Neoliberalism, Neoclassical economics and the Mont Pelerin Society Methodenstreit

Prominent critics of neoliberalism have mistakenly conflated it with neoclassical economics (e.g. Harvey 2005; Bourdieu 1998). In fact, not all neoclassical economists are neoliberal, and conversely, not all neoliberal economists are neoclassical economists (Van Horn and Mirowski 2009; Offer and Söderberg 2017). This relationship is explored empirically by following Mirowski and Plehwe’s inductive approach (2009). I have examined all sessions focusing specifically on economics present in the archives of the Mont Pelerin Society (MPS) General Meeting Files (in Ghent) diachronically. Unsurprisingly, my first finding is that the MPS members’ appreciation for neoclassical economics evolved over time, partially reflecting the changing composition of the MPS (Audier 2012). From the 1970s on, the original one-sided critique of mainstream economics formulated by Austrian economists turned into an internal methodological debate among the MPS neoclassical members, culminating in 1996 with a panel titled “Methodenstreit’: The Austrian vs. Neo-Classical Approaches to Economics”. Following Pascal Salin’s MPS presidential address (1996), “ideology” rather than methodology is suggested as a foundation for the MPS. In addition, the ‘Methodenstreit’ is recast as an internal pluralism (Plehwe & al. 2018) constituting an asset rather than an obstacle for the diffusion of neoliberalism. For instance, at a special meeting in Stockholm on “The Breakdown Of The Welfare State”, Lepage explained how, as a ‘second-hand dealer of ideas’, he merges elements from the two sides of the ‘methodenstreit’, namely Chicago positivism and Austrian subjectivism, as well as ‘Libertarian constructivism’, to build “an intellectual and ideological tool of a remarkable dialectic efficiency” (1981: 10). I elaborate this point further using secondary literature. First, using history and sociology of economics, I claim that Neoclassical and Austrian economics offer very different but complementary assets to diffuse the neoliberal ideology, as neoclassical economics is part of mainstream economics while Austrian economics is much more convincing and appealing in philosophical and ontological terms. Secondly, I draw on existing discourse analysis to show that the neoliberal era was marked by central notions coming from Austrian economics, starting with the entrepreneur, which never appears in neoclassical economics.