Neoliberals rejected both laissez-faire and universal welfare, seeking market-compatible assistance instead.

Evidence

In the wake of the Great Depression, the laissez-faire tenets of an earlier liberalism no longer seemed tenable to any but the most intransigent opponents of state intervention. Ludwig von Mises found himself largely isolated at the inaugural meeting of the MPS when he argued that all public relief should be abolished, as private charity was sufficient to ‘prevent the absolute destitution of the very restricted hard core of unemployables’. The majority of the neoliberals, in contrast, sought to avoid what Röpke called the false choice between the ‘social Darwinism’ of laissez-faire and a ‘cradle to the grave’ welfare system. The former, they believed, had neglected the conditions necessary to sustain a labour force and created a backlash against the competitive market. Against the latter, they revived a series of objections the ILO had canvassed back in the 1920s: the welfare state was a ‘foretaste of communism’ that would undermine the responsibility of workers to provide for their families, remove the incentive for wage labour, increase bureaucracy, and (in a Malthusian vein) increase the profligacy of the poor and the growth of the population. Rather than rejecting all state assistance, however, the neoliberals focused on the forms of welfare that would be compatible with a market economy. — Jessica Whyte, The Morals of the Market, 199

Categorization

• DEFINE: Establishes the core conceptual position of postwar neoliberalism: neither laissez-faire nor welfare statism, but market-compatible social policy.
• XREF: Connects to Whyte’s broader thesis on market ethics and to the debate over welfare-state critiques in the 1920s ILO. — connects to: Early neoliberalism rejected laissez-faire in favor of a state-built competitive order. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 365; Neoliberals sought minimal welfare that avoided legitimizing the welfare state — Jessica Whyte, The Morals of the Market: Human Rights…, 206; Early neoliberals rejected laissez-faire and wanted strong state action (+1 more)
• SEED: Nuclear material for an essay on how ‘third way’ welfare positions since the 1930s keep resurfacing: the false-choice framing between social Darwinism and cradle-to-grave.
• DEEPTHINKING: This passage captures the crucial point that austerity-era ‘welfare reform’ is not a departure from but a founding concern of neoliberalism — the movement was born defining which welfare is compatible with markets.

Broader Connections

• Early neoliberalism rejected laissez-faire in favor of a state-built competitive order. #corroborates (0.90) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 365
• Neoliberals sought minimal welfare that avoided legitimizing the welfare state #expands (0.90) — Jessica Whyte, The Morals of the Market, 206
• Early neoliberals rejected laissez-faire and wanted strong state action #corroborates (0.85)
• The term ‘neoliberal’ was adopted deliberately to distance liberalism from pure laissez-faire #corroborates (0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 279