The ‘rebirth of liberalism’

I n t r o d u c t i o n : L i b e r a l r e v i va l

As the previous chapter has demonstrated, liberal ideas are seldom static and never uniform. The beliefs held by liberals in 1945 displayed, as they had in the past, considerable diversity. They continued to change and continued to produce internecine debates in the years that followed. A new liberal framework, clearly visible in the immediate years after the Second World War, while significantly different from the old, drew on the liberal traditions of the past as a source of guidance for establishing a new liberal discourse and a new liberal agenda.

The collectivist liberalism evident during the war and in the years of its aftermath was accompanied by the growth of a powerful counter-movement encapsulated within this framework. Economists, philosophers and social scientists of the ‘old’ liberal school became an important voice on behalf of old liberalism in modern society and bitter critics of the collectivism they saw sweeping through Germany, Britain and the United States since the 1930s. Neo-liberalism emerged in the late1940s as a revered symbol of anti- socialism and a powerful voice of liberal hopes. This happened after it became evident to many liberals that liberalism had ceased to bear any clear relation to the ideological rationales that had supported its creation. This revival of liberal thought occurred slowly, at times almost imperceptibly, coming together from innumerable small adaptations which accumulated gradually but decisively.

It is the intention of this chapter to trace the path by which neo- liberalism since 1930s articulated an important and serious critique of contemporary liberal culture. This path was awash in ideas – ideas of It is the intention of this chapter to trace the path by which neo- liberalism since 1930s articulated an important and serious critique of contemporary liberal culture. This path was awash in ideas – ideas of

significant range and diversity, but which somehow managed to coexist and form a coherent ideology. The revival of liberalism, the chapter will argue, was the product of a period of fundamental adjustment. This period occurred during the 1930s and 1940s, culminating in the immediate post- war years, and formed the early intellectual life of neo-liberalism. It became associated with a backlash against the prevailing collectivist ide- ologies of the age and with the formation of the Mont Pelerin Society, through which early neo-liberals sought to distinguish their ideas and beliefs from those associated with the prevailing collectivist liberal ethos. This period established the basis of an effective political movement, cre- ating a vast network of scholars, publications and think-tanks to rival and outperform liberal opponents.

The purpose of this chapter is therefore to explore the intellectual and historical context within which neo-liberal ideology evolved in the 1930s and 1940s. First it will set out the intellectual context within which the seeds of neo-liberalism germinated, by highlighting the apparent decline of laissez-faire liberalism during the first half of the twentieth century – with particular reference to the works of J. M. Keynes, Joseph Schumpeter and Karl Polyani; it will then examine the different forms of collectivism that emerged in Germany, Britain and the United States in the twentieth century and assess neo-liberalism’s backlash against these variants; finally, it will turn to the formation of the Mont Pelerin Society in the immediate years after the Second World War, which was integral to the ideological genesis of neo-liberalism.

The ‘rebirth of liberalism’