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His analysis is remarkable in that it represents one of the first attempts to closely study neoliberalism as a thought collective — the things that united it as well as the great differences that coexisted within it. We often forget that between Friedman and Hayek there was an intellectual chasm. But it wasn’t until the 1990s that more researched studies of the intellectual history and analysis of neoliberalism appeared. So Foucault offered one of the first interesting interpretations of its main concepts and ideas.

In particular, he distinguishes it from classical liberalism, in that it isn’t a form of “laissez-faire” but, on the contrary, an active politics of market construction. There isn’t the domain of the state on the one hand and the free play of market forces on the other hand. Foucault observes quite rightly that for the Austrian neoliberals the failure of nineteenth-century economic liberalism led them to see their own doctrine as one of actively and conscientiously constructing the market, an entity that was in no way natural. “There will not be the market game, which must be left free, and then the domain in which the state begins to intervene,” he explained in his lectures, “since the market, or rather pure competition, which is the essence of the market, can only appear if it is produced, and if it is produced by an active governmentality.”

Another interesting element of his analysis, in this case bearing mainly on American neoliberalism, is that it sees this new neoliberal mentality as “environmental.” It wasn’t aiming to produce subjectivities but to stimulate individuals to behave in certain ways, mainly by acting on their economic environment. Neoliberalism as a “technology of the environment,” he said in his lectures, heralds a “massive withdrawal with regard to the normative-disciplinary system.” Foucault observed that for someone like Gary Becker, crime should be dealt with by acting on economic incentives and not by constructing criminal subjectivities. In the neoliberal view, the criminal is merely someone whose cost-benefit calculus inclines them toward crime.

As a result, the goal of economic action should be to alter these variables so as to “optimally” reduce the “incentive” for crime. Foucault thus understands neoliberalism not as the withdrawal of the state, but as the withdrawal of its techniques of subjection. It wasn’t trying to assign a certain identity to us, but simply trying to act on our environment.

For the premier thinker of modern techniques of normalization, that’s saying something! This analysis explains the deep connection between the deployment of neoliberalism as a form of governmentality in mid-1970s France and Foucault’s championing of the invention of new subjectivities. Far from being opposed, in his eyes the two go together. Neoliberalism, being more open to pluralism, seems to offer a less constrictive framework for the proliferation of minoritarian experiments.

But all of this represents less a critique of neoliberalism than a way of making its rationality intelligible. On this point, it’s significant that Gary Becker, one of the fathers of American neoliberalism, found himself in perfect agreement with Foucault’s analysis of his own texts. Critiquing neoliberalism means not mirroring its own image of itself, but, on the contrary, deconstructing the mythology it’s built for itself.