is where I break with neo-Gramscian-style international political economy. I don't make claims in this book about what the "transnational capital class" is trying to do or undertake. Most of my protagonists and actors in this book are discrete, identifiable groups, rather than economic formations—which doesn't mean that I don't think you can't come to really good insights through Gramscian IPE approaches. But the genesis of this book was reading people whom I admire a lot like Stephen Gill or A. Claire Cutler, who do this kind of bloc analysis, who I think have the story right, but whose intellectual genealogy was totally absent.
The connection between the origin of certain ideas and their apparent manifestation in institutional realities was the gap that I was trying to bridge with a number of these chapters. I think that the IPE and sociology people are basically right, but my idea was "let's get some of the history to back that up", and "let's also rediscover points at which there wasn't a necessary, teleological, sometimes functionalist outcome to these ideas." The goal was to open up the contingency and space for contestation, instead of giving the appearance of the ever-tightening grip of a certain set of ideas and institutions that are air-tight.
SPIRO: One of the definite points of contingency and contestation in the book was the question of the European Economic Community as Eurafrica, and how it split both the neoliberals and Third World interlocutors interested in trade policy. Could you briefly describe that dual, simultaneous split?
SLOBODIAN: If I were to write a thousand-page version of this book, instead of a four-hundred-page version, I would do more of what I do in the chapter on Europe. My approach there is to propose that if you want to understand how ideas become reality, first you need to read a bunch of books and articles and figure out how certain ideas germinate through exchange and connection and so on and get that intellectual lineage right. But then the question of how those translate into a reality is often contingent. We use this word contingency a lot, which is a way of getting out of specific explanation, but I think that what one usually finds is that those ideas gain purchase for reasons that the articulator of those ideas did not necessarily anticipate. So it's not just that Hayek or Haberler write the book that the "transnational capital class" wants, and that those ideas become reality. Intellectual property rights is a perfect example. Most of these card-carrying neoliberals are very critical of intellectual property rights. Intellectual property rights become part of the WTO not because Friedman or Posner wanted them to be there, but because pharmaceutical companies, software companies, apparel companies, entertainment companies wanted them to be there and were very good at lobbying.
In the inverse, when you look at something like the dissolution of Eurafrica, what we find is that you have people who are advocating for a total free trade version of European integration. They find allies interestingly not in the core countries of the Global North but in developing countries of the Global South, specifically ones that are left out of the special arrangement with the colonies of the original six countries of the European Economic Community. So you have the Latin American countries, India, and the British colonies, which are not part of the association in 1957, and their advocacy becomes a matter of pushing for (ultimately unsuccessfully) a kind of free trade version of Europe.
You can never understand the globalization of neoliberalism as a simple core-to-periphery diffusion of ideas. It always works not strictly through imposition but through uptake by domestic actors, who find certain of their own interests fulfilled by adopting neoliberal policies.
SPIRO: Which you definitely see for an earlier period with Listian national political economy, and how it gets entangled, reinterpreted, taken up all over the world in terms of import substitution, for instance, against the metropolitan British Empire in India and Ireland.
SLOBODIAN: Right. And we recognize this because we're used to thinking about economic nationalism as a kind of voluntary policy for the periphery as a strategy of development. But I think we can't understand the last fifty years if we don't also think of neoliberal policies as voluntary policies taken up by certain elites on the periphery for their own interests. That's how we've come to understand empire. Frederick Cooper was a big influence on me in grad school, and working with him, one finds that as morally satisfying as it might be to think of the tale of empire as simply of a giant boot coming in from outside and stomping on the face of everything it encounters, the only reason why empire works is that it finds willing compradors and domestic elites who will do the work of empire for the metropole for the most part.
I want to provide the first step for that kind of storyline to allow other people to do the second step. Ideally, my book can be a kind of handbook where people realize, "You don't have to go read a million of these boring Ordo articles now, just to know what the position of the neoliberals were." Instead we can go to the next step and ask, "How did this actually play out, when these ideas—these complicated and sometimes internally contradictory ideas—were partially and selectively taken up in their application globally?"
That's where I think the history of neoliberalism is going. There's a conference at the British Academy, which I'll be part of in June, called Global Neoliberalisms. The whole point of the conference is to move from the groundwork we've laid of an adequate intellectual history and begin to talk about its moments of encounter and alternative influence globally.
SPIRO: For this second step, where would the material angle fit in? You've said that this is not a blueprint that then is implemented by some falsely homogenous capitalist class. How would this effort speak to Robert Brenner or David Harvey reading neoliberalism as not necessarily market liberalization but "upward redistribution" or "accumulation by dispossession?" If we were to research that, where would you start digging?
SLOBODIAN: Well, surprisingly enough, the whole era of structural adjustment after the Third World debt crisis in 1982 is still wide open for research. The Fed has full text searchable transcripts of everything that the central bankers, the Federal Reserve governors, have ever said publicly. And yet we still have an overly simplistic idea of what happened at the end of the '70s and how countries exposed to the colossal rise in interest rates responded.
So I'm excited to see new histories of this inflection between central bank policy, international institutional policy and domestic decision-making. The question of how much maneuver Global South countries actually had has been too quickly concluded. The new constraints produced by the late 1970s and early 1980s created a landscape of decision-making that I think still is very relevant. So I'd like to see people working on how ideas and interests intersected in the changed global landscape of the 1980s and 1990s.
But I think if 2016 taught us anything, it's that it isn't just a question of the things that Harvey thinks it is. I really think that if we want to understand politics, we can't simply unidimensionally focus on questions of class interest. It's not telling us true stories about the world. We also need to focus on those supposedly irrational forces of nationalism.
SPIRO: Speaking of which, a number of the neoliberal thinkers you look at expressed nostalgia for the Habsburg Empire. Was this just nostalgia for the "world of yesterday," or did they truly think it was a successful economic unit? To what extent was it a real model, including on the linguistic and nationalities question?
SLOBODIAN: Part of this requires you to think about it biographically. Recall someone like Ludwig von Mises. He was in what Ernest Gellner called "the Habsburg Dilemma": being a Jew, a Jew who was not even born in Vienna but Galicia, and was raised speaking Polish as well as German; moving to Vienna later and feeling locked out of the politics of national identity and nationalism because of his own identity; forced then as a liberal to defend an empire—which seems paradoxical, but I think explains a lot. The more you think about biographies like these, the more you can understand the kind of neoliberalism that someone like Mises has created and become associated with. So the nostalgia for the Habsburg Empire was real, and was about this notion of what Hayek called "double government," the idea that you could have a cultural government and an economic government. And that people at some level could be satisfied with their superficial trappings of nationality as he saw them, while still being united by the bonds of free trade and monetary exchange, and migration.
Part of the attraction of the Habsburg Empire is that the era before 1914 is seen as being "more laissez faire" than the world that followed it. And that is just patently true at some level. You didn't have an income tax. You didn't have full suffrage, meaning that you didn't have a consensus about producing labor peace through the provisions of the social state and so on. So what it meant to placate the nation was seen as pretty minimal.
So, for example, one of the things Mises liked the best about the Habsburg Empire was their system of providing a small amount of money for separate schools for the different nationalities, in effect, the voucher system 1.0. He had an overly naïve belief that that was about all you needed to offer to nationalities to keep them happy, and the market would then have a kind of irenic effect and would produce a sense of interdependence and mutual reliance through competition.
SPIRO: I think one of the consistent points in the book that is usefully destabilizing—and perhaps will be surprising to some readers, though not necessarily to readers of Hayek—is the question of unknowability. Specifically, how unknowability underpinned the whole idea of encasing the market away from democratic decision-making. Could you speak to the portions in the book about economic statistics, data visualizations, and their epistemic status? What do these questions mean for debates over technocracy and Big Data, which include critics from both the Left and Right?
SLOBODIAN: One of the things that I was really writing against was something I'd observed in the scholarship in the last ten or twenty years, namely, a kind of conflation of notions of neoliberalism, economism, and delusions of omniscience or all-knowability. These really come together in the literature around the "invention of the economy," which was mostly connected to Timothy Mitchell's work, someone whom I studied with at NYU and who I admire a lot.
The basic point of the "invention of the economy" literature was that it was only through the creation of new quantitative, calculative technologies in the 1930s that we were first able to measure and then model something that became known as the national economy. In the minds of some, this had a negative political effect as the economy grew to have an agency of its own, capable of trumping any democratic decision-making processes. So the economy became something that governs our lives. Therefore, a responsible form of critical scholarship would be to dismantle the economy and to show its underpinnings as a made and constructed thing, and not a natural thing preexisting our own knowledge production.
But, ironically, that whole project of uninventing the economy is very much something that Hayek himself was undertaking. He says more than once in his writings that one of the great fallacies of the twentieth century is the belief that there is something called the economy, that can somehow be seen and controlled and managed. And he could say that because the invention of the economy was mostly a social democratic, Keynesian project. It was a project of governing and collectivizing risk.
SPIRO: …but not necessarily democratically.
SLOBODIAN: That's right. Not a popular democratic project, very much an expert-driven technocratic project.
SPIRO: …but still a realm of possible governance.
SLOBODIAN: A realm of governance with at least a kind of self-declared goal of some level of social justice—if not redistribution, some notion of economic evenness, never fulfilled, but at least existing as a potential. It was the notion of full employment as a project of the midcentury that Hayek was specifically attacking. This might be surprising for people who have spent all this time trying to undo the power of experts. What one finds when you actually read someone like Hayek and the Austrians are some surprising things. One, as you said, is the kind of invisibility or the unknowability of the economy is quite central to them. The belief that it's the hubris of expertise, or as Hayek calls it in his Nobel speech, "the pretense of knowledge," to think that you can actually have any kind of oversight over the economy as such. It's not always observed that his Nobel speech was a direct response to the Club of Rome's Limits to Growth report, which was the signal shot of ecological consciousness, of attempting to get a global overview of what we now see as the universally existential crisis of our resources and our planet.
By trying to undo the possibility of economic expertise, by exposing the epistemological limits of the economy, neoliberals give a sort of sanction to a form of governing the economy not through data and expertise but through relatively inflexible rules. It's quite amazing to read journals that are produced in the run-up to the WTO, for example, and see there are not really any statistics, numbers or equations involved. One of the most successful twentieth-century projects of governing the economy, in other words, was operating without economic data as we normally think about it as produced in economics departments--which is pretty interesting actually.
So part of my hope with the book is to actually reclaim the possibility of a leftist or heterodox economics, and to try to dispel the taboo of economics as being somehow tinged by a conjoined project of "neoliberal economism." I think that economistic thinking can serve a range of political projects, and a range of political and social outcomes.
There are probably two big assumptions about how neoliberals think that the book undermines. One, any lingering idea that neoliberals are anti-state will be dispelled because you can see that, in their own writings, the whole project of neoliberalism is about redesigning the state, especially in questions of law. Secondly, it challenges the idea that neoliberals or Austrians are individualistic or believe in individual will in a straightforward way. When you actually sit with Hayek's ideas of order, you can't think of him as an individualist without seeing that, for him, the individual reneges their actual agency and autonomy in the world and allows themselves to be shaped and buffeted by the forces of the market and by the forces of competition. The normative ideal for the individual is a kind of total subjection to the forces of competition. We gain our freedom insofar as we subject ourselves to that.
SPIRO: I wonder on the question of development: neoliberal thinkers are against the measurements of the economy that the Keynesian school is doing, but they're still thinking about the conditions of capital accumulation as development, no? Is capital accumulation still the end goal? Certainly not any social welfare or redistribution, but accumulation. Or is the goal the pure encasement of the market in itself?
SLOBODIAN: The goal is the international division of labor, meaning that populations should interact with the resources at hand, attract and repulse the resources that come to them or leave them in such a way that enhances the greater unity of the global economy. Interdependency is the goal and capital accumulation is a means to that end.
But this is where we get to ideas-on-the-page versus ideas-in-translation. Why is it that their ideas end up having such staying power and popularity with certain wealthy members of society? I think that the way they see the goal of the international division of labor being arrived at necessarily allows for potentially unlimited capital accumulation. If you have a framework of total free trade, free capital movement, then this is naturally attractive for people for whom this would be an enriching strategy. By trying to approach these thinkers on their own terms, I give them the benefit of the doubt that they're not simply arriving at their theories as kind of alibi for the ever-greater accumulation of wealth by the wealthy. I think that it's possible and probably more helpful for critics of neoliberalism to at least allow for the idea that their vision was of a kind of interconnected and interdependent order that had a success that was not necessarily measurable.
When people defend globalization and the neoliberal model, they say, "look at the number of dollars that people are now living on, there's a rising standard of living." But I actually think that Hayek and company, because they rejected aggregate indicators of any kind like that, would even find that a false way of measuring success or failure. The success or failure of the system, and Hayek gets into this in his later work, is measured in terms of lives—capitalism is the right system because it has produced more bodies on the Earth, more lives on the Earth.