Wednesday, June 30, 2010

"A Brief History of Neoliberalism," Chapter 3

Let's face it: the more prominent contemporary continental philosophers have not attempted  too many in-depth analyses of the functions of the neoliberal state form. Given that they are often focused on revitalizing a theory of the subject in our cynical and consensual times, and given that talk about seizing state power evokes whispers about Lenin or Stalin-- that is, authoritarianism-- this makes sense. Nevertheless, it also makes sense that a theory of collective subjectivity should say something about what we are up against, about the interaction of the state and capital in what David Harvey calls neoliberal governance.[1]

Hardt and Negri have already shown us the wrong direction; recall in the heady days when so many people were reading Empire, how misguided their celebration of the end of big government was even then, which they attempted to rectify in Multitude.

Since then, Zizek has taken some interest in delineating the relationship between the state and capital, but he has been unusually tentative. When talking about the use of patents to generate profit through rents, in First as Tragedy, Then as Farce, he writes:
Perhaps therein resides the fundamental "contradiction" of today's "postmodern" capitalism: while its logic is de-regulatory, "anti-statal," nomadic, deterritorializing, and so on, its key tendency to the "becoming-rent-of-profit" signals a strengthening of the role of the state whose regulatory function is ever more omnipresent (p. 145).[2]
The general point about rent extraction is correct, but it's addled with enough Deleuzian jargon and inverted commas that its impact is completely muted. I've annotated this passage in my copy; it says that Zizek could straighten this out if he spent more time reading up on political economy rather than Chesterton, Paul, etc. [3] Which is why we're now reading through the third chapter of David Harvey's A Brief History of Neoliberalism.

Probably part of the provisional character of the philosophical analysis of the neoliberal state is derived from its pragmatic variability. While the neoliberal state is relatively simple to define in theory, neoliberal governance often departs from the theoretical template. If we accept what I will call Harvey's 'class power thesis': (neoliberalism is a political project to restore class power), then these pragmatic departures should be expected.

In its theoretical form the state would promote individual choice through the guarantees of property rights, free trade, free markets, and rule of law. Individual choice is contrasted with state decision making, and in all cases-- theoretically-- the interaction of and competition between individuals in the private sphere/market is held to be more efficient and productive than public decision making (of course, more efficient and productive for what end?). The 'free choice' of the individual-- even if this is the legal fiction of the business or corporation as individual-- is "regarded as a fundamental good" (p. 64). Hence neoliberals are "assiduous" when it comes to implementing the privatization of public goods and the deregulation of markets (what, following Harvey, we've called forcing open markets), and they exhibit strong preferences for juridical resolution of individual-social conflicts rather than democratic or parliamentarian means.

Even in theory several contradictions and tensions are present. Harvey notes that neoliberalism has some theoretical difficulty when confronted with monopoly power, market failures (especially regarding environmentalism) that are often conjured away with questionable assumptions, and a fetish regarding the 'technological fix' for all problems (do I have to mention BP here?), even if technology is in some cases socially disruptive.  Nevertheless, these tensions have often been turned to pecuniary advantages through temporary fixes. Rather than resolving crises, neoliberalism provokes them:
There is an inner connection, therefore, between technological dynamism, instability, dissolution of social solidarities, environmental degradation, deindustrialization, rapid shifts in time-space relations, speculative bubbles, and the general tendency towards crisis formation within capitalism (p. 69).
Rather than interpret this situation as an accident, the class power thesis grasps these connections as means for the redistribution of wealth. Even crises, as Harvey discusses in Chapter 4, serve as a mode of redistribution.

In practice, neoliberal governance exhibits two fundamental biases that show how decisions favoring class power trump the theoretical template. First, when faced with a decision between 'fostering' a 'good business' or 'good investment' climate and labor or environmental concerns, neoliberal governance chooses in favor of business and investment. Not that on all levels these decisions are specifically made with class motives behind them. Rather neoliberal political economy is structured to coerce competition between cities, regions, countries; so while not all decisions need exhibit class motive (often at the local levels they are made to preserve a collapsing set of social relationships), the structure does.

Second, neoliberal states "typically favour the integrity of the financial system and the solvency of financial institutions over the well-being of the population or environmental quality" (p. 71). 

The neoliberal reliance (or is this a fetish too?) upon monetarism and the integrity of money means that neoliberal governance "cannot tolerate any massive financial defaults even when it is the financial institutions that have made the bad decision" (p. 73). This is a particularly perverse bias. From a theoretical perspective, the neoliberal ought to hold individual investors responsible for their bad choices, just as neoliberals would want to force people to be responsible for their actions and well-being, their health care, education, pension, etc. As Harvey notes, some "fundamentalist-minded" neoliberals argue that organizations that protect investors, such as the IMF, should be abolished. But they don't prevail over pragmatics Their failure is not unexpected if one uses class analysis.

The protection of finance also benefits the upper class at the expense of the public. Domestically, the general populace is forced to bear the burden of financial failure, just as it happened, most recently, in the 2008 bailout. Since this burden is shifted through the state-- that is, as public debt-- it also constrains future deficit spending on public goods that benefit the majority. [4] Internationally, finance-protection-- brokered through the IMF-- is used to transfer wealth from the global south to the global north through austerity measures,  debt repayment, and the removal of barriers to the flow of goods and capital /foreign investment (although the reverse does not hold).

Of course, the neoliberal response to the movement of organized labor and forms of social solidarity is, as we've already seen, the exception to the rule. One of the prime difficulties of confronting neoliberalism is that it uses competition between regions and improvements in communication and investment flow to break social solidarity. Capital accumulation benefits from uneven geographical development. Even if labor is able to move to regions with better pay and greater benefits, the state can still manage this movement through restricting immigration, or increasing it.

In addition, the state, with its monopoly on violence, can curb certain forms of "redistribution through criminal violence" (what a great phrase) through incarceration (p. 48). It is difficult to ignore both the tendency toward surveillance and incarceration as social policy over the last few decades, especially in the United States. While Harvey does not discuss these social transformations in detail, I would like to let the reader know that I will be reviewing a book that does, Loïc Wacquant's Prisons of Poverty (University of Minnesota, 2010), later this summer. One of the purposes of reading Harvey is to establish the features of neoliberal pragmatics before turning to how it interacts with other social institutions.

Next Week: We will be working through at least Chapters 4-6.

1. On 'governance': Harvey writes that one of the pronounced features of neoliberalism is the shift from government ("state power on its own") to governance ("a broader configuration of state and key elements in civil society"). I think this distinction is useful as long as that we add the phrase "... which includes the redistribution of state resources, and transfer of state functions, to private corporations." See p. 77.

2. "Becoming-rent" is discussed in more depth in Christian Marazzi's accessible (although marred by some typographical errors) The Violence of Financial Capitalism. Trans. Kristina Lebeveda (Semiotext(e), 2010), 44-66.

3. Since I'm on the topic, has anybody else noticed how Zizek hardly references Lacan in First as Tragedy? Is this the case in Living in the End of Times as well? Matt, I'm asking you!

4. Thomas Frank's The Wrecking Crew (Metropolitan Books, 2008) argues that neoconservatives deliberately misgovern in order to later justify privatizing government functions.


Matthew R. McLennan said...

There's definitely some Lacanese throwdown in "End Times"!

Devin Zane Shaw said...

I thought as much. How could Zizek not do so in a book of 400 pages?