Know your product

Human Capital: abilities machines producing income streams

A great passage from Jodi Dean's essay "Drive as the structure of Biopolitics: Economy, Sovereignty and Capture".

Neoliberalism is [. . .] a governmentality wherein economic reason confronts, judges, and displaces governmental reason. Foucault’s primary examples are Germany and the United States. In each instance neoliberalism arises out of a critique of excessive governance (2008: 322), as a response to a mode of government that is erring on the side of too much and hence endangering freedom. The interesting twist is that where one would expect such a critique to urge the state to take its hands off the economy, it does something else instead: it subjects the state to the economy. German and American neoliberals reverse the equation, making the economy the legitimator of the state. ‘In other words: a state under the supervision of the market rather than a market supervised by the state’ (2008: 116).

This reversal intensifies and extends biopolitical processes and mechanisms. Insofar as neoliberalism emphasizes the market as a site of competition rather than exchange, it demands that the state combat anti-competitive mechanisms and work to spread opportunities for competition. Consequently, the state must be ever vigilant in these efforts as well as vigilant about its own efficiency in so doing. Such vigilance, moreover, is exercised not just with regard to government, as its operations and resources are privatized. Rather, neoliberalism entails a governmentality of ‘active, multiple, vigilant, and omnipresent’ intervention in society (2008:160). Society, too, must be opened up and subjected to the dynamic of competition. For neoliberals, this takes the form of the enterprise society, a vital, differentiated society of productive entrepreneurs, that is, individuals who take responsibility for their own success and well-being (hence, Foucault emphasizes their role as producers rather than consumers).

American neoliberalism was particularly effective in extending biopolitics via its theory of human capital. Human capital was the concept through which neoliberals grasped labor in its specificity, the way they sought to understand the meaning of labor means for the working person, the rationality underlying the worker’s choices. Treating income as a return on capital, neoliberals construed the worker’s income in terms of the capital he has in himself. Because of the multiplicity of factors influencing workers’ choices – mobility, quality of life, familiarity, capacities to adapt, aversion to risk – the theory of human capital enabled economic analysis to permeate a variety of new domains, domains previously the purview of the human sciences that developed around disciplinary institutions (sociology, psychology, demography, criminology, etc).

Foucault explains that there are two primary kinds of human capital, innate and acquired. Innate elements are heritable, genetic. A person concerned with her child’s innate human capital can take the proper steps toward finding an appropriate co-producer of this child. She can seek to secure a mate with desirable traits that might reduce her off-springs’ risks and enhance their competitive position. Genetic research is thus valuable to individuals in an enterprise society as it provides a knowledge they can use to plan for the future. At the same time, it gives rise to a complex of issues of screening, disclosure, prevention, and risk. Acquired capital refers to the skills and capacities that prepare individuals for competition. Health care, both infant and maternal, is important here, as are matters of health and hygiene, diet and exercise, relationships and opportunities. In this regard, the theory of human capital stimulates interventions in family life as it asks about the best ways to produce economic competitors. Neoliberalism’s emphasis on education as preparation for work similarly targets the worker as an ‘abilities machine.’ Rather than producing critical humanists or responsible citizens, the theory of human capital treats education as a means for instilling in the worker those specific capacities that render him sufficiently competent, competitive, and flexible.

Under neoliberalism, then, power gets a hold of individuals to the extent that they are little enterprises, abilities machines competing in the market.

References are to Michel Foucault's The Birth of Biopolitics. Thomas Lemke has an excellent summary of the lectures, here.

What's new . . . government intervention to spread the fragile market form

From John Protevi's essay "What does Foucault think is new about Neoliberalism"

Neoliberalism [. . .] Foucault insists, is something other than liberalism; neoliberals "break" with classical liberalism; we must "avoid at all costs" seeing neoliberalism as a mere "repetition" of classical liberalism after a Keynesian interlude. So for Foucault neoliberalism is a modification of the art of governing as an exercise of political sovereignty; it is another turning point in the history of the state seen through the grid of governmentality. Its novelty consists in an interventionist state which creates conditions for the artificial or purely competitive market in which homo economicus makes choices as rational self-entrepreneur.

For Foucault, neoliberal macroeconomics is not so much a shift from the Keynesian objective of full employment to the monetarist control of inflation (although it does of course entail that as well), as it is a change in government's relation to market structure. For classical liberals, the market was a natural mechanism for the exchange of commodities. For the neoliberals, the market is an ideal structure of competition, fragile and in need of construction and support. Thus neoliberalism is not laissez-faire, but interventionist, though neoliberal intervention into society occurs at the level of the conditions of market, and its intervention must take the form of the "rule of law".

Let us repeat the key contrast. Classical liberals want the market to be a free natural zone where government can't interfere, precisely to let the invisible hand provide for social benefits from individual self-interest. There's a whole anthropology here of the natural homo economicus as only an abstraction from concrete man living in civil society, of which the juridical subject is another abstraction. But the important thing for classical liberals, ignored by the neoliberals, is the Smithian analysis of moral sentiments and the need for government to provide the moral framework that the market erodes. So the classical liberal formula is "protect the market from government in order to allow social benefits from natural exchange." The neoliberals say we must proceed on two paths: (1) we must have government intervention at the level of the conditions of the market in order (2) to spread the enterprise form throughout the social fabric. So the neoliberal formula here is "use government to change society to constitute an artificial and fragile market."

For Foucault, the American neoliberals are more radical than their German counterparts. They share the desire to intervene at the level of market conditions to support fragile competition. But for government / market relations they also want to refuse to shield government from market relations: they want to submit all government actions to cost-benefit analysis. But this is just macro-level reflection of the move to insert market relations throughout the social fabric. This is not simply the drive to privatize government services; it also entails making the surviving government agencies into enterprises, so that we must ask what is bottom line for, in the American system, agencies such as Amtrak, the Post Office, the National Parks, and so on). And this is not just the drive to make any multi-unit organization into a collection of enterprises (each department in a university has its own bottom line and its own contribution to the university bottom line: e.g., loss of subventions for university presses). It goes further than that: each individual becomes an enterprise, a self-entrepreneur.

What we all Want

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Man out of Time