How an Economic Ideology Took Control of
U.S. State and National Legislative Agendas
In 1980 Republican Ronald Reagan had defeated America's last Progressive President Democrat Jimmy Carter to become America's first Neoliberal President. By that time Reagan was the America's most effective spokesperson for Neoliberalism using the alternative reality game.
The Koch Brothers and others who have successfully defeated the Progressive Message in America east of the Intercontinental Divide. They have embraced the American Neoliberal Ideology which is based upon the economics beliefs of the founder of American Neoliberalism which he summarized as follows:
In a market economy in which no single person or group determines who gets what, and the shares of individuals always depend on many circumstances which nobody could have foreseen, the whole conception of social or distributive justice is empty and meaningless. Nothing has done so much to destroy the juridical safeguards of individual freedom as the striving after this mirage of social justice. - Friedrich Hayek, 1973.Reagan's internship among the Neoliberals started 26 years before he was nominated for President and just seven years after the founding of the Mont Pelerin Society. Reagan was hired by General Electric (GE) in 1954 to host the General Electric Theater, a weekly TV drama series. At the same time unbeknownst to the American television audience he was hired to give talks to over 200,000 GE employees as a motivational speaker. His speeches carried the Neoliberal re-education message. Reagan was influenced by Lemuel Boulware, a senior GE executive whose ideas have been called "Boulwarism." In a 1949 address at Harvard Boulware stated:
We have simply got to learn, and preach, and practice what’s the good alternative to socialism. And we have to interpret this to a majority of adults in a way that is understandable and credible and attractive.History Matters: Neoliberalism comes to America
In 1938 in Paris Friedrich Hayek and fellow exile from Austria Ludwig von Mises discovered a shared belief that Progressivism as manifested in social democracy was collectivism, an ideology that occupied the same spectrum as Nazism and Communism. In their view this less obvious enemy was exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state.
At that time they coined the term Neoliberalism as a label for their view. Thus Neoliberalism came into being. Except that in 1938 it was a discussion between economic theorists in an academic setting. To avoid the Nazi's, Mises immigrated to the United States and Hayek to Britain.
In 1940 Mises received support by the William Volker Fund and a grant by the Rockefeller Foundation to obtain a position at New York University, where businessman and libertarian commentator Lawrence Fertig funded his work on a continuing basis.In 1950, Hayek left the London School of Economics for the University of Chicago, where he became a professor in the Committee on Social Thought. Hayek's position also was funded by the William Volker Fund. (It should be noted that in 1946 the William Volker Fund financed the creation of the Foundation for Economic Education which today is accused of being a Koch Industries climate denial front group.)
Mont Pelerin Society – supported by billionaires and their foundations. Charles Koch, one of the famous or infamous (depending on your point of view) Koch brothers, is a long-standing member.
In order to be successful in countering the Neoliberal movement, Americans need to know they exist and about their ideology. It doesn't help that "liberal" is a meaningless and misused word in American political jargon.
In the abstract, most Americans find it hard to disagree with Neoliberal free market spin. But in real life economics are complicated, particularly in the 21st Century. It begins with the fact that money and corporations are artificial creations of the government.
Look at a dollar bill or any other denomination of U.S. currency and recognize they are Federal Reserve Notes with the words "this note is legal tender for all debts, public and private" printed on each note. A corporation exists by virtue of a charter or registration issued by a government granting certain rights and benefits not afforded a person.
In other words, the 21st Century economy begins with and is based on government intervention. But that truth is lost on Neoliberals as they drive along the Interstate Highway system.
Neoliberalism refers primarily to mid-20th Century ideas associated with economic liberalism which holds that the greatest possible number of economic decisions should be made by individuals or households, rather than collective institutions or organizations.
Economic liberalism includes support for equality of opportunity based on the belief that a lack of equality of opportunity will lead to an increase in private monopoly and therefore infringed liberty of individuals.
Economic liberalism opposes government intervention on the grounds that the state often serves dominant business interests, distorting the market to their favor and thus leading to inefficient outcomes.
But Neoliberalism adds intangible fear to that. In a 1944 book The Road to Serfdom Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Or as to paraphrase his opinion quoted above, striving for social justice destroys individual freedom.
History Matters: The Loss of the Progressive Message in America
The loss of the Progressive message came about in the face of cautions and warnings from respected leaders. In remarks made at the United Nations, March 27, 1958, 10 years after her leadership success resulting in the adoption of the Universal Declaration of Human Rights, Eleanor Roosevelt warned:
Where after all do universal human rights begin? In small places, close to home - so close and so small that they cannot be seen on any map of the world. Yet they are the world of the individual person: The neighborhood he lives in; the school or college he attends; the factory, farm or office where he works.Three years later at the end of his second term President Dwight Eisenhower was worried that the tenants of Progressivism were under attack and, as can be seen in this excerpt from his 1961 Farewell Address, he sounded a clear alarm:
...Our basic purposes have been to keep the peace; to foster progress in human achievement, and to enhance liberty, dignity and integrity among peoples and among nations. To strive for less would be unworthy of a free and religious people. Any failure traceable to arrogance, or our lack of comprehension or readiness to sacrifice would inflict upon us grievous hurt both at home and abroad.The fact is, since Eisenhower's warning in 1961 far too many Americans have...
The International Covenant on Economic, Social and Cultural Rights has never been ratified by the U.S. Senate because of overwhelming opposition from Neoliberal ideologues. The International Covenant on Civil and Political Rights was ratified by the Senate with reservations in 1992, 15 years after Carter signed it.
In 1992 after the International Covenant on Civil and Political Rights was ratified by the U.S. Senate with reservations Jimmy Carter wrote an opinion piece in The Christian Science Monitor stating:
Now that the US has taken this important step, however, it must not create doubts about its dedication and adherence to the Covenant by sanctimoniously picking and choosing among the provisions to which it will adhere. President [George H. W.] Bush officially took exception to some Covenant provisions that conflict with domestic laws, including one on juvenile executions. The Bush administration wants to reserve the right to allow states to continue to execute juveniles. The only other nations that execute their young are Iran, Iraq, Pakistan, Bangladesh, and Nigeria. New legislation is now required to make US law conform with the Covenant and with international law on this and other points.That same year - 1992 - Democrat Bill Clinton was elected President ushering in the era of Third Way Democrats and ushering out of the Democratic Party power structure true Progressives. As explained in Wikipedia:
In politics, the Third Way is a position akin to centrism that tries to reconcile right-wing and left-wing politics by advocating a varying synthesis of right-wing economics and left-wing social policies. The Third Way was created as a serious re-evaluation of political policies within various centre-left progressive movements in response to international doubt regarding the economic viability of the state; economic interventionist policies that had previously been popularized by Keynesianism and contrasted with the corresponding rise of popularity for economic liberalism and the New Right.What that "win at all cost" values-compromised Third Way implied is a tacit agreement by the Democrats that using "say whatever they want to hear" populist politics focused on the anxiety and anger is OK, even if it meant embracing Neoliberal economics. That is why Democratic protests about Donald Trump's 2016 campaign rang hollow.
Ironically, Keynesian economic theory which was the standard economic model in the Progressive period during the later part of the Great Depression, World War II, and the post-war economic expansion (1945–1973) fell out of favor as Neoliberal ideology gained - until the financial crisis of 2007–08 caused a brief resurgence in Keynesian thought among some Democrats. But Neoliberal ideas soon pushed that away with virtually no resistance from the National Democratic Party.
History Matters: After Reagan, Neoliberals continue to win
In what can only be called a remarkably clever strategy, "Neoliberalism" has not become a household word in the United States even though it has captured the economic policies of the Republican Party and Third Way Democrats. Most Americans have no idea what it is and did not hear the term Neoliberal or Neoliberalism mentioned once on any news show on TV in the entire election year of 2016. Neocon maybe. But Neoliberal, no.
Yet, in 2017 it remains the most powerful political movement in the United States.
Those at Colorado Springs gathering enjoy winning in these United States political arenas as opposed to tilting at windmills and they know how as explained in The Washington Post:
COLORADO SPRINGS—The wealthy donors who finance the Koch network are frustrated that national Republicans are not doing more to capitalize on having unified control of the federal government. But at their summer seminar here in the Rocky Mountains, which wrapped up last night, many were ecstatic—even giddy—about significant conservative gains that have been made this year in state capitals across the country.Some confusion exists because in 2015-2017 many were erroneously led to believe that Trump had the support of the Neoliberal ideologues. He did not. At one point, Charles Koch described the choice between Trump and Hillary Clinton as one between “cancer or heart attack.”
Right now the highest Neoliberal office holder is Vice-President Mike Pence, former president of the Indiana Policy Review Foundation, one of hundreds of "think tanks" set up to spread Neoliberalism.
Neoliberals detest populist movements like Donald Trump's. On September 19-23, 2016, the Mont Pelerin Society held a General Meeting in Miami. Its President, Economist Pedro Schwartz, gave the closing address which in part read as follows:
...The latest danger for freedom is the spread of Populism in our democracies, be it of the democratic kind or of those who use our liberties to try to destroy our freedom. We Pilgrims of Liberty have much to contribute to the fight against this new plague, because much of it originates in the realm of ideas.As stated before, Charles Koch is a long time "Montpelerinian." The "devils" label has been assigned by "liberals" to the billionaire Koch brothers. If you think you know who the Koch brothers are, consider this article: Koch brothers partner with Deion 'Primetime' Sanders to fight poverty. You need to know the Koch brothers are no more evil than their liberal accusers.
But they are committed to implementing the Neoliberal economic ideology. Unlike the impression left in Economist Pedro Schwartz's speech above, American Neoliberals don't oppose politicians who use demagoguery to appeal to the angry in order to get elected if those politicians share their economic views . Though they don't like Trump, American Neoliberals hold their nose and get into the halls of power even in the nation's capitol as was noted in the Los Angeles Times:
The Koch network’s efforts to influence the Trump team were aided when the White House hired several Koch-affiliated alumni as key aides for a president who arrived without any government experience or a deeply staffed bench.Still, it is the work of Neoliberals in the 50 states that matters as reflected in this map.
Organization and Drudgery Matter: The Neoliberal Advocacy Network
To more effectively coordinate their message, in 1981 the Atlas Network was created which today has 179 affiliated organizations in the United States (click on the image to the right to access through the Atlas Network website a list of those organizations).
The early U.S. organizations, many describing themselves in the press as "think tanks" included among others The American Enterprise Institute, The Heritage Foundation, The Cato Institute (founded as the Charles Koch Foundation in 1974), the Pacific Research Institute, and The Heartland Institute.
SPN groups operate as the policy, communications, and litigation arm of the American Legislative Exchange Council (ALEC), drafting ALEC "model bills" which are then presented as "local" legislation.
This allowed the U.S. Neoliberal movement to more effectively spread their views and influence in state government policy in the United States which also leads to gaining control within the U.S. Congress.
If you click on the image to the left you can access through the SPN website a directory of its "affiliates" and "associates."
As we note in these pages, "Neoliberalism" has not become a household word in the United States even though it has captured the economic policies of the Republican Party and Third Way Democrats. Most Americans have no idea what it is and did not hear the term Neoliberal or Neoliberalism mentioned regularly, or in many cases even once, on news show on TV in the entire election year of 2016. Neocon maybe. But Neoliberal, no.
It is tempting to think that this is some wild conspiracy theory. However, anyone can verify the truth by using this extremely long list created from the State Policy Network directory: