Foucault, Lepage, Anarcho-capitalism and anti-Marxism

In his fifth lecture of 7 February 1979 Foucault introduces "American anarcho-capitalism" as a synonym for "contemporary American liberalism." (The Birth of Biopolitics p. 104.) In context, the intended contrast is with German Ordoliberalism and Hayek's Austrian liberalism. In the next lecture, of 14 February, 1979, Foucault contrasts "contemporary American anarcho-capitalism" with the "classical liberalism of the nineteenth century." (p. 133) Later in the sixth lecture, Foucault claims that "American anarcho-capitalism" develops from the rejection of "Keynesian economics, and others from the Beveridge plans or European social security plans." (pp. 144-145) Foucault doesn't use the phrase "Anarcho-capitalism" again. He does use 'anarcho-liberal' (and its cognates) a few times (p. 117; p. 161) as apparent synonym. 

It's pretty clear, however, that he is thinking of the Chicago school, especially the strand inspired by Henry Calvert Simons (1899 –1946). Because Foucault makes clear that that "Simons drafted a number of critical texts and articles, the most interesting of which is entitled: “The Beveridge Program: an unsympathetic interpretation,” which there is no need to translate, since the title indicates its critical sense." (p. 216) In addition, Foucault had just introduced Simons to his audience as follows, "The first, fundamental text of this American neo-liberalism, written in 1934 by Simons, who was the father of the Chicago School, is an article entitled “A Positive Program for Laissez-Faire.” (p. 216) And, in fact, Foucault explicitly identifies 'anarcho-liberalism' with the Chicago school (p. 161).

Foucault's adoption of the phrase 'anarcho-capitalism' is a bit strange because Simons is no anarchist. And, in fact, to the best of my knowledge most real anarchists (Left and Right) would not treat any Chicago economist as an anarchist (since they tend to accept non-trivial state institutions). Milton Friedman's defense, for example, of central banking often gets him criticized by certain libertarians and anarchists alike. 

Unusually, the editorial team of The Birth of Biopolitics is silent on Foucault's use. I mention that not to criticize them. For, in a note attached to a cryptic remark by Foucault -- "The ideas of North on the development of capitalism, for example, are directly in line with this opening up made by the neoliberals" -- in lecture of 14 February 1979 they call to "H. Lepage, Demain le capitalisme (Paris: Librairie Générale Francaise, 1978; republished “Pluriel”) p. 34 and chapters 3 and 4 (this book was one of the sources used by Foucault in the last of these 1979 lectures)." Lepage treats North at length in this fascinating book, translated by Sheilagh C. Ogilvie* as Tomorrow, Capitalism: The Economics of Economic Freedom (Open Court, 1982).

Lepage introduces the term 'anarcho-capitalism' near the end of the first chapter ("The New Economists") in a section, "The Libertarians," as follows:

This renaissance in modern economic thought has given rise to the appearance on the American political chessboard of a new ideological movement—the Libertarian movement. It does not yet represent more than an intellectual fringe, but it embodies an astonishing reconciliation between a distinctly controversial social libertarianism (favoring legalization of drugs, moral freedom, freedom from military conscription, international neutrality, suppression of the CIA, abolition of the corrupt ‘‘military-industrial complex’’) and an economic libertarianism that calls for a radically laissez-faire capitalist society in which a maximum of transactions would take place through voluntary contractual exchange.

Often having close ties with the ‘‘radical”’ philosophy of the New Left and mostly less than 40 years of age, these libertarians are the direct descendants of the great libertarian revolt of the 1960s. They hold the very existence of the state to be the supreme evil that is to be actively resisted. Opponents of all manifestations of Gulag, down to the least offensive, their objective is to abolish the state in favor of a social system in which all public functions would be made private. This has given them the name ‘‘anarcho-capitalists,’’ a name assumed by certain of their leaders such as David Friedman, son of Milton Friedman, also a professor of economics, now at UCLA and formerly at the Virginia Polytechnic Institute and State University in Blacksburg." Lepage Capitalism, Tomorrow, p. 25

A few pages later Lepage clarifies that "Milton Friedman, for instance, passes for “‘libertarian’’ in most circles, but he is not recognized as libertarian by militants of the Libertarian Party such as his own son." (p. 27) And a few lines down, he is equally clear that "not all Chicago school adherents or the new economists are libertarians." (p. 27) It's natural to read this page as suggesting that Nozick and David Friedman are anarcho-capitalists. In the section on anarcho-capitalism (near the end of chapter 7) only David Friedman is mentioned and quoted (and no Chicago economist).+ 

I suspect Foucault gets the term 'anarcho-capitalism/liberalism' from Lepage. And it is pretty clear that Lepage's discussions of Becker, Stigler, and North shape Foucault's analysis (about this some time soon more). But Foucault does not follow Lepage slavishly (or may have conflated Milton and David Friedman). Another important difference between Foucault and Lepage is that while Lepage identifies Simons as one of the founders of the "Chicago tradition," he treats Knight (correctly) as the "true founder." (p. 5) Lepage devotes no space at all to discuss Simons (who was long dead when Lepage wrote his book). By contrast Foucault largely ignores Knight and focuses on Simons. 

Okay, Capitalism, Tomorrow (Demain, le capitalisme) is a superb survey of anti-Keynesian economics and political philosophy of the 50s-70s. (It was a bestseller in France.) In his "foreword" to the English translation, James Buchanan notes that Lepage visited in September 1976. Throughout the foreword Buchanan treats Lepage as a "journalist." But I understand from Guillaume Yon that Lepage wrote important policy briefs for the regulatory framework of French electricity industry. And in France Lepage quickly became associated with 'new economists' and 'anarcho-capitalism.' And I suspect that Foucault used 'anarcho-capitalism' to alert his audience that he would be talking about the whole ensemble of characters that Lepage discusses in his book, rather than conflate the more narrow work of David Friedman with the much broader movement that Lepage discusses.

One reason Douglass North is so important to Lepage's argument, and why I think Foucault mentions him in that otherwise obscure passage when he first introduces 'anarcho-capitalism,' is that running through Lepage's book are a whole number of set-pieces in which known criticisms by Marxists of capitalism, markets, and/or liberalism are answered (if not refuted) rather thoroughly. As Lepage puts it in his introduction, "capitalism and economic freedom cannot be defended successfully...[without] new theoretical and scientific insight into the economic bases and implications of their own political philosophy," (p. 3; emphasis in original.) In fact, Capitalism, Tomorrow would still work very well in an 'intro to PPE' course or as the right-wing response to (say) Polanyi's The Great Transformation (or some such book) or as an introduction to economic way of thinking.

An example of this occurs right at the start of the book. After briefly introducing the significance of human capital theory and the new theory of consumer behavior to his audience, Lepage writes,

Formulated separately by Gary S. Becker at Chicago and Kelvin J. Lancaster at Columbia, the new theory of consumption sees the consumer as an individual who not only consumes but also ‘‘produces’’ his own satisfaction, using inputs consisting of his market purchases and his time. This is in itself—as we shall see'’—an intellectual revolution, yet despite its controversial political implications it is still practically unknown outside economic circles. Its new view of consumer demand finally makes it possible to reply effectively to the critics of capitalism who base their view of society on a supposed distinction between ‘‘true”” and ‘‘false’’ needs. In their view, advertising, by changing people’s desires, makes consumers the slaves of the producers, and the proliferation of new products becomes proof of the wasteful and suicidal nature of consumer society. But consumer behavior can be explained convincingly without invoking ‘‘false needs’’ or consumer irrationality. (Capitalism, Tomorrow, Chapter one, pp. 9-10, emphasis added)

My present point is not to endorse Lepage's claim that the new theory of consumption does respond adequately to the Marxist criticism. To evaluate that we will need to explore the details of his argument (in the very near future!) But rather that responding to anti-capitalism systematically is clearly Lepage's purpose. And I suspect this is what made the book attractive to Foucault, who, as is well known, runs with the idea that what is distinctive about American neoliberalism (as exemplified by Becker and Stigler) is the "programming of policies of economic development, which could be orientated, and which are in actual fact orientated," toward the development of human capital. (Birth of Biopolitics, p. 233) And this programming can, as Foucault clearly discerns, be developed through social policy and one's own activities.

Finally, Becker's move is at odds (recall; see also here) with Frank Knight’s position who claimed that “wants which impel economic activity and which it is directed toward satisfying are the products of the economic process itself.” (This is a view that is not just Marxist, but goes back to Smith and Rousseau and probably Aristotle.) Arguably this is one of the central oppositions between 'old' and 'new' Chicago.  TBC.

 

 

*I believe this is the same person as the Chichele Professor of Economic History at Oxford University. So there is an interesting back-story lurking here.

+There is a fascinating footnote to chapter 1, that brings the nouveaux philosophes and David Friedman rather close together. But I leave discussion of it for another occasion.

 

Comments

[John Quiggin]

Here's my response to Becker and Murphy https://johnquiggin.com/2006/05/11/becker-and-murphy-on-advertising/

[David Friedman]

Pace Lepage, I regard my father as a libertarian and myself as a Chicago school economist. And while some libertarians attack my father as a defender of central banking, it isn't true.

[ERIC SCHLIESSER]

Hi David (if I may?),
Thank you for responding! I had the privilege of corresponding with your father over my interpretation of his views, and I am pleased that you found this website.

I am curious why you think your father is not a mitigated (and skeptical) defender of central banking (as distinct from fee banking). Even in his 1986 with Anna Schwartz, “Has Government Any Role in Money?” seems to me to express skepticism and caution about free banking.

I don't think anyone (who is not a purist) would deny your dad is in a non-trivial sense a libertarian (but not of the anarchist sort). But I wonder if you think it's really so odd that some people (including Lepage) thought you were far more anarchist than your dad in the 1970s? Also did you review or discuss Lepage's interpretation of you back in the day?