Abstract
Friedrich Hayek’s defense of neoliberal free market capitalism hinges on the distinction between economies and catallaxies. The former are orders instituted via planning, whereas the latter are spontaneous competitive orders resulting from human action without human design. I argue that this distinction is based on an incomplete semantic history of “economy.” By looking at the meaning of “oikonomia” in medieval providential theology as explained by Giorgio Agamben and Joseph Vogl, I argue how Hayek’s science of catallactics is itself a secularization of providential theology. This exposes Hayek to three criticisms: (1) he unjustifiably neglects the possibility of tendencies toward spontaneous disorder in free markets, (2) he condemns the “losers” of neoliberal competition to being providential waste on the road to general prosperity, and (3) he imposes on people the duty to consent to a neoliberal order that hinders them from cultivating their inoperativity.
God is dead; but given the way people are, there may still for millennia be caves in which they show his shadow. And we, we must still defeat his shadow as well!
That Hayek misrepresents the history of economic thought is not an inconsequential accident. It implies that the criticisms of economic providentialism also apply to Hayek’s theory of spontaneous orders. I discuss three concerns: (1) just like Christians believe history ultimately leads to salvation thanks to divine providence, Hayek has nothing more than faith to explain why spontaneously ordered markets lead to greater prosperity. 4 The history of financial crashes and economic depressions however shows how superstitious the belief in the benevolence of spontaneous orders can be; (2) providential theology served to justify the existence of evil in the world by arguing how these adverse events were in fact the collateral damage of redemption. 5 Hayek similarly justifies the misery of the disadvantaged in the name of a future higher market order, but ignores the irremediable suffering along the way; and (3) Agamben argues that providential theology functions as a capturing machine imposing on humanity a rule of abstractions. 6 In Hayek’s case, this capturing machine is embodied in the price system that enforces humble obedience to the market on individuals and thereby orders them into an entrepreneurial form of life that conflicts with their essential inoperativity.
1. Hayek’s distinction between economy and catallaxy
Hayek posits two kinds of social order, economy and catallaxy. He defines economy as “a complex of activities by which a given set of means is allocated in accordance with a unitary plan among competing ends according to their relative importance.”
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Taking his cue from Aristotle’s theory of oikonomia,
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Hayek argues that the father of the household sovereignly determines a hierarchy of ends for the family’s resources and thereby introduces order (taxis) from the outside.
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Such a plan is simple enough for a single individual to understand, while also being geared toward the fulfilment of specific ends and composed of concrete commands for all family members.
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According to Hayek however, such a conception of planning is only possible on the small-scale level of the individual or the local organization. That we should think out beforehand what we are going to do, that a sensible ordering of our lives demands that we should have a clear conception of our aims before we start acting, seems so obvious that it appears difficult to believe that the demand for planning should ever be wrong.
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Hayek however rejects economic planning on the collective level because it is: (1) immoral and (2) unfeasible. (1) Different individuals have different preferences. Organizing society via a centralized exogenous plan would imply that planners construct their own hierarchy of ends and impose it on the rest of the population.
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They would have to coerce people to accept their conception of the good life. (2) Planning social order would also prove impossible. Human reason is too fallible to take up the position of oikonomikos in such complex and abstract societies as those of modern civilization.
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The “Great Society” is simply too multifaceted to plan via centralized decision-making.
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The kind of knowledge required to efficiently organize this society is dispersed among many individuals and usually not susceptible to explicit articulation.
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Whether the price of German government bonds will go down after the elections, how potential customers are best persuaded to buy soap, or at what time of the day bread sales are the most profitable, is knowledge that could never be gathered in one single mind.
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It constitutes tacit entrepreneurial knowhow, or what Hayek calls “knowledge of the particular circumstances of time and place.”
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Planning this like an economy would create “calculational chaos”
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as governments consistently fail to predict individual preferences down to the minutest detail and thereby distort the adequate usage of the required local expertise. Summarized, Hayek rejects the handling of society as an economy because the trouble with this socialist aim is a double one. As is true of every deliberate organization, only the knowledge of the organizer can enter into the design of the economy proper, and all the members of such an economy […] must be guided in their actions by the unitary hierarchy of ends which it serves.
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The law will consist of purpose-independent rules which govern the conduct of individuals toward each other, are intended to [universally] apply to an unknown number of further instances, and by defining a protected domain of each, enable an order of actions to form itself wherein the individuals can make feasible plans.
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The Rule of Law thus solves the two previously mentioned problems. It circumvents the issue of immorally imposed conceptions of the good life by reducing the government’s role to that of an impartial legislator guaranteeing a framework of abstract rules. 25 This framework leaves space for individuals to make their own choices based on many divergent preferences. 26
Hayek secondly avoids the impracticalities of collective planning by decentralizing decision-making to the individual level where the knowledge of particular circumstances of time and place resides. 27 It reduces the government to the role of a gardener tending the spontaneous growth of individual conducts in his or her garden. 28
The Rule of Law establishes a spontaneous order or catallaxy, that is, “the order brought about by the mutual adjustment of many individual economies in a market.”
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The odd word “catallaxy” is derived from the Greek term katallattein denoting “to exchange” or “to turn an enemy into a friend.”
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So long as collaboration presupposes common purposes, people with different aims are necessarily enemies who may fight each other for the same means; only the introduction of barter made it possible for the different individuals to be of use to each other without agreeing on the ultimate ends.
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Hayek locates the origin of catallactic theory in Scottish Enlightenment philosophy. 34 Most philosophers only accept two kinds of regularity: the unplanned orderliness of nature (physis) or the designed organizations of human decision-making (thesis) that we have called “economy.” 35 Scottish liberals however posited a third realm, that of order from human action without human design. 36 This is the collection of human interactions that spontaneously self-coordinate into a sustainable and even growing system without the need for exogenous constructive planning. The ultimate expression of this spontaneous emergence of order is Adam Smith’s theory of the invisible hand of the market. 37 According to Smith, the pursuit of individual preferences in a free market eventually delivers greater prosperity for all. The spontaneous self-coordination of individuals through exchange creates an order more beneficial than could ever have been accomplished by human design. The focus is hence on the invisibility of the hand of the market. 38 Nobody can see the general interest on beforehand nor possess the information to bring it about, and yet the market spontaneously generates the best of all possible worlds. 39 Hayek consequently praises the blindness of catallaxies: the free market sails spontaneously to prosperous shores without any individual seeing where the ship is heading. 40
Hayek entrenches this market order in his theory of competition as a discovery procedure.
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The basic assumptions are that knowledge of the particular circumstances of place and time is dispersed throughout the population and that different individuals have divergent conceptions of the good life. This information is processed via the price system, which reflects the supply and demand for all commodities.
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It shows to every individual how scarce goods are and how much other people are willing to pay for them. By disclosing the opportunities and risks associated with every transaction, prices function as signals to guide future action.
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This implies that, for instance, wages – the price for labour – are not rewards for past efforts, but signals for where to invest future labour.
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“Their function is not so much to reward people for what they have done as to tell them what in their own as well as in the general interest they ought to do.”
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If wages in a particular sector are high, it means that expertise in this field is in high demand, and vice versa. This process obviously only functions when producers – in casu workers – are expected to compete against each other. Individuals must be incentivized to listen to the appropriate signals. Entrepreneurs should interpret these signs and readjust their behaviour accordingly. Prices thus generate spontaneous order by coordinating for optimal mutual adjustment the demands of every single individual with all other individuals in the network. If, for example, more people want a particular good, the price will go up and everyone will re-evaluate whether they still want that good for the higher price. Competition is essentially a process of the formation of opinion: by spreading information it creates that unity and coherence of the economic system which we presuppose when we think of it as one market. It creates the views people have about what is best and cheapest, and it is because of it that people know at least as much about possibilities and opportunities as they in fact do. It is thus a process which involves a continuous change in the data.
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Catallactic order thus proceeds via selective adaptation.
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Individuals learn the “spirit of enterprise”
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by adapting their choices to price signals. This is ultimately a gradual trial-and-error endeavour.
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Full equilibrium is unachievable, but it functions as an asymptotic goal.
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Those who refuse to adapt or make irrecoverable mistakes, should know that they run the risk of failing the selection procedure.
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Who survives and who does not, is not however knowable on beforehand. It is only through the process of competition – and with a large role for sheer luck – that the winners and losers are determined. Hayek consequently proposes to regard catallactic conduct as a game. It proceeds, like all games, according to rules guiding the actions of individual participants whose aims, skills, and knowledge are different, with the consequence that the outcome will be unpredictable and that there will regularly be winners and losers. And while, as in a game, we are right in insisting that it be fair and that nobody cheat, it would be nonsensical to demand that the results of individual players be just. They will of necessity be determined partly by skill and partly by luck.
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Hayek’s theory of competition implies the acceptance of “unmerited failure.”
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Individuals can lose due to simple misfortune (see infra).
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An early 20th-Century businessperson with investments in the ice-cutting sector would have been undeservedly ruined with the advent of the refrigerator in the 1920s. This might stir social outrage, but Hayek maintains this is morally neutral.
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Individuals should practice “humility”
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with regard to the spontaneous order of the Great Society.
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This affect used to be promoted by religion, but it is still necessary to maintain the best of all possible worlds. It was men’s submission to the impersonal forces of the market that in the past has made possible the growth of a civilization which without this could not have been developed; it is by thus submitting that we are every day helping to build something that is greater than any one of us can fully comprehend.
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2. Agamben’s alternative semantic history of “economy”
Although Hayek firmly establishes catallactics as an atheistic discipline, the religious overtones are hard to miss. He prescribes “humility” and provides a justification of misfortune that recalls Christian theodicies. 63 Using Agamben’s semantic history of “oikonomia,” this section discloses the theological heritage animating Hayek’s thought. Economic historiographies tend to jump from ancient Greek economic thought to modern mercantilism and Hayek’s economy/catallaxy dichotomy is no exception. This historical jump however neglects how medieval theologies of oikonomia were a “laboratory for the problems of worldly government.” 64 Taking medieval conceptions of oikonomia into account allows to regard catallaxy as secularized divine providence. 65 This blurs the economy/catallaxy distinction insofar as theology accepts both the existence of a single transcendent governor and the emergence of immanent spontaneous order. “The Christian government of the world […] assumes the paradoxical figure of the immanent government of a world that is and needs to be extraneous.” 66 Exogenous planning does not contradict endogenous self-coordination.
Oikonomia gained a technical theological meaning in the 2nd and 3rd centuries, when Irenaeus, Hippolytus and Tertullian struggled with the apparent contradiction between Christian monotheism and the Trinity.
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Some heretics rejected the Trinity, while the Gnostics rejected monotheism in favour of a theology with two gods. The Church Fathers solved this enigma by fracturing God into a singular being and a multiple praxis.
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Monarchy because it belongs to one man does not for that reason make a standing rule that he whose it is may not have a son or must have made himself his own son or may not administer his monarchy by the agency of whom he will. Nay more, I say that no kingdom is in such a sense one man’s own, in such a sense single, in such a sense a monarchy, as not to be administered also through those other closely related persons whom it has provided for itself as officers.
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That an earthly king should have ministers to execute his laws is a sign not only of his being imperfect, but also of his dignity; because by the ordering of ministers the kingly power is brought into greater evidence.
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Medieval theologians however stress that the providential economy is compatible with human freedom and spontaneous order.
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They distinguish general from special providence to that purpose.
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In Aquinas’ words, God determines the general design of government (ratio gubernationis), but leaves the execution (executio) of his plan to intermediary agents.
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If there were only special providence, God would specifically determine for each creature its actions, which would diminish his majesty.
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God does not concern himself with every individual action, but as creator, or “first cause,” he invests each creature with a natural essence that makes it spontaneously act according to the salvific plan as an intermediary agent of God’s will.
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God does not command every individual creature what to do, but establishes the general rules so that each creature spontaneously acts as God requires. “God set up certain broad rules […] within which moral agents can act with real freedom – and yet their free actions wind up moving towards the direction God is taking history.”
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Agamben calls this indirect way of bringing about redemption a “government of collateral effects”: God does not immediately make creatures conform to his plan, but he has created them in such a way that he can accept the effects of free creaturely interaction as part of his general providence.
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The immanent spontaneous coordination of worldly beings is a series of unintended consequences wilfully affirmed by God. The government of the world occurs neither by means of the tyrannical imposition of an external general will, nor by accident, but through the knowing anticipation of the collateral effects that arise from the very nature of things and remain absolutely contingent in their singularity.
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Things are ordered insofar as they have a specific relation among themselves, but this relation is nothing other than the expression of their relation to the divine end. And, vice versa, things are ordered insofar as they have a certain relation to God, but this relation expresses itself only by means of the reciprocal relation of things. The only content of the transcendent order is the immanent order, but the meaning of the immanent order is nothing other than the relation to the transcendent end.
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There is a transcendent God who created the world in such a way as to let salvific order grow spontaneously from creaturely interactions. After six days of creation however, God remains idle.
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His work as first cause is done and he withdraws into inoperativity.
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Dieu règne, mais il ne gouverne pas. Worldly creatures, on the other hand, function as secondary causes.
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By following their natural inclinations, they render God’s plan of redemption operative without him having to intervene directly.
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What defines divine government is […] the fact that it fully coincides with the very nature of the things that it directs. Following a paradox that perfectly corresponds to the structure of the order, the divine government of creatures has no other content than the natural necessity inherent in things.
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This vicarious ontology is still at work in the Scottish Enlightenment thinkers Hayek builds his catallactics on. 94 When Hayek, for instance, interprets Adam Ferguson’s statement “establishments, which are indeed the result of human action, but not the execution of any human design,” he transmogrifies the argument so that spontaneous orders lack any design for Ferguson. 95 He wilfully ignores the theological intent of Ferguson’s texts to interpret it as a precursor to a fully immanent spontaneous order. 96 According to the Scottish thinker however, God is at the origin of such establishments. 97 Various Adam Smith scholars have also shown Smith’s claim about the invisible hand of the market to be more than simple metaphor. 98 He takes the phrase of an “invisible hand” from providential theology 99 and some argue that it should be viewed in light of Smith’s natural theology, implying that the market order really is the work of God rendered operative by human agents pursuing their self-interest. 100
Hayek still carries the weight of this theological heritage, even if he put himself to the task of defending a theory of spontaneous order without recourse to theology. 101 His catallactic order is a secularized version of providential theology. The former is a system of spontaneously coordinated individual preferences that accomplish the general welfare via competition and the price system. The latter is a system of spontaneously coordinated secondary causes or collateral effects that effectuate redemption by following their natural inclinations. The main difference is that Hayek rejects the existence of a transcendent God arranging this immanent order on beforehand. He accepts the ordo ad invicem, but not the ordo ad unum principium, ignorant of the theological background of spontaneous orders. Hayek thereby completes the advance of rendering the transcendent pole of government obsolete and the immanent order self-sufficient. 102 He completes the movement toward the death of God hidden in providential theology and replaces God’s harmonious creation with the price system as an immanent technique for mutually harmonizing individual preferences. This does not however constitute a complete break with the providential paradigm. 103 The price system is a herald for “the impersonal forces of the market” 104 incentivizing individuals to readjust their preferences. The “market” consequently functions as a deus absconditus, 105 an empty master signifier that itself remains idle, but authorizes the actions of individual agents as reflected in commodity prices (see infra). 106 Hence why Hayek frequently refers to “market order” “as if it were an entity existing independently of its constituent members.” 107 Individual agents in Hayek’s catallaxies function as secondary causes effectuating their mutual harmonization via their influence on prices. The latter embody, as it were, the will of the market. 108
3. The fragility of spontaneous order
Hayek’s historiographical misrepresentation is no mere philological matter. A first problem is that his belief that catallaxies necessarily generate prosperity is based more on faith than on scientific knowledge. 109 It obscures malevolent tendencies for chaos in spontaneous orders. For Scottish Enlightenment thinkers’ theodicies, this was no issue. If the market order is the indirect expression of a benevolent deity’s invisible hand, there are good grounds for being optimistic. Hayek’s catallactics, on the other hand, merely constitutes an “oikodicy”: 110 it justifies market order with the optimistic faith that selective adaptation leads to the best of all possible worlds. 111 But what makes this more than superstition?
According to Joseph Vogl, these statements function as “efficacious myths”: 112 by implementing theories of market equilibrium in real-life economic policies, this optimism gets a certain self-fulfilling effectiveness, but it is a fiction nonetheless. 113 There are limits to what “planning for competition” 114 can accomplish. Spontaneous orders also manifest tendencies for disorder. 115 Hayek hints at this in the context of the law of entropy in physical spontaneous orders, 116 but cannot imagine the existence of similar dynamics in social contexts. Vogl finds such tendencies in the economic theories of Mandelbrot and Minsky. Mandelbrot’s mathematical studies of financial markets in the beginning of the 20th century demonstrate how inexplicable freak events rather than steady equilibrating growth are the norm. 117 Small molecular changes can instigate devastating macroscopic effects. Even more problematic are Minskyan positive feedback loops. 118 Minsky hypothesizes that the availability of credit tends to render markets unstable. 119 Whenever prices rise for a specific good, there is an incentive for people to take out loans to buy more of that commodity in the hope that prices soar even higher. If a lot of people imitate this behaviour and the supply of this commodity cannot keep up, prices rise even more and people take on even more debt to keep the speculative bubble growing. 120 Once however confidence goes down for whatever reason – a new government policy, a large firm goes bankrupt, a revelation of fraud, etc. – people realize how exposed to risk they are and start selling the previously appraised commodity for unusually low prices to pay off increasing debts. 121 As a result, prices rapidly go down and individuals who had positive balance sheets before, get into trouble. 122 Eventually ever more people are sucked into the black hole and the market crashes. Positive feedback loops of indebtedness thus lead to increasing insecurity until the whole market collapses. “If there is an invisible hand at work here, then it can only be described as diabolical in nature.” 123
This is not a mere thought experiment aimed at discrediting Hayek. The boom and bust of the US housing market in the 2000s demonstrates the Minskyan suspicion toward debt-fuelled consumption. 124 This crash was not the result of exogenous shocks, but of the spontaneous order of the market itself leading toward disorder. 125 Real estate had the reputation of being a safe investment for borrowed money, 126 while the trade in mortgage-backed securities was highly profitable. 127 Increasingly poor borrowers were stimulated to take out “subprime” mortgages because houses were gaining value and to ensure a steady supply of mortgages for the securities trade. 128 The lending boom in a context of a more or less fixed supply of real estate incentivized people to overleverage. 129 Once people started defaulting on their loans, the whole market plummeted.
Hayek might thus praise the catallactic entrepreneur as someone daring to take on risk, 130 but he ignores the possibility of this individual risk-taking leading to systemic insecurity. If there is no benevolent providence watching over us, there is no reason to assume that spontaneous self-coordination does not lead to generalized disorder in the long run. The unintended consequences of a spontaneous order might create a path-dependency toward unmanageable catastrophes.
4. The collateral damage of spontaneous order
Providential theology gained much of its traction as a response to the problem of evil.
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“The governmental machine functions like an incessant theodicy, in which the Kingdom of providence legitimates and founds the Government of fate, and the latter guarantees the order that the former has established and renders it operative.”
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Theologians claim that God, in his goodness, decided to restrain his absolute potency to immediately impose a plan on his creation in order to let worldly freedom be.
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God consequently governs the world via collateral effects that spontaneously effectuate God’s plan of redemption as secondary causes. This however requires the acceptance of some unintended side-effects along the way.
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Every act of government aims at a primary target, yet, precisely for this reason, it can lead to “collateral damages,” which can be expected or unexpected in their specifics, but are in any case taken for granted. The computation of collateral effects, which can even be considerable (in the case of war they entail the death of human beings and the destruction of cities), is, in this sense, an inherent part of the logic of government.
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Smith’s secularization of providence in the metaphor of the invisible hand also functions as a justification of collateral damage, or “necro-economics” as Montag & Hill call it. 140 Smith justifies the exclusion from the good life of the labouring classes in the light of future spontaneous improvement. 141 “The market by being permitted (laisser) to deprive some of subsistence will bring about greater opulence than existed before the deprivation.” 142 Deprivation even fulfils a necessary function: the threat of starvation serves as a motivator for workers to seek employment and contribute to general welfare. 143 The unfortunate side-effect is the production of a barely surviving section of the population, “les malheureux.” 144 They are the disposable lives of the providential order, excluded from the good life yet included insofar as their bare existence is necessary to the fulfilment of general prosperity. 145 Montag & Hill find the ultimate expression of this dynamic in Smith’s treatment of the problem of dearth. 146 Smith rejects state interventions like price ceilings or forced grain sales during food crises, since those would interfere with property rights and merely lead to future famines due to the promotion of economic inefficiencies. The only supposedly legitimate state intervention during famines Montag & Hill discover in Smith’s writings is the obligation to suppress uprisings of the poor in defence of merchants’ property. 147
Hayek’s catallactic order produces its own malheureux. 148 Hayek prescribes selective adaptation in a competitive spontaneous order as the best route to prosperity. To survive, subjects must have the endurance to acquire a competitive subjectivity and be fortunate enough to win in the game of catallaxy. “Competition yields winners and losers; capital succeeds by destroying or cannibalizing other capitals. Hence, when market competition becomes generalized as a social and political principle, some will triumph and some will die.” 149 The “losers” of the adaptive selection process are the collateral damage on the way to prosperity. 150 This creates two figures of inclusive exclusion in Hayek’s thought: (1) those who adapt to market discipline but lose out by chance and (2) those who fail to adapt to market discipline. These people are barred from enjoying the profits of economic order, yet their bare existence is necessary for that order to subsist.
(1) The game of catallaxy determines outcomes on the basis of merit and chance, which implies that some undeservedly fail due to bad luck. 151 According to Hayek, everyone should be exposed to this risk – independently of the individual costs – to ensure general welfare. 152 This privatization of risk amounts to a government by precarization. 153 “Neoliberal governing proceeds primarily through social insecurity, through regulating the minimum of assurance while simultaneously increasing instability.” 154 Analogously to Agamben’s claim that we are all virtually homines sacri, the precarization of catallaxy implies that everyone is potentially malheureux. Hayek allows for a minimum income of subsistence, but nothing more than that. 155 He imagines that in the long run these unfortunates will be reintegrated in the catallactic order, 156 but this hope is not confirmed in empirical reality, where precarization generates an immobile population of “forgotten losers.” 157 Guy Standing exemplifies this problem with reference to “precarity traps.” Young workers, for example, frequently have to choose between unpaid internships that offer good but uncertain career prospects or dead-end temporary jobs that pay the bills. 158 Whatever they choose, they will probably end up in a state of structural insecurity. Another common example is unemployed single-parents who have to choose between a subsistence income like Hayek prescribes or an unsteady job that hardly delivers any extra income due to transportation costs, children’s day-care costs, etc. 159 These people are not reintegrated in the catallactic order, but are stuck in the margins. Whatever they choose, they will undeservedly remain in precarious situations.
(2) Catallactic subjects are supposed to adapt to market discipline by using their entrepreneurial alertness and knowledge of particular circumstances of space and time to thrive. This implies continuous vigilance for price signals and a preparedness to quickly change professions, locations, social circles, etc. 160 There are however natural barriers to what human bodies can do. 161 Especially since competition is a potentially endless project – one can always secure one’s position a little better with regard to competitors – subjects live under the constant fear of losing out. 162 They tend to hold themselves to unfeasible standards and suffer from feelings of inadequacy when they fail to meet these self-imposed standards. 163 The result is a steady rise in mental illnesses like depression and burnout. 164
For Hayek all this suffering is collateral damage in the name of catallactic providence. “The chance of as many expectations as possible being fulfilled will be most enhanced if some expectations are systematically disappointed.” 165 Selective adaptation is hence a euphemism for “a savage sorting of winners and losers.” 166 People who can no longer contribute to prosperity are disposable providential waste. 167 Alleviating these exclusions via government intervention is ruled out by Hayek on two accounts, as already mentioned: it enforces a particular conception of the good life instead of guaranteeing individual freedom and it suffers from the synoptic delusion that some single-minded state agency would be able to extraneously plan a catallactic order. 168 The promise that promoting the spontaneous order of catallaxy will eventually ensure prosperity for all is however questionable. Many individuals will have been sacrificed for the greater good along the way and one could even ask whether one would still want to partake in a providential paradise that has been built on so much suffering.
5. Spontaneous order’s rule by abstractions
According to Agamben, humankind lacks a human nature or vocation (opera) to fulfil. 169 Although the good life is frequently identified with the cultivation of a specific human quality, Agamben is thus sceptical of such philosophies. Since human beings lack a nature, there will always be a part of their lives that does not fit this particular conception of the good life. Real happiness would not lie in the fulfilment of some vocation, but in the rendering “inoperative” of all forms of identity. Inoperativity hence names that way of life that detaches human beings from any identification with the good life as the actualization of a specifically human quality. 170 Aristotle would, for instance, advise people to cultivate their reason (logos) to achieve the good life, but Agamben argues that such a specific articulation of the human vocation relies on a division between a rational side that should be enacted and non-rational potentialities that should be suppressed. 171 Not only does this condemn everyone to exclude the non-rational parts of oneself, but it also reduces to bare life all people unable to cultivate their logos. 172 To lead an inoperative life however, one can still, for example, cultivate logos, but one should not regard it as the fulfilment of some naturally inherent telos. One should know that this is only one contingent way to lead one’s life that in no way guarantees happiness. For Agamben, there is no purpose to human life, so also no prescribable way to achieve the good life. Human life is “inoperative” insofar as it detaches itself from any endeavour to fulfil a vocation. The identities it actually performs do not contribute to the good life, but are mere contingent roles one plays.
In providential theology humankind is however alienated from its own inoperativity. 173 God might have seemed to guarantee worldly freedom, but he established this freedom within a providentially organized order of creaturely interaction that predetermines the outcome and obliges individuals to affirm their part in God’s plan. They are obliged to identify with a particular role as their vocation. God himself, on the other hand, is allowed to exist without prescriptions. “The governmental apparatus functions because it has captured in its empty center the inoperativity of the human essence.” 174 Inoperativity is located in God, who after six days of creation reigns but lets his secondary causes govern the world vicariously. The latter render his will operative, while God remains idle as a transcendent absolute potentiality. Providential theology hence functions as a series of abstractions that induce creatures to identify with a certain role in God’s providential plan. Creatures are supposedly free to determine their own conduct, but nonetheless God has established his creation in such a way that entities are incentivized to execute his will. They have to voluntarily confirm their imposed telos of governing the world in God’s name. Instead of regarding their behaviour as contingent expressions of a life that always has the potentiality to be different, they are supposed to identify themselves with the duty God assigned them in the providential plan.
Agamben ascertains multiple articulations of this duty in Christian thought. The most illustrative one is Francisco Suarez’ virtue of religio. 175 Because God is the first cause of everything, creatures owe their complete existence to his voluntary decision to create the world. This installs a irredeemably infinite natural debt in humankind. Whatever humans could possibly give God as reimbursement originates in the divine grace to create. No matter what they give, they must have previously received it from God. According to Suarez, human beings consequently have the duty of reverentia. They ought to entirely obey God’s command, independently of what he specifically asks of them, whether it is killing their first-born son or taking the Israelites to the promised land. For Agamben, the Jesuits formulate this duty succinctly: the sole purpose of humanity on Earth is to infinitely glorify God by actualizing his will. 176 Humans are ad majorem Dei gloriam obliged to completely submit to God’s command and identify with whatever vocation he desires of them. Whether divine providence leads them to prosperous fulfilled lives or to excruciating ordeals, it will have been God’s will and therefore good. People have to deny their own capacity to live by no purpose, accept the alienation from their own inoperativity, and take on the form of life most suited to the glorification of God’s will. 177
One could wonder why people would voluntarily assent to their own servitude. According to Agamben, this duty of glorification is sustained through “insignia of power” that manifest the glory of God. 178 These signs embody a figure’s authority spectacularly enough to demand reverence. 179 They are hence more than simple representations. 180 A power-sign incarnates or evokes something of the acclaimed being. It refers to an excess that could never have been articulated into words. It glorifies a transcendent entity by highlighting its own incapacity to present this entity in its full glory. Christian liturgy’s main power-sign is the Eucharist’s sacramental bread. For Catholics, this is not a mere representation of the body of Christ. 181 Thanks to transubstantiation, it incarnates Christ itself, even if it still looks like just a piece of bread. By signifying God’s excess of being (plusquam esse), it inspires humble submission among the community of believers to a being so great that it could never be fully presented in merely human-made settings. By showing its own ineptitude to signify God, the sacramental bread ex negativo reveals the glory of God. It is the reverence for this excess of signification that makes humans consent to their creaturely nature and accept their role as secondary causes. Power-signs like these engender consent to governmentality, even if they cover up human inoperativity. 182 “The transcendent, glorious goal that mobilizes all the immanent economic forces towards itself serves ultimately to cover up the fact that there is no transcendent glorious goal of humanity.” 183
In Hayek, a secularized version of this mechanism also alienates humankind from its inoperativity and imposes on it a duty of absolute obedience to an empty authority. The market moves in mysterious ways and individuals are supposed to follow wherever it leads instead of detaching themselves from any obligatory way of life. The sense of alienation involved is expressed in the ambiguity toward economic freedom many people experience. On the one hand, everyone is free to conduct one’s life as one pleases within the bounds of the Rule of Law. This would seem to confirm Agamben’s ethical ideal of people detaching themselves from any specific vocation. The market looks like a free space that does not impose any pre-established conception of the good life. On the other hand, market imperatives institute “a rule by abstractions.” 184 They take a job, move to a certain city, consume specific goods not because they live detached from any human vocation and are free to determine their own lives, but because they obey market incentives that push people toward specific forms of life. Nothing they do is truly theirs, because they are obliged to follow where the market takes them. Economic freedom is experienced as its opposite and the “market” is an abstraction that takes on the role of empty master signifier. 185 It is never present as such – individuals can only hope to get a limited knowledge of particular circumstances of time and place – and yet it determines the course of the Great Society. The market moves in mysterious ways and effectively functions as a deus absconditus with absolute potency. 186 The market can change direction at any time and in any way and people should follow its incentives submissively, according to Hayek. 187
Why would people voluntarily submit to the erratic movements of the market and choose to act like “the market” wants them to? Prices function not just as information-distributors, but also as power-signs communicating and embodying the will of the market.
188
They convey an order beyond human individual fallible knowledge. Prices do not just communicate information, but incentives.
189
They signal entrepreneurs what to do, reward the alert, and punish the ungrateful.
190
Because of competition individuals are forced to obey the price system whatever it commands, but the latter is not only a disciplinary tool, but also a power-sign. Hayek’s prescription of humility reveals how for him prices are objects of reverence.
191
They impose a duty of religio on the Great Society. It was men’s submission to the impersonal forces of the market that in the past has made possible the growth of a civilization which without this could not have been developed; it is by thus submitting that we are every day helping to build something that is greater than any one of us can fully comprehend.
192
6. Conclusion
With the overcoming of economy by catallaxy Hayek sings the glory of the death of God. There can be no transcendent planner in Hayek’s philosophy controlling the particular outcomes of spontaneous market movements. Catallaxies are orders stemming from human actions without divine or human design. Agamben’s genealogy of economy however shows Hayek’s theory of catallactics to be a secularization of providential theology. Hayek might proclaim the death of God, but he is still singing his Requiem aeternam Deo. He cannot abandon the tombs and monuments of God. Since the Middle Ages, theologians distinguished between general and special providence and thereby combined the belief in spontaneous worldly order with faith in a transcendent planner. Although Hayek rejects the latter thesis, his defence of spontaneous order is still premised on the providential setup. He still proclaims faith in “the market order” as an essentially benevolent process of spontaneous harmonization that instrumentalizes individual actions for greater welfare as if by an “invisible hand.” This creates three blind spots in Hayek’s philosophy: (1) it blinds Hayek from imagining the existence of malevolent tendencies in spontaneous market orders. As Vogl and Minsky demonstrate, debt-fuelled markets tend not to deliver ever greater prosperity, but become so volatile that they trigger economic crashes, (2) Hayek wilfully sacrifices the suffering of les malheureux in the name of greater future prosperity. It is however doubtful that this welfare will be accessible to all, since some are incapable of acquiring the right entrepreneurial subjectivity and other unfortunates simply lose out in market competition due to bad luck, and (3) the price system alienates human beings from their inoperativity and captures it in the “market” as empty master signifier. The latter is presented as an erratic movement of potentialities that can change directions in an instant, whereas human beings are expected to remain humble and absolutely obey price signals in order to effectuate the providential route to prosperity. Instead of letting humankind cultivate a life beyond absolute obedience to the market, Hayek only proclaims the death of God, but simultaneously prescribes submission to the empty throne. Or do I come too early?
Footnotes
Acknowledgements
I wish to thank my supervisor Prof. Toon Braeckman and the anonymous reviewer for reading and commenting on my text. I also wish to thank the people from the Finance & Society conference 2017 in London and Dissecting Violence conference 2018 in Amsterdam, where I have presented this research.