Is ‘neoliberalism’ a Latin American export?

In 2001 I wrote an article for Quadrant tracking the changing terminology used to describe the Australian Right, in which I noted that ‘neoliberalism’ was starting to replace ‘economic rationalism’ as the favourite term of the left for the free-market right (with ‘economic rationalism’ having itself largely displaced ‘New Right’.)

I’d tracked down uses of ‘neoliberalism’ to 1989 and 1990 in Australia, but beyond noting its global academic use not worked out where it started internationally. I now think that this incarnation of ‘neoliberalism’ (there are other earlier ‘neoliberalisms’ that I doubt are connected) probably started in Latin America, and came to Australia via US academia.

My main evidence for this is an examination of book titles in the Library of Congress catalogue and article titles in JSTOR, an academic articles database.

Because the Library of Congress gets a lot of Latin American books, we can see that the early books with ‘neoliberalism’ in the title are largely in Spanish and about Latin America. JSTOR is English-language only, but again ‘neoliberalism’ is used largely in the context of Latin America (though there was one 1974 article on University of Chicago economist Frank Knight that used ‘neoliberal’ in its current meaning, though I think this was just an isolated instance of what drives this more generally – people seeing or wanting some change in the prevailing liberalism just add ‘neo’ to it).

This raises the question of whether Spanish-speaking ‘neoliberals’ use this term or whether, as here, it has been thrust upon them. A 1992 article in the journal Latin American Perspectives (from JSTOR) suggets the latter. It says

Neoliberalism, or as its propagandists dub it, “free-market economics”, makes claims to being a new, realistic, practical approach to Latin America’s problems. (emphasis added)

So while this point needs exploring further, it seems that the preferred self-description may have been some variation on “free market”. It’s still a little puzzling that academics around the world refuse to use the same terminology as the people they are writing about. It adds considerably to the sum of human confusion (not least among the academics themselves). But I think we are getting clearer on the origins of this latest ‘neoliberalism’.

20 thoughts on “Is ‘neoliberalism’ a Latin American export?

  1. Interesting, perhaps people should adopt the Latin American term for those who oppose globalisation and protest at the G20 etc which is the amusing term “globophobicos”.

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  2. “This raises the question of whether Spanish-speaking ‘neoliberals’ use this term or whether, as here, it has been thrust upon them.”

    From what I’ve read, Latin American ‘neoliberals’ in the 1960s used the term with positive connotations. There’s also a link back to an earlier ‘neoliberalism’ — German neoliberalism (ordoliberalism).

    In a 2006 paper Taylor C. Boas and Jordan Gans-Morse tracked early Latin American use of the term ‘neoliberalism’ through the right-wing Chilean magazine PEC (Politics, Economics, Culture) — published from 1963 to 1973.

    They found that when the term was used, it was usually in reference to the German neoliberalism of the Freiburg School and the policies of the Erhard government. They write:

    “References to the concept of neoliberalism in PEC were almost entirely positive, reflecting admiration for the German philosophy that bore this label and the economic model that it inspired.”

    An early reference you might have come across is:

    Norman A Bailey, “The Colombian ‘Black Hand’: A Case Study of Neoliberalism in Latin America,” The Review of Politics 27, no. 4 (October 1965): 455-462.

    I haven’t been able to get hold of this paper, but I understand that Bailey refers to Mises and Hayek.

    The background is something like this — in the early 1960s a group of Colombian business leaders established an organisation called the Center for Social Studies and Action (CEAS) to promote free market ideas and combat communism. Apparently the CEAS became known as the ‘Black Hand’ as a result of some of its covert propaganda activities. There were also links with the US State Department.

    So, it seems that in the early 1960s some Latin American free market supporters looked to Germany and German neoliberalism for inspiration. They would have been familiar with the work of Mises and Hayek as well as the more mainstream social market thinkers.

    To them ‘neoliberalism’ would have had positive connotations. And while they might not have often described themselves as ‘neoliberals’, they would not have objected to the label.

    Because of some of the covert activities of free market supporters in Latin America during the Cold War, members of leftist movements would probably have associated ‘neoliberalism’ with business leaders, US imperialism and right wing violence

    Boas and Gans-Morse’s paper is here:

    Click to access Boas_Neoliberalism_Development.pdf

    Some background on Colombia and the CEAS is here:

    Click to access Karl.pdf

    I found the reference to Bailey’s paper here:
    http://lcweb2.loc.gov/hlas/mdbquery.html

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  3. Don – Very helpful, thanks. My CIS colleague Oliver Hartwich (who is German) has written an interesting paper on the German neoliberalism, but without being able to draw a connnection between it and contemporary ‘neoliberalism’. The Boas and Gans-Morse paper suggests that maybe there is an indirect connection via Chile, and from there widespread Latin American usage spilled over into North American usage which in turn spilled over into Australian usage. I don’t think they’ve 100% nailed it, given the time and ideological gaps, but it’s certainly plausible.

    The Boas and Gans-Morse paper is also interesting in noting the sloppy scholarship surrounding ‘neoliberalism’, so it is not just the word but the methodology that our local left academics have imported.

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  4. Thanks for the interest in our work on neoliberalism. I thought I’d point out that a revised version of the conference paper mentioned above has just been published, and you can find it on my website: taylorboas.com/neoliberalism.pdf.

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  5. There are many fine names for those who import the perojative “neoliberal”. These names include, xenophoble, glogophobist, misanthrope, nutjob, dole-bludger, Luvvie, among others.

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  6. A simple search of the OED reveals that use of the term in English goes way back before the 1960s.

    As an adjective:
    “1898 Econ. Jrnl. 8 492 The Neo-liberal school, of which M. Pantaleoni is one of the highest authorities, retains the same old attitude towards co-operation. 1930 Jrnl. Polit. Econ. 38 490 Mr. Halm (a member of the neo-liberal school of Professor Adolf Weber, of Munich) sets out to controvert the argument that competition is giving place to socialism. 1951 Amer. Hist. Rev. 56 273 British ‘actuality’ is best explained by historians who write in the Whig-Liberal-Labour tradition. But..the present situation is unbalanced and unhealthy, tending to create a sort of neoliberal stereotype.”

    As a noun:
    “1921 Amer. Jrnl. Sociol. 27 320 He [sc. Herbert Spencer] thus came very near to the position taken by the neo-Liberals, Hobhouse and Hobson, differing chiefly in not complaining that the expenditures in imperialism prevented great appropriations for social legislation at home. 1935 Sun (Baltimore) 16 July 10/1 He thinks an arrangement by which Russia agrees to double her purchases from us, in consideration of lower rates for a few Russian products which we need is a ‘sucker deal’… Such an attitude by a Senator who has been out in front as a neo-liberal is puzzling. 1952 A. T. BOUSCAREN tr. R. Buron in Jrnl. Politics 14 109 The neo-liberals are attached to political democracy separated from economic democracy.”

    I expect that the Latin Americans just knew their literature and their history better, and picked up the term from that, rather than inventing it. I think that Polanyi used it, and his work shows why the people should be reticent to uncritically adopt ‘free market’. As Polanyi demonstrates the liberal period in Britain was the closest that an empirical economy had been to the ideal, but this was not a ‘free market’ in the sense that it was a natural occurrence or devoid of politics and power, but rather that it was reliant on the state and politics. So to use ‘free market’ implies that the economy is separate from society, separate from politics, which has never been the case in any empirical economy in human history.

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  7. Ben – Thanks for this; I did not have access to the OED. The liberals being referred to in the second citation are commonly called the ‘new liberals’, but it seems like they were also sometimes called ‘neoliberals’.

    The first citation is to the German neoliberals referred to in other comments, who like the ‘new liberals’ were contrasting themselves with classical liberalism, but in reality much closer to it – these ordo liberals (as they were more commonly called in the second half of the 20th century) are hard to distinguish from the kinds of classical liberals found in Australia today.

    I’m not sure that there is any connection beween the new liberals and the German neoliberals – I have not yet seen any evidence for it.

    I seriously doubt the Latin Americans know their English or German intellectual history very well; they typically have very poor knowledge of what contemporary neoliberals believe, so it seems unlikely that they know about what long-dead neo-liberals thought.

    I still think the most likely explanation is that recent use of the terminology started in Chile with the original German meaning, and and due to similarities between ordo liberalism and later more radical classical liberalisms it was taken up by the left when they became preoccupied with market reforms, and was then transmitted by them to the US and Australia.

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  8. Andrew,

    Just a couple of points.

    I’m not sure that I am getting the point of all this, but your method seems a bit odd to me. Restricting your search to publication titles is rather narrow – the chances that an author would use the term in the title are pretty slim, I would think. I just did a search for ‘neoliberal’ or ‘neo-liberal’ on google scholar, restricting to publication dates between 1900 and 1965, which yielded 103 results. The first hit was ‘Two Concepts of Economic Freedom’, M Bronfenbrenner – Ethics, 1955 – jstor.org. It describes a neoliberal as pretty much the direct opposite of the current meaning, and includes Tawney as an example. So, a German neo-liberal, as you say.

    While a 1964 piece (THE MARKET PRINCIPLE AND ROMAN CATHOLIC THOUGHT, AF McKee – Kyklos, 1964) uses it with the contemporary meaning: “a neo-liberal group had urged that economic freedom
    and the market price system be safeguarded” p.65.

    So in English-language publications in 1964 we already have the current meaning in use, while the following year a contradictory meaning is still in use. That’s interesting, don’t you think.

    I am skeptical about the Spanish-language beginnings of neoliberalism because of the very British beginnings of intellectual as well as political liberalism.

    Also, you say:
    “I seriously doubt the Latin Americans know their English or German intellectual history very well; they typically have very poor knowledge of what contemporary neoliberals believe, so it seems unlikely that they know about what long-dead neo-liberals thought”

    I think you might be complicating things here. Don’t forget the importance of Chicago-trained economists in Latin America, esp. Chile. They would definitely have been aware of classical liberalism. Also, you might be limiting yourself by looking for proponents rather than opponents. I think it very likely that the Latin American left were aware of 19th century liberalism, via Marx of course but many others as well. If it did begin in Latin America, it may have started with that intellectual history in mind. So perhaps the term was used originally as a critique? And if not a critique, the Chicago Boys were very influential.

    Which brings me to a critique of your Quadrant piece. I don’t know what your academic background is, but you don’t seem to be all that hot on intellectual history yourself, which might explain some of the confusion.

    ‘Economic rationalism’, as an aspect of the rationality of the ‘iron cage’ of rationality characteristic of modernity, comes from Max Weber, and emphasises culture and values. ‘Economic rationalism’ is clearly critical, even if those who adopted it as a badge of honour didn’t realise it. I remember Keating saying it was better than economic irrationalism, which is just stupid if you understand the term. But in a naive way ‘rational’ sounds like it must be a good thing. And for those steeped in neoclassical economics, rationality is key to the foundational idea of homo economicus, so it seems rather appropriate.

    Liberalism, on the other hand, refers to a deliberate and conscious political project, which is quite different even if the policy effects are the same.

    Neo-liberalism refers to the political project to resurrect classical market liberalism. Classical liberalism drew on the classical economists, neo-liberalism draws on neo-classical economics, who were inspired by the classics. The ‘neo’ is important because it suggests that there is a return to the same intellectual roots, but that there have also been changes in the subsequent centuries.

    The history is important – liberalism and neoliberalism are political projects to implement policies that will structure economic conditions according to the ideals of classical, and then neo-classical, economic theory. In the first case it is to establish a market-based economy and society for the first time in history in the wake of the industrial revolution, and in the second it is to try to re-establish it, or pick up where it left off, following the adoption of Keynesian protectionism and the welfare state in already establish industrial economies. These are different projects in that they are starting from different bases, even if the destination is similar.

    The reason that ‘economic rationalism’ is used only in Australia (and nowhere else) can, I think, be attributed to the popularity of (and publicity around) Pusey’s book, which you mention. Though I could be wrong – you mention earlier citations. I expect that the reason that the term neo-liberalism came to overtake economic rationalism in Australia is that simply that it becomes awkward trying to shift between the two terms and engaging in international discussion, and the centrality of international trade means that the frame of reference is inherently international.

    Hope that helps.

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  9. Ben – Have you read Taylor Boas’s paper at comment 8? On the strength of this, I believe that the Chile connection is the likely explanation, because it had both direct use of the German terminology and parallel ideas from the Chicago-trained economists. Despite some methodological and other differences, the two groups would hold similar views on most policy issues and so it would be unsurprising if both were described as neoliberalism. The only gap in the story is that it doesn’t seem to have been used frequently in the 1970s, but on the other hand it would not have been forgotten by those engaged in the relevant debates.

    ‘Economic rationalism’ in some ways has a more puzzling history. As you suggest, there is an explicable logic to ‘neoliberalism’, even if it is not used by ‘neoliberals’.

    When I wrote that Quadrant piece, the international usage of ‘economic rationalism’ (though not common) had an entirely opposite meaning to the local usage, ie a belief that it was possible to rationally plan the economy – an idea that Hayek spent much of his life trying to demolish. Apart from Weber, it also has a history in Michael Oakeshott’s work that people on the Australian Right may be familiar with. But I don’t think there is really any evidence that anyone was drawing on the word’s intellectual history.

    Whatever its origins, maybe it was accepted in Australia as you suggest because of the parallel with rational man or the polemical fun in branding Pusey et al as irrationalists.

    As my Quadrant article suggests, I think – while not telling us very much in itself – the term ‘economic rationalism’ has uses partly because it does not tell us much, so it can bring quite different groups into the one issue movement.

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  10. I’m curious about the same thing Andrew is — how the term was used in Latin America during the 1970s.

    I’m also curious whether Catholicism is part of the reason German neoliberalism crossed more easily into Latin America than into English speaking countries.

    Some prominent German neoliberals attempted to integrate their liberalism with Catholic social teaching — for example, Alexander Rüstow.

    It would also be interesting to see early examples of the term ‘neoliberalism’ in the US literature. The earliest examples I’ve found either refer to German neoliberalism or use the term in a completely different sense.

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  11. Don – I’m purely speculating here, but apart from Catholicism there were other parallels that might have caught Latin American interest, such as recovery from a very low point (the Latin Americans having created a deep hole for themselves without a catastrophic war), and a greater need to combat powerful left-wing forces.

    But flukish as much as structural factors could be relevant – neoliberalism meaning #2 in Chile was probably due to a relatively small number of individuals who studied at the University of Chicago, and similarly German neoliberalism may have been the result of a small number of individuals, though presumably they were able to make it resonate with a larger number of people.

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  12. How the frightened spiders do spin. Own your neo-liberalism you craven cowards. You defended this ideology for years as the record plainly shows. There is no escaping that.

    You are doomed to be forever known as neo-liberals and even today, neo-liberal apologists.

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  13. I don’t think the term ‘neo-liberal’ will go away. Australia has simply converged with the rest of the world. Home grown labels like ‘economic rationalist’ have been lost to linguistic globalisation.

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