Taking Off the Neoliberal Lens: The Politics of the Economy, the MIT School of Economics, and the Strange Career of Lawrence Klein

Abstract

Over the last decade, a narrative centered around the rise of neoliberalism has become the dominant framework for explaining recent US, and often global, history. Although this neoliberal lens has repeatedly proven its value, it also obscures major continuities running across the twentieth century. This article highlights one striking example of continuity that becomes easier to see after taking off the neoliberal lens—namely the commitment to discretionary management of the macroeconomy, often short-handed as Keynesianism. It begins with a survey linking the development of a politics centered around managing the economy to the making of what Karen Orren and Stephen Skowronek have termed a “policy state.” Next it considers the role of economists within the policy state, paying particular attention to what it calls the MIT school of economics. Then it uses the career of Lawrence Klein, an exemplary product of the MIT school, to illuminate the politics of the economy in a supposedly neoliberal age.