The [Lippmann] colloquium was introduced and organized by someone you know, Louis Rougier, one of the rare and very good post-war French epistemologists who is especially known in history for having been the intermediary between Pétain and Churchill in the summer of 1940. So Louis Rougier is the organizer of the Walter Lippmann colloquium in the summer of 1939, in May or June I think. He introduces the whole of the colloquium and the different contributions, and I think his introduction is quite remarkable with regard to the general principles of this neo-liberalism. This is what he says concerning, precisely, the legal problem: “The liberal regime is not just the result of a spontaneous natural order as the many authors of the Natural codes declared in the eighteenth century; it is also the result of a legal order that presupposes juridical intervention by the state. Economic life takes place [in fact]* within a juridical framework which fixes the regime of property, contracts, patents, bankruptcy, the status of professional associations and commercial societies, the currency, and banking, none of which are given by nature, like the laws of economic equilibrium, but are contingent creations of legislation. There is then no reason to suppose that the current, historically existing legal institutions are definitively and permanently the best suited for safeguarding the freedom of transactions. The question of the legal framework best suited to the supplest, most efficient, and fair operation of the market has been neglected by classical economists and deserves to be the object of an International Center of Studies for the Renewal of Liberalism. To be liberal, therefore, is not at all to be conservative, in the sense of the maintenance of de facto privileges resulting from past legislation. On the contrary, it is to be essentially progressive in the sense of a constant adaptation of the legal order to scientific discoveries, to the progress of economic organization and technique, to changes in the structure of society, and to the requirements of contemporary consciousness. Being liberal is not like the ‘Manchester’ attitude, allowing vehicles to circulate in any direction, according to whim, with the consequence of endless congestion and accidents; and it is not that of the ‘planners,’ fixing the hours of use and routes to be followed for every vehicle: it means imposing a Highway Code, while accepting that at a time of faster means of transport this code will not necessarily be the same as in the time of stagecoaches. Today we understand better than the great classics what a truly liberal economy consists in. It is an economy subject to a double arbitration: the spontaneous arbitration of consumers, who decide between the goods and services they are offered on the market according to their preferences through the plebiscite of prices, and [, on the other hand,] the common arbitration of the state ensuring the freedom, honesty, and efficiency of the market†.
This text contains a number of elements. Straightaway we can put aside some propositions that would clearly be unacceptable to the ordoliberals; everything concerning the natural character of the mechanisms of competition. When Rougier says that the liberal regime is not only the result of a natural order but also the result of a legal order, the ordoliberals would obviously say: “Not true, the natural order, what is understood by the natural order, what the classical economists or, at any rate, those of the eighteenth century understood by a natural order, is nothing other than the effect of a particular legal order.” So we can leave these elements at the turning point of classical liberalism and neoliberalism, or of this form of neo-liberalism, and move on to the more important elements in this text, those specific to neo-liberalism.
First of all, I think we should note that for Rougier, as for the ordoliberals moreover, the juridical is clearly not part of the superstructure. That is to say, they do not conceive of the juridical as being in a relation of pure and simple expression or instrumentality to the economy. The economy does not purely and simply determine a juridical order that would both serve it and be constrained by it. The juridical gives form to the economic, and the economic would not be what it is without the juridical. What does this mean? I think we can identify three levels of meaning. First, a theoretical meaning. You can see that the theoretical meaning, I am embarrassed to point it out, is that instead of distinguishing between an economic belonging to the infrastructure and a juridical-political belonging to the superstructure, we should in reality speak of an economic-juridical order. In this, Rougier, and then the ordoliberals, place themselves strictly in line with Max Weber’s important perspective. That is to say, like Max Weber, they situate themselves from the outset at the level of the relations of production rather than at the level of the forces of production. At that level they grasp in one hand, as it were, both history and economics, both law and the economy strictly speaking, and, placing themselves in this way at the level of the relations of production they do not consider the economic to be a set of processes to which a legal system is added which is more or less adapted or more or less obsolete in relation to these processes. In actual fact, the economic must be considered as a set of regulated activities from the very beginning: it is a set of regulated activities with rules of completely different levels, forms, origins, dates, and chronologies; rules which may comprise a social habitus, a religious prescription, an ethics, a corporate regulation, and also a law. In any case, the economic is not a mechanical or natural process that one can separate out, except by abstraction a posteriori, by means of a formalizing abstraction. The economic can only ever be considered as a set of activities, which necessarily means regulated activities. It is this economic-juridical ensemble, this regulated set of activities that Eucken calls—in a perspective which is more phenomenological than Weberian—the “system.” What is the system? It is a complex whole including economic processes the specifically economic analysis of which is a matter for pure theory and a formalization which may take the form of the formalization of mechanisms of competition, for example, but these economic processes only really exist, in history, insofar as an institutional framework and positive rules have provided them with their conditions of possibility. This is what this common analysis, this combined analysis of the relations of production means historically. Michel Foucault, 21 February 1979, translated by Graham Burchell, Lecture 7, The Birth of Biopolitics, 161-163
In Lecture 7, Foucault confronts the elephant in the room (recall; and here), Louis Rougier, who, perhaps, single-handedly discredited both liberal philosophy and analytic philosophy in France for a generation (or more) of the intellectually and morally sensitive young not just by his association with Petain in 1940, but also in his post-WWII defense of Pétain and other far-right commitments(etc.). Strikingly, Foucault has no interest in using this history to discredit Rougier (or the commitments).* In fact, he explicitly praises Rougier's epistemology. And here he is interested in using Rougier's introduction to set up discussion, later in the lecture, of the neo-liberal responses to marxism, weber, and schumpeterianism.
In reading Foucault's response to Rougier, I have a sense that Foucault (who seems to have read everything) has not read Lippmann's Good Society. Because I take Rougier's introduction as a perfect summary of the significance of Lippmann's book. The re-invention of liberalism as a progressive project by embracing as a liberal stance, the 'spirit of adaptation,' is (recall) central to Lippmann's argument (that Lippmann traces to Adam Smith, and I think is discernible in Locke). And this spirit is needed in virtue of the expectation of (i) technological change (e.g., faster means of transport vs the time of stagecoaches) and in virtue of the idea that (ii) the law may express and, thereby, entrench political power, which itself needs to be guarded against. In addition, (iii) as society develops and grows there will be more sources of mutual friction which require legal pacification or resolution. And so Lippmann and Rougier reject nineteenth century ('Manchester') liberalism and its adoption of laissez faire (while also rejecting the 'planners.')
And because (iv) the market itself generates never seizing outcomes ('spontaneous arbitration of consumers'), and so evolves according to its own logic, and in virtue of (i-iii), the liberal, who understands the need for the spirit of adaptation, always sees liberalism as an unfinished project, which requires the never-ending work by the state to create the framework in which markets can work. (Again, markets are not self-justifying but are a mechanism that do not just generate efficient growth and innovation, but are a mechanism by which political/concentrated power can be resisted.)
Foucault correctly corrects Rougier from the perspective of an ORDO. And he explains that the significance of Rougier's (Lippman-esque) reinterpretation of liberalism entails a rejection of the marxist thought that the law is a 'pure and simple expression or instrumentality to the economy' or is determined by the economy. Rather, the law shapes the economy and, in turn, is shaped by it. Such that the legal and economic are in non-trivial inter-defined/intertwined as (in Weber's terminology) relations of production.** The legal 'regulation' that Foucault speaks of here is -- as I had noted the lecture before -- at the level of framework enhancing and framework ordening policies. (It is not regulation in the market place.)
The law helps create and constitute economic agents with rights and legal tender and practices of credit generation, and these in turn influence the shape of the law. Significantly, and here I make something explicit that Foucault gestures at, it also means that from the perspective of neoliberalism, that a well-functioning system of law is not just neutral arbiter, but itself a form of capital to society it helps order. And in so far as the system of law is 'more or less adapted' to the processes it simultaneously helps shape, the more productivity and freedom enhancing it is.
As Foucault goes on to say, what the spirit of adaptation entails is that at any given time capitalism has the possibility to be (reasonably) adapted to its circumstances or not. And this means that from the reconstituted progressive liberal (not to be confused with the modern progressive), who resists the status quo bias of nineteenth century liberalism, capitalism always has a multiplicity of possibilities. This is not a bug, but a virtue of this liberalism. For, it both contradicts the Marxist analysis -- which treats capitalism as homogeneous 'with its own necessity' that is simultaneously self-contradictory (164) -- and it affirms liberalism (recall) as a potential (moral and political) critic of any really existing Mercantile-Imperialist capitalism.
And, second, it opens the productive role to what Foucault has been calling the liberal 'art of government,' which is rooted in a set of intellectual ideas as much as it is in a set of practices, as an instrument to reinvigorate liberalism's spirit of adaptation. In practice what this means is that in a liberal polity there must be a site of intellectual and scientific freedom in which its own dogmas are critically explored and rejuvenated in order to help shape the politics of liberal survival.
Of course, this leaves hanging what it might mean for a system of law to be more or less adapted to the processes it simultaneously shapes? Or: what does a rule of law in the spirit of adaptation amount to then? This is the subject of the core of Foucault's seventh lecture, and I turn to that soon.
*Foucault also omits mention of Pinochet when discussing Friedman.
**It is an open question how much Weber is self-consciously present in Lippmann. But it is pretty clear there is a lot of Weber in the ORDOs and in Lippmann's sources.
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Posted by: Cameron Brown | 03/18/2021 at 08:28 PM