I would like to bring out some aspects of American neo-liberalism, it being understood that I have no desire and it is not possible to study it in all its dimensions. In particular, I would like to consider two elements which are at once methods of analysis and types of programming, and which seem to me to be interesting in this American neo-liberal conception: first, the theory of human capital, and second, for reasons you will be able to guess, of course, the problem of the analysis of criminality and delinquency.
First, the theory of human capital. I think the interest of this theory of human capital is that it represents two processes, one that we could call the extension of economic analysis into a previously unexplored domain, and second, on the basis of this, the possibility of giving a strictly economic interpretation of a whole domain previously thought to be non-economic.
First, an extension of economic analysis within, as it were, its own domain, but precisely on a point where it had remained blocked or at any rate suspended....Starting from this criticism of classical economics and its analysis of labor, the problem for the neo-liberals is basically that of trying to introduce labor into the field of economic analysis. A number of them attempted this, the first being Theodore Schultz, who published a number of articles in the years 1950–1960 the result of which was a book published in 1971 with the title Investment in Human Capital. More or less at the same time, Gary Becker published a book with the same title, and then there is a third text by Mincer, which is quite fundamental and more concrete and precise than the others, on the school and wages, which appeared in 1975.--Michel Foucault, 14 March, 1979, translated by Graham Burchell, Lecture 9, The Birth of Biopolitics, 219-220.
Perhaps, some other time I return to neoliberal history of classical economics that Foucault summarizes in the part I skipped in this quote. And in what follows I also ignore Foucault's acuity in grasping the inner meaning, as it were, of intellectual trends in a different rather technical discipline in real time.
In the first quoted paragraph, Foucault introduces the central theme of the lecture and, perhaps, of the whole book without alerting his audience (or himself) that he has done so. There are features of American neo-liberalism (in his discussion he mostly confines himself to Chicago economics) that are "methods of analysis and types of programming." That papers and books in economics contain methods of analysis is no surprise. But Foucault insists, without initially making a big deal about it, that they are simultaneously types of programming. And so the question is what (or who) is being programmed and what counts as a program in this context?
While Foucault uses programming (and its cognates) throughout the lecture, Foucault only offers his answer in the final two sentences of lecture nine: "programming of policies of economic development, which could be orientated, and which are in actual fact orientated," toward the development of human capital. (233) So, it is humans and, perhaps, whole societies that are to be programmed. The purpose of this programming can be varied. For, example the focus on developing human capital is to stimulate economic development (locally and internationally) from which many things may follow. (The analysis of delinquency may serve other ends.)
I do not know if in the 1970s, a French audience, would have heard 'programming' as the thing we do to write software or make computers and robots run. Perhaps, they heard it terms of scheduling. Or perhaps they heard it as an ironic counterpart to the programmatic political projects ordinarily associated with five year social planning. But it is quite clear that Foucault treats these economists not merely as offering (who?) new kinds of descriptions of society, but also offering a new kind of praxis.
Foucault's claim here sits uneasily with the self-understanding of many Chicago economists of the period; they, following Milton Friedman's lead , generally claim that they make a sharp description between the descriptive ('positive') and prescriptive ('normative') elements in their work; while leaving practice ('art') largely to the side. So, for example,
THE new economic approach to political behavior seeks to develop a positive theory of legislation, in contrast to the normative approach of welfare economics. The new approach asks why certain industries and not others become regulated or have tariffs imposed on imports or why income transfers take the form and direction they do, in contrast to asking which industries should be regulated or have tariffs imposed, or what transfers should be made.
Both the normative and positive approaches to legislation, however, generally have taken enforcement of laws for granted, and have not included systematic analyses of the cost of enforcing different kinds of laws. In separate studies we recently formulated rules designed to increase the effectiveness of different laws. We proposed that offenders convicted of violating laws be punished by an amount related to the value of the damages caused to others, adjusted upwards for the probability that offenders avoid conviction. Gary S. Becker & George J. Stigler. "Law enforcement, malfeasance, and compensation of enforcers." The Journal of Legal Studies 3.1 (1974): 1.*
Stigler and Becker (both Chicago Nobels eventually) present themselves as doing something on the 'positive'/descriptive side of things. In their work they explore the costs of enforcements. Yet, even if one grants that their work is firmly grounded in empirical analysis, it is not so odd that Foucault thinks they are doing what he calls programming. For, they offer a rule of punishment intended to decrease 'cost' of punishment and increase the 'effectiveness' of these. To an outsider that does seem prescriptive. Why do Becker and Stigler not call that normative analysis? To an outsider this seems like obscurification.
The beauty of Foucault's treatment in lecture 9, is that he shows that part of the confusion stems from the way Robbins' definition of what economists do gets (ahh) operationalized in economics. I quote Foucault (initially quoting Robbins):
“Economics is the science of human behavior as a relationship between ends and scarce means which have mutually exclusive uses.” You can see that this definition of economics does not identify its task as the analysis of a relational mechanism between things or processes, like capital, investment, and production, into which, given this, labor is in some way inserted only as a cog; it adopts the task of analyzing a form of human behavior and the internal rationality of this human behavior. Analysis must try to bring to light the calculation—which, moreover, may be unreasonable, blind, or inadequate—through which one or more individuals decided to allot given scarce resources to this end rather than another. Economics is not therefore the analysis of processes; it is the analysis of an activity. So it is no longer the analysis of the historical logic of processes; it is the analysis of the internal rationality, the strategic programming of individuals’ activity. (222-223)
Economics stops being the large scale study of historical processes. Rather, economics becomes the study of the scarce means given ends. As Foucault notes in the passage I quoted at the top of this post, this definition is topic neutral. And facilitates what (already (recall) back in 1934) Talcott Parsons called 'economic imperialism' (that is, "the extension of economic analysis into a previously unexplored domain, and second, on the basis of this, the possibility of giving a strictly economic interpretation of a whole domain previously thought to be non-economic.") The setting of ends is treated as normative or prescriptive activity. And so when one studies means in light of scarcity one is doing descriptive work.
So, in the just quoted passage, the rules offered by Stigler and Becker are rules that govern the means, but not the ends criminal laws are supposed to serve. They are a form of instrumental rationality or conditional/hypothetical rationality. 'Programming' is an excellent term to capture what is going on here because these 'rules' offered by Becker and Stigler are, in fact, supposed to be legally binding on subjects.
Now, a critic may well worry about the immaculate conception of the ends. Who decides what they are? And by what right do Stigler and Becker assume them as given? (Answering these questions has informed my own work on them.) But Foucault, however notices or is interested in something else. (I think this is really spectacular.) I continue with Foucault's analysis of human capital theory:
This means undertaking the economic analysis of labor. What does bringing labor back into economic analysis mean? It does not mean knowing where labor is situated between, let’s say, capital and production. The problem of bringing labor back into the field of economic analysis is not one of asking about the price of labor, or what it produces technically, or what is the value added by labor. The fundamental, essential problem, anyway the first problem which arises when one wants to analyze labor in economic terms, is how the person who works uses the means available to him. That is to say, to bring labor into the field of economic analysis, we must put ourselves in the position of the person who works; we will have to study work as economic conduct practiced, implemented, rationalized, and calculated by the person who works. What does working mean for the person who works? What system of choice and rationality does the activity of work conform to? As a result, on the basis of this grid which projects a principle of strategic rationality on the activity of work, we will be able to see in what respects and how the qualitative differences of work may have an economic type of effect. So we adopt the point of view of the worker and, for the first time, ensure that the worker is not present in the economic analysis as an object—the object of supply and demand in the form of labor power—but as an active economic subject. (223)
To put the point as a paradox: the very theory that seems to objectify humans as capital and that is often accused of treating citizens as optimizing paws in engineering problems, is in fact a theory that treats humans as subjective agents. Now, as my former colleague John Davis has shown in a number of books, as this theory gets developed (in ever more subtle mathematical ways), it becomes difficult to see where, in the effervescent moments of a second derivative, agency ends up being located. But that's for a different time.
Admittedly, the cognitive content of such agency is reductive in character because human motivation is treated in fairly simple fashion. Quoting Foucault again,
People like Schultz and Becker say: Why, in the end, do people work? They work, of course, to earn a wage. What is a wage? A wage is quite simply an income. From the point of view of the worker, the wage is an income, not the price at which he sells his labor power. Here, the American neo-liberals refer to the old definition, which goes right back to the start of the twentieth century, of Irving Fisher, who said: What is an income? How can we define an income? An income is quite simply the product or return on a capital. Conversely, we will call “capital” everything that in one way or another can be a source of future income. Consequently, if we accept on this basis that the wage is an income, then the wage is therefore the income of a capital. Now what is the capital of which the wage is the income? Well, it is the set of all those physical and psychological factors which make someone able to earn this or that wage, so that, seen from the side of the worker, labor is not a commodity reduced by abstraction to labor power and the time [during] which it is used. Broken down in economic terms, from the worker’s point of view labor comprises a capital, that is to say, it as an ability, a skill; as they say: it is a “machine.”And on the other side it is an income, a wage, or rather, a set of wages; as they say: an earnings stream.
This breakdown of labor into capital and income obviously has some fairly important consequences. First, if capital is thus defined as that which makes a future income possible, this income being a wage, then you can see that it is a capital which in practical terms is inseparable from the person who possesses it. To that extent it is not like other capitals. Ability to work, skill, the ability to do something cannot be separated from the person who is skilled and who can do this particular thing. In other words, the worker’s skill really is a machine, but a machine which cannot be separated from the worker himself, which does not exactly mean, as economic, sociological, or psychological criticism said traditionally, that capitalism transforms the worker into a machine and alienates him as a result. We should think of the skill that is united with the worker as, in a way, the side through which the worker is a machine, but a machine understood in the positive sense, since it is a machine that produces an earnings stream. An earnings stream and not an income, precisely because the machine constituted by the worker’s ability is not, as it were, sold from time to time on the labor market against a certain wage. In reality this machine has a lifespan, a length of time in which it can be used, an obsolescence, and an ageing. So that we should think of the machine constituted by the worker’s ability, the machine constituted by, if you like, ability and worker individually bound together, as being remunerated over a period of time by a series of wages which, to take the simplest case, will begin by being relatively low when the machine begins to be used, then will rise, and then will fall with the machine’s obsolescence or the ageing of the worker insofar as he is a machine. We should therefore view the whole as a machine/stream complex, say the neo-economists—all this is in Schultz is it not—it is therefore a machine-stream ensemble, and you can see that we are at the opposite extreme of a conception of labor power sold at the market price to a capital invested in an enterprise. This is not a conception of labor power; it is a conception of capital-ability which, according to diverse variables, receives a certain income that is a wage, an income-wage, so that the worker himself appears as a sort of enterprise for himself. Here, as you can see, the element I pointed out earlier in German neo-liberalism, and to an extent in French neo-liberalism, is pushed to the limit, that is to say, the idea that the basic element to be deciphered by economic analysis is not so much the individual, or processes and mechanisms, but enterprises. An economy made up of enterprise-units, a society made up of enterprise-units, is at once the principle of decipherment linked to liberalism and its programming for the rationalization of a society and an economy. (224-225)
So Foucault understands human capital theory as a theory focused on agents, which are simultaneously programmable machines, that is, as possible generators of income streams. Given the recent focus on risk and uncertainty, and the many social and political challenges (pandemic, climate, financial instability) which lay in the future, it is natural to wonder about how we should think of possible income of these machines with, as the logicians teach, necessarily finite time spans. And this is also natural because Foucault (correctly) treats Chicago economics as a return to the radical utilitarian program of Bentham (248) and given that utilitarianism is as a technique of decision-making resolutely oriented toward the future (and spectacularly useful to forget crimes from the past).
Even so, agents don't fall like manna from heaven ready to produce income streams; they need to be educated and cultivated, and constituted by norms and institutions. Capital-ability is the product of history, and the machine-stream ensemble is built over time in society. So, lurking in this theory is a complex analysis relating past and (possibly discounted) future time. And while from one perspective wages merely reflect supply and demand at a given time, in other perspective they become a way to connect individual decisions over time to larger social ends (e.g., development). And as Foucault recognizes, the irony is that a relatively libertarian, intellectual community with distrust of collective planning, pioneers a set of analytical techniques by which policy-makers may come to shape (if not program) human agents toward collectively imposed ends.
*The paper I am quoting from is not discussed by Foucault. But the papers Stigler and Becker are summarizing are also discussed by Foucault in a later lecture.
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