Michel Foucault, The Birth of Biopolitics - Chapter Eleven

• The problem of homo economicus and its applicability to domains that are not immediately and directly economic (crime, marriage, child rearing etc.) is interesting as it posits a notion of the “rational subject” that bears no relationship to the work done in the social sciences on how individuals respond to behavioural stimuli, but it also presents homo economicus not as someone who should be left alone (as in the theory of laissez faire), but rather as ‘the person who accepts reality or who responds systematically to modifications in the variables of the environment … as someone manageable … someone who is eminently governable. Far from being the intangible partner of laissez faire, homo economicus now becomes the correlate of a governmentality which will act on the environment and systematically modify its variables’ (pp. 2070-271).

• There is in fact no theory of homo economicus, but it draws upon a notion of the subject that begins to appear in C17th English empiricist philosophy as ‘a subject of individual choices which are both irreducible and non-transferable’ (p. 272). The legal subject of contract is understood as a ‘subject of interest’ in this sense, who ‘has become calculating, rationalized’ (p. 273). The ‘subject of interest’ overflows the ‘subject of right’ – juridical will cannot take over from interest – and the subject of interest is not governed by the principle of rights, but is assumed to be an egoistic subject – ‘The market and the contract function in exactly opposite ways and we in fact have two heterogeneous structures’ (p. 276)

• ‘The situation of homo economicus could therefore be described as doubly involuntary, with regard to the accidents which happen to him and with regard to the benefit he unintentionally produces for others’ (p. 277) – Adam Smith’s ‘invisible hand’ – uncertainty about outcomes is an absolute condition for the effective functioning of such a system – ‘The collective good must not be an objective. It must not be an objective because it cannot be calculated, at least, not within an economic strategy. Here we are at the heart of a principle of invisibility.’ (p. 279) – the invisibility is as important as the ‘hand’ – ‘Invisibility is absolutely indispensable. It is an invisibility which means that no economic agent should or can pursue the collective good’ (p. 280).

• The economy must also be obscure to political power, not only in the importance of leaving people alone to pursue self-interest, but also ‘it is impossible for the sovereign to have a point of view on the economic mechanism which totalizes every element and enables them to be combined artificially or voluntarily. The invisible hand 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’ (p. 280).

• ‘Liberalism acquired its modern 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’ (p. 282).

• The C18th saw liberalism form itself in opposition to raison d’Etat and the idea of the sovereign that was both a sovereign of right and an administrative sovereign, capable of delivering good government on the basis of superior knowledge. Economic liberalism emerges in opposition to the Physiocrats and the Economic Table, as part of a more general project of ‘disqualification of a political reason indexed to the state and its sovereignty’ (p. 284)

• After Adam Smith ‘Political economy is indeed a science, a type of knowledge (savoir), a mode of knowledge (connaissance) which those who govern must take into account. But economic science cannot be the science of government and economics cannot be the internal principle, law, rule of conduct, or rationality of government. Economics is a science lateral to the art of governing. One must govern with economics, one must govern alongside economics, one must govern by listening to the economists, but economics must not be and there is no question that it can be the governmental rationality itself’ (p. 286).