In the wake of the Great Depression, the laissez-faire tenets of an earlier liberalism no longer seemed tenable to any but the most intransigent opponents of state intervention. Ludwig von Mises found himself largely isolated at the inaugural meeting of the MPS when he argued that all public relief should be abolished, as private charity was sufficient to 'prevent the absolute destitution of the very restricted hard core of unemployables'. The majority of the neoliberals, in contrast, sought to avoid what Röpke called the false choice between the 'social Darwinism' of laissez-faire and a 'cradle to the grave' welfare system. The former, they believed, had neglected the conditions necessary to sustain a labour force and created a backlash against the competitive market. Against the latter, they revived a series of objections the ILO had canvassed back in the 1920s: the welfare state was a 'foretaste of communism' that would undermine the responsibility of workers to provide for their families, remove the incentive for wage labour, increase bureaucracy, and (in a Malthusian vein) increase the profligacy of the poor and the growth of the population. Rather than rejecting all state assistance, however, the neoliberals focused on the forms of welfare that would be compatible with a market economy.

Jessica Whyte, The Morals of the Market, loc. 199