The injunction to act in the face of inadequate epistemic warrant is the very soul of “constructivism,” an orientation sometimes shared with the field of science studies, and the very soul of the Neoliberal Thought Collective. Classical liberalism, by contrast, disavowed this precept. As Sheldon Wolin once wrote, classical liberalism “conceived the issue as one of reconciling freedom and authority, and they solved it by destroying authority in the name of liberty and replacing it by society.” The neoliberals reject “society” as solution, and revive their version of authority in new guises. This becomes transmuted below into various arguments for the existence of a strong state as both producer and guarantor of a stable market society. As Peck puts it, “Neoliberalism was always concerned . . . with the challenge of first seizing and then retasking the state.” “What is ‘neo’ about Neoliberalism . . . [is] the remaking and redeployment of the state as the core agency that actively fabricates the subjectivities, social relations and collective representations suited to making the fiction of markets real and consequential.”70
[2] This assertion of a constructivist orientation raises the thorny issue of just what sort of ontological entity the neoliberal market is, or should be. What sort of “market” do neoliberals want to foster and protect? While one wing of the MPS (the Chicago School) has made its career by attempting to reconcile one version of neoclassical economic theory with neoliberal precepts, other subsets of the MPS have innovated entirely different characterizations of the market. The “radical subjectivist” wing of the Austrian School of economics attempted to ground the market in a dynamic process of discovery by entrepreneurs of what consumers did not yet even know that they wanted, due to the fact that the future is radically unknowable.71 Perhaps the dominant version at the MPS (and later, the dominant cultural doctrine) emanated from Hayek himself, wherein the “market” is posited to be an information processor more powerful than any human brain, but essentially patterned upon brain/computation metaphors.72 This version of the market is most intimately predicated upon modern epistemic doctrines, which in the interim have become the philosophical position most closely associated with the neoliberal Weltanschauung.
Here we find the first intimate point of connection with the narrative of the global crisis. From this perspective, prices in an efficient market “contain all relevant information” and therefore cannot be predicted by mere mortals. In this version, the market always surpasses the state’s ability to process information, and this constitutes the kernel of the argument for the necessary failure of socialism. All attempts to outguess the market, even in the midst of crisis free fall, must fail. But far from a purely negative doctrine, another related version of the efficient-markets hypothesis underwrote much of the theories and algorithms that were the framework of the baroque financial instruments and practices which resulted in the crisis in the first place.
Another partially rival approach to defining the market emanated from German ordoliberalism, which argues that competition in a well-functioning market needs to be directly organized by the state, by embedding it in various other social institutions.73 Hence, contrary to much that has been written on the beliefs of our protagonists, neoliberals do not speak with one voice on the key concept of the nature of the market. They most certainly do not uniformly subscribe to neoclassical economic theory, nor do they all pledge their troth to the cybernetic vision of the market in lockstep. (This reiterates the analytical separation broached in chapter 1.)
It may seem incredible, but historically, both the neoclassical tradition in economics and the NTC have been extremely vague when it comes to analytical specification of the exact structure and character of something they both refer to as the “market” Both seem overly preoccupied with what it purportedly does, while remaining cavalier about what it actually is. For the neoliberals, this allows the avoidance of a possible deep contradiction between their constructivist tendencies and their uninflected appeal to a monolithic market that has existed throughout all history and indifferently across the globe; for how can something be “made” when it is eternal and unchanging? This is solved by increasingly erasing any distinctions among the state, society, and the market, and simultaneously insisting their political project is aimed at reformation of society by subordinating it to the market.
[3] Even though there has not existed full consensus on just what sort of animal the market “really” is, the neoliberals did agree that, for purposes of public understanding and sloganeering, neoliberal market society must be treated as a “natural” and inexorable state of mankind. Neoliberal thought therefore spawns a strange hybrid of the “constructed” and the “natural,” where the market can be made manifest in many guises.74 What this meant in practice was that there grew to be a mandate that natural science metaphors must be integrated into the neoliberal narrative. (This is explored further in chapter 6.) It is noteworthy that MPS members began to explore the portrayal of the market as an evolutionary phenomenon long before biology displaced physics as the premier science in the modern world-picture.75 If the market was just an elaborate information processor, so too was the gene in its ecological niche. Poor, unwitting animals turn out to maximize everything under the sun just like neoclassical economic agents, and cognitive science “neuroeconomics” models treat neurons as market participants. “Biopower” is deployed to render nature and our bodies more responsive to market signals.76 Because of this early commitment, neoliberalism was able to make appreciable inroads into such areas as “evolutionary psychology,” network sociology, ecology, animal ethology, linguistics, cybernetics, and even science studies. Neoliberalism has therefore expanded to become a comprehensive worldview, and has not been just a doctrine solely confined to economists.77
With regard to the crisis, one wing of neoliberals has appealed to natural science concepts of “complexity” to suggest that markets transcend the very possibility of management of systemic risk.78 However, the presumed relationship of the market to nature tends to be substantially different under neoliberalism than under standard neoclassical theory. In brief, neoclassical theory has a far more static conception of market ontology than do the neoliberals. In neoclassical economics, many theoretical accounts portray the market as somehow susceptible to “incompleteness” or “failure,” generally due to unexplained natural attributes of the commodities traded: these are retailed under the rubric of “externalities,” “incomplete markets,” or other “failures.” Neoliberals conventionally reject all such recourse to defects or glitches, in favor of a narrative where evolution and/or “spontaneous order” brings the market to ever more complex states of self-realization, which may escape the ken of mere humans.79 This explains why the NTC has rejected out of hand all neoclassical “market failure” explanations of the crisis.
[4] A primary ambition of the neoliberal project is to redefine the shape and functions of the state, not to destroy it. Neoliberals thus maintain an uneasy and troubled alliance with their sometimes fellow-travelers, the anarchists. The contradiction with which the neoliberals constantly struggle is that a strong state can just as easily thwart their program as implement it; hence they are inclined to explore new formats of techno-managerial governance that protect their ideal market from what they perceive as unwarranted political interference. Considerable efforts have been developed to disguise or otherwise condone in rhetoric and practice the importance of the strong state that neoliberals endorse in theory. As Peck puts it, the pursuit of neoliberal policies is “a self-contradictory form of regulation-in-denial.”80 One implication is that democracy, ambivalently endorsed as the appropriate state framework for an ideal market, must in any case be kept relatively impotent, so that citizen initiatives rarely are able to change much of anything.81 As Hayek said in an address before the MPS in 1966: “Liberalism and democracy, although compatible, are not the same . . . it is at least possible in principle that a democratic government may be totalitarian and that an authoritarian government may act on liberal principles . . . [A state] demanding unlimited power of the majority, has essentially become anti-liberal.”82
One way to exert power in restraint of democracy is to bend the state to a market logic, pretending one can replace “citizens” with “customers” (see point 5). Consequently, the neoliberals seek to restructure the state with numerous audit devices (under the sign of “accountability” or the “audit society”) or impose