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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-Take-

All). 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 winner-

take-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
ii
    Henwood wallstreet 237
iii
    On neoliberalism with Chinese characteristics see David Harvey, A Brief History of Neoliberalism

				
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