The first point to underline is that, as you can see, and as the neo-liberals have always said, neo-liberal governmental intervention is no less dense, frequent, active, and continuous than in any other system. But what is important is to see what the point of application of these governmental interventions is now. Since this is a liberal regime, it is understood that government must not intervene on effects of the market. Nor must neo-liberalism, or neo-liberal government, correct the destructive effects of the market on society, and it is this that differentiates it from, let’s say, welfare or suchlike policies that we have seen [from the twenties to the sixties]. Government must not form a counterpoint or a screen, as it were, between society and economic processes. It has to intervene on society as such, in its fabric and depth. Basically, it has to intervene on society so that competitive mechanisms can play a regulatory role at every moment and every point in society and by intervening in this way its objective will become possible, that is to say, a general regulation of society by the market. So this will not be the kind of economic government imagined by the physiocrats, that is to say, a government which only has to recognize and observe economic laws; it is not an economic government, it is a government of society. What’s more, one of the participants in the Lippmann colloquium, who, in 1939, was looking for this new definition of liberalism, said: Could we not call it a “sociological liberalism”? In any case, it is a government of society; what the neo-liberals want to construct is a policy of society......
So, what does this sociological government want to do in relation to this society that has now become the object of governmental intervention and practice? It wants, of course, to make the market possible. To play the role of general regulator, of principle of political rationality, the market must be possible. But what does it mean to introduce market regulation as regulatory principle of society?....It is not market society that is at stake in this new art of government; it is not a question of reconstructing that kind of society. The society regulated by reference to the market that the neo-liberals are thinking about is a society in which the regulatory principle should not be so much the exchange of commodities as the mechanisms of competition. It is these mechanisms that should have the greatest possible surface and depth and should also occupy the greatest possible volume in society. This means that what is sought is not a society subject to the commodity effect, but a society subject to the dynamic of competition. Not a supermarket society, but an enterprise society. The homo oeconomicus sought after is not the man of exchange or man the consumer; he is the man of enterprise and production. Michel Foucault, 14 February 1979, translated by Graham Burchell, Lecture 6, The Birth of Biopolitics. 148-149.
In addition to a polemic (recall) with lazy lefty reactions to neo-liberalism, Foucault's sixth lecture tries to grasp ORDO-liberal thought in its historical specificity. He tries to differentiate it from earlier forms of liberals, how it builds on other arts of government, and he shows how it relates to policy across Europe. This is in service of letting "knowledge of the past work on the experience of the present." (130) He does by using the ORDO approach to three areas where the art of government may be practiced: monopoly, social policy, and how to think about about government actions in a framework (Foucault treats this in terms of 'conformable actions'.) Each is fascinating in its own right, and perhaps, I'll end up writing a post on each.
The quoted material at the top of this post is the initial pay-off to his discussion. Neo-liberalism is a firm break with the night-watchman-state. Neo-liberal government is hyper-active. And this presupposes considerable state capacity. This is something Foucault kind of skips quickly. But clearly it presupposes (i) weberian-rule following bureaucracies; (ii) considerable technical expertise in lots of domains; (iii) and access to funds (debt or taxes) to pay (i-ii).
I do not mean to deny the significance of Foucault's remarks that this hyper-active and vigilant state does "not intervene on effects of the market" or on the market process. This latter point he had made earlier in the lecture, while commenting on the ORDO's attitude toward monopoly:
There is no need to intervene directly in the economic process, since the economic process, as the bearer in itself of a regulatory structure in the form of competition, will never go wrong if it is allowed to function fully. What constitutes the specific property of competition is the formal rigor of its process. But what guarantees that this formal process will not go wrong is that in reality, if one lets it function, nothing will come from competition, from the economic process itself, that is of such a nature that it will change the course of this process. Consequently, non-intervention is necessary at this level. (137)
But to make non-intervention necessary condition on market processes and market outcomes presupposes "an institutional framework" for example, one that prevents "either individuals or public authorities intervening to create a monopoly." (137) So the state must have independent juridical and economic expertise to policy the development of cartels and monopolies, but it also must find ways to immunize the political process from would-be-monopolistic forces. (This points to the need of effective campaign finance laws, public disclosure rules, etc.) So,in addition to having state capacity, the state must (iv) have the capacity to police itself so it does facilitate monopolistic or anti-competitive political powers.
So, neoliberal -- in its ORDO variant -- art of government requires complex analysis of state capacity and must evaluate how states can develop the resources and apply them in such a way such that market functioning is made possible. To put this in quasi-Hayekian terms: the price system is a natural machine with a clear purpose... a mechanism for communicating information to dispersed agents. And to make this mechanism do its proper job in modern times, it presupposes a state with distinct capacities (i-iv). Lurking in the background is the Lippmannian idea (recall here; here), emphasized also by Nick Cowen, (v) that the state also supplies the conditions for the generation of at least some reliable basic information that can be used in the market. (As Foucault notes in this sixth lecture (132) Lippmann's writings prompted the “Walter Lippmann Colloquium” in which these ideas got first hashed out in public.)
Of course, this whole set up presupposes a conceptual and social distinction between the market process (and its participants) and market outcomes, on one side, and the framework or preconditions that make markets possible. Since government intervention is only permitted on the latter and not on the former, this requires both (sociological-juridical-economic) knowledge where to draw the line between the two and skill at applying interventions such that this line is respected.
In addition to state capacity and skill (i-v), a new understanding of human agency is required: the man of enterprise and production. The gendered nature of this new homo oeconomicus is something explored (recall) by Melinda Cooper in her (2017) Family Values., which is inspired by Foucault without slavishly repeating him. Importantly, the enterprising and productive agent is itself somebody that must both be conceptualized scientifically, made possible juridically, and produced/prepared/invested in by government. So, while market processes and outcomes are highly unpredictable, even uncertain to particular market participants, these very differentiated market participants or populations are in another sense a certain type (and so predictable) if society or government does its proper job.
So one important difference that Foucault tracks is that the art of eighteenth century liberal government involved agents conceived as naturally occuring traders who consumed with the aim of increasing the number of them (virtuous cycle of population, economic, and technological growth--to have lots of cheap goods), ORDO liberal government requires the state's development of enterprising and productive agents who can participate in the market process. From here the step to the Chicago school's focus on human capital is small, as future lectures show. And this population needs to be large enough so as to facilitate the relevant differentiation, but growing population is not an end in itself beyond this threshold.
Of course, this presupposes, as we have already seen, competition is "not presented as in any way a primitive and natural given" (131) but must be generated. That is to say, the Ordo variant of "Neoliberalism should not therefore be identified with laissez-faire, but rather with permanent vigilance, activity, and intervention. (132;) This last sentence is derived from Röpke as Foucault makes clear later (on p. 133).
Let me close with an important implication of this that Foucault makes explicit about how ORDOs experience the world and how the economy is conceptualized scientifically. When they see a monopoly they deny that this is product of market process alone (as a certain kind of Marxist might claim). Rather, it is an invitation to look critically at the juridical and state practices that make monopoly and rents possible (including not just rent-seeking behavior, but also the mutually reinforcing assignation of property rights, licenses, tariffs, and copyright/patent protections, etc.. (134-136)). Often this involves the interplay among domestic public opinion, public norms, and political lobbying with foreign (trade) policy. Often they conceptualize the forces of monopoly in terms of “predatory neo-feudalism" (Rüstow , 136). So, inscribed into this conceptualization is an idea of modernity. As Foucault notes, the intellectual foundations of "the ideas of [Douglas] North on the development of capitalism, for example, are directly in line with this opening up made by the neoliberals." (135)
+Foucault puts it like this: "the problem of neo-liberalism is rather how the overall exercise of political power can be modeled on the principles of a market economy. So it is not a question of freeing an empty space, but of taking the formal principles of a market economy and referring and relating them to, of projecting them on to a general art of government. (131))
Comments