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Three theses on neoliberalism (or, contestants not entrepreneurs)
1.
Thesis one: Neoliberalism is a strategy of class domination that uses the state to
promote certain competitive dynamics for the very rich. This thesis is not original to me.
Different people have made the same point in slightly different ways. My view here is informed
in part by the work of French economists Gerard Dumenil and Dominque Levy. They write:
“Neoliberalism is a new stage of capitalism that emerged in the wake of the structural crisis of
the 1970s. It expresses the strategy of the capitalist classes in alliance with upper management,
specifically financial managers, intending to strengthen their hegemony and expand it globally.”i
What’s important about this thesis? Well, it does not easily cohere with Foucault’s view,
a view relatively better known among contemporary political theorists. In his 1978-1979
lectures, published as The Birth of Biopolitics, Foucault describes neoliberalism as a
governmentality that accords with the idea that “One must govern for the market, rather than
because of the market” (121). Dumenil and Levy make clear that neoliberalism has not
functioned as a government for the market but as one for the restoration of very high income. It
is not a strategy for production but for the transfer of wealth to the very rich. The most blatant
recent evidence is the Bush tax cuts and the Obama extension, but the changes in taxes to benefit
corporations and the very rich already started under Carter (Hacker and Pierson, Winner-TakeAll). Further evidence comes from deregulation—particularly in financial markets. The financial
incentives provided by monetary policies enacted so was to ward off inflation (as well as the
downward profit pressure globalization exerts) push corporations away from capital
accumulation—reinvestment in productive industry and infrastructure—and toward creating high
income for managers and owners as well as dividends and increasing stock prices for investors.
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In the neoliberal era, corporations repurchase their own stock instead of growing their productive
capacities. So, contra the Foucault-inspired reading of neoliberalism in terms of government
intervention for the sake of a competitive market economy, Dumenil and Levy offer a view of
neoliberalism as a class hegemony wherein the “needs of money” take precedence “over those of
production.”ii
To be clear: I am not emphasizing this point as part of a critique of Foucault—I admire
The Birth of Biopolitics and don’t fault him for not seeing thirty years into the future. But to the
extent that political theorists continue to be influenced by his thinking here, and by some of the
work of Thomas Lemke and Wendy Brown on neoliberalism, we miss the crucial anti-economic
component of neoliberalism that is inextricable from its class character, which, incidentally, is
globally apparent—in the US and “the periphery” class elites work for their own wealth and gain
and not for broader economic progress.
2.
Thesis two: neoliberalism is not a governmentality wherein the state intervenes on society
“so that competitive mechanisms can play a regulatory role at every moment and every point of
society and by intervening in this way” all of society can be subjected to the market (Foucault
145). It doesn’t format people as “abilities machines,” rational cost-minimizers, or little
entrepreneurs. It makes a few winners—top 1 percent—and a lot of losers. So, stated as thesis
number two: neoliberal competition is select (partial), brutal, and for the benefit of the top
one percent. This thesis is significant, again, in contradistinction to Foucault. Neoliberalism
isn’t characterized by an extension of a rationality of any sort throughout society. Instead there
has been the stimulation and securitization of debt which has itself been exacerbated by
unregulated and exotic financial instruments as well as by practices like mark-to-market
accounting that lead corporations to over-estimate their profits and inflate their balance sheets.
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Recognizing the class character of neoliberalism, thesis one, means that we have
acknowledge the absence of competition in a variety of places. Monopolies are the most obvious
but other examples include CEOs of companies that experience losses who still get huge
bonuses; private and select colleges and universities that privilege legacies in admissions; and
the variety of other ways the rich shield their own. If the US has been under neoliberal hegemony
and if neoliberalism were primarily a policy subjecting all of society to market expectations, then
we would expect things to look much different: inheritance would have been abolished; there
would not have been a bizarre and expensive war on drugs; dollars would have been put into
education rather than prisons. The examples here matter less than the basic point, namely, a
governmentality whereby the state and society are fully subjected to the market suggests the
prioritization of an economic logic that would have incentivized productive investment rather
than consumption and debt. From this vantage point, it does not look like society has been fully
subjected to a competition of the sort that induces efficiency, cost-benefit analyses, or anything
like market rationality.
Instead, competition is organized for the benefit of the rich (who are protected from it)
and to the detriment of the rest of us. Neoliberalism is thus a form of society-wide exploitation,
where exploitation is of the larger social substance rather than a specific amount of labor time (I
can’t go into the details here but my longer argument relies on a reading of Marx’s discussion of
the relationship of value to the larger network of social relations). So, many of us are subjected
to competition, but this competition isn’t that associated with the discipline of a market that
installs in us the mindset of a rational capitalist or entrepreneur evaluating costs and benefits.
Neoliberalism doesn’t make us little entrepreneurs; it makes us contestants.
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To illustrate this point—which is actually the bulk of my remarks today—I need to add to
this discussion of neoliberalism the idea of communicative capitalism, a distinct ideological
formation I’ve worked to theorize over the last decade or so. Communicative capitalism is an
ideological formation wherein capitalism and democracy converge in networked communication
technologies. Ideals of access, inclusion, discussion, and participation take material form in the
expansion and intensification of networked, personalized, participatory media. The relation
between neoliberalism and communicative capitalism is historical and contingent. In principle, a
convergence between capitalist and democratic ideals in networked communications could have
accompanied Keynesianism, just as China’s particular unleashing of market logics did not entail
a corresponding blossoming of democratic speech.iii In actuality, though, neoliberalism and
communicative capitalism have been mutually reinforcing. Networked information and
communication technologies have been the means through which some people have been
subjected to the new competitive intensities associated with neoliberalism (as well as key parts of
the infrastructure of high speed finance). For some of us, more aspects of our lives seem speeded
up, counted, subjected to logics of counts and hits and popularity and share. But, it doesn’t make
sense to see this as our being subjected to market competition because others make money off of
us without ever purchasing our labor power—like folks betting on a dog fight.
So, my illustration of thesis two—namely, neoliberalism is a formation that organizes the
competition of many to benefit the few who do not compete—involves the structure of complex
networks (those characterized by free choice, growth, and preferential attachment; for example,
academic citation networks, blockbuster movies, best-sellers, the popularity of blogs and
websites). As Albert-Laszlo Barabasi explains, links or items in complex networks are
distributed in a pattern called a powerlaw (it looks like an L rather than a bell curve). The item in
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first place or at the top has much more than the item in second place, which has more than the
one in third and so on such that there is very little difference among those “at the bottom” but
massive differences between top and bottom. So lots of novels are written; few are published;
fewer are sold; a very few become best-sellers. Or lots of articles are written; few are read; the
same 4 are cited by everybody. The idea appears in popular media as the 80/20 rule, the winnertake-all or winner-take-most character of the new economy, and the “long tail.” In these
examples, one winner emerges out of a general field of interactions. Exploitation consists in
stimulating the creative production of the field in the interest of finding, and then monetizing, the
one. The more expanded the field, the more powerful or valuable the one (big fish in a big pond).
We should recognize here an increasingly common condition of labor under neoliberal
capitalism. Now, rather than having a right to the proceeds of one’s labor by virtue of a contract,
ever more of us win or lose such that remuneration is treated like a prize. In academia, art,
writing, architecture, entertainment, design, and, in the US, increasing numbers of different areas
(education, technology), people not only feel fortunate to get work, to get hired, to get paid, but
ever more tasks and projects are conducted as competitions for a prize, which means that those
doing the work are not paid unless they win. They work but only for a chance at pay.
Hobbes’ description of merit is helpful here. In Leviathan (chapter fourteen), Hobbes
explains that the one who performs first in the case of a contract merits that which he is to
receive by the performance of the other. Because of the performance of the first, the second is
obliged to give the first what is due him. In the instance of a prize, we also say that the winner
merits his winnings, but there is a difference: the prize is the product of the event, the contest.
The relation between the one awarding the prize and the winner depends on the good will of the
giver; there is nothing that specifically links the winner to the prize. The implication of this shift
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from contract to contest, from wages to prizes (a shift the consent to which has been
manufactured in part via so-called reality television competitions), is the mobilization of the
many to produce the one. Without the work of the many, there would not be one (who is
necessarily contingent).
The Obama administration has made inducement prizes a key part of its “Strategy for
American Innovation.” Outlining its vision for a more competitive America, the White House
said that government "should take advantage of the expertise and insight of people both inside
and outside" Washington by using "high-risk, high-reward policy tools such as prizes and
challenges to solve tough problems." What goes unmentioned: the characteristics of those in a
position to take risks. Contests privilege those who have the resources to take risks, transferring
the costs associated with doing the work to the contestants (furthering neoliberalism’s basic
mechanism of socializing risk and privatizing reward). People pay to do the work for which they
will not be remunerated—like in art and most academic writing.
Inducement prizes, contests, are alterations of the entrepreneurial attitude—a
reformatting of the entrepreneur into the contestant. The work is done and then maybe paid for
(the winner) and likely not (the losers). The only link between the work and the remuneration
comes from the prize giver, who is now in a position of judge, charitable giver, beneficient lord
and who has no obligation to any of the contestants. The entrepreneur is typically at the mercy of
the market; the contestant is at the mercy of the judge, that is, the privileged venture capitalist or
official who awards the prize. As a governmental policy, or approach to funding, the logic of the
prize is extended into an acceptable work relation. Now, you might say--sure, but no one forces
anyone to enter the competition. Yes, but what happens when this is a dominant approach to
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work? Those who don't choose to enter have fewer opportunities to enter into contract-based
work because the amount of contract-based work diminishes.
3.
Third thesis: neoliberalism has collapsed. Having done its redistributive work and left a
path of economic destruction in its wake, it has lost its place as the hegemonic economic
discourse. Dumenil and Levy explain the economics behind the financial crisis and broader
collapse of neoliberalism. I can’t go into it here. What’s interesting, though, is the resemblance
between the seventies and where we are now. As historian Judith Stein explains in her history of
the US in the seventies, what made the Keynesian consensus ultimately unravel was the failure
of Keynesian mechanisms to solve economic problems that resulted from global pressures. From
issues of trade barriers and tariffs to the more visible oil crisis, the US economy in the seventies
encountered problems with a much broader reach than the Keynesian model allowed. Solutions
called for by the model didn’t work. Our situation is similar in that it is clear that neoliberal
measures—protect the rich, keep cutting taxes, don’t invest in production, cut social services—
can’t keep the illusion of free markets, fair governance, and prosperity alive. The realities of
unemployment, inequality, and austerity, particularly in combination with the open class war
fought by the rich and the open subservience of the US government to the finance sector, have
brought into sharp relief neoliberalism’s class character. The current fight is over what happens
next.
i
Dumenil and Levy 1
Henwood wallstreet 237
iii
On neoliberalism with Chinese characteristics see David Harvey, A Brief History of Neoliberalism
ii