The neoliberal rejection of politics did not entail a rejection of government intervention or an advocacy of laissez-faire; on the contrary, it implied what Bauer termed 'state action on a wide scale'. Rewriting Adam Smith's invisible hand, Bauer stressed the necessity to devise suitable institutions to harness selfish interests to the general interest. The premise of neoliberal thought was that the institutional structure profoundly influences the operation of the economic system, and 'does not arise from the operation of the system itself'. Neoliberalism countenanced a significant role for state action in relation to the market, as Foucault noted; but this action served to secure the conditions for the market, not to compensate for its effects. What Foucault missed, as he prepared his lectures on neoliberalism, was the extent to which the new interventionist politics of human rights, which fascinated him at the time, shared in the dominant 'state phobia' (which conflated state welfarism with totalitarianism) that he portrayed as his time's inheritance from a previous generation of neoliberals.

Jessica Whyte, The Morals of the Market, loc. 431