Phobia 0/the state. rv Queshons 0/method: sense and stakes 0/the brackehng o/J0/a theory 0/the state in the analysis 0/ mechanzsms 0/jJower. rv Neo:"ltheral gove17lmenfalprachces: German liberalismfrom 1948 to 1962; Amencan neo-liberalism.

Michel Foucault's courses were held every Wednesday from January to March. The huge audience made up ofstudents, teachers, researchers and the curious, including many who came from outside France, required two amphitheaters of the College de France. Foucault often complained aboutthe distance between himself and his "public" and of how few exchanges the course made possible.

The courses also performed a role in contemporary reality. Those who followed his courses were not only held in thrall by the narrative that unfolded week. by week. and seduced by the rigorous exposition, they also found a perspective on contemporary reality. Michel Foucault's art consisted in using history to cut diagonally through contemporary reality. He could speak ofNietzsche or Aristotle, ofexpert psychiatric opinion or the Ehristian pastoral; but thosewho attended his lectures always took from what he said a perspective on the present and .contemporary events. Foucault's specific strength in his courses was the subtle interplay between learned erudition, personal commitment, and work on the event.

The object of police is almost infinite. That is to say, when it is a question of an independent power facing other powers, government according to raison d'Etat has limited objectives. But there is no limit to the objectives of government when it is a question of managing.-3. public':power that has to regulate the behavior of subjects. Competition between states is precisely the hinge. connecting these limited and unlimited objectives, because it is precisely so as to be able to enter into competition with other states, that is to say, maintain an always uneven, competitive equilibrium with other states, that government [has to regulate the life of] its subjects, to regulate their economic activity, their production, the price [at which] they sell goods and the price at which they buy them, and so on [ ... ]. The correlative of this limitation of the international objective of government according to raison d'Etat, of this limitatioll-in internationalrdatiQlls, is the absence ofa limit in the exercise of government in the police state.

Raison d'Etat, on the other hand, accepts that every state has its interests and consequently has to defend these interests, and to defend themabsolutelyhut the state's obje<:tive must not be that ofreturning to the unifying position ofa total and global empire at the end of time. It must not dream that one day it will be the empire ofthe lastday. Each state must limit its objectives, ensure its inde= pendence, and ensure that its forces are such that it will never be in an inferior position with respect to the set ofother countries, or to its neighbors, or to the strongest of all the other countries (there are different theories of European balance at this tie, but that's not important here).

Throughout the Middle Ages, judicial prac:ticewas-amultiplier of royal power. Now when this new governmental rationality develops in the sixteenth century, and especially from the start of the seventeenthcentury,law provides_th<:: basis for any one who wants to limit in one way or another this indefinite extension of raison d'Etatthat is becoming embodied in a police state. Legal theory and judicial institutions no longer serve as the multiplier, but rather as the subtractor ofroyal power.

Anyway, I think we should keep it in mind that even if it is true that ra£Son d'Etat formulated and manifested as the police state, embodied in the police state, has unlimited objectives, it is also the case that in the sixteenth and seventeenth centuries there are constant attempts to limit ra£Son d'Etat, and the principle or reason of this limitation is found in juridical reason. But you can see that it is an external limitation. Moreover, the jurists are fully aware that their question oflaw is extrinsic to ra£Son d'Etat insofar as this is precisely that which exceeds the legal domain.

In France, for example, it is members of the parlements, protestants, and the nobility who take up the historical-juridical aspect. In England it is the bourgeoisie against the absolute monarchy of the Stuarts, and religious dissidents from the start of the seventeenth century. In short, the opposition always malces a legal objection to ra£Son d'Etat and consequently uses juridical reflection, ~egal rules, and legal authority against it. In a word, let's say that in the seventeenth and eighteenth centuries public law is oppositional,* although it is true that some theorists favorable towards royal power tookup the problem and tried to integrate questions oflaw; legal questioning, within ra£Son d'Etat and its justification.

What is at issue, what explains this, is precisely that when a government violates these laws of nature, it quite simply ignores them. It ignores them because it is unaware oftheir existence, mechanisms, and effects. In other words, governments can be mistaken. And the greatest evil of government, what ma1<:es it a bad government, is not that the prince is wicked, but that he is ignorant. Inshort, through political economy there is the simultaneous entry into the art of government of, first, the possibility of self-limitation, that is, of governmental action limiting itselfby reference to the nature ofwhat it does and of that on which it is brought to bear, [and second, the question of truth].* The possibility of limitation and the question of truth are both introduced into governmental reason through political economy.

But we can see that the relationship between the principle of truth and the principle of self~limitation in the prince's wisdom is completely different from their relatiomhip in the emerging governmental practice that is anxious to lmow the natural consequences of its actions in the objects it deals with and manipulates. The prudent counselors who previously fixed limits of wisdom to the prince's presumption no longer have anything to do with these new 'economic experts whose task is to tell the government what in truth the natural mechanisms are of what it is manipulating.

With the emergence of political economy, with the introduction of the restrictive principle in governmental practice itself, an important substitution, or doubling rather, is carried out, since the subjects of right on which political sovereignty is exercised appear as a population that a government must manage.

The question of frugality has, if not replaced, at least overtaken and to an extent forced back and somewhat marginalized a different question which preoccupied political reflection in the sixteenth and seventeenth centuries, and even up to the start of the eighteenth century, which was the problem of the constitution.

Let's put it more dearly. The market, in the very general sense of the word, as it operated in the Middle Ages, and in the sixteenth and seventeenth centuries, was, in a word,essentially-a site of justice;-Inwhat sense was it a site of justice? In several-senses. In the first place it was, of course, invested with extremely prolific and strict regulations: it was regulated with.regard to the objects brought to market, their type of manufacture, their origin, the duties to be paid, the procedures of sale, and, of course, the prices fixed~ So, the market was a site invested with regulations. It was also a site of justice in the sense that the sale price fixed in the market was seen, both by theorists and in practice, as a just price, or at any rate a price that should be the just price, that is to say a price that was to have a certain relationship with work performed, with the needsofi:1ie merchants, and, of course, with the consumers' needs and possibilities. The market was a site ofjustice to such an extent that it had to be a privileged site of distributive justice, since as you know, for at least some basic products; like food products, the rules of the market operated to ensure that, if not all, then at least some of the poorest could buy things as well as those who were more well-off. So in this sense the market was a site of distributive justice. Finally, what was it that essentially had to be ensured in the market, by the market, or rather by the regulations of the market, and which makes it a site of justice? Was it the truth of prices, as we would say now? Not at all. What had to be ensured was the absence of fraud. In other words,.it was the protection of the buyer.

When penal practice replaced the question: "What have you done?" with the question: "Who are you?" you see the jurisdictional function of the penal system being transformed, or doubled, or possibly undermined, by the question of veridiction.

In the same way, studying the genealogy of the object "sexuality" through a number of institutions meant trying to identify in things like confessional practices, spirittlal direction, the medical relationship, and so on, the moment when the exchange and cross-over took place between a jurisdiction of sexual relations, defining the permitted and the prohibited, and the veridiction of desire, in which the basic armature of the object "sexuality" currently appears.

You can see that all these cases-whether it is the market, the confessional, the psychiatric institution, or the prison-involve taking up a history of truth under different angles, or rather, taking up a history of truth that is coupled, from the start, with a history of law. While the history oferror linked to a. history ofproliibitionshas been attempted fairly frequently, I would propose undertaking a history of truth coupled with a history of law. Obviously, a history of truth should not be understood in the sense of a reconstruction of the genesis of the true through the elimination or-rectification of errors; nor a history of the true which wouldconstitute a historical succession of rationalities established through the rectification or elimination of ideologies. Nor would this history of truth be the description of insular and autonomous systems oftruth. It would involve the genealogy of regimes ofveridiction, that is to say, the cODstirntion ofa partiC11l<lI right (droit) oftruth on the basis of a legal situation, the law (droit) and truth relationship finding its privileged expression in discourse, the discourse in which law is formulated and in which what can be true or false is formulated; the regime of veridiction, in fact, is not a law (loi). of truth, [but] the set of rules enabling one to establish which statements in a given discourse can be described as true or false.

Now the critique* of knowledge I would propose does not in fact consist in denouncing what is continually-I was going to say monotonously-oppressive under reason, for after all, believe me, insanity (deraison) is just as· oppressive. Nor would this political critique of knowledge consist in flushing out the presumption of power in every truth affirmed, for again, believe me, there is just as much abuse of power in the lie or error. The critique I propose consists in determining under what conditions and with what effects a veridiction is exercised, that is to say, once again, a type of formulation falling under particular rules of verification and falsification.

After all, the first economists were at the same time jurists and people who addressed th~problem 9f public law. Beccaria, fO:J:"_~~p1ple, who was a theorist of public law, basically in the form ofpenal law; was-also an economist.lO You only have to read The Wealth of Nations, and not even his other works, to see that the problem ofpublic law runs through all of Adam Smith's work. Bentham; ;ipublic law theorist, was at the same time an economist and wrote books on political economy.

Well, just as at the end of the eighteenth century there was a criticism of despotism and a phobia about despotism-an ambiguous phobia about despotism-so too today there is a phobia about the state which is perhaps also ambiguous.

The state is nothing else but the effect, the profile, the mobile shape of a perpetual statification( etatisation) or statifications, in the sense of incessant transactions which modify, or move, or drastically change, or insidiously shift sources of finance, modes of investment, decision..,making centers, forms and types of control, relationships between local powers, the central authority, and so on. In short, the state has no heart, as we well know; but not just in the sense that it has no feelings, either good or bad, but it has no heart in the sense that it has no interior. The state is nothing else but the mobile effect of a regime of multiple govemmentalities.

First ofall there is the main doctrinal adversary, Keynes, the common enemy,· which ensures that criticism of Keynes will pass back and Iorth between these two neo-liberalisms. Second, they share the same objects of repulsion, namely, the stateconfrolled economy,plamiing, and state·interventionism on precisely those overall quantities to which Keynes -attached such theoretical and especially practical importance. Finally, a series of persons, theories, and books pass between -these two forms of neo-liberalism, the main ones referring -to ·the Austrian-school -broadly speaking, to Austrian neomarginalism, at any ,rate to those who came from there; like von Mises, Hayek, and so on.

This economic institution,the economic freedom that from the start it is the role of this institution to guarantee and maintain, produces something even more real, concrete, and immediate than a legal legitimization; it pro...: duces a permanent consensus of all those who. may appear as agents within these economic processes, as investors, workers, employers,and trade unions. All these economic partners produce a consensus, which is a political consensus, inasmuch as they accept this economic game of freedom.

History had said no to the German state, but now the economy will allow it to assert itself. Continuous economic growth will take over from a malfunctioning history. It will thus be possible to live and accept the breach of history as a breach in memory, inasmuch as a new dimension of temporality will be establIshed 111 Germany that will no longer be a temporality of history, but one of economic growth. A reversal ofthe axis oftime, permission to forget, and economic growth are all, I think, at the very heart of the way in which the German economic-political system functions. Economic freedom is jointly produced through groWth, well-being, the state, and the forgetting of history.

The problem they had to resolve was the following: given the existence of a legitimate state, which is already functioning in the fully and completely administrative form of a police state, how can we limit this existing state and, above all, allow for the necessary economic freedom within it? The problem the Germans had to resolve was the exact opposite: given a state that does not exist, how can we get it to exist on the basis of this non-state space of economic freedom?

At the Hanover Congress, and again at the Bad Diirkheim Congress in 1949, the German Socialist Party still recognized the historical and political validity of the class struggle and had the socialization of the means of production as its objective. Fine, this is still how things stand in 1949, in 1950. In 1955, Karl Schiller, who will later become Minister of the Economy and Finance in federal Germany, writes a book that will cause a big stir since it bears the significant title Socialism and Competition, that is to say, not socialism or competition, but socialism and competition.

With regard to all forms of real socialism, of every-socialism implemented in policy, we should not ask what text it refers to, whether or not it betrays the text, whether or not-it conforms to' the text, or whether it is true or false. We should simply and always ask socialism: So, what is this necessarily extrinsic governmentality that makes you function and only within which you can function? … Is there a governmentality appropriate to socialism? What governmentality is possible as a strictly;intrinsically, and autonomously socialistgovernmentality? In any case, we know only that if there is a really socialist governmentality, then it is not hidden within socialism and its texts. It cannot be deduced from them. It must be invented.

This was the problem, and the answer given by the eighteenth century was ultimately simple and consisted in saying that what will give a place to market freedom and allow its insertion within raison d'Etat and the police state is quite simply that left to itself and governed by laissez-faire the market will be a source of the state's.enrichment, gro~ and theref6repower.The answer of tllt~ eighteenth century was, in sum, that you will move towards more state by less government.

Eucken was appointed professor of political economy at Freiburg in 1927 where he met Husserl, encounteredphenomenology, and met a number of the jurists who were eventually so important in the theory of law in twentieth century Germany, who themselves came into contact with phenomenology and who tried to re-elaborate a theory of law that tried to avoid both the constraints of nineteenth century historicism and rcclsen's formalist, axiomatic, statist conception.

Broadly speaking, everything which opposes liberalism and proposes state "management·of the economy thus constitutes an invariant whose history can be seen throughout the development of European societies since the"end of the nineteenth century and, more precisely, from the start of the twentieth century, that is to say, when the liberal art of government became, so to speak, intimidated by its own consequences and tried to limit the consequences that it ought to have drawn itselffrom its own development. How did iury tolimitthem? Well; by a technique of intervention which consisted·in applying to society and the economy a type of rationality considered valid within the natural sciences. In short, what we can broadly call technology. Technicization 6f state management, .of control of the economy, and also in the analysis of economic phenomena, is what the ordoliberals call "eternal Saint-Simonism,,, and they identify Saint-Simon48 with the birth of that vertigo which takes hold of the liberal art of government and leads it to seek a principle of limitation, a principle of organization in the application to society of a schema of rationality specific to nature, a principle which ultimately leads to Nazism. So, from Saint-Simon to Nazism there is a cycle of rationality entailing interventions which entail the growth of the state, which entails setting up an administration that itselffunctions according to technical types of rationality, and this constitutes precisely the genesis of Nazism over two centuries, or at any rate a century and a half, ofthe history of capitalism.

I think thiskind of reversal, which the ordoliberals were only able to carry out on the basis oftheir analysis of Nazism, enabled them in 1948 to try to resolve the problem they faced of finding a way of giving legitimacy to a state that did not yet exist and that had to be made acceptable to those who most mistrusted it. Well, let's adopt the free market and we will have a mechanism that will found the state and at the same time, by controlling it, will provide the guarantees demanded by those ~. who have grounds for mistrusting it.

1:odOiY's neo-liberalism is, as is too often said, the resurgence* or recurrence of old forms of liberal economics which were formulated in the eighteenth and nineteenth centuries~nd-are-nowbeingreactivated by capitalism for a variety ofreasons to-d.o with its impotence and crises as well as with some more or less local and determinate political objectives. In actual fact, something much more important is at stake in modern neo-liberalism, whether this takes the German form I am presently referring to, or the anarcho-liberal American form. What is at issue is whether a market economy can in fact serve as the principle, form, and model for a state which, because of its defects, is mistrusted by everyone on both the right and the left, for one reason or another. Everyone is in agreement in criticizing .!he state and identifying its destructive and harmful effects. But within this general critique-which is also a confused critique since it can be found with little difference from Sombart to Marcuse-through and in the shadow of this critique, will liberalism in fact be able to bring about its real objective, that is to say, a general formalization of the powers of the state and the organization of society on the basis of the market economy? Can the market really have the power offormalization for both the state and society? This is the important, crucial problem ofpresent-day liberalism and to that extent it represents an absolutely important mutation with regard to traditional liberal projects, those that were born in the eighteenth century.

Just as for Husserl a formal structure is only given to intuition under certa,in cQ!!ilitions, in the same way competition as an essential economic logic will only appear and-produce its effects under certain conditions which have to be carefully and artificially constructed. This means that pure competition is not a primitive given. It can only be the result of lengthy efforts and, in trrl:th, pure competition is never attained. Pure competition must and can only be an objective, an objective thus presupposing an indefinitely active policy. Competition is therefore an historical objective of governmental art and not a natural given that must be respected. In this kind of analysis we find, of course, both the influence of Husserl and, in a somewhat Weberian way, the possibility of connecting up history with the economy.

Non-intervention is necessary on condition, of course, that an institutional framework is established to prevent either individuals or public authorities intervening to create a monopoly. And thus you findin enormous anti-monopolistic institutional framework in German legislation, the function of which is not at all to intervene in the economic field to prevent the economy itselffrom producing the monopoly, but whose function is to prevent external processes from intervening and creating monopolistic phenomena.

What does this involve? Well, when we look a bitmoredosely, we may of course hear it as a kind of more or less Rousseauesque return to nature, something that Riistow called, moreover, with a very ambiguous word, a "V.italpolitik," a politics of life. But what is this Vitalpolitik that Riistow talks about, and of which this is an expression? Actually, as you can see, it is not a matter of constructing a social fabric in which the individual would be in direct contact with nature, but of constructing a social fabric in which precisely the basic units would have the form of the ente1:pris~,forwhat is private property if-not an enterprise? What is a house if not an enterprise? What is the management of these small neighborhood communities [ ... *] ifnot other forms of enterprise? In other words, what is involved is the generalization of forms of "enterprise" by· diffusing and multiplying them as· much as possible, enter~ prises which must not be focused on the form of big national or international enterprises or the type ofbig enterprises of a state. I think this multiplication of the "enterprise" form within the social body is what is at stake in neo-liberal policy. It is a matter of making the market, competition, and so the enterprise, into what could be called the formative power of society.

Being liberal is not like the 'Manchester' attitude, allowing vehicles to circulate in any direction, according to whim, with the consequence of endless congestion and accidents; and it is not that ofthe 'planners,' fixing the hours of use and routes to be followed for every vehicle: it means imposing a Highway Code, while accepting that at a time of faster means of transport this code will not necessarily be the saine as in the time of stagecoaches.

Analyzing the history of the role of the protestant ethic andofthe religious prescriptions link.ed'toit,15for example, and developing the pure theory of competition, were two different aspects, or two complementary ways of posing and trying to resolve in a particular way the problem ofwhether or not capitalism could survive.

Ifwe accept that we are not dealing with an essential Capitalism deriving from the logic of Capital, but rather with a singular capitalism formed by an ecol1omic-institutional ensemble, then we must be able to act on this ensemble and intervene in such a way as to invent a different capitalis.m. We do-nothave to carry on with capitalism so much as invent a new one.

The other aspect of the text that I have just read concerns what we could call "legal interventionism," which is the consequence of the first aspect. Ifwe accept that we are not dealing with an essential Capitalism deriving from the logic of Capital, but rather with a singular capitalism formed by an ecol1omic-institutional ensemble, then we must be able to act on this ensemble and intervene in such a way as to invent a different capitalis.m. We do-nothave to carry on with capitalism so much as invent a new one. But where and by what route will this irruption of innovation be able to take place within capitalism? Clearly innovation will not come from the laws of the market, it will not take place in the market itself sipce economic theory shows that, by definition, the market must function insuch away that its pure mechanisms are in themselves regulative of the whole. So we do not touch the laws of the market but act so that institutions are such that these laws, and only these laws, really are the principle ofgeneral economic regulation and, as a consequence, of social regulation. The consequence of this is no economic interventionism, or a minimum of economic interventionism, and maximum legal interventionism.

This is thefirst definition of the Rule oflaw, of !'Etat de. droit. Second, in the Rule of law there is a difference of kind, effect, and origin between, on the one hand, laws, which are universally valid general measures and in themselves acts ofsovereignty, and, on the other hand, particular decisions of the public. authorities. In other words, the Rule oflaw is a state in which legal dispositions, the expression of sovereignty, on the one hand, _and administrative measures, on the other, are distinguished in their principle, effects, apd nlidity.

First, it is defined in opposition to despotism understood as a system that makes the particular or general will of the sovereign the principle of the obligation of each and all with regard to the public authorities. Despotism is that which identifies the obligatory character and form of the injunctions of the public authoritywith-the sovereign's will. … Second, the Rule of law is also opposed to something different from despotism, and this is the Poliistaat,the police state. The police state is different from despotism, although concretely they overlap, or aspects of them overlap. What is understood by police state, by Poliistaat?It is a system in which there is no difference of kind, origin, validity, and consequently of effect, between, on the one hand, the general and permanent prescriptions of the public authorities-roughly, if you like, what we will call the law-and, on the other hand, the conjunctural, temporary, local, and individual decisions of these same public authorities-if you like, the level of rules and regulations. The police state establishes an administrative continuum that, from the general law to the particular measure, makes the public authorities and the injunctions they give one * M.

What does applying the principle ofthe Rule oflaw in the economic order mean? Roughly, I think it means that the state can malce legal interventions in the economic order only ifthese legal interventions take the form solely of the introduction of formal principles. There can only be formal economic legislation. This is the principle of the Rule oflaw in the economic order.

In actual fact,thestatemutb._blindto_theeconomic processes. It must not be expected to know everything concerning the economy, or every phenomenon concerning the economy. In short, both for the state and for individuals, the economy must be a game: a set of regulated activities-you can see that we have come back to what we were saying at the Start-but iri which the rules are not <1ecisions which someone takes for others. It is a set ofrules which determine the way in which each must playa game whose outcome is not known by anyone. The economy is a game and the legal institution which frames the economy should be thought of as the rules of the game.

Law and order*: these two notions, [to which] I will try to retu~ next w~-_· and whose destiny in the thought of the American Right you are familiar with, are not just slogans for a stubborn Atuerican extreme Right born in the Midwest. Law and orderoriginally had a very precise meaning which can be traced back well beyond the liberalism I am talking about.t Law and order means that the state, the public authorities, win only ever intervene in the economic orderintl1e-formohhelawana.,lf _ the public authorities really· are limited. to these legal interv~ntiofi5, within this law an economic order will be able to emerge which will be at the same time both the effect and principle of its own regulation.

So, first of all, an essential Capitalism (Ie capitalisme), with its logic, contradictions, and impasses does not exist. Second, it now becomes perfectly possible to invent or devise a capitalism different from the first, different from the capitalism we have known, and whose essential principle would be a reorganization of the institutional framework in terms of-the Rule-.oflaw, and which would consequently discard the whole system of administrative or legal interventionism which states have assumed the right to impose, be it in the form of the nineteenth century protectionist economy or of the planned economy ofthe twentieth century.

In short, the more the law becomes formal, the more numerous judicial interventions,And to the extent thatgovernmentalinterventions ofthe public authority are more and more formalized, and to the extent that administrative intervention recedes, then to the same extent justice tends to become, and must become, an omnipresent public service.

Schumpeter and the ordoliberals think that there is no internal contradiction in the logic of capital and its accumulation and consequently that t:apitalism is per- -_. fectly viable from an economic and purely economic point ofview.

For Schumpeter, capitalism cannot avoid this concentration; .it cannot avoid a sort of transition to socialism being brought about within its own development, since this, for Schumpeter, is what defines socialism: "a system in which a central authority will be able to control the means of production and production itself.,, So the transition to socialism is not inscribed in the historical necessity of capitalism by virtue of an illogicality or irrationality specific to the capitalist economy, but due to the organizational and social necessity entailed by the competitive market.

Another thesis I would like to put forward-and this is, in short, the other side of what I have just been saying-is that what is presently at issue in our reality, what we see emerging in our twentieth century societies, is not so much the growth of the state and of raison d'Etat, but much more its reduction, and in two forms. One of these is precisely the reduction of state govemmentality through the growth of party govemmentality, and the other form of reduction is the kind we can observe in regimes like our own in which there is an attempt to find a liberal govemmentality.

All those who share in the great state phobia should know that they are following the direction of the wind and that in fact, for years and years, an effective reduction of the state has been on the way, a reduction of both the growth of state control and of a "statifying" and "statified" a German invasion of England, which had be~n definitively averted by then.

Now this idea that there must be a rule of non~exclusion and that the function of the social rule, of social regulation, or of social security in the broadest sense ofthe term, is purely and simply to ensure non-exclusion with regard to an econ6mic game that, apart from this rule, must follow its own course, is implemented, or outlined at any rate, in a whole series of more or less clear measures.

First of all, what is it that will be attenuated by the action which is explicitly sought after in the idea of a negative tax? It is the effects of poverty, and only its effects. That 1s to say, in no way does the negative tax seek to be an action aiming to modify this 0]:' J:ht.C;:1!~~QfFQVrty;The negative t will never functiQu at the level of the causes of povertynbut simply at the level ofits.effects. This is what Stoleru says when he writes: ."For some, social assistance must be motivated by the causes of poverty/' and thus what it covers, what it is directed towards, is illnes§,accidents, unfitness for work, or the impossibility of finding employment. That is to say, in this traditional perspective, you cannot give someone assistance without asking why he needs it and so without seelcing to change the reasons for which he needs it. "For others," those who support the negative tax, "social assistance must only be motivated by the iffects of poverty; every human being," StoIeru says, "has basic needs, and society must help him to meet them when he cannot do so by himself." So that when it comes to it, the famous distinction that Western governmentality has tried for so long to establish between the good and bad poor, between the voluntary and * In inverted commas in the manuscript (p.

The third characteristic of negative tax is that, as you can see, it ensures as it were a general security, but at the lowest level, that is to say, the economic mechanisms of the game, the mechanisms of competition and enterprise, will be allowed to function in the rest of society. Above the threshold everyone will have to be an enterprise for himself or for his family. A society formalized on the model of the enterprise, of tIie competitive enterprise, will be possible above the threshold, and there will be simply a minimum security, that is to say, the nullification of certain risks on the basis of a Iow level threshold.

So with this systemwhich,again, has not been applied for a number of reasons, but whose features are clearly visible in the current economic policy of Giscard and Barre-you have the formation of an economic policy which is no longer focused on full employment, and which can only be integrated in the general market economy by abandoning the objective of full employment along with its essential instrument of centrally planned growth. Full employment and volun- 6irisfgroWth are renounced in favor ofintegration in a maiket economy. But this entails a fund of a Boating population, of a liminal, infraor supra-liminal populaiion;-in -Which the assurance mechanism will enable each to live, after a fashion, and to live in such a way that he can alwaYsbe availablefor. possibleworl,<:, jrarket cpnditions require it.

This is a completely different system from that through which eighteenth and nineteenth. century capitalism was fOrD;1ed and developed, when it had t0 7deal w1-th a peasant population which was a possible constant reservoir of manpower. When the economy functions as it does now, when the peasant population can no longer ensure that kind of endless fund of manpower, this fund has to be formed in a completely different way. This other way is the assisted population, which is actually assisted in a very liberal and much less bureaucratic and disciplinary way than itis by a system focused on full employment which employs mechanisms like those ofsocial security. D1timately, it is up to pe9ple to workiftheywantornot work if they don't. Above all there is thepossibilityofnot forcing them to work if there is no interest in doing so. They are merely guaranteed the possibility of minimal existence at a given level, and in this way the neo-liberal policy can be got to work.

It would be very interesting to study this set of documents, analyses, programs, and researchfor itself; because it seems to me tllat,ifI am not mistaken, this is the first: t:Lm.~ that entire nations waged war on the basis ofa system of pacts which were not justinternational alliances between powers, but 'social pacts ofa kind that promised-=to those who were asked to go, to war and get themselves killed-a certain type ofeconomic and'social organization which assured security ( of employment, with regard to illness and other kinds of risk and at the level of retirement): they were pacts of security at th~ moment of a demand for war. The demand for war on the part of governments is accompanied-and very quickly; there are texts on the theme from 1940-by this offer of a social pact and security.

So, even if there really is a return to the idea of homo reconomicus as the analytical grid of economic activity, there is a complete change in the conception of this homo reconomicus.

If there is innovation that is to say, ifwe find new things, discover new forms of productivity: ~nd make technological innovations, this is nothing other than the ~ncome of a certain capital, of human capital, that is to say, of the set of Investments we have made at the level of man himself.

And here again a number_of historical analyses are taken up again, like the famous problem ofthe Westerri economic takeoff in the sixteenth and seventeenth century. To what was this due? Was it due to the accumulation of physical capital? Historians are increasingly skeptical about this hypothesis. Was it not due precisely to the existence of an accumulation, an accelerated accumulation, of human capital?

All the problems of [inheritance?]-transmission-education-training-inequality of level, treated from a single point ofview as homogenizable elements, themselves in their [tum?] refocused no longer around an anthropology or an ethics or a politics of labor, but around an economics (Jf capital. And the individual considered as an enterprise, i.e., as an investment/ investor ( ... ). His conditions oflife are the income of a capital."

You recall that in'this conception-ofEucken, Ropke;Miiller-Annad~ and others~themarket was defined as a principle ofeconomic regulation indispensable to the formation of prices and so to the consistent development of the economic process. What was thegovemment's task in relation to this principle of the market as the indispensable regulating function of the economy? It was to organize a society, to establish what they call a Gesellschaftspolitik such that these fragile competitive mechanisms of the market can function to the full and in accordance with their specific structure.

The enterprise society imagined by the ordoliberals is therefore a society for the market and a society against the market, a society oriented towards the market and a society that compensates for the effects of the market in the realm of values :l.ndexistence. This is what Riistow said in the Walter Lippmann colloquium 1have talked about: "We have to organize the economy of the social body according to the rules of the market economy, but the fact remains that we still have to satisfy new and heightened needs for integration."

We only move over to the side of the subject himself inasmuch as-and we will come back to this, because it is very important, I am telling you this in a very roughwaY='Ye can approach it throughthe angle, the aspect, the kind of network of intelligibility of his behavior as econonllcbehavior. The subject is considered only as homo reconomicus, which does notmean that the whole subject is considered as homoreconomicus. In other words, considering the subject as homo recondmicus does not imply an anthropological identification of any behavior whatsoever with economic behavior. It simply means that economic behavior is the grid of intelligibility one will adopt on the behavior of a new individual. It also means that the individual becomes governmentalizable,* that power gets a hold on him to the extent, and only to the extent, that he is a homo reconomicus. That is to say, the surface of contact between the individual and the power exercised on him, and so the principle of the regulation of power over the individual, will be only this kind ofgrid ofhomo reconomicus.

So what -should the attituae be of those who direct law enforcement policy? They will have to ensure that what is called the opening price, that is to say, the price for new consumers, is as high as possible so that price itself is a weapon of dissuasion and small, potential consumers cannot take the step of becoming consumers hecause of the economic threshold. On the. other hand, those whose demand is inelastic and who will pay any price should be given the drug at the best possible price, that is to say, at the lowest possible price, so that, since they will buy the drug anyway, they are not forced to get the moey by any means t buy it-.

So we need low prices for addicts and very high prices for non-addicts. You know that this is a view which sought expression in a p0licy of distinguishing not so much between so_called soft drugs and hard drugs, as between drugs with an inductive value and drugs without an inductive value, and above all between elastic and inelastic types of drug consumption. From this stems a policy of law enforcement directed towards new and potential consumers, small dealers, and the small trade that takes place on street corners; a policy oflaw enforcement according to an economic rationality of the market differentiated in terms of the elements I have referred to.

In his article on capital punishment, Ehrlich said: "The abhorrent, cruel, or pathological nature of the crime is of absolutely no importance. There are no reasons for thinking that people who love or hate others are less 'responsive,'''' less accessible, or respond less easily to changes in the gains and losses associated with their activity than persons indifferent toward the well-being of others.,, In other words, all the distinctions that have been made between born criminals, occasional criminals, the perverse and the not perverse, and recidivists are not important. We must be prepared to accept that, in any case, however pathologi<:a1 the subject may be at a certain level and when seen from a certain angle, he is nevertheless "responsive" to some extent to possible gains and losses, which means that penal action must act on the interplay of gains and losse~ or, in other words, on the environment; we must act on the market milieu in which the individual makes his supply of crime and encounters a positive or neg;ltive demand.

Homo reconomicus is someone who accepts reality. Rational conduct is any conduct which is sensitive to modifications in the variables ofthe environment and which responds to this in a non-random way, in a systematic way, and economics can therefore be defined as the science of the systematic nature of responses to environmental variables.

I think 'this paradox enables us to pinpoint the problem I would like to say something about, which is precisely this: since the eighteenth century, has homo ceconom£cus involved setting up an essentially <t,ncl unconditionally irreducible element against any possible government? Does the definition ofhomo ceconom£eus involve marking outthe zone that "- -is definitively inaccessible to any government action? … Obviously,the wayin which I haveformu,- lated this question gives the answer straightaway, but this is what I would like to talk about, that is to say, homo ceconomt"cus as the partner, the vis-a.-vis, and the basic element of the new governmental reason formulated in: the eighteenth century.

To simplify things, and somewhat arbitrarily, I will start, as from a given, with English empiricism and the theory of the subject which is in fact put to work in English empiricist philosophy, with the view that-once again, I am making a somewhat arbitrary division-the theory of the subject in English empiricism probably represents one of the most important mutations, one of the most important theoretical transformations in Western thought since the Middle Ages.

So that economic man is situated in what we could call an indefinite field of immanence which,.on.the one hand, links him, in the form of dependence, to a series ofaccidents, and, on the other, links him, in the form of production, to the advantage of others, or which links his advantage to the production of the advantage of others. The convergence of interests thus doubles and covers the indefinite diversity of accidents. … The situation of homo reconomicus could therefore be described as doubly involuntary, with regard to the accidents which happen to him and with regard to the benefit he unintentionally produces for others. … So, we have a system in which homo reconomicus owes the positive nature of his calculation precisely to everything which eludes his calculation.

So, in other words,.there.are two, absolutely coupled elements. For there-Lobe:certainty of collective benefit, for it to be certain that the greatest good is attained for the greatest number of people, not only is it possible, but it is absolutely necessary that each actor be blind with regard to this totality. Everyone must be uncertain with-regard to the collective outcome if this positive collective outcome is really to be expected. Being in the dark and the blindness ofall the economic agents are absolutely necessary. The collective good must not be an objective. It must not be an objective because it cannot be calculated, at least, not within an economic strategy. Here we are at the heart of a principle of invisibility. In other words, what is usually stressed in Smith's famous theory of themvisible hand is, if you like, the "hand," that is to say, the existence of something like providence which would tie together all the dispersed threads. But I think the other element, invisibility, is at least 278 THE BIRTH OF BIOPOLITICS 28 March 1979 279 as important.

Invisibility is not just a fact arising from the imperfect nature of human intelligence which prevents people from realizing that there is a hand behind them which arranges or connects everything that each individual does on their own account. Invisibility is absolutely indispensable._kis an invisibility which means that no ~conomic agent should or can pursue the collective good. … But we must no doubt go further than economic agents; not only no economic agent, but also no political agent. In other words, the world of the economy must be and can only be obscure to the sovereign, and it is so in two ways.

What did the English bring to colonize America? Did they bring grand projects? Not at all. They arrived with "limited views." They had no other project than the immediate advantage of each, or rather, each had in mind only the limited view of their own project. As a result, industry was active and settlements flourished. Consequently, the economy, understood as a practice but also as a type ofgovernment intervention, as a fonn. ofaction of the state or sovereign, can only be short~sighted, and if there were a sovereign who claimed to be long-sighted, to have a global and totalizing gaze, he would only ever see chimeras.

Economic rationality is not only surrounded by, but founded on the unknowability of the totality of the process. Homo reconomicus is the one island of rationality possible within an economic process whose uncontrollable nature does not challenge, but instead founds the rationality of the atomistic behavior of homo reconomicus. Thus the economic world is naturally opaque and naturally non-totalizable. It· is originally and definitively constituted from a multiplicity of points ofview which is all the more irreducible as thissame multiplicity assures their ultimate and spontaneous convergence. Economics is an atheistic discipline; economics is a discipline without God; economics is a di!'iciplinewithout totality; economics is a discipline that begins to demonstrate not only the pointlessness, but also the impossibility ofasovereign point ll{view qy:er the totality ofthe state that he has to govern.

The problematic of the economy is by no means the logical completion of the great problematic of sovereignty through which eighteenth century juridical-political thought stroveto show how, by starting from individual subjects of natural right, one could arrive at the constitution of a political unity defined by the existence ofan individual or collective sovereign who is the holder of Part of the totality of these individual rights and at the same time the principle of their limitation. The economic problematic, the problematic of economic interest, is governed by a completely different configuration, by a completely different logic, type of reasoning, and rationality. In fact, from the eighteenth century the political-juridical world and the economic world appear as heterogeneous and incompatible worlds. The idea of an economic-juridical science is strictly impossible and what is more it has never in fact been constituted.

I think this is an important moment when political economy is able to present itself as a critique of governmental reason. I am using "critique" here in the specific, philosophical sense of the term. Kant too, alittle later moreover, had to tell man that he cannot know the totality of the world. Well, some decades.earlier, political economy had told the sovereign: Not even you can know the totality of the economic process. There is no sovereign in economics. There is no economic sovereign.

On a more limited scale, it seems to me that the basic function or role of the theory of the invisible hand is to disqualify the political sovereign.

But the physiocrats straightaway added this: Economic agents must be left free, but, first, we must take account of the fact that the entire territory of a country is basically the sovereign's property, or at any rate that the sovereign is co-owner of all the land of the country and so is therefore co-producer. This enabled them to justify taxation.

Second, the physiocrats say that the existence of an Economic Table, which enables the circuit of production and the formation of rent to be followed very exactly, gives the sovereign the possibility of exact knowledge of everything taking place within his country, thus giving him the power to control economic processes. That is to say, the Economic Table will offer-the sovereign a principle of analysis and a sort of principle of transparency in relation to the whole of the economic process.

Adam Smith's invisible hand is the exact opposite of this. It is the critique of this paradoxical idea of total economic freedom and absolute despotism which the physiocrats tried to maintain in the theory of economic evidence. The invisible hand posits instead, as a rule,-thafthis is not possible, that there cannot be a sovereign in the physiocratic sense, and that there cannot be despotism in the physiocratic-sense, because there cannot be economic evidence.

Political economy is indeed a science, a type of knowledge (savoir), a mode of knowledge (connaissance) which those who govern must take into account. But economic science cannot be the science of government and economics cannot be the internal principle, law, rule of conduct, or rationality of government. Economics is a science lateral to the art of governing. One must govern with economics, one must govern alongside economists, one must governby listening to the economists, but economics must not be and there is no question that it can be the governmental rationality itself.

"Ifthe palace be unnatural, the cottage is so no less.,, That is to say, the primitive cottage is not the natural and pre-social expression of something. We are not closer to nature with a primitive cottage than with a palace. It is simply a different distribution, a different form of the necessary intertwining of the social and the natural, since the social is part of the natural and the natural is always conveyed by the social. So, we have the principle that civil society is an historical-natural co'nstant for humani1:)r.

The principle of dissociative association is also a principle of historical transformation. That which produces the unity of the social fabric is at the same time that which produces the principle of historical transformation and the constant rending of the social fabric.

One always governs too much"~or at least, one should always suspect that one governs too much. Govenimentality shouldnot be exercised without a "critique" far more radical than a test of optimization. It should not only question itself about the best ( or least costly) means for achieving its effects, but also about the possibility and even legitimacy of its project for achieving effects. The question behind the suspicion that there is·always tue riskofgoveming too much is: Why, after all, is it necessary to govern?

Undoubtedly liberalism does IJ,ot derive from juridical thought any more than it does from an economic analysis. It is not born from the idea of a political society founded on a contractual bond. Rather, in the search for a liberal technology of government, it emerged that the juridical form was a far more effective instrument of regulation than the wisdom or moderation of governors. … Regulation has not been sought in the "law" because of the supposedly natural legalism of liberalism, but because the law defines forms ofgeneral intervention excluding particular, individual, and exceptional measures, and because participation of the governed indrawingup1:he-law ina parliamentary system is the most effective system of governmental economy.

These two schools do not just participate in an identical project ofthe radical reform ofliberalism. They also represent two distinct forms of the "critique of the irrationality peculiar to excessive government," one stressing the logic ofpure competition on the economic terrain, while framing the market through a set of state interventions (theory of the "policy ofsociety"), and the other seeking to extend the rationality ofthe market to domains hitherto considered to be non-economic (theory of "human capital").