neo-liberalism

Neo-liberalism is a maturated version of liberalism which is a rational art of governance that ruled Western Europe in the 18th and 19th centuries. Liberalism is characterised by its application of the natural laws of the market as a fundamental framework of state governance. For liberals the economic market is perceived as a wholly natural self-regulating phenomenon that reflects truth, unlike politics which can be simply reduced to mere rhetoric. Thus the market becomes the cornerstone of the political system and adheres to the natural rules of the economy. In this regard the market regulates the state. Foucault calls this the Regime of Veridiction, whereby the truth and law of the market regulate the state. This liberal art of governance, he continues, bestows its subjects with a form of utilitarian freedom that declares freedom not as something naturally inherent and possessed by individuals, but rather an independence of the governed from the governors. This type of freedom manifests itself within the natural laws of the market and grants individuals liberty from direct state control. Simply stated in market terms, individuals’ freedom of consumption yields their freedom of production. However, this freedom of the market comes at the price of the necessary regulation and security from fraud and other threats. Thus freedom is allocated amid limitations and regulations that inevitably hinder it. Further, as Foucault states, the panopticon becomes a vital aspect of this limitation through supervision and surveillance; and as a result ‘this liberalism is not so much the imperative of freedom as the management and organisation of the conditions in which one can be free ... [but rather]... risks limiting and destroying it’ (2008: 63-4).
Liberalism is defined by its laissez-faire approach to market regulation as it is believed that the market economy reflects truth according to natural laws and only limited regulation of the market is necessary. Neo-liberalism, on the other hand, rejects this laissez-fair ideal, that the market should be left to its own “natural accord”, and instead posits that regulation for the market must become a priority. In this regard, neo-liberalism advocates regulatory policies, as outlined by Foucault, to bolster the market economy. Firstly, neo-liberals emphasise the importance of price stability over purchasing power or unemployment, adhering to the disposition that price stability will inevitably advance purchasing power and create employment. Secondly, actions must be undertaken on the framework of the market economy and this becomes an imperative mission. In this sense, regulations, technical advancements and other interventions at the structural level are performed to increase market potential. Lastly, neo-liberalism advocates social policy, in the loosest sense, as a means of maintaining the bare minimum for those who cannot engage in the market economy. Thus welfare provisions are reduced to the essentials simply to maintain a standard of living defined by the state. In addition, the privatisation of social policy is ensured as a means to motivate those unable to afford it to join in the competitive hubbub of the market economy; ironically coined “The Social Market Economy”.
Neo-liberalism’s departure from liberalism continues with its commission to colonise all arenas of life with this market economy rationality of competition, calculation and enterprise. Brown (2003) argues that neo-liberalism conflates moral actions with rational actions by ‘configuring morality entirely as a matter of rational deliberation about costs, benefits and consequences’. And it is within a neo-liberal political economy where we see a proliferation of homo oeconomicus, which Foucault declares is no longer the subject of consumption but rather of competition and production. Thus the consequences of when market economy rationality becomes embedded in every aspect of life are not that humans become reduced simply to their labour power, as in previous critiques, but that they are valued on their human capital and become avenues of investment. Life as a consequence becomes reduced to a competitive acquisition of capital in the form of education, work, worldly experiences and even social interactions. These avenues simply become converted into capital “points” that can be exchanged for monetary capital in the marketplace. And, as Harvey (2007) points out, failure to succeed in the neo-liberal market economy is attributed solely to a lack of human capital assets.
The all pervasive rationality of neo-liberalism that penetrates us through commonplace media rhetoric to full-fledged ideologies perpetuated by politicians and powerful elites alike is what makes this art of governance particularly successful. Neo-liberalist rhetoric drives normative beliefs about the practices and functions of this rationality and is reinforced by major institutions and policy (Brown 2003). What maintains this full-fledged ideological imperialism is precisely the way in which ideals such as freedom, liberty and democracy have been latched onto the neo-liberalist agenda. These ideals of personal freedom and liberty have been conflated with those of freedom of trade and the market, sardonically illustrated in a statement quoted by Harvey of an Iraqi member of the Coalition Provisional Alliance dissenting neo-liberalist policy calling it a ‘forced imposition of “free market fundamentalism”’ (2007: 4). Freedom is the penchant of neo-liberalism but in actuality this freedom is paradoxical in its nature. This freedom we are granted in a neo-liberal political economy grants us with endless avenues of enrichment and ultimately in accumulating human capital. The freedom of choice and limitlessness of direction is fundamentally transparent; the high prices for education, privatisation of health services and selectivity of the housing ladder spell out a more honest picture of what is actually inaccessible without human capital. Secondly, neo-liberalist policies and regulations are in many instances blatantly anti-democratic. As Brown demonstrates, ‘democratic values and institutions are trumped by a cost-benefit and efficiency rationale for practices ranging from government secrecy ... to the curtailment of civil liberties’ and, she continues, neo-liberalist subjects ‘are controlled through their freedom’ (2003). Lastly, the freedom to choose to join the neo-liberal market economy or simply to opt out of it, is in many circumstances not an option; and in some cases this may be regarded as subversive and a threat to the stability and security of the state. The difficulty in removing oneself from this “system” is precisely why it works; because as Harvey argues, neo-liberalism is a politics that aims to restore class powers and thus ‘this [class] unevenness must be understood as something actively produced and sustained by processes of capital accumulation’ (2007: 23).
References
Brown, W., 2003. Neo-Liberalism and the End of Liberal Democracy. Theory and Event, 7(1).
Foucault, M., 2008. The Birth of Biopolitics: Lectures at the College de France 1978-79. New York, NY: Palgrave Macmillan.
Harvey, D., 2007. Neoliberalism as Creative Destruction. The Annals of the American Academy of Political and Social Science, 610(1), pp.21–44.