The financial crisis, which has turned into a crisis of sovereign debts, imposes new modes of governmentality and new figures of the subject both on the side of the governing (‘technical government’) and on that of the governed (the indebted who expiates his own guilt through tax). The novelties of the figures of these subjects are a manifestation of the true nature of governmental techniques and the relation liberalism establishes with capital, one that is better and deeper than previously identified in the period of the birth of neoliberalism.
A critique of the liberal government of the crisis must confront Foucault’s analysis in the two lecture series on Territory, Security and Population and especially The Birth of Biopolitics , as they represent a significant advancement in the analysis of models of control and government of populations. Foucault’s research on liberal governmentality is part and parcel of his development of a theory of power relations (from power as war and strategy to power as ‘government’). Nonetheless, it seems that these lecture series introduce a weak interpretation of the relation that ‘Capital and its logic’ (in his words) entertains with liberalism. One might even say that the most important limitation of the two lecture series on governmentality, especially the second on the birth of biopolitics, is that they take for granted that liberalism and liberal techniques of government exist, or that they never existed in opposition or as alternatives to the strategies of the State.
Liberalism, as the practice and theory that posits itself between capital and the state in order to defend and augment the freedoms of the market and society, should not to be taken for granted. In light of the neoliberal management of the relation between state and capital in the crisis, I think it makes sense to put to the test a working hypothesis put forward by Deleuze and Guattari in Anti Oedipus , where they set out the reasons that give capitalism the ‘appearance, and illusion of liberalism’. The radical conclusion they draw on these premises is decisive to an interpretation of the current crisis and its consequences: ‘Capitalism was never liberal, it was always state capitalism’ (1). The analysis of governmentality must not focus on the ‘suspicion that one risks to govern too much’, or on the ‘freedom’ that liberals allegedly produce and defend in principle against the state, but rather on the alliance between State and Capital (between ‘State’ and ‘Market’, to say it with the economists), and thus on state capitalism.
Rather than representing an alternative to state government, liberals are only one of the possible modes of subjectivation of state capitalism, as the crisis is unequivocally demonstrating. There was never any ‘struggle against the very principle of state control’ (2). The action against state monopoly refers to a time past, when ‘commercial and financial capital still made an alliance with the old system of production, and where the nascent industrial capitalism could not ensure production and the market unless it obtained the abolition of privileges’ (3). Moreover, rather than representing the freedom of society and the market against the state, liberals have certainly given a fundamental contribution to the building of a state that is perfectly convenient to capital. But what state and what capital are we talking about?
Is the state capitalism that we can see operating in the crisis the same state capitalism of the 19th and 20th century? Can we still speak of state capitalism in Deleuze and Guattari’s terms? Despite all its limitations, the work of Michel Foucault can be useful so long as we interpret both Ordo-liberalism and neoliberalism as policies that work towards a new configuration of state capitalism, a new relationship between state and market, and liberals as its subjective condition. Neoliberalism constitutes a new and foundational stage in the integration of capital and state, and the governmentality of the current crisis can be seen as an accomplishment of this integration.
In any case, the main thesis going through both lecture series is deeply undermined not so much by the critiques one might level against it, but by the events that have been shaking capitalism since 2007. This is the thesis that the problem with liberalism is that it ‘governs too much’, that its critique focuses on the ‘irrationality that characterises the excess of government’, and that, thus, one must govern ‘as little as possible’. This thesis is amply falsified by the crisis. The neoliberal government of the current crisis operates a centralisation and a multiplication of authoritarian techniques of government that compete with the policies of so-called totalitarian states. The claim that ‘liberalism consists in limiting as much as possible the forms and fields of action of government’ is indefensible not only for today, but also for the past.
How is it that liberals have suddenly shifted from governing as little as possible to wanting to govern everything? How to explain that they deemed any form of government irrational, and yet since 2007 technical governments, Europe, the IMF, the ECB, and all the institutions of liberal creed drew recovery ‘plans’ for national budgets that span over ten years (the Fiscal compact requires at least twenty years of ‘sacrifices’ to pay creditors), plans of proliferations of control institutions supervised by experts, that verify the smallest administrative spending and prescribe cuts down to the smallest details, that fix in an authoritarian way the time scales of balance recoveries, and literally dictate laws to parliaments and national governments? How does one explain that the so-called ‘minimal state’ of liberals before the crisis has been replaced, by those very same liberals, by a ‘maximal’ state? How to account for this neoliberal supranational ‘big government’ that, after all, can unscrupulously do without ‘democracy’?
There’s clearly something wrong in this opposition between a before and an after, and it would be absolutely reductive to think that the crisis imposes a change in the nature of liberalism, that this intervention is conjunctural, and that, once the crisis is over, this centralising, authoritarian, invasive government will go back to being ‘liberal’. The crisis has the role of revealing a historical truth: that capitalism was never liberal, that there always and necessarily was a state capitalism. The state, today, in its non-minimal version, intervenes, twice rather than once, to display its function: the first time to save the banks, finance and the liberals; the second, to impose on populations that they pay for the political and economic costs of the first intervention. First for the markets, second against society.
But this is only one stage in a process that began with the birth of capitalism.
‘A state has never lost as much power to put itself so forcefully at the service of the dream of economic power. The capitalist state assumed this role very early, whatever people say, ever since its beginnings, its gestation in semi-feudal or monarchical forms’.(4) There certainly has been a degree of heterogeneity between state and capital. The state identifies itself through a territory and borders, whereas capital has no territory as such, on the contrary, capital is a process of permanent deterritorialisation that knows no territorial border. The state constitutes a community, a people, a nation, whereas capital is incapable of producing one because competition, class divisions and private appropriation destroy communities, peoples and nations. The state is founded on rights and citizenship, whereas capital is founded on the ‘interests’ of entrepreneurs and the exploitation of workers and populations, and so on and so forth. The state exercises a political sovereignty that is linked to a territory and a people, whereas capital organises an economic power over a population whose world market is the only true dimension.
Governmentality (of which liberals are nothing but one of the subjective modalities) first entailed a composition of this heterogeneity, then a subordination and a reconfiguration of the state principles in line with the process of capitalist valorisation.
One of the most important aspects of this process of subordination is the formation of a social state, which Ordo-liberals and Carl Schmitt radically theorise in the clearest way. The introduction of the German constitution of the social state has historical and current significance, in so far as the building process of European institutions and of the Euro seem to refer back to these Ordo-liberal techniques of development of a new kind of state. Carl Schmitt, the author who was used to promote the ‘autonomy of the political’, is someone who, on the contrary, demonstrates that the social state signals the irreversible decline of the ‘sovereign’ state as Europe had known it. The social state has no longer any political autonomy because it is occupied by the social and economic forces of capitalism. Now the state is entirely traversed by class struggle, its conflicts and interests, and for this reason it can no longer represent the general interest, the ‘destiny’ of a people, the ethics of a nation. It can no longer be super partes because it is also the object of political economic struggles and conflicts. The neoliberals do not oppose the state merely to defend the freedom of society; they also work to mould it, to transform it from top to bottom, so that it can perfectly suit capital and its accumulation. This new sequence in the transformation of state capitalism is perfectly described in The Birth of Biopolitics through an analysis of the relationship between the Ordo-liberals and the German state at the time of its re-foundation after the war. Here we simply interpret it differently, in light of Deleuze and Guattari’s analysis and what the crisis allows us to see clearly.
The defeat of Bismarck’s state in World War One and of the Nazist state in World War Two opens up a new field for the foundation of a ‘new kind’ of state, as Carl Schmitt named it. Foucault asks: ‘Given a state that does not exist, how can we get it to exist on the basis of this non-state space of economic freedom?’. Through its permanent genealogy, ‘a permanent genesis of the state from the economic institution’, so that ‘the economy creates public law’ (5). This beginning is not spontaneous. Such a state needs to be built with an anchor to the functioning of the market, and this is the main task of governmentality, according to Ordo-liberalism. The economy, rather than being other from politics, is its generative force, what leads and legitimates it. The market, rather than limiting itself to being a self-regulating automatism, is the founding political ground on which the sovereignty of the state rests.
‘The economy, economic development and economic growth, produces sovereignty; it produces political sovereignty through the institution and the institutional game that, precisely, make this economy work’. (6) The economy must not be understood in economistic terms, and reduced to a mechanism of production (factory) and automatic exchange (market), but as a centre or centres of power, or more precisely as a power relation amongst powers. Foucault does nothing but confirm the analyses Schmitt put forward at the very moment of the constitution of the social state: the sovereign state, the nation state, the transcendent state, is dead, and in its place is built an ‘economic state’. ‘In contemporary Germany we have what we can say is a radically economic state, taking the word “radically” in the strict sense, that is to say, its root is precisely economic’(7).
And here we can see the emergence of a new concept of sovereignty, where the economy of the state, political power and the power of capital are indistinguishable. The sovereignty of the new state does not derive from the people, democracy, or the nation, but from capital and its development, which gives rise to a radical renewal of the concept of ‘state capitalism’. Rather than ‘governing as little as possible’, governmentality must aim to build the ‘social state’, an economic state at the service of a valorisation that invests primarily society.
Germany and Japan did not witness the economic miracle because they had to fund an army (the military-industrial complex never prevented capitalist valorisation, on the contrary, the realisation of surplus value finds fertile ground in these investments); more probably, they did because they built a state that, after WWII, was completely ‘compliant to the exigencies of the market’. In contemporary Europe, the German ‘model’ prevails and is at the foundation of the Euro. We hear talk of the German economy, but the economy is inseparable from the state, or, rather, in contemporary capitalism one cannot distinguish the state and the economy from society. These three realms are transversally invested by capital, and governmentality works towards making them combine and cohere.
This process of re-foundation of the state, invented and set into motion in Germany after the war, manifested itself in the rest of the world with the advent of neoliberalism, with all its implications and in all its force. But we could also reinterpret the past in light of the present. The neoliberal interpretation of Fordism seems more pertinent than the Keynesian or social democratic one. If in the post war period the advent of the economic state, traversed and defined by class conflict, seems to be clearly theorised and practiced only in Germany, it is actually the truth of all capitalist states. What is seen in action during Fordism is not the state as representative of the general interest, or the sovereign state, but the economic state traversed by class struggle. The concessions that capital makes to the working class movement are not a mediation, a regulation or a compensation of capitalist divisions organised by a state that is super partes, but rather the recognition of a power relation. The change in this power relation that intervened at the end of the 1970s gives liberals the chance to utilise the functions of the state for their own purposes and advantage (state as lender in the last instance, fiscal policies, redistributive policies etc.): they rushed to do this, and this shows that the social state and its constituent functions are, to use the ‘crude’ and realist language of Carl Schmitt, the winners’ ‘spoils’.
The neoliberal turn
The shift from Ordo-liberalism to American neoliberalism would deepen and specify this new organisation of state capitalism. The process of integration and subordination of the state to economic logic would continue, and the state would wholly take on its new nature, and become produced by the economy, relinquishing whole parts of its old sovereignty to it. The two principles of action and legitimation of the state, the ‘management’ of the population and the representative system of the formation of ‘popular’ sovereignty, become definitively integrated in the economy in so far as they are reshaped as devices of neoliberal governance.
The work of transformation of the representative system carried out since the 1980s, where the differences between parties of (centre) right and (centre) left become imperceptible, does not seem to suffice in the crisis. There needs to be men of ‘capital’ at the head of the state. Through the action of ‘technical’ or ‘elected’ government, both completely aligned, anyhow, to the capitalist logic, the representative system is suspended; parties are deprived of all ‘power’, and the parliament is reduced to a chamber where the orders dictated by the institutions of world capitalism are recorded. Angela Merkel summed up the meaning of this process by invoking, in her own words, a ‘democracy that conforms to the market’. The shift from the ‘market’ (of goods) of the Ordo-liberals to the ‘markets’ (of shares) of the neoliberals attests to the hegemony that finance enjoys over other forms of capital, and in particular over ‘industrial capital’. Popular sovereignty is subordinated because the only will that counts is that of the markets, of the international financial institutions that express, day by day, their ‘political’ will in real time through the stock markets and the spread.
If the people vote like these ‘great voters’, then the vote is legitimate; otherwise there must be a new vote or a way of going around this democracy that is devoid of all powers. The American version of this process is even more directly oligarchical and plutocratic. The Republicans and the Democrats have turned into lobbies of large corporations who compete to finance their electoral campaigns. Liberalism has turned the democratic maxim ‘one person, one vote’, into ‘one dollar, one vote’. The barriers to become a candidate in the American presidential elections are as high as piles of millions of dollars. The new stage in the subordination of the administration and welfare to the valorisation of capital, inaugurated by the neoliberalism of the 1980s, is not a minimal state, but a state free from the control of workers, the unemployed, women, the poor. A state free from the concessions (in terms of rights, social services and legislation) that the social state was forced to grant to the ‘working class’, to the institutions of the working class movement and to the new ‘social movements’ of the post war era.
As the crisis is demonstrating, the minimal state is wholly compatible with neoliberalism, so long as the appropriation it carries out through taxes and spending (distributions) favour the rich and corporations, so long as the ‘sovereign’ functions of currency management and issuing, and of tax collection, are completely safeguarded from Keynesian ambitions of full employment, of relative distribution of wealth, and prosperity. Neoliberal economy carries on the way paved by Ordo-liberalism, to reconfigure the sovereignty of the state.
On the one hand, governmentality must continue to progressively weaken political sovereignty in favour of the economy, in particular when it comes to monetary sovereignty, which undergoes a process of privatisation, and tax collection, another ‘royal’ function of the state that collects on behalf of the creditors and their supranational institutions. The two functions of the state, issuing money and collecting taxes, are still managed by the state, but are no longer the expression of the power of the state as representative of the general interest, as guarantor of the unity of the nation. Instead, they are articulations of the supranational government of capital. On the other hand, governmentality must stay vigilant and make sure that the economic state guarantees a full and intensive exercise of sovereignty over the population and society as a modality of political control of capital over class conflict and the ‘comportment’ of the governed.
The social state as government of society
This new version of state capitalism, the social state, is imposed by the new objectives of capital: the subordination of all aspects of society to its valorisation through the generalisation of the logic of interest. [to be continued…]
Translation by Arianna Bove, March 2013
(1)Gilles Deleuze, Anti-Œdipe et Mille plateaux, Cours di Vincennes. Nature des flux, 14.12.1971 (http://www.webdeleuze.com/php/texte.php?cle=118&groupe=Anti%20Oedipe%20et%20Mille%20Plateaux&langue=1).
(2)Gilles Deleuze, Félix Guattari , AntiOedipus. Capitalism and Schizophrenia, Trans. Robert Hurley, Mark Seem and Helen R. Lane (London and New York: Continuum, 2004), p. 287.
(5) Michel Foucault [1978-79], The Birth of Biopolitics, Trans. Graham Burchell (London: Palgrave, 2008), p. 86-87.
(6) Ibid, p. 84
(7) Ibid. p. 86
* This text is a translation of a lecture delivered in Berlin, March 2013:
Learning Places – Lecture at Former West, Haus der Kulturen der Welt, Berlin