Book review: “The Great Persuasion: Reinventing Free Markets since the Depression”

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