Neoliberalism by Force of Thought

The Power of International Status Hierarchies

One of the striking patterns in this author’s interviews with policy intellectuals in Bucharest was their reference to “serious Western economists” and the nearcomplete lack awareness of the existence of Western heterodox perspectives on the East European economic transition (see also Pop 2006). The reason, it turned out, had to do with the high status enjoyed by neoliberal economists, which, in turn, was a function of their access to professional and material resources.

The international advocates of neoliberalism benefited not only from the support of Western resources and a better ideological fit with the new political and civil elites of Eastern Europe. In addition to these considerable advantages, they could also leverage overwhelming professional resources to weaken their adversaries. Neoliberals occupied pivotal positions in government, worked as advisers to heads of government, and sat on the boards of flagship economics journals. Others were senior staff in IFIs, were recognized as international academics, established schools of economics with international pedigree in Eastern Europe, and circulated through the revolving door between all these institutional settings.

The high salience of neoliberal economists in debates over the East European transition was often asserted but never demonstrated empirically on a systematic basis. A combination of network and content analysis can address this gap. The network can be read using the following rule of thumb: the thicker and shorter are the linkages, the higher the number of economists associated with a school of thought. The comparison brings to the fore several dimensions of the superior resources of the neoliberal (or orthodox) camp. First off, figure 7.1 shows that the orthodox were more closely tied to economists with PhDs obtained in top economics departments like Harvard, MIT, Minnesota, or Chicago than the revisionists were. In contrast, while top departments like the LSE and Yale appear in the revisionist network, their contribution is comparatively a lot weaker. Given the status position awarded by one’s PhD in the hierarchies of the profession (Fourcade 2006; 2009), this asymmetry helped tilt the playing field in favor of the orthodox.

The difference is even more striking if we go beyond one’s graduate school experience and look at the actual professional experiences of the orthodox and the revisionists during the late 1980s and early 1990s, the critical juncture of transition. As figure 7.1 shows, the neoliberals’ institutional bases cluster strongly around the top of the academic hierarchy: Harvard, MIT, Chicago. Their appointments also include the IMF and the World Bank as well as “real world” posts such as consultancies or policymaking positions in Eastern Europe and Latin America, with Russia and Poland looming large in the distribution. Contrary to conventional wisdom, EU institutions and the US government are rather insignificant providers of professional affiliations for the intellectuals of neoliberal transition economics. Other usual suspects such as central banks, private financial institutions, and global players in the consulting market are also peripheral. In short, the core of the neoliberal network was a US-based epis- temic community situated at the apex of academia and institutional financial institutions.

In contrast to this neoliberal network, the revisionist one is almost purely academic and less connected in the top economic departments (see figure 7.2). While it may include Harvard and MIT, they are a lot less important than the University of Washington, University of Maryland, Columbia, and Stanford. Unlike the neoliberal network, here continental European universities and heterodox US schools like the University of Massachusetts at Amherst play an important, albeit not central, role. The World Bank looms large, but this is a consequence of hosting such prominent critics of neoclassical transition economics as Joseph Stiglitz, David Ellerman, and Branko Milanovic. The “great absentees” in this network are the IMF and advisory positions for national governments, which meant that the revisionists were not invited to advise the governments of postcommunist countries (see figure 7.3).

In sum, the revisionist network was a US-based epistemic community situated largely on the middle and lower rungs of the academic profession, with

PhD-granting institutions of economists involved in the economic transition debate. Source

Figure 7.1 PhD-granting institutions of economists involved in the economic transition debate. Source: LinkedIn and institutional bios.

a weak membership in international financial institutions, whose members seemed to have been excluded from the government consulting opportunities opened up by the end of the Cold War. While neoliberals spoke from the centers of political and academic power, the revisionists could make their view known only in academic debates or in the dissident but politically weak milieus of the World Bank.

Institutional affiliations of the proponents of neoliberal transition economics. Source

Figure 7.2 Institutional affiliations of the proponents of neoliberal transition economics. Source: LinkedIn and institutional bios.

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