Kindle Notes & Highlights
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December 4 - December 27, 2020
For Röpke, some paths to development, and thus possible futures, for postcolonial nations were disqualified from the outset.
Hayek’s message to Hutt and others was that a state captured by black voters would cease to be a problem if the state itself was stripped preemptively of its right to grant exemptions from the discipline of the competitive market.
The United Nations system was emphatically international rather than supranational, and the jealously guarded principle of national sovereignty was at its heart.
In the case of the Haberler Report, developing nations used the master’s tools against him by suggesting that Europe and the United States adhere to their own much-preached liberal principles. The Haberler Report shows that the rise and spread of neoliberal ideas can be understood only through its piecemeal adoption by Global South nations as a development strategy.
Beginning in the early 1960s, Hayek began to suggest using the drafting of constitutions as a way to anchor economic freedoms against the attempts of legislatures to enact protectionist or redistributive policies.
In the end, “principles are practically all that we have to contribute.”
The highest value for Hayek was not, in fact, individual freedom except insofar as it was a functional necessity for the overall reproduction and productivity of the system itself.
Okay, but what's 'the system' for? What's its point?
“a pluralist party state will become ‘total’ not from strength and force but out of weakness: it intervenes in all sectors of life, because it feels it has to fulfill the demands of all interested parties.”
As Mestmäcker put it, “if a conflict arises national law must give way.”171 As we will see in Chapter 7, this became the core of what would later be theorized by Geneva School neoliberals as “multilevel governance.”
As he wrote in 1965, the European Community was a “new legal entity in International Law whose legal subjects are not only the Member States but also individuals.”
What this permitted was the separation of public and private law, providing market actors a forum beyond their own state to make their appeals—directly now to the community level.
the apparent depoliticization that was the political project itself. Yet this should not lead to the conclusion that liberals felt this was a completed process. The ongoing depoliticization of the economic was a continual legal struggle, one that required continual innovation in the creation of institutions capable of safeguarding the space of competition.
nation-states accepted laws binding their own freedom of discretionary policy, then the human right to trade could be enforceable by a supranational order. The idea of the multilevel economic constitution would be central to Geneva School neoliberalism into the twenty-first century.
Delegates from the G-77 also argued that empire had not vanished with formal sovereignty. “Private investments, following the flag in past models, are seen now as precursors of the flag,” observed Jagdish Bhagwati in 1977, “with brazen colonialism replaced by devious neocolonialism.”
By extending the demand for sovereignty and autonomy from the realm of politics into the realm of property, the NIEO was in direct opposition to the normative neoliberal model of double government.
NIEO move to control over dom economic property + democratic control + move to full employment + collective bargaining as base conditions for free movement of people? (notably requiring defence of sovereignty) or at least as leading to background conditions and knowedge to enact it democratically-something like this needs to be basis. Spell out more
Equally important was the rise of monetarism, culminating in the so-called Volcker Shock in 1979, which dramatically raised U.S. interest rates—and thus debt service payments for Global South nations—initiating the Third World debt crisis and dealing the “death blow to the NIEO movement.”
Scholars have long argued that cybernetics, system theory, and psychology were the silent (and sometimes not-so-silent) partners in Hayek’s epistemology.
the idea of agency is diffuse in Hayek’s work. One scholar speaks of Hayek’s “instrumental justification of liberty, [by which] freedom is essential for the utilization of dispersed, fragmented, and habitual or tacit knowledge.”
It is helpful here to return to a distinction between planning and design offered by the philosopher Garrett Hardin in a 1969 article cited by Hayek in his Hong Kong paper. Hardin defined planning as “the making of rather detailed, rather rigid plans.” By designing, he meant “much looser, less detailed, specification of a cybernetic system which includes negative feedbacks, self-correcting controls.”
“Where market failures are occasionally discernible,” Tumlir noted, using a phrase employed by contemporary public choice theorists, “government failure is pervasive and massive.”188 Tumlir’s conclusion, which he shared with Petersmann and Roessler, echoed that of Stigler in Hong Kong. Asking why the socialists were winning, he conceded that perhaps democracy may simply lead by its own logic to socialism.
Far from employing a rhetoric of personal freedom, Tumlir cast his warnings in the Hayek-inspired Geneva School rhetoric of the limits to freedom inherent in the functioning of the totality, or what he called the “costs of interdependence” by which certain “legitimate national objectives … have to be sacrificed to the discipline of the international order.”
law would not be conducted between nations but within nations, not at the border but “beyond the border,” as it would become known.
Tulir
Crucial was that “the common European law overrides the national law of member states.”216 Conceptually, he wrote, “this is the strongest possible form of implementing a supranational order. Its rules are genuine law, fully integrated into municipal law of member States, interpreted by a single authority, and creating enforceable private claims on each member State to comply with its treaty commitments.”
Tumlir
the creation of the WTO in 1995.
The “blue marble” photograph of the whole earth from outer space, first available in 1968, was a symbol of the first Earth Day in 1970
The global economy of Spaceship Earth—a domain of volumes, quantities, and disparities—vanished to make way for a Hayekian world economy of signals.
At a deeper level the NIEO represented the threat of what Hayek called “constructivism.” It did not take seriously enough the importance of instinctive action and the cybernetic insight that order required a neutral and uniform framework of rules for equilibrium to prevail.
Indeed, the proliferation of formally sovereign territories could even be useful by multiplying the jurisdictions for investment and innovation, leading to pressure on states to create attractive climates for capital. As Tumlir said in his talk given for Hayek’s birthday: “The economist sees the world of many sovereign countries as a competitive market for political ideas.”
Neoliberals welcomed flux as the necessary condition of a world ruled by the superior, if opaque, wisdom of the market. Order was not a steady state but an adjustment, an often painful process of learning. This was a doctrine of structural adjustment, but more to the point it was one of perpetual adjustment.
In an exploration of neoliberal federalism, one scholar notes that the American Enterprise Institute set up a Federalism Project in 2000, pursuing Buchanan’s proposals from the 1990s to preserve “an effective exit option in market relationships.”24 An AEI resident scholar explained the vision of the project: “A world without borders is a world without exits. We need the exits.”
Augustine suggests a counterintuitive mode of observation. The viewer must guard against being deceived by a part misrepresenting the whole. There is a call here for the potential of inverse observation: that which appears as order may in fact be disorder; and that which appears as disorder may in fact be order. It was a common neoliberal critique of socialism that they failed to see the greater order.
Hayek scoffed at the use of mathematics in macroeconomics to “impress politicians … which is the nearest thing to the practice of magic that occurs among professional economists.”32 He said that he always felt he should have written a critique of Milton Friedman’s Essays in Positive Economics, “every bit as dangerous as that of Keynes.”33 Unlike the Chicago School, the Geneva School opposed the mathematization of economics and thus foreclosed the possibility of extensive forecasting and modeling of the economy.
After the global financial crisis, German finance minister Wolfgang Schäuble said, “We have learned from Friedrich August von Hayek … that society and the economy are not machines. Anyone who believes it is possible to acquire comprehensive knowledge enabling him to control events has no knowledge, but only a pretense of knowledge.”
Contrary to the notion of our present-day knowledge society, scholars have noted, it is professions of ignorance and unknowability that are most helpful in exonerating those putatively responsible for global systemic risk, as, for example, in the world of finance.
Even understood as an information processor and a self-organizing system, the world economy requires intervention to calibrate the rules.
Seems result is rules based system in favour of one version of spotaneous order versus spontaneous responses to that order (which for some reason are external not internal to it). Seems to be a distinction btwn two forms of spontaneity or order in becoming based on the form of its becoming or origination.
Integration is not the creation of something new but the restoration of something lost.
Scholars realized only later, some ruefully, that global economic governance may have worked best when it was performed in an ad hoc, backroom manner, through negotiation, with many exit options, rather than through legalization.
The leading thinkers of the Geneva School after the assault on the WTO took neither the Pinochet option nor the recourse to a “liberal dictator” in their theorizing. Rather, they turned to the language of Pinochet’s most effective opponents: that of human rights.
With echoes of Philip Cortney’s postwar calls for the human right of capital flight, they doubled down on the very language of human rights scorned by Hayek to buttress their project. This book has shown that the recasting of trading rights, market rights, and capital rights as individual rights was proposed by the International Chamber of Commerce (ICC) and neoliberals against the United Nations’ idea of social and economic rights around 1945,
Interesting q here about possible dual nature of rights, e.g. With right to exit/emigrate
After Seattle, a term appeared in Petersmann’s writings that was previously almost entirely absent: “legitimacy.” He responded directly to the protest, saying that “in the now regular street demonstrations at the ministerial conferences of the IMF, the World Bank and WTO, citizens are reminding governments of the need to adjust the state-centered traditional international law and international organizations to their human rights and to the emerging ‘right to democracy.’
One scholar notes that “unlike most people, a market can function quite well without being loved.”75 But the exact reverse might be true. Many people persist without love, and experience has shown that some attention to the legitimacy of a given order is necessary for it not to descend into chaos and popular revolt. If not loved, the market needs to be accepted.
It may be that Geneva School neoliberals were so busy building crystalline fortresses for the world economy that they failed to heed Mises’s advice about reinforcing a mass mentality that would favor global rather than national markets as an absolute good rather than a pragmatic good to be favored or rejected as fortunes changed.
