First of all, we should not forget that the diffusion of the German neo-liberal model has taken place in France on the basis of a strongly state-centered, interventionist, and administrative governmentality, with precisely all the problems this entails. Second, the attempt to introduce and implement the German neo-liberal model in France takes place in a context of an initially relatively limited, and now acute economic crisis which is the motive, pretext, and reason for the introduction and implementation of the model and, at the same time, what checks it. Finally, for the reasons I have just mentioned, the third characteristic is that the agents of the spread and implementation of this model are precisely those who administer and direct the state in this context of crisis. Because of all this, the implementation of the German model in France involves a whole range of difficulties and a sort of awkwardness mixed with hypocrisy, examples of which we will see. Michel Foucault, 7 March, 1979, translated by Graham Burchell, Lecture 8, The Birth of Biopolitics, 192
According to Foucault, the twentieth century is characterized by two kinds of "reduction of state governmentality." (191) One is through the "growth of party governmentality," as occurred most dramatically in fascist and communist states.* Lecturing in 1979 the Marxist kind was not yet something of the past.
As an aside Foucault is also having a bit of fun here because for Max Weber the mediating function of parties (and party bosses) is characteristic of nineteenth century developing liberal democracies. (Of course, that is compatible with the rule of law, which, by contrast, true party governmentality erodes.) This is a core commitment of twentieth political science (see, e.g., Schattschneider). As I have noted before, this feature of liberal democracy has been eroded by the development of the open primary (this started to happen in Foucault's life-time).
Liberal democracies, by contrast, "regimes like our own" experiment with the second "form of reduction" and "attempt to find a liberal governmentality." (191) And it is very important for Foucault's argument that liberal governmentality has two different templates: one that he calls the "German model," which is the ORDO liberal version he has articulated in the first seven lectures. This ORDO model is ""being diffused, debated, and forms part of our actuality, structuring it and carving out its real shape, is the model of a possible neoliberal governmentality." (192) The other approach is the Chicago school.*
Now, what's crucial -- and what has taken me a long time to discern -- is that Foucault makes a rather sharp distinction between the way the German model functions in its origin and what happens to it when (ahh) its copy is diffused and 'implemented' elsewhere; the implementation is, simultaneously, a "radicalization," (207). But Foucault does not make the distinction (between original and copy) fully explicit because he does not repeat the analysis of the previous weeks to draw out all of the contrast.
For, in a seeming paradox, while the ORDOs confronted a much more distinctive circumstance, the collapse of Nazi Germany and occupation, Foucault treats original ORDO-neoliberalism as a kind of organic political solution to circumstances. (Here he implicitly kind of tracks Röpke conception of what ought to happen as factual.) Whereas the application of the copy of neoliberalism in France during the apparently more ordinary political crisis of the 70s is treated as disruptive. And so lurking in Foucault there is a surprisingly nineteenth century assumption in which ideas and society form a kind of organic whole.**
One way to track the most fundamental difference is that in Germany, post Stunde Null, the ORDOs had to invent (recall lecture 4) a new kind of sovereign power, which simultaneously made the NAZIs illegitimate, and that would constitute the legitimacy of the Bonn Republic by the maintenance of certain basic rights by way of the rule of law and economic growth with social characteristics. Whereas in France, liberal governmentality is imported by leading technocrats of a legitimate state in economic crisis. And for Foucault this starts to happen around 1970 or "from 1970 to 1975 or anyway in the decade now coming to a close." (195)
As another aside, Foucault here very quietly, and prudently, skips the collapse of the third republic, and all the turbulence of the fourth republic, and the founding of the fifth, not to mention '68. Or to be more precise, he mentions some of it in the lecture, but from a vantage point, as if, of relatively little import. Given some of the flamboyant political persona associated with Foucault, it is no surprise that his prudence when discussing his own society goes so unremarked so often. And, he turns the rise of Giscard into a turning moment in French history (197). But it means one misunderstands him easily.
Now, for Foucault the awareness among the technocrats that France is in economic crisis is triggered by the 1973 oil crisis. Foucault's interpretation of it is worthy of attention, but I skip to the effect of it (which gives a sense of his analysis of it):
Liberalism, that is to say, the total, unrestricted integration of the French economy in an internal, European, and world market, was the choice which appeared, first of all, as the only way to be able to rectify the erroneous investment choices made in the previous period because of interventionist objectives, techniques, and so on; so, liberalism was the only means of correcting these investment errors by taking into account the new factor of the high cost of energy, which was in reality only the formation of a market price for energy. (196)
Crucially, then, the diffusion of the ORDO template means in France not just a correction on Keynesian countercyclical dirigisme, but more importantly an insertion of France into a new kind of political economy in which energy costs would be (potentially) high and a submission (to use a Hayekian phrase) to the discipline of impersonal market forces. For students of the EU Foucault's observation is key because it suggests that from a French political perspective, the EU's Delors era (starting in 1985) originates in a change of intellectual climate of the 70s.
Foucault's discussion of French experience with social security and the negative income tax anticipates the far more elaborate treatment (and much to recommend) of American neoliberal (recall) family policy by Melinda Cooper (Family Values). But while interesting today I skip to Foucault's conclusion:
Full employment and voluntarist growth [of the Keynesian era] are renounced in favor of integration in a market economy. But this entails a fund of a floating population, of a liminal, infra- or supra-liminal population, in which the assurance mechanism will enable each to live, after a fashion, and to live in such a way that he can always be available for possible work, if market conditions require it. This is a completely different system from that through which eighteenth and nineteenth century capitalism was formed and developed, when it had to deal with a peasant population which was a possible constant reservoir of manpower. When the economy functions as it does now, when the peasant population can no longer ensure that kind of endless fund of manpower, this fund has to be formed in a completely different way. This other way is the assisted population, which is actually assisted in a very liberal and much less bureaucratic and disciplinary way than it is by a system focused on full employment which employs mechanisms like those of social security. Ultimately, it is up to people to work if they want or not work if they don’t. Above all there is the possibility of not forcing them to work if there is no interest in doing so. They are merely guaranteed the possibility of minimal existence at a given level, and in this way the neo-liberal policy can be got to work. (207)
Now, what's important, and remarkable, is that Foucault is not claiming to unmask. On his presentation, the new system is not hidden. It's a self-conscious construct of French technocracy explicit in "the speeches, writings, and texts." (194) It involves the creation of a floating population that is not starving, but available (note the modality) for possible work. And the intention is to keep this population above subsistence by a safety-net. The pay-off is both a more efficient and productive economy that is capable of giving consumers what they wish in a high cost energy environment as well as reduce the amount of compulsion in society. Because unlike the friends/partisans of taylorist social democracy, Foucault tacitly grants their critics that the previous era of full employment also involved a lot of forced homogeneity.+
Since plans for negative income tax and basic income are still thought radical (despite the earned income tax credit and equivalencies elsewhere), we must acknowledge that Foucault's diagnosis is in some sense premature. And as Cooper shows, when neoliberal ideas where implemented, when political winds followed, they involve non-trivial amount of force with an ideology of moral hazard--many more sticks than carrot we might say. From our vantage point, then, neoliberalism never arrived fully (because it was hijacked by intrinsically conservative ideology).
*In this lecture Foucault makes it seem initially as if the roots of the Chicago school are in the German model. But while not denying the significance of Hayek and other exhiles, he quickly corrects that, "it can also be seen as a phenomenon which is absolutely endogenous to the United States." (193)
**There is more evidence of this in the lecture, because he treats American neoliberalism as homegrown (see the previous note).
+Critics of neoliberalism forget that at heart it is an emancipatory project that was welcomed by those who wished to break the traditional gender/family/sex roles enforced by the state.
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