21 March 1979: Foucault Returns to Ordoliberalism (XXXII)

Let���s go back to the theme of German liberalism, or ordoliberalism. You recall that in this conception���of Eucken, R��pke, M��ller-Armack, and others���the market was defined as a principle of economic regulation indispensable to the formation of prices and so to the consistent development of the economic process. What was the government���s task in relation to this principle of the market as the indispensable regulating function of the economy? It was to organize a society, to establish what they call a Gesellschaftspolitik such that these fragile competitive mechanisms of the market can function to the full and in accordance with their specific structure. Such a Gesellschaftspolitik was therefore orientated towards the formation of a market. It was a policy that had to take charge of social processes and take them into account in order to make room for a market mechanism within them. But what did this policy of society, this Gesellschaftspolitik have to consist in for it to succeed in constituting a market space in which competitive mechanisms could really function despite their intrinsic fragility? It consisted in a number of objectives which I have talked about, such as, for example, avoiding centralization, encouraging medium sized enterprises, support for what they call non-proletarian enterprises, that is to say, broadly, craft enterprises, small businesses, etcetera, increasing access to property ownership, trying to replace the social insurance of risk with individual insurance, and also regulating all the multiple problems of the environment.
Obviously, this Gesellschaftspolitik includes a number of ambiguities and raises a number of questions. There is the question, for example, of its purely optative and ���light��� character in comparison with the heavy and far more real processes of the economy. There is also the fact that it entails a weight, a field, an extraordinarily large number of interventions which raise the question of whether they do in fact correspond to the principle that they must not act directly on the economic process but only intervene in favor of the economic process. In short, there are a number of questions and ambiguities, but I would like to emphasize the following: in this idea of a Gesellschaftspolitik there is what I would call an economic-ethical ambiguity around the notion of enterprise itself, because what does it mean to conduct a Gesellschaftspolitik in the sense this is given by R��pke, R��stow, and M��ller-Armack? On one side it means generalizing the ���enterprise��� form within the social body or social fabric; it means taking this social fabric and arranging things so that it can be broken down, subdivided, and reduced, not according to the grain of individuals, but according to the grain of enterprises. The individual���s life must be lodged, not within a framework of a big enterprise like the firm or, if it comes to it, the state, but within the framework of a multiplicity of diverse enterprises connected up to and entangled with each other, enterprises which are in some way ready to hand for the individual, sufficiently limited in their scale for the individual���s actions, decisions, and choices to have meaningful and perceptible effects, and numerous enough for him not to be dependent on one alone. And finally, the individual���s life itself���with his relationships to his private property, for example, with his family, household, insurance, and retirement���must make him into a sort of permanent and multiple enterprise. So this way of giving a new form to society according to the model of the enterprise, or of enterprises, and down to the fine grain of its texture, is an aspect of the German ordoliberals��� Gesellschaftspolitik.
What is the function of this generalization of the ���enterprise��� form? On the one hand, of course, it involves extending the economic model of supply and demand and of investment-costs-profit so as to make it a model of social relations and of existence itself, a form of relationship of the individual to himself, time, those around him, the group, and the family. So, it involves extending this economic model. On the other hand, the ordoliberal idea of making the enterprise the universally generalized social model functions in their analysis or program as a support to what they designate as the reconstruction of a set of what could be called ���warm��� moral and cultural values which are presented precisely as antithetical to the ���cold��� mechanism of competition. The enterprise schema involves acting so that the individual, to use the classical and fashionable terminology of their time, is not alienated from his work environment, from the time of his life, from his household, his family, and from the natural environment. It is a matter of reconstructing concrete points of anchorage around the individual which form what R��stow called the Vitalpolitik. The return to the enterprise is therefore at once an economic policy or a policy of the economization of the entire social field, of an extension of the economy to the entire social field, but at the same time a policy which presents itself or seeks to be a kind of Vitalpolitik with the function of compensating for what is cold, impassive, calculating, rational, and mechanical in the strictly economic game of competition.
The enterprise society imagined by the ordoliberals is therefore a society for the market and a society against the market, a society oriented towards the market and a society that compensates for the effects of the market in the realm of values and existence. This is what R��stow said in the Walter Lippmann colloquium I have talked about: ���We have to organize the economy of the social body according to the rules of the market economy, but the fact remains that we still have to satisfy new and heightened needs for integration." This is the Vitalpolitik. A bit later, R��pke said: ���Competition is a principle of order in the domain of the market economy, but it is not a principle on which it would be possible to erect the whole of society. Morally and sociologically, competition is a principle that dissolves more than it unifies.��� So, while establishing a policy such that competition can function economically, it is necessary to organize ���a political and moral framework,��� R��pke says. What will this political and moral framework comprise? First, it requires a state that can maintain itself above the different competing groups and enterprises. This political and moral framework must ensure ���a community which is not fragmented,��� and guarantee cooperation between men who are ���naturally rooted and socially integrated.���-Michel Foucault, 21 March, 1979,  translated by Graham Burchell, Lecture 10, The Birth of Biopolitics, 240-243

The quoted passage, really a mini-essay, is Foucault's attempt to set up one side of the comparison between the German Ordos and the Chicago-school variants of neo-liberalism. In broad outlines Foucault is summarizing his earlier interpretation of the ORDOs, and we may see in this, just sound pedagogic repetition. Even so, this return to Freiburg, and the earlier Lippmann colloquium, also allows Foucault to be more precise in his own analysis and to deepen his treatment of the relationship between the Ordos' conception of Gesellschaftspolitik and their approach to Vitalpolitick. Foucault had touched on this, briefly, in his sixth lecture on 14 February (see p. 148). But clearly he felt the inadequacy of his earlier treatment. So, the repetition is not merely restatement, but also needed improvement in light of, I submit, the larger theme of the lecture course (that is the liberal art of government in relation to biopolitics).

And the key point Foucault wishes to make is that in one crucial respect, or at least a major theme in, the ORDOS' thinking is that it is not centered on let's say context-free, individual choice at all. But rather on embedding individuals into, and constructing the preconditions for, what we may call umwelts suitable to the needs and scale of humans. (We may call this the Protagoras commitment in Ordoliberalism.) The point then is to create environmental/social conditions such that meaningful choice is possible. And one way meaningfulness is operationalized by the ORDOs is by the circumstance of meaningful feedback mechanisms between choices (as causes) and their effects ('the individual���s actions, decisions, and choices to have meaningful and perceptible effects,").

In addition to creating the conditions of meaningful choice -- which echoes Adam Smith's conception of liberty --, the ORDOS favor, second, social circumstances in which the individual cannot be dominated by large businesses (and other institutions). That is to say, it must be possible to have meaningful exit options in the market place and other important social orders.

Somewhat surprisingly, and as I noted in commenting on lecture 5 (of 7 February), Foucault does not remind the audience that this second circumstance echoes and reinforces the ORDOS' political understanding of the, quoting now (recall) Mestm��cker, "restraining power" purpose and mechanisms of anti-trust policy, which is designed to prevent concentration of political power, and rent-seeking, by corporations and other favored social institutions through vigilant promotion of competition in the market place. 

That is to say, the commercial enterprise is supposed to be vulnerable to exit from below and horizontally from competitors. In both cases the independent state has responsibility to create these umwelt conditions. Foucault is right to wonder to what degree one can expect the state to have the will and competence to get this program right. 

Now, for those habituated in reading political thinkers of the past in terms of 'left' and 'right' (etc.), there is no doubt that the vitalpolitik of the ORDOS has distinctly illiberal socially conservative overtones connected to corporatist, even catholic traditions of social thought. And in light of the American experience of the conservative-libertarian alliance over (the policing of) family values, so ably documented (recall here; here) by Melinda Cooper.

I don't think this is how Foucault is reading them. But in the lecture he has a strange reticence to explain what the political purpose of their vitalpolitick is. So what follows is a bit speculative, but it is informed by Foucault's analysis of the ORDOS response (in lecture 5 and here) to liberal defeat in the 1930s. And, what I want to claim is that the justification for their vitalpolitik shares, and to some degree anticipates, Hannah Arendt's analysis that totalitarianism was made possible by, to simplify greatly, the mechanisms of alienation and isolation, reinforcing a stifling loneliness or solitude (personal and spiritual) characteristic of modernity. And on this picture totalitarianism is a kind of gigantic rein of the false that becomes a coping mechanism for this fragile existence.*

So, that's to say, the ORDOS choices becomes fully explicable if we see them not just as addressing the problem of how to design countervailing institutions that allow the individual to make meaningful choices and prevent corporate rent-seeking, but also, and primarily, as grounded in their analysis of, and a response to, the rise of totalitarianism. And while I do not want to ignore the ways in which the ORDOS are indebted to Marxist ideas of alienation and Republican ideals about non-domination, we cannot understand their analysis if we remove from it the lived reality of the democratic victory not just of caesarianism, but totalitarianism.

And so, while strictly speaking, Foucault is not wrong to say that the "enterprise society imagined by the ordoliberals is therefore a society for the market and a society against the market, a society oriented towards the market and a society that compensates for the effects of the market in the realm of values and existence;" what gives the ORDOS project its urgency and also its political salience, is the specter of totalitarianism.  The point of the ���warm��� moral and cultural values is not just to put a humane face on Homo Oeconomicus, but it is to prevent, to create inoculation against (viz., the road to serfdom) the rise of Hitlerism, which is what happens in the dissolution effectuated by wrongly directed, that is, monopolistic competition.

I should stop here. To offer this interpretation of the ORDOS is not to ignore the down-side risks of and instabilities (Foucault's "ambiguities") in their approach. But it is to note that Foucault's comparison between the ORDOS and Chicago is hampered by the fact that the latter, but not the former, take, as Foucault himself noted (recall) in lecture 9, the survival of liberal political life for granted. And while Foucault is clearly indifferent to that, we cannot afford that luxury.

 

 

*Walter Lippmann had come very close to grasping this point already in Public Opinion, and it is lurking in various places in the The Good Society, which gave raise to the Lippmann colloquium. But in the latter work, he decides, or so I claim, to make liberalism itself a kind of spiritual enterprise.