WINNING CONSENT: THE PROTRACTED CAMPAIGN FOR AN ANTI-CORPORATIST “COMMON SENSE” by S. FULLER B.A., University of Cape Town, 1977 Post Baccalaureate Diploma, Simon Fraser University, 1988 M.A., Simon Fraser University, 1990 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY in THE FACULTY OF GRADUATE STUDIES INTERDISCIPLINARY STUDIES We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA February 14, 1995 © S. Fuller, 1995 _________________ In presenting this thesis in partial fulfillment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. (Signature) Department of fV4Zti1(L4/uW4k”/ 7’vo,e The University of British Columbia Vancouver, Canada Date YCL’-I 2\ “(5 AB STRACT The metaphor used to read the world significantly influences how it is interpreted. Similarly, the assumptions which underpin a study influence the form the arguments take. This thesis embodies the assumption that in complex systems such as that of contemporary society, which do not merely reproduce themselves but entail continual change, this change is best understood in terms of how it has been actively contested. The metaphor is struggle. The project has social movements theory as its theoretical interest, in particular themes derived from the thought of Antonio Gramsci and Main Touraine. Specifically, the study pursues its understanding of social transformation using a framework formulated by social movements theorists Ron Eyerman and Andrew Jamison to search out and identifj longer-term processes related to the subjectivities of intellectual and social action as the key to understanding how the dominant way in which a society sees itself can change and in turn can change the society. The thesis argues for a new understanding of the dramatic changes which took place in industrialised western countries during the 1 980s associated with a decline of the corporatist perspectives of what is known as the Keynesian “consensus” and an erosion of the power of meta-narratives. Adapting to a new purpose an investigative approach in the social movements tradition, it identifies and traces a movement campaigning against large-scale state intervention and for a more market-based social order and pushes its origins back to the 193 Os. It takes issue with and puts forward a reformulation of what the dominant accounts have called the “New Right,” generally seen as a response to the “crisis” of the late 1 96Os and II 1970s and interpreted through the metaphor of base/superstructure, where historical developments are rooted in economy. Selecting the period from 1931 to 1981, this study traces the development over 50 years of a movement whose growth began with the arrival in Britain of Friedrich Hayek in 1931 and which since that time has fought a concerted international campaign for limited government and more market-based approaches, creating and developing the research and policy institute, or think-tank, as an important organisational form along the way and consistently foreshadowing political/policy change in the thrust of its movement activities. Methods associated with field work are used, such as observation of the activities and practices of the intellectuals in their various fora; focused, semi-structured interviewing, used as a method within the methodology of both survey and case study; as well as what is referred to as unobtrusive measures, such as the examination of documents and other archival material. An account of material not in the bibliography is included in a set of appendices. The originality of this thesis lies in two things: Firstly, in showing that the more robust market policies of many Western governments in the 1980s were the result not just of currents of ideas but of 50 years of struggle by a social movement with intellectuals and organisation; secondly, in using a social movements approach to study a grouping generally conflated with the Right. The study examines in detail the process in which the movement intellectuals were engaged and makes links between their protracted, organised intellectual campaign and the changes which have undermined the postwar Keynesian welfare state. Direct contact was ifi made with the intellectuals in their organisational settings, notably the think-tank, and relevant documents stretching back close to the turn of the century were consulted. The study also identifies Hayek not only as a central figure in the revival and reformulation of classical liberalism and resolute organiser of the movement campaigning against centralised, large-scale state intervention, but also as an important player in contemporary epistemological themes. His critique of positivism in particular has been a contribution to an intellectual strand eroding the dominance of positivist notions in the post-World War II social sciences. Overall, his work has contributed to keeping the movement vital while raising his own profile in the last quarter of the 20th century in what is being called the knowledge or information society. iv TABLE OF CONTENTS Abstract ii Table of Contents v List of Tables viii Acknowledgements ix Preface xii PART ONE Mapping the methodological. theoretical, historical and spatial terrain CHAPTER 1 1. Introduction 5 2. Why the Period 1931 to 1981? 10 3. Whythis Site? 14 4. The “New Right,” and a Reformulation i) The Term Contested 20 ii) Taking Issue with the Dominant Accounts ofthe “New Right” 27 iii) The Reformulation 36 5. Divisions within this Work 45 CHAPTER 2 Making Links to Existing Literature on Intellectuals and Social Movements 1. The Revival of Interest in the Intellectual and Social Movements as Social Agents 48 2. (3ramsci as Invigorator, and some Similarities to Hayek 58 3. Touraine’s Influence on Social Movements Theory 63 4. The Project Framework: Mapping the Eyerman & Janiison Approach 71 5. Cycles and Social Movements 86 CHAPTER 3 The Research 1. Research Problem 90 2. Research Strategy: Why This Approach? 91 3. Research Questions 98 4. Procedures i) Interviewing 100 ii) Observation 105 iii) Documentary Research: Historical, Biographical and Organisational Statements 106 5. General Significance of Research Approach 107 v PART TWO Considering the Contexts: The Political. Economic, Cultural andIntellectual CHAPTER 4 The Period 1931 to 1948: From National Crisis to the Official Inauguration of the British Welfare State 113 CHAPTER 5 Keynes and Hayek and the Intellectual Milieu from which they Emerge Cambridge and the LSE: Opposing Camps in Contested Terrain 124 a) Hayek: His Position Hayek’s Austrian Beginnings 126 Hayek at the LSE, 1931-1950, and his Academic Evolution 137 c) Keynes: His Position 149 Keynes at Cambridge, 1919-1946 152 b) The Keynes/Hayek Struggle: Differences and Some Similarities 155 CHAPTER 6 1. The Keynesian Climate, and the Early Resistance 163 2. The Contexts and the Movement 176 PART THREE Reading the movement: The protracted struggle against large-scale state intervention and campaign for a more market-based order. 1931-1981 CHAPTER 7 The Period of Gestation, 1931 to 1944: Contesting the Interventionist Argument 180 CHAPTER 8 The Period ofFormation, 1944 to 1957: Organising the Base 202 CHAPTER 9 The Period of Consolidation, 1957 to 1974: The lEA, the Changing Climate and the Campaign for Market Approaches to Policy 228 CHAPTER 10 Winning Consent for Market-Based Thinking, 1974 to 1981: Creating Spaces, Expanding the Network and Translating the Model 276 vi PART FOUR The influence on the intellectual and social field of the movement’s protracted campaign for a more market-basedsocial order CHAPTER 11 By Way of Conclusion: Intellectuals, Think-tanks and the Intellectual and Social Field 304 POSTSCRIPT: BETWEEN THE LINES 316 BIBLIOGRAPHY 335 APPENDICES I The Research Procedure 359 II People attending Mont Pèlerin Society inaugural meeting, April 1-10, 1947 368 ifi Statement of Aims ofthe Mont Pêlerin Society 369 IV First elected office-bearers ofthe Mont Pèlerin Society 370 V Chronology of the lEA to 1981 371 VI Topics discussed at Mont Pèlerin meetings, 1947 to 1989 374 VII Institute ofEconomic Affairs publications from inauguration to 1981 375 VIII U.K. parliamentary election results 1931-1987 384 IX U.S. presidential election results 1932-1988 385 X The British Privatisation Campaign 386 INDEX 390 vii LIST OF TABLES Table 1: U.K. parliamentary voting trends 1945-1987 3 Table 2: U.S. presidential voting trends 1932-1984 4 Table 3: lEA Income and Expenditure for 1990/91 248 Table 4: International growth of research and policy institutes resisting large-scale state intervention and promoting market-based approaches 277 vifi ACKNOWLEDGEMENTS Most work is a collaboration before it is an individual effort and, as I note in a postscript, Between the Lines, which augments the brief acknowledgements format, this thesis is no exception. To rank those who contributed is always difficult, but the tireless support at every level of my foremost partner, John Fuller, from unflagging encouragement to committed editing, was crucial to the completion and quality of this project, a contribution so considerable as to make any attempt at thanks seem insufficient and the customary rendition of thanks too clichéd to describe either the contribution or my appreciation. While my thanks fall short of the contribution, I offer them with sincere gratitude. The significant contribution of my other foremost partner, Marc Fuller, stretches back some way through time. An academic career would have been impossible to even conceive of without his enthusiasm, grace, humour and wisdom — attributes he always exhibited irrespective of his youth.