Book
review: “The Great Persuasion: Reinventing Free Markets since the
Depression”
Book details:
Name: The Great Persuasion:
Reinventing Free Markets since the
Depression
Author: Angus Burgin
Format: Hardcover, 320 pages
Publisher: Harvard University Press
Release date: October 30, 2012
ISBN: 978-0674058132
About the author:
Angus Burgin is an assistant professor at the Johns Hopkins
University’s History department, in which he
focuses on twentieth-century United States, political history,
intellectual history and history of capitalism. The Great Persuasion
is Burgin’s first book and doctoral dissertation at Harvard. The
book (during draft stages) was awarded with the 2010 Joseph Dorfman
Prize by the History of Economics Society.
Summary:
The Great Persuasion:
Reinventing Free Markets since the Depression is an a engaging and
rich historical analysis of the birth, emergence and strengthening of
the Mont Pelerin Society (MPS); it also discusses how this single
institution pioneered the philosophical and intellectual foundations
for the unification and expansion of a solid and substantial new age
in the American free-market and conservative thought. This
international organization founded by Friedrich Hayek in 1947 brought
together economists, philosophers, journalists and philanthropists
who considered rehabilitating the social-public support for the
free-market philosophy of the nineteenth century, which was severely
damaged during the twentieth.
The book encompasses more than 40 years of the
twentieth century’s evolution of free-market ideas as well as the
institutions and foundations that monetarily supported these ideas
over decades. Additionally it explains the key actors and
intellectuals who produced not only those ideas but also created the
philosophical framework for a social-political system based on the
free-market, which resulted in shaping American politics 30 years
later. The book also brilliantly exposes how intellectual
institutions and an international network of intellectuals can create
an extensive system of communications over the decades that helps
foster the message as well as discussion, assisting to create a
comprehensively aligned rhetoric advocating for the free-market. This
shared rhetoric eventually permeates into the rest of society and
creates a new philosophical paradigm which the population is willing
to accept; therefore it makes political changes towards the
free-market more plausible.
The Great Persuasion also concerns itself with
the power of abstract ideas and philosophy of seeing
the world. It seeks to highlight the role that academic discussion
and communication of economic theory, methodology and political
philosophy can manifest on popular debates or even among these fields
of research. The way in which these ideas influence and affect other
fields, academics and politics requires fundamental insights into the
dynamics in which institutions, foundations, research students and
scientific communities are involved. It conveys the way in which the
ideas are communicated and projected into popular debates until they
finally permeate social conventions. This book is a great attempt to
address these dynamics as well as the roundabout paths that thought
must pass in order to transform from “radical” into “widely
accepted” paradigms.
Mr. Burgin’s main focus is this historical
evolution and the dynamics that helped shape the Mont Pelerin Society
(MPS). In order to make this evolution richer in details, Mr. Burgin
luminously guides us through the history of ideas with brief
historical biographies of the main intellectuals that shaped MPS. In
this regard the book can be understood as a two-phase, two-player
dynamic. The first phase concerns the 30’s through the 50’s in
which Mr. Burgin leads us from MPS’s birth and foundation, directed
by the surprisingly intellectual and entrepreneurial-driven F.A.
Hayek. During the 30’s Hayek understood the relevance of academic
networking and the role of international intellectual institutions in
shaping the progressive tendency of thinking in western countries.
MPS was founded on very ambitious goals that were never met; the
organization was initiated on divergent heterogeneous visions of the
free-market economy and on its cultural moral implications- which
according to some members were necessary to address. Consequently
after WWII, during the 50’s, MPS consolidated and narrowed its
scope and also drastically increased its membership, particularly in
the U.S. This demonstrated how MPS was willing to adapt to recent
changes- including social ones- which demanded a focal shift.
The second phase is one marked by a
reformulation of MPS’s goals and vision of the free-market economy.
This alternate way of thinking was particularly due to a severe
generation change within MPS: skeptical members like Roepke and
Knight were retired, Hayek was no longer the society’s president
and later Milton Friedman took presidential control, bringing MPS to
a whole different level of reach, influence and free-market
intellectual ideas. MPS was founded under Hayek’s
ambition and other member’s concerns to revisit and propose a
modernized version of the nineteenth century laissez-faire on new
ethical foundations. This would distinguish the free-market
philosophy from people’s detestable vision regarding rapacious
laissez-faire individualism. The idea was to reformulate the moral
argument and the free-market discourse into one more “progressive”
oriented (not in its policy but in its rhetoric). By the late 50’s
it was clear that neither Hayek’s original goal nor the revisionist
attempts had been achieved (in part due to uncompromising members
like Mises that opposed any moral revision or messaging concerning
the free-market foundations). Therefore MPS’s actions and ideas
narrowed, growing more market-based oriented and “radical” toward
free-market solutions.
Subsequently, the book follows the society to
its turn towards the Chicago-economic sort of mindset and
specifically more geographically U.S.-driven; some members’
skepticism towards the influence of the market in local cultures and
the possible degradation of virtues in the individuals and the risks
we face as a society was drastically discarded. Therefore the society
moved into a program of simply focusing on praising the benefits of
the market: meeting human necessities, continuous innovation,
improvement of our well-being, and shaping and channeling human
virtues- specifically the ones concerning our commercial, impersonal
interactions. The MPS also radically moved along with Friedman
towards an empirical economic academic focus, a drastic change from
its heterogeneity in the social sciences while Hayek was president.
At the height of Milton Friedman’s intellectual fame, the MPS was
already the main nodule of an extensive free-market network that
fostered communication and ideas all over the globe. Suddenly the
success of MPS was becoming tangibly evident through the policies
implemented both by the U.S. and Britain during the 80’s. The
philosophical and intellectual foundations necessary to influence the
public’s core beliefs were built through the expansion of
relationships that MPS founded more than 30 years ago; thus it became
a pioneer in the field of entrepreneurship of ideas and academic
business relationships. Friedman
elevated the MPS to a different social model of influencing politics.
He identified neither with conservatives nor with the bourgeois but
rather with the entrepreneur and the common man who just opened his
business. In contrast to Hayek’s top-down approach, he moved
throughout the spectrum of players: he went beyond academic circles,
writing for Newsweek and interviewing with Playboy magazine. Hence he
broadened the reach and discussion of his philosophy.
The final section of the book recounts
Friedman’s intellectual rise and his increasingly active role in
politics- advising Barry Goldwater in 1964 and then, more famously,
Ronald Reagan. He was the “leader” of the free-market movement in
the 70’s and 80’s. During this time Friedman and his Chicago
colleagues made the most profound intellectual attacks on the
dominant Keynesian orthodoxy; Mr. Burgin’s description of
Friedman’s maneuverings in those years is careful, precise and
fascinating.
In conclusion
the book is an exceptionally well-written, semi-academic endeavor
that tells the evolution of an intellectual institution and the
repercussions it had in the practical public policy world. It
encompasses various subjects ranging from economic methodology in
American politics, but yet it is simultaneously quite succinct (226
pages of text), while still profoundly covering much of what it aims
to achieve. Burgin offers a book
that dives deeply and skillfully into the world of think-tanks and
intellectual organizations that are entangled in the battle of ideas.
He sketches complex interrelationships between ideas, politics,
business, foundations and academic centers. He provides meaningful
insights into how ideas cross-fertilize among fields of research and
how ideas evolve as generations pass and social conditions are
altered. While telling the evolution and maturation of these ideas
alongside MPS society, Burgin proposes
intellectual biographies of MPS’s key members- ranging from the
critical role of the society’s early administrator Albert Hunold to
personalities such as Karl Popper, Michael Polanyi and George
Stigler.
Final remarks:
The book
teaches us about the shared belief by Keynes and Hayek that ideas
matter- often quite a lot and that timing and social context are
crucial for their success. Ideas need successful political long-term
project management since they remain a long time in underground lives
only to burst out later into common views under the right conditions
and the proper leverage of the ‘already-built’ international
network sharing that vision. Mr. Burgin concludes with an open
ending: which vision of the world will endure? Which ideas will shape
the economic and political decision of our post-financial crisis era?
Will a new Hayek or Keynes challenge the popular wisdom and current
consensus? Will this start a whole new process of paradigm-building?
The answers will depend on how successfully these future
organizations and institutions can leverage networks of intellectual
communities, how well they will engage in the discussion with the
public and civic media, and finally how successfully their academics
and “second-hand” dealers of ideas will be at articulating their
next persuasion.
“I am sure that the power of
vested interests is vastly exaggerated compared with the gradual
encroachment of ideas. Not, indeed, immediately, but after a certain
interval; for in the field of economic and political philosophy there
are not many who are influenced by new theories after they are
twenty-five or thirty years of age, so that ideas which civil
servants and politicians and even agitators apply to current events
are not likely to be the newest. But, soon or latter, it is ideas,
not vested interests, which are dangerous for good or evil”.
John Maynard Keynes
