Defining Neoliberalism

by Rob Horning

24 June 2011


Forgive me if this post becomes excessively pedantic (a warning I should probably affix to all of them), but I mainly want to try to clarify some stuff for myself here. I tend to use a mishmash of terms—neoliberalism, post-Fordism, affective labor, immaterial labor, general intellect, etc.—without as much consistency as I’d like, and I want to do better. (Or perhaps I am trying to bore whatever readership I have into nonexistence, if that hasn’t already happened.)

Neoliberalism is a term I didn’t know in the 1990s, when I first started reading leftist political theory—instead the totalizing terms in vogue as far as I could tell were late capitalism, or globalization, or the New Economy, or consumer society. In the past decade, though, neoliberalism has emerged as the go-to term on the left to describe the way capitalism (particularly “post-Fordist” capitalism; that is, “postindustrial” relations of production that are dominated not by factory-organized manufacturing but by services, brands, etc.) has been administered politically more or less since the 1970s. It’s potentially confusing to those used to associating anything with the word liberal in it with the left, as neoliberalism is “liberal” in the sense of protecting the “free” functioning of markets, not necessarily extending the liberty of people or guaranteeing them equal opportunities.
It seems that “neoliberalism” gains it currency from Foucault’s use of it in a series of lectures for courses he gave in the late 1970s, which only recently have been translated into English and published. That seems as good a place as any to get the bottom of it. In his February 14, 1979, lecture (collected in The Birth of Biopolitics—not a helpful title, as it dumps another confusing term into the mix), Foucault develops the point that neoliberalism is not a matter of limiting government intervention in society; it is a matter of intervening heavily to protect a particular vision of how markets should work in order to be “fair.” Foucault sums up this position this way: “One must govern for the market, rather than because of the market.”

The market as we know it is not some natural phenomenon; it is produced through the state’s approach to governing. Neoliberal governance regulates markets to make competitiveness their essential feature.

Neoliberal governmental intervention is no less dense, frequent, active, and continuous than in any other system. But what is important is to see what the point of application of these governmental interventions is now. Since this is a liberal regime, it is understood that government must not intervene on effects of the market. Nor must neoliberalism, or neoliberal government, correct the destructive effects of the market on society, and it is this that differentiates it from, let’s say, welfare or suchlike policies that we have seen [from the twenties to the sixties]. Government must not form a counterpoint or a screen, as it were, between society and economic processes. It has to intervene on society as such, in its fabric and depth. Basically, it has to intervene on society so that competitive mechanisms can play a regulatory role at every moment and every point in society and by intervening in this way its objective will become possible, that is to say, a general regulation of society by the market.

This seems important to the question of why politicians don’t care about achieving full employment. So-called welfare policies impede the ideological imperative of letting (constructed) markets legislate everything—of legitimizing markets so conceived. This in turn legitimates the state. (Jodi Dean highlights this thesis in her summary of these lectures: “The economy produces legitimacy for the state that is its guarantor.”)

When neoliberal politicians make demagogic claims about getting government out of people’s lives, what they really mean is that they want to implement a social policy of saddling the individual with bearing as much risk as possible so that markets can have pristine price signals. “To the same extent that governmental intervention must be light at the level of economic processes themselves, so must it be heavy when it is a matter of this set of technical, scientific, legal, geographic, let’s say, broadly, social factors which now increasingly become the object of governmental intervention,” Foucault explains. Controlling social factors “involves an individualization of social policy and individualization through social policy, instead of collectivization and socialization by and in social policy. In short, it does not involve providing individuals with a social cover for risks, but according everyone a sort of economic space within which they can take on and confront risks.” Government actively shapes society to posit individualism through the risks we all personally must bear: we know ourselves as discrete individuals because we intimately know how vulnerable we are; then it becomes incumbent upon us to make the best of it, take an entrepreneurial attitude toward that risk in the ostensibly level economic playing field. Another way of putting that: government attempts to craft the subjectivity of its subjects along entrepreneurial lines through various institutional interventions. The way the state wants markets to function, Foucault suggests, determines how we function—how we are able to conceive of ourselves, our problems and how they can be solved. I don’t know, maybe that is sort of self-evident.

Moreover, inequality is not an accident of this system but its deliberate creation. In the following passage (which gives a good flavor of the cumbersomeness of these lectures), Foucault summarizes the logic of the “ordoliberals”—German neoliberals of the 1930s who Foucault represents as sort of the anti-Frankfurt school—in rejecting social-democratic principles or even socialized consumption.

In particular, relative equalization, the evening out of access to consumer goods cannot in any case be an objective. It cannot be an objective in a system where economic regulation, that is to say, the price mechanism, is not obtained through phenomena of equalization but through a game of differentiations which is characteristic of every mechanism of competition and which is established through fluctuations that only perform their function and only produce their regulatory effects On condition that they are left to work, and left to work through differences. In broad terms, for regulations to take effect there must be those who work and those who don’t, there must be big salaries and small salaries and also prices must rise and fall. Consequently, a social policy with the objective of even a relative equalization, even a relative evening out, can only be anti-economic. Social policy cannot have equality as its objective. On the contrary, it must let inequality function and, I no longer recall who it was, I think it was Röpke, who said that people complain of inequality, but what does it mean? “Inequality,” he said, “is the same for all.” This formula may seem enigmatic, but it can be understood when we consider that for the ordoliberals the economic game, along with the unequal effects it entails, is a kind of general regulator of society that nearly everyone has to accept and abide by.

That pretty much sums up the neoliberal attitude: Inequality is the same for all, since the market doesn’t discriminate—it produces its inequalities with the same logic that applies to all the players. All the players, in turn, must adopt “neoliberal subjectivity”—a kind of entrepreneurial desperation that looks for any possible way to mitigate personal risk and gain an individual economic edge that may be necessary for survival.

The main thing for me is this: Neoliberal society is not consumer society. Neoliberalism doesn’t posit us all as passive, conformist consumers in thrall to mass culture and doomed to consume the surplus of mass-produced junk. Instead, as Foucault puts it,

The society regulated by reference to the market that the neo-liberals are thinking about is a society in which the regulatory principle should not be so much the exchange of commodities as the mechanisms of competition…. This means that what is sought is not a society subject to the commodity effect, but a society subject to the dynamic of competition. Not a supermarket society, but an enterprise society. The homo economicus sought after is not the man of exchange or man the consumer; he is the man of enterprise and production.

Neoliberalism makes consuming into an personal, private enterprise. We are obliged to view it as everybody’s business, because it is essentially our own.

Anyway I’m reading an essay (pdf) by Thomas Lemke on these lectures now; may have more to add later.

UPDATE: This passage from Lemke’s essay restates what I see as the crucial point of Foucault’s analysis, that homo economicus—the human governed entirely by incentives, human nature as posited by Freakonomics—is fostered by state power. “neoliberalism admittedly ties the rationality of the government to the rational action of individuals; however, its point of reference is no longer some pre-given human nature, but an artificially created form of behavior. Neo-liberalism no longer locates the rational principle for regulating and limiting the action of government in a natural freedom that we should all
respect, but instead it posits an artificially arranged liberty: in the entrepreneurial and competitive behavior of economic-rational individuals.” Neoliberalism creates its own notion of freedom—freedom of competition—and disseminates it; subjects internalize it and regulate themselves in accordance with it. It is a state-sanctioned principle around which one can form an identity seemingly in accordance with the society one must live in. Transforming oneself into a personal brand can then appear to be an autonomous rational choice of the individual given the “reality” of the world.

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