Michel Foucault, The Birth of Biopolitics - Chapter Five

I have provided a summary of notes on the fifth lecture given by Michel Foucault at the College de France 1978-79, published under the title The Birth of Biopolitics. This lecture was given on 7 February, 1979.

• While classical liberalism and political economy raised the question of how to reconcile the expansion of the market and the objectives of raison d’Etat by proposing the paradox of ‘more state by less government’, the challenge facing German neo-liberals was how to legitimize a state in advance that both guarantees economic freedom and is guaranteed by it?

• The Freiberg School of German political economists (Watter Eucken, Franz Böhm, Müller-Armack, Wilhelm Röpke, Röstow) developed an influential reading of German history that saw a consistent rejection of liberalism over the C19th and early C20th as the path that led to the Nazi state

• By the early C20th, according to Foucault, the Marxist problematic of the contradictory logic of capital had been largely displaced in intellectual circles by the problematic of Max Weber around the ‘irrational rationality of capitalist society’. The Weberian problematic saw no internal limits to the logic of capital accumulation, but pointed to its paradoxical social consequences. While the Frankfurt School sought a new social rationality that could displace economic irrationality, the Freiberg School sought to redefine the economic rationality of capitalism in ways that could nullify its social irrationalities.

• The Freiberg School’s historical reading argued that obstacles to liberalism had appeared successively in German history:

1. List’s principle in 1840 that national economy needed to take priority over liberal economy, and that Germany needs protectionism – liberalism seen as the policy of a maritime nation (Britain)
2. Bismarckian state socialism in late C19th that preserved national unity against the socialist challenge through a welfare policy that reintegrated the working classes
3. Preservation of the machinery of a planned economy after WWI, and support for economic planning by both socialist and non-socialist governments
4. Early adoption of Keynesian-style interventions from 1930 onwards
5. Nazism coalesced all of these already existing elements of German economic policy around the ‘total system’ of the war economy. Rather than being an aberration, Nazism – like Soviet planning – could be seen as the coalescence of a diverse range of non-liberal forms of governmental economic action.

• Nazism was seen by the Freiberg School as also drawing upon critiques of mass society under capitalism associated with Werner Sombart and others (society of the spectacle, loss of communitarian ties, individuals as isolated atoms), but only through intensifying mass society and spectacles – they reject the argument (associated with the Frankfurt School) that the liberal model of capitalism produces these ideas, but rather see them as a consequence of ‘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’ (p. 114). – contrast to Herbert Marcuse (p. 117)

• The Freiberg School attributes those irrationalities that others link to the market and to capitalism to the state and the absence of a fully-functioning market: ‘Nothing proves that the market economy is intrinsically defective since everything attributed to it as a defect and as the effect of its defectiveness should really be attributed to the state. So, let’s do the opposite and demand even more from the market economy than was demanded from it in the eighteenth century’ (p. 116).

• ‘The ordoliberals say we should completely turn the formula around and adopt the free market as organizing and regulating principle of the state, from the start of its existence up to the last form of its interventions. In other words: a state under the supervision of the market rather than a market supervised by the state’ (p. 116).

• Ordoliberalism is not a continuation or a reversion to classical liberalism, liassez-faire or Adam Smith. It fundamentally revises liberal political economy in three ways:

1. The focus is shifted from the market as a system of exchange generating prices but as a mechanism which ensures competition. If it is only competition that can guarantee economic rationality, then the state must play a role in ensuring that competition occurs, which raises the issue of monopoly as well as how the ‘rules of the game’ are structured by government – the competitive market is not a ‘natural order’, but must be continually guaranteed through the actions of government;
2. There can never be ‘pure competition’, but only a striving towards producing more competition - ‘Competition is therefore an historical objective of governmental art and not a natural given that must be respected’ (p. 120)
3. The relationship between the market/competition and the state/government cannot be a ‘reciprocal delimitation of different domains’ – ‘the essence of the market can only appear if it is produced, and it is produced by an active governmentality’ (p. 121).