Economic Liberalism and the State: Dismantling the Myth of Naïve Laissez-Faire

Abstract

The article offers a critique of the prevailing understanding of the relationship between neoliberalism and classic nineteenth-century liberalism in contemporary international political economy (IPE) and offers a redefinition inspired by Polanyi and Gramsci. Within critical IPE studies, a consensus has emerged that neoliberalism cannot be reduced to a simple attempt to roll back the economy and let loose free-market forces. However, this insight relies on contrasting neoliberalism with a classic liberalism, that is, a simple attempt to implement just this naïve laissez-faire ideology. In contrast, this article argues that nineteenthcentury liberalism is also characterised by an active use of state and legislative power. Through a historical study of two cases from nineteenth-century Britain, Poor Law reform and the Gold Standard, the paper will argue that state action played a central role even during the heyday of laissez-faire liberalism. With a starting point in Polanyi's dictum that 'laissez-faire was planned', this reinvestigation will point towards a need to develop a more nuanced understanding of the distinctions between economic theory, ideology, and practical policy, as well as pointing towards a general reinterpretation of the role of the state in liberal economic ideology.

Money and the ‘Level Playing Field’: The Epistemic Problem of European Financial Market Integration

“…While the epistemic problem conforms to the general tension of liberal economic thinking between anti-statism and the desire to use state power to bring about market freedom (Stahl 2019), it is also more specific. It concerns the question of the endogeneity or exogeneity of money as an infrastructure of European market integration, given the constitutional commitment to the competitive conception of the market and the creation of a 'level playing field' in the EU.…”

“…While studies of ongoing international (including European) market integration processes have certainly not avoided reflecting on the role played by neoliberalism, the conception of neoliberalism in this literature is continuously met with critique from scholars who are more oriented towards the history of economic ideas, and who point to often overlooked doctrinal nuances and internal differences. For example, Stahl (2019) argues that twentieth-century neoliberalism is often erroneously depicted in opposition to a strawman version of nineteenth-century laissez-faire liberalism as replacing naïve anti-statism with a regulatory road to competitive markets. In fact, Stahl argues, liberal economic thinking across the two centuries is marked by 'a constant tension … between a desire to limit the state to let the market have freedom, and a continuing need to use just state power to bring this project to fruition' (Stahl 2019, p. 483).…”

Doing Away with the Sovereign: Neoliberalism and the Promotion of Market Discipline in European Economic Governance

“…For the neoliberal rationality the euro crisis was never a reason to reconsider the viability of the market as a principle and practice of governance in the Eurozone. Far from invalidating the market as a governance mechanism its flaws provide the government its raison d'être: one of neoliberalism's central insights, after all, is that the functioning of the market can always be improved by reforming its operational framework (Jackson 2012;Woodruff 2016;Stahl 2019). The question is not how to insulate economic policy as much as possible from market pressures.…”

“…Nevertheless, their intellectual attraction to federalism as a form of governance and keen involvement in shaping and running international agencies indicates that the neoliberals never dismissed the importance of political institutions (Slobodian 2018). Positioning itself against simplistic ('laissez-faire') conceptions of the market as a natural or spontaneous phenomenon, neoliberal reasoning emphasises the need for a strong political authority to establish the market's very conditions of existence through laws, rules and regulations (Dale 2019;Stahl 2019). As discussed by Foucault (2008) and Vogl (2017), a dilemma thus appears in liberal thought concerning political authority and its rule over the economy.…”

Interwencjonizm państwowy na rynku usług turystycznych w warunkach pandemii COVID-19

“…Wśród ekonomistów do dzisiaj istnieją spory o realne efekty różnych form interwencjonizmu, zwłaszcza współcześnie, na tle globalizacji, europeizacji, społeczno-ekonomicznych przemian czwartej rewolucji cyfrowej. Jak stwierdza C. Berry, krytycznie nastawieni ekonomiści (Davies, 2014;Mirowski, 2013;Schmidt, Woll, 2014;Stahl, 2019) powszechnie akceptują obecnie przekonanie, że "interwencje państwa na dużą skalę w gospodarce kapitalistycznej są nie tylko zgodne z neoliberalizmem, ale mogą być nawet jedną z jego cech definicyjnych (w przeciwieństwie do klasycznego liberalizm)" (Berry, 2021, 1).…”