William Callison is a political theorist with research interests in the history of political and economic thought, democratic theory, and critical theory. His work explores dilemmas of neoliberal capitalism, democratic crisis, political subjectivity, conspiracy theory, climate change politics, and far-right nationalist movements in Europe and the Americas. With Zachary Manfredi, he is the editor of the recent collection, Mutant Neoliberalism: Market Rule and Political Rupture. He is a member in the School of Social Science at the Institute for Advanced Study, Princeton, and received his Ph.D. in Political Science from the University of California, Berkeley.
He spoke with contributing editor Alex Collin about his essay “The Politics of Rationality in Early Neoliberalism: Max Weber, Ludwig von Mises, and the Socialist Calculation Debate” in JHI (83.2).
Alex Collin: Firstly, a very general question. I’d like to ask how you came to write this piece, and how it relates to your research more broadly?
Will Callison: I came to this through my dissertation research on twentieth-century conceptions of rationality, technocracy, and politics, with a focus on the Austrian, Freiburg, and Chicago Schools of neoliberalism and the Frankfurt School of neo-Marxism. At the time I was interested in the origins and critique of what we could call neoliberal anti-politics: the transformation of political economy into economics and the displacement of “the political” through notions of rationality. One thing I discovered through reading primary texts—and many dusty books with old German typeface—was the central if muted role Max Weber played in these intellectual traditions. This is perhaps unsurprising. But some key parts of that story have been overlooked. For example, an important point of departure for each of these schools was the so-called “socialist calculation debate”—a debate in which Weber was an early participant. Examining Weber’s place in the calculation debate became important for my dissertation; it also became the basis for this article. My work has changed as times have changed. But that research informed part of my current manuscript, which is a historical and theoretical study of what I call “haywire liberalism.” The book examines the evolution of different currents of neoliberalism, their tangentially authoritarian foundations, their distinctive constructions of (anti-)socialism, and their hybridization with far-right politics. This article explores one part of its epistemological and methodological backdrop.
AC: Your article alludes to the social context between Weber, Mises, and other scholars living in and around Vienna, as well as groups and institutions like the Verein für Sozialpolitik and the Mont Pelerin Society. How important were the social and intellectual dimensions for these developments?
WC: Incredibly important. The article begins by highlighting the significance of the Methodenstreit, or methodological dispute, between Gustav von Schmoller’s German Historical School and Carl Menger’s Austrian School. That debate concerned the epistemological basis of the interdisciplinary economic sciences, including law and the “state sciences,” pitting German approaches to historicist institutionalism against Austrian formalistic subjectivism or “marginalism.” But the social dimensions were key to these intellectual developments. Here I draw on some excellent historians of late-nineteenth and early-twentieth century political economy, such as Johanna Bockman, Bruce Caldwell, Erwin Dekker, Stefan Kolev, Niklas Olsen, Pavlos Roufos, Quinn Slobodian, Keith Tribe, and Janek Wasserman, among others. The debates of that time developed through social, political, and academic organizations, especially the Verein für Sozialpolitik.
My article explains how Weber’s frustration with the Verein’s overtly political debates spurred his famous formulation of “value neutrality” (Wertfreiheit)—a way of carving science off from politics. It also led his thinking about methodology and economic theory from the views of German Historical School toward those of Austrian School. Not coincidentally, Weber was invited to Vienna, where he delivered lectures on “Economy and Society: Positive Critique of the Materialist Conception of History” to university students and a talk on “Socialism” to military officers and Austro-Hungarian royalty. The time he spent in Vienna and elsewhere, with Austrians like Friedrich von Wieser and Ludwig von Mises, was significant for their work in general and for the socialist calculation debate in particular. Mises and Hayek’s ability to form intellectual and political alliances, many of which began in the Verein, laid the interwar basis for the postwar founding of the Mont Pelerin Society.
AC: In the socialist calculation debate, you describe Mises as having ‘radicalized’ Weber’s ideas about formal rationality. Could you introduce that debate and explain why their respective notions of rationality were important to it?
WC: Under the revolutionary conditions that obtained at the end of the First World War, the socialist calculation debate concerned the theoretical foundations of socialist planning. In the framing of Weber, Ludwig von Mises, and Friedrich von Hayek, it concerned whether socialism is possible at all. Their shared target of critique was Otto Neurath, a positivist philosopher, proponent of socialist rational planning, and a former classmate of Mises. Neurath also led the Central Planning Office for the Bavarian revolutionary workers’ council before it was crushed by state and proto-fascist paramilitary forces in 1919. The conceptualization and critique of “planning” in Weber and Mises made the logic of market exchange into the criterion of formal rationality. Weber posited state planning as inherently less rational than markets, whereas Mises radicalized the concept of formal rationality in Menger and Weber to make state planning definitionally irrational. This set the conceptual architecture through which the debate would unfold. While participants like Karl Polanyi and Felix Weil rejected some of this framing, market socialists like Lange, Lerner, and Dickinson largely worked within it. Lange even praised Mises’ scientific contribution, suggesting there should be a statue of him in the future Central Planning Board of the socialist state! Through a close reading of certain texts, particularly the second chapter in the posthumously published manuscripts titled Economy and Society, one can see how Weber’s binary typology of rationality shared a great deal with and even contributed to the Austrian framing of the calculation debate. Accordingly, if suspiciously, Hayek later argued that Mises, Weber, and the Russian economist Boris Brutzkus all “independently” arrived at the same conclusions about the “irrationality” of socialist planning.
AC: In the conclusion, you describe the calculation debate as ‘modelled on the Methodenstreit’. To what extent should we see the calculation debate as a unique phenomenon, and to what extent does it sit within a longer tradition of argument in the history of ideas.
WC: In addition to the Austrian School’s views on politics, culture, and civilization, the tradition was built on a series of epistemological interventions. Beyond Menger’s own writings, it was formed through his methodological polemic against Gustav von Schmoller and the German Historical School. In other words, a tradition of political and economic thought emerged through a critique of its alleged opposites. I argue that Mises, Hayek, Lionel Robbins and others learned a great deal from Menger’s maneuvering in the Methodenstreit. This form of critique was continued and transformed through Mises’ attack on socialist planning. In the early 1930’s, the neoliberals made “socialism” and “planning” into sliding signifiers for irrationality and existential danger, which were soon applied to Keynesianism as well. As I explain in the article, it’s important to track how that discursive maneuver was carried forward. But it’s also imperative to understand the history of such concepts, methods, and strategies—that is, how they develop within and between different traditions of thought.
AC: It has been argued lately, for instance by Gary Gerstle, that neoliberalism is coming to an end in many countries today. Do you agree, and if so, how does that affect our assessments of the importance of the calculation debate?
WC: We are surely witnessing a set of fundamental transformations to political and economic, order that are at once locally rooted and yet global in scope. But for reasons my current manuscript will explain, and Mutant Neoliberalism already indicated, I disagree. In our introduction to that edited volume, Zachary Manfredi and I offered a critique of kneejerk narratives proclaiming the “death” of neoliberalism. These began with the global financial crisis of 2008 and were run on repeat after the Brexit referendum and Trump’s election. At the beginning of the Covid-19 pandemic, we again observed the implicit hope that declaring neoliberalism over might make it so. Gerstle is a renowned historian of the twentieth century. Yet with this book, I fear he has written a certain version of this story—the post-election version equating neoliberalism with free markets and rightwing populism with its assumed opposites—backward in time. Gerstle takes neoliberalism to be a combination of free-market globalization and cosmopolitan culture. This interpretation may allow for an accurate account of neoliberalism’s uptake by New Labour and the New Democrats, one which can also be found in Stephanie Mudge’s Leftism Reinvented, among other books. But as a century-spanning intellectual and political history of neoliberalism, that rendition is far too simple and does not adequately track the internal diversity of neoliberal thought or the evolution of neoliberal practice, as captured by books like Melinda Cooper’s Family Values, for example. Gerstle is right that there is an important connection between classical liberalism and neoliberalism, as my manuscript also argues. But for precisely this reason, one needs to account for longer and more global histories of political-economic struggle. As my article suggests, the socialist calculation debate is a part of that history. And as libertarian disciples and contemporary socialists like Evgeny Morozov and Aaron Benanav reconsider some lingering questions in that debate, it is also critical to political-economic struggles today.
Alexander Collin is a PhD candidate at the University of Amsterdam where he works on northern Europe from the 1490s to the 1700s. His doctoral thesis aims to test the historical applicability of theories of decision making from economics and organizational studies, considering to what extent we should historicize the idea of ‘The Decision’ and to what extent it is a human universal.
Edited by Tom Furse
Featured Image: Max Weber, Creative Commons.