Trapped in the Free-Market Fantasia Masters of the Universe' Details the Failures of Conservative Economic Theory (and the Practice Is Worse)

Article excerpt


By Daniel Stedman Jones.

Princeton University Press ($35).

The political revolution associated with Ronald Reagan in the United States and Margaret Thatcher in Britain was built on conservative (also called "neoliberal") economic theory. Promulgated by Friedrich Hayek and Milton Friedman, the theory endorsed free- market individualism, low taxes, limited government and low inflation in contradistinction to regulation, central planning, social welfare spending and full employment.

Tested -- and some would say, found wanting -- during the global financial crisis that began in 2008, neoliberalism remains highly influential in the 21st century.

In "Masters of the Universe," Daniel Stedman Jones draws on extensive archival research and interviews with politicians, policy- makers and intellectuals to provide a lucid, richly detailed examination of the evolution of the free-market ideology since the end of World War II.

A London-based barrister with a Ph.D. in history, who has worked as a policy adviser for the New Opportunities Fund and Demos, Mr. Jones maintains that the rightward shift of politics was not inevitable. To be sure, the ideas of John Maynard Keynes, the New Deal and social democracy had grown stale -- and seemed unable to address the "stagflation" of the 1970s. Nonetheless, according to Mr. Jones, it took articulate and assertive ideological entrepreneurs, led by Hayek and Friedman, to seize the moment, package and sell "a simple script of individual opportunity and free enterprise" that resonated with the anxieties and aspirations of working class and middle-class voters and the policy agendas of politicians.

The role of thinkers, Friedman recognized, was to keep options open so that when the "brute force of change" provides an opportunity, alternatives are available. In the 1970s, Mr. Jones demonstrates, the neoliberals were ready. Making extensive use of the rhetoric of freedom and opportunity, they were no longer perceived as abstract and eccentric right-wingers. …