chapter  2
25 Pages

Constructing the consumer

From its very earliest publications in the late 1950s, authors at the Institute of Economic Affairs (IEA) sought to problematize methods for governing the economy that did not, as far as they were concerned, maximize the potential for the free expression of consumers in the marketplace. Its goal was to achieve for liberalism what it was believed the Fabian society had achieved for the welfare state; only now, these Fabian goals were to be the target of criticism. The IEA was thus founded in a world in which the practices of government were shaped by social concerns. Certain techniques for governing the economy, such as Keynesian demand management, planning and income controls, formed part of an assemblage of governmental practices that required the state to ensure economic security and with it a functioning social order. Yet there was no crisis; 1959 was in fact the year in which the British population were told by the Prime Minister Harold Macmillan, perhaps overenthusiastically, that they had never had it so good. One might thus say that the liberal critics of the supposed Keynesian orthodoxy were simply arguing that things could be even better, that the general level of consumer satisfaction was below that which it would be if certain industries were allowed to run along market principles. At the very least, these British (neo-)liberals, along with other Mont Pèlerin liberals such as Hayek and Friedman, were determined to argue against policies that sought to extend the role of government intervention in the economy. This chapter focuses on how these arguments were constructed, and how they referenced a particular kind of human economic agent, the consumer. Whether in the context of political philosophy, economic theorizing of consumption and the demand for holding money, or in more localized political arguments regarding controls over advertising, consumer credit and the provision of consumer goods and services, the figure of the consumer was activated to counteract and bring into question the conventional economic thinking of the time. A key part of these arguments was the recurring liberal criticism of government, that there are often negative unintended consequences of government intervention, however benign the intention. Nevertheless, the focus here is not on these wellrehearsed arguments but instead on the way the consumer was constituted in discourse so as to immediately problematize the kinds of human agents that were taken for granted by more progressive and ‘social’ ways of thinking. Indeed,

while welfare-based political rationalities certainly activated a particular organic notion of society monitored by the state, this same governing mentality also imagined a certain kind of consumer, one who was weak in the face of corporate power and prone to habitual, as opposed to aspirational, spending patterns. This is a key point, for to understand how the neoliberal mentality tackles governing the economy in ways that are distinctive, say from classical liberalism, it is necessary to understand how it referenced human behaviour in contradistinction to the social democratic orthodoxy of the time. This counterrevolution in economic theory and policy, to use Friedman’s term, was never about restoring the initial situation (classical liberalism) but was about articulating something new.1 The argument here is that neoliberalism, both in theory and policy, referenced a human agent that was different from that practised by progressive liberals; and one that was not referenced at all by orthodox nineteenth century political economists, the thinkers that this grouping were claiming lineage from. To look to the consumer as a transformative agent of (economic) progress required a distinctive and different view of society and the types of human beings that constituted it, discontinuous with both a classical and progressive liberal mentality of rule. In this regard neoliberal economic thinking was decidedly post-Keynesian. This chapter asks the question: how did neoliberals conceive of the figure of the consumer and how did this figure appear in their political thinking in the 1950s and 1960s? To answer this question the early work of the IEA, as well as some of the writings of Hayek and Friedman, are examined. All these authors referenced in their publications taken-for-granted assumptions regarding human behaviour and the associated norms that they took to be symptomatic of human existence, albeit with different methodologies and audiences in mind. At the same time, it is important to understand the way this neoliberal figure of the consumer problematized the conception of individual economic conduct in the political rationality practised, although certainly not created, by Keynes. As such this chapter also examines what Keynes took for granted when writing about the economy, and how his ‘revolution’ can be seen as an economic theory that incorporated the idea, already in existence, that government could and should play a distinctive role in providing economic security. Post-1945 economic policy was made in the wake of the Keynesian Revolution, and it is only in this context that one begins to comprehend the formation and constitution of British neoliberalism; the way that a new kind of social realm was imagined, one composed of entrepreneurs and enterprising consumers. Understanding Keynes therefore provides the necessary background to the work of the IEA and important neoliberal figures, like Hayek and Friedman.