Early neoliberalism rejected laissez-faire in favor of a state-built competitive order.

Evidence

In order to realize the agenda of liberalism, early neoliberalism rejected the notion of laissez-faire as the preferred means to serve the human individual. Rather, the competitive order, a man-made moral and legal framework within which markets would be as free as possible, was identified as the new means to the end. In addition, early neoliberalism was conscious of social concerns and tasked the state with social responsibilities as well as the protection of the free market order. As the WLC participants argued in a discussion following the agreement on the five essential points of the agenda of liberalism, “maximum utility is a social good, but is not necessarily the only one that must be sought.” Admitting that the economy was shaped to build a society of a certain kind, early neoliberals were engaged in the conscious construction of a state to safeguard the so-called competitive order in both its internal setup and its relations to other states. This competitive order could well be run according to certain social goals and based on certain social convictions, but the operationalization needed to be carried out according to a liberal script. Any state agency had to be based on liberal interventionism, avoiding arbitrary political decisions and case-by-case action. The call was for principled legal and market-conforming intervention that would not endanger the price mechanism. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 365

Freiburg economist and early MPS member Walter Eucken was typical of early neoliberalism in his belief that nineteenth-century liberalism had failed. This failure, Eucken wrote to his fellow German neoliberal Alexandre Rüstow, was not due to its religious and metaphysical foundations. Rather, when liberalism ‘lost its religious and metaphysical content, it decayed’. Eucken, one of the founders of Germany’s postwar social-market economy, shared the dominant MPS view that securing a competitive market order could not be left to the invisible hand. The experience of the political polarisation and crisis of Weimar Germany had alerted the German liberals to the moral, institutional and legal conditions for a competitive market order. Whatever their differences, the early neoliberals largely accepted that the survival of civilisation required state action to produce the conditions for a competitive market, including by promoting a conducive moral climate. Even the Chicago School’s Milton Friedman – who would later describe the invisible hand as Smith’s ‘great achievement’ – argued in 1951 that the collec-tivist faith in the state was ‘an understandable reaction to a basic error of nineteenth-century individualist philosophy’ and its embrace of laissez-faire. — Jessica Whyte, The Morals of the Market, 117

Categorization

• XREF: Directly fractures the caricature that neoliberalism equals minimal state / laissez-faire — connects to Mirowski’s larger argument about the ‘neoliberal thought collective’ and to Philip Mirowski’s other work on the Chicago School’s state-building. — connects to: Neoliberals rejected planning yet immediately designed world-scale institutional blueprints. — Quinn Slobodian, Globalists: The End of Empire and the…, 398; Early neoliberals explicitly distanced themselves from classical laissez-faire doctrine — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 117; Neoliberalism rejects laissez-faire in favor of perpetual constructionist state intervention — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 148 (+17 more)
• DEFINE: Defines the key early-neoliberal term ‘competitive order’ and ‘liberal interventionism’ as distinct from laissez-faire.
• corroborated: 2 independent passages support this claim — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 365; Jessica Whyte, The Morals of the Market: Human Rights…, 117

Broader Connections

• Early neoliberals rejected laissez-faire and wanted strong state action #corroborates (0.98)
• Neoliberalism differs from laissez-faire liberalism by using state intervention to create competition #expands (0.92)
• Ordoliberals rejected laissez-faire because markets need moral and institutional scaffolding #exemplifies (0.85) — Jessica Whyte, The Morals of the Market, 118
• Neoliberals pursued an engineered order rather than expecting free markets to emerge naturally #expands (0.82) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1907
• Early neoliberalism emerged partly from a critique of laissez-faire and naturalist philosophies of history #corroborates (0.78) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 379
• Early ordoliberalism demanded a strong independent state to counter organized interests #exemplifies (0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 524
• Neoliberals rejected the pure state-versus-market binary as a false dichotomy #expands (0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 9
• Early neoliberalism allowed state intervention alongside price mechanisms, even tariffs #expands (0.72) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 389