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Although it is broadly accepted that neoliberalism emerged as a reaction to what its foundational thinkers believed was a crisis of modern liberalism, little work has been done to understand either the timing or the nature of the intellectual shift that gave rise to it. Through an assessment of Friedrich Hayek’s thought, this article claims that the neoliberal critique of liberalism is primarily grounded in an epistemological dispute about the capabilities of mind that can be traced to the early nineteenth century and the development of Jeremy Bentham’s universal principle of self-preference. Hayek’s epistemological perspective, anchored in a theory of the understanding, and Bentham’s conception of mind as plastic, knowable, measurable, and reformable, led each thinker to embrace vastly different constitutional models. This epistemological dispute is critical to grasp, not merely for historical precision, but also because many of its essential features lurk at the heart of contemporary debates about the rise of an anti-democratic neoliberalism, and the future of liberal democracy.

Hayek’s theory of mind and the origins of the neoliberal critique of modern liberalism