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The Market and the People: on the Incompatibility of Neoliberalism and Democracy

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The Market and the People: on the Incompatibility of Neoliberalism and Democracy The Market and the People: On the Incompatibility of Neoliberalism and Democracy Lars Sebastiaan Cornelissen Through gentle digging one can uncover the old latent configurations, but when it comes to determining the system of discourse on the basis of which we still live, as soon as we are obliged to question the words that still resonate in our ears, that are mingled with those we are trying to speak, then archaeology, like Nietzschean philosophy, is forced to work with hammer blows. —Michel Foucault, ‘On the Ways of Writing History’ To Kate, and to all of the friends who made this work possible 3 ABSTRACT This dissertation intervenes in current debates surrounding the relationship between neoliberalism and democracy, developing a novel perspective on the history of neoliberalism. It argues that these debates have overlooked the epistemological framework that made possible the emergence of neoliberalism in the 1940s. On the basis of an analysis of this framework, it offers an understanding of how and why neoliberal political philosophy developed as an anti-democratic doctrine. The first part of this dissertation, consisting of three chapters, engages with contemporary critiques of neoliberalism. The first and second chapters engage with Michel Foucault’s account of what he calls neoliberal “governmentality” and with recent interpretations thereof. Special attention is paid to the methods of analysis used by both Foucault and those who adopt his account. It is argued that for a rigorous understanding of the relationship between neoliberalism and democracy, neoliberal governmentality must be subjected to what Foucault calls “archaeological” analysis. The third chapter explores the archaeological method as developed by Foucault in his early work and compiles a set of analytical tools used in the remainder of the dissertation. The first part is concluded with a “seam” that identifies a crucial oversight in Foucault’s historical portrait of neoliberalism and that advocates a renewed engagement with the history of neoliberalism. The three chapters that constitute the second part develop a novel account of neoliberalism’s history based upon an archaeological study. The fourth and fifth chapters offer an archaeological account of the “marginal utility revolution” in political economy and of its effects on political, economic and philosophical thought. It is argued that marginalism caused certain shifts in political-economic thought that made possible the emergence of a novel philosophical conception of societal order in the 1930s, which went on to provide the foundations for neoliberal thought and politics. The sixth and final chapter offers a close reading of F.A. Hayek’s political thought, arguing that Hayek pushes neoliberal thought to its limits and arrives at a political-philosophical programme that is explicitly aimed at restricting citizens from influencing the legal order. In the afterword to the dissertation, it is argued that if democracy is understood minimally as popular 4 control of legislation, neoliberal thought must be viewed as inherently anti- democratic because it actively seeks to insulate the legislature from control by the citizenry. Keywords: Neoliberalism, Democracy, Michel Foucault, Archaeology, De- Democratisation, Wendy Brown, F.A. Hayek 5 6 CONTENTS Abstract 4 Acknowledgements 8 Author’s Declaration 9 Introduction 11 Part 1 Chapter 1: Michel Foucault and Liberal Governmentalities 37 Chapter 2: The Economisation of Democracy 69 Chapter 3: Towards an Archaeology of Neoliberalism 99 Seam 127 Part 2 Chapter 4: Carl Menger and the Prehistory of Neoliberalism 137 Chapter 5: The Birth of Neoliberal Thought 181 Chapter 6: Neoliberalism and Democracy 227 Afterword: Beginning Again 265 Bibliography 279 7 ACKNOWLEDGEMENTS ‘Friendship is so tightly linked to the definition of philosophy that it can be said that without it, philosophy would not really be possible.’1 The same can be said to apply to this dissertation, which was made possible by all of the support and care I have received over the years. The ideas presented here are, overwhelmingly, the outcome of countless conversations with my friends. I am especially grateful to Afxentis, Bas, Fearghus, German, Giovanni, Guilel, Joel, Kate, Megan, Melayna, Robin, Sam and Tim. My gratitude for their friendship, their respect, their support and their interlocution is limitless. I thank Carla, Carole, German, Michael and Viktoria for their help in translating tricky (and sometimes downright nonsensical) passages from French and German sources. I thank the Critical Studies Research Group and all of its members for offering me a forum and a network of support through the years. I extend special gratitude to Afxentis, Bas, German, Giovanni, Kate, Megan, Melayna and Tim for their assistance in copy-editing the final draft and helping me with the final editorial and motivational push. I thank my supervisors, Bob, Mark and Clare, for overseeing my doctoral research and for gently ushering me into Academia. I am very grateful to the Power, Conflict and Ideologies Research Cluster in Galway—and especially to Liam, my host—for organising a workshop discussing two of my chapters and for engaging with my ideas and my writing so thoughtfully and productively. I offer my thanks to the staff at the Liberaal Archief in Ghent (Belgium) for assisting me in my archival research. Finally, I offer thanks to my family for sending their unceasing love and support (and, at moments of my greatest need, some Dutch chocolate) across the Channel and to Kate for offering me support, help, love, confidence and friendship when I needed it the most. 1 Agamben, Giorgio, ‘The Friend’, in: What is an Apparatus? And Other Essays, transl. D. Kishik & S. Pedatella (Stanford, CA 2009 [2007]: Stanford University Press): 25-37, 25. 8 AUTHOR’S DECLARATION I declare that the research contained in this thesis, unless otherwise formally indicated within the text, is the original work of the author. The thesis has not been previously submitted to this or any other university for a degree, and does not incorporate any material already submitted for a degree. Lars S. Cornelissen 12th December 2017 9 10 INTRODUCTION Seeking to comprehend the times we live in, theorists, pundits and commentators of all stripes have, in recent years, come increasingly to focus on neoliberalism. The attempt to think, and think about, neoliberalism has produced a large body of literature in which attempts to deny the very existence of neoliberalism coexist with essays that blame all of society’s ills on neoliberals and their followers. The fact that it has attracted such a large amount of commentary indicates that neoliberalism, however it is understood or assessed, poses a profound problem for contemporary thought and politics. Aiming to reach a better understanding of our neoliberal present and, specifically, of the place occupied therein by democratic politics, this dissertation offers an historical and philosophical analysis of neoliberalism. The Argument In this dissertation I offer a twofold argument. First, I argue that neoliberalism, understood as an historically specific form of governmentality, is underpinned by a singular mode of thinking about societal order; a mode of thinking that, in turn, was historically made possible by what is known as the “marginal utility revolution” in political economy. Second, I contend that one crucial implication of the neoliberal conception of societal order is that democratic politics, instead of appearing either as categorically good or as categorically bad, poses a profound problem for neoliberal thought; a problem that, when pushed to its limits, pitches the people against the market. In this confrontation, the latter must, in the eyes of neoliberal theorists, be victorious over the former. Let me expand upon this. Following Michel Foucault’s account of neoliberalism as set out in his 1979 lectures on The Birth of Biopolitics, I argue that the emergence of neoliberal governmentality in the first half of the 20th century inaugurates a new phase in the history of modern governmental rationality. What marks neoliberalism in its specificity, in Foucault’s view, is that it reorients governmental rationality, turning it away from classical liberal technologies of laissez-faire and non-intervention and demanding, instead, an ever-vigilant, ever- 11 active form of governmental intervention. According to this account, neoliberalism submits the concept and practice of intervention to a fundamental transformation, requiring not intervention in economic or social processes but, rather, demanding that government act upon the conditions under which economic and social processes emerge in a “spontaneous” fashion. Following Foucault, I argue that this last feature characterises neoliberalism in its specificity, setting it apart from all modes of governmentality that preceded it. However, I go on to argue that Foucault’s account of neoliberalism overlooks the fact that this feature is grounded in a specific understanding of societal order. Indeed, it is, I contend, because neoliberals conceptualise economic and social order as being historically conditioned that they are capable of proposing a governmental programme aimed primarily at the active construction of the necessary preconditions of a competitive market order. My thesis is that this feature was made possible by the marginal utility revolution in economic thought; an epistemological event that was instigated in the early 1870s by three authors,
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