Hokey Cowboy

The​ Mont Pelerin Society was set up in 1947 with the aim of ensuring that the apparent triumph of freedom over fascism in the Second World War should instead be understood as a defeat. Inspired by its founding father, Friedrich von Hayek, whose rallying call The Road to Serfdom had been published three years earlier, the organisation believed that the price of victory had been too high. Democratic Western societies – notably the United States – had won the war by aping the economic tactics of their geopolitical rivals, including the Soviet Union: central planning, market controls, massive government spending and extensive social and economic engineering. Once the fighting was over this translated into promises of continued government spending to fund extensive welfare programmes as a reward for the sacrifices that had been made, which in turn ensured that the social and economic engineering would continue. A total war had required a monster state to prosecute it. The monster was now threatening to devour the peace as well. The task at hand was to dismantle that state in the name of liberty. This was the basis of postwar neoliberalism, and the Mont Pelerin Society became its intellectual clearing house.

On a conventional telling of the story, the real victory of neoliberalism had to wait until forty years later, at the end of the Cold War, when a combination of the Reagan-Thatcher ascendancy and the collapse of the Soviet Union signalled that freedom had finally triumphed. After long decades of often thankless academic guerrilla warfare, the neoliberals’ ideas emerged from the netherworld of think tanks and journals and into the halls of power. Central planning had been vanquished. Regulation was in retreat. Markets were the masters now. Money, ideas, people: all were at liberty to go wherever they could find the best return. But as Quinn Slobodian makes clear in his bracing history of the intellectual origins of the alt-right, the conventional story misses out a big part of the picture.

For plenty of Mont Pelerin diehards, history didn’t right itself at the end of the 20th century so much as repeat itself. Once again, they decided, the price of victory had been too high. The Cold War had been won by indulging the weakness of Western societies for panaceas of global solidarity, social security and personal empowerment. Even Reagan and Thatcher had not dared take on many leftist pieties for fear of frightening voters. As a result, by the 1990s other ideas were on the march, including environmentalism, feminism and racial justice. All of them – with their insistence on correcting for social inequality and market failures – threatened the integrity of capitalism. So the fight for freedom had to begin again.

In making the case this second time around that seeming victory was really a defeat, the new breed of neoliberals was being true to Hayek’s original vision and at the same time entirely distorting it – hence the name Slobodian gives them: ‘Hayek’s bastards’. Hayek had understood that persuading any society to accept the rigours of capitalist freedom was never going to be easy. Capitalism is scary because it is so uncertain: the whole point of market logic is that no one knows what’s going to work until they have discovered whether or not people are willing to buy it. But that for Hayek was also its glory. The free exchange of goods and ideas produced wonders beyond imagining because the market could see things that no human being could. As a result, the neoliberal prospectus had to be carefully handled. Too much forthrightness about the great unknown that is market wisdom would spook people and have them reaching for familiar comforts. They needed grounds for retaining some kind of faith in the future. Religion might help, Hayek thought. So too would a minimal social security net.

Hayek based this insight partly on his observations of electoral politics – voters would always require non-neoliberal reasons to vote for neoliberal policies (Thatcher, with her insistence on playing the part of the careful housewife, instinctively knew this, as did Reagan the hokey cowboy). But it also derived from his reading of evolutionary theory. He believed that human nature inclined towards socialism. This was because tribal feelings of loyalty – trade with the in-group, kill outsiders – had served us well on the savannah. We naturally want to organise our economic life according to a muscle memory of the potency of reciprocal obligations. But capitalism demands something very different. We truly prosper only when we learn to trade with total strangers, indifferent to their customs and loyalties. Otherwise the market cannot cast its net wide enough to encompass the unknown. So capitalism is evolutionarily advantageous – its ability to generate prosperity on a scale no rival system could match demonstrated that – but it goes against our evolved preference for social solidarity. As a result, Hayek suspected that nothing about the vindication of neoliberalism was likely to be straightforward. Some magical thinking would be needed to leaven the mix. Hayek wanted elites properly educated in the virtues of free-market economics but he also wanted them alive to the ways people might recoil from the experience of living under such a system. Quite a few of the educated elite might recoil from it too. They would need to be given something else to believe in to keep their fear of the unknown at bay.

For a time this strategy of freedom by stealth appeared to be paying dividends, but the problem for many members of the Mont Pelerin Society was that it had been too successful. Just when the market seemed to have won, Western elites were no longer satisfied with it. They wanted something like the market-plus: capitalism, for sure, but with greater cohesion, more integration, fewer injustices. They also wanted less risk of ecological catastrophe, once it became clear that the unleashing of human productive potential might threaten the viability of our natural habitat. So they embarked on new projects of global governance, ecological regulation and capitalist co-ordination. This was the danger of magical thinking: it’s hard to know where to stop. By the end of the 1990s it had produced, among other things, the Eurozone, which looked like just the sort of grand scheme of political and economic engineering that Hayek had spent a lifetime warning against. The Mont Pelerin Society was not in triumphant mood at the turn of the century. It was thoroughly spooked.

In taking the fight to this new enemy, some neoliberals ended up turning Hayek’s argument on its head. Hayek worried that human nature might push so hard against capitalism that concessions would have to be made to the pull of social solidarity. But this went much further than he intended and had produced a weird hybrid: solidaristic capitalism on a global scale. The new breed of neoliberals decided that the idea of human evolution could and should be used to push back against this nonsense. If the socialists now believed in global justice, the capitalists needed to go back to the savannah to harness the power of tribal loyalty. Neoliberalism morphed into paleolibertarianism: free markets plus primitive racial, sexual and political hierarchies. Hayek had celebrated dynamic entrepreneurs and free-thinking intellectuals. Hayek’s bastards were into cavemen.

By revealing this twist, Slobodian wants to show that the politics of the alt-right – all that wildly orchestrated chest-beating for alienated kids, for men who just want to be actual men, for whites who don’t want to watch endless goodies being parcelled out to undeserving Blacks – is not a repudiation of neoliberal globalisation on behalf of the people who lost out, as is often assumed. This is not a revolt of the left-behinds. It is an attempt to rescue neoliberal capitalism from globalisation, inspired by a bunch of pointy-heads who came to believe that globalisation had become a stalking horse for social engineering on the most extreme scale. Essentially, they thought Hayek had horribly miscalculated. He had believed that allowing for some human solidarity was a price worth paying for global capitalism. Instead, it turned out that the other side was willing to pay the price of global capitalism for the sake of some human solidarity. Globalism turned into the thing that bleeding-heart liberals did. Davos man was either too stupid to know he had been played or too devious to let on that he was playing everyone else. So there was only one thing for red-in-tooth-and-claw neoliberals to do. They had to explode the whole fateful bargain.

The dynamite they used was the politics of race. Crude evolutionary theory was deployed to argue that there were hierarchies of freedom: some kinds of people – basically, white ones (though East Asians were sometimes allowed a look-in) – were better suited to it than others. The argument went that we can live free and prosper so long as we stick to doing business with our own kind. When we start bending over backwards to let all the others join in we simply drag everyone down. Exhibit A in the new racial backlash – though as Slobodian says, it was really a ‘frontlash’, since these intellectual entrepreneurs were determined to get ahead of the game – was Richard J. Herrnstein and Charles Murray’s The Bell Curve, published in 1994, which made the case that differences in IQ between racial groups should be factored into policy-making. But Slobodian shows that this was just the tip of a Mont Pelerin-sized iceberg: you didn’t have to look hard in the 1990s and beyond to see neoliberal outriders starting to make the case for the in-group over the rest.

All this should have been antithetical to capitalism as Hayek understood it. Ruling people out on the grounds of race suggested borders, barriers and restrictions, not the openness and indifference to origin on which market dynamism depends. But the new neoliberals weren’t bothered, not least because they had an earlier model of dynamic capitalism on which to draw. Nineteenth-century free traders were usually also imperialists, who knew that one way to get rich was to control the world and keep everyone in their place rather than allowing a free-for-all. Plus they were racists (pretty much everyone in the 19th century was racist). None of that stopped the global economy from expanding rapidly and the people at the top from doing best of all. Ethnopolitics doesn’t just mean an ethnostate with ruthlessly policed borders. It can also mean an ethnoeconomy in which the market works its magic for the people who understand how to make best use of it. The people who don’t understand don’t get to play. They get herded to the margins where they belong.

There were two problems with this argument. First, the racial science on which it rested was utterly bogus. IQ was treated as a rigorous statistical tool rather than a rough and ready benchmark that can do pretty much whatever you want it to. The evidence that on almost every measure there are far greater differences within so-called racial groups than there are between them was ignored. Supposed hard data was often just an assembly of anecdotes. Second, the new neoliberals abandoned the faith in an unknowable, open-ended future which Hayek believed was the essence of capitalist dynamism. Instead, the story now was that everything was going to shit and it was time to pull up the drawbridge. Ethnocapitalism was premised on the assumption that we were pretty near the end of times unless we started to take more immediate control over what happened next – and prepping can end up sounding a lot like planning. This was a deeply pessimistic doctrine, full of dark forebodings about the coming conflagration of the races. Hayek thought it was precisely such primordial fears of the unknown that had to be educated out of us. The ‘paleos’ and their new neoliberal friends thought these fears needed to be stoked by whatever fuel they could get their hands on.

Despite these handicaps, the new version of neoliberalism had two things going for it. There were plenty of people buying what these people were selling: if you’re in the race prejudice business, you aren’t going to have to look too hard for customers. Some of the buyers had money to burn and so the next-gen neoliberals got funding: they were able to set up a new network of think tanks and talking shops, they could spread the word through their newsletters and websites and YouTube channels and podcasts, and they found that someone – Charles Koch, for instance – was usually willing to pay them to keep pumping it out. They also discovered it was possible to make good money on the side peddling apocalypticism. On those websites and YouTube channels a message of impending catastrophe was invariably accompanied by ads for the things that might hedge against it: pills and protein powders to get you ready for a world in which only the fittest will survive, books and videos to explain what was at stake, and, above all else, gold – buy it! trade it! hoard it! (gold has long been the financial refuge of the terrified racist). These were the twin pleasures of being on the alt-right: fuelling impending conflict and skimming a nice commission off the top.

The other boon for this version of neoliberalism is that its alt-right proponents weren’t the only ones raising the stakes. Though Slobodian doesn’t really want to address it, the alt-left was just as willing to take things to the next level. This happened in environmental politics (Just Stop Oil!), in street politics (Antifa!), in gender politics (Trans Women Are Women!). Whatever you think of the merits of these particular positions, there’s no question that the more the temperature went up, the deeper both sides dug in. Where the right found a kind of solace in its re-embrace of biology, the left found solace in abandoning it. And in that particular market, I’m afraid, the new right had the easier product to sell.

Slobodian’s​ story is fascinating, but the problem with his account is that he doesn’t much want to explore how the ideas he describes found their way into the mainstream, or what else had to happen to make that possible. He is content with tracking the ideas back to their sources and pursuing them across the obscure university departments, cranky newsletters and weird work outings where they first got going. He has a colourful cast of characters – like the bouffant-haired Peter Brimelow, who started out as a fairly standard Thatcherite in the UK and ended up in the US as a white supremacist, or Murray Rothbard, who went from paleolibertarianism to promoting David Duke and Holocaust denial – but after a while they are hard to tell apart. It’s difficult to get a sense of which ideas mattered most, which alliances gained real traction, which people knew what they were doing politically and which of them didn’t really care. The neoliberal origins of the populist right are treated as though they existed in a kind of ideological vacuum, the various ideas tumbling down on top of each other as we repeatedly discover that some bad people knew plenty of people who were even worse.

There are early hints of the craziness to come. Trump’s preoccupation in 2024 with dog and cat-eating Haitian immigrants (‘I’ve seen people on television!’) can probably be traced back to the scare stories about Haitian immigrants with Aids that he will have been familiar with in the 1990s. That same decade, Brimelow was already channelling his inner Bertolt Brecht to complain that US immigration policy meant the federal government ‘is literally dissolving the people and electing a new one’, which is more or less how Trump thinks Biden stole the 2020 presidential election (dead people and illegals on the electoral rolls). It’s fun watching the cheerleaders of the new right having to turn themselves inside out to keep up. In the 1990s the Wall Street Journal was noting with approval that the only people calling for literal open borders were hardcore neoliberals who believed that all barriers to freedom of movement were a constraint on the efficient workings of the international labour market. Now that the Trumpian right thinks the defenders of open borders are communists and traitors, the Wall Street Journal has somewhat changed its tune.

But supplying a litany of links from then to now isn’t the same as making sense of it all. This kind of history feels very much of its moment. It is perhaps a little too easy these days to track the connections across an endless array of online sources, following each idea into whichever murky chamber it might lead. We all do it. While reading this book I myself chased Slobodian across a series of podcasts trying to find out what he has to say about Trump, Musk and all that. I reached my limit when I got to an episode of Trashfuture and heard him discussing Michael Young’s original conception of ‘meritocracy’, something he explores at length in the book. He had to pause while his hosts pointed out that Michael Young is (drum roll) the father of Toby Young, free-speech warrior, and everyone took a moment to savour the exquisite, ironic significance of this detail. It all connects! But of course it does: everything connects if you look long and hard enough, which means that mere connection isn’t enough to sustain the argument. Slobodian has an interesting thesis about the way Hayek’s ideas got turned inside out, but it feels overdetermined and undertheorised. Hayek’s Bastards is a short book – 176 pages – yet it has 52 pages of notes and a 38-page bibliography. Something is out of whack here.

There’s also something missing. Slobodian spends a bit of time tracking the alt-right back to Silicon Valley, where warped ideas of racial and intellectual hierarchy have long had a home. Stanford University, as he points out, was established by a eugenicist. But he doesn’t have much to say about the place of ideas of technology in the war over Hayek’s legacy, even though this is probably where the deepest schism on the new right is to be found. Hayek himself thought technological innovation was the key demonstration of the virtues of market economics, and many of his followers would agree. The problem with planned societies, in their view, is that they get stuck recycling what already exists. Free-market societies stumble across a future no one could have foreseen. The Soviet Union ended with exploding TVs, cars that looked like toys and Chernobyl. The United States, meanwhile, created the internet. Hayek’s disciples have sometimes wanted to frame this difference in evolutionary terms. Markets allow ideas to cross-fertilise and mutate, where social engineering invariably leads to inbreeding. Matt Ridley, author of The Rational Optimist: How Prosperity Evolves (2010), which is a manifesto for people who want to retain their faith in Hayek’s open future, said the internet is what happens when the personal computer has sex with the telephone. And that can’t happen outside a market economy.

But there are two ways in which Hayek can be used to argue something different. In his own understanding of human evolution, we have continued to rely on forms of ‘tacit’ knowledge that lie beyond the reach of computers. It was the innate human ability to navigate uncertainty that enabled us to interact with one another in the marketplace. As a result we are able to use the hidden power of the market to build computers, but they shouldn’t be able to use it to build us. Of course, Hayek had no idea what might become possible in the age of AI, when computers are increasingly adept at mimicking all the forms of knowledge – tacit, unspoken, unconscious even – that human beings possess. He was thinking of cack-handed earlier attempts to use computer technology to run the economy, such as the doomed Project Cybersyn in Allende’s Chile, which promised to manage prices and goods in real time and never got further than resembling a set for a bad sci-fi movie. It may be that the latest AI technology will soon be able to ‘do’ freedom as Hayek understood it. Perhaps liberation isn’t only for humans after all. But there are grounds for Hayekians to be nervous of Silicon Valley’s ambitions in this area – let alone what is being attempted by its Chinese rivals. The point of the market was to allow us to fulfil our potential. If there are non-human entities who do better under market conditions than we do, might that not be a good reason to shut the market down?

The other tension in Hayek’s legacy is more directly visible on the new right itself. Did the market actually build the internet? After all, its true origins can be traced back to the Cold War, when massive US government spending on technology – much of it wasteful, some of it downright paranoid – hardly conformed to Hayek’s template for innovation (this tale began with Hayek wanting states to stop behaving in peacetime as though the wartime economy were a permanent state of affairs). More significant, state spending continues to play a big part in many Silicon Valley success stories. Look at SpaceX, Alphabet, Amazon Web Services (the cloud computing wing that drives the company’s profitability): they all do much of their business off the back of government contracts, and also benefit from extensive subsidies. Have the new tech giants ever truly weaned themselves off government support or are they really just bloated receptacles for taxpayers’ handouts?

One person who is very alive to this question is Steve Bannon, once and for ever a MAGA stormtrooper (he now has the jail time to prove it) and in many ways an unlikely disciple of Hayek. But in 2018, speaking alongside Marine Le Pen at a party congress of the Front National (as it was called back then), Bannon invoked Hayek to rail against the forces that were stifling freedom everywhere:

The central governments, the central banks, the central crony capitalist technology companies control you and have taken you on a ‘road to serfdom’ in three ways. The central banks are in the business of debasing your currency, the central government is in the business of debasing your citizenship and the crony capitalist technological powers are in the business of debasing your personhood. Hayek told us: the road to serfdom will come through these three.

Hayek didn’t tell us that, as Slobodian points out in citing this speech (though it’s interesting to speculate what he would have made of the argument). Slobodian thinks it’s notable merely that even a Neanderthal like Bannon should have been bandying about Hayek’s name, but he doesn’t discuss the implications. This line of thinking is why Bannon so detests Musk, whom he has recently described as a ‘parasitic illegal immigrant’. One wing of the alt-right thinks that Silicon Valley is a template for the future: renegades such as Curtis Yarvin (aka the blogger Mencius Moldbug) love the way that tech titans run their companies as though they were medieval fiefdoms and would like to turn the whole of the federal government into a giant technology corporation. But another wing of Trumpworld believes these companies are evil freeloaders, run by secret globalists to boot (Silicon Valley is not at all keen that curbs on immigration include technology engineers from Asia or anywhere else). What does Trump think? God knows. But these people are all Hayek’s bastards in their different ways and it’s not hard to imagine them eventually ripping each other’s throats out.