The Making of the Neoliberal Subject: Response to Whyte

In her recent essay, Jessica Whyte has challenged the tendency to repurpose Friedrich Hayek’s thought for a progressive and participatory politics. Objecting to such thinkers as Michel Foucault and William Connolly who find inspiration in Hayek’s critique of the monolithic political sovereign and his defense of spontaneous order, Whyte contends that his neoliberalism is actually predicated on the cultivation of politically submissive subjectivity and the curtailment of democratic politics. I agree with her substantive conclusions. But I think her conceptual frame centered on the themes of invisibility and providentialism, while insightful, is limited in explaining Hayek’s ideas and, more generally, the operation of neoliberalism. Whyte argues that Hayek’s neoliberalism produces submissive subjects by making economic processes invisible. In my view, however, it does not simply stave off political challenges by obfuscation; it wages an active and highly visible campaign to recruit and interpellate individuals as market subjects. In what follows, I first briefly review Whyte’s argument. Then, while agreeing with her that Hayek’s neoliberalism requires supplemental forces to contain its inherent instabilities, I show how he grounds his theory less on providentialism than on tangible collective benefits supposedly produced by the market order. Because she does not recognize this distinct aspect of Hayek’s neoliberalism, I suggest, Whyte’s interpretation of Hayek is incomplete with regard to a number of key points, including individualism, rationalism, political sovereignty, and most pertinent to her discussion, the nature and construction of neoliberal subjectivity.

Whyte’s central claim is that Hayek conceives the concept of spontaneous order at the heart of his neoliberalism by drawing on Adam Ferguson’s account of civil society, while “obscur[ing] the providentialism that underpinned” Ferguson’s ideas. ¹ According to Whyte, Hayek’s selective appropriation of Ferguson reveals his key strategy: by pushing the free market outside the realm of human comprehension and control, he deifies capitalism, inculcating the belief that, since we cannot understand it, “the remaining response is to submit to the incomprehensible.” ² At the same time, Whyte suggests that Hayek’s quasi-religious, if veiled, portrayal of capitalism signals the fragility of neoliberalism. Because the belief in “the providential ordering of the world” is a linchpin of the idea of spontaneous order Hayek supposedly seeks to extract from Ferguson’s work, without providentialism Hayek “struggles to explain why the unpredictable and incomprehensible results of the spontaneous order are superior to the results of deliberate human planning”—the struggle, Whyte claims, that “animated all his work, beginning with his contributions to the socialist calculation debates of the 1930s, extending through his influential theorizations of the role of knowledge in society, and ultimately leading him to the Scottish Enlightenment and to Ferguson’s providential account of social order.” ³

This is a provocative interpretive claim, especially given the forty-year span of Hayek’s work it professes to account for. Whyte is careful to avoid making a historical claim, though sometimes she also tries to show that he was at least open to the idea of relying on religion to secure popular adherence to market rules. ⁴ As I understand it, her main claim is that Hayek’s neoliberalism has, in Derridian parlance, a fundamental lack and needs to be supplemented by faith, despite his apparent secularism. But even so, Whyte seems uncertain as to how strongly she wants to emphasize the significance of theological motifs to his theory. Although she acknowledges a possible objection that Hayek’s account of the price mechanism “provides a coherent and naturalistic foundation to his theory of spontaneous order” and that his neoliberalism “therefore requires no supplement of faith,” Whyte does not directly address it. Instead, she points to his well-known turn, initiated in the mid-1930s through his participation in the socialist calculation debate, from narrow modes of economic analysis to an integrative social philosophy that connects economics, politics, and law, insisting that it was “simultaneously a turn to a providential tradition for which . . . the problem of how order was possible had already been answered.” ⁵

I agree that, as an organizing principle of social order, Hayek’s neoliberalism is an unstable one and requires supplemental forces to preserve its dominance. ⁶ But I wish Whyte said more about why that supplement needs to take the particular form of faith (she claims that Hayek faces “difficulties . . . that only faith could resolve”), ⁷ not because I believe theological and empirical matters are always strictly separated, but because her theological rendition of Hayek’s theory obscures some of its most distinct aspects as well as neoliberalism’s more general dynamics. Ferguson’s account of social order may have rested on the belief in God, but even if we assume that Ferguson’s work was a formative influence on Hayek’s theory of spontaneous order (rather than, as I think is more likely, a felicitous vessel he used to articulate and lend intellectual pedigree to the ideas he had already developed), it does not necessarily mean that the coherence or stability of Hayek’s neoliberalism, too, hangs on providentialism. Hayek may have sought necessary external support to make up for his doctrine’s internal deficiencies elsewhere. In my view, he did.

As Whyte notes, Hayek claims, counterintuitively, that “true individualism” is centered on people’s conformity to certain rules rather than on the promotion of distinct individuality, à la J. S Mill. ⁸ But if we see this conformity, as Whyte does, simply as an expression of religiously inflected blind submissiveness, ⁹ it is not clear how anyone could be persuaded that it is the foundation of a sensible, let alone “true,” doctrine of individualism. Hayek’s argument here is actually almost opposed to Whyte’s suggestion. Rather than seeking to secure conformity by shrouding market rules in the garb of providentialism, he stresses tangible collective benefits that he insists can be generated only by capitalist civilization—benefits that would redound to each individual as long as she belongs to that civilization. With this, Hayek departs significantly from classical liberalism, in that he does not defend individual liberty in its own right but makes it dependent on a particular social order. In his neoliberalism, the individual does not appear as the owner of natural rights but as a beneficiary of the market order that may enjoy her liberties, provided that she continues to contribute, if unwittingly, to that order. ¹⁰

The emphasis on tangible collective benefits thoroughly permeates Hayek’s theory. Not only does he conceive individual liberty as a collective, though individually distributed, benefit, but he also conceptualizes another pillar of his theory—coercion and the rule of law as its only acceptable form—in the same fashion. He argues that coercion occurs “when one man’s actions are made to serve another man’s will, not for his own but for the others’ purpose.” ¹¹ At first glance, this seems like a classical liberal stance, but as in the case of his individualism, the problem for Hayek is not that coercion intrudes upon certain fundamental rights to which all individuals are entitled. Rather, coercion is “bad because it prevents a person from using his mental powers to the full and consequently making the greatest contribution that he is capable of to the community.” ¹² In order for individuals to maximize the (material) value of the fragments of knowledge in their possession without central direction, it is crucial for them to be able to predict the outcome of their decisions with some reliability. Market prices are a key instrument serving that goal, but laws, too, play the same role. An individual’s knowledge of law, Hayek writes, “enables him to foresee what will be the consequences of his actions,” and “helps him to make plans with confidence.” ¹³ In this respect, laws are “means put at his disposal” and should be judged by their “usefulness” in producing overall social benefits. ¹⁴

The recognition that such foundational principles of liberalism as individual liberty and the rule of law are made to serve the market order in Hayek’s neoliberalism brings into focus a number of issues that remain unproblematized in Whyte’s account. For one thing, it suggests that mystification is not Hayek’s major strategy to produce politically submissive subjectivity. It is hard to think that simply hiding something, or telling people that they are too ignorant to grasp its complexity, is a particularly effective way to keep them from trying to understand it, especially when it is one of the most important and acutely felt conditions of their life. Whyte implies that Hayek adopts such a poor strategy and that it makes his neoliberalism unpersuasive and even obsolete, but that would seriously underestimate the sophisticated and multifaceted construction of his theory. In fact, mystification cannot be his major strategy, because it is hardly sufficient for, and can sometimes be detrimental to, the thriving of the neoliberal order. What neoliberalism requires for its success is not simply people’s endurance or resignation but their enthusiastic participation; neoliberalism needs to induce people to actively play what Hayek calls a “wealth-creating game” (as opposed to a zero-sum game). ¹⁵ And this is possible only when distinctly capitalist subjectivity is cultivated—when individuals are motivated chiefly by “the striving for the better satisfaction of their material needs” and organize their social relations primarily through “cash-nexus.” ¹⁶ The teaching of intellectual humility cannot generate these dispositions; only the allure of perpetually growing wealth promising to reward, if differentially, everyone can.

Also, partly because of her focus on the issue of invisibility, Whyte criticizes Hayek’s theory of the rule of law mainly on the familiar ground that it is too narrow and juridical, and thus conceals and effectively condones the violence and oppression in “civil society,” in which, as Marx writes, man “treats other men as means, degrades himself to the role of a mere means, and becomes the plaything of alien powers.” ¹⁷ As a result, even as she interrogates how genuinely spontaneous the neoliberal order is, she does not directly challenge the notion that Hayek’s neoliberalism is poised against the monolithic sovereign—that, as Foucault approvingly puts it, it serves to “disqualify the political sovereign.” ¹⁸ But Hayek’s position on political sovereignty is far more complex. As Whyte notes, Hayek’s thinking is continually haunted by the anxiety that, when left alone, people might not follow market rules even though that is what eventually produces benefits that they desire—individual liberty, social peace, material prosperity, and so on. This anxiety creates a distinct tension in his neoliberalism, and brings his professed libertarianism inexorably to political authoritarianism. Hayek does not simply debunk the political sovereign’s claim to omniscience and delimit its power; he enlists it to contain the tension within the neoliberal order.

In order to understand this point, we need to reconsider the view, which Whyte seems to accept, that Hayek is an unequivocal critic of rationalism. ¹⁹ To be sure, the critique of rationalism is one of the central strands of his thought. But even in The Road to Serfdom, where his rebuke of rationalism—which posits that social order is a deliberate human construct subject to rational analysis, control, and alteration—was particularly pronounced, he flummoxed his readers by insisting that the target of his criticism was only “planning against competition” and endorsing “the very necessary planning which is required to make competition as effective and beneficial as possible.” ²⁰ And he later repeated the same idea in an almost oxymoronic remark: “it is at least conceivable that the formation of a spontaneous order relies entirely on rules that were deliberately made.” ²¹ Hayek’s apparent embrace of rationalism here is less puzzling once we realize that, as discussed above, he views the capitalist order as a condition of possibility for individual liberty. For him, it is the former that delimits the latter’s scope and mode, not the other way around. And he is so confident in championing this regimentation of individual liberty, because the working of market rules is not impenetrable to him and his fellow “liberals.” Even though Hayek describes “the faith . . . in the self-regulating forces of the market” as an important element of the “liberal attitude”—the statement Whyte cites to illustrate the theological undertone of Hayek’s theory—it cannot be viewed as the unquestioning type of faith she associates with providentialism. Hayek not only contrasts the liberal “faith” to the conservative’s belief, which he disavows, that “some higher wisdom watches and supervises change, . . . keeping the change ‘orderly.’” (Whyte acknowledges this point.) Perhaps more tellingly, he also juxtaposes it to “people’s . . . inability to conceive how some necessary balance, between demand and supply, between exports and imports, or the like, will be brought about without deliberate control”—the inability that is clearly not shared by “liberal” economists. ²²

This, then, reveals what is really at stake in Hayek’s account of the incomprehensibility of market rules. It is not that the market order, like God, works in fundamentally mysterious ways. Rather, it is that it seems mysterious to most people when in fact it is not, as a few select individuals know. Insofar as that apparent incomprehensibility is one of the reasons why capitalism is unpopular, as Hayek asserts, mystifying it further only makes matters worse. Rather, the fundamental dynamic of neoliberalism lies, as he puts it, in the knowing minority’s attempt to “persuade the majority to observe certain principles.” ²³ And there is little mysterious or even subtle about that persuasion. Whyte charges that Hayek “renders invisible the direct violence and discipline that accompanies the imposition of capitalist labour,” ²⁴ but he quite explicitly acknowledges and even celebrates such discipline. Calling market competition “a method for breeding certain types of mind,” he describes it as “a process in which a small number makes it necessary for larger numbers to do what they do not like, be it to work harder, to change habits, or to devote a degree of attention, continuous application, or regularity to their work which without competition would not be needed.” ²⁵ Ideally, the majority would voluntarily adjust themselves to the demands of the capitalist market, compelled by the absolute or relative insecurity of their economic standing, enticed by the convenience and aesthetics of consumer goods, or goaded by the success of their peers more adept at playing the wealth-creating game. If all else fails, what awaits them is not an impenetrable but benevolent deity; it is the iron hand of the political sovereign. As Hayek writes, while some rules facilitating spontaneous order will be followed voluntarily, “there will be still others [rules] which they [people] may have to be made to obey, since, although it would be in the interest of each to disregard them, the overall order on which the success of their actions depends will arise only if these rules are generally followed.” For that reason, “the organization we call government becomes indispensable in order to assure that those rules are obeyed.” ²⁶

Pace Whyte, I would argue that neoliberalism reproduces and disseminates itself not by obscuring or downplaying the pressure it puts on people or the risk to which it exposes them, but by assertively owning it with the promise that it will pay off, perhaps not for everyone, but for those who, as they say, are willing to take risk, resilient, and entrepreneurial. It is an elusive promise for most people, true, but it is delivered to us not by a grand sermon but by ubiquitous signals that strike our senses, sometimes lightly and sometimes not so lightly—but insistently and incessantly. To observe a small laboratory in which neoliberal subjects are incubated, visit a public elementary school that adopts the “positive behavior reinforcement” program, which is apparently one of the new pedagogical approaches now in vogue. Students “earn” tickets (small color-coded pieces of paper) when they do what they are supposed to do: being quiet during class, lining up quickly, submitting homework on time, eating vegetables, completing a test, and even donating a can of food to help those in need. From time to time, they can use their tickets to “buy” stuff—toys, or the right to wear Halloween costumes to school or to attend a puppet show. No one loses, exactly (most of them receive more tickets than they can use), though some of them might feel mildly competitive. But every day, students become a little more used to experiencing the consequences of their action through tangible, countable, and individually possessed artifacts that it ostensibly yields. It is an easier way to understand one’s relation to the world, and so it can establish itself more easily as a habit, a frame of mind, and eventually, perhaps, a culture that is less willing and able to deal with matters that cannot be readily color-coded or translated into “what is mine.” My child goes to one of those schools. He is six years old.