Debunking the Economist’s Myths of Free-Market Liberalism
The Economist’s liberalism is often framed as the politics of human rights and individual freedom, but its origins lie just as much in a fear of the masses and democracy.
Portrait of James Wilson, the founder of the Economist. (Wikimedia Commons)
- Interview by
- Grace Blakeley
Marx once called the Economist “the tribune of the aristocracy of finance.” As a dominant magazine amongst elite liberalism, it has played an important role in shaping and promoting the ideology of liberalism, through its changes and continuities, from its founding in 1843 to today.
Alexander Zevin, assistant professor of history at City University of New York and editor at New Left Review, recently published a new book, Liberalism at Large: The World According to the Economist, which delves into the history of liberalism through the lens of looking at the Economist.
Recently, on an episode of Tribune’s podcast, A World To Win, Tribune’s Grace Blakeley sat down with Zevin to discuss the history of liberal ideology, whether it’s in crisis — and where the liberal rules-based world order goes next.
What is liberalism?
My book rejects some ideas about what liberalism is in order to get to a better definition. What I’m responding to are these ideas that liberalism either begins in the seventeenth century with John Locke and his political ideas and theories or with Adam Smith in the eighteenth century in The Wealth of Nations and stuff like that.
I argue in this book that liberalism really emerges and has to be understood in its historical context in the period in the wake of the Napoleonic Wars — that’s the moment in Europe, Spain, and then in France, when people first describe themselves as “liberal.” We have to discuss what liberalism is by virtue of that self-description. When we begin at that moment, we see very clearly that it’s a reaction to several developments, one of which is the sweeping away of the old regimes in Europe so that a new form of middle-class politics emerges.
On the one hand, it’s against absolutism, it wants responsible government, it wants elections, at least in some sense for some people, and it wants constitutional rights and things like that. But on the other hand, it becomes afraid very quickly of mass mobilizations of the populations below. That sort of in-between space is where liberalism gets started.
It’s also the moment when industrial capitalism actually kicks into high gear. It’s the things people think about when it comes to limited government, checks and balances, and responsible government, but it’s also this phenomenon that can only really emerge at the turn of the nineteenth century as liberals confront challenges like the demand for the vote from ordinary people, and the spread of capitalism and what that means for governance and the economy.
From that perspective, something like the argument that neoliberals in the 1980s saw democracy as an impediment to the introduction of the economic policies they wanted is actually a tension that has been inherent in liberalism from its inception — the tension between democracy, democratic representation, and the interests of capital. Is that correct?
Yeah, absolutely. One of the things that was obscured during the Cold War and today, too, is the idea that liberal and democracy go together – that there are these things called liberal democracies, that we live in them, and that it’s impossible for those two things to be separated.
In fact, historically, liberals were not democrats. They devised many different strategies to try and limit the vote to those with an education or those who paid a certain amount of income or property tax — all sorts of ingenious ways of devising constitutional limits on the ability of the working class — of the rabble — to vote.
What’s interesting is that the neoliberals take a problem that liberals have been thinking about since the dawn of liberalism in a new context. In some sense, democracies are to stay by the time neoliberals come into their own — by the turn of the 1980s — but there are new ways and new means at their disposal for trying to deal with this problem of redistribution, of demands for economic rights that may interfere with the free operation of the market and the price mechanism that they think is fundamental to securing individual liberty and the good operation of capitalism.
Your full book title is Liberalism at Large: The World According to the Economist. Why study liberalism from the perspective of one newspaper?
It’s a strange endeavor that I’ve embarked on. One of the reasons I did it was to try to break apart the standard ways of talking about liberalism. Instead of looking at the canon — Locke, Mill, Rawls, these famous liberals — it came clear to me that by looking at a magazine, which is a collective endeavor, which comes out every week, which has actually been at the center of events, whose editors are anonymous but have served in prominent roles in the Treasury, in the Foreign Office, as prime ministers, as Bank of England governors, that you could tell a history of liberalism that accommodated the concept of change and transformation.
Liberalism wasn’t always the same thing, because it kept responding to new challenges, new threats, new events — the Economist has to respond to events every week for over 175 years. It was a way of trying to create a definition of liberalism that was a lot more flexible and also more contextual.
I feel like there’s something a little dreadful or boring about books about newspapers, but it’s not a boring book — I don’t think. That’s because it doesn’t really try to make a biography of a newspaper in a standard way. It looks at it as a nexus for a give-and-take, back-and-forth, a set of challenges, crises, debates that happen inside the paper, and with the paper and other thinkers.
In each chapter, from the 1840s all the way to today, I always situate what’s happening inside the Economist, its various positions, vis-à-vis key thinkers on the left or right of liberalism. In the 1850s, ’60s, ’70s, it’s a debate with John Stuart Mill. In the 1920s, ’30s, and ’40s, it’s a debate with John Maynard Keynes. It does something unusual and more fun than it might appear vis-à-vis this history of a newspaper.
It’s so interesting the way that you study liberalism from the perspective of this one particular newspaper. If you were to study liberalism, as I and many others did in our undergraduate politics courses, it will be Locke and Mill, and then you’ll go up to Rawls and look at the development of this canon of liberal thought.
But when you look at how it’s actually applied, as is always the case with the application of any theory, it’s so different to what the ideological canon would suggest. You play that out in the book and look at those tensions in different ways, over a very long period of time, using exceptionally interesting evidence from archives and loads of different sources. I was wondering if we could go through some of these examples of divides within liberalism — between the practice and theory of liberalism — the first one of course being free trade.
In the mythology of liberalism, free trade is supposed to be the thing that allowed it to emerge as its own separate ideology and the thing that liberal parties were championing several centuries ago. But there were more divides about how free trade would happen, particularly in the context of empire, than you might ordinarily think.
The theory of free trade was supposedly a theory of peace and good will: that if you exchanged more, you would have more peaceful interactions. There’s an enlightenment idea here — that trade polishes manners and brings different kinds of people into intercourse, where they learn how to behave and act well with one another.
That’s the theory of Richard Cobden, one of the heroes of the Anti-Corn Law League, this famous body that emerges in the 1830s and ’40s in England in the fight against the Corn Laws, which were classically mercantilist and kept grain prices up in England in the aftermath of the Napoleonic Wars. They were viewed by the middle classes as a vestige of the aristocratic privilege of the landowning class.
Along with that idea — that if you abolish the Corn Laws, you’ll see greater prosperity — you also have the idea that it will do away with war. There’s the idea that war is also an aristocratic warrior-class vestige of an ancien régime mindset, and it’s very important to the theory of trade.
James Wilson, the founder of the Economist, is not very well known, but he’s a fascinating figure from a Scottish background — the son of a textile manufacturer. He promotes this idea as well. What we see by the 1850s is this really radical split between James Wilson and Richard Cobden and John Bright, which just isn’t really understood in the literature on free trade, or the Economist. But it’s really fundamental to get at something about the dominant strain of liberalism as it emerges in the 1850s.
For the Economist, it becomes quite clear that by the 1850s in order for free trade to actually become the ordering structure of the world economy, as they had hoped, it’s more than a matter of simply trading. You have to force people to trade freely, as it were. There’s a string of conflicts in the 1800s, starting with the Crimean War, but then extending into China with the Open War, and then also the Indian uprising and rebellion, that see the Economist take positions within the paper that advocate the use of force to “crack the cake of custom” and penetrate into what they see as an “Asiatic resistance” to free trade and progress.
There’s a moral and economic dimension to the argument — that this is going to require the use of the Royal Navy, troops on the ground, and collaboration with other powers like France in order to open up this world economy. You also see James Wilson denouncing Richard Cobden and John Bright in Parliament because by that point he’s serving in the Treasury, creating government policy, and taking out loans to fight these wars. The role of the Economist in this shift within Britain and British politics toward a much more liberal-imperialist aggressive posture is one of the discoveries of the book.
Another big break within liberalism was the birth of Keynesianism. The rise of support for more domestic intervention by the state and the birth of the Bretton Woods institutions internationally was presented as this big transition that split liberalism and liberals between left and right, and the decline of real socialist movements over the last forty years or so has left us with this axis defining left and right on the basis of whether or not you think the state should be doing more or less.
How much of a break is the birth of Keynesianism, Keynesian economic policy, and what’s often referred to in the UK as the postwar consensus, with the laissez-faire liberalism that came before, and how is it viewed by the Economist?
I set up a debate between Keynes and the Economist, and by looking at that debate we see Keynes changing his own mind. We see him arguing with himself because he embodies so many of the values of the Economist. He’s a student with Alfred Marshall, the doyen of neoclassical economics in Britain, who more than anyone else created the study of economics in Britain in a modern, scientific sense, at Cambridge. And he’s a student with Walter Layton, who becomes the editor of the Economist and serves with him in government during both World Wars. There’s a real personal dialogue between them.
There’s also a famous line in The Economic Consequences of the Peace where Keynes talks about the pre-1914 world and describes himself lying in bed reading about stock prices and knowing that the pound in his pocket, because it’s backed by gold, is the same everywhere. There’s no passport needed to travel. I have a sense that this famous phrase, that’s so evocative about what the Edwardian globalized world was like before the First World War came and shattered it, really describes Keynes reading the Economist in bed. It’s the Economist that’s that window onto the world of high finance and globalized capital in that period before 1914.
In 1925, Britain goes back on the gold standard at parity with the US dollar, basically imposing harsh deflationary austerity while there has already been austerity for several years up to that point. After 1925, the Economist and Keynes start to do battle. Keynes started to question many of the assumptions about free trade that he had up to that point, and begins to experiment with ideas about a flexible gold standard or flexible exchange, and ideas about revenue tariffs and other things like that.
However, I argue that up until 1925 — but even after that point as well — the Economist and Keynes share certain assumptions about, in particular, the importance of the City of London to Britain’s position as a global power in the world, and the idea of the pound as an important reserve currency.
The way that I narrate this is that yes, there are fundamental disagreements between the Economist and Keynes that are very sharp by the turn of the 1930s. Keynes begins to argue that something like deficit spending, something like creating a certain level of inflation, is necessary. Although many editors of the Economist are students of Keynes by this point and are discussing his ideas, the magazine is very resistant to his new notions, in part because they are afraid about what the City of London will say about this idea that investment decisions are going to be taken away from it. I wanted to open up a set of questions, debates, arguments between Keynes and the City of London and certain ideas about finance, Britain, and the world.
There’s a wider question here as well about the link between Economics as a discipline and liberalism. Many of the early liberals were obviously political economists. The big questions they were asking about trade, the national interest, sovereign policies. Around the ’60s, there’s have the rise of Keynesianism. In the ’60s and ’70s, there’s also the birth of neoclassical economics, the Keynesian synthesis which brings together some of the early political economy and thinking about the marginalists along with insights of Keynes, as well as the rise of microeconomics and mathematical modeling. That goes along with the transition toward neoliberalism. These political trends seem to go hand in hand with the trends in economics. What in your view is the link between the two?
By virtue of the fact that I’m thinking about liberalism, rather than neo, ordo, and other variants that crop up over these decades as the world economy changes and new ideas take place, I see continuity where others see break and rupture.
With David Edgerton, who wrote a book called The Rise and Fall of the British Nation, I’ve been having a productive exchange about the extent to which 1945 was really a fundamental shift in the political economy of Britain, and to what extent say 1979 was another break. Certainly the election of the Labour government in 1945 and the sorts of changes they made to the welfare state, and then, in contrast, Thatcher’s election and the reversal of those reforms, are breaks.
But there’s a great deal of continuity of liberalism within this. That includes the lack of thought about what the City of London and the private control of the investment function do to the British economy, and the ongoing importance of a certain conception of free trade, within both the right and the left of the Labour Party. Sometimes, new solutions and accommodations come about because the labor movement is strong, or because the Second World War shows that the state can play a more active role in the economy, and Hayek’s warnings in The Road to Serfdom look a bit exaggerated. But it’s difficult to explain how we get to 1979 and Thatcher.
Thatcher didn’t come out of the blue. She didn’t overturn a fully functional non-crisis-ridden, non-contradictory form of social democracy. She exploited those contradictions. She exploited the disorientation within the Labour Party among social democrats. Keep in mind that James Callaghan, who became the leader of the Labour Party and prime minister in the late ’70s, had already adopted a form of monetarism, and had accepted the IMF austerity loans.
Those shifts I see as taking place more gradually, because liberalism never really goes away. The form of liberalism the Economist espouses shifts and changes in all sorts of ways over the course of the 1840s all the way to the 1940s, but some elements of that story are in place throughout those transitions within the study of economics.
I’m going to put this question in provocatively simplistic terms.
That point about continuity versus rupture is really interesting. You could come back and say if you view liberalism as the ideology generally held by the capitalist ruling class — which is debating how this ideology should be interpreted and implemented in something like the pages of the Economist — then you can see a lot of the changes that take place in liberal ideology as responses to material changes taking place that require innovation within this ideology to facilitate the ongoing capital accumulation.
That might focus a bit too much on the economic base, but to what extent do you think there’s something there that explains some of the continuity but also the undeniable changes that we have seen in liberal ideology over the last hundred years?
It’s not so provocative to me. As a crude materialist or vulgar Marxist, I do accept that idea. What we see is that maybe a similar set of questions are being asked by liberals over these two centuries, but the answers change based on circumstances and historical context.
What to do about the forcible entry of the working class onto the scene of politics? How to limit it? Is it by restricting suffrage? Is it by accepting universal suffrage but by limiting what parliaments can do? Is it a question of handing over control of interest trades and monetary policy to a central bank so that those sorts of questions that are so fundamental to capital accumulation are out of the hands of legislatures?
The answers to those questions change depending on what’s possible in a given moment. But the questions are rather consistent in the history of liberalism.
I emphasize the way liberalism changes, but I don’t discuss as much as I could that turning point in the 1980s — the entry of, as David Harvey puts it, “the long march through the institutions of the neoliberals.” They were biding their time in the 1920s and ’30s, and by the 1980s, that time had arrived.
In some sense, that story is undeniably true. What’s interesting to me, though, is that journalists at the Economist don’t describe themselves as neoliberals. In fact, I was just looking through the archives of the paper and seeing that the term “neoliberal” really only gets applied in quotation marks employed by Latin American leftists to describe a set of policies applied in their countries in the aftermath of the coup in Chile — if it gets used at all.
It’s not viewed as a real descriptor of a political-economic world view, let alone one that the Economist would adopt. And this is despite the fact that by the end of the 1980s, the Economist is rightly viewed as a bastion of free-market thinking. Reagan and Thatcher are beatified in the pages of the Economist and a version of globalization á l’outrance is championed there. You don’t see the term “neoliberal” in the Financial Times, the Economist, or other financial newspapers. The IMF didn’t seem to recognize that it existed until fairly recently.
What that indicates to me is that this transition between liberalism and neoliberalism from the point of view of those who were enacting it is not always so clear-cut. Many of the ways that neoliberalism gets implemented as a set of policies, whether that’s of austerity or deregulation or privatization, comes about via people who view themselves as classical liberals or even center-left liberals. That’s key to understanding the way the transition takes place.
Today, there’s a shift in the economic common sense — whether you look at the reaction against austerity in some of the big international economic institutions, or just the more dirigiste economic policies that are being implemented in response to the pandemic. This is all taking place in response to the changing needs of capital.
Do you think this is going to be reflected in another shift in liberal ideology? If so, to what extent will this be a new shift or an attempt to return to a more social-democratic model to try and re-embed markets within a national context — and will that work?
The United States, Britain, and several other countries have opened up the taps and have been spending quite generously to buttress the economy during the pandemic — to provide people with paid unemployment insurance extensions, and all sorts of other things to businesses to keep the economy turning over.
When Biden came in, there was a sense at the outset that he was going to be more impressive in his scale of spending than many had imagined on the Left. Certainly, there was this one-off package extending the kind of spending that Trump had already implemented, as well as some aid to states, so that some of the state-level post-2008 austerity might be avoided. (States can’t run deficits in the United States, and many municipalities, such as where I am in New York City, were devastated by COVID in kind of a unique way since the economy here is so dependent on tourism.)
But now, as Biden starts to encounter real resistance to his agenda within the Democratic Party, as well as from Republicans, to raising corporate tax rates, to actually implementing an infrastructure plan in its entirety, it’s open to debate how much of a break we’re going to see — even insofar as that means a return to something like a Keynesian conception of priming the pump, and so on.
In the absence of real resistance from organized labor and the Left challenge, I wonder how much simply spending money on the part of the state and racking up deficits when interest rates are low can actually bring a lasting shift to political economy. I’m far from having a clear answer about that, and things are changing really rapidly right now in response to a totally unprecedented crisis.
Cédric Durand wrote very well about this for New Left Review’s Sidecar the other day, and asked some very interesting questions about what this new moment we’re living in potentially is. Neoliberalism is no longer quite the right description. What is it? I have some skepticism about the extent of that break, but I’m actually quite curious about what you think at the moment.
The points you were making earlier about the tensions between liberalism and democracy from its inception are really important. I think we’re seeing that reemerge today. The traditional view on the Left as to why a capitalist state could simply continuously increase its spending in the way we have seen in some states during the pandemic would have been a kind of Kaletskyan view — that it’s going to empower workers and disrupt capital accumulation in the favor of labor, which is a slightly different argument given the onslaught against the labor movement that we’ve had over the last forty years, but also given the massive role that was already played by the state within capital accumulation.
The big lie of neoliberalism, which has been unpacked many times, is that it involved the shrinking of the state, which of course it didn’t. It just involved a reorientation of the state, and a shift toward setting the rules of the game — toward massive increases in regulation, particularly regulation in the finance sector, which was required to underpin that big bubble that we saw. It wasn’t less state, but a different kind of state. It was the erosion of the power of workers and the use of the state to boost the power of capital.
But that was also associated with the state being more visible, and being in so many more areas of life. I think the challenge today isn’t necessarily that if you spend more money, there’s higher employment, thereby tipping the balance in the favor of labor. The challenge today is that a state that is doing lots of stuff has to justify why it is doing some stuff and not other stuff.
It has to be able to justify that to a population which, especially in the places that neoliberalism has gone the furthest, is increasingly insecure, precarious, low-paid, and dealing with appalling public services. While the people in the shop are experiencing that, we’re also seeing very overt, massive demonstrations of the power of capital with regards to the state — whether that’s them extracting tons of tax cuts or subsidies or whatever.
The challenge we’re seeing today, and the tightrope that a lot of liberal politicians are walking, is between being able to meet the needs of capital, and using the state to meet the needs of capital, while also being able to say they have to draw the line somewhere.
If we’re in a democratic system, they have to be able to say there are certain things you just can’t ask for. You just can’t ask for them to reverse privatization, or reverse anti-union laws, or take some of the things you need to survive out of the market mechanism, or provide more social housing. That’s going to be the interesting legitimation question that these liberals are going to be facing now.
For the Left, the big thing is going to be around asking how we assert democracy and our right to say “no” — how we can actually ask for these things, will ask for, and demand, and campaign for these things. This gets back into the tension between liberalism and democracy again.
It seems like there was a moment during the pandemic when questions arose about fairness, justice, and who gets what in a very clear way. For the Left, it’s about extending that realm of politicization around questions of who does what work, what forms of compensation they receive, how are they classified, who is essential, and also the question of how and who gets to decide those questions.
Arguably, a bigger challenge for liberalism over the longer term and apart from COVID is the rise of China. At the moment, we’re seeing Joe Biden attempt to construct this anti-China axis. Arguably, a lot of the giveaways he’s been providing in terms of agreeing, finally, that he needs to work with Europe to clamp down on tax avoidance — predominantly by US tech giants — is about giving stuff away to encourage European countries to be more assertive about resisting the rise of China.
What are the implications going to be for what some call the liberal rules-based world order? Clearly, this was not a crisis that began and ended with Trump. It’s something much more structural. How are liberals going to react and respond?
Clearly the way Trump deployed “America First” and the rhetoric of a new Cold War with China was already there under Obama. Based on Biden’s playbook so far, and based on this incredible interview Hillary Clinton gave where she talked about the rise of China and the means of production, while Trump deployed it very effectively as a rhetorical and mobilizing tool, it’s clear Biden has adopted it.
A number of the stimulus measures are couched in the language of needing to compete with China: on-shoring semiconductor production, or preventing that technology from being appropriated by Chinese manufacturers, guarding intellectual property, needing a labor force that is able to be retrained and competitive in higher-value industries, and so on. All this language around industry in the United States, its decline, and reviving it, are all coded in anti-Chinese rhetoric that seems to be like a playbook literally distributed to the leaders of the Democrats in the Senate, Congress, and the White House.
I see that as something that’s here to stay, and I don’t see it as a positive development, unlike some on the Left, who might think it’s a clever way of getting these progressive priorities within various pieces of legislation. I see it as actually quite characteristic of the way that liberalism can and does employ nationalism. Liberalism has not always historically been a rootless cosmopolitan doctrine: it quite often employs nationalism in certain ways to get stuff done or to attain power.
To think about the British case, the liberal imperialists were numerous as a faction in the Liberal Party at the turn of the twentieth century. They emphasized this idea of efficiency in the aftermath of the Second Boer War. The working class who went and fought in that war were malnourished, were considered too short, and so on. There were all sorts of complaints about the “racial stock” of the British people, and it led to a number of elements of progressive social legislation to make sure there were health checks at school, or that food and milk were distributed.
This is just an example to talk about the way that the idea of efficiency and the idea of empire can be a spur within liberalism toward more progressive social legislation at home. This playbook in use with the rise of China seems quite consistent with, on the one hand, getting social reform, and on the other, ramped-up imperial intentions. And rather than the two being separate, in the history of liberalism, they often go hand in hand.
There’s simply no reason to accept this hypocritical idea on the part of the West, which is the more powerful party. Another important question to consider in these discussions on foreign policy is who is the more powerful party, and who has more to gain from this moralism around the idea of democracy and human rights. Since Carter, at the latest, it’s the United States. If we were more specific, we could get into how that is used in a variety of contexts: Iran, which is entirely encircled by US military bases, as well North Korea, as well as China, as well as Cuba.
Cuba has now created two vaccines based on a biotechnology sector which is one of the strongest in the world, with an embargo against it, ninety miles off the coast of Florida, but they can’t get the syringes and technical equipment they need. It’s a crime, and has nothing to do with the moral qualities of that regime.
The question of foreign policy and liberal imperialism is really fundamental to understanding the whole orientation of the Left. One of the things about Corbyn that was so refreshing was that he really represented a break from a Labour Party that historically has always been quite nationalistic in its outlook. Of course, that was one of the things that was most anathema, and one of the reasons why the Labour right pulled out all the stops in its desire to undo him.
Finally, why is there no Economist of the Left — and can we make one?
In reading the Economist, and its archives, it’s quite clear that the Left has always been interested in it. Marx was reading the Economist at the British Library in the 1840s and ’50s to try and understand why the revolutions of 1848 had fizzled out. In his view, it was in part due to the improving economic conditions, which he confirmed by reading the prices and quotations and indices in the Economist. Isaac Deutscher, the great biographer of Trotsky and historian of the Russian Revolution, actually wrote for the Economist and was a correspondent for it during the Second World War about what was happening in eastern Europe and Russia.
The Left has always been fascinated by the Economist, so I see myself as part of that tradition that looks at it as this tribune of a liberal ruling class, of a financial aristocracy — that’s what Marx called it, “the tribune of the aristocracy of finance” — to understand the political orientation of these leaders and markets and how they change and shift.
The Economist serves a particular function for a global ruling class. It’s always held an international orientation and has always been sent abroad to Buenos Aires, to Paris, to all sorts of cities around the world that were interested in trade and foreign capital investment. Structurally, the Left, which is oppositional, nonhegemonic, and is attempting to create a new political modality, couldn’t have created something like the Economist organically because it cannot hold a mirror up to capital in the way the Economist does.
It’s perhaps a goal of the Left to be as comprehensive and totalizing at the Economist is in covering the entire world, in thinking about the ways that domestic and foreign policy politics are connected, and in being quite savvy and clear in the ways that the emergence of the new political movements on the Left in somewhere like Mexico or Brazil is not only going to challenge national capitalists, but international capitalists.
I don’t have an answer for why the Left doesn’t quite have the Economist, but it seems quite structural to the ways that the insurgent left and the dominant ruling class work. In reading the Economist, the Left has found a tool to understand capital in a clear-eyed way. David Singer, a left-wing journalist who worked for the Economist, once said, “in The Economist you can hear the ruling class speaking to itself and it can speak quite plainly.”
Maybe the question is not exactly why the Left doesn’t have an Economist, but how the Left, by reading the Economist and by taking it and its worldview seriously, can empower itself and can gain a certain purchase on this world that they want to overturn.