H-Diplo Roundtable XXII-28 on Offner. Sorting out the Mixed Economy: The Rise and Fall of the Welfare and Developmental States in the America

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H-Diplo Roundtable XXII-28

Amy C. Offner.  Sorting out the Mixed Economy:  The Rise and Fall of Welfare and Developmental States in the AmericasPrinceton: Princeton University Press, 2019.  ISBN:  9780691190938 (hardcover, $39.99.

22 February 2021 | https://hdiplo.org/to/RT22-28
Editor:  Diane Labrosse | Commissioning Editor: Sarah Snyder | Production Editor: George Fujii

Contents

Introduction by Max Paul Friedman, American University. 2

Review by Claudia Kedar, The Hebrew University of Jerusalem.. 5

Review by Sara Lorenzini, University of Trento. 8

Review by April Merleaux, Williams College. 10

Review by Niklas Olsen, University of Copenhagen. 12

Response by Amy C. Offner, University of Pennsylvania. 15

 

 

What if neoliberalism, a paradigm faulted for so many of the ills of the Global South and of workers in the rich West since the 1970s, was not a backlash perpetuated by the ideologues of the New Right, but a name tacked onto the late stage of developmentalism we associate with New Deal Democrats?  And what if that association is itself called into question by the kind of sweeping transnational archival work that uncovers the simultaneity of welfarist capitalism in Latin America, and, indeed, illustrates the mutual north-south-north transference of ideas rather than the imposition of a U.S. agenda on passive Latin American recipients?  Then we would have one of the most exciting and talked-about books to hit SHAFR members’ shelves in recent years: Amy Offner’s Sorting out the Mixed Economy.

Offner writes that this is not “a book about neoliberalism, at least until the very end” (16), and even then, it is not another critique from the left of the right-wing triumphalist story of how the economists Milton Friedman and Hernando de Soto and the leaders of the United Kingdom and the United States, Margaret Thatcher and Ronald Reagan, smashed the state and unleashed a new global order of market idolization, the Washington Consensus.  Her book lays bare how the ideas and policies we call neoliberal were fully integrated into state developmentalist projects at midcentury, existing alongside other welfarist efforts in an all-of-the-above strategy.  Rather than a tale of “the rise and fall of the New Deal Order,”[1] we are invited here to examine the entangled threads of the interweaving of state and market approaches.  Sorting out the Mixed Economy moves the emergence of neoliberalism back from the 1970s ideological triumph of policy and business elites to an earlier, more diverse loose coalition of economists and development-oriented leaders across the Americas.  They did not, as Offner points out, call it neoliberalism.  Whether working on the New Deal in the United States or Colombia’s Revolución en Marcha, they spoke of the mixed economy, a third way between pure capitalism and socialism.

Histories of neoliberalism have traced the term back further, including reviewer Niklas Olsen’s recent The Sovereign Consumer.[2] Charles Gide in 1898 wrote of the “neo-liberal school” of Italian proto-fascist economists who promoted a “hedonistic world…in which free competition will reign absolutely” and individuals will fight for their own interests.[3] Refreshingly, Offner is less interested in arguing about the etymology of the term than in showing that the concepts held responsible for everything from the 1973 coup against President Salvador Allende in Chile to the impoverishment and sickening of working-class populations everywhere were not the exclusive purview of right-wing ideologues. Instead, already in the 1930s and beyond, faith in market solutions to social problems took a seat at the same table as efforts to apply to those problems the organized power of the state.  Capitalists found profitable new opportunities in contracting for government programs, and government officials tried to apply market solutions to housing, education, land reform, and economic growth.

April Merleaux finds the account “epic in scope” and persuasive, as Offner “upends neat histories of the nature of the state, the origins of conservatism, and the histories of capitalism and privatization” to produce “an example of what historians do best,” a book that is rich in fine-grained and nuanced depictions of people and institutions.  Where Merleaux reads the book as conveying Colombia’s influence on the United States, Sara Lorenzini, who also praises the book as a “fascinating account” based on “outstanding” research, takes away a different impression of how the United States imposed “quasi-imperial control” on Colombia, and points out that the insignificance of Raul Prebisch and other Latin American dependency theorists in Offner’s account suggests an important recasting of the narrative of histories of Latin American political economy in this period. Claudia Kedar calls the first section of the book on Colombia’s political economy a “major contribution” and the overall work “innovative, important, and extremely well-researched…an essential point of reference for any further discussion on the history of capitalism in the Americas.”

Offner’s response provides a taste of the power of her prose as well as a neat synthesis of the major arguments in the book.  She explains why this is not an account of U.S. imperial control over a weaker country, since “Colombian capitalists could in fact exercise decisive control over the conduct of U.S. aid programs, and Colombian businessmen and economists played essential roles in building North Atlantic institutions that they believed would strengthen their hand in domestic conflicts.  The United States, for its part, appears to me not as a monolith projecting power southward, but rather as a site of class and imperial conflict in itself.”

Niklas Olsen appreciates the surprise effect of the ironies that spill from the pages of Offner’s book, calling it a “fascinating read” and “a great achievement.” Like Lorenzini, he wonders whether considering other ideational currents from Asia, Africa, and elsewhere might present a different picture from the bilateral relationship depicted here.  He also finds Offner has more in common with her historiographical predecessors than she, and some of the book’s reviewers, acknowledge.  That is to say, there is less that is new about broadening the origins and context of the emergence of neoliberalism if one credits more of the literature about it. In citing some recent examples (published after Offner submitted her manuscript), Olsen offers some ideas for what to read next if, like all four of the reviewers and the author of this introductory comment, they find Sorting out the Mixed Economy so rewarding.

Participants:

Amy C. Offner is associate professor of history at the University of Pennsylvania.  Her current book project, The Disappearing Worker, is a transnational history of the unraveling of the employment relationship since 1945.

Max Paul Friedman is Professor of History and International Relations at American University in Washington, D.C.  He is the author of Rethinking Anti-Americanism: The History of an Exceptional Concept in American Foreign Relations (New York: Cambridge University Press, 2012), and Nazis and Good Neighbors: The United States Campaign against the Germans of Latin America in World War II (New York: Cambridge University Press, 2003), winner of the Herbert Hoover Prize in U.S. History and the A.B. Thomas Prize in Latin American Studies.  He is co-editor, with Padraic Kenney, of Partisan Histories: The Past in Contemporary Global Politics (Palgrave Macmillan, 2005), and with David Engerman and Melani McAlister of the Cambridge History of America and the World: Volume 4, since 1945 (Cambridge University Press, forthcoming 2021).  He has published some 35 articles and book chapters on diplomatic, political, social, and cultural history, and held fellowships from the Guggenheim Foundation, Fulbright Commission, Woodrow Wilson Foundation, and Alexander von Humboldt Foundation, among others.  For his sins, he is currently Interim Dean of AU’s College of Arts and Sciences.

Claudia Kedar is a Senior Lecturer in the Department of Spanish and Latin American Studies at the Hebrew University of Jerusalem.  Her research interests include the IMF, the World Bank and their relations with Latin America and the US; the Cold War in Latin America; the “Washington Consensus,” and contemporary Argentina and Chile.  Her book, The International Monetary Fund and Latin America.  The Argentine Puzzle in Context (Temple University Press, 2013) received an honorable mention from the 2014 Luciano Tomassini Latin American International Relations Book Award (LASA). Her articles have appeared in the Hispanic American Historical Review, the Journal of Latin American Studies, the International History Review, the Journal of Contemporary History and Cold War History.  Her current research project, “Latin America and the Washington Consensuses in Historical Perspective, 1944-2000” is supported by the Israeli Science Foundation (Grant 631/19).

Sara Lorenzini is a Professor of Modern History at the School of International Studies and at the Department of Humanities of the University of Trento, Italy, where she also holds a Jean Monnet Chair (2018-2021).  She has written extensively on the history of the Cold War.  Her latest book is Global Development.  A Cold War History (Princeton University Press, 2019).

April Merleaux teaches environmental studies at Williams College.  She is the author of Sugar and Civilization: American Empire and the Cultural Politics of Sweetness (UNC, 2015), which won the Myrna F. Bernath Book Award from the Society for Historians of American Foreign Relations.  Her current research examines the political economy of illicit drug production and drug control policies, with emphasis on the environmental and agrarian aspects of those histories.

Niklas Olsen is Associate Professor at the SAXO-Institute, and Chair of Centre of Modern European Studies, at the University of Copenhagen, Denmark.  He specializes in twentieth century intellectual history with a particular focus on political ideology, economic thought and academic culture.  Among his publications are The Sovereign Consumer: A New Intellectual History of Neoliberalism (Cham: Palgrave Macmillan, 2018) and History in the Plural: An Introduction to the Work of Reinhart Koselleck (New York: Berghahn Books, 2012).

 

 

 

The significant but under-used or even unfairly neglected concept of ‘mixed economy’ refers to a wide variety of economies that combine, in changing proportions and at different times, ideas, policies, practices and institutions of socialism and what is known today as ‘neoliberalism.’ This concept implies that national economies are not mere dogmatic reflections of one single economic theory, but rather are the result of the mix of different if not altogether contradictory ideas and policies.  Amy Offner’s Sorting Out the Mixed Economy constitutes a needed, original, and important contribution to our understanding of these hybrid-economies and of the not necessarily real dichotomy between the public and the private, between state and capital.

Offner’s book though, offers much more than that.  Based on an impressive array of primary sources from multiple archives in Colombia and the United States as well as numerous interviews, it provides a meticulous reconstruction and in-depth analysis of the rise and fall of the welfare and developmental states in the Americas (while what might be missing is a more explicit discussion of the nature of welfare and developmental states).  The book advances the notion that many of the strategies which are widely perceived as distinctive features of the neoliberalism of the 1980s onwards had actually emerged in the mixed-economies of the 1940s-1960s. In other words, Offner rightly maintains that more than a turning point, the so-called ‘Washington Consensus’ of the 1980s was part of a long-term process of liberalization, de-centralization, and shrinking of the state.  This process was accompanied by a new economic terminology which created the somewhat inaccurate impression that we were witnessing the beginning of a new era.  As Offner claims, self-help and mutual-help housing projects which were undertaken in Colombia and the U.S. between the 1950s and 1960s were, to a large extent, privatizing projects that elevated the idea of private ownership to an almost religious level.

The book builds on the premise that “the fate of the US welfare state and Latin American developmental states cannot be understood in isolation from one another” (2).  This premise determined the analytical approach and the structure of the book.  Thus, by tracing the two-directional movement of people and ideas between the U.S. and Colombia during most of the twentieth century, Offner reveals many of the still understudied mechanisms that paved the way to the implementation of housing programs, pro-business land reforms, austerity measures, and more, both in North and Latin America.  Moreover, she also identifies the businessmen, government officials, international and regional institutions, economists, universities, and academics who, whether consciously or not, facilitated the transplant and adaptation of neoliberal economic policies and practices from and to the U.S. and Latin America.

The book is divided into three very different parts.  The first, which is composed of three chapters, provides a well-grounded, revealing, and masterfully written examination of Colombia’s political-economy from the 1950s onwards. This, in itself, represents a major contribution of the book as Colombia’s contemporary history has not received yet sufficient scholarly attention. The book opens with the arrival to Colombia of the development advisor David Lilienthal, an old New Dealer and previous director of the Tennessee Valley Authority (TVA).  It centers on the establishment, in 1954, of the Corporación Autónoma Regional del Cauca (CVC).  Under Lilienthal’s initiative and direction, the CVC emerged as a regional development authority with the mandate to design and implement projects aimed at mechanizing agricultural production and promoting intensive use of the natural resources in the Cauca Valley – Colombia’s most fertile region.  According to Offner, the CVC reflected the tensions of the mixed economy.  On the one hand, it expanded public responsibilities in the Cauca Valley, as the state assumed, like never before, responsibility for the development of the area (34-36). On the other hand, it adopted the model of private enterprise, decentralizing public functions and vesting far-reaching public powers (such as signing international loan contracts, adjudicating the use of water and lands, and collecting taxes) in the executive board of a private business association.  Offner stresses that the mixed character of the CVC reflected Lilienthal’s imported ideas but also the ideas of many local members of the CVC board.  With the CVC well-established, Lilienthal founded his own consulting firm, the Development and Resources Corporation – D&R, which was administrated by former TVA managers.  The D&R obviously helped in creating contacts between Colombia, the Export-Import Bank and the World Bank.  The creation and entrenchment of these transnational networks alongside the ideological affinity between Lilienthal and the Colombian members of the CVC board (or between foreign and local elites), inevitably brings to mind basic premises of Dependency Theory – a theory that took form in Latin America in the 1960s to criticize, among others, the very same actors and dynamics described in the book.[4] It is thus somewhat surprising that Offner mentions Dependency Theory only in passing in one or two occasions.

Chapter 2 shows that the CVC performed the iconic functions of the developmental state.  Among others, the CVC administered Colombia’s 1961 land reform law in one of Latin America’s richest agricultural regions.  Under the shadow of the Cuban Revolution, the reform was an attempt to show that capitalist development could deliver economic redistribution and social justice.  However, as Offner convincingly shows, rather than serving as a redistribution instrument, the land reform, (which was supported by the Alliance for Progress, a ten-year, $20 billion foreign aid program for Latin America launched by President Kennedy in 1961, turned into a strategy to increase productivity at the expense of small farmers and agricultural workers.  Thus, by “popularizing economic thought” (51), the large landowners of the Cauca Valley used the land reform law to justify the concentration of wealth in the hands of a few.  Productivity, so they argued, serves the interest of society at large.  Chapter 3 focuses on ‘Ciudad Kennedy,’ the largest project built in Latin America under the Alliance for Progress.  Located on the outskirts of Bogotá, it was a complex of private homes and apartments designed to house 84,000 people.  This project was a clear example of developmentalism and mixed economy – it assigned governments the tasks of titling land, extending mortgage loans, supplying materials and supervising construction, while recipients built the housing and became property owners (79).  Since Colombia was unable to build publicly owned and/or heavily subsidized housing, the city became a neighborhood not for the poor but for an emerging middle-class of government employees and skilled workers (100-101).  Rather than solving social problems, Ciudad Kennedy generated even more inequalities, social tensions, and political conflicts.

The second part of the book is divided into two chapters that ask to what extent economic thought and economic reasoning were reflected in, and were influenced by, the evolution of Departments of Economy in three Colombian universities – Universidad de Los Andes (private), Universidad Nacional (public), and Universidad del Valle (public), the last one of which was located in Cali, within the CVC area.  Chapters 4 and 5 thus, provide a detailed history of these universities and of key actors from the U.S. and Colombia who were involved in their management and financing as well as in the shaping of their respective curricula.  Among others can be mentioned influential organizations like the Rockefeller Foundation and renowned figures like the economist Alberto Hirschmann (who had worked previously with the CVC).  These chapters examine the heated debates that took place in Colombia regarding the difference between Economics and Business Administration, between agricultural and industrial economics, and about the best way to train the future managers of Colombia’s economy.  Most importantly, Offner examines here the links between the academia and the private sector and the impact of those links on the gradual neoliberalization of Colombia.

In the third part, which comprises Chapters 6 to 8 and an epilogue, the old New Dealers who travelled with their ideas to Colombia in the 1940s and 1950s ultimately made their way back to the U.S. in the 1960s, to be joined by new generations of transnational figures like Eduardo Wiesner, to whom Offner dedicates a chapter.  Wiesner, a Colombian economist, belongs to a large and influential group of Latin American economists who obtained their doctoral degrees in Ivy League U.S. universities (in many cases supported by U.S. funds, like Fulbright fellowships), and then returned to their home countries to fill key governmental positions and/or enter the private sector, while spending several years working for or at the International Monetary Fund (IMF), the World Bank and/or the Inter-American Development Bank.  Argentine economists like Claudio Loser and Alejandro Werner, who is the current Director of the IMF’s Western Hemisphere Department, are just two among many other cases in point.  In any event, this part opens with the return of Lilienthal to the U.S., when, famous for his alleged successful involvement in Colombia, he was invited to cabinet meetings, corporate boardrooms, and universities.  In 1961, President John F. Kennedy even invited him to serve as assistant secretary of state for Latin America, an invitation that he rejected.  Back home, Lilienthal tried to sell his ideas and his Colombian experience to U.S. governmental entities and businessmen.  In order to do so, he created a narrative which described the consolidation of the agribusiness in Cali as a consensual project that was free of any detrimental social consequences.  He talked about managers as moral heroes, talented leaders, and patriots, and about businessmen as public servants doing the work of government.  Offner explains that the US government “was leading promoter of self-help housing abroad but a warry opponent at home” (216).  Interestingly, the main supporters of self-help housing projects in the U.S. “were dissidents and outsiders:  Quakers, African Americans, and Native Americans” (216-217).  Offner thus offers a comprehensive analysis of how a housing policy that until then had been an imperial and foreign practice turned into a national anti-poverty policy in the United States.

As already mentioned, one of the main arguments of the book is that the rise and fall of the U.S. welfare state and Latin American developmental states cannot be understood in isolation from one another.  With this premise in mind, the book traces how key figures circuitously traveled between Colombia and the U.S., claiming that they sought to strengthen the developmental and welfare state but actually doing the opposite. The fact that each part of the book shows a very different aspect of this process is among its major strengths and innovations.  However, the geographic and historical differences between the three parts of the book are so significant and the number of actors and events described are so vast that one has the impression that the book could be divided into three well-differentiated books: one focusing on Colombia’s economy; another dealing with intellectual history and the history of ideas; and another one focusing on US history.

That said, Sorting Out the Mixed Economy is an innovative, important, and extremely well-researched book.  Those who are interested in the origins of the current neoliberal order as well as on the impact of businessmen on policy-making and on the creation of economic paradigms should read it. Offner’s book will surely serve as an essential point of reference for any further discussion on the history of capitalism in the Americas.

 

 

Sorting Out the Mixed Economy is a fascinating account of Colombia’s development.  It claims that developmentalism did not per se imply an increase in state power—quite the contrary.  The state in Latin America, argues Amy Offner, “enlarged its capacity by underwriting the growth of private enterprise” (179).  In Colombia, landmark projects for regional development, land reform, or housing turned out to be excellent examples of for-profit business activities, with the state kept hostage to private interests.  Private capital was able to use state resources for its purposes, expanding agribusiness through rapacious expropriation, or encouraging pirate urbanization.  The history of David Lilienthal’s Development and Resources Corporation that is told in this book makes a perfect case of aggressive contracting practices in international development.

The book also admirably shows how the history of Colombia is strictly entangled with the history of the United States.  It makes a strong case for U.S. hegemony through development.  Although the U.S. was not able to impose its will and strategies everywhere, Colombia reveals a shocking scene of quasi-imperial control.  It comes as no surprise that Arturo Escobar, Colombia’s anthropologist who has become a point of reference for everyone studying development, engaged so dramatically with American pervasiveness through international organizations.[5]  Expanding the American empire of knowledge in Colombia was an intrusive operation.  Through the programs of the Rockefeller Foundation, the U.S. molded Colombia’s academia.  Having transformed “management from a pedestrian vocation into a prestigious profession” (149), it implanted economics and business administration into Colombia’s higher education system and displaced the illustrious and internationally renowned Latin American legal tradition that until then had been central.  Unfortunately, the result was a system that was tediously intertwined with US circles and ruled by a fundamentally conservative epistemic community.

Offner’s work produces an original narrative of developmentalism in Latin America where the Economic Commission for Latin America (CEPAL) and dependency theory play a risible part.  Raul Prebisch and his fellow economists and social scientists at CEPAL are far from center stage in this book.  Instead, rapacious conservatism prevails here: a tradition much more deeply rooted in Colombia that wipes off the scene both dependency theory and radical criticism of capitalist development.  I believe that this is a remarkable element that illuminates the dynamics of left versus right in Latin American political economy.

Offner’s book is the outstanding result of extensive and detailed research.  It is based on a vast bibliography, and on copiuous original sources in public and private archives both in Colombia and the United States.  The abundance of details, programs, people, and institutions involved makes it at times not the lightest read.  However, in the jungle of acronyms of the many bodies that played relevant parts in this very meticulous and complex history of Colombia’s economy, the reader can find interesting characters, especially those animating the compelling story of the Cauca Valley Corporation.  The main actors are mostly ambiguous, both on the side of government, such as Colombia’s President   Gustavo Rojas Pinilla, or of the Corporation, such as Corporacion Autonoma Regional del Cauca (CVC) executive director Bernardo Garcés Córdoba or economist and education manager Reinaldo Scarpetta.  None of them can be called a hero.  Offner irreverently and amusingly describes some crucial figures in the history of development, painting them as fundamentally frustrated individuals.  For example, “Mr. TVA” David Lilienthal, elsewhere the mighty champion of US initiative,[6] is here “the old New Dealer turned for-profit development consultant” (175).  He stands out for his greedy personality, renouncing government for a more lucrative business, manipulating realities, and inventing success stories.  Foreign advisors such as Lilienthal, Offner authoritatively states, “never had the power to unilaterally remake societies, but they did have the power to tell stories as they wished back home” (177).  Another example is the U.S. and World Bank economic advisor Lauchlin Currie, elsewhere described as an idealist missionary,[7] who appears here to settle down in Colombia after failing in his other, more daunting, international career prospects.

One of the elements that I found to be quite startling in Sorting Out the Mixed Economy is the predominantly bilateral dimension of its narrative, which is bidirectional (U.S.-Colombia and vice versa) rather than global.  The circulation of ideas described here does not appear to have had a marked worldwide scope.  The Third World, which is elsewhere mostly populated by actors from Asia, Africa, and the Middle East, is here de facto identified with Latin America.  And in Colombia, the Global North is just the United States - government, private companies or foundations, with their experts.  I wonder whether diverse views on development were able to enter Colombia, via international experts such as development economist Albert Hirschmann.

The chapter I enjoyed most in this extremely dense, instructive, and useful book is the last one, on “Decentralization Reborn.” Offner very effectively portrays the dynamics of repatriating the lessons of the Third World (again, mainly Latin America), through the central figure of Eduardo Wiesner, the leading expert of the International Monetary Fund (IMF) and the World Bank, who redeployed the practices of decentralization after the perceived failure of the state as a development agency.  Here, the reflection of what happened outside the U.S.-Colombia connection is much more significant.  The Latin American model of regionalism and austerity implemented after the 1980s resounds with the global dynamics of the decentralization (and demolition) of the welfare state that are still with us today.

 

 

 

In Sorting Out the Mixed Economy Amy Offner upends neat histories of the nature of the state, the origins of conservatism, and the histories of capitalism and privatization.  Her core premise is that “the fate of the US welfare state and Latin American developmental states cannot be understood in isolation from one another” (2).  Offner finds much in common between these midcentury state forms, including a broad focus on macroeconomic policy and attention—albeit austere—to social welfare.  Most importantly, practices of decentralization and privatization that we associate with neoliberalism turn out to have also been significant for earlier statecraft.  Offner follows a fascinating cast of businessmen, economists, government leaders, philanthropists, and reformers who moved, mostly out of the spotlight, between public and private sectors and across the Americas.  This is an exemplary transnational history, one which is epic in scope and methodologically sophisticated.

I read Sorting Out the Mixed Economy as a persuasive pre-history of neoliberalism, and a thorough account of New Deal liberalism’s fate.  Offner insists that there is no neat linear progression from liberalism to neoliberalism (16).  “This history” she argues, “forces us to rethink accounts of the midcentury state’s destruction that center on the mobilization of the right and the southward projection of power by US and multilateral institutions” (15).  Instead she shows that liberal and neoliberal forms of governance have each charted a path between public and private realms. Mid-century capitalism and state-building contained “competing possibilities” (16) as leaders navigated what Offner calls the mixed economy—“that vast imagined space between socialism and laissez-faire” (279). Welfare and developmental states were mixed economies that “relied on the imagined dichotomy between public and private while systematically conjoining the two” (17).  Offner offers an important corrective to narrowly remembered liberalism since “we forget the novel opportunities that capitalists found inside the state, the austere systems of social welfare provision that flourished at midcentury, and the many uses of privatization, deregulation, and decentralization to fulfill public promises” (285).  On the other hand, Offner recasts the origins of neoliberalism, arguing that the “lessons of midcentury statecraft” found new life in the structural adjustment programs and Reagan-era retrenchments of the International Monetary Fund (IMF) and the World Bank.  Neoliberalism, she concludes, is an “unruly, unsettled aggregation of practices susceptible to sorting and redeployment, much like the mixed economy from which it grew” (289).

The book focuses primarily on Colombia and United States, tracking people and ideas as they zigzagged back and forth.  “For decades,” Offner argues, “Colombian housing complexes, river valleys, planning agencies, and universities became international laboratories for new thinking about political economy” (7).  The book begins with the Cauca Valley Corporation (CVC), founded in 1954 to promote development in southwestern Colombia.  Emblematic of the ‘mixed economy,’ the CVC was an autonomous corporation with a distinctive approach to regional development.  Loosely modeled on the Tennessee Valley Authority, whose former head, David Lilienthal, advised the CVC, Offner shows that the hybrid public-private regional agency brought U.S. advisors like Lilienthal into collaboration with a cosmopolitan group of Colombian businessmen.  Other regional development corporations modelled themselves on the CVC, applying management and technical expertise to public services.  The central government devolved authority to these regional bodies in ways that insulated them from mass mobilization and enabled them “to pursue deeply unpopular policies” (253).

Offner follows the mixed economy back to the United States to tell a remarkable series of stories about businessmen who drew on experiences in Colombia as they “burrowed” (184) into the welfare state as for-profit service providers during the War on Poverty.  She recasts midcentury anti-poverty programs as “a platform from which corporate executives fought for authority in public life” (176).  Business was “to apply existing strategies of capital accumulation to the widening array of problems that social movements had forced onto the national agenda” (182).  The federal government offered new contracts, appealing to those private contractors who had done development work outside of the United States.  Such contracts remade “the welfare state in the image of foreign and imperial policy” (13).  For-profit corporations ultimately ran most of the War on Poverty’s education and job-training programs, using those programs to undermine organized labor and erode the welfare state’s promise.

Offner is sensitive to the power imbalance between the United States and Colombia without assuming that the relationship was one-sided.  A case in point is her portrayal of Colombian economist Eduardo Wiesner, who is remembered for his role at the IMF and the World Bank, where he was a key architect of neoliberalism.  Wiesner began his career with an undergraduate study of the CVC, and drew lessons from this decentralized experiment as he developed structural adjustment programs in the 1980s and 1990s. Wiesner’s educational and professional trajectory clearly demonstrates how neoliberal reforms emerged from Colombian experiences of development and decentralization. Wiesner is thus emblematic of Offner’s broader claim about the routes of imperial power.  As she puts it, “imperial power is never simply produced in metropoles” (251).  Thinkers such as Wiesner shaped U.S. statecraft as thoroughly as U.S. actors influenced Colombia (273).

I have barely scratched the surface in my brief description of this deeply researched book, which draws on dozens of archives, including government collections in the United States and Colombia, as well as the personal papers of many of the people she describes.  The book has as much for intellectual historians who are interested in schools of economic thought as it does for those who are interested in mid-century political histories of Colombia and the United States.  The book deserves to be read widely by scholars in many subfields.  To name a few: historians of capitalism, conservatism, the War on Poverty, social welfare, international development, modernization, education, employment programs, land reform, housing, business, environmental politics, social activism, Native American politics, technocracy, management, farm labor, and the New Deal.

Ultimately, Sorting Out the Mixed Economy is an example of what historians do best.  Offner banishes narrowly conceived causality and deterministic storylines, instead showing people and institutions in their full complexity.  She tells a story of contingency and open-ended possibility, one which is filled with details and brilliantly argued.  Offner reminds us that the historians’ craft can ultimately be a hopeful one.  If people make political economic regimes, people can remake them, too.

 

 

The ascendancy of the neoliberal approach to political economy since the 1970s is a familiar story.  Neoliberalism, so a wealth of books and articles argue, has caused privatization, deregulation, and decentralization. It has reduced government spending through austerity and decoupled the pursuit of efficiency, growth, and prosperity from the promotion of equality, social rights, and democracy. Indeed, while criticizing the bureaucratic, ineffective, and repressive features of the welfare state, neoliberalism has entrusted government policy to technocratic elites, who manage the economy in ways that favor big business while disregarding the human costs at the bottom of the social scale. In neoliberalism, technocrats and corporate managers are nevertheless depicted as the true guardians of public interest. Moreover, reforms are legitimized with reference to positively framed and market-focused notions of freedom and democracy that emphasize values of individual initiative, consumer choice and societal participation. These values inform, for example, the idea of private homeownership that has driven the commodification of public housing taking place worldwide in recent decades.[8]

One of the many achievements of Amy Offner’s extraordinarily well-researched, well-written, and well-argued book Sorting Out the Mixed Economy is its contribution to our understanding of the emergence of neoliberalism.  According to Offner, many scholars stress that neoliberal politics achieved its breakthrough in the 1970s, arguing that self-declared neoliberal ideologists, policymakers and businessmen were responsible for its success, and that it relied to great extent on their carefully developed and disseminated ideas.[9] In contrast, Offner emphasizes that neoliberal policies were widespread already by the 1970s, that they were developed and pushed forward in broad alliances that included developmentalists, economists, architects, and businessmen of diverse academic and political orientations, and that they emerged through political practice rather than through the application of preconceived ideas.

Offner explains the formation and development of neoliberal policies by showing the links between public policy experiences of the New Deal, Latin American economic development programs, and U.S. domestic antipoverty policies in the postwar era.  Skillfully analyzing a wealth of sources and literature, Sorting Out the Mixed Economy shows how the complex and often contingent interweaving of events, institutions, persons, and ideas caused neoliberal ideology and politics to relentlessly morph and expand within these three contexts.  This account emphasizes continuities rather than breaks, unintended consequences instead of planned outcomes, and ideological-political pragmatism in place of uncompromising agendas. As a consequence, the story told in Sorting Out the Mixed Economy is one full of surprises. Who, for example, would have thought that former New Dealer David Lilienthal invented in 1966 the notion of ‘social entrepreneurship’ to convey the idea that corporate managers are ultimately doing business for a social cause? (14)

Building on impressive archival work, Offner’s analysis relies on a methodology that effectively uses biographies of individuals such as Lilienthal as prisms to exhibit specific historical situations and developments.  This makes the book a fascinating read from cover to cover. Overall, Sorting Out the Mixed Economy is a great achievement.  Presenting a broad account of the emergence of political economies in the Americas since the 1960s, it provides an important contribution to the history of neoliberalism by uncovering roots, chronologies, and dynamics that have not been covered in the literature so far.

Yet I am slightly puzzled by the strong positioning against existing literature on neoliberalism.  Offner says little about how this literature has disclosed, for example, the important role played by self-declared neoliberals in economic reforms in other Latin American countries, such as Chile or Peru, or in dismantling the socially embedded managed capitalism and regulatory framework upholding the postwar American political economy. Instead, she notes that scholars in this field have produced a critical mirror image of neoliberal policy makers’ and businessmen’s triumphalist accounts of their own careers, which, by relying on identical episodes, casts of characters and periodizations, tends to provide a narrow account of the mixed economy (284-285). This seems a little unfair, given the many achievements and diverse character of existing research.[10]

It is certainly true that many scholars have privileged ideas, persons, and institutions associated with the Mont Pelerin Society in writing the history of neoliberalism.[11] But all approaches inevitably give center stage to certain features and sideline others in analyzing their subject matter.  While impressively broad in scope, in explaining what paved the way for our current neoliberal order, the main storyline in Sorting out the Mixed Economy arguably concerns the ways in which corporate influence effected the decentralization and privatization of government activities. This focus leaves out a range of other actors, processes, and contexts that were also central to the rise of neoliberalism. The book is also silent on the question of how neoliberalism emerged in other geographical locations. This is not to say that Offner’s rich analysis should have covered more ground, but rather that no approach is exhaustive. Rather than offering a radically alternative explanation, Sorting Out the Mixed Economy complements existing interpretations and approaches.

Indeed, one might argue that, in homogenizing a quite diverse literature, Offner disregards similarities between this literature and her own analysis.  Think, for example, of Melinda Cooper’s fascinating Family Values.[12] In a breathtaking analysis, starting from the old poor law tradition, Cooper’s book explores the relationship between neoliberalism, social conservatism, and the family in the United States since the 1960s. In so doing, she covers a vast number of themes (including social welfare, healthcare and educational debt), illuminates a wide cast of actors (including former New Deal liberal Daniel Patrick Moynihan, the moderate republican Richard Nixon, neoliberals such as Gary Becker, and representatives of the religious right) and merges intellectual, political, cultural and social history. Sorting Out the Economy and Family Values is characterized by commonalities and overlaps rather than by differences in their respective attempts to explain the emergence of neoliberalism through emphasizing multiple roots, long chronologies, and social practice.

Overall, instead of regarding it as a clear break with existing research, I regard Offner’s book as contributing to strands of scholarship which have in many ways gone beyond the realms of self-declared neoliberal actors and institutions in writing the history of neoliberalism.  One such strand of research concerns the transformation of Western social democratic parties from socialism to neoliberalism as brilliantly analyzed in Stephanie Lee Mudge’s Leftism Reinvented, which focus on developments within social democratic parties and on various societal developments in explaining the rise of third way neoliberalism.[13] Another relevant strand of research has explored the making of the ‘economy’ in ways similar to Offner. Key contributions to this literature emphasize that the ideas of decentralization, marketization, and privatization, which have become hegemonic today, have long historical roots and were formulated by economists from across the political spectrum in a range of shifting contexts and debates. This includes discussions on how the American public service provision could be made more economic efficient and politically democratic that began in the early 1940s and intensified in the 1950s and 1960s.[14]

At the same time, I wonder whether there is more Mont Pelerin Society neoliberalism to be found in the mixed economy than Offner acknowledges.  Most of her few references to the Mont Pelerin Society concern how milieus at the University of Chicago helped to further the training, careers, and objectives of Columbian economists, businessmen, and institutions. But the neoliberalism of the Mont Pelerin Society contains many other features than neoclassical economic doctrines emanating from Chicago. Moreover, many of these features date back to the interwar period. That is, they predate the ideas of the mixed economy that Offner analyzes in her book. Already from the early 1920s onwards, neoliberal theorists contributed to coining and shaping a wealth of arguments and ideas that became mainstream in postwar academia and politics in and beyond the United States. These ideas include the juxtaposition of the effective, democratic, and just nature of the market economy to the inefficient, rigid, and unfair workings of planned economy, and the portrayal of free consumer choice as the foundation of liberal capitalism.[15] Could it be that neoliberals made discourses available to the advocates of the mixed economy rather than the other way around? Is it possible that, in legitimizing reforms, these advocates were in fact relying on ideas with a neoliberal offspring and imprint, even if no direct traces can be found? Surely, answers to these questions are difficult to provide and can only be addressed through deep contextualization of the various discourses at disposal. However, such contextualization might be required to justify the limited use of existing research in Offner’s analysis.

All of the above remarks are minor and do not level any serious criticism of the main arguments in Sorting Out the Mixed Economy. As stated, the book is a great accomplishment. I read Offner’s fascinating analysis with much admiration, and I am very much looking much forward to reading her forthcoming The Disappearing Worker.

 

 

 

In a moment like ours, it is a miracle that anyone finds time to read a book, so I am truly grateful to Claudia Kedar, Sara Lorenzini, April Merleaux, and Niklas Olsen for reading mine with such care and generosity of spirit.  I extend my thanks, too, to Sarah Snyder for organizing this roundtable, Max Paul Friedman for introducing it, and Diane Labrosse for editing it.

Sorting Out the Mixed Economy travels through river valleys, housing complexes, job-training centers, economic planning offices, and college classrooms to understand how governments in the capitalist economies of Colombia and the United States took on widening functions during the decades after 1945, and how their functions were dismantled, reassigned, and redefined after the 1970s.  Ultimately, the book makes two central points.  First, it reveals the influence of Latin American developmentalism on the formation of the U.S. welfare state, and on the intellectual and political life of the North Atlantic.  In that sense, it takes a central insight of postcolonial studies—the idea that imperialism shapes metropoles—and applies it to the history of the United States.  Second, the book argues that a number of practices that are regarded today as quintessentially neoliberal inventions had earlier lives as developmentalist phenomena.  It finds things that we tend not to remember about midcentury statecraft: austere systems of social welfare provision, evolving methods of state decentralization, and novel forms of for-profit and private delegation.  Capitalism in the late twentieth century, the book concludes, wasn’t built in simple reaction against Keynesianism and developmentalism.  Instead, it was a parasitic formation that appropriated and redeployed key elements of the very order it destroyed.

This argument was my attempt to resolve what had become confounding puzzles within the burgeoning literature on the origins of neoliberalism.  Much writing on the subject has depicted the 1970s and 1980s as a moment of cataclysmic rupture in which spectacularly marginal ideas and practices obliterated all that came before.  It has generally suggested, moreover, that those ideas originated in the North Atlantic, and mainly among intellectual and political communities on the right.  For all that these accounts have taught us, they leave us with some perplexing problems.  Many purportedly novel practices of the late twentieth century—including the techniques of state restructuring and social welfare provision analyzed in my book—had long, tangled roots that extended into welfare and developmental states themselves.  Some of the leading policymakers within the World Bank and International Monetary Fund (IMF) were Latin Americans who believed that they were carrying forward the lessons of midcentury statecraft.  Radical liberalization programs rarely relied on coups or massive purges but instead drew strength from existing institutions and officials with long careers inside the state.  My book presents a different understanding of the way that political-economic orders give way, one that accounts for continuities across successive forms of capitalism and recognizes the Third World as a significant laboratory for ideas and practices.

As Sara Lorenzini notes, the book uses the history of two countries—the United States and Colombia—to make broad claims about twentieth-century political economy.  She is right that the choice is worth discussing.  Focusing on two countries allowed me to move up and down scales, analyzing not only high politics and intellectual life but social experience and vernacular knowledge.  Fundamentally, I understand social conflict as an engine of political-economic change, and I needed to sink into particular places in order to comprehend social conflict.  Limiting myself to two countries was one way to do that, and it struck me as a wise choice for the person I was when I began my research: a U.S. historian venturing into Latin American history.  In a region as diverse as Latin America, there is a reason that most scholars specialize in one country: national contexts really do matter.  In my case, I chose Colombia because it was so elaborately connected to the United States and the World Bank, because it was a notably busy crossroads for international intellectual currents, and because it struck so many midcentury development theorists and institutions as a potential model of capitalist development.  There is no such thing as a typical country, but Colombia was a richly connected one—a propitious place from which to look out at the United States, the Bretton Woods institutions, and the wider world.

For me, that choice yielded several rewards.  On the one hand, as Claudia Kedar notes, studying Colombia’s land reform, housing projects, and university reforms allowed me to see how social conflicts transformed economic ideas, both popular and professional.   When I began my research, I wanted to understand the rise of economists as policymakers and public intellectuals.  By the time I finished the book, I had a new appreciation for the forces that channeled, inflected, and limited economists’ power.  The book pays special attention to economists’ rivalrous entanglement with capitalists and their struggles to influence publics that were historical protagonists in themselves.  The latter struggle is something that I discovered in my research on housing and land reform.  As I show, economic thought was never simply a form of expertise transmitted from the academy, think tanks, or planning institutions.  In developmental states, it was also a popular language of legitimation that non-economists used to make their interests legible to the state.  They crafted that language through processes of translation, popularization, appropriation, and contestation, and I argue that the best places to see those processes at work are in public policies that touched the lives of millions of people. 

One implication of this insight is that the rise of economists in the twentieth century was a profoundly ironic process.  At times, economists transformed the terms of public debate, but they could never fully control the application of their ideas because non-economists relentlessly picked them up and put them to unexpected ends.  My book brings to life the meetings of capitalists and campesinos, construction firms and economic planners, homeowners and politicians, foundations and student movements, to show that the globalization and differentiation of economic knowledge entailed much more than the growth of rival schools of economic thought within the academy.  It involved the simultaneous growth of rather distinct professional and popular variants of economic reasoning, and the production of the world we live in today—one in which nearly everyone speaks in economic terms but no one quite agrees on the substantive content of economics or the realms of life in which economic reasoning ought to apply.   I have no expectation that social conflict took the same course in every country, but I hope that my work has methodological value for those studying intellectual and social life beyond the United States and Colombia.

Focusing on two countries also allowed me to dig deeply into the War on Poverty and Colombian developmentalism, offering insights that I hope will matter to most historians who frame their work in purely national terms, as well as those interested in transnational processes.  For U.S. historians, for instance, the book presents a new origin story for for-profit educational contracting in the United States.  That practice, I argue, was not born of right-wing mobilization against the welfare state after 1970; it was originally a strategy to expand the welfare state during an era when U.S. officials considered it perfectly legitimate to build the state by delegating functions to private capital.  The seventh chapter explores the War on Poverty in rural areas and Indian reservations that have received much less scholarly attention than U.S. cities.  It follows austere build-your-own-home programs from Puerto Rico and the Third World to Indian country and farmworker communities during the 1960s.  Over the course of three decades, self-help housing found champions and changing meanings among U.S. civil rights activists, Quakers, social democrats, Native American nations, foot-soldiers of the New Right, and eventually Clintonian New Democrats.  These chapters generate new understandings of core problems in the purportedly ‘domestic’ history of the United States, and they do so not just by crossing the hemisphere or crossing the divide of the 1970s.  They also integrate Indian country into the study of U.S. labor and social welfare.  As such, they have important methodological implications for U.S. historians, contributing to a growing effort to end the enduring influence of imperial governance on historical inquiry.

To borrow April Merleaux’s formulation, looking up and down scales also allowed me to analyze “the power imbalance between the United States and Colombia without assuming that the relationship was one-sided.”  I am particularly interested in class conflict and the power of capital within welfare and developmental states, which inflected imperial power.  As the book shows, Colombian capitalists could in fact exercise decisive control over the conduct of U.S. aid programs, and Colombian businessmen and economists played essential roles in building North Atlantic institutions that they believed would strengthen their hand in domestic conflicts.  The United States, for its part, appears to me not as a monolith projecting power southward, but rather as a site of class and imperial conflict in itself.  The circuits connecting Colombia and the United States are inescapably distinctive, but I hope that the intersections of class and imperial power I analyze will interest students of empire and capitalism more widely.

As several reviewers observe, moving across scales in just two countries already made this a long, wide-ranging book.  I am lucky that readers seem willing to follow such a story, and am especially grateful for Merleaux’s comment that the book should be read by “historians of capitalism, conservatism, the War on Poverty, social welfare, international development, modernization, education, employment programs, land reform, housing, business, environmental politics, social activism, Native American politics, technocracy, management, farm labor, and the New Deal.”  I learned an enormous amount from scholars in all of those fields, and by the end of my research, I found it impossible to tell any of these stories in isolation.

All that said, it is absolutely true that Colombia and the United States cannot stand in for the entire hemisphere, let alone the First and Third Worlds.  The book presents contradictions that I think were at work in midcentury capitalist economies, as well as processes of appropriation, redeployment, and historical erasure that I think were at work after 1970.  At times, it offers glimpses into other parts of the Americas and the Third World.  But fundamentally, the book presents arguments that remain to be explored and tested by others.  I hope that it will inspire new research on places I dared not tread.

Understandably, Kedar wonders why the book has relatively little to say about dependency theorists.  I certainly began my research expecting to write about great contests between cepalinos, dependentistas, neoclassicals, Austrians, and the other protagonists of the voluminous literature on twentieth-century economic thought.  But archival research led me in different directions.  When I began reading the records of Colombia’s first economics programs, I was struck by the extraordinary amount of noise and distraction they contained.  There were so many memos that were not about economics at all, but about accounting or management, about trying to rustle up funding, about fighting with funders, and about businessmen, who seemed to be everywhere.  Indeed, some of the faculty members who produced the most paper in these archives were corporate managers, and some of those managers evinced no interest in economic debates of any kind.  Eventually, I realized that the noise was the signal.  Because historians of economics have gravitated toward doctrinal debates between recognizable schools of economic thought, they have generally missed what I consider an equally consuming conflict within Latin America’s fledgling economics programs at midcentury: a battle over the very definition of discipline and profession.  This was a fight to determine what qualified as an economic question at all, who could call himself an economist, and what kind of work an economist did.  More than anything else, this conflict focused on the problem of distinguishing economics from management in a society where businessmen had long been called economists because of their roles in directing enterprises, making economic policy, and sometimes teaching courses in political economy, accounting, and business administration.  As a result, my book focuses on the simultaneous institutionalization of economics and management as fields within Colombian universities and their practitioners’ rival claims to authority in public life.  In that dispute, conflicts among economists were often less significant than conflicts over the boundaries and jurisdiction of the field.

The fact that my book explores that struggle is not to say that there were no dependency theorists in Colombia or that they had no consequence.  We see them, for instance, in the extraordinary student movement that transformed the Universidad del Valle in chapter 5—a movement that shaped the career of anthropologist Arturo Escobar.  But as I show, the economics department those students assailed was not run by economists representing a rival school of thought.  It was run by a corporate manager building the country’s first MBA program.  The key debate in the economics faculty—beginning before the birth of dependency theory and extending into the early 1970s—concerned the status of management with the system of professions, within the public university, and within the developmental state.

I nevertheless take from Kedar’s question the important insight that these two stories—one about doctrine and the other about disciplinary definition—might be fruitfully joined in the future.  Structuralism and dependency theory remain vital topics of investigation; today, I am particularly excited by Margarita Fajardo’s and Christy Thornton’s research, which places these schools of thought at the center of twentieth-century world history.[16]  It may be that there is something new to learn about structuralism and dependency theory by asking how changes in the system of professions that I explore interacted with changes in the substantive content of economics, and with the international movement of ideas.

Niklas Olsen poses two essential, interrelated questions.  First, he asks whether the book underestimates the significance of self-declared neoliberals in the political-economic transformations of the late twentieth century.  Given all that we know about the Chicago Boys in Chile or Hernando de Soto in Peru, is the Colombian story exceptional?  And given the multiple intellectual traditions that ran through the Mont Pelerin Society, have I missed some of its currents that were present in Colombia?  I should say first that my research was only possible because the literature on self-described neoliberals is so strong and well developed.  In the epilogue to my book, I describe the birth of this critical strain of historical inquiry, and those pages track my own intellectual development from the time I first encountered the term neoliberalism in the 1990s to the time that I began my research.  I dove into the archives expecting to find a story like the one Juan Gabriel Valdés told in Pinochet’s Economists—or perhaps a story like the one Sarah Babb told in Managing Mexico, in which wider communities of neoclassical economists tied to North Atlantic institutions remade the logic of statecraft.[17]

My experience in the archives forced me to tell a different story.  It may be that members of the Mont Pelerin Society were more deeply involved in Colombia than I could see.  This is a long book, but the Colombian chapters are inevitably selective studies of a handful of universities and development projects.  Moreover, they focus on policies below the level of much macroeconomic planning and jurisprudence that might have attracted the figures Olsen is looking for; this is not a book about the juridical construction of property rights or the determination of tariff policies, price levels, interest rates, and exchange rates.  Nevertheless, the only usual suspects I found on the scene were members of the Chicago School.  I trace their most significant exploits in chapters 4 and 5, showing that they had utterly mundane careers in the city of Cali consulting for agribusiness and teaching a few hundred students who became local businessmen.  I spared readers a long, convoluted discussion of economist Larry Sjaastad’s work in Colombia just before he began teaching at Chicago because it was such a tale of futility.  Sjaastad is known today as one of the most infamous of Chicago’s collaborators with Pinochet; he was reportedly the only member of the Chicago School who accepted paid work from the dictatorship.  Before moving to Chicago, he was a professor at the University of Minnesota, and during the mid-1960s, he taught at Bogotá’s Universidad de los Andes as part of a mission that Minnesota sent to create Colombia’s first MA program in economics.  It turned out that the head of the Minnesota mission was on such awful terms personally with the Colombian professors in the department that the Colombians completely marginalized the group.  Sjaastad and his colleagues trained no Colombian counterparts, and when they left, the Colombians continued running the MA program using their own curriculum.  The dean of the undergraduate program who sidelined the Minnesota mission, obstructing any influence Sjaastad might have had, was none other than Eduardo Wiesner, the Colombian economist who went on to become Western Hemisphere director of the IMF during the 1980s.  Clearly Wiesner’s ideas about structural adjustment did not come from Sjaastad—and yet again, an origin story I was ready to tell simply was not there.

The question remains: if I am right about Colombia, am I right about any other part of Latin America?  I hope that Latin Americanists will answer that question themselves in future research.  For my part, I have done my best to address the cases that Olsen raises—Chile and Peru—in the epilogue to the book.  I do regard Chile as an exceptional case, and I have found that many Latin Americanists agree.  The story of the Chicago Boys in Chile is absolutely, terribly true, and it is vital to understand both because of what it meant for Chileans and because the story itself became so central to the consciousness of self-identified neoliberals and their opponents.  But it is not the story of Latin America as a whole.  As for Peru, my research and that of Helen Gyger suggests that Hernando de Soto was not quite the intellectual iconoclast he made himself out to be during the 1980s.  He was instead a scavenger who picked up ideas about informality that left-wing architects had articulated since the 1950s, and that the United Nations and World Bank amplified during the 1970s.[18]

My reading of de Soto suggests the way that I attempt to integrate my book with studies of self-identified neoliberals and wider communities known as architects of neoliberalism after 1970.  I agree with Olsen that these stories must meet at some point—or at many points—if we are talking about the same world.  As the introduction to my book explains, “For all the influence and intellectual production of the right, for all the power of lenders to demand structural adjustment, much of the raw material they had to work with during the 1970s and 1980s came from the repertoire of midcentury statebuilding itself.”[19]  It is the argument of my book that some of the ideas and practices that became quintessential features of neoliberalism attained that status after 1970 when figures associated today with neoliberalism appropriated them, redeployed them, politically resignified them, and retold their histories in ways that obscured their roots inside welfare and developmental states.  The book offers a new answer to the question: when critics of welfare and developmental states acquired the power to reconfigure them, where did they reach for tools?  Many of these figures, like the members of the Mont Pelerin Society, had their own projects and had spent decades pursuing them, but to suggest that they were politically and intellectually autonomous, simply projecting their ideas outward and inventing practices that had no precedent, takes self-affirming self-conceptions as fact.  Not every feature of capitalism at the end of the twentieth century originated through appropriation and historical erasure—there is no single origin of any political-economic order—but my book identifies processes that were demonstrably at work, and that have been little examined beyond the path-breaking work of Johanna Bockman.[20]

Olsen’s final challenge in this line of questioning concerns periodization: he wonders whether my story would change if I looked back to the interwar period.  I am very sympathetic to the suggestion.  Histories of economic development all too often begin in 1945, following the rise in U.S. interest in the subject, but they should start in the Great Depression or the era of the Mexican and Russian Revolutions.  Olsen takes interest in the interwar period for a rather different reason, however.  He wonders whether the transatlantic and southward transmission of neoliberal ideas during those years might have produced the very features of mixed economies that I analyze after 1945—features that proved so susceptible to appropriation by later generations of self-described neoliberals.  It’s an interesting question.  But I would caution against the assumption that when we look back in time, we should expect to find a one-way transmission of ideas from north to south.  As Greg Grandin, Katherine Marino, Tore Olsson, Daniel Rodríguez, Karin Rosemblatt, Christy Thornton, and Barbara Weinstein are revealing, we are just as likely to find the influence of Latin American liberalism, Cuban anti-imperialism, the Mexican Revolution, and Latin American feminism on the North Atlantic.[21]  Moreover, as I argue in the book, I think that the features of the mixed economies I examine were direct outgrowths of the New Deal and Colombia’s Revolución en Marcha of the 1930s—the very policy traditions that self-declared neoliberals criticized during the interwar period.

Olsen’s second question is historiographic: did my book give the literature on neoliberalism its due?  On this count, I agree unreservedly that my book’s glosses on this literature are very brief and stylized; they pull out common claims at the risk of homogenizing a large field of study.  Moreover, they reflect the state of the field when I submitted my book manuscript two years ago.  For those reasons, Olsen’s distillation of debates in the field is very much worth reading alongside my book.  So, too, is Leigh Claire La Berge’s and Quinn Slobodian’s discussion of the multiple meanings of neoliberalism that scholars conflate at their own peril.[22]  For my purposes, I was interested in reconsidering a few claims that remain prevalent, if not universal and not always articulated together: the notions that the ideas and policies that transformed welfare and developmental states originated on the right; in the North Atlantic; and before, outside, or in reaction against the states they took apart.  Throughout, I also wrestled with economists’ own image of themselves as world-changing figures, a conception that informs much writing on neoliberalism.  Olsen is right that these generalizations are becoming more contested by the day.  When I submitted my book manuscript, Stephanie Mudge’s book was just appearing in print, and Olsen’s was in press.  Their books, as well as those by Katrina Forrester, Lily Geismer, and Kim Phillips-Fein, have taught us much about the transformation of economists, intellectuals, and political parties to the left of center after 1960.[23]  Melinda Cooper, Elizabeth Hinton, Michael Katz, Julilly Kohler-Hausmann, Alice O’Connor, and Stuart Schrader have shown that the construction of the US welfare state and US aid policies in the Third World relied on ideas about poor people and families that were just as effectively deployed to abolish social welfare programs or subsume them into a new carceral state.[24]  Elizabeth Blackmar has charted the wild transformation of the concept of the free rider, which originated in the nineteenth-century labor movement before being remade as a neoliberal idea.[25]  Keeanga-Yamahtta Taylor and Marcia Chatelain have shown how the U.S. government mobilized private capital to respond to the demands of the black freedom movement, and in the process gave birth to new forms of lending and investment in black communities that perpetuated racial inequality into the twenty-first century.[26]  Dara Orenstein and Vanessa Ogle have unearthed roots of today’s foreign-trade zones and tax havens in the long history of warehousing and the shorter history of twentieth-century decolonization.[27]  In Colombia, Lina Britto and Ricardo López have revealed the role of midcentury developmentalism in producing the drug economy and the contested social inequalities of the late twentieth century.[28]  Forthcoming work by Alex Beasley, Leandro Benmergui, Margot Canaday, Brent Cebul, Andra Chastain, Nathan Connolly, Lily Geismer, Adam Leeds, Jessica Levy, Aldo Marchesi, Joanne Meyerowitz, Mary Roldán, Beryl Satter, Chelsea Schields, Emma Teitelman, and Gabriel Winant, among others, illuminates the multiple origins of contemporary ideas and practices of entrepreneurship, microcredit, self-help, public-private partnership, poverty alleviation, post-industrial and precarious work, and more.

The debates among these authors are numerous and significant.  But I hope that my book will be read alongside all of this work, which is collectively contributing to a new understanding of twentieth-century political economy, its turning points, its deep continuities, and—as Merleaux reminds us—its possibilities for transformation.


 

Notes


[1] Steve Fraser and Gary Gerstle, The Rise and Fall of the New Deal Order, 1930-1980 (Princeton: Princeton University Press, 1989).

[2] Niklas Olsen, The Sovereign Consumer: A New Intellectual History of Neoliberalism (London: Palgrave Macmillan, 2019).

[3] Quoted in Kean Birch, A Research Agenda for Neoliberalism (Northampton: Edward Elgar Publishing, 2017), 21.

[4] See, among others: André Gunder Frank, “The Development of Underdevelopment,” Monthly Review 18:4 (1966): 17-31; Fernando Henrique Cardoso and Enzo Faletto, Dependency and Development in Latin America (Berkeley: University of California Press, 1979); Celso Furtado, Desarrollo y subdesarrollo (Buenos Aires: EUDEBA, 1964). 

[5] Arturo Escobar, Encountering Development: The Making and Unmaking of the Third World (Princeton: Princeton University Press 2011, original edition 1995).

[6] For example in David Ekbladh, The Great American Mission: Modernization and the Construction of an American World Order, 1914 to the Present (Princeton: Princeton University Press, 2010).

[7] Michele Alacevich, The Political Economy of the World Bank: The Early Years, (Stanford: Stanford University Press 2009), 30-82.

[8] See for example Quinn Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism (Cambridge: Harvard University Press, 2018): Wendy Brown, In the Ruins of Neoliberalism: The Rise of Antidemocratic Politics in the West (New York: Columbia University Press, 2019); William Davies, The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition (London: Sage, 2014); Angus Burgin, The Great Persuasion: Reinventing Free Markets since the Depression (Cambridge: Harvard University Press, 2012); Colin Crouch, The Strange Non-Death of Neoliberalism (Cambridge: Polity Press, 2011).

[9] Here, Offner arguably merges two literatures on neoliberalism.  The first constructs neoliberalism as a period stretching from the 1970s onwards in which ideas of market exchange became dominant in political thought and practice throughout the world.  David Harvey’s influential A Brief History of Neoliberalism (Oxford: Oxford University Press, 2004) is the most famous example of this literature.  The second literature traces the ideational and institutional antecedents to this policy programme back to the interwar era and argues that the labor of self-declared neoliberals to a great extent was responsible for its later success.  See for example Philip Mirowski and Dieter Plehwe, eds., The Road from Mont Pelerin: The Making of a Neoliberal Thought Collective (Cambridge: Harvard University Press, 2009).

[10] For further examples of current scholarship, see Simon Springer, Kean Birch, and Julie MacLeavy, eds., The Handbook of Neoliberalism (New York: Routledge, 2016) and Damien Cahill, Melinda Cooper, Martijn Konings, David Primrose, eds., The SAGE Handbook of Neoliberalism (London: SAGE, 2018).

[11] See for example Slobodian, Globalists; Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton: Princeton University Press, 2014); Burgin, The Great Persuasion; Jamie Peck, Constructions of Neoliberal Reason (Oxford: Oxford University Press, 2010).  Mirowski and Plehwe, The Road from Mont Pelerin.

[12] Melinda Cooper, Family Values: Between Neoliberalism and the New Social Conservatism (New York: Zone Books, 2017).

[13] Stephanie Lee Mudge, Leftism Reinvented: Western Parties from Socialism to Neoliberalism (Cambridge: Harvard University Press, 2018).

[14] A pioneering work in this context is Sonja M. Amadae, Rationalizing Capitalist Democracy: The Cold War Origins of Rational Choice Liberalism (Chicago: The University of Chicago Press, 2003).  For more recent contributions, see for example Timothy Shenk, Inventing the American Economy (Ph.D.-dissertation: Columbia University, 2016) and Binyamin Appelbaum, The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society (New York: Little, Brown and Company, 2019).

[15] I have myself explored these themes in Niklas Olsen, The Sovereign Consumer: A New Intellectual History of Neoliberalism (Cham: Palgrave, 2019), which analyzes developments in the mainstream discipline of economics and on the political center-left in the post-war period in explaining the rise of neoliberalism.

[16] Christy Thornton, Revolution in Development: Mexico and the Governance of the Global Economy (Oakland: University of California Press, 2021); Margarita Fajardo, The World that Latin America Created: The United Nations Economic Commission for Latin America in the Development Era (forthcoming).

[17] Juan Gabriel Valdés, Pinochet’s Economists: The Chicago School of Economics in Chile (Cambridge: Cambridge University Press, 1995); Sarah Babb, Managing Mexico: Economists from Nationalism to Neoliberalism (Princeton: Princeton University Press, 2001).

[18] Helen Gyger, Improvised Cities: Architecture, Urbanization, and Innovation in Peru (Pittsburgh: University of Pittsburgh Press, 2019).

[19] Amy C. Offner, Sorting Out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas (Princeton: Princeton University Press, 2019), 16.

[20] Johanna Bockman, Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism (Stanford: Stanford University Press, 2011).

[21] Greg Grandin, “The Liberal Traditions in the Americas: Rights, Sovereignty, and the Origins of Liberal Multilateralism,” American Historical Review 117:1 (February 2012): 68-91; Katherine Marino, Feminism for the Americas: The Making of an International Human Rights Movement (Chapel Hill: University of North Carolina Press, 2019); Tore C. Olsson, Agrarian Crossings: Reformers and the Remaking of the US and Mexican Countryside (Princeton: Princeton University Press, 2017); Daniel A. Rodríguez, The Right to Live in Health: Medical Politics in Postindependence Havana (Chapel Hill: University of North Carolina Press, 2020); Karin Alejandra Rosemblatt, The Science and Politics of Race in Mexico and the United States (Chapel Hill: University of North Carolina Press, 2018); Thornton, Revolution in Development; and Barbara Weinstein’s forthcoming book on Frank Tannenbaum.

[22] Leigh Claire La Berge and Quinn Slobodian, “Reading for Neoliberalism, Reading Like Neoliberals,” American Literary History 29:3 (Fall 2017): 602-614.

[23] Stephanie Mudge, Liberalism Reinvented: Western Parties from Socialism to Neoliberalism (Cambridge: Harvard University Press, 2018); Niklas Olsen, The Sovereign Consumer: An Intellectual History (Cham: Palgrave Macmillan, 2019); Katrina Forrester, In the Shadow of Justice: Postwar Liberalism and the Remaking of Political Philosophy (Princeton: Princeton University Press, 2019); Lily Geismer, Don’t Blame Us: Suburban Liberals and the Transformation of the Democratic Party (Princeton: Princeton University Press, 2014); Kim Phillips-Fein, Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics (New York: Metropolitan Books, 2017);.

[24] Melinda Cooper, Family Values: Between Neoliberalism and the New Social Conservatism (New York: Zone, 2017); Elizabeth Hinton, From the War on Poverty to the War on Crime: The Making of Mass Incarceration in America (Cambridge: Harvard University Press, 2016); Michael B. Katz, The Undeserving Poor: America’s Enduring Confrontation with Poverty, second edition (Oxford: Oxford University Press, 2013); Julilly Kohler-Hausmann, Getting Tough: Welfare and Imprisonment in 1970s America (Princeton: Princeton University Press, 2017); Alice O’Connor, Poverty Knowledge: Social Science, Social Policy, and the Poor (Princeton: Princeton University Press, 2001); Stuart Schrader, Badges Without Borders: How Global Counterinsurgency Transformed American Policing (Oakland: University of California Press, 2019).

[25] Elizabeth Blackmar, “The Peregrinations of the Free Rider,” in Transformations in American Legal History: Essays in Honor of Professor Morton J. Horwitz (Cambridge: Harvard University Press, 2009), 267-299.

[26] Keeanga-Yamahtta Taylor, Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership (Chapel Hill: University of North Carolina Press, 2019); Marcia Chatelain, Franchise: The Golden Arches in Black America (New York: Liveright, 2020).

[27] Dara Orenstein, Out of Stock: The Warehouse in the History of Capitalism (Chicago: University of Chicago Press, 2019); Vanessa Ogle, “Archipelago Capitalism: Tax Havens, Offshore Money, and the State, 1950-1970,” American Historical Review 122:5 (December 2017): 1431-1458.

[28] Lina Britto, Marijuana Boom: The Rise and Fall of Colombia’s First Drug Paradise (Berkeley: University of California Press, 2020); A. Ricardo López-Pedreros, Makers of Democracy: A Transnational History of the Middle Classes in Colombia (Durham: Duke University Press, 2019).