Neoliberalism and the Problem of Poverty, 1929-73

Abstract

This dissertation examines the development of neoliberal ideas on poverty and inequality between the 1930s and the 1970s. To do so, it takes key members of the Mont Pèlerin Society as its focus, including Frank Knight, Friedrich Hayek, Ludwig von Mises, Peter Bauer, and Milton Friedman. While poverty and inequality have formed the greatest arsenal of neoliberalism’s critics, my dissertation explores the solutions these thinkers offered to meet those challenges, and how they evolved over the course of the twentieth century. It explores these themes across five distinct theoretical and political contexts: depression (1929-39), war (1939-47), development (1946-62), affluence (1948-62), and welfare (1962-73). I argue that what always united the neoliberal network was not an opposition to redistribution per se, but rather the protection of the market price mechanism. I centre instead what I have called “the sectional interest state” as their primary target for social critique - a political economy providing security to particular producer and occupational groups on the basis of political weight rather than economic need or contribution. Such provisions came at the expense of free trade, the price mechanism, and a neutral liberal state, all of which neoliberals placed as non-negotiable features of the liberal order. The dissertation charts how redistribution initially formed a separate consideration to this framework, birthing stark divisions between neoliberals at the foundation of their network in the 1940s, bound at its poles by Henry Simons and Ludwig von Mises in particular. By charting the receding popular attraction of socialism, the return of capitalist prosperity, and the growing international context of development debates in the postwar decades, I track how neoliberal accommodations with redistributive taxation had nonetheless evaporated by the 1960s.