A spectre is haunting America — the spectre of fascism. All the powers of neoliberal political economy have entered into a holy alliance to exorcise this spectre. Instead, however, they have inadvertently nurtured its ghost and laid the groundwork for its resurrection.
In his monograph The Birth of Biopolitics (the numbers in parentheses throughout this article refer to page numbers from Foucault’s text), Michel Foucault discusses, among other topics, the development of neoliberalism. Neoliberalism itself is something of a contested term (and that argument goes on longer than I have space for here). What I’m interested in discussing is the development of an economic system, originating in liberalism, and growing into a form of political economy still in operation today — one characterized by a radical laissez-faire capitalism and a commitment to frugality and efficiency in the exercise of government.
You’re all familiar with neoliberalism: the free market reigns supreme; it’s never wrong, and by the way, we don’t have room in the budget for whatever it is you’re requesting because it’s simply too expensive. Be rational, please. Be more frugal, but also be more productive while being more frugal. Be neoliberal.
Neoliberalism developed in post-World War II Europe. Among its primary objectives were transitioning Germany from a war economy back to a peace economy (79) and preventing the revival of Nazism in Europe (80). These were absolutely essential requirements for governing post-war economic policies.
Nazism, the German neoliberals (ordoliberals) decided, was “Essentially and above all… the unlimited growth of state power” (111). The ordoliberals determined that, in fact, Nazism revealed that all the defects that previously had been attributed to the market economy were in actuality defects of the state (116). The solution was clear.
On April 28th, 1948, Ludwig Erhard (economic advisor, future Minister of Economic Affairs, and eventual German Chancellor) delivered a report explaining how to temper the defects of the state without abandoning the state form altogether. In order for the state to shake off and remain disentangled from fascism and its firm grip on the economy, Erhard explained, “We must free the economy from state controls” (80–81). The economy, in other words, ought to function according to the “natural” and “spontaneous” mechanisms of the free and deregulated market. That deregulation, they argued, was the most effective means for ensuring security and also justice.
But the market is not and has never been a neutral site of justice.
In the Middle Ages, the market was controlled by what Foucault often refers to as “royal power.” Prices were fixed such that they balanced the needs of producers, merchants, and consumers. In this way, the market really was considered as “a site of distributive justice” because it ensured that “if not all, then at least some of the poorest could buy” basic necessities (30). Furthermore, the market was controlled in such a manner that protected the buyer from fraud. Of utmost importance was the protection of the consumer.
In the middle of the 18th century, however, views on the function of the market took a turn. Thinkers like Adam Smith began to argue that, rather than allowing the government to fix fair market prices, the market must obey “natural” mechanisms. Rather than the monarch setting prices, now Smith’s famous “invisible hand” of the market would ensure the “just” price. Any attempt to intervene in these spontaneous market mechanisms would, Smith et al. argued, only mangle the market’s already perfectly fine spontaneous operations.
In a way, this shift in thinking about the market feels like a religious movement: human intervention in the market will only result in anguish and woe, whereas the divine intervention of the market’s “invisible hand” will fairly tend to the economic needs of one and all.
Of course, the “natural” or “just” price that the free market determines is now completely stripped of any old medieval “connotations of justice” (31). What we’re left with is a mere number, “a certain price that fluctuates around the value of the product” (31). The “just” price is determined by the internal mechanisms of the market as it reaches an equilibrium price point between supply and demand.
So, what we discover in this price-value relationship is that the market can reveal the truth of something’s value and can even spit out a number telling you exactly what that value is. We can apply this logic to any service or commodity. Furthermore, thinking in terms of political economy, we can even apply this judgment of the market to governance itself.
What is revealed is that through natural mechanisms, the market “enables us to falsify and verify governmental practice” (32). Yes, “inasmuch as it enables production, need, supply, demand, value, and price, etcetera, to be linked together through exchange, the market constitutes a site of veridiction… a site of verification-falsification for governmental practices” (32). That’s right, folks: the market will tell us the truth of governmental practice, and because of the way that market logic has evolved, we are no longer talking about justice in the sense of justice for all.
Quite simply, we are using the market to justify government action.
For all his incisive critiques of systems of power, Foucault maintains a fond attachment to neoliberalism. Daniel Zamora in Foucault, Sa Pensée, Sa Personne argues that Foucault “saw in neoliberalism a ‘much less bureaucratic’ and ‘much less disciplinarian’ form of politics than that offered by the postwar welfare state” (Zamora). Zamora claims that Foucault uses neoliberalism to critique the Left, while also indicating Geoffrey de Lagasnerie’s contention that Foucault uses neoliberalism to reinvent the Left. In either formulation, Foucault is giving neoliberalism too much credit.
Under neoliberalism, even Lefist politics have followed a decidedly rightward trajectory. In the United States in particular, the neoliberal practice of market veridiction of government practice has taken quite the nefarious turn.
Under what even Foucault called “American anarcho-capitalism” (104), the US has placed its faith in the infallible mechanism that is the deregulated market. The problem that Foucault did not anticipate was exactly how far the economic determinant of “right” and “just” could proceed in providing simple answers to the difficult questions of human existence and interrelation. He placed too much faith in neoliberalism to moderate capitalist-statist impulses. For Americans looking to understand the justness revealed by the market, it was only a matter of time before they simplified the equation even further.
It turns out that comprehending the market is a rather complex task. We needed simpler metrics or, failing that, better soothsayers. For example, if the Federal Reserve is raising interest rates, what prophet will emerge to explain how I might best profit? Or, on the other hand, can anyone explain to me how raising interest rates is bad for the average citizen? Is it actually good? Under what circumstances can I interpret these straightforward data differently? It seems that the “just” price, simple as that concept was, was not the best indicator of the “truth” that the market purports to reveal. Even the market’s simple numeric answers have always required interpretation.
So, rather than considering the entirety of the market, what about just the stock market? No? Still too complex? Let’s take the Dow Jones and maybe the S&P. Those should provide simple enough answers, right? They should tell me if what the government is doing is in fact justified. Let’s look for some recent, real-life examples to elaborate on all this. Let’s look at Trump.
Donald Trump has frequently taken credit for the stock market’s performance. He has frequently pointed to both the rising Dow Jones and the shrinking unemployment numbers as proof, as verification, that his brand of political action is justified. He doesn’t stop there, of course. He also likes to tout the power of his tax cuts and to harp on trade deficits and tariffs. He doesn’t talk about budgetary deficits, though. He and his fellow conservatives have continued to balloon the budget while cutting out revenue sources (taxes). Now he’s (falsely) promising even more tax cuts to middle class Americans. During Obama’s presidency, I couldn’t talk to a conservative about even the weather for five minutes before they started lambasting the Democrats for exploding our budget and racking up a deficit. These days, though, not a peep from them. They no longer care now that it’s a Republican blowing up the budget. It’s like the market metrics are all up to interpretations and they never really revealed an immutable truth about value in the first place.
But we still pretend these numbers, these arbitrary abstractions, matter. And we interpret them in whatever way suits us in the political moment. The truth remains, as always, up for interpretation.
The “truth” the market reveals was never in actuality some eternal, given fact. The market was never a neutral arbiter of truth, so the “truth” it reveals about government practice has always required interpretation. It turns out that dollars and cents just aren’t as clear-cut metrics as we might like to pretend. That necessity for interpretation means any kind of government action is justifiable so long as the government can spin it. If the stock market doesn’t supply a favorable “truth,” look to unemployment numbers or deficits or trade deficits or anything that seems vaguely related to economic metrics. Keep going until you land on an acceptable truth to justify any current government practice.
So what happens if we inject a little nationalism into our politics, but the stock market rallies anyway? What if we amp up the white nationalism, and the stock market continues to rise? Well, why stop there? What if we call foreigners scum and criminals and rapists, but still the stock market doesn’t mind our rhetoric at all and keeps on skyrocketing? What if we start the killings at the southern border? What if we build out concentration camps? What if we engage in genocide? Nice, orderly, scientific, rational, and above all frugal genocide? And what if, despite all that, still the markets rise?
My point is that even if the “truth” of the market were as simple as a revealed truth about the justness of government practice (and interpretation wasn’t necessary), neoliberalism was a faulty mechanism for staving off fascism in the first place. It’s entirely possible for the market to respond positively even as the state approaches fascism. In fact, in a significant way, neoliberalism never actually escapes fascism. Neoliberalism’s very frugality and subsequent demands for efficiency dovetail all too well with the rational efficiency of fascist genocide. There was a scientific precision in fascist torture, an obsession with best practices, and neoliberalism does not take us far from that logic or mode of operation. Now, the stage is set for neoliberalism to fall into fascist practice and for its market mechanisms to reveal that fascism is a perfectly fine exercise of government.
Neoliberalism was an attempt to save both the state and capitalism. Capitalism, however, cannot be rehabilitated. It will not save us from totalitarianism or state-sponsored genocide. Capital can absorb any product, service, or practice (including government practice) into itself and then reproduce itself. It is always primed for, always flirting with, the spectre of fascism.