A History of the Mont Pelerin Society

The MPS Intellectual Push for a Free Society Has Ever Been Uphill

Dr. Peterson is an adjunct scholar at the Heritage Foundation and the Distinguished Professor Emeritus of Business Philosophy at Campbell University in North Carolina.

Ideas have consequences on the right and left. R. M. Hartwell of Oxford University and a recent Mont Pelerin Society president points to Britain’s Fabian Society as a counterpoint to MPS, a worldwide group of 450 mainly economists dedicated to the ideas of freedom and free enterprise.

The Fabian Society, founded in 1884 and later a think-tank for the Labor Party, rejected outright Marxism while setting a successful organizational strategy—careful marketing of soft socialist ideas advanced slowly, by degrees. The basic idea: undercut private property rights.

It did so by pushing state-protected trade unionism and other state interventions such as social security and unemployment insurance. And it did so by claiming that capitalism worsens inequality and exploitation, that it is rife with robber barons and virtueless inheritors such as playboys.

Prominent Fabians included Ramsay MacDonald (later a Labor prime minister), H. G. Wells, George Bernard Shaw, and Beatrice and Sidney Webb (later Lady and Lord Passfield). By 1945 Fabian ideas triumphed. Churchill was out, and a postwar Labor Government boldly enacted cradle-to-grave welfarism and nationalization of basic industries such as coal and steel.

The Mont Pelerin Society was founded in 1947 when state ascendancy and Marxist or Keynesian planning were sweeping the globe.

Principal organizer and longtime MPS president was F. A. Hayek, who stressed that MPS was to be a scholarly community arguing ideas against collectivism while not engaging in public relations or propaganda. At the first MPS meeting in Switzerland were Hayek, Karl Popper, and Lionel Robbins of the London School of Economics, Milton Friedman, Aaron Director, and George Stigler of the University of Chicago, Leonard E. Read and F. A. Harper of the Foundation for Economic Education, Henry Hazlitt of Newsweek, Ludwig von Mises of New York University, Bertrand de Jouvenel of Paris, Trygve Hoff of Oslo, and 27 other devotees of a free society.

The MPS declaration of aims included ideas on reaffirming and preserving private property rights, a moral code for both public and private activity, intellectual freedom, state behavior limited by the rule of law, and “the right of each individual to plan his own life.”

Prominent MPS members who advanced to policy positions included Chancellor Ludwig Erhard of West Germany, President Luigi Einaudi of Italy, Chairman Arthur Burns of the U.S. Federal Reserve Board, and, currently, Prime Minister Vaclav Klaus of the Czech Republic. Eight MPS members, including Hayek, Friedman, and Stigler, won Nobel prizes in economics. And according to Martin Anderson of Stanford’s Hoover Institution, of 76 economic advisers on Ronald Reagan’s 1980 campaign staff, 22 were MPS members, including Anderson himself.

Hartwell also notes the MPS intellectual push for a free society has ever been uphill against counter-ideas. Even today government almost everywhere is still looked upon as the guardian of “social justice,” the purveyor of “affirmative action,” the regulator and restrainer of “unbridled capitalism,” the educator of the young, the pensioner of the old, the compassionate redistributor of income and wealth from the “haves” to the “have-nots.”

Hartwell also notes MPS members, if united on the idea of freedom, have had to deal with sharp internal differences over means. Substantive debates within the society have ranged over social security, public schools, economic development, the gold standard, compulsory arbitration as a way to head off strikes, Milton Friedman’s idea of a negative income tax, and other welfare reforms. More than once, Ludwig von Mises, perhaps the most uncompromising MPS member, accused some MPS members of harboring socialist tendencies.

Hartwell believes MPS, along with dozens of regional free-market think-tanks it helped spawn across the globe, has changed the world for the better. He holds that, thanks to MPS as an intellectual venture, freer trade prevails, and few thinkers now boost state planning or question the superior efficiency of the market and its close tie to human liberty.

Hartwell’s sometimes narrowly focused yet fascinating book on the role and duel of ideas is a clarion call for, in his words, “continued vigilance in the defense of the free market and in opposition to the omnipotent state.”

The Hartwell MPS history gives rise to three conclusions: Thought precedes action. Think-tanks and ideas indeed have consequences. Ideas, good or bad, triumph in the end.