Austerity As Neoliberal Governmentality?

As noted at the outset, one of the most popular explanations of the choice to pursue austerity after 2008 was the idea that politicians and policymakers had been seduced by neoliberal theory. Indeed, one figurative example of the popularity of this explanation occurred late in 2010, when a video by the constructivist International Political Economy scholar Mark Blyth went viral on YouTube.¹ In the video, Blyth explained that the recovery strategies being pursued by world leaders in the aftermath of the events of 2008 were being driven by what he termed, a “balance-sheet” perspective. This perspective, he contended, had led them to perceive a need to control sovereign debt and caused them, therefore, to commit a “fallacy of composition.” That is, to accept the fundamentally mistaken belief that what is good for any one economic actor in a given situation is necessarily good for the whole. In the wake of the 2008 financial crisis, this fallacy led to the implementation of austerity: a counterproductive mass-cutting of spending on important government services, in the midst of a collapse in global demand.

Breaking with this constructivist perspective, however, much of the Foucault-inspired work on the crisis has been focused less on the narrow, technical prescriptions of key elites and intellectuals and more on the complex philosophical genealogies of neoliberalism, especially insofar as these might reveal clues as to austerity’s political function. Taking its cue from Foucault’s (2008) Birth of Biopolitics lectures, wherein he explored the origins of liberal political economy, this literature recognizes Foucault as possibly the first theorist to grasp the full breadth of neoliberalism’s anthropological ambition. The first, that is, to grasp neoliberalism’s commitment to using markets and governance to completely recast, as Mirowski puts it, “the totality of human existence into a novel modality, to be disciplined and punished by structures of power/knowledge” (2013: 94).

Building on this insight, Mirowski observes that a core enabling tenet of neoliberalism is the belief that the market is “an information processor more powerful and encompassing than any human being or organization of humans” (2013: 98). With its great and unbeaten capacity to anticipate change in complex relations of exchange, the market is seen as the superlative tool of social governance. First, and most obviously, because it is capable of optimizing the efficient allocation of resources throughout society. But secondly, and more interestingly, because it is the essential mechanism by which it becomes possible to achieve neoliberalism’s anthropological vision. For the subject of neoliberal governance is, as Foucault hinted, a creature that bears a certain ethical responsibility. In Wendy Brown’s terms: “As human capital, the subject is at once in charge of itself, responsible for itself, yet an instrumentalizable and potentially dispensable element of the whole” (2015: 38). This “political” aspect of neoliberalism is perhaps best captured by Margaret Thatcher’s famous axiom, “Economics are the method but the object is to change the soul” (quoted in Hilgers 2012: 82). Neoliberal theory thus expresses both the fantasy ideal of an order spontaneously self-organizing around the principles of the market, while also evoking the possibility of a pedagogical mechanism by which that fantasy might be realized.

Critically, this idea of neoliberalism as a “political project” is ubiquitous in research on neoliberal governmentality (Larner 2003; Davies and Mills 2014), and it clarifies the approach’s methodological contrast with constructivism. In Mirowski’s terms, neoliberalism cannot be explained by the mere “consilience of [neoliberal] doctrine and function” (2013: 89). Rather, through governmental processes, neoliberalism has become “integrated directly into the makeup of modern agency,” and “fills up the pores of our most unremarkable day” (2013: 94). And, it is in precisely this sense then that the research agenda of what we might call neoliberal governmentality studies addresses, per Jessop’s definition, the problem of “a political project that is justified on philosophical grounds and seeks to extend competitive market forces, consolidate a market-friendly constitution and promote individual freedom” (Jessop 2013: 70). Addressing discourses that target everyday life and practice, in other words, neoliberal governmentality distinguishes itself from constructivism by taking neoliberalism seriously as a vision of government.

Yet, it is unclear to what extent this vision is understood as one of capitalist provenance or, indeed, whether it has any relationship to capitalism at all. Reviewing the historically and spatially fragmented genealogy of neoliberalism, governmentality scholars appear to want to disaggregate neoliberalism, in space and time. Scrutinizing the historical record of its immense internal diversity on key issues, including the relative merits of regulating corporate monopolies (Gane 2013), they ask questions such as, “at what point in history do the specifically neoliberal technologies of power and accompanying rationalities kick in, as it were?” (Birch 2015). Similarly, in terms of space, following the framework laid out in the Introduction to this volume, governmentality scholars are curious to problematize neoliberalism’s “globality.” Can neoliberalism be described as a monolithic project with world-spanning ambitions? Or should it, per Larner (2003), be grasped as a collection of locally emergent discourses, alloyed with other specific local knowledges that share only the most tenuous of affinities?

Prioritizing such questions, the governmentality approach thus focuses on problematizing neoliberalism’s genealogical specificity, in space and time. Notice, however, the constitutive significance of discourse as a variable in the

Explaining austerity 129 framing of these questions. Economic practices, like those associated with capitalism, are not seen as relevant. In this sense, it cannot be gainsaid that a political effect of this research has been to discourage the possibility that economic practices might themselves be an explanatory variable in the development of neoliberal ideology, or its relation to the global. Indeed, governmentality scholars can frequently be found arguing that such contentions are economically reductionist, a trait which Larner, for example, attributes to problematic and suspicious theoretical traditions, like “Marxis(m) or Neo-Marxis(m)” (2003:511). Hamilton, similarly, in a review of Joseph’s The Social in the Global (2012), contends that Foucauldian and Marxist concepts are “at their foundation antithetical” (Hamilton 2014: 130). Mirowski, finally, is unequivocal in his view that “Marxist concepts of exploitation and surplus value” can have no place in a Foucauldian political economy (2013: 100).

Now, critically, one can certainly debate in good faith the merits of various perspectives on scale in global governmentality (see Kiersey 2009). For the arguments of this chapter, however, the more important issue is the expectation that neoliberal ideas operate autonomously from economic practices and forces. In this sense, the normative agenda of the governmentality approach bears more than a family resemblance to that of constructivism. Crucially, what these Foucauldians appear to forget is that an account of the governmentality of European austerity would require equally some reckoning with the immanent practices to which these ideas are tied. Ignoring this question, governmentality studies risk advocating what is effectively no more than a simple or naive Polanyism. That is, as Konings (2018) puts it, a belief that austerity policies bespeak no more than a temporary, exceptional capture of the political by the (ir)rationality of the market. An accidentally mistaken form of thought, in other words, which will be corrected when political leaders finally awaken, as they inevitably must, from their theoretical slumbers.

As plausible an account of the impulse to implement austerity as they may seem to offer then, the governmentality approach offers little by way of consideration as to whether or how austerity might be more than an innocent mistake. Mirowski (2013), for example, explicitly criticizes the naïveté of those on the left and right who believed in the post-2008 conjecture that the financial crisis itself would force a realignment in economic thought. Even as he does this, however, he himself explains the absence of such a realignment by means of reference to something he calls the “Neoliberal Thought Collective.” That is, an informal network of economic scholars, first crystalized in 1947, with the gathering of foundational neoliberal figures like Friedrich Hayek, Ludwig von Mises, Lionel Robbins, and Milton Friedman, at the Mont Pèlerin Institute in Switzerland, and which has continued since to exert enormous influence over the thinking of the world’s most powerful policymakers. Determined not to “let a good crisis go to waste,” the success of this network of intellectual partisans for neoliberalism is, for Mirowski, largely attributableto the group’s capacity to act as a metaphorical “Russian doll,” prosecuting by means of combined esoteric and exoteric discourses a meticulous strategy of popular legitimation (2013: 44). Mirowski thus effectively offers us a theory of the success of neoliberal theory predicated on the idea that its most major historical figures have advanced their intellectual agenda through a strategic and premeditated program of deceit.

Now, our problem with Mirowski’s argument is not so much his dependence on the idea that neoliberal theorists are liars. Indeed, as Foucault himself insisted, political discourses should never be read at face value: “power is tolerable only on condition that it masks a substantial part of itself” (Foucault 1990: 86). No, our problem with Mirowski is that he never broaches the possibility that the will to engage in such calculated deceit might have been driven by anything other than the neoliberal political imaginary itself. On this score, Foucault was himself equally clear: notwithstanding neoliberalism’s celebration of the universal entrepreneurialism of homo economicus, a central if unstated stake of the advent of biopolitics was the “indispensable” role it was to play in the development of capitalist “valorization” (1990: 140-141).

To make this observation is by no means to gainsay the core contributions of neoliberal governmentality scholarship, or to suggest that henceforth, we must all now read Foucault as some sort of class reductionist. After all, not once did Foucault stint from his core claim about the complexity of modern power relations, insisting that it is never clear “that those who exercise power [...] have a vested interest in its execution; nor is it always possible for those with vested interests to exercise power” (Foucault and Deleuze 2006). Yet, as we will see, it is questionable whether Foucault himself afforded neoliberal discourse anything like the degree of analytic autonomy from capitalism afforded to it by Mirowski.

To be sure, as Ryan (2018) observes, a key reason we may want to talk about neoliberalism as a problem is not, as governmentality theorists would seem to believe, so that we can then justify the claim that ideas are somehow in the final instance determinative. Rather, it is to make what is potentially a much more powerful point: we need to go beyond ideas if we are to understand, as Konings (2015) demands of us, how it is that certain ideas can seem so intuitive to us, in the first place. Indeed, on this score, it is not implausible that Konings has Mirowski in mind when he notes that the fundamental question of capitalism is how it “gets into our heads, becomes part of our identity, disposition, and desires, our basic sense of self” (2015: 28). To wit, we will need to address an aspect of Foucault’s work that is all-too-frequently ignored by scholars of governmentality, and one most certainly ignored by Mirowski. That is, the category of confessional desire. We will return to this question below, when we examine how governmentality studies should engage this question of the hidden capitalist stake of neoliberalism. Before we do so, however, we should pause and review the arguments of those who repudiate Foucault from a Marxist perspective.