Dismantling the Myth of Pure Laissez-faire Liberalism

The paper proposes a rethinking of some of the orthodoxy that have emerged around the understanding of neoliberalism in critical IPE that have emerged in the aftermaths of Foucault’s 1978 lectures (Foucault 2008). Today it is widely accepted that neoliberalism have not in practice meant a retreat of the state from the economy, as a step toward the realisation of the free market ideals of
thinkers such as Milton Friedman and Hayek. Instead neoliberalism is understood as a redefinition of the state-market relationship, and a process of re-regulation as well as de-regulation (see Peck 2010 , Mirowski 2009, Crouch 2011). But this insight is made by contrasting neoliberalism with classical
liberalism, that is, explicit or implicitly, understood as being a full realisation of laissez-faire ideology.
The paper will argue however, that 19th century liberalism, was also characterised by a tension
between economic ideology and the actual practices of political economy. State action played a central role even during the heyday of laissez-faire liberalism.