Although Director never himself employed the term neoliberalism in his scant few publications, his brother-in-law, Milton Friedman, did employ it self-referentially in his 1951 article entitled “Neoliberalism and Its Prospects.” Friedman’s 1951 manifesto did not seek to fully lay out a cogent doctrine of neoliberalism; instead, it pointed toward some salient features of neoliberalism and compared them to the superseded classical liberalism. According to Friedman, nineteenth-century liberals maintained that the state should restrict its activities to the preservation of order and enforcement of contracts. Friedman pejoratively labeled it a negative philosophy in which “Laissez-faire must be the rule” (1951a, 91). One glaring flaw of nineteenth-century liberalism, according to Friedman, was that “it failed to see that there were some functions the price system could not perform and that unless these other functions were somehow provided for, the price system could not discharge effectively the tasks for which it is admirably fitted” (p. 91). Hence, Friedman specified that the state must indeed play a positive role: “Neoliberalism would accept the nineteenth century liberal emphasis on the fundamental importance of the individual, but it would substitute for the nineteenth century goal of laissez-faire as a means to this end, the goal of the competitive order. . . . The state would police the system, establish conditions favorable to competition and prevent monopoly, provide a stable monetary framework, and relieve acute misery and distress” (pp. 91, 93).

Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, loc. 1107