Defining neoliberalism
Neoliberalism is clearly not a unified doctrine to the extent that Keynesianism is. While Hayek is one of the obvious figureheads of the neoliberal âthought collectiveâ (Mirowski & Plehwe, 2009) his work is at odds with many other neoliberal forms of policy and governance. The origins of the neoliberal movement can be traced to the contributions of Hayek and Ludwig Von Mises to the âsocialist calculation debateâ of the 1920s and 1930s (Mises, 1990; Hayek, 2009). The intellectual project of reinventing liberalism was scattered between London, New York, Chicago, Freiburg and Vienna, up until the 1970s (Peck, 2010). The application and adaptation of these ideas spread no less haphazardly, serving various masters as they went. But what, I suggest, is the common thread in all of this â and what makes the term âneoliberalismâ a necessary one â is an attempt to replace political judgement with economic evaluation, including, but not exclusively, the evaluations offered by markets. Of course, both political and economic logics are plural and heterogeneous. But the central defining characteristic of all neoliberal critique is its hostility to the ambiguity of political discourse, and a commitment to the explicitness and transparency of quantitative, economic indicators, of which the market price system is the model. Neoliberalism is the pursuit of the disenchantment of politics by economics.
The language of politics, unlike the language of economics, has a self-consciously performative dimension. It is used with a public in mind, and an awareness that the members and perspectives contained in that public are plural and uncertain. The praxis and aesthetics of discourse are acknowledged in what we consider to be âpoliticalâ situations. These include legal process, in which text and speech resonate in public settings, and seek to do something as much as represent something. This doesnât mean that economics as a discipline is not performative, requires no public or has no praxis. On the contrary, a great deal of recent scholarship has demonstrated that economics is often powerfully performative (Callon, 1998; Mitchell, 2002; MacKenzie, 2006; MacKenzie et al., 2007) and employs political rhetorics (McCloskey, 1985). Quantification and measurement have their own affective and aesthetic qualities (Porter, 1995), but the example of market price indicates to an economic sensibility that ambiguity and performativity can be beneficially minimized or constrained. From a neoliberal perspective, price provides a logical and phenomenological ideal of how human relations can be mediated without the need for rhetorical, ritualized or deliberately performative modes of communication. Indeed, price may even suggest that peaceful human interaction is feasible without speech at all. The reduction of complex and uncertain situations to a single number, as achieved by a market, appears as a route out of the hermeneutic pluralism and associated dangers of politics. Whether generated by markets or by economics, a price is an example of what Poovey terms the âmodern factâ, a simple âpreinterpretiveâ or ânoninterpretiveâ representation of a state of affairs (Poovey, 1998).
If today politics and public institutions appear to have disintegrated into merely calculated and strategic behaviour, one response would be to view this as a side-effect of âmodernityâ or âadvanced capitalismâ or plain âgreedâ. But perhaps a more fruitful one would be to examine this as a self-conscious project of rationalization on the part of intellectuals and policy elites. The disenchantment of politics by economics involves a deconstruction of the language of the âcommon goodâ or the âpublicâ, which is accused of a potentially dangerous mysticism. In the first instance, as manifest in the work of Mises and Hayek, this is an attack on socialism and the types of state expertise that enact it, but it is equally apparent in a critique of the liberal idea of justice, as in the work of Richard Posner and others. With some reservations, it is also manifest as a critique of executive political authority which is contrasted unfavourably with the economically rational authority of the manager. The targets of neoliberal critique are institutionally and ontologically various, which elicits different styles of critique. In each case, substantive claims about political authority and the public are critically dismantled and replaced with technical economic substitutes. These substitutes may need to be invented from scratch, hence the constructivist and often experimental dimensions of neoliberalism, a selection of which will be explored in detail in subsequent chapters.
As the more observant critics of neoliberalism have noted, it did not, therefore, seek or achieve a shrinking of the state, but a re-imagining and transformation of it (Peck, 2010; Mirowski, 2013). In the seventy years separating the golden age of Victorian liberalism and the intellectual birth of neoliberalism, the character of the state and of capitalism had changed markedly. The rise of American and German industrial capitalism had been achieved thanks to new economies of scale and organizational efficiencies associated with large corporations and hierarchical structures, including the birth of management (Chandler, 1977; Arrighi, 2009). Science and expertise were now formally channelled into business. Technical advancements in the fields of statistics and national accounts, followed by the birth of macroeconomics in the 1930s, meant that âthe economyâ had appeared as a complex object of political management (Mitchell, 1998; Suzuki, 2003). And the on-going growth of a âsocialâ realm, measured and governed by sociology, social statistics, social policy and professions, meant that the American and European states of the 1930s had far more extensive capacities and responsibilities for audit and intervention than the British liberal state of the 1860s (Donzelot, 1991; Desrosieres, 1998).
The pragmatism of the neoliberal pioneers prevented them from proposing a romantic return to a halcyon age of classical liberalism, instead committing them to a reinvention of liberalism suitable for a more complex, regulated, Fordist capitalism. Hayek believed that âthe fundamental principle that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion, is capable of an infinite variety of applicationsâ (1944: 17). Victorian laissez-faire was only one empirical manifestation of the liberal idea. Restoring economic freedom would not be achieved simply through withdrawing the state from âthe marketâ, but through active policy interventions, to remould institutions, state agencies and individuals, in ways that were compatible with a market ethos (however defined) and were amenable to economic measurement. The state is therefore a powerful instrument of neoliberalism, though also an object of its constant critique; this is one of many contradictions of neoliberalism, and one which has been raised to new heights since the banking crises of 2007â09.
Hayekâs own interpretations of both liberalism and the political public sphere were highly idiosyncratic. Liberalism is associated primarily with the uncertainty of outcomes. Freedom, by this account, requires ignorance of the future, and the preservation of freedom requires a dogmatic agnosticism on the part of public institutions.1 By contrast, political activity is interpreted as a project of determining outcomes and reducing uncertainty. At least in the modern era, politics is viewed as an instrument of planning and the pursuit of certainty, though this is concealed by the deceptive nature of political language. This pessimistic view directly inverts the (equally pessimistic) perspective of Hannah Arendt, for example, who saw liberal governance of the economic and âsocialâ realm as a poor, expertly managed substitute for the inherent uncertainty and vitality of political action (Arendt, 1958). Both positions celebrate, and arguably romanticize, uncertainty, but see its rationalist enemies in different places â the Hayekian neoliberal fears the politician, while the Arendtian political actor fears the economist.
Most analyses of neoliberalism have focused on its commitment to âfreeâ markets, deregulation and trade. I shanât discuss the validity of these portrayals here, although some have undoubtedly exaggerated the similarities between âclassicalâ nineteenth-century liberalism and twentieth-century neoliberalism. The topic addressed here is a different one â the character of neoliberal authority: on what basis does the neoliberal state demand the right to be obeyed, if not on substantive political grounds? To a large extent, it is on the basis of particular economic claims and rationalities, constructed and propagated by economic experts. The state does not necessarily (or at least, not always) cede power to markets, but comes to justify its decisions, policies and rules in terms that are commensurable with the logic of markets. Neoliberalism might therefore be defined as the elevation of market-based principles and techniques of evaluation to the level of state-endorsed norms (Davies, 2013: 37). The authority of the neoliberal state is heavily dependent on the authority of economics (and economists) to dictate legitimate courses of action. Understanding that authority â and its present crisis â requires us to look at economics, economic policy experts and advisors as critical components of state institutions.
Max Weber argued that modernity disenchants the world through positivist science and bureaucratization, subsuming the particular within the universal, reducing qualities to quantities. In Weberâs analysis, modern science and bureaucracy lack any âoutwardâ or public sense of their own intrinsic value to humanity, making them cold, impersonal and anonymous forces â those same characteristics of markets that Hayek deemed valuable (Weber, 1991a, 1991b). Both the scientist and the bureaucrat run the risk of nihilism, but counter this through holding on to private, âinwardâ vocations which condition and sustain their practices of empty rationalization. In this respect, âdisenchantmentâ can never be complete, as it depends for its progress on unspoken ethical commitments on the parts of those who propagate it. To some extent these ethical commitments must be shared, if rationalist depictions of the world are to hold together as a consensually shared reality. This becomes self-evident where the question of scientific and social scientific âmethodologyâ arises. In order for objective representations to be generated, certain presuppositions and practical procedures must be adhered to that have a normatively binding force. The stronger the claim to value neutrality, the more rigidly these presuppositions and procedures must bind, so, for example, neo-classical economists are bound by far tighter rules of conduct than social anthropologists. Paradoxically, therefore, value neutrality is an ethos in its own right (Du Gay, 2000), and efforts to eradicate all values are ultimately as dangerous to rationalization as they are to ethics, as Nietzsche recognized.
What is distinctive about neoliberalism as a mode of thought and government, however, is its acute desire to invert the relationship between technical rationality and substantive ethos. Where Weber saw modern rationalization and capitalism as dependent on certain ethical precepts, Hayek and his followers believed that various technical forms of quantitative evaluation could provide the conditions and guarantee of liberal values. This technocratic turn diverts the attention of the liberal away from moral or political philosophy and towards more mundane technical and pragmatic concerns. Prosaic market institutions and calculative devices become the harbinger of unspoken liberal commitments. This style of political reasoning survives, for example, in Thomas Friedmanâs âgolden arches theory of conflict preventionâ, which observes that no two nations possessing a McDonaldsâ outlet within their borders have ever gone to war with each other: the Kantian liberal ideal of âperpetual peaceâ comes to be pursued via the mundane technologies of hamburger production (Friedman, 2000).
This offers one route to understanding the contradictory nature of neoliberal authority. Whether in the work of the Chicago School of economics, the âNew Public Managementâ and âshareholder valueâ movements of the 1980s or the ânational competitivenessâ evaluations that framed policy debates in the 1990s, neoliberalism has sought to eliminate normative judgement from public life to the greatest possible extent. In the tradition of Jeremy Bentham, intrinsic values are to be replaced by extrinsic valuation (i.e. measurement). Converting qualities into quantities removes ambiguity, emptying politics of its misunderstandings and ethical controversies, over which, Milton Friedman believed, âmen can ultimately only fightâ (Friedman, 1953). Just as Bentham reduced all forms of experience to different quantities of utility, Friedman and his colleagues reduced all values, tastes, beliefs and political ideals to the status of âpreferencesâ, eliminating the distinction between a moral stance and a desire. In this respect, they shared the anti-metaphysical ethos of behaviourism which permeated much of American social science over the first half of the twentieth century (Mills, 1998). Neoliberalism has been an acutely modernizing force, in the Weberian sense of rationalization.
But this form of rationalization, this disenchantment of politics by economics still rests on certain vocational commitments and intrinsic notions of the common good, albe...