«The whole question of critical governmental reason will turn on how not to govern too much. The objection is no longer to the abuse of sovereignty but to excessive government. And it is by reference to excessive government, or at any rate to the delimitation of what would be excessive for a government, that it will be possible to gauge the rationality of governmental practice. (…)
… political economy – the term employed by Rousseau in his famous article in the Encyclopedia – is a sort of general reflection on the organization, distribution, and limitation of powers in a society. I think that fundamentally it was political economy that made it possible to ensure the self-limitation of governmental reason. (…)
The notions of natural and nature will thus be transformed with the appearance of political economy. (…) Nature is something that runs under, through, and in the exercise of governmentality. It is, if you like, its indispensable hypodermis. It is the other face of something whose visible face, visible for the governors, is their own action. Their action has an underside, or rather, it has another face, and this other face of governmentality, its specific necessity, is precisely what political economy studies. It is not background, but a permanent correlative. (…) If it were to disrupt this nature, if it were not to take it into account or go against laws determined by this naturalness specific to the objects it deals with, it would immediately suffer negative consequences. (…) What is at issue, what explains this, is precisely that when a government violates these laws of nature, it quite simply ignores them. It ignores them because it is unaware of their existence, mechanisms, and effects. In other words, governments can be mistaken. And the greatest evil of government, what makes it a bad government, is not that the prince is wicked, but that he is ignorant. (…) Walpole said: “quieta non movere“. This is no doubt a counsel of prudence, and we are still in the realm of the wisdom of the prince, that is to say: When the people are peaceful, when they are not agitating and there is no discontent or revolt, stay calm. So, wisdom of the prince. (…)
In 1751, an anonymous article appeared in the Joumal économique. It was in fact written by the marquis d’Argenson, who, had just given up his official activities. Recalling what the merchant Le Gendre said to Colbert – when Colbert asked him: “What can I do for you?”, Le Gendre replied “What can you do for us? Laissez-nous faire” – in this text to which I will come back, d’Argenson says that what he would like to do is comment on this principle of laissez-nous faire, because, he shows, in economic matters this really is the essential principle which all governments must respect and follow. At this moment he has laid down clearly the principle of the self-limitation of governmental reason. But what does “the self-limitation of governmental reason” mean? What is this new type of rationality – in the art of government, this new type of calculation that consists in saying and telling government: I accept, wish, plan, and calculate that all this should be left alone? I think that this is broadly what is called “liberalism”. (…)
* The formula “do not govern too much (pas trop gouvemer)” is from the marquis d’Argenson [text from 1768].
… however paradoxical it may seem, liberty in the second half of the twentieth century, well let’s say more accurately, liberalism, is a word that comes to us from Germany. (…)
All of those mechanisms which since the years from 1925 to 1930 have tried to offer economic and political formulae to secure states against communism, socialism, National Socialism, and fascism, all these mechanisms and guarantees of freedom which have been implemented in order to produce this additional freedom or, at any rate, to react to threats to this freedom, have taken the form of economic interventions, that is to say, shackling economic practice, or anyway, of coercive interventions in the domain of economic practice. (…)
But is it not the case that these mechanisms of economic intervention surreptitiously introduce types of intervention and modes of action which are as harmful to freedom as the visible and manifest political forms one wants to avoid? (…)
I am sure you have all heard of the art historian, Berenson. He was almost one hundred years old, approaching death, when he said something like: “God knows I fear the destruction of the world by the atomic bomb, but there is at least one thing I fear as much, and that is the invasion of humanity by the state“. (…) The state and the atomic bomb, or rather the bomb than the state, or the state is no better than the bomb, or the state entails the bomb, or the bomb entails and necessarily calls for the state: this familiar theme is not that recent since Berenson expressed it around 1950-1952. This state-phobia runs through many contemporary themes and has undoubtedly been sustained by many sources for a long time: the Soviet experience of the 1920s, the German experience of Nazism, English post-war planning, and so on. (…)
What is the nature of today’s liberal, or, as one says, neo-liberal program? You know that it is identified in two main forms, with different cornerstones and historical contexts. The German form is linked to the Weimar Republic, the crisis of 1929, the development of Nazism, the critique of Nazism, and, finally, post-war reconstruction. The other, American form, is a neo-liberalism defined by reference to the New Deal, the criticism of Roosevelt’s policies, and which, especially after the war, is developed and organized against federal interventionism, and then against the aid and other programs of the mainly Democrat administrations of Truman, Kennedy, Johnson, etcetera. (…)
[In 1948, Ludwig Erhard] He says: “We must free the economy from state controls”. “We must avoid,” he says, “both anarchy and the termite state,” because “only a state that establishes both the freedom and responsibility of the citizens can legitimatdy speak in the name of the people.” (…)
I have mentioned the career details of these people who inspired the programming of neo-liberal politics in Germany for a third, clearly more important reason, which is that the experience of Nazism was at the very heart of their reflections. (…)
So, from before the Nazi seizure of power, we have four elements: a protected economy, state socialism, economic planning, and Keynesian interventionism. (…) All of this was connected, of course, but it did not form a system. Now what Nazism finally contributed was the strict coalescence of these different elements, that is to say, the organization of an economic system in which protectionist economics, the economics of state aid, the planned economy, and Keynesian economics formed a firmly secured whole in which the different partswere bound together by the economic administration that was set up. (…)
The neo-liberals say: Take any of these elements (…), you will never be able to develop one without arriving, in one way or another, at the other. (…) If you adopt one of them you will not escape the other three. (…) Ropke (…) said to the English: What you are preparing for yourselves with your Beveridge plan is quite simply Nazism. On one side you battle with the Germans militarily, but economically, and so politically, you are in the process of repeating their lessons. English Labour party socialism will lead you to German-style Nazism. (…)
The second lesson they drew from Nazism was the following. What, they said, is Nazism? Essentially and above all it is the unlimited growth of state power. (…)
So, everything presented by the Nazis as the destruction of the bourgeois and capitalist state are in fact supplements of the state, a state in the process of being born, institutions undergoing statification (étatisation). There is in fact a necessary link between this economic organization and this growth of the state, which means that none of these elements of the economic system can be adopted without the other three arriving gradually in its wake, and to be established and to work; each of these·elements calls precisely for the growth of state power. (…)
But, say the neo-liberals, what do the Nazis actually do with their organization, their party, and their principle of the Führertum [conduction]? (…) Look at Nazi society as it actually functions. We are dealing entirely with the order of the mass, the masses at Nuremberg, the Nuremberg spectacles, standard consumption for everyone, the idea of the Volkswagen, and so on. All of this is only the renewal and intensification of all those features of bourgeois capitalist society (…) which the Nazis claimed to be rejecting. (…)
Rather, they are the product and effect of a society that economically does not accept liberalism, of a society, or rather of a state, that has chosen a policy of protectionism and planning in which the market does not perform its function and in which the state or para-state administration takes responsibility for the everyday life of individuals. These mass phenomena of standardization and the spectacle are linked to statism, to anti-liberalism, and not to a market economy. (…)
More concretely, if you like, in 1950 Ropke wrote a text entitled The Orientation of German Economic Policy, which was published with a preface by Adenauer. What does Ropke identify in this text, this charter, as the object, the final aim, the ultimate objective of governmental action? I will list the objectives he fixes: first, to enable as far as possible everyone to have access to private property; second, the reduction of huge urban sprawls and the replacement of large suburbs with a policy of medium-sized towns, the replacement of the policy and economics of large housing blocks with a policy and economics of private houses, the encouragement of small farms in the countryside, and the development of what he calls non-proletarian industries, that is to say, craft industries and small businesses; third, decentralization of places of residence, production, and management, correction of the effects of specialization and the division of labor; and the organic reconstruction of society on the basis of natural communities, families, and neighborhoods; finally, generally organizing, developing, and controlling possible effects of the environment arising either from people living together or through the development of enterprises and centers of production. Broadly speaking, Ropke says in 1950, it is a question of “shifting the center of gravity of governmental action downwards.” (…)
At any rate, we should try to take it as it is given, that is to say, well and truly, as a program of rationalization, and of economic rationalization. What does this involve? Well, when we look a bit more closely, we may of course hear it as a kind of more or less Rousseauesque return to nature, something that Rüstow called, moreover, with a very ambiguous word, a “Vitalpolitik,” a politics of life. But what is this Vitalpolitik that Rüstow talks about, and of which this is an expression? Actually, as you can see, it is not a matter of constructing a social fabric in which the individual would be in direct contact with nature, but of constructing a social fabric in which precisely the basic units would have the form of the enterprise, for what is private property if not an enterprise? What is a house if not an enterprise? What is the management of these small neighborhood communities, if not other forms of enterprise? In other words, what is involved is the generalization of forms of “enterprise” by diffusing and multiplying them as much as possible, enterprises which must not be focused on the form of big national or international enterprises or the type of big enterprises of a state.
I think this multiplication of the “enterprise” form within the social body is what is at stake in neo-liberal policy. It is a matter of making the market, competition, and so the enterprise, into what could be called the formative power of society. (…)
…non-liberalism – by which I mean interventionist policies, whether in the form of Keynesian style economics, planning, or economic and social programs-appeared, especially from the middle of the twentieth century, as something extraneous and threatening inasmuch as it involved both introducing objectives which could be described as socializing and also as laying the bases of an imperialist and military state. Criticism of this non-liberalism was thus able to find a double foothold: on the right, precisely in the name of a liberal tradition historically and economically hostile to anything sounding socialist, and on the left, inasmuch as it was a question not only of criticism but also of daily struggle against the development of an imperialist and military state. Hence, the ambiguity, or what appears to be an ambiguity, in American neo-liberalism, since it is brought into play and reactivated both by the right and the left. (…)
American liberalism is not – as it is in France at present, or as it was in Germany immediately after the war – just an economic and political choice formed and formulated by those who govern and within the governmental milieu. Liberalism in America is a whole way of being and thinking. (…)
An economy made up of enterprise units, a society made up of enterprise units, is at once the principle of decipherment linked to liberalism and its programming for the rationalization of a society and an economy. (…)
Obviously, the neo-liberals pose their problems and set out their new type of analysis much more from the angle of acquired human capital, that is to say, of the more or less voluntary formation of human capital in the course of individuals’ lives. What does it mean to form human capital, and so to form these kinds of abilities-machines which will produce income, which will be remunerated by income? It means, of course, making what are called educational investments. (…) But the neo-liberals lay stress on the fact that what should be called educational investment is much broader than simple schooling or professional training and that many more elements than these enter into the formation of human capital. What constitutes this investment that forms an abilities-machine? Experimentally, on the basis of observations, we know it is constituted by, for example, the time parents devote to their children outside of simple educational activities strictly speaking. We know that the number of hours a mother spends with her child, even when it is still in the cradle, will be very important for the formation of an abilities-machine, or for the formation of a human capital, and that the child will be much more adaptive if in fact its parents, or its mother, spend more rather than less time with him or her. This means that it must be possible to analyze the simple time parents spend feeding their children, or giving them affection as investment which can form human capital. Time spent, care given, as well as the parents’ education – because we know quite precisely that for an equal time spent with their children, more educated parents will form a higher human capital than parents with less education – in short, the set of cultural stimuli received by the child, will all contribute to the formation of those elements that can make up a human capital. (…)
In the same way, we can analyze medical care and, generally speaking, all activities concerning the health of individuals, which will thus appear as so many elements which enable us, first, to improve human capital, and second, to preserve and employ it for as long as possible. (…)
Schumpeter – he was not the first, but we just refocusing things around him – noted that, contrary to the predictions of Marx and classical economics more generally, the tendency of the rate of profit to fall actually turned out to be continuously corrected. (…) It is due, generally, [to] innovation, that is to say, [to] the discovery of new techniques, sources, and forms of productivity, and also the discovery of new markets or new resources of manpower. In any case, the explanation of this phenomenon is to be sought in the new and in innovation, which Schumpeter thinks is absolutely consubstantial with the functioning of capitalism. (…)
If there is innovation, that is to say, if we find new things, discover new forms of productivity, and make technological innovations, this is nothing other than the income of a certain capital, of human capital, that is to say, of the set of investments we have made at the level of man himself. (…)
On the basis of this theoretical and historical analysis we can thus pick out the principles of a policy of growth which will no longer be simply indexed to the problem of the material investment in physical capital, on the one hand, and of the number of workers, on the other, but a policy of growth focused precisely on one of the things that the West can modify most easily, and that is the form of investment in human capital. (…) In the same way, the problems of the economy of the Third World can also be rethought on the basis of human capital. And you know that currently an attempt is being made to rethink the problem of the failure of Third World economies to get going, not in terms of the blockage of economic mechanisms, but in terms of insufficient investment in human capital. (…)
The invisible hand [of Adam Smith], which spontaneously combines interests, also prohibits any form of intervention and, even better, any form of overarching gaze which would enable the economic process to be totalized. (…) Consequently, the economy, understood as a practice but also as a type of government intervention, as a form of action of the state or sovereign, can only be short-sighted, and if there were a sovereign who claimed to be long-sighted, to have a global and totalizing gaze, he would only ever see chimeras. In the middle of the eighteenth century, political economy denounces the paralogism of political totalization of the economic process. (…) So, the principle of laissez-faire: in any case, every man must follow his own interest. (…)
Economic rationality is not only surrounded by, but founded on the unknowability of the totality of the process. Homo oeconomicus is the one island of rationality possible within an economic process whose uncontrollable nature does not challenge, but instead founds the rationality of the atomistic behavior of homo oeconomicus. Thus the economic world is naturally opaque and naturally non-totalizable. (…) Economics is an atheistic discipline; economics is a discipline without God; economics is a discipline without totality; economics is a discipline that begins to demonstrate not only the pointlessness, but also the impossibility of a sovereign point of view over the totality of the state that he has to govern. (…). Liberalism acquired its modem shape precisely with the formulation of this essential incompatibility between the non-totalizable multiplicity of economic subjects of interest and the totalizing unity of the juridical sovereign. (…) [Homo oeconomicus] He also tells the sovereign: You must not. But why must he not? You must not because you cannot: And you cannot in the sense that “you are powerless”. And why are you powerless, why can’t you? You cannot because you do not know, and you do not know because you cannot know. I think this is an important moment when political economy is able to present itself as a critique of governmental reason. I am using “critique” here in the specific, philosophical sense of the term. Kant, too, a little later moreover, had to tell man that he cannot know the totality of the world. Well, some decades earlier, political economy had told the sovereign: Not even you can know the totality of the economic process. There is no sovereign in economics. There is no economic sovereign. (…) All the returns and revivals of nineteenth and twentieth century liberal and neo-liberal thought are still a way of posing the problem of the impossibility of the existence of an economic sovereign. (…) On a more limited scale, it seems to me that the basic function or role of the theory of the invisible hand is to disqualify the political sovereign. (…) It is opposed, very precisely, to what the physiocrats said (…). That is to say, the Economic Table will offer the sovereign a principle of analysis and a sort of principle of transparency in relation to the whole of the economic process. (…) Thus, in the name of this total knowledge, he will be able to accept freely and rationally, or rather, he will be forced by reason, knowledge; and truth to accept the principle of the freedom of economic agents. (…) There will have to be an economic knowledge spread as widely and uniformly as possible among all these subjects, and this economic knowledge; whose principle is found in the Economic Table drawn up by the physiocrats, will be common to economically well-educated subjects and to the sovereign who will be able to recognize the fundamental laws of the economy. (…) You can see therefore that the principle of laissez-faire in the physiocrats, the principle of the necessary freedom of economic agents can coincide with the existence of a sovereign who is all the more despotic and unrestrained by traditions, customs, rules, and fundamental laws as his only law is that of évidence, of a well-formed, well-constructed knowledge which he will share with the economic agents. (…) It is here, and only here, that we can find the idea that economic agents must be allowed their freedom and that a political sovereignty will cover the totality of the economic process with a gaze in the uniform light, as it were, of evidence.
Adam Smith’s invisible hand is the exact opposite of this. It is the critique of this paradoxical idea of total economic freedom and absolute despotism which the physiocrats tried to maintain in the theory of economic evidence. The invisible hand posits instead, as a rule, that this is not possible, that there cannot be a sovereign in the physiocratic sense, and that there cannot be despotism in the physiocratic sense, because there cannot be economic evidence. So you can see, from the start – if we call Adam Smith’s theory and liberal theory the start of political economy – economic science never claimed that it had to be the line of conduct, the complete programming of what could be called governmental rationality. (…) So, a problem arises: what will government be concerned with, if the economic process, and the whole of the economic process, is not in principle its object? I think it is the theory of civil society (…).
Homo oeconomicus and civil society are therefore two indispensable elements. Homo oeconomicus is, if you like, the abstract, ideal, purely economic point that inhabits the dense, full, and complex reality of civil society. Or alternatively, civil society is the concrete ensemble within which these ideal points, economic men, must be placed so that they can be appropriately managed. So, homo oeconomicus and civil society belong to the same ensemble of the technology of liberal governmentality. (…)
First, civil society as an historical-natural constant. (…) That is to say, there is no need to look somewhere else for the state of nature sought by philosophers in the reality or myth of the savage, we can find it right here. (…) Society studied even in its most complex and developed forms, society with the greatest state of consistency will always tell us what the state of nature is, since the state of nature requires us to live in society. So, the state of nature is permanent in the state of society (…). We are not closer to nature with a primitive cottage than with a palace. (…)
Second, civil society assures the spontaneous synthesis of individuals. (…) In other words, there is reciprocity between the whole and its components. (…) Better, we cannot even assess exactly an individual’s quality, value, and virtue, we cannot attribute a coefficient of good or evil to the individual unless we think of it in the reciprocity, or at any rate unless we think of it on the basis of the place he occupies, the role he performs, and the effects he produces within the whole. Every element of civil society is assessed by the good it will produce or bring about for the whole. We can say that a man is good, that he is fine only insofar as he is right for the place he occupies and, Ferguson says, “produces the effect it must produce.” (…) Civil society does not coincide with humanity in general; it exists in the form of ensembles at the same or different levels which bring individuals together in a number of units. (…)
The third characteristic of civil society is that it is a permanent matrix of political power. (…) In fact, these differences between individuals are expressed, of course, in the different roles they play in society and in the different tasks they perform. These spontaheous differences immediately give rise to divisions of labor in the collective decision-making processes of the group: some give their views, others give orders; some reflect, others obey. “Prior to any political institution whatever,” says Ferguson, “men are qualified by a great diversity of talents, by a different tone of the soul, and ardour of the passions, to act a variety of parts. Bring them together, each will find his place. (…)”. Consequently, the fact of power precedes the right that establishes, justifies, limits, or intensifies it, power alteady exists before it is regulated, delegated, or legally established. (…) On page 86, describing North American savages, or reporting observations of North American savages, Ferguson says: “Thus, without any settled form of government, or any explicit bond of union, and by an effect in which instinct seems to have a greater part than reason conducted themselves with the intelligence, the concert, and the force of a nation. Foreigners, without being able to discover who is the magistrate ( … ) always find a council with whom they may treat (…). Without police or compulsory laws, their domestic society is conducted with order.” (…) So, there is a spontaneous bond and spontaneous equilibrium. (…)
[The fourth characteristic of civil society:] It is egoistic interest, and consequently the economic game, which introduces the dimension through which history is permanently present in civil society, the process through which civil society is inevitably and necessarily involved in history. “Mankind,” he says on page 122, “in following the present sense of their minds, in striving to remove inconveniencies, or to gain apparent and contiguous advantages, arrive at ends which even their imagination could not anticipate, and pass on, like other animals, in the track of their nature, without perceiving its end. ( … ) Like the winds, that come we know not whence, and blow withersoever they list, the forms of civil society are derived from an obscure and distant origin.” In short, the mechanisms which permanently constitute civil society are therefore the same as those which permanently generate history in its general forms. (…)
Does civil society really need a government? This is the famous question posed by Paine at the end of the eighteenth century and which will haunt English politics at least until the twentieth century: Could not society exist without government, or at any rate, without a government other than the government it has created spontaneously and without need of institutions which take charge of civil society, as it were, and impose constraints which it does not accept? Paine’s question: We should not, he says, confuse society and government. “Society is produced by our wants, and government by our wickedness… The one encourages intercourse, the other creates distinctions. The first is a patron [in the English sense of the word, a protector – M.F.], the last a punisher.” (…)
The rationality according to which power is regulated may take the form of the rationality of the state understood as sovereign individuality. In this case – this is the period of raison d’État – governmental rationality is the rationality of the sovereign himself, of whomever it is who can say “me, the state.” (…) How can this rationality of the sovereign who claims to say “I” be exercised with regard to problems like those of the market or, more generally, economic processes in which rationality not only completely dispenses with a unitary form, but absolutely excludes both the unitary form and the bird’s-eye view? (…)
It is now a matter not of modeling government on the rationality of the individual sovereign who can say “me, the state,” but on the rationality of those who are governed as economic subjects and, more generally, as subjects of interest in the most general sense of the term. It is a matter of modeling government on the rationality of individuals insofar as they employ a certain number of means, and employ them as they wish, in order to satisfy these interests in the general sense of the term: the rationality of the governed must serve as the regulating principle for the rationality of government. This, it seems to me, is what characterizes liberal rationality: how to model government, the art of government, how to found the principle of rationalization of the art of government on the rational behavior of those who are governed.
It seems to me that this (…) is far from meaning that the rationality of state-individual or of the individual sovereign who can say “me, the state” is abandoned. We can even say, in a general, overall way, that the principle of rationality of all the nationalist and statist politics will be pegged to the rationality or, if you prefer, in other terms, to the interest and to the strategy of interests of the individual sovereign, or of the state insofar as it constitutes a sovereign individuality. Similarly, we can say that government regulated according to the truth also has not disappeared. For after all, what in the end is something like Marxism if not the pursuit of a type of governmentality which will certainly be pegged to a rationality, but to a rationality which is not the rationality of individual interests, but the rationality of history progressively manifesting itself as truth? (…)
What is politics, in the end, if not both the interplay of these different arts of government with their different reference points and the debate to which these different arts of government give rise? It seems to me that it is here that politics is born. (…)
I tried to analyze “liberalism,” not as a theory or an ideology, and even less, obviously, as away in which “society” “represents itself,” but as a practice, that is to say, a “way of doing things” directed towards objectives and regulating itself by continuous reflection. (…)
Liberalism, then, is to be analyzed as a principle and method of the rationalization of the exercise of government, a rationalization which obeys – and this is what is specific about it – the internal rule of maximum economy. (…)
Liberalism breaks with the “raison d’ État“ that, from the end of the sixteenth century, sought in the existence and strengthening of the state. (…)
Liberalism, on the other hand, is imbued with the principle: “One always governs too much” (…).
It constitutes (…) a tool for the criticism of reality: criticism of a previous governmentality from which one is trying to get free; of a present governmentality that one is trying to reform and rationalize by scaling it down; or of a governmentality to which one is opposed and whose abuses one wants to limit. (…)
German liberalism of the years 1948-1962, and the American liberalism of the Chicago School. In both cases, liberalism arose in a very precise context, as a critique of the irrationality peculiar to excessive government, and as a return to a technology of frugal government (…).
This excess was represented in Germany by the war regime, by Nazism, but, beyond that, it was a type of directed and planned economy that was the outcome of the 1914-1918 period and the general mobilization of resources and men; it was also “state socialism“. (…)
[Ordo-liberalists] advanced their criticisms on three different political fronts: Soviet socialism, National Socialism, and Keynesian interventionist policies. (…)
American neo-liberalism. This is generally grouped under the Chicago School which also developed in reaction to the “too much government”. (…) As with the German ordoliberals, criticism made in the name of economic liberalism is justified by the danger represented by the inevitable sequence: economic interventionism, inflation of governmental apparatuses, over-administration, bureaucracy, rigidification of all the power mechanisms, and, at the same time, the production of new economic distortions, which would lead to new interventions. (…)»
– Michel Foucault, “The Birth of Biopolitics – Lectures at the Collège de France 1978-79“.