The rhetoric of competitiveness seemed to serve a crucial function in winning certain moral and political arguments, on behalf of economic elites, and I wanted to understand how and why.
– William Davies, The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition
Began reading William Davies new book The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition in which he tackles a couple of themes: the first, concerning the question of uncertainty that plays a central role in the neoliberal vision of society and economics; and, second, the concerns of state: – What are the rationality and authority of the neoliberal state? What are they based on? Are they constituted by a careful, economizing logic, in which waste is monitored, productivity optimized, and agents carefully regulated? Or is this a more excessive, violent force, that transcends any economic or evaluative logic?
Before I began reading decided to do a little cataloguing of the experts he relied on in the bibliography. Was able to discover the usual suspects, such economists and authors like Angus Burgin (The Great Persuasion: Reinventing Free Markets since the Depression), Philip Mirowski (The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective), and Daniel Stedman Jones (Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics). There were many others recognizable from the differing political spectrums as well: Agamben (State of the Exception), S.M. Amadae (Rationalizing Capitalist Democracy: The Cold War Origins of Rational Choice), etc., the list could go on… The point of this exercise is a truism: that authors begin to refer to each other and the supposed truths that emerge become self-reinforcing over time, allowing for a legitimation that may or may not be deserving. Always need to be aware of this discursive looping as the expert treadmill weaves and unweaves in the academic climate of opinion and doxa. Beyond that let’s take a peak at where he’s taking us in this critique.
Obviously like many other authors he centers his discourse around Friedrich von Hayek who he tells us produced a “model of political economy that incorporated uncertainty at its heart, but nevertheless elevated certain types of expertise and government as the guarantors of that uncertainty”.1 Back in the 1930’s an economist Oskar Lange had written a book Economic Theory of Socialism which supported an equilibrium theory based on Walrasian general equilibrium theory, which purports the notion we should convert the whole economy using a “bottom-up” approach, starting with individual markets and agents. Whereas, macroeconomics, as developed by the Keynesian economists, focused on a “top-down” approach, where the analysis starts with larger aggregates, the “big picture”. Therefore, general equilibrium theory has traditionally been classified as part of microeconomics. Without going into the complex details of the mathematical theorems itself what we discovered after it was introduced is the fact that like many economic theories it first came out of Vienna, Austria. It was there that such anti-socialist thinkers and economists as Ludwig von Mises would attack any notion of central planning and a mathematically centered view of economics. Hayek would later take many of Mises ideas and as early as 1935 argue against the Walrasian model of central planning and mathematical certainty, saying, “the mere assembly of these data” needed to prosecute the calculation “is a task beyond human capacity”; but moreover, “every one of these decisions would have to be based on a solution of an equal number of simultaneous differential equations, a task which, with any of the means known at the present , could not be carried out in a lifetime.”2
We can see here in these debates about the use and abuse of mathematics the seeds that would later spawn the need and desire for computing machines that could tackle these massive equations. But all that would come during the 50’s of which Mirowski documents in his thick book Machine Dreams – Economics Becomes A Cyborg Science. So no need to go there for the moment. To bring us back to Davies new work what he tells us about Hayek and neoliberalism is that they would – against such social engineers as Oskar Lange and even Keynes produce a model of political economy that incorporated uncertainty at its heart, but nevertheless elevated certain types of expertise and government as the guarantors of that uncertainty (KL 163).
As for the rationality and authority of the State problematique within neoliberalism that is the central issue of Davies second theme he has this to say:
Sovereignty, in the sense of an immeasurable and ‘ultimate power’, is wedded to economics of various forms and in various ways. Legal and executive power blend with forms of economic rationality, in an unwieldy balance between the immeasurable and the measurable. Procedures of measurement take on a quasi-sovereign authority…. The sovereign-economic ambivalence of the neoliberal state is one of the key lessons of the financial crisis – it transpired that this state’s economically rational role is to offer an irrationally large guarantee to maintain the status quo. (KL 176)
All this sets the stage for his book. As he tells us this book is descriptive and historical, and not an explicitly critical work. “Given the historical moment, this will disappoint some”, readers, he tells us. “But I would suggest that we need to understand how power works, how it achieves authority , and the role of economics (and business strategy) in facilitating this”.
Contrast of Metaphysical and Empiricist Sociological Discourses:
The metaphysical discourses of moral and political philosophy do not, from a pragmatist perspective, actually succeed in grasping that which they refer to (such as authority, fairness, virtue), but they make sense in spite of this. By contrast, the empiricist discourses of the social sciences (and associated forms of management, statistics and governance of populations) seek to operate purely at the level of the sensible, the physical and the measurable. But they must also offer reasons how and why to do so, which draw them into moral appeals, which extend beyond the limits of the empirical.(KL 468-472)
I have yet to complete my reading of it, so this is more or less just a teaser. Yet, it seems to have some viable and critical appraisals of this whole history and some possible solutions going forward. I am disappointed that it is strictly aligned with historical analysis without offering some kind of tentative solutions, but I’ll assume that this will come in the future as he continues his investigations down the line. I’ll need to finish it this week and return with an updated report.
1. Davies, William (2014-04-29). The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition (Published in association with Theory, Culture & Society) (Kindle Locations 163-165). SAGE Publications. Kindle Edition.
2. Philip Mirowski. Machine Dreams – Economics Becomes A Cyborg Science ( Cambridge University Press, 2002)