Quinn Slobodian’s *Globalists*

The subtitle is The End of Empire and the Birth of Neoliberalism.  Imagine a novel and interesting coverage of the post-war Austrian School, here relabeled the “Geneva School,” a well-done partial history of the WTO and EU, and a book where the central characters are not only Mises and Hayek, but also Alexander Rüstow, Wilhelm Röpke, and Michael Heilperin.

And it’s written by a Wellesley historian who appears to be entirely sane and responsible throughout.

The main lesson, and here these are my own words not those directly of the author, is that various liberals came to realize that their dreams for a free world order in fact involved quite an extensive international legal apparatus, far removed from the traditional nightwatchman state.  The EU and the “Four Freedoms” are in this view the actual instantiation of historic classical liberalism, arguably more than anything the United States has done of late.  And if you don’t like the over-regulation and excess bureaucracy of the EU, well maybe you’d better realize those are difficult to avoid secondary consequences of having the international law be so strong as to actually constrain state power (again my words, not Slobodian, though his book may lead you to this idea).

Wilhelm Röpke it turns out is the (a?) bad guy, and I have to say I always considered him a third-rate, misguided agrarian thinker.  It turns out his views on Africa were not entirely sound, and furthermore he sought to pull the rest of the liberals away their “economic libertarianism,” keeping in mind that Hayek already favored a social welfare state and socialized health insurance, among other interventions.

I folded over 12 separate pages in this book, which is considerably higher than average.

That all said, I don’t quite buy onto the whole story.  I read Hayek as rebelling against the vanquished Austro-Hungarian Empire, rather than keeping it as a mental model for reform.  Nor am I persuaded by the idea of a identifiable “Geneva School,” whether as an independent group or as a sub-branch of the Austrians.  In my view, the connections running through Geneva are historical ones (various people and institutions got put there), not intellectual in nature.  Haberler and Machlup I would have covered in greater detail, and that would have strengthened the author’s core thesis.  Oddly, there is no mention of Melchior Palyi at all.

pp.271-272 have a good fifteen-point summary of what the Geneva School is supposed to stand for, you might try #5: “World law trumps a world state. International institutions should act as mechanisms for protecting and furthering competition without offering spaces for popular claims-making.”

Henry Farrell has very good remarks on the book.  You can pre-order it here.

And by the way, use of the word “neoliberalism” in a book’s title is almost always a major negative signal, but here it is actually appropriate.


I'll be the first to say that indeed "neoliberalism" is a step towards One Government and away from the Hobbesian "war of all against all", and, as such, requires rules of the road rather than autarchy. That said, even primitive man traded with his neighbors, so you can't say that you need fancy WIPO institutions for free trade.

Bonus trivia: modern sailing with a triangular sail that pivots and with capstans and the like is about 100 years old, about the same as the bicycle and roughly the same as with globalization. It's not as "old" as people assume.

Melchoir Palyi! What an interesting obit, I'd like to read these prescient books: "Among his major books were “Compulsory Medical Care and the Welfare State" (1950), “Managed Money at the Crossroads" (1958), and “An Inflation Primer" (1961). His last book, “The Twilight of Gold,” is to be published next fall.[1971].

That is a rather yachty definition of modern sailing. If I recall correctly, multihulls have only recently beat speed records set by square rigged tea clippers in the 1870s.

@Anonymous- square rigged? Can they tack like the yacht? With a tailwind naturally a big square rigged clipper should win no contest, but going upwind? Of course a داو (Dhow) predates what I describe but it does not have the pivoting boom at the bottom (instead it's at the top) and the capstans.

In 1988 when US public debt was $2.6 trillion, statist bank regulators assigned it a 0% risk weight. At end of 2017, much because of that, its debt was now US$20.2 trillion, and it still has a 0% risk weight. The unrated citizens have a 100% risk weight. Is that neoliberalism?


The theory is 'we owe it to ourselves' and a state does not have to default on debts, rather, it hyper-inflates them away, which is arguably less painful (both Germany and Greece had hyperinflation and did OK afterwards, and no, I don't believe Hit ler came to power due to 1920s German hyperinflation). However, I do feel that some day the USA may default on all debt owned by foreigners rather than hyper-inflate (my pet theory).

"some day the USA may default on all debt owned by foreigners rather than hyper-inflate (my pet theory)." Nah, it'll do both.

The ratio of public debt to domestic product was higher in 1945 than it is today, and is today far higher in Japan than it is in the U.S. There was no hyperinflation after 1945. There was moderate inflation for about six years, a period of near price stability for about 15 years, then serious (but non-hyper) inflation for 16 years, then moderate inflation for another 25 years or so, followed by a decade of near price stability.

Even that is more than is necessary to deflate the debt load if the political class can commit itself to balancing the budget over the course of a business cycle (which was what was done prior to 1961 bar during general mobilizations and is what is done as we speak by state and local governments). Maintaining the nominal value of the debt while nominal domestic product increases at 2% per year would suffice to reduce debt service burdens by 60% over the course of one man's worklife.

America in 1946 was not addicted to permanent government deficits. Inflation is the only end-game here. Just a question of time-period.

What does it mean to be 'addicted to deficits'? Congress doesn't balance the budget because they don't feel like it and because their institutional procedures are dysfunctional. State legislatures manage to get it done.

Nor is 'inflation the only endgame', much less 'hyperinflation'. Just accumulating debt at a rate slower than the increase in production and income will allow us to scrape by.

The mean annual increase in the gdp deflation has since 1961 been about 3.4% per annum. Not ideal, but you can work with it.

What does it mean to be "addicted to deficits"? It means our government has found an equilibrium among various distasteful ways of financing government (taxation, borrowing, devaluation).

Between 2014 and 2016, well into an economic expansion, the deficit increased $200 billion. That's what I mean.

Inflation is default along a sliding scale. Your fantasy about repudiating debt to foreigners is just silly.

Inflation is default along a sliding scale.

No, it isn't. Inflation is inflation. It only injures your bondholders if it's unanticipated.

Just because bondholders want to be compensated for holding bonds in a currency that is constantly being devalued changes nothing, other than to say that there is nothing destabilizing at all about expected inflation that is realized.

And if you don’t like the over-regulation and excess bureaucracy of the EU, well maybe you’d better realize those are difficult to avoid secondary consequences of having the international law be so strong as to actually constrain state power (again my words, not Slobodian, though his book may lead you to this idea).

You don't need an 'international law' to 'constrain state power'. You need an international law if you want to transfer state power from elected officials in particular nations to an unaccountable cosmopolitan apparat.

Not really. Even North Korea caters to international law aka the opinion of other nation states. It's well known among political scientists, and one reason war atrocities (like in Africa, in the former Yugoslavia, and now Burma) are covered up. If we lived in a true Hobbesian state of affairs, no country would give a hoot about what any other country thinks, but they do.

"If we lived in a true Hobbesian state of affairs, no country would give a hoot about what any other country thinks, but they do."

Of course they would. The states would want to be globally connected for the benefits associated with the transfer of ideas and goods. After the populace is globally connected, each state has to do their best to retain their best lest they lose them.

Far better than some dystopian state where we live our lives at the whim of bureaucrats.

That this is a question on a purportedly libertarian blog, and that the opposite ideas are *continually* promoted by our self professed libertarian host is staggering.

@AI - but your argument concedes my point, namely, in a globalized world the countries are not in a 'war of all against all' but must cooperate. Put another way, in a true Hobbesian world, countries would ban citizens from leaving the country (as they do in North Korea).

"... their dreams for a free world order in fact involved quite an extensive international legal apparatus..."

Such a "legal apparatus" requires law/rule-makers, law interpreters/judges, and violent law-enforcers ... all staffed by quite fallible & self-interested humans.

Who Watches the Watchers ? That's the eternal problem of human society.

Grand global legal schemes just magnify the shortcomings of national and local government legal structures. Global government-law is merely the standard push for collectivism. Globalists are vanilla collectiivists -- we've heard their dreams many times and watched their failures through the centuries.

The human individual always faces threats from other humans. There is often substantial safety-in-numbers by banding in human groups (tribes, states, etc) against rogue individual & outside hostile groups -- but the oligarchic power imperative usually converts any governed group into a threat itself against peaceful individuals. There is no solution to this dilemma except to maximize peaceful individualism and minimize group collectivism as temporal circumstances permit.


"Who guards the guards?"

Obviously, in Tyler Cowen's world, a well-remunerated class of experts with impeccable social opinions. You Can Trust Them. Top People.

Yeah let's let the poor dummies take care of things instead.

I am a great fan of "the future neoliberals want" cartoons. Often they are exactly the future I want. Taco trucks on every corner, etc.

> "It turns out his views on Africa were not entirely sound..."

Then again, people are writing articles in the New York Times about how Wakanda is "an almost too perfect rebuttal" to Trump, so comparatively speaking Röpke's views are probably quite sane.

Apparently Ropke foresaw Rhodesia becoming Zimbabwe (whites expropriated) but did not see apartheid South Africa becoming modern South Africa (i.e., no overt race war happened in South Africa after apartheid abolished). But since the future is hard to predict, you can't blame Ropke too much, though you can fault him if he's a "third-rate, misguided agrarian thinker".

Bonus trivia: a first-rate, guided agrarian thinker would be Thomas Jefferson. Go here for a colorful debate between him and Frederick Douglas: https://www.youtube.com/watch?v=O-ZblMfZpuw Frederick Douglass vs Thomas Jefferson. Epic Rap Battles of History - Season 5

No race war because white society turned itself into barracks state within a state. There are more private security contractors in South Africa than there are soldiers in the South African military.

Yeah. I wasn't too taken with Tyler's review of BP, but having seen it now I have to agree with him. This was how an American views an idealised Africa being self-consciously Africa; a polycultural medley of colours, ethnicities, spears and animals. Wakanda would fit right in at Epcot centre.

Tabarrok's comment at Farrell's pre-review of the book: "Trust me, libertarians fear majorities of any color–which is one reason libertarians tend to like a bill of rights and federalism both of which South Africa adopted." I assume Tabarrok is being ironic ("trust me"). In any case, Farrell is making an analogy between black/white Africa and black/white America, the solution to the dilemma presented by public choice being one or more of the following: (a) one man one vote together with a stripped down government (its power limited to enforcing contracts and promoting competition), (b) effectively denying the vote to as many as possible,or (c) brainwashing as many as possible by appeals to racism and cultural divisions. Public choice demands extreme measures because of the extreme stakes. MacLean's book makes so-called libertarians (especially those at GMU) uncomfortable, as it should. After all, one either believes in democracy or one doesn't, rationalizations to the contrary notwithstanding. I believe the dilemma of public choice is highly overrated. Americans don't look to government the same way Europeans do. And libertarians do themselves and their cause a disservice by supporting (a), (b), and (c). Trust me.

"Trust me."

Nah, I'm good. I don't trust your straw men either.

I have not read this new book, but I will defend Roepke. He was anti-Nazi before it was so fashionable, and left Germany for Turkey and then Switzerland.

He advised Erhard (and Gen. Clay) on economic reform. He published a book outlining the economic reforms that needed to be done in 1947, and got his way. With the unification of west Germany, he devised the program of monetary reform, a new currency, and the elimination of price-wage controls. He was a major architect of the "German economic miracle." He deserves major credit. He devised the "social market economy" that combined free markets with a social safety net and responsible union behavior and a policy of ensuring that productivity gains would be widely shared. Germany had forty good years.

His book "A Humane Economy" is a plea for a hybrid philosophy of conservatism and "neoliberalism." He did not reject manufacturing or cities for agrarianism the way that the US Southern writers did. He anticipated the anti-globalization movement in that he liked a policy that put local interests ahead of multinational corporations. He would never have treated declining regions with indifference and contempt, the way that many US economists discard the interests of the manufacturing towns of the industrial Midwest. And he liked a basic welfare state but without subsidizing lazy people.

He was also an advocate of the gold standard. I think it is a German thing, after two bouts of hyperinflation. At the same time, he urged fiscal action to stop deflation.

I wish he was here advising Trump.

It is hard to name a practical economist of the past 100 years who was so useful. Policy informed by economic theory and philosophical values. Imagine that.

Great review.

Of course it missed that the illumnati have been working since the 30 years war to re-unite the Holy Roman Empire and these neoliberals are just the latest incarnation of a great work, begun five centuries ago.

Thankfully the black hand killed the last prince, and saved the word for nation states.

That's a lot of words to say Roepke sucks because he disliked plutocracy.

And it’s written by a Wellesley historian who appears to be entirely sane and responsible throughout.

Is that a Straussian comment on historians or on Wellesley?

I really wish Hyatt Hotels had not renamed it's top-tier loyalty status as Globalist

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