a “taxis.”
Sometimes people are poleaxed by some of the astounding things neoliberals have said (in public, in the media) about the crisis: that it was all the fault of Freddie Mac and Fannie Mae, that China made us do it, that it all was due to a “deficiency of economic literacy” on the part of the lower classes, that investors rationally factored in the threat of the Obama administration taking office by going on an investment strike from 2008 to 2010, that the greatest contraction since the Great Depression is solely to be laid at the door of government debt—and I am not making these up; they will be documented herein. How could people of moderate intelligence and goodwill say and write such things? Here the double-truth doctrine bites hard. The major ambition of the Neoliberal Thought Collective is to sow doubt and ignorance among the populace. This is not done out of sheer cussedness; it is a political tactic, a means to a larger end. Chapter 6 makes the argument: Think of the documented existence of climate-change denial; and then simply shift it over into economics. Of course, they can’t seriously admit it in public; but years of evidence since 2007 and the esoteric theory of ignorance recounted above unite to buttress the case that this has been one of the main tactics by which the NTC has escaped all obloquy for the crisis. The double truth is: as an insider, you realize that this is a good thing, since it fosters defeat of political opponents, the health of the kosmos, and the victory of the neoliberal market society.
Learning from Carl Schmitt
Perhaps the greatest incongruity of the Neoliberal Thought Collective has been that the avatars of freedom drew one of their most telling innovations from the critique of liberalism that had been mounted by totalitarian German and Italian political thinkers from the interwar period. Although there were a fair number of such writers who were important for the European MPS members, the one that comes up time and again in their footnotes is Carl Schmitt, whom Hayek called “Adolf Hitler’s crown jurist Carl Schmitt, who consistently advocated the replacement of the ‘normative’ thinking of liberal law by a conception of law which regards as its purpose ‘concrete order formation’”; another was Bruno Leoni, who posited law as something best fortified as resistant to all popular alteration. It is a watchword among those familiar with the German literature that Hayek reprises much of Schmitt’s thesis that liberalism and democracy should be regarded as antithetical under certain circumstances155:
Liberalism and democracy, although compatible, are not the same . . . the opposite of liberalism is totalitarianism, while the opposite of democracy is authoritarianism. In consequence, it is at least possible in principle that a democratic government may be totalitarian and that an authoritarian government may act on liberal principles . . . [in] demanding unlimited power of the majority, [democracies] become essentially anti-liberal.156
Since the epistemic innovations covered above informed the MPS thought collective that the masses will never understand the true architecture of social order, and intellectuals will continue to tempt them to intervene and otherwise muck up the market, then they felt impelled to propound the central tenet of neoliberalism, viz., that a strong state was necessary to neutralize what he considered to be the pathologies of democracy. The notion of freedom as exercise of personal participation in political decisions was roundly denounced.157 Hayek insisted that his central epistemic doctrines about knowledge dictated that freedom must feel elusive for the common man: “Man in a complex society can have no choice but between adjusting himself to what to him must seem the blind forces of the social process and obeying the orders of a superior.”158 Paraphrasing Walter Benjamin, citizens must learn to forget about their “rights” and instead be given the opportunity to express themselves through the greatest information conveyance device known to mankind, the market.159 The Neoliberal Thought Collective, through the instrumentality of the strong state, sought to define and institute the types of markets that they (and not the citizenry) were convinced were the most advanced. Hayek’s frequent appeals to a “spontaneous order” often masked the fact that it was the NTC who were claiming the power to exercise the Schmittian “exception” (and hence constitute the sovereignty of the state) by defining things like property rights, the extent of the franchise, constitutional provisions that limit citizen initiatives, and the like. As Scheuerman writes about the comparison with Hayek, “For Carl Schmitt, the real question is who intervenes, and whose interests are to be served by intervention.”160
In too many ways to enumerate here, the reaction of both economists and the NTC to the global economic crisis is a case study in the applications of Schmitt’s doctrine of the exception. All the rationalizations of the Federal Reserve “staying within its legal mandate” went out the window the minute it started to block market verdicts on which banks should fail; the American government followed by deciding which auto firms and insurance companies would live or die; the imperious negation of market diktat continued apace with a stream of further arbitrary decisions. Governors in Michigan began to oust legitimately elected local officials, and replace them with unelected “emergency managers”; mortgage firms set about to ignore long-standing legal restrictions on conveyance and foreclosure. Similar things began to happen within the European Union, with the imposition of unelected prime ministers in Greece and Italy, and the suspension of competition guidelines at the Brussels level. As Will Davies so perceptively noted, “In answer to the question of whether neoliberalism is alive or dead, it seems entirely plausible to speak of an ongoing or permanent state of exception.”161 The NTC has demonstrated that true political power resides in the ability to make the decision to “suspend” the market in order to save the market.
As in so many other areas, they were merely echoing Schmitt’s position that “Only a strong state can preserve and enhance a free-market economy” and “Only a strong state can generate genuine decentralization, [and] bring about free and autonomous domains.” This was echoed (without attribution) by Hayek: “If we proceeded on the assumption that only the exercises of freedom that the majority will practice are important, we would be certain to create a stagnant society with all the characteristics of unfreedom.”162
One can therefore only second the verdict of Christi that, “In truth, Hayek owed much to Schmitt, more than he cared to recognize.”163 For Hayek and the neoliberals, the Führer was replaced by the figure of the entrepreneur, the embodiment of the will-to-power for the community, who must be permitted to act without being brought to rational account. While he probably believed he was personally defending liberalism from Schmitt’s withering critique, his own political “solution” ended up resembling Schmitt’s “total state” more than he could bring himself to admit. If it had been apparent to his audience that he was effectively advocating an authoritarian reactionary despotism as a replacement for classical liberalism, it would certainly have not gone down smoothly in the West right after World War II. Further, there was no immediate prospect of a strong authority taking over the American university system (by contrast with Germany in the 1930s) and sweeping the stables clean. In an interesting development not anticipated by Schmitt, Hayek and his comrades hit upon the brilliant notion of developing the “double truth” doctrine of neoliberalism—namely, an elite would be tutored to understand the deliciously transgressive Schmittian necessity of repressing democracy, while the masses would be regaled with ripping tales of “rolling back the nanny state” and being set “free to choose”—by convening a closed Leninist organization of counterintellectuals. There would be no waiting around until some charismatic savior magically appeared to deliver the Word of Natural Order down from the Mont to the awestruck literati. Intellectual credibility could not be left to the vagaries of “spontaneous order.” The constellation of double-truth doctrines enumerated in this chapter are the direct consequence of Schmitt’s definition of politics as the logic of the friend/enemy distinction.
This was sometimes admitted by members of Mont Pèlerin in public, but only when they felt that their program was safely in the ascendant:
Let’s be clear, I don’t believe in democracy in one sense. You don’t believe in democracy. Nobody believes in democracy. You will find it hard to find anybody who will say that
