Week 9

In The Birth of Biopolitics, Foucault expounds German and American neo-liberalisms. First of all, After the German experience with Nazism, many came to mistrust the the state. German neo-liberalism after the fall of Nazis was concerned about legitimizing the newly emergent German state through the principles of a market economy. The state were to be placed under the supervision of the market and the state, in turn, were to function to guarantee the smooth workings of economy. "Ordoliberals" drew parallels between what they called statism or anti-liberalism of capitalistic society and Nazism and argued that statism would inevitably lead to Nazism. The state had to allow competition because competition is the organizing form of the market; therefore, the state should not intervene on the level of market economy. Instead, the state was to intervene on the level of "framework" or the social environment--such as education and the legal system--to guarantee that the smooth workings of the market economy would be possible.

As for American neo-liberalism, what is closely related to it, I think, is the concept of homo economicus. Homo economicus , Foucault says, is "the man of consumption, insofar as he consumes" and he is also a producer in that "he produces his own satisfaction" (226). With men being producers, it is now possible to use homo economicus as the analytical grid of economic activity. Therefore, with American neo-liberalism, social relationships and individual behavior can be analyzed, studied and deciphered, and, as the objects of economic analysis, people become govermentalizable.

Moreover, as producer of his own satisfaction, homo economicus is also a subject of interest. But while homo economicus are rational and predictable in that they contantly act to further their interests, the overall society is by no means predictable and it can never be controlled according to the people's will. Instead, the American neo-liberalists argue that "the efforts each makes for himself serve [serving in original] the good of all" (277). The government, therefore, should not and cannot obstruct the interests of individuals because no one, including the sovereign, has a firm grasp on the economic mechanism. The sovereign cannot interfere with the individuals' pursuit of their interest, and it is only when the individuals are free to pursue their interest that the totality will also reap benefits and somehow gain a balance. This, Foucault argues, is what is meant by the invisible hand of Adam Smith.