Neoliberalism 3: Mônt Pèlerin to Mont Pelerin

by Mike Goodman

The setting

Mônt Pèlerin is an idyllic Swiss resort set in the mountains above Lake Geneva, roughly half way between Lausanne to the east and Montreux to the west and set back just a little from the north shore of the lake itself. We can imagine that in early April the skiing was about over. The weather would still have had a chill in the air so the business of the summer season would yet be in abeyance. Hence a perfect setting for a conference, away from the bustle of a big city such as Paris and without the distractions of a busy resort.

The Hotel Du Parc in this resort was the setting Friedrich von Hayek chose for the first conference and inaugural meeting, from 1st to 10th April 1947, of what was to become the Mont Pelerin Society, taking its name from the anglicised version of the resort’s name.

Hayek had attended the 1938 “Colloque Walter Lippmann” in Paris and had learned from that the level of support for a return to “liberalism” as defined by the early pioneers, rather than what he perceived as the watered down centrist version. It gave him the confidence to organise a follow-up, the planning for which was seriously interrupted by the war years.

The build up

During the interim period, which included the early stages of the planning of this conference, Hayek wrote “The Road To Serfdom” within which he outlined his political philosophy. Published in 1944, it took an almost neurotic stance towards any form of government activity, asserting that it would almost inevitably lead to totalitarianism. His views on globalisation were hardly any more restrained. All barriers to the movement of goods or capital should be removed, rendering national governments obsolete. Of course, it has not worked out that way, which we shall come on to later in the series.

Orwell correctly identified that these views, if enacted, would inflict great harm and distress upon ordinary working people. Shortly after his review of “The Road To Serfdom” in 1944 Orwell began writing his most famous novel, “1984”. I believe that “The Road To Serfdom” and anything he may have subsequently learned about Hayek’s plans, along with others classifying themselves as neoliberals, disturbed him so deeply that the three extremisms he developed in his “1984” were communism, nazism and neoliberalism.

On completion of his book, Hayek began planning the conference. Whilst there were more economists than any other discipline among those invited, there were also philosophers, historians, journalists, intellectuals and business business leaders. 36 are said to have attended, roughly three quarters of the invitees. Hayek was particularly keen to ensure a significant proportion of Americans, which would to prove to be an expensive business.

The people

Four were present who also attended the 1939 Colloque. They were von Mises, Polanyi, Röpke and, of course, Hayek. With one name missing from the 1938 list it is impossible to say if there was another. The names were Maurice Allais, Carlo Antoni, Hans Barth, Karl Brandt, Herbert C Cornuelle, John A Davenport, Stanley Dennison, Aaron Director, Walter Eucken, Erich Eyck, Milton Friedman, Harry D Gideonse, Frank D Graham, Floyd A Harper, Henry Hazlitt, Trygve Hoff, Albert Hunold, Bertrand de Jouvenel, Carl Iversen, John Jewkes, Frank H Knight, Henri de Lovinfosse, Fritz Machlup, Loren B Miller, Felix M Morley, Karl Popper, William E Rappard, Leonard E Read, George Révay, Lionel Robbins, George J Stigler, Herbert Tingsten.

Finance was forthcoming from a variety of sources. Among them Harold Luhnow donated from the William Volker Fund which he ran and which paid the expenses of the USA attendees. The Bank of England also contributed a substantial amount through the offices of Alfred Suenson-Taylor, the first Baron Grantchester.

The conference

On the eighth day, with breathtaking hyperbole, the conference agreed a list of ideas to discuss:

“Over large stretches of the Earth’s surface the essential conditions of human dignity and freedom have already disappeared. In others they are under constant menace from the development of current tendencies of policy. The position of the individual and the voluntary group are progressively undermined by extensions of arbitrary power. Even that most precious possession of Western Man, freedom of thought and expression, is threatened by the spread of creeds which, claiming the privilege of tolerance when in the position of a minority, seek only to establish a position of power in which they can suppress and obliterate all views but their own.”

Then, on the tenth and last day, which was also the inaugural meeting of The Mont Pelerin Society, they agreed upon that name and a set of principles and aims to pursue. The general thrust was that they would encourage intellectual debate on freedoms and encourage the formation of think tanks to promulgate their ideas and ideals. Given what we now know about the outcomes to date and the forward reaching aims, they now stand out from the written page as positively anodyne, almost philanthropic.

  1. “The analysis and exploration of the nature of the present crisis so as to bring home to others its essential moral and economic origins.
  2. The redefinition of the functions of the state so as to distinguish more clearly between the totalitarian and the liberal order.
  3. Methods of re-establishing the rule of law and of assuring its development in such manner that individuals and groups are not in a position to encroach upon the freedom of others and private rights are not allowed to become a basis of predatory power.
  4. The possibility of establishing minimum standards by means not inimical to initiative and functioning of the market.
  5. Methods of combating the misuse of history for the furtherance of creeds hostile to liberty.
  6. The problem of the creation of an international order conducive to the safeguarding of peace and liberty and permitting the establishment of harmonious international economic relations.”

From that first meeting, more than 140 “think tanks” were set up worldwide. Founder members included Sir Geoffrey Howe and William Rees-Mogg from the British political establishment and Antony Fisher, who established that “independent think tank”, as frequently introduced by both the BBC and the mainstream press in the UK, the Institute of Economic Affairs (IEA) in London, probably the nastiest right wing propagandist organ I have come across since reading about Joseph Goebbels as a child. Fisher went on to set up the Manhattan Institute of Policy Research in New York City in 1977; and the Atlas Economic Research Foundation, in 1981. Now known as the Atlas Network, they support a wide network of think-tanks, including the Fraser Institute.

Author: Mike Goodman

Mike's main intersts are in economic policy, politics and current affairs. He has a degree in economics. He is retired now but still makes himself available occasionally for interesting speaking or training engagements. Leisure interests include rugby (the union code), cricket, music (especially modern to contemporary jazz), food, wine, good company or a good book.

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