The following passage is from Michel Foucault’s lectures tiltled The Birth of Biopolitics:
When you talk about contemporary neoliberalism, whether German or any other kind, you generally get three types of response.
The first is that from the economic point ofview neo-liberalism is no more than the reactivation of old, secondhand economic theories.
The second is that from the sociological point of view it is just a way of establishing strictly market relations in society.
And finally, the third response is that from a political point of view neo-liberalism is no more than a cover for a generalized administrative intervention by the state which is all the more profound for being insidious and hidden beneath the appearances of a neoliberalism.
You can see that these three types of response ultimately make neoliberalism out to be nothing at all, or anyway, nothing but always the same thing, and always the same thing but worse. That is to say: it is just Adam Smlth revived; second, it is the market society that was decoded and denounced in Book I of Capital; and third, it is the generalization of state power, that is to say, it is Solzhenitsyn. on a world scale.
Adam Smith, Marx, Solzhenitsyn, laissez faire, society of the market and spectacle, the world of the concentration camp and the Gulag: broadly speaking these are the three analytical and critical frameworks with which this problem of neo-liberalism is usually approached, and which therefore enable it to be turned into practically nothing at all, repeating the same type of critique for two hundred, one hundred, or ten years. Now what I would like to show you is precisely that neo-liberalism is really something else. Whether it is of great significance or not, I don’t know, but assuredly it is something, and I would like to try to grasp it in its singularity.
So, what is this neo-liberalism? Last week I tried to indicate at least its theoretical and political principle. I tried to show you how the problem of neo-liberalism was not how to cut out or contrive a free space of the market within an already given political society, as in the liberalism of Adam Simith and the eighteenth century. The problem of neoliberalism is rather how the overall exercise of political power can be modeled on the principles of a market economy. So it is not a question of freeing an empty space, but of taking the formal principles of a market economy and referring and relating them to, of projecting them on to a general art of government. This, I think, is what is at stake, and I tried to show you that in order to carry out this operation, that is to say, to discover how far and to what extent the formal principles of a market economy can index a general art of government, the neo-liberals had to subject classical liberalism to a number of transformations.
The first of these, which I tried to show you last week, was basically that of dissociating the market economy from the political principle of laissez-faire. I think this uncoupling of the market economy and laissez-faire policies was achieved, or was defined,at any rate, its principle was laid down, when the neo-liberals put forward a theory of pure competition in which competition was not presented as in any way a primitive and natural given, the very source and foundation of society that only had to be allowed to rise to the surface and be rediscovered as it were. Far from it being this, competition was a structure with formal properties, [and] it was these formal properties of the competitive structure that assured, and could assure, economic regulation through the price mechanism. Consequently, if competition really was this formal structure, both rigorous in its internal structure but fragile in its real, historical existence, then the problem of liberal policy was precisely to develop in fact the concrete and real space in which the formal structure of competition could function. So, it is a matter of a market economy without laissez-faire, that is to say, an active policy without state control. Neoliberalism should not therefore be identified with laissez-faire, but rather with permanent vigilance, activity, and intervention.
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 neo-liberalism, or neo-liberal government, correct the destructive effectsof 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 1920s 1960s]. 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 playa 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.
So, what does [neoliberal government] want to do in relation to this society that has now become the object of governmental intervention and practice? It wants, of course, to make the market possible. To play the role of general regulator, of principle of political rationality, the market must be possible. But what does it mean to introduce market regulation as regulatory principle of society? Does it mean establishing a market society, that is to say, a society of commodities, of consumption, in which exchange value will be at the same time the general measure and criterion of the elements, the principle of communication between individuals, and the principle of the’ circulation of things? In other words, does this neo-liberal art of government involve normalizing and disciplining society on the basis of the market value and form? I don’t think so in fact. It is not market society that is at stake in this new art of government; it is not a question of reconstructing that kind of society. 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. It is these mechanisms that should have the greatest possible surface and depth and should also occupy the greatest possible volume in society. 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 of the consumer; he is the man of enterprise and production.