Michael Polanyi: From Academic to Cultural Freedom

DRAFT - DO NOT QUOTE MARTIN BEDDELEEM Canadian Center for German and European Studies (CCGES), Université de Montréal School of Culture and Society, Aarhus University

MICHAEL POLANYI: FROM ACADEMIC TO CULTURAL FREEDOM

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ichael Polanyi’s part in the creation of neoliberalism is an unlikely one. Born in Budapest in 1891, he emigrated a first time from Hungary to Germany before leaving the Continent to seek a more open and tolerant workplace in England, arriving in Manchester in 1933 from the famous Kaiser-Wilhelm Institute in Berlin-Dahlem. Polanyi had left his chemistry laboratory in Berlin dissatisfied with the lack of public engagement of fellow scientists – Fritz Haber in particular – in speaking out either for their Jewish colleagues being dismissed, or against the evolution of the political situation. Berlin, where science was practiced in tightly-knit independent communities, epitomised the ideal workplace Polanyi would never find elsewhere. At that time however, England herself was facing a grave economic and moral crisis, questioning the very foundations of its longstanding traditions. As the decade progressed, Polanyi progressively lost interest in chemistry and scientific matters and became preoccupied with the necessary conditions for free science and the political and ideological determinants required for the pursuit of discovery as he understood it. Faced with a concerted movement promoting the planning of science, Polanyi became an important public figure in the English discussions around the opportunity to increase state oversight over scientific research. I will purport to show how his (neo)liberalism was consolidated within this epistemological quarrel over the nature of knowledge, and the conception of what science is and does. In this dispute, questions of how to organize the community of researchers became relevant to the kind of political system one wished to defend and promote. Conflicting visions of the nature of science – its historical development and its relation to truth – became entangled with economic positions and programs. Most visibly, concerns about the role of science in society were tied up with the most pressing political question of the day: the rise of fascism and totalitarianism. From 1931 onwards, intellectual claims about the nature and character of scientific knowledge were translated in organizational forces which had a pivotal impact not only on government policy, but on the future capacity for neoliberal ideas themselves to be institutionalized and carried out. The Mont-Pèlerin Society, which Polanyi contributed to found, was but a late-comer – ultimately the most successful one – in a movement which started more than a decade earlier. The history of neoliberalism is one of paradoxes and dead-ends, not least because its enemies turned out ironically to be its best allies. Retracing Michael Polanyi’s gravitational course around the neoliberal core, we will aim to show how epistemological questions played a decisive role in the consolidation of a neoliberal theory of knowledge (part 1). Liberalism, it was felt from the Colloque Walter-Lippmann onwards, needed to reclaim the mantle of science planners and collectivists had

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misappropriated (part 2). Yet, the organizational impulses needed to carry out a defence of liberalism materialized themselves within conflicting agendas and diverse institutions, which blurred what neoliberalism actually covered and meant (part 3).

PART 1: RESISTANCE The 1930s proved to be a pivotal decade in the history of science, a period “when radical historicist messages from Central Europe and the new Soviet Union combined with local antiquarian cultures into historiographical and institutional changes” (Mayer 2004: 43). The movement for planned science gained prominence in the United Kingdom after a surprise Russian delegation stunned the 2nd International Congress for the History of Science held in London in 1931.1 The audience, largely scientists and amateurs, had been unprepared to the discourse of dialectical materialism applied to the history of science: what sounded like a Martian language to some was a revelation to others (Kojevnikov 2008: 123). Boris Hessen’s paper “The Social and Economic Roots of Newton’s ‘Principia’” claimed science was but one kind of labour within the system of social production, and recast Newton’s discoveries within the social (bourgeois) and industrial (capitalist) needs of his time, namely ballistics, optics, and navigation (Hessen 1971, 204). Pure science was subordinated, technically and cognitively, to applied science and existing technology. This conference, remarked Edward Shils, “led an important bloc of British scientists to support the Marxist theses that all scientific work, however 'pure' it might appear, is a witting or unwitting response to the practical problems confronting the society or the ruling classes of the society in which the scientists live” (Shils 1947, 80). Under the leadership of J. D. Bernal, P. M. S. Blackett, and a young generation of natural scientists sympathetic to socialism, the Social Relations of Science movement promoted a fuller integration of society, industry, and science, where the latter, emancipated from capitalism, would fulfil its natural object of serving human welfare. “Science has social roots and social consequences,” wrote Hyman Levy (1933, 38-9) and the scientist himself was “no longer a free-lance” (Bernal 1975, 49). They made theirs the conclusion of Boris Hessen that: “Only in a socialist society will science genuinely belong to all mankind” (Hessen 1971, 212). From 1931 onwards, the history of science became suffused with political overtones, and new epistemological lines of fracture accompanied much larger theoretical and ideological commitments. In a sensitive economic context, the Marxist approach confronted the prevailing internalist historiography of science institutionalized in the International Academy of the History of Science, the main international body of the discipline (Fox 2006: 414). The current crisis, all agreed, was not due to an excess of science, but a default. The birth pangs of the externalist account in science activated an intense scrutiny over the possibility and desirability of planning in science. Not that the two were logically linked, but the Soviet example and the degrading economic conditions of the time called for a science at the service of society, a science that would help rationalize both the economy and the political system. The achievement of Hessen and others to actualize a vision of science rooted in its conditions of production doubled up as a commitment to a certain form of social organization. It was the historical association of these two trends that made the field divided as much along scientific disagreements than ideological lines: “For the new science historians, historicity formed a key concern, yet clearly this was profoundly so in conjunction with the political good that it The papers given by the Russian delegation were published together a couple of days after the end of the Congress and were widely disseminated (Werskey 1971, Werskey 1979). 1

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promised to deliver” (Mayer 2004: 65). This diffusion of a sophisticated sociological theory of knowledge and science, connected to a predilection for a definite form of social organization, elicited the dynamic epistemological response of liberal scientists.2 Michael Polanyi’s visit to the Soviet Union in 1935 triggered his involvement in the political and economic debates of his times. Polanyi met there with Bukharin, the leader of the 1931 Russian delegation, who explained to him that “the distinction between pure and applied science made in capitalist countries was due only to the inner conflict of a type of society which deprived scientists of the consciousness of their social functions, thus creating in them the illusion of pure science.”3 Bukharin persisted in seeing no contradiction between a comprehensive planning of science and the limited freedom of research of the scientists; it was to be regarded as “a conscious confirmation of the pre-existing harmony of scientific and social aims” (Polanyi 1939, 177). Polanyi’s conflictual experience with the Soviet system and its supporters in England crystallized his latent intuitions about the nature of science and drove their expression within a theoretical frame. Polanyi published USSR Economics in 1935 (Polanyi 1936a), a detailed study of Soviet statistics showing the failure of the Communist Party to have reached the objectives the quinquennial Plan had set. He did not see in planned production a substantial improvement over a free economy: “it seems that public and collective management is developing on lines almost identical with those in the marketing system of Capitalism” (Polanyi 1936a, 18). Despite the abysmal record of the planned economy, the genuine support of the population puzzled Polanyi who spotted in the Soviet propaganda’s displays of “public emotion” a “vivid form of social consciousness” which provided clear purpose and direction to the citizens. At the core of the desire for social revolution in Western societies, he concluded, brewed a frustration with the opacity of the market system, a lack of a refined grasp of the economic mechanisms.4 Incomprehension of modern economics bred resentment and suffering; and the revolt against the present system was simmering. The theoretical sophistication of economic science had alienated the general public and allowed for more “vivid” modes of explanation to gain their assent at the expense of the more scientific view. Laissez-faire utilitarian ideas had failed to resolve the moral contradictions of a society bound by a communal spirit and a private motive of acquisitiveness. The decisive advantage of dictatorships lay exactly in their rhetorical clarity regarding the purpose of economic life. Taking upon himself to correct the situation, Polanyi undertook to produce an educational motion picture expounding the workings of a market economy for the general public. In the documents dealing with the making and distribution of the diagrammatic film, he wrote: “For no real devotion is possible to daily work which is involved in a conundrum of perplexities. No man can be satisfied by thinking of himself only; robbed of clear consciousness of his relations to those with whom he actually co-operates, he feels that the complex structure which thus isolates him is bad, inhuman, revolting.” (Polanyi 1936d, I underline)

Robert K. Merton himself has acknowledged the triggering factor of the 1931 Congress, even though he did not adopt a Marxist point of view. 3 The significance of this conversation for Polanyi’s intellectual development was such that this anecdote opened The Tacit Dimension, published 27 years later in 1966. 4 Economics was far from foreign to the Polanyi family (cf. Nagy 1994). In Berlin, Michael had started to organize a Sunday night’s meeting at the Kaiser-Wilhelm Institute’s Harnack House whom John Von Neumann, Jakob Marschak, Eugene Wigner, among others attended. Also present were personal acquaintances Gustav and Toni Stopler, both economists. Gustav Stopler was the editor of the Deutsche Volkswirt which featured regular discussions of the Austrian school thinkers, like Hayek and Schumpeter. Once in Manchester, Polanyi became a regular visitor of the Economics Department and befriended there John Jewkes, an ardent anti-planner and founding member of the Mont-Pèlerin Society (Scott and Moleski 2005, 158-60). 2

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Only earnest education could prevent the masses from seeking more direct and noxious remedies. “To find, present, and develop truth in social matters,” Polanyi had written to one of his close Manchester colleagues in June 1935, “is the first revelation we require, a revelation which can be gained by a technique of seeing society and cannot be found without it. This is my obsession.”5 The educational film aimed at embedding expert understanding of the economic mechanism into the public spirit. Polanyi saw in Otto Neurath’s pictorial statistics the way forward in remodelling the popular economic consciousness towards a better understanding of the complex. Lyrically, he praised the semiotic quality of a motion picture where: “we should see our social life symbolically projected, happening before us on the screen on an artistic plane of its own, directly significant, like the symbolic drama of the Middle Ages or the comic cartoons of Walt Disney.” A society so transformed by this effort to educate and publicize would fulfil the “promise of liberalism” (Polanyi 1937b). What was achieved in the Soviet Union through public emotion and propaganda could be accomplished in liberal societies through reason and public education. Through this project, Polanyi reoriented his efforts from chemistry to the defence of pure science and scientific freedom within a liberal order, which entailed spheres of opaque complexity the public intellectual ought to explain if its implicit principles were to be preserved against glaring propaganda. Protesting the positivist creed in exact values and sweeping laws as found in physics and Marxism, Polanyi emphasized the “value of the inexact” which makes those laws “only valuable in combination with the element of uncertainty in them, which is compensated by the supreme sanction of validity, which is faith” (Polanyi 1936c, 233). This unaccountable element both in science and in human behaviour – “tacit” knowledge –, he would spend the next decades fleshing out in his philosophy of science (Polanyi 1958). Bearing witness to the gradual submission of science to ideological purposes in totalitarian countries, Polanyi now defended science on political grounds with three main arguments: -

That “science, and generally the independent search for truth, is destroyed when political liberty falls;” “that such [independent] thought must claim superiority to temporal power and is therefore incompatible with totalitarianism;” That there is “a common fate between independent science and political liberty. […] The link between science and liberty is completely reciprocal.” (Polanyi 1937a)

The superiority of liberalism as a regime was grounded in its unceasing commitment to free discussion and controversy, something which was compromised in totalitarian countries. Our trust into science mirrored our trust into liberal institutions as a way to foster reason and liberty, since science without freedom was at risk of becoming an instrument of propaganda. Already by 1937, Polanyi had begun examining topics that would define neoliberal epistemological premises: providing critiques of planning and objectivism, emphasizing the limits of exact predictions, and observing the inherent complexity of phenomena, both in the natural and social sciences. The conflicting interpretations of science and of scientific method took particular importance at a time where totalitarian ideologies credited themselves with a superior scientificity. Many scientists from the left railed against the “frustration of science” (Blackett 1975) and the lack of coordination and planning which could be brought only through scientific expertise. J. D. Bernal, their most vocal spokesperson, committed himself to show that science represented the archetype of communism, one which society should embrace at large. He decried 5

Polanyi to O’Neill, Hugh O’Neill Papers. TOWARDS GOOD SOCIETY – 6TH PROJECT MEETING – COPENHAGEN, 9-11 DECEMBER 2015

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liberalism as the method of chaos, “spontaneously grown,” hindering the use of knowledge in society because it was corrupted by a profit-making economic system. On the contrary, communism translated accurately the collaborative method used by scientists, and prioritized applied science as the logical output of pure research (Bernal 1939, 322-3). “The task which the scientists have undertaken,” Bernal concluded, “the understanding and control of nature and of man himself, is merely the conscious expression of the task of human society. […] in its endeavour, science is communism” (Bernal 1939, 415). Paradoxically, the new epistemological vista brought by the Russians played a decisive role in the creation of the neoliberal project. Polanyi produced, in response to Bernal, a vision of pure science as a template for the liberal society. He envisioned independent spheres carrying their spiritual aims without state intervention. His general model of liberalism was built on the duplication of the rules he had discovered to work at its best for science. The role of the liberal state was not to contain the freedom of science, but to protect and uphold it as part of its tasks. How the discovery and justification of knowledge functioned provided a blueprint for constructing a cohesive social theory. Epistemological battles around scientific method reverberated as a political and ideological argument over the best form of government: “philosophy of science and political economy became fused together into a single set of propositions.”(Mirowski 1998, 31) Between pure and applied science lied the liberal gap: a refusal to harness the quest for knowledge to social expediency.6 A free society cultivated science as the boundless quest for new knowledge, which will be then available for practical applications: “To the Liberal this position of science in society is a significant example of the principles of liberty. Science, munificently showering gifts on all men, when allowed freely to pursue its own spiritual aims, but collapsing into barren torpor if required to serve the needs of society, makes a powerful argument for liberty” (Polanyi 1939, 181-82; I underline). Polanyi’s understanding of the relationship between scientific work and social theory greatly expanded in reaction to Bernal’s revolutionary ideas. Far from being the archetypal communist society, science represented the incarnation of a liberal order guided by scientific method. Yet, the ideological confrontation unravelling between left scientists and liberal scientists concealed a much wider agreement upon the relationship between science and society. Polanyi and Bernal were each framing “a social turn” in studying the history and philosophy of science (Nye 2011, 184). On the one hand, Bernal’s exposition of the communism of science was close to what Robert Merton would define in 1942 as the scientific norms of universalism, communism, disinterestedness, and organized skepticism: “To the extent that a society is democratic,” he wrote, “it provides scope for the exercise of universalistic criteria in science” (Merton 1942: 121). Also, the personal elements in the scientist work, his own participation to the process of research and discovery, were unavoidable. On the other hand, Bernal and Polanyi believed the working of science anchored both its public trust and its stability. They shared a valuing of disinterested knowledge as an inherent good and as a model for social order (Thorpe 2009: 72). Science as a social activity relied on social networks knitted together through institutions and publications: traditions and values mattered to account for how exactly was science made and supported (Nye 2011, 219). The missing link between the individual scientist and the public was the “scientific community” whose opinion exercised “a profound influence on the course of every individual investigation” (Polanyi 1951, 64). Decisively, this concept of a specific constituency within a democratic polity, bound by its tradition and authority and pursuing an ideal which society supported, became the model upon which Polanyi articulated his vision of other orders within a liberal economic framework. “It was through the idea of scientific community,” notes David Hollinger, “that the conflicting claims for "planning" and "laissez-faire" were reconciled. It 6

Compare with Popper’s Poverty of Historicism (2002). TOWARDS GOOD SOCIETY – 6TH PROJECT MEETING – COPENHAGEN, 9-11 DECEMBER 2015

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amounted to what we might call "laissez-faire communitarianism"” (Hollinger 1996, 110). Tis design had a tremendous influence upon the American post-war model where science was presented as self-regulatory, yet heavily state-funded. Vannevar Bush (F.D.R.’s scientific advisor), James B. Conant (President of Harvard), and Warren Weaver (Science Officer at the Rockefeller Foundation) all argued at the end of WWII that this scientific community represented “an exemplary model of organization for a free and democratic society” (Nye 2007). This idea, Polanyi would pursue it his whole career, giving it a definitive formulation in 1962 when he declared that: “A free society may be seen to be bent in its entirety on exploring self-improvement ― every kind of self-improvement. This suggests a generalization of the principles governing the Republic of Science.” (Polanyi 1962).

PART 2: CONSOLIDATION Oskar Jászi, a fellow Hungarian emigre, had sent a copy of USSR Economics to the publicist Walter Lippmann, who complimented Polanyi as an “exceptionally gifted observer” in his 1937 book The Good Society (2005, 78). At that time, Lippmann was corresponding with a network of dispersed liberals across the Atlantic, notably Friedrich Hayek, Lionel Robbins, and Wilhelm Röpke, advocating for a closer cooperation between “genuine” liberals (Burgin 2012, 65-7). The debacle of liberalism resulted of an intellectual error, not of a historical fate. Lippmann wished to isolate an authentic “liberal science” from the false science of collectivism which was “morally right” but “founded in a profound misunderstanding of the economy at the foundation of modern society” (Lippmann 2005, 204). Liberalism had become stultified and dogmatic, falling into a “mystique” which had removed itself from experience (Rougier 1938). When Louis Rougier took the initiative to organize a conference to discuss the recent publication – and French translation – of Lippmann’s book, Polanyi was invited as part of the English contingent. He shared with most of the participants an acute sense of the failures of 19th century liberalism, and a harsh criticism of the planned economy. With Lippmann and Rougier in particular, Polanyi lamented over the “dismal science” of liberalism (Lippmann 2005, 195) which had abandoned the radical promise of the scientific method, leaving it to the collectivist to claim the mantle of science. Liberty, he wrote in the preface of The Contempt of Freedom, “cannot be saved unless it again becomes a progressive idea. Those who have returned to its defense must now give it all their hearts and gifted minds to make it again a progressive faith” (1940, vi). This mission, Polanyi was one of the few who had undertaken it at the time. His economic film entitled “An Outline of the Working of Money” was shown to the Colloque Walter-Lippmann participants.7 His sole recorded intervention during the proceedings tapped into the same educational themes he had vigorously exposed in defense of his movie project. Their lack of comprehension of economic principles had driven the masses to overthrow liberalism and to adopt a “passionate conviction” that economic life ought to be regulated by force. Civilization was threatened by this “mental derangement” caused by a “permanent state of perplexity” over the unintended consequences of economic interventions. The problem with the invisible hand was precisely its invisibility which frustrated the agent’s economic activity from its larger social and moral sense, a void which central plannism fulfilled (in Audier 2008, 325-7). This widespread ignorance about how the economic system operated threatened to make the Despite some criticism, Polanyi received encouragement to work on a more ambitious version. With the help of John Jewkes, he obtained a grant from the Rockefeller Foundation to redo and enlarge the first version, which he intended to distribute in America. He completed “Unemployment and Money” in the Spring 1940 and it premiered in London and New York. Unfortunately, the movie failed to attract any substantial attention (Scott and Moleski 2005, 178-9). 7

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next century “a modern Dark Age in which the use of rational thought was lost.” 8 Free cooperation through the market had thus to be made tangible through popular education and intellectual initiative. Created for that purpose, The Centre internationale de rénovation du libéralisme was short-lived due to the outbreak of the war and did not keep the promises shared during the event (cf. Denord 2006, 142-60). Nor was the idea of a “liberal journal” proposed by Polanyi ever to see light. In early 1939, Hayek wrote enthusiastically to Polanyi about his suggestion to create a new publication whose main purpose “would be to discuss what Lippmann has called the Agenda of Liberalism, including of course the question of a future world order. But it would of course discuss all “cultural” problems from a Liberal angle.”9 Hayek submitted “Common Affairs” as a tentative title and advocated its publication in French and English to emphasize the “cultural collaboration between the two countries.”10 Despite Hayek’s insistence, the project never saw to light, and Hayek’s organizational efforts would not come to fruition before the first meeting of the Mont-Pèlerin Society (Caldwell 1997, 47). A lack of financial supporters seemed to have been the principal reason behind the failure (Mirowski 1998, 41n13). Upon meeting Polanyi for the first time at the Paris conference, Hayek remembered having “very interesting discussions,” acknowledging that his influence on Polanyi’s economic ideas was in fact limited, as the essays that would feature in Logic of Liberty (Polanyi 1998) were mostly fleshed out before their acquaintance. But for the next decade, they were “always just thinking about the same problems” as their minds “moved on parallel courses” (Hayek 1983, 246-7). Despite some important differences, both Hayek and Polanyi traced the origin of the enthusiasm for planning within a perversion of the Western rationalist tradition, what Hayek came to name “the Abuse of Reason” and Polanyi “moral inversion.” In fact, the ubiquitous association between the worldview of the scientific mind and its methods, and the promotion of planning – “scientism” – became one of the psychological wedges Hayek would not cease to hit. Both were looking for ways to defeat the current “scientific socialism” which was a dominant voice in the media and the public intelligentsia, and fed the public with the kind of fallacies neoliberals promised to counter. In a letter from July 1, 1941, Hayek explained that he attached “very great importance to these pseudo-scientific arguments on social organization being effectively met and I am getting more and more alarmed by the effects of the propaganda” of the left scientists which “discredit the reputation of science by such escapades.”11 Hayek was now effectively joining Polanyi’s fight against planned science, writing in Nature that the movement for economic planning strongly supported by left scientists and engineers, had now “succeeded in capturing public opinion that what little opposition there is comes almost solely from a small group of economists.” (Hayek 1941, 213) Being in the midst of writing his own critique of the scientist psychology (Hayek 2010), he derided the natural scientists’ meddling habit with economics, “pronouncing in the name of science in favour of schemes or proposals which do not deserve serious consideration.” (Hayek 1941, 217). Mirowski is right to point out that Hayek’s formative political activities during the writing of the Road to Serfdom12 “were not aimed at Marxists per se as they were at scientists who were promoting socialism and planning as the logical extrapolation of a scientific world-view.” (Mirowski 2007, 363). Writing to Hayek after the article’s publication, Polanyi reiterated his current commitment to their joint enterprise, stating that “the only real aim in my view is the starting of a literary and “Chapters,” “1929-1939,” box 42, folder 2, Polanyi Papers (quoted in Scott and Moleski 2005, 177). Hayek to Polanyi, 28 January 1939, Box 3, Folder 14, Polanyi Papers, University of Chicago Library. 10 Hayek to Polanyi, 28 January 1939, Box 3, Folder 14, Polanyi Papers, University of Chicago Library. 11 Hayek to Polanyi, 1 July 1941, Box 4, Folder 7, Polanyi Papers, University of Chicago Library. 12 Of which the first draft had been completed as early as 1942. The same topic of science and plannism appears in Road to Serfdom. cf. Hayek 2007, pp. 200-204. 8 9

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philosophical movement of our own for the renaissance of Liberalism.”13 Polanyi’s own refutation of planning had evolved from a defence of pure science towards an epistemological defence of liberalism based on the position of thought in society. Thus the real adversary, imagined or quoted, was Karl Mannheim’s sociology of knowledge which provided not only a social deterministic point of view on the production of knowledge, but concluded that intellectuals had to join the fight for planning (1940). Mannheim and the Social Relations of Science were veering towards the same conclusions: that thought, being a product of society, had to serve society. On the contrary, a liberal society, Polanyi argued, entailed a supervisory authority of independent organizations and public authorities, providing the framework for them to operate without corruption. Since no central control was possible, “as in the case of science, the comprehensive view is not an essential view but a superficial view and an ignorant view” (Polanyi 1940, 52). Polanyi’s liberal defence of pure science relied on the same epistemological premises which Hayek had independently developed for justifying the market: knowledge being dispersed and largely tacit, only the individual agency on the market provided reliable public information on the state of the economy. The role of the State was to enforce freedom “under the law” where citizens were guided in co-operative endeavours by customs and public opinion. Polanyi modelled his architecture for a liberal society from the freedom he had experienced as a scientist (Nye 2007). The struggle for pure science had been a small, but revelatory and synecdochical part of a much larger civilizational struggle: “The attack on science is a secondary battlefield in a war against all human ideals, and the attack on the freedom of science is only an incident in the totalitarian assault on all freedom in society” (Polanyi 1941, 454). Science was only one of the many “dynamic orders” to be found in the “intellectual and moral heritage of man” and characterized by “an arrangement of great complexity and usefulness, achieved by a series of direct lateral adjustments between individual producers making independent decisions” (Polanyi 1941, 435-6). For Polanyi, dynamic orders extended beyond the economy, they encapsulated a variety of activities or institutions which resembled each order according to their method of organization. Two in particular were paradigmatic examples: Science as Polanyi tirelessly demonstrated, and the Common Law towards which Lippmann had pointed. Common Law had arisen “by a process of direct adjustments between succeeding judges” in a process “precisely analogous to the relationship between the consecutive decisions of individual producers acting in the same market” (Polanyi 1941, 436). Here we can see at work the construction of neoliberal theory: the epistemological foundations unravelled in the analysis of the economic order (Hayek) or in the workings of science (Polanyi) were the templates of a much larger foundation for social activity which had been inherited as “spontaneously arising orders.” They were ‘analogous’, or illustrative of a much larger and unifying principle: undesigned orders. Polanyi already possessed at that time an allencompassing view of society as “a network of dynamic orders” (Mullins 2013) anchored in tradition and publicity. The complexity of existing orders made them epistemologically superior in embedding and discovering new knowledge and information while conferring to the individual a higher sense of responsibility and commitment. If analogy was the first epistemological device employed by Polanyi, critical idealism must be the second one. The permanent fundamental ideals which anchored these dynamic orders to social life could not be expressed precisely. Traditions consisted in the cultivation of a community of dedicated seekers. In the pursuit and practice of science, or law, or beauty in art, the ideal being followed could not be fully explicited, yet its guardianship was entrusted to senior fellows. The fundamental opacity at the core of tradition was revealed through its practice which embodied forms of knowledge irreducible to their positive and formal expression. This epistemology of ignorance penetrated liberalism because dynamic orders 13

Polanyi to Hayek, 18 November 1941, Box 78, Folder 35, Hayek Papers, Hoover Archives. TOWARDS GOOD SOCIETY – 6TH PROJECT MEETING – COPENHAGEN, 9-11 DECEMBER 2015

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depended on freedom as “the only method” to recover a truth that “is so complex, and each particle of it hangs together directly with so many others, that it can be revealed only by a continuous series of independent individual initiatives.” (Polanyi 1941, 448) The unpredictability of the outcomes of our interactions called not for a renounciation of our beliefs, but, on the contrary, a renewal of our faith into the constititive groundings of our principles, a fiduciary commitment to the liberal society against the materialist program of “social absolutism:” “The status of Science in Society, by which science is allowed to pursue its own life, illustrates the general obligation which civilized society bears for the cultivation of its own ideals.”14 The positive militant liberalism Polanyi promoted found a decisive outlet in the formation of the Society for the Freedom in Science (SFS) which heralded a turning point in the struggle between the liberal view of science and its collectivist foe. Like his colleagues from the Left, he dismissed the neutralist position as naïve in the face of the “absolute state,” “today it is the detachment of the scientists which blinds them to the danger of science.” (Wigner and Hodgkin 1977, 427). A four-page letter was circulated among scientists in May 1941 which pressed for the “defence of scientific freedom” not to be put rest once came peacetime. The SFS insisted that adhering to a liberal view of science was not to retreat into the high spheres of knowledge, but serving society to the scientist’s best abilities. Keeping an eye on the international level, it proposed to help scientists in foreign countries and “organize the forces which support the ideal of free science” ((SFS) 1941, §6). In August 1941, 48 members had joined, reaching 107 by October 1942 (McGucken 1984, 272). In the face of repeated failures at expanding its influence and publicity, the Society came to foster and rely on the actions of individual members: contributing letters to Nature, Science, various newspapers, and writing articles and books on the subject (McGucken 1984, 279). The SFS was only moderately successful at recruiting prestigious names to its ranks because its objectives confounded established scientists. Forming a society explicitly opposing Bernal’s views was, in fact, conceding that science, its method and organization, were political. Max Born, a Jewish emigre like Polanyi, refused to join on the ground that freedom of thought and economic questions should not be linked together. Either the SFS was deemed unnecessary, or too extreme in its refusal of any form of planning in a time of war when it was generally felt that some modicum of planning was both necessary and beneficial (McGucken 1984, 293). The recurring problem with enlarging the membership of the SFS was that it linked mechanically political design and freedom of thought. It was perceived as a political effort rather than a truly academic venture. In the end, the society’s main achievement lied with the incubation of a countereconomics of science which would influence the post-war settlement, notably in America. It allowed Polanyi to have a first-hand experience in the organizational aspect of ideological conflict, an experience that will prove invaluable after the war. The Society for Freedom in Science concretized an important dilemma for Polanyi’s thought: how to divert the intellectual minds of his day from supporting the cause of planning? The slogan “planning for freedom” tirelessly promoted by Karl Mannheim was directed at the intelligentsia his sociology of knowledge targeted. It involved a social criticism of the relationship between one own’s beliefs and social position. Traditions and community bonds were problematized and the “socially unattached intellectual” (freischwebende Intelligenz) embodied a skeptical and adetached outlook on the world, an apparent impression of superior scientificity. “Planning as opposed to aimless drifting is the natural inclination of a purposeful scientifically trained mind,” Polanyi conceded (1940, 28). An engineering mentality combined

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“Science, Welfare and the State” 1942, Box 27, Folder 4, Polanyi Papers, University of Chicago Library. TOWARDS GOOD SOCIETY – 6TH PROJECT MEETING – COPENHAGEN, 9-11 DECEMBER 2015

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with the regimentation of thought seemingly guaranteed a rational course of action, public acknowledgment, and a sense of benevolence from the experts. Mannheim’s materialism was even more unsettling for Polanyi as it explained mental categories and interests as results of social conditions. His sophisticated Marxist sociology of knowledge risked displacing all the established positions and institutions upon which Polanyi’s model of a liberal society rested. Nonetheless, both Polanyi and Mannheim’s epistemology doubled up as a social theory, and both paid particulat attention to the intellectuals: spontaneous orders did not mean at all an absence of formal regulation; they did not develop out of laissez-faire. On the contrary, these bodies of special and professional interests were regulated by experts - “influentials” as Polanyi called them – who “rule the internal life of the community of specialists of which they possess the confidence” (Polanyi 1941, 441). Polanyi stressed that knowledge was produced and rooted in communities of practice which relied on trust, publicity and authority. Skills, apprenticeship, traditions reflected a deeper tacit knowledge which severely limited the scope of any sociology of knowledge. “As regards the social analysis of the development of ideas,” Polanyi wrote to Mannheim, “suffice to say that I reject all social analysis of history which makes social conditions anything more than opportunities for a development of thought.”15 Polanyi’s antimaterialist and antireductionist philosophy of science brought him to criticize the deterministic sociology of knowledge upon which Bernal and Mannheim founded their defence of planning. Furthermore, Polanyi’s critique of the scientific impossibility of planning foreshadowed his epistemological argument for economic and scientific freedom anchored in the cognitive superiority of spontaneous orders. Both these projects were clearly linked as they informed his organizational efforts to promote liberalism both as a method and a civilizational achievement: “Far from contradicting his antimaterialism, Polanyi saw his defense of the capitalist economic system as a fundamental argumentative pillar for his antimaterialist position” (Thorpe 2009, 71). By 1943, Polanyi was beginning to pull together his account of modern European intellectual history. It contrasted the way that ideas and cultural practices (especially political practices) developed in English and Continental history. English traditions and practices had proven sound and sensible, providing social stability and gradual reform, whereas the way in which ideas and practices developed on the Continent ultimately followed out the logical implications of the Enlightenment and have brought nihilism, violence and totalitarianism. Polanyi was fascinated in the operation of “the living moral tradition in England” and how it was revived in World War II (Polanyi 1943). Polanyi’s defence of a liberal order as a good society sought to combine traditional authority and free-market mechanisms on the basis on a new epistemology of knowledge which reconciled the individual and social aspect. His positive commitment to academic freedom in a liberal society embodied the defence of the Western civilizational ideal. “In the great struggle for our civilization,” he wrote in 1942, “science occupies a section in the front line. In the movement which is undermining the position of pure science I see one detachment of the forces assailing our whole civilization“ (Polanyi 1998, 8).

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PART 3: SCISSION Despite the limited success of the Society for the Freedom of Science, Polanyi’s ideas were gaining traction in England and in the U.S.A. as he was quickly recognized as the principal exponent of the principles of academic freedom. His production during the war and after built upon the intuitions he had expounded within his early work, and more and more Polanyi framed his writings within a conscious perspective of rescuing liberalism and Western civilization. By the spring of 1943, Polanyi had written fifty pieces in defense of the liberal traditions, some as outlines and manuscripts, others as lectures and essays (Scott and Moleski 2005, 190). “Up until The Road to Serfdom,” Mirowski reminds us, “it was Polanyi, and not Hayek, who was the more visible and publicly effective spokesman against the Left in Britain. [...] it was Polanyi and not Hayek who was situated at the axle of a vast wheel of controversy over political economy and science in Britain in the 1940s” (Mirowski 1998, 33). Polanyi’s repeated insistence upon the spiritual dimensions of both science and society lent his liberalism a particular flavor. Yet, his proclamations that the commitment to the Western civilization was a matter of faith were echoed by the participants to the Mont-Pèlerin meeting of April 1947. In his opening address, Hayek denounced the same “false rationalism” which Polanyi had repeatedly criticized since the end of the 1930s, as leading to a form of “intellectual hubris.” The proper attitude towards the spontaneous orders within society were those of reverence and intellectual humility, akin to the spiritual awe found in religious convictions. Like Polanyi, Hayek did not believe that positivism or radical skepticism provided solid grounds for a renewed liberalism: “Unless this breach between true liberal and religious convictions can be healed,” he announced, there was “no hope for a revival of liberal forces” (Hayek 1992, 244). Moreover, the private militant organization which Hayek wished to establish relied on two fundamental Polanyian assumptions: on the one hand, participants ought to share an “agreement on fundamentals” where “certain basic conceptions are not questioned at every step” (Hayek 1992, 238). On the other hand, Hayek acknowledged that adherence to liberalism simply out of tradition was insufficient: participants were expected to commit to its ideal and to spread it within society. Against the Marxist message of materialism and universalism, the neoliberals reaffirmed the importance of a community bonded by shared ideals. Within this community, the dissemination of these ideals would be confided to “second-hand dealers of ideas” who could educate and influence the masses. Responding to Hayek’s paper on “Intellectuals and Socialism” (1949), Polanyi admitted there was “hardly one paragraph who hasn’t given me a thrill of pleasure.”16 Despite the proximity between Hayek’s vision and his own, Polanyi was disappointed with the Mont-Pèlerin meeting. His participation to the initial meeting did not elicit flattering comments and his credentials were not as well assured with the Society as they were in England. He was not trusted neither by the Germans nor the Americans, and Karl Popper in particular opposed from the beginning Polanyi’s project of anchoring liberalism to a metaphysical framework.17 On the other hand, John Jewkes kept vouching for Polanyi, and his participation to the Society allowed him to strike friendships with Raymond Aron, Bertrand de Jouvenel, and Veronica Wedgwood. Polanyi dedicated the summer of 1948 to the writing of The Logic of Liberty, his book devoted to economics and the planning controversies which collected essays and broadcasts from the past decade. In the preface to its first publication in 1951 (reed. 1998), Polanyi presented the “freedom in science” as the “Natural Law of a community committed to certain beliefs and the same is seen to apply by analogy to other Polanyi to Hayek, 14 December 1948, Box 78, Folder 35, MPS Papers, Hoover Archives. Hayek Papers See the minutes from the first meeting of the Mont-Pèlerin Society, especially the session titled “Liberalism and Christianity” in “Mont-Pèlerin Conference, April 4th, 9.30,” Box 5, Folder 13, MPS Papers, Hoover Archives.

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kinds of intellectual liberty.” In this matter, Polanyi remained faithful to the argument he had made a decade ago, that there was a fundamental analogy between the various orders, and that one could describe liberalism as a commitment to uphold freedom within these orders. On the other hand, Polanyi did take issue with Popper’s definition of a Liberal society: “A free society,” he wrote, “is not an Open Society, but one fully dedicated to a distinctive set of beliefs” (Polanyi 1998, xviii). Polanyi explicitly criticized views of liberty he felt were either negative or individualistic, insisting that unless a more positive version of liberalism was to be found, one which relied on faith and commitment, liberalism would fail to recover. After a successful visit to the University of Chicago for a series of lecture on the Logic of Liberty in the spring 1950, Polanyi received an offer from Edward Shils for a permanent position with the Committee on Social Thought, where Hayek had been appointed in 1950. Despite his enthusiasm at this recognition of his philosophical stature, the position never materialized as Polanyi was denied a visa of entry until 1953. Polanyi’s relationship with the Mont-Pèlerin Society illustrates the hopes and deceptions some of its early members shared. Compared to other participants, Polanyi was neither an economist, nor (yet) a philosopher. He had come to a formulation of liberalism from the necessity to protect and uphold scientific and political freedom. There was a social imperative liberalism had to take charge, and against the socialists and planners, liberals ought to offer their own theory founded on scientific principles. Science was a model for the design of other communities bound by shared ideals and beliefs. The economy, despite being central, was one among other orders, and Polanyi remained a committed Keynesian all his life: “A correct Keynesian policy,” he wrote in Full Employment and Free Trade, “should regenerate free competition and re-establish capitalism on renewed foundations” (1945, x). To achieve this aim, it ought to command both political and popular support since the “pre-condition of confidence is a clear, truthful, generally understood policy, fundamentally acceptable to all. It is high time therefore that modern economic theory and policy should be presented unhesitatingly to the public in all their striking and at first somewhat bewildering simplicity” (1945, 150). Polanyi’s concern to reassert a liberalism committed to a moral and cultural ideal did not sit well with the budding Mont-Pèlerin Society, and Polanyi quickly felt ill at ease with the technical economic discussions of his fellow neoliberals. At the onset, MPS members had been united more by what they opposed than by a common agenda. Polanyi, for instance, who regarded capitalism and tradition as connected elements of an antirationalist critique of planning, opposed members who conceived the two as incompatible. Three elements account for the progressive distance Polanyi felt with the MPS. First, the progressive circumspection of the members to discuss liberalism as a general idea or framework for society as it seemed to have been agreed on at the original 1947 meeting. Somehow the Society relinquished its role as an intellectual center for the development of an alternate account of what liberalism entailed beyond economic freedom. Second, the idea of a multidisciplinary academy which Hayek had envisioned quickly faded as economists took the lion’s share of new appointments whereas philosophers declined in numbers. Finally, the Society was perceived as rather closed onto itself, unwilling to commit to its positions publicly. At the conclusion of its first decade, the MPS had moved away substantially from the foundational questions which had motivated its constitution. Hayek’s ambition to prevent the MPS from becoming a society of economists failed and polymaths members like Knight and Jouvenel retreated from debates increasingly economistic in style. By early 1956, Hayek was suggesting to colleagues that the society ought to celebrate its tenth anniversary and then wind down. The “Hunold affair” and the mass resignation of Continental members narrowed down the Society membership to technical economics and an Atlantic identity even further. Both Aron and Jouvenel would effectively TOWARDS GOOD SOCIETY – 6TH PROJECT MEETING – COPENHAGEN, 9-11 DECEMBER 2015

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withdraw by the end of the 1950s, the latter addressing a long letter to Milton Friedman where he asked: “Has the Society remained faithful to its initial spirit? This I have increasingly doubted. [...] Now as against this wide mandate of defense and promotion of freedom, [...] the Society has turned increasingly to a Manicheism according to which the State can do no good and private enterprise can do no wrong. [...] It is much to be admired that people have strong intellectual convictions and are willing to fight doughtily for them: but such a people do harden an intellectual group into a mould. The group then is not a free company of people who thing together with some initial basis of agreement but it is more like a team of fighters. This is what Mt. Pèlerin, in my eyes, has become.”18

The original members’ ambition to create an active dialogue between economists and philosophers dissipated and the shared attempt to construct a “new” liberalism had irremediably collapsed (Burgin 2012, 125). In a letter sent in 1955, Polanyi explained his own misgivings to Hayek about the MPS whose “great achievements were due to a theoretical position which is not wholly right and which succeeded to some extent in spite of some rather far reaching errors.” “One of the benefits of the Mont Pèlerin Society,” Polanyi continued, “was to consolidate friendships, such as those between [Bertrand de] Jouvenel and myself which fostered a somewhat different view of liberty and the menaces to liberty than those expounded by [Ludwig von] Mises and [Jacques] Rueff – and sometimes by yourself. Of this I have made no secret, either in Beauvallon [France, MPS Meeting 1951] or in Venice [MPS Meeting 1954], at both of which places I intervened to say so at some length.”19 Reluctant to be a source of divisiveness among the members, Polanyi concluded the letter by asking whether he should withdraw from the MPS. In response, Hayek encouraged Polanyi not to withdraw as he represented “an extreme wing” in a Society he had never intended to become “homogenous.” Hayek’s answer is quite revealing in that he conceded that the original intention of the MPS had been somewhat betrayed as the “wider philosophical issues” were not topic of discussions anymore, denting his own interest in participating: “if you and perhaps the two others I have mentioned [Aron and Jouvenel] ceased to attend I should probably rapidly lose interest in the proceedings and get tired of the thing.” 20 Despite personal assurances that they were both “concerned with the same kind of problems which are my concern,” Polanyi retreated himself from any involvement from this point onward. It is significant that this epistolary exchange took place six weeks after the conclusion of the “The Future of Freedom” Conference of the Congress for Cultural Freedom (CCF) organized in Milan in 1955. Michael Polanyi and Raymond Aron both sat on the organizing committee which aimed at a post-ideological reconciliation between progressives and (neo)liberals. MPS members Bertrand de Jouvenel, Carlo Antoni, and Franz Böhm were also involved in the preparation of the event. Ditching the conflictual language of the Cold War, and of the MPS to some extent, the program asserted that “beneath the surface of everyday political discussion and controversy, there are already signs of a tendency to rethink our conventional political ideas in the light of recent history.” The meeting aimed at setting up a new framework for cooperation between opponents, serving as a forum for the expression of views from “economics, sociology, and political philosophy.”21 The interdisciplinary and philosophical program underpinning the CCF was precisely that which had vanished from the MPS, and was sorely missed by philosophers. Jouvenel to Friedman, 30 July 1960, Box 86, Folder 2, Friedman Papers, Hoover Archives. Polanyi to Hayek, 9 November 1955, Box 43, folder 35, Hayek Papers, Hoover Archives. 20 Hayek to Polanyi, 20 November 1955, Box 43, folder 35, Hayek Papers, Hoover Archives. 21 Program of “The Future of Freedom. Milan, September 12-17,” Box 397, Folder 5, IACF Papers, University of Chicago Library. 18 19

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In consequence, it makes sense to consider the MPS and CCF as two competing projects for redefining liberalism, each with a specific recruitment and strategy. One would nearly disband in the 1960s before its members, now mostly economists, would gain international recognition; the other would be hugely successful in providing a forum for diverse liberal intellectuals, but would ultimately falter once its financial ties to the CIA were revealed (Saunders 1999, Scott-Smith 2002). In a way, the CCF realized what Karl Popper wished the MPS would accomplish when he warned Hayek that the adoption of ideological prerequisites would hamper the Society’s capacity to mediate disputes and recruit members from diverse backgrounds.22 In Milan, the social-democrat orientation of many of the leading participants overwhelmed the neoliberal voices. Whether national political leaders such as Willy Brandt or Hugh Gaitskell, or reformist economists like C. A. R. Crosland and J. K. Galbraith, the Milan Conference aimed at celebrating the advent of a post-ideological agenda, while at the same moment, the MPS took a more radical turn towards free markets and against intervention (Audier 2012, 312). Polanyi had personally invited Hayek on behalf of the organizing committee, judging that the debate between him and Gaitskell would constitute the “axis of the Milan conference.”23 Nevertheless, Hayek was marginalized by participants as one of the last standing member of an outdated liberalism, even among his former MPS friends. In addition to Polanyi’s private reserves aforementioned, Aron publicly shunned Hayek’s liberalism for being too ideological and dogmatic, disparaging “certain forms of neoliberalism” as an “inverted orthodoxy.” 24 Nothing illustrates the diverging paths of both institutions better than the editorial signed by Raymond Aron in May 1955 in Le Figaro, in which he acknowledged the futility of strict ideological divisions when contemplating that: “[A] semi-dirigiste, semi-liberal commercial policy has brought the same results which, theoretically, would have been induced through liberal mechanisms. Impassioned controversies between the doctrinaires of liberty and the doctrinaires of administrative control today take on an outdated and almost trivial character.”25 During the conference itself, left-leaning thinkers like Stuart Hampshire and Jacob Talmon lambasted Hayek as representing a “reactionary concept of the defense of liberty” to which Hayek virulently retorted that he did not come to the conference to “write an obituary of Liberty.”26 Thus the agenda of the CCF was to overcome ideological divisions which the MPS had contributed to reinforce. Despite a sensible hope of uniting the two projects, the two organizations were working at cross-purposes, as the MPS was progressively becoming an American vehicle for free-market revivalism, while the CCF sheltered left-tocenter anti-communists intellectuals. The 1955 Conference definitely annihilated Polanyi’s ambition of a genuine liberal renovation on the terms which had been those of the 1947 MPS conference. In a lucid letter to Frank H. Sparks, Hayek found in his participation to the Milan conference a new motivation to carry on with the MPS, at a moment when doubts about its viability had started to emerge: “the experience of attending this Congress on the Future of Freedom,” he wrote, “composed as I find predominantly of socialists, has taught me more than almost anything else could how important the efforts of the Mont Pèlerin Society are.”27

Popper to Hayek, 11 January 1947, Box 305, Folder 13, Karl Popper Papers, Hoover Archives. Polanyi to Hayek, 14 July 1955, Box 43, Folder 15, Hayek Papers, Hoover Archives. 24 Raymond Aron, Opening allocution, Box 397, Folder 7, IACF Papers, University of Chicago Library. 25 Raymond Aron, “La reconstruction de l’Europe,” 29 May 1955, Le Figaro (quoted in Stewart 2015). 26 “Proceedings September 17th, morning session,” Box 398. Folder 3, IACF Papers, University of Chicago. 27 Hayek to Sparks, 16 September 1955, quoted in (Walpen 2004, 92). 22 23

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CONCLUSION

“Events have discredited a purely defensive liberalism. [...] The cultivation of detachment in the face of an advancing foe is a certain way to enslavement,” confessed Polanyi in 1940 in a letter to J. R. Baker (Wigner and Hodgkin 1977, 427). This call to arms to scientists exposed the indissoluble bond between liberalism and free science: the pursuit of science depended upon its institutional and political framework. The materialist and historicist theories of the development of science had disclosed how much the scientists and their work were embedded within the progress of society. Planning its progress, some said, would finally liberate humanity from the shackles of error and misery. The nascent sociology of science and knowledge, often advanced by Marxists to support the case for planned science, paradoxically triggered the epistemological recasting of the relationship between the nature and use of knowledge, and the organization of society. For Polanyi, the constitution of the scientific community embodied both our highest civilizational achievement, and the template upon which the good society ought to be modelled. Polanyi’s engagement towards the “Republic of Science” brought him close to some epistemological questions which other liberals were also considering. The premise that knowledge was irrevocably tacit and personal (Polanyi), local and dispersed (Hayek) and always subject to its own falsification (Popper) unless it was to fall into a dogmatic mystique (Rougier) underpinned a recoding of liberalism as an institutionalized network of spontaneous orders with the market acting as a scientific device of coordination. The market served not only economic functions, but was endowed with the role of an epistemological guardian of a free society. Hayek’s attempt to ally himself with Polanyi in order to argue for a different portrait of the operation of science, at a time when he was deep into his project of criticizing scientism, showed that the real adversary of early neoliberals were other scientists supporting socialism and planning as the logical extrapolation of their scientific world-view, and not interventionist liberals like Keynes. Paying attention to the shifting conceptions of the position of science in society during the 1930s provides us with an indispensable foundation for understanding the evolution of the neoliberal project. Finally, one of the lessons neoliberals learnt from their fight against socialism was that the politics of theorization were as important as scientifically defeating their opponents: ideologies needed channels of diffusion to prosper. Polanyi founded the Society for Freedom in Science in 1941 to organize scientists against the threat of planned science. Hayek, prompted by the unexpected success of the Road to Serfdom in America, revived his international activism which would lead to the foundation of the Mont-Pèlerin Society in 1947. Polanyi would be instrumental in the development of the Congress for Cultural Freedom founded in 1950. The tensions between the agendas of the various organizations, and the unfulfilled promises of the Mont-Pèlerin Society, brought many early neoliberals with polymath leaning into the fold of the CCF and away from the MPS. This showed the fundamentally open nature of neoliberalism at its beginnings and the fluid environment which existed post-WWII before these various institutions crystallized divergent agendas and positions. Until 1955, it was felt that these competing liberal projects could work hand-in-hand, their personnel freely moving from one to another. After 1960, we find the picture of a dispersed set of groups whose orientations have moved then far from their post-war project. The original neoliberalism was dead, with the corpse never to be found.

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