Neoliberalism’s Populist Bastards | Public Seminar – In the late 1930s a group of intellectuals, including Hayek, Ludwig von Mises, and others adopted the term “neoliberalism” to describe their agenda based on the conviction that laissez faire was not enough. The Great Depression paired with the rise of mass democracy meant that the market would not take care of itself. Wielding their ballots, electorates would always vote for more favors for themselves — and, thus, more state intervention into the economy — crippling the combination of market prices and private property upon which capitalism depended. From this time onward, as I describe in my recent book, one of the primary dreams of neoliberals was for institutions that would constrain democratic demands and protect the free movement of capital, goods, and (sometimes, but not always) people across borders.
By the 1990s, it seemed that the neoliberal dream had been realized. The WTO, the European Union, and NAFTA — all inaugurated within two years of each other — locked in policies of free trade. A host of new legal instruments protected international investment and the IMF and World Bank had converted to policies of free capital movement. Yet at the moment of apparent triumph, some neoliberals, in Germany and Austria in particular, began to have second thoughts. Perhaps the EU was not the guardian of capitalist competition? Perhaps it was merely replicating the problems of bureaucracy and redistribution at a grander level?