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23 May 2013
Question # 1
What is the difference between liberalism and neoliberalism
Liberalism, birthed from the intellectual activity of the Enlightenment, was at the
time of its inception a revolutionary political philosophy, proposing radically new ideas
of freedom to fight the oppression of feudalism and monarchism. The visionary ideas of
one of its founding thinkers, John Locke, incited a quantum leap in history—from
absolute monarchy to various forms of democracy—based on rights to life, liberty, and
property (Locke 9). Interpretations on how to best secure these rights have varied; but,
there has been general consensus in the liberal tradition that these are best secured if
people are on the one hand, secured the political freedom needed to ensure equal
participation in the formation of their government 1, and, on the other hand, left to
independently conduct their business by the principle of laissez-faire. Catastrophic
events in the 20th century, namely the devastations caused by totalitarian regimes, has led
to much speculation concerning the concept of liberty and how it is realised: This has
been the project of what has been come to be known as neoliberalism, which is best
descried as a "thought collective" dedicated to securing their image of liberty through the
revision and even reversal of the main principles of liberalism.
Neoliberal ideology pivots itself around the liberal tenet of individual freedom,
except it has formulated an entirely different schema that adds a radically new dimension
to its meaning. Maximal 'freedom' is rendered to be of an almost exclusively economic
kind—subordinating or eliminating the importance of political liberties—via three of the
following major developments: the inversion of laissez-faire as the raison d'État to state-
led economic activism; the transformation of homo oeconomicus from a non-totalisable
unit of rationality to a totalisable subject through the application of economic science to
all realms of life; which consequently makes homo juridicus—the third figure in the
schema—a homogeneous figure in relation to the former per the systematisation of law in
order to achieve optimal predictability and control. It must be stated that while an
abstract discourse on the aforementioned neoliberal phenomenon can relatively be said to
run throughout most analyses of neoliberalism, there certainly isn't a definitive and
universal understanding of neoliberalism. If one were to endeavour to wrest a singular,

1
see Montesquieu 1989. "To concur by one's suffrage in enacting laws is to enjoy a share, whatever it
many be, in power: to live in a state where the laws are equal to all, and sure to be executed...is to be free"

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unifying principle shared by nearly all of its expressions, it would be the decisive role of
knowledge in human affairs—to produce visibility from the "invisible" (Mirowski 417).
In the 18th century two reciprocal notions were advanced: lassiez-faire and homo
oeconomicus. On the whole, liberalism has buttressed its attitude of laissez-faire on the
incalculability of both the "collective good" and individual "interest" (Foucault 279).
Homo oeconomicus is quintessentially the subject of interest, in the sense David Hume
gave to it, which asserted that an individual's actions depended on the "painful or non-
painful nature of the thing"; this is the irreducible choice referred to as interest (Foucault
276). Now Condorcet acknowledged economic man's interest was dependent on an
infinite number of things, that is to say that he is located in an "indefinite field of
immanence"; however, he was nevertheless able—by focusing on his own efforts—to
unintentionally benefit both himself and others in the half-conscious pursuit of his
interests (Foucault 277). It was this rather miraculous, mutually beneficial
synchronisation of interests in spite of any conscious individual or collective planning
that was the spirit of Smith's "invisible hand". Invisible is a keyword because it confers
the fact that, under the paradigm of the "invisible hand", no agent can know, and
therefore pursue, the collective good—the state must laissez-faire (leave it alone)
(Foucault 280).
Beginning in the 1930s with ordoliberalism—a close relative to neoliberalism—
there was the an embryonic loss of confidence in the laissez-faire system and a growing
league of intellectuals who believed that the market had to be constructed to procure
competition, replacing classical liberalism's ideal of blind, balanced exchange guided by
the "invisible hand" (Read 27). Indeed this sentiment—diametrically opposed to the
liberal state that delineated the state and the economy—was reflected within the Mont
Perelin Society: in their view, "neoliberalism is first and foremost a theory of how to
reengineer the state in order to guarantee the success of the market" (Mirowski 161).
Therefore, political power had to be moulded on the principles of the economy (Foucault
150).
Gary Becker, although of a more radical strain of neoliberalism, hence thought
economic analysis can and ought to be applied to virtually all domains of life, including
those deemed non-rational. This is largely due to the scientification of economics

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whereby individual conduct ought to respond systematically to modifications and
variables in the environment (Foucault 269). Homo oeconomicus is thus converted into a
subject "who can be managed, someone who is eminently governable" (Foucault 270).
All areas of human aspiration that were previously inconceivable in economic terms
"from marriage, to crime, to expenditures on children" are made conformable to cost
benefit analysis (Read 28). Perhaps most significantly, the worker becomes "human
capital" of whom requires to be invested in order to compete on the market (Read 28).
Systematic techniques aimed at picturing the invisible so that we may, in sort of a
Heideggarian sense 2, hold the world as an object before us and place it under our control
have flattened subjectivity in neoliberal ideology. Negri pointed out that the distance
between different representations of the subject have disappeared—most importantly, the
"difference between the citizen and the economic subject, as in classical liberalism"
(Read 35). Homo juridicus's essentially heterogeneous relationship to homo juridicus in
liberalism is submitted to a homogenising systematisation, where rights and obligations
are deemphasised and the regulation of individual striving is secured by the rule of law.
In truth, law historically has always been a hermeneutics in which "questions of value can
be posed...and the cold logic of the market subordinated to broader human needs"
(Krever). Frederick Hayek—whose The Constitution of Liberty is considered by many to
be a most authoritative text on neoliberal philosophy—argues that in order for each
individual to make "the fullest use of his knowledge" he needs rules from which he can
"predict the consequences of his actions" (Hayek 156). For that reason, human
judgement and interpretation of the law must be reduced to a minimum:

" 'To rule' means the enforcement of general rules, laid down irrespective of the particular
case and equally applicable to all. For here no human decision will be required in the
great majority of cases to which the rules apply; and even when a court has to determine
how the general rules may be applied to a particular case, it is the implications of the
whole system of accepted rules that decide, not the will of the court." (Hayek 156)

2
in reference to Heidegger's 1938 essay The Age of the World Picture

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Ultimately, even the much treasured value of freedom is changed from something
to be protected into something to be managed (Foucault 63). Neoliberalism narrowly
centres around a "consumer of freedom" with a menu of market freedoms and strong
property rights. Bank bailouts and costly wars to secure resources were undoubtedly
orchestrated to protect and create markets have not only turned the liberal principle of
laissez-faire upside down, but have completely undermined the liberal notion of a limited
state. The term neoliberalism may always have a degree of ambiguity, but it is
nonetheless important to articulate an understanding of the new political and economic
phenomena that so clearly deviates from the liberal tradition. With the continual
construction of its meaning, we will be given the vigilance needed to see the evolution of
ideas before us, in hopes that we will not forget about our rights and resist the paltry
substitution of expression through market mechanisms (Mirowski 444).

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Works Cited

Foucault, Michel. The Birth of Biopolitics. New York: Palgrave Macmillan. 2008. Print

Hayek, Frederich. The Constitution of Liberty. London: Lowe and Brydone. Reprinted
1963. Print

Krever, Tor. "Calling Power to Reason?". New Left Review. 65 (September-October


2010). Web. 20 May 2013

Locke, John. Second Treatise of Government. 1689. Electronic

Mirowski, Phillip. The Road from Mont Pelerin. Cambridge: Harvard University Press.
2009. Electronic

Montesquieu, Charles de. The Spirit of the Laws. Cambridge: Cambridge University
Press. 1989. Print.

Read, Jason. "A Genealogy of Homo-Economicus: Neoliberalism and the Production of


Subjectivity". Foucault Studies. 6 (February 2009): 25-36. Web. 20 May 2013

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