It is rather astounding to me - a token of the profound laziness and
irresponsibility of contemporary intellectuals - that people still be in
doubt or even in complete ignorance as to what neoliberalism is, how it
has developed, what its major doctrinal differences have been, how its
theory has been made into practice, the role of technology, of the
financial markets, of the military, etc. THIS IS YOUR LIFE, FOLKS. It's
also your death due to climate change. Maybe study up a little? Maybe
produce some arguments that can help others?
If you are too busy with your job or you don't like concepts (there are
other ways of dealing with society, for sure) then just don't bother
with the below. It is long, but fascinating for those who care about how
are societies are governed.
I highly recommend Philip Mirowski's book Cyborg Economics as well as
the subsequent edited volume on the "neoliberal thought collective." The
latter came AFTER Mirowski had read Foucault's The Birth of Biopolitics
(Sorbonne course in 1978-79/ English publication in 2008).The new
clarity of Mirowski's thought after this encounter speaks volumes about
the importance of Foucault's analysis. For Foucault, capitalism is not a
single, essentially unified system bearing essential contradictions, as
the classical Marxists still think. Rather, it is a thoroughly political
process and therefore it is susceptible of reformulation at each turning
point or crisis. Now, you can respond like the Regulation school or even
Deleuze and Guattari, and say that capitalism continually changes
certain axiomatic propositions, in order that its major principle of
endless accumulation through labor exploitation can continue. That's
what I think. But such a statement still demands that one understand
each new bundle of axioms, with its inner variations and their political
origins, as well as their specific consequences. I don't see any other
way to confront neoliberalism. It is so powerful that most of what we
think stands against it - especially, most anarchism - is merely
subsumed beneath it. In the 70's, emergent US neoliberalism was often
called "anarcho-capitalism." Let's look at some of Foucault's central
arguments about the Freiburg school of German Ordoliberalism, and then
maybe we can discuss it all much better.
To begin, Foucault explores the background of the German "social market
state" that emerged against heavy contestation from the left, who
obviously wanted a socialist state, not a social market one:
"In 1955, Karl Schiller, who will later become Minister of the Economy
and Finance in federal Germany, writes a book that will cause a big stir
since it bears the significant title Socialism and Competition, that is
to say, not socialism or competition, but socialism and competition. I
don't know if he states it for the first time in this book, but anyway
he gives the greatest publicity to what will become the formula of
German socialism: "as much competition as possible and as much planning
as necessary." This is in 1955. In 1959, at the Bad Godesberg congress,
German social democracy first renounced the principle of transition to
the socialization of the means of production and, secondly and
correlatively, recognized that not only was private ownership of the
means of production perfectly legitimate, but that it had a right to
state protection and encouragement. That is to say, one of the state's
essential and basic tasks is to protect not only private property in
general, but private property in the means of production, with the
condition, adds the motion of the congress, of compatibility with "an
equitable social order." Finally, third, the congress approved the
principle of a market economy, here again with the restriction, wherever
"the conditions of genuine competition prevail."
Foucault's point here is that yes, we have a social market state in
contemporary Germany, but its aim is primarily to plan for the
marketization of society, and not for the socialization of the economy.
In other words, this is a political strategy for running a neoliberal
economy under conditions where there is a strong push for socialism. How
to argue for this plan? and how to implement it? Let's start with the
argumentation, which turns mainly around the ordoliberal quest for a
rule of law utterly distinct from Nazi authoritarianism:
"The search for a Rule of law in the economic order ... was directed at
all the forms of legal intervention in the economic order that states,
and democratic states even more than others, were practicing at this
time, namely the legal economic intervention of the state in the
American New Deal and, in the following years, in the English type of
planning. 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'Etat 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.
[snip - and then the very interesting part] ...
"In short, both for the state and for individuals, the economy must be a
game: a set of regulated activities.. but in which the rules are not
decisions which someone takes for others. It is a set of rules which
determine the way in which each must play a game whose outcome is not
known by anyone. The economy is a game and the legal institution which
frames the economy should be thought of as the rules of the game. The
Rule of law and l'Etat de droit formalize the action of government as a
provider of rules for an economic game in which the only players, the
only real agents, must be individuals, or let's say, if you like,
enterprises. The general form taken by the institutional framework in a
renewed capitalism should be a game of enterprises regulated internally
by a juridical-institutional framework guaranteed by the state. It is a
rule of the economic game and not a purposeful economic-social control."
This idea that the state should be run as a rule-of-law-governed game is
so close to hacker ideas about transparency and equal access and
open-source code watched over by civil society and so forth, that you
have to suspect that they read Hayek - and of course, the libertarians
who are responsible for so much anarcho-hacker ideology DID read Hayek,
he was one of their sources. Is that not curious? Maybe worth thinking
about? What would a pure rule-of-law society be like? Well, in my view,
you would have to specify, not only which laws, but how are they
oriented. What is their goal, their telos? What kind of society and what
kind of cosmos does it construct?
Foucault's argument comes to a kind of high point, for me anyway, when
he describes how the emergent ordoliberal principles (ie the German
variant of neoliberalism) were applied to the problem of how to found a
postwar German state. It was not an easy problem, because any reference
to the previous state was simply impossible. So here are some long
excerpts from Foucault:
"The problem posed to Germany in 1945, or more precisely in 1948... was:
given a state that does not exist, if I can put it like that, and given
the task of giving existence to a state, how can you legitimize this
state in advance as it were? How can you make it acceptable on the basis
of an economic freedom which will both ensure its limitation and enable
it to exist at the same time? This was the problem, the question that I
tried to outline last week and which constitutes, if you like, the
historically and politically first objective of neo-liberalism. I would
now like to try to examine the answer more closely. How can economic
freedom be the state's foundation and limitation at the same time, its
guarantee and security? Clearly, this calls for the re-elaboration of
some of the basic elements of liberal doctrine -- not so much in the
economic theory of liberalism as in liberalism as an art of government
or, if you like, as a doctrine of government."
[snip- over several pages Foucault analyzes all the things that the
ordoliberals found unbearable in Nazism, which they traced back, not to
capitalism, but to the authoritarian planner-state. Then he continues:]
"The essential thing is the conclusion the ordoliberals drew from this
series of analyses, namely: since Nazism shows that the defects and
destructive effects traditionally attributed to the market economy
should instead be attributed to the state and its intrinsic defects and
specific rationality, then the analyses must be completely overturned.
Our question should not be: Given a relatively free market economy, how
should the state limit it so as to minimize its harmful effects? We
should reason completely differently and say: Nothing proves that the
market economy is intrinsically defective since everything attributed to
it as a defect and as the effect of its defectiveness should really be
attributed to the state. So, let's do the opposite and demand even more
from the market economy than was demanded from it in the eighteenth
century. In the eighteenth century the market was called upon to say to
the state: Beyond such and such a limit, regarding such and such a
question, and starting at the borders of such and such a domain, you
will no longer intervene. This is not enough, the ordoliberals say.
Since it turns out that the state is the bearer of intrinsic defects,
and there is no proof that the market economy has these defects, let's
ask the market economy itself to be the principle, not of the state's
limitation, but of its internal regulation from start to finish of its
existence and action. In other words, instead of accepting a free market
defined by the state and kept as it were under state supervision--which
was, in a way, the initial formula of liberalism: let us establish a
space of economic freedom and let us circumscribe it by a state that
will supervise it--the ordoliberals say we should completely turn the
formula around and adopt the free market as organizing and regulating
principle of the state, from the start of its existence up to the last
form of its interventions. In other words: a state under the supervision
of the market rather than a market supervised by the state."
[snip]...
"I think this idea of a legitimizing foundation of the state on the
guaranteed exercise of an economic freedom is important. Of course, we
must take up this idea and its formulation in the precise context in
which it appears, and straightaway it is easy to see tactical and
strategic shrewdness. It was a matter of finding a juridical expedient
in order to ask from an economic regime what could not be directly asked
from constitutional law, or from international law, or even quite simply
from the political partners. Even more precisely, it was an artful move
with regard to both the Americans and Europe, since by guaranteeing
economic freedom to a Germany in the process of reconstruction and prior
to any state apparatus, the Americans, and let's say different American
lobbies were assured that they could have the free relationships that
they could choose with this German industry and economy. Secondly, both
Western and Eastern Europe were reassured by ensuring that the
institutional embryo being formed presented absolutely none of the
dangers of the strong or totalitarian state they had experienced in the
previous years. But beyond these immediate tactical imperatives, and
beyond the immediate context and situation of 1948, I think there was
the formulation in this discourse of something which will remain a
fundamental feature of contemporary German governmentality*: we should
not think that economic activity in contemporary Germany, that is to
say, for thirty years, from 1948 until today, has been only one branch
of the nation's activity. We should not think that good economic
management has had no other effect and no other foreseen and calculated
end than that of securing the prosperity of all and each. In fact, in
contemporary Germany, the economy, economic development and economic
growth, produces sovereignty; it produces political sovereignty through
the institution and institutional game that, precisely, makes this
economy work. The economy produces legitimacy for the state that is its
guarantor. In other words, the economy creates public law, and this is
an absolutely important phenomenon, which is not entirely unique in
history to be sure, but is nonetheless a quite singular phenomenon in
our times. In contemporary Germany there is a circuit going constantly
from the economic institution to the state; and if there is an inverse
circuit going from the state to the economic institution, it should not
be forgotten that the element that comes first in this kind of siphon is
the economic institution. There is a permanent genesis, a permanent
genealogy of the state from the economic institution. And even this is
not saying enough, for the economy does not only bring a juridical
structure or legal legitimization to a German state that history had
just debarred. This economic institution, the economic freedom that from
the start it is the role of this institution to guarantee and maintain,
produces something even more real, concrete, and immediate than a legal
legitimization; it produces a permanent consensus of all those who may
appear as agents within these economic processes, as investors, workers,
employers, and trade unions. All these economic partners produce a
consensus, which is a political consensus, inasmuch as they accept this
economic game of freedom."
[end of quotes]
***
Neoliberal capitalism takes the form of a state supervised by the
market, where the primary reference, and, as it were, the permanent
referendum founding the legitimacy of the market state is society's
expression of its preferences through buying and selling, as signaled by
prices. The volume of exchanges along with price discovery and the
gradual emergence of a "just price" for each type of product tells the
state not only what people value, but also, what is the most efficient
way to produce what people value. Every move of the state that furthers
the cheaper production of whatever people value is therefore legitimate
in neoliberal politics and foundational for neoliberal society. That is
the foundation of the ordoliberal state through a pure reference to the
market. So, why did Germany veer away from being a society oriented
toward labor unions, social welfare and complete inclusion, to gradually
become the society that promotes unequual competition and savage
inequality on a European scale? And why is there such a broad consensus
around that transformation within Germany itself? Why has the German
government been so *legitimate* throughout the years of the current
crisis? The answer is that neoliberalism in general, and ordoliberalism
in particular, was and remains a political technique, an art of
governing, specifically designed to effect the transformation from
socialist principles (or indeed, national-socialist principles) to
market principles of the kind outlined by Hayek and later by Milton
Friedman. A similar thing was done, somewhat differently in each case,
in the US, the UK, Chile, China, and countless other countries. Germany,
not the US, may have been the pioneer. But Germany was, of course, under
relatively strong American influence in 1948! Hayek himself, one may
recall, was Austrian.
There are things one can only learn through a bit of hard work. I would
recommend reading the Birth of Biopower, twice or three times. It is not
like Foucault's other books. It is full of lengthy analyses of
political-science details drawn from both the pre- and post-war
experience on both sides of the Atlantic. Unfortunately Foucault
conducted no further investigation along these lines. Without any way of
knowing, I suspect that he was so awed and frightened by the capacity of
neoliberalism to do exactly what he had been calling for - namely, a
Nietzschean transvaluation of all values - that he felt compelled to
begin his own exemplary Nietzschean self-transformation through the
return to and reworking of the subjectivizing discourses of Antiquity.
That was, imho, a big mistake. Had he pursued his analyses and made them
public in an authored book, rather than a seminar that was only released
in French in 2004, an entire generation would have had a philosopher's
analysis of neoliberalism to go on. Well, we have it since 2008 in
English, and perhaps it can help us to clear the rubble of a collapsing
neoliberalism and chart out the possibilities of new forms of government
(and perhaps indeed, of new, more useful variants of capitalism or of
socialism) in order to face the terrible challenges that climate change
and its attendant social chaos are already bringing.
BH
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