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Book Review: The Great Persuasion; Reinventing Free Markets since the Depression

Book Review: The Great Persuasion; Reinventing Free Markets since the Depression

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Book Review
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Published by: Pablo Paniagua Prieto on Feb 02, 2013
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Book review: “The Great Persuasion: Reinventing Free Markets since the Depression”
From: Pablo PaniaguaDate: January 28
, 2013
Book details:
The Great Persuasion
Reinventing Free Markets since the DepressionAuthor: Angus BurginFormat: Hardcover, 320 pages
Publisher: Harvard University PressRelease date: October 30, 2012ISBN: 978-0674058132
About the author:
Angus Burgin is an assistant professor at the Johns Hopkins University’sHistorydepartment, in which he focuses on twentieth-century United States, political history, intellectual history andhistory of capitalism. The Great Persuasion is Burgin’s first book and doctoral dissertation at Harvard. The book(during draft stages) was awarded with the 2010 Joseph Dorfman Prize by the History of Economics Society.
The Great Persuasion
: Reinventing Free Markets since the Depression is an a engaging and rich historicalanalysis of the birth, emergence and strengthening of the Mont Pelerin Society (MPS); it also discusses how thissingle institution pioneered the philosophical and intellectual foundations for the unification and expansion of asolid and substantial new age in the American free-market and conservative thought. This internationalorganization founded by Friedrich Hayek in 1947 brought together economists, philosophers, journalists andphilanthropists who considered rehabilitating the social-public support for the free-market philosophy of thenineteenth century, which was severely damaged during the twentieth.The book encompasses more than 40 years of the twentieth century’s evolution of free-market ideas as well asthe institutions and foundations that monetarily supported these ideas over decades. Additionally it explainsthe key actors and intellectuals who produced not only those ideas but also created the philosophicalframework for a social-political system based on the free-market, which resulted in shaping American politics30 years later. The book also brilliantly exposes how intellectual institutions and an international network of intellectuals can create an extensive system of communications over the decades that helps foster the messageas well as discussion, assisting to create a comprehensively aligned rhetoric advocating for the free-market. Thisshared rhetoric eventually permeates into the rest of society and creates a new philosophical paradigm whichthe population is willing to accept; therefore it makes political changes towards the free-market more plausible.The Great Persuasion also concerns itself with the power of abstract ideas and philosophy of seeing the world.It seeks to highlight the role that academic discussion and communication of economic theory, methodologyand political philosophy can manifest on popular debates or even among these fields of research. The way inwhich these ideas influence and affect other fields, academics and politics requires fundamental insights intothe dynamics in which institutions, foundations, research students and scientific communities are involved. Itconveys the way in which the ideas are communicated and projected into popular debates until they finally1
permeate social conventions. This book is a great attempt to address these dynamics as well as the roundaboutpaths that thought must pass in order to transform from “radical” into “widely accepted” paradigms.Mr. Burgin’s main focus is this historical evolution and the dynamics that helped shape the Mont Pelerin Society(MPS). In order to make this evolution richer in details, Mr. Burgin luminously guides us through the history of ideas with brief historical biographies of the main intellectuals that shaped MPS. In this regard the book can beunderstood as a two-phase, two-player dynamic. The first phase concerns the 30’s through the 50’s in which Mr.Burgin leads us from MPS’s birth and foundation, directed by the surprisingly intellectual and entrepreneurial-driven F.A. Hayek. During the 30’s Hayek understood the relevance of academic networking and the role of international intellectual institutions in shaping the progressive tendency of thinking in western countries. MPSwas founded on very ambitious goals that were never met; the organization was initiated on divergentheterogeneous visions of the free-market economy and on its cultural moral implications- which according tosome members were necessary to address. Consequently after WWII, during the 50’s, MPS consolidated andnarrowed its scope and also drastically increased its membership, particularly in the U.S. This demonstratedhow MPS was willing to adapt to recent changes- including social ones- which demanded a focal shift.The second phase is one marked by a reformulation of MPS’s goals and vision of the free-market economy. Thisalternate way of thinking was particularly due to a severe generation change within MPS: skeptical memberslike Roepke and Knight were retired, Hayek was no longer the society’s president and later Milton Friedmantook presidential control, bringing MPS to a whole different level of reach, influence and free-marketintellectual ideas. MPS was founded underHayek’s ambition and other member’s concerns to revisit andpropose a modernized version of the nineteenth century laissez-faire on new ethical foundations. This woulddistinguish the free-market philosophy from people’s detestable vision regarding rapacious laissez-faireindividualism. The idea was to reformulate the moral argument and the free-market discourse into one more“progressive” oriented (not in its policy but in its rhetoric). By the late 50’s it was clear that neither Hayek’soriginal goal nor the revisionist attempts had been achieved (in part due to uncompromising members likeMises that opposed any moral revision or messaging concerning the free-market foundations). Therefore MPS’sactions and ideas narrowed, growing more market-based oriented and “radical” toward free-market solutions.Subsequently, the book follows the society to its turn towards the Chicago-economic sort of mindset andspecifically more geographically U.S.-driven; some members’ skepticism towards the influence of the market inlocal cultures and the possible degradation of virtues in the individuals and the risks we face as a society wasdrastically discarded. Therefore the society moved into a program of simply focusing on praising the benefits of the market: meeting human necessities, continuous innovation, improvement of our well-being, and shapingand channeling human virtues- specifically the ones concerning our commercial, impersonal interactions. TheMPS also radically moved along with Friedman towards an empirical economic academic focus, a drastic changefrom its heterogeneity in the social sciences while Hayek was president. At the height of Milton Friedman’sintellectual fame, the MPS was already the main nodule of an extensive free-market network that fosteredcommunication and ideas all over the globe. Suddenly the success of MPS was becoming tangibly evidentthrough the policies implemented both by the U.S. and Britain during the 80’s. The philosophical andintellectual foundations necessary to influence the public’s core beliefs were built through the expansion of relationships that MPS founded more than 30 years ago; thus it became a pioneer in the field of entrepreneurship of ideas and academic business relationships. Friedman elevated the MPS to a different social2
model of influencing politics. He identified neither with conservatives nor with the bourgeois but rather withthe entrepreneur and the common man who just opened his business. In contrast to Hayek’s top-downapproach, he moved throughout the spectrum of players: he went beyond academic circles, writing forNewsweek and interviewing with Playboy magazine. Hence he broadened the reach and discussion of hisphilosophy.The final section of the book recounts Friedman’s intellectual rise and his increasingly active role in politics-advising Barry Goldwater in 1964 and then, more famously, Ronald Reagan. He was the “leader” of the free-market movement in the 70’s and 80’s. During this time Friedman and his Chicago colleagues made the mostprofound intellectual attacks on the dominant Keynesian orthodoxy; Mr. Burgin’s description of Friedman’smaneuverings in those years is careful, precise and fascinating.In conclusion the book is an exceptionally well-written, semi-academic endeavor that tells the evolution of anintellectual institution and the repercussions it had in the practical public policy world. It encompasses varioussubjects ranging from economic methodology in American politics, but yet it is simultaneously quite succinct(226 pages of text), while still profoundly covering much of what it aims to achieve. Burgin offers a book thatdives deeply and skillfully into the world of think-tanks and intellectual organizations that are entangled in thebattle of ideas. He sketches complex interrelationships between ideas, politics, business, foundations andacademic centers. He provides meaningful insights into how ideas cross-fertilize among fields of research andhow ideas evolve as generations pass and social conditions are altered. While telling the evolution andmaturation of these ideas alongside MPS society, Burgin proposes intellectual biographies of MPSs keymembers- ranging from the critical role of the society’s early administrator Albert Hunold to personalities such asKarl Popper, Michael Polanyi and George Stigler.
Final remarks:
The book teaches us about the shared belief by Keynes and Hayek that ideas matter- often quite a lot and thattiming and social context are crucial for their success. Ideas need successful political long-term projectmanagement since they remain a long time in underground lives only to burst out later into common viewsunder the right conditions and the proper leverage of the ‘already-built’ international network sharing thatvision. Mr. Burgin concludes with an open ending: which vision of the world will endure? Which ideas will shapethe economic and political decision of our post-financial crisis era? Will a new Hayek or Keynes challenge thepopular wisdom and current consensus? Will this start a whole new process of paradigm-building? The answerswill depend on how successfully these future organizations and institutions can leverage networks of intellectualcommunities, how well they will engage in the discussion with the public and civic media, and finally howsuccessfully their academics and “second-hand” dealers of ideas will be at articulating their next persuasion.
“I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political  philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or latter, it is ideas, not vested interests, which are dangerous for good or evil”.
John Maynard Keynes

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