Early Neoliberalism - Imagining a Different Kind of Strong State

Central to the invention of Neoliberalism in the 1930s and 40s was a dual argument claiming both that "economic planning" lead to "totalitarian" regimes, but also that laissez-faire was an insufficient doctrine for modern liberals. This was a somewhat contradictory endeavour, since the strong rhetoric employed by early neoliberals regarding the catastrophic consequences of economic planning and state intervention, did seem to suggest that the state had no constructive role to fill in the organization of modern market economies what so ever. Even so, several scholars have argued persuasively that early neoliberalism also amounted to an attack on the ideology of laissez-faire. The early neoliberals concept of a strong state charged with providing the legal framework for markets and spreading market-like structures to more spheres of social life, was in fundamental conflict with contemporary social democratic and social liberal concepts of a strong welfare state, charged with providing for citizens from cradle to grave. Furthermore, while the welfare state version of the strong state was national in character, the early Neoliberals argued that federations and other supranational legal arrangements could become the structures needed for a market society and that these could be designed in such a way as to undermine welfare states and minimize the possibilities for “economic planning” at the national level. The paper explores early Neoliberal thought on the background of these conceptual conflicts between different ideas about strong states, nations and supranational organizations.