Coining Neoliberalism: Interwar Germany and the Neglected Origins of a Pejorative Moniker

Abstract

Widespread academic use of the term neoliberalism is of surprisingly recent origin, dating to only the late 20th century. The vast and growing literature on this subject has nonetheless settled on an earlier origin story that depicts the term as self-selected moniker from the Walter Lippmann Colloquium, a 1938 Paris gathering of free-market academics that foreshadowed the post-war founding of the Mont Pelerin Society. This origin story, however, is a myth that likely derives from a misreading of French philosopher Michel Foucault, who first directed modern scholarly attention to the Paris gathering. By turning to neglected German-language sources, this study shows that the term and modern concept of neoliberalism predate the 1938 conference. Rather, neo/neu-liberalismus was first popularized by a succession of Marxist and Fascist political theorists in the early 1920s, who employed it as a term of disparagement against the Marginal Utility School of economic thought anchored at the University of Vienna. These critics of marginalism diverged sharply on the political far-left and far-right of interwar Austrian and German politics, but shared a common disdain for the theory of subjective value promoted by the Viennese circle around economist Ludwig von Mises. This earlier origin story of the term links it conceptually to modern-day uses, which often display a similar pejorative character to its interwar uses on the political left. It further helps to explain why several attendees of the 1938 conference, Mises among them, rejected the proposed term.