Similarly, we can produce the conditions for the formation of an order in society, but we cannot arrange the manner in which its elements will order themselves under appropriate conditions. In this sense the task of the lawgiver is not to set up a particular order but merely to create conditions in which an orderly arrangement can establish and ever renew itself. As in nature, to induce the establishment of such an order does not require that we be able to predict the behavior of the individual atom—that will depend on the unknown particular circumstances in which it finds itself. All that is required is a limited regularity in its behavior; and the purpose of the human laws we enforce is to secure such limited regularity as will make the formation of an order possible.
Where the elements of such an order are intelligent human beings whom we wish to use their individual capacities as successfully as possible in the pursuit of their own ends, the chief requirement for its establishment is that each know which of the circumstances in his environment he can count on. This need for protection against unpredictable interference is sometimes represented as peculiar to “bourgeois society.”26 But, unless by “bourgeois society” is meant any society in which free individuals co-operate under conditions of division of labor, such a view confines the need to far too few social arrangements. It is the essential condition of individual freedom, and to secure it is the main function of law.--Hayek (1960) The Constitution of Liberty, p. 140-141.
The quoted passage is the end of chapter 10 of Hayek's The Constitution of Liberty. If the main task of the lawgiver is "to create conditions in which an orderly arrangement can establish and ever renew itself" then the task is to maintain what Michael Polanyi calls (as Hayek notes in context) a "polycentric order" or a law-governed "spontaneous order." (140) The lawgiver's laws, which create a limited regularity in individual behaviors will guide expectations ("which of the circumstances in his environment he can count on") and, so, presuppose publicity (they are known) and (relative) stability ("can count on"). The laws also have a generality and impartiality because the laws (now quoting Hayek quoting Polanyi), "uniformly apply to all" agents. (140)
The generality and impartiality of laws of a polycentric order have, according to Hayek an abstract even formal character. In fact, when in the start of Chapter 10, Hayek discusses what he has "called the “abstract character” of true law." (p. 133) He adds a footnote (8): "If there were no danger of confusion with the other meanings of those terms, it would be preferable to speak of “formal” rather than of “abstract” laws, in the same sense as that in which the term “formal” is used in logical discussion." (p. 394-395)+ And the reason why Hayek avoids using 'formal' in the main body of the text here is because, as becomes clear near the end of the note, Max Weber uses "formal justice" in a different than Hayek's sense: "he [Weber] means justice determined by law, not merely formal but in the substantive sense" (p. 395) In fact, throughout The Constitution of Liberty, Hayek does go on to use 'formal' when he means 'abstract law.'
This is probably all familiar enough. In the final paragraph of chapter 10, which is quoted in full above, Hayek confronts an objection which claims that the formal structure of such a polycentric order just is a special feature of bourgeois society. Without any further information, one can infer that lurking in the background is a kind of historicist idea that the characteristics of bourgeois society are peculiar to a particular age/time and material context. Hayek responds to the objection, in part, by de-historicizing the claim, and universalizing it (to repeat): "unless by “bourgeois society” is meant any society in which free individuals co-operate under conditions of division of labor." (emphasis added this time.)
In note 26, the objection is attributed to Max Weber.* The note reads as follows:
Max Weber, Theory of Social and Economic Organization (London: W. Hodge, 1947), p. 386, tends to treat the need for “calculability and reliability in the functioning of the legal order” as a peculiarity of “capitalism” or the “bourgeois phase” of society. This is correct only if these terms are regarded as descriptive of any free society based on the division of labor. [p. 397 in the 1960 edition]
The note basically repeats the claim in the main body of Hayek's text except that it specifies calculability as part of the legal order that needs to be secured by the lawgiver.
When we turn to Weber's Theory of Social and Economic Organization, the passage that Hayek refers to can be found in the context of Weber's discussion of representation and ways in which "the governing powers of representative bodies may be both limited and legitimized," (419) and, especially "the relations of the different forms of representation to the economic order." (420):++ I quote the wider context of the material that Hayek had quoted in his footnote (and highlight it):
1. One factor in the development of free representation was the undermining of the economic basis of the older estates. This made it possible for persons with demagogic gifts to pursue their own inclinations without reference to their social position. The source of this undermining process was the development of modern capitalism.
2. Calculability and reliability in the functioning of the legal order and the administrative system is vital to rational capitalism. This need led the middle classes to attempt to impose checks on patrimonial monarchs and the feudal nobility by means of a collegial body in which the middle classes had a decisive voice, which controlled administration and finance and could exercise an important influence on changes in the legal order.
3. At the time when this transition was taking place, the proletariat had not reached a stage of development which enabled it to become an important political factor which could endanger the position of the bourgeoisie. Furthermore, there was no hesitation in eliminating any threat to the power of the propertied classes by means of property qualifications for the franchise.
4. The formal rationalization of the economic order and the state, which was favourable to capitalistic development, could be strongly promoted by parliaments. Furthermore, it seemed relatively easy to secure influence on party organizations.
5. The development of demagogy in the activities of the existing parties was a function of the extension of the franchise. Two main factors have tended to make monarchs and ministers everywhere favourable to universal suffrage, namely, the necessity for the support of the propertyless classes in foreign conflict and the hope, which has proved to be unjustified, that, as compared to the bourgeoisie, they would be a conservative influence.
6. Parliaments have tended to function smoothly as long as their composition was drawn predominantly from the classes of wealth and culture, that is, as they were composed of political 'amateurs.' Established social status rather than class interests as such underlay the party structure. The conflicts tended to be only those between different forms of wealth, but with the rise of class parties to power, especially the proletarian parties, the situation of parliaments has changed radically. Another important factor in the change has been the bureaucratization of party organizations, with its specifically plebiscitary character. The member of parliament thereby ceases to be in a position of authority over the electors and becomes merely an agent of the leaders of the party organization. This will have to be discussed more in detail elsewhere. (Weber, pp. 420-421).
It's pretty clear why Hayek treats Weber as offering an alternative count. Weber is offering a historical development in which a Hayekian free society risks being understood as a transitory stage to be undermined once parliament and parties are professionalized and subject to class warfare.
The reason I have quoted so much is that Hayek's response to Weber can help illuminate Foucault's treatment of ordoliberalism and its conception of the rule of law. For, Foucault treats (recall) the ORDOs as applied Husserlians who are essentially responding to a problematic bequeathed by Max Weber (and competing with the Frankfurt school). I quote the Birth of Biopolitics, the fifth lecture of 7 February 1979:
What I mean is that Max Weber was a starting point for both schools and we could say, to schematize drastically, that he functioned in early twentieth century Germany as the person who, broadly speaking, displaced Marx’s problem. If Marx tried to define and analyze what could be summed up as the contradictory logic of capital, Max Weber’s problem, and the problem he introduced into German sociological, economic, and political reflection at the same time, is not so much the contradictory logic of capital as the problem of the irrational rationality of capitalist society...The decipherment of this irrational rationality of capitalism was also the problem for the Freiburg School, but people like Eucken, Röpke, and others try to resolve it in a different way, not by rediscovering, inventing, or defining the new form of social rationality, but by defining, or redefining, or rediscovering, the economic rationality that will make it possible to nullify the social irrationality of capitalism. (p. 105-106)
Now situating ordoliberalism in terms of this Weberian starting point is a bit awkward because it's not how the ORDOs present themselves. In fact, in an important recent paper, "The Abandoned Übervater: Max Weber and the Neoliberals," Stefan Kolev has demonstrated (and now I quote from his conclusion) "the curious disregard of Max Weber in the writings of the neoliberal generation. While certainly a towering figuring during his lifetime, after his passing in 1920 Weber successively fell into oblivion." As it happens, in his exercise, Kolev had also treated Hayek's response to Weber, but ignored The Constitution of Liberty (which for his purposes is fine).
But for Foucault the way the ordoliberals resolve this Weberian starting point is by advocating for the rule of law in the service of constituting a market order. And when Foucault explains what the rule of law means in such a context he says the following in his seventh lecture on 21 February 1979:
What does applying the principle of the Rule of law in the economic order mean? Roughly, I think it means that the state can make legal interventions in the economic order only if these legal interventions take the form solely of the introduction of formal principles. There can only be formal economic legislation. This is the principle of the Rule of law in the economic order. What does it mean to say that legal interventions have to be formal?
I think Hayek, in The Constitution of Liberty, best defines what should be understood by the application of the principles of l’État de droit, or of the Rule of law,* in the economic order. Basically, Hayek says, it is very simple. The Rule of law, or formal economic legislation, is quite simply the opposite of a plan.....if we want the Rule of law to operate in the economic order, it must be the complete opposite of this. That is to say, the Rule of law will have the possibility of formulating certain measures of a general kind, but these must remain completely formal and must never pursue a particular end. (171-172)
Now, as the editors of Birth of Biopolitics note, Foucault is here alluding to chapter 15 of The Constitution of Liberty, but the actual definition that Foucault quotes is from The Road to Serfdom. But as they also note, in the previous pages of the lecture, Foucault had just repeatedly cited without making this explicit chapter 13 of The Constitution of Liberty (“Liberalism and Administration: The ‘Rechtsstaat’”).
So, here's my proposal. It is pretty clear that in preparing these lectures, Foucault had read The Constitution of Liberty, which he explicitly mentions and cites including without attribution. In fact, as the editors of Birth of Biopolitics notice, Hayek's postscript -- "Why I am Not a Conservative" -- to The Constitution of Liberty is alluded to in the very beginning and near end of Foucault's 1979 lectures. (See note 3 of p. 23 and note 11 on p. 234 of The Birth of Biopolitics.) I return to this fact before long. In Particular, it is very clear that in addition to the postscript, Foucault had assimilated Part II of The Constitution of Liberty on Freedom and the Law (which includes chapter 9-16 that Foucault explicitly cites in Birth of Biopolitics).
And, in fact, when in lecture 7, Foucault illustrates the nature of the rule of law for Hayek, he also cites Michael Polanyi's Logic of Liberty: "Or again, Polanyi, in his The Logic of Liberty, writes: “The main function of a system of jurisdiction is to govern the spontaneous order of economic life. The system of law must develop and reinforce the rules according to which the competitive mechanism of production and distribution operates.” (21 February 1979, p. 174) And Hayek and Polanyi are treated as representing, or articulating, characteristic features of the ordoliberal rebirth of the liberal art of government. [To bring Hayek and Polanyi so close to the ORDOs is not in all respects right, but for Foucault's purposes in chapter 7, it's okay.]
And if one reads The Constitution of Liberty, it would be silly to suggest that Weber looms large over it. However, Hayek does end the first chapter with a very Weberian claim, that because coercion cannot be avoided in a free society it has conferred "a monopoly of coercion on the state." (The accompanying footnote cites inter alia Weber's Essays in Sociology.) But more important, Hayek does engage critically with Weber in Part II in The Constitution of Liberty. In particular, as we have seen above, Hayek treats Weber's historicist account of the rule of law in bourgeois society as a key target. But Weber is also an important source.
For example, in chapter 14, when articulating "systematically the essential conditions of liberty under the law," (180), the "second chief attribute"...of "true laws is that they be known and certain." (182) In fact, Hayek immediately adds that there is "probably no single factor which has contributed more to the prosperity of the West than the relative certainty of the law which has prevailed here." (183) And Hayek drops a footnote to a number of works including "the extensive discussion in Max Weber, Max Weber on Law in Economy and Society."
So, when Foucault tried to contextualize and situate ordoliberal thought, he recognized or attributed a fundamental similarity with Hayek on the conceptualization of the rule of law. (I think this is especially likely to occur if one reads Ropke's works of the 1940s alongside Hayek's Road to Serfdom and The Constitution of Liberty.) And this part of Hayek is quite explicitly a critical response to Weber. And in Hayek (and by implication the ORDOs) this step/stage/era in Weber's developmental account is, as it were, constantly frozen in time, or not allowed to be corrupted, by the the proper understanding of the rule of law as formal and as directed, even actively, at the maintenance of a competitive order.**
+ In the 2011, "definitive edition" edited by Hamowy this is note 9 (p. 220).
*In the 2011, "definitive edition" edited by Hamowy this is note 27 (p. 231). The main change in Hamowy's version of the note is the addition of Talcott Parsons as editor (and the German subtitle).
++While I am also using the 1947 edition of the translation, the pagination is different because I have access only to the Free Press (Glencoe, IL) edition, while Hayek is citing a copy published in London.
**At the end of lecture 7, Foucault treats the ORDOs and Hayek as having a principled program to maintain this stage as their goal of a free society because they deny it is self-contradictory, and the rule of law can (recall) solve the problem of monopoly as diagnosed by Lenin:
the ordoliberals, and the ordoliberals like Weber, think that Marx, or at any rate, Marxists, are wrong in looking for the exclusive and fundamental origin of this rationality/irrationality of capitalist society in the contradictory logic of capital and its accumulation...the ordoliberals think that there is no internal contradiction in the logic of capital and its accumulation and consequently that capitalism is perfectly viable from an economic and purely economic point of view. (21 February 1979, 177)
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