A Working Paper

Method notes. The paper examines the myth of a pre-regulatory golden age, the ideological mechanisms of neoliberal theory, the cult and pseudo-religion comparison, and the promises and failures of the model. It does not argue that neoliberalism is a religion. It argues that the structure of its claims, the mechanisms of its propagation, and the resistance to disconfirming evidence are structurally analogous to religious belief systems.

Abstract

This paper examines the claim, frequently advanced by proponents of neoliberal economic theory, that there existed a pre-regulatory golden age of minimal state intervention which must be restored. It finds no historical evidence for such a period. Every recorded economy — from Sumerian temple administrations to the post-war settlement — has been regulated, managed, and shaped by state action. The paper then examines the ideological mechanisms by which neoliberal theory is propagated: naturalisation, moralisation, individualisation, technocratic language, and sacralisation. It assesses the structural parallels between neoliberalism and cult or pseudo-religious belief systems, identifying a cast of founders, prophets, missionaries, and enforcers. It compares the promises of the theory to the documented outcomes. It concludes that neoliberalism functions as a belief system that resists disconfirming evidence, and that the costs of this resistance are borne by the citizens who experience the outcomes daily.

1. Introduction: The Myth of the Golden Age

Some proponents of neoliberal economic theory allude to a golden age when state regulation was minimal or non-existent. They present the present as a fallen condition — a world of bureaucrats, regulations, and restrictions — and the market as a lost Eden that must be restored.

The question this paper asks is simple: did such a time ever exist?

The answer is no. There has never been a time in recorded history when economic activity was unregulated. There has never been a time when the state was absent from the economy. The “free market” that neoliberals invoke is not a memory. It is a myth.

The paper proceeds in eight sections. Section 2 documents the historical absence of a pre-regulatory golden age. Section 3 examines the myth’s function. Section 4 documents the ideological mechanisms. Section 5 assesses the cult and pseudo-religion comparison. Section 6 identifies the cast of characters. Section 7 compares the promises to the outcomes. Section 8 draws structural conclusions.

2. The Historical Record: There Was No Golden Age

2.1 Ancient Economies Were Regulated

The earliest recorded economies were state-managed.

Sumerian temple economies were centrally administered. The temple controlled land, labour, and distribution. The palace economy of the Minoans redistributed goods through a central authority. The Egyptian state managed grain, labour, and construction for millennia.

Ancient Greece was regulated. Athens had public works programmes, grain regulations, and restrictions on the export of certain goods. The agoranomoi — market officials — supervised weights, measures, and prices.

Rome was heavily regulated. The grain dole (annona) was a state programme. The emperor Diocletian’s Edict on Maximum Prices (301 CE) attempted to fix prices for over 1,000 goods. The state controlled mines, quarries, and the production of key goods.

Status: Established.

2.2 Medieval Economies Were Regulated

Feudalism was a system of reciprocal obligations — the lord provided protection, the serf provided labour. The manor was a regulated economic unit. The guilds controlled entry into trades, set standards, and regulated prices. The Church prohibited usury and enforced the just price.

The Hanseatic League was a cartel — a regulated trading network with rules about membership, shipping, and trading. The Italian city-states — Venice, Florence, Genoa — were commercial republics with extensive state involvement in trade and finance.

Status: Established.

2.3 Mercantilism Was State-Managed

Mercantilism — the dominant economic system from the 16th to the 18th century — was explicitly state-managed. The state controlled trade through tariffs, monopolies, and charters. The British East India Company was a state-chartered monopoly. The navigation acts restricted colonial trade to English ships. The state was the engine of mercantilist expansion.

Status: Established.

2.4 Adam Smith Was Not a Neoliberal

Adam Smith is often invoked as the father of free-market economics. But Smith was not a free-market absolutist.

Smith supported state provision of education, arguing that an educated workforce was a public good. He supported state infrastructure — roads, bridges, harbours. He supported limits on monopoly, arguing that merchants would collude if given the chance. He supported tariffs in specific cases — the navigation acts, for example — when national defence required them.

The “invisible hand” was a metaphor for the unintended social benefits of individual action. It was not a policy prescription. It was a description of how markets sometimes work. Smith also wrote The Theory of Moral Sentiments, which argued that sympathy and social bonds were fundamental to human nature.

Status: Established.

2.5 The 19th Century Was Not Laissez-Faire

The 19th century is often presented as the era of laissez-faire. It was not.

The British state was deeply involved in the economy. It built railways, imposed tariffs, managed the currency through the Bank of England, and regulated the poor through the Poor Laws. The Corn Laws — tariffs on imported grain — were a central political issue until their repeal in 1846.

The American state was heavily involved. The American System — tariffs, a national bank, and internal improvements — was the policy of Henry Clay and the Whig Party. The transcontinental railroad was built with federal land grants and subsidies.

Germany industrialised under state guidance. Japan — the Meiji Restoration — was a state-led industrialisation. The French state was actively involved in infrastructure and industry.

Status: Established.

2.6 The Post-War Settlement Was Regulated

The post-war settlement — the “golden age of capitalism” (1945–1973) — was the most regulated period in modern economic history. It was also the most prosperous.

· Bretton Woods fixed exchange rates and created the IMF and World Bank.

· The Marshall Plan rebuilt Europe with state funds.

· The welfare state provided health, education, and social security.

· Capital controls limited the movement of money across borders.

· Trade was managed through the GATT.

This was the period of highest growth, lowest inequality, and greatest social mobility in modern history.

Status: Established. There was no pre-regulatory golden age.

3. The Function of the Myth

3.1 The Noble Savage of Economics

The myth of the pre-regulatory golden age functions in the same way as the myth of the noble savage. It posits a past state of natural freedom that has been corrupted by society. It locates the ideal in the past rather than the future. It says: we were once free, and we must be free again.

The myth is not historical. It is ideological. It serves to delegitimise the present order and to justify the restoration of a previous one. But the previous order — the one that is invoked — never existed. It is a constructed past.

Status: Inference.

3.2 The Fall and Redemption Narrative

The myth has a structure that is recognisably religious:

· Eden: A golden age of minimal regulation.

· The Fall: The expansion of the state, regulation, bureaucracy, and welfare.

· The Promise: A return to the golden age through deregulation, privatisation, and tax cuts.

· The Enemy: Bureaucrats, regulators, trade unions, and critics of the market.

This is the structure of a fall and redemption narrative. It does not require evidence. It requires faith.

Status: Inference.

4. The Ideological Mechanisms

4.1 Naturalisation

Neoliberal theory presents the market as a natural phenomenon — like gravity or the weather. It is not. It is a constructed institution that requires constant maintenance, rules, and enforcement.

Naturalising the market removes it from the realm of political debate. If the market is natural, then questioning it is like questioning the laws of physics. It is not an argument. It is a category error.

Status: Established.

4.2 Moralisation

The market is presented as a realm of freedom, choice, and moral desert. The successful are those who have made good choices. The unsuccessful are those who have made bad choices. Poverty is a personal failure, not a structural outcome.

This moralisation serves to justify the distribution of wealth. The rich are rich because they deserve it. The poor are poor because they do not. The market is a just mechanism because it rewards virtue.

Status: Established.

4.3 Individualisation

The market is presented as a realm of individuals — rational agents pursuing their own interests. This erases the structures that shape the distribution of wealth and power. It erases the family as a unit of analysis. It erases the class as a unit of analysis. It erases society itself.

Margaret Thatcher’s statement — “There is no such thing as society. There are individual men and women and there are families” — is the purest expression of this mechanism.

Status: Established.

4.4 Technocratic Language

The market is described in the language of efficiency, productivity, and growth. This language presents the market as a technical problem to be solved, not a political choice to be made.

The language obscures the values embedded in the market. It says: this is not about who gets what. It is about making the pie bigger. It says: this is not about power. It is about efficiency.

Status: Established.

4.5 Sacralisation

The market is presented as a beneficent force — the “invisible hand” that turns private vice into public virtue. It is presented as a source of meaning — the arena in which we realise our potential. It is presented as a source of hope — the mechanism that will deliver prosperity for all.

This is the language of sacralisation. The market is not merely an economic system. It is a quasi-religious one.

Status: Inference.

5. The Cult and Pseudo-Religion Comparison

5.1 The Features of a Cult

Cults and pseudo-religions share a set of structural features. The following framework is drawn from the sociology of religion and the psychology of belief systems (see, e.g., Singer, 1995; Hassan, 2000; Lalich & Tobias, 2006).

1. A totalising worldview that explains all of reality.

2. A founding text or set of texts treated as authoritative.

3. A charismatic leader or group of leaders.

4. A cast of heroes and villains — the faithful and the heretics.

5. Rituals and symbols — the movements, the conferences, the texts.

6. Dogma that cannot be questioned.

7. Apocalyptic narratives — the crisis that is coming, the catastrophe that must be avoided.

8. Demand for sacrifice — the pain that must be borne for the future reward.

9. Resistance to disconfirming evidence — the recalcitrance in the face of failure.

10. In-group and out-group dynamics — the believers and the unbelievers.

5.2 The Assessment

Feature- Neoliberalism

Totalising worldview -Yes. The market explains all of reality.

Founding text -Yes. Hayek’s The Road to Serfdom, Friedman’s Capitalism and Freedom.

Charismatic leader- Yes. Hayek, Friedman, Reagan, Thatcher.

Heroes and villains- Yes. The entrepreneurs vs. the bureaucrats.

Rituals and symbols -Yes. Davos, the Mont Pelerin Society, the think tanks.

Dogma that cannot be questioned -Yes. “There is no alternative.”

Apocalyptic narratives -Yes. The coming crisis, the debt bomb, the collapse.

Demand for sacrifice -Yes. Austerity, wage restraint, “painful reforms.”

Resistance to disconfirming evidence- Yes. The 2008 crisis, the failure of the Washington Consensus.

In-group and out-group dynamics Yes. The “serious people” vs. the “populists.“

5.3 The Caveats

The comparison is structural, not literal. Neoliberalism is not a religion in the conventional sense:

· It does not have a supernatural being.

· It does not have a sacred text in the same way.

· It does not have a formal clergy.

· It does not have a promise of an afterlife.

But it has a faith — the faith that the market will deliver. It has a dogma — the dogma of efficiency. It has a promise — the promise of prosperity. It has a ritual — the ritual of deregulation. And it has a resistance to evidence — the refusal to acknowledge failure.

The comparison is credible. But it is an analogy, not an identity.

Status: Inference.

6. The Cast of Characters

6.1 The Founders

· Friedrich Hayek — the philosopher. His The Road to Serfdom (1944) argued that central planning leads to totalitarianism. His The Constitution of Liberty (1960) argued for the rule of law and the market.

· Milton Friedman — the economist. His Capitalism and Freedom (1962) argued for free markets, deregulation, and monetarism. His Free to Choose (1980) popularised the ideas.

· Ludwig von Mises — the theorist. His Human Action (1949) provided the Austrian School’s framework.

6.2 The Prophets

· Ronald Reagan — the politician. He cut taxes, deregulated finance, and broke the air traffic controllers’ union.

· Margaret Thatcher — the politician. She privatised state industries, broke the miners’ strike, and declared “there is no alternative.”

· Alan Greenspan — the central banker. He presided over the deregulation of finance and the housing bubble.

6.3 The Missionaries

· The Mont Pelerin Society — the network. Founded in 1947 by Hayek, it brought together the intellectual founders.

· The Chicago School — the academic institution. It produced the Chicago Boys, who advised Pinochet.

· The think tanks — the advocacy institutions. The Institute of Economic Affairs (UK), the Heritage Foundation (US), the Centre for Independent Studies (Australia).

· The World Economic Forum — the ritual gathering. Davos brings together the global elite.

6.4 The Enforcers

· The IMF — the debt enforcer. It imposed structural adjustment programmes on developing countries.

· The World Bank — the development enforcer. It funded projects that opened markets to foreign capital.

· The World Trade Organization — the trade enforcer. It enforced the rules of global trade.

Status: Established.

7. The Promises and the Failures

7.1 The Promises

· Growth: The market will deliver prosperity for all.

· Efficiency: The market will allocate resources optimally.

· Freedom: The market will liberate individuals from state control.

· Innovation: The market will produce technological progress.

· Trickle-down: The wealth of the rich will benefit the poor.

7.2 The Outcomes

Growth: Slower than the post-war period. The global economy grew at 4.9% per year from 1950 to 1973. From 1980 to 2019, it grew at 3.2% (World Bank data).

Inequality: The richest 1% captured 63% of new wealth created since 2020 (Oxfam, 2023). The richest 1% captured half of all new wealth in the past decade.

Poverty: 3.7 million Australians live below the poverty line. 757,000 children live in poverty. 122,000 people are homeless (ACOSS, 2025; Salvation Army, 2026).

Financial crises: 1987, 1997, 2000, 2008. The 2008 crisis cost the global economy an estimated $10 trillion (IMF).

Deindustrialisation: The destruction of manufacturing communities in Australia, the US, and the UK. The collapse of the coal mining communities in the UK.

Environmental destruction: The market externalises environmental costs. Climate change, biodiversity loss, and resource depletion.

Social fragmentation: The collapse of social trust. The rise of populism. The decline of community.

7.3 The Resistance to Evidence

The pattern is consistent. When the promises fail, the theory is not abandoned. It is adjusted:

· The crisis was caused by external factors (the government, the unions, the “greed” of individuals).

· The reforms did not go far enough.

· The problem is implementation, not the theory.

· The next round of reforms will deliver the promise.

This is the structure of a belief system that cannot be falsified. It is not a scientific theory. It is a faith.

Status: Established for the outcomes. Inference for the resistance to evidence.

8. Conclusion: The Faith and the Citizen

The neoliberal theory is not a science. It is not a description of a natural phenomenon. It is a belief system — a set of claims about the world that are held with conviction, defended against evidence, and propagated through a network of institutions and individuals.

The theory promises prosperity. It delivers inequality. It promises freedom. It delivers dependency. It promises efficiency. It delivers waste. It promises growth. It delivers stagnation.

But the theory is not abandoned. It is protected. The faith is maintained. The believers persist. The cast of characters continues to preach. And the citizens — the ones who experience the outcomes daily — are told that the problem is not the theory. It is them.

The record is kept. The myth is named. And the faith is still being preached.

Claim -Status- Summary

#- Claim- Status

1- There was no pre-regulatory golden age -Established

2- Ancient economies were regulated- Established

3- Medieval economies were regulated- Established

4 -Mercantilism was state-managed- Established

5 -Adam Smith was not a free-market absolutist -Established

6- The 19th century was not laissez-faire- Established

7 -The post-war settlement was regulated and prosperous- Established

8- The myth functions as a fall and redemption narrative- Inference

9 -Neoliberalism naturalises the market -Established

10 -Neoliberalism moralises market outcomes -Established

11 -Neoliberalism individualises social problems- Established

12- Neoliberalism uses technocratic language -Established

13 -Neoliberalism sacralises the market -Inference

14 -Neoliberalism has structural parallels to a cult -Inference

15- The theory has a cast of founders, prophets, missionaries, enforcers -Established

16- The promised outcomes did not materialise -Established

17 -The theory resists disconfirming evidence- Inference

18 -Neoliberalism is a belief system, not a science -Inference

References

1. Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. London: W. Strahan and T. Cadell.

2. Smith, A. (1759). The Theory of Moral Sentiments. London: A. Millar.

3. Hayek, F. A. (1944). The Road to Serfdom. London: Routledge.

4. Hayek, F. A. (1960). The Constitution of Liberty. Chicago: University of Chicago Press.

5. Friedman, M. (1962). Capitalism and Freedom. Chicago: University of Chicago Press.

6. Friedman, M., & Friedman, R. (1980). Free to Choose. New York: Harcourt.

7. von Mises, L. (1949). Human Action: A Treatise on Economics. New Haven: Yale University Press.

8. Mirowski, P. (2013). Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown. London: Verso.

9. Slobodian, Q. (2018). Globalists: The End of Empire and the Birth of Neoliberalism. Cambridge, MA: Harvard University Press.

10. Klein, N. (2007). The Shock Doctrine: The Rise of Disaster Capitalism. New York: Metropolitan Books.

11. Oxfam International. (2023). Survival of the Richest: How We Must Tax the Super-Rich Now to Fight Inequality. Oxford: Oxfam.

12. ACOSS. (2025). Poverty in Australia 2025. Sydney: Australian Council of Social Service.

13. The Salvation Army. (2026). Record Homelessness Should Shock Australia into Action. Melbourne: The Salvation Army.

14. Costanza, R., et al. (2014). Time to leave GDP behind. Nature, 505, 283–285.

15. Chang, H.-J. (2014). Economics: The User’s Guide. London: Bloomsbury.

16. Raworth, K. (2017). Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist. White River Junction: Chelsea Green.

17. Rodrik, D. (2011). The Globalization Paradox: Democracy and the Future of the World Economy. New York: W. W. Norton.

18. Stiglitz, J. (2002). Globalization and Its Discontents. New York: W. W. Norton.

19. Piketty, T. (2014). Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press.

20. Milanovic, B. (2016). Global Inequality: A New Approach for the Age of Globalization. Cambridge, MA: Harvard University Press.

21. Singer, M. T., & Lalich, J. (1995). Cults in Our Midst: The Hidden Menace in Our Everyday Lives. San Francisco: Jossey-Bass.

22. Hassan, S. (2000). Releasing the Bonds: Empowering People to Think for Themselves. Somerville: Freedom of Mind Press.

23. Lalich, J., & Tobias, M. (2006). Take Back Your Life: Recovering from Cults and Abusive Relationships. Berkeley: Bay Tree Publishing.

24. Klein, N. (2014). This Changes Everything: Capitalism vs. The Climate. New York: Simon & Schuster.

25. World Bank. (2020). World Development Indicators. Washington, DC: World Bank.