Theory,Culture&Society

Theory,Culture&Societycatersfortheresurgenceofinterestinculturewithincontemporarysocialscienceandthehumanities.Buildingontheheritageofclassicalsocialtheory,thebookseriesexamineswaysinwhichthistraditionhasbeenreshapedbyanewgenerationoftheorists.Italsopublishestheoreticallyinformedanalysesofeverydaylife,popularculture,andnewsocialandintellectualmovements.

EDITOR:MikeFeatherstone,GoldsmithsCollege,UniversityofLondon

SERIESEDITORIALBOARDRoyBoyne,UniversityofDurhamNicholasGane,UniversityofWarwickScottLash,GoldsmithsCollege,UniversityofLondonCouzeVenn,GoldsmithsCollege,UniversityofLondon

TheTheory,Culture&Societybookseries,thejournalsTheory,Culture&SocietyandBody&Society,andrelatedconference,seminarandpostgraduateprogrammesnowoperatefromtheDepartmentofSociologyatGoldsmithsCollege,UniversityofLondon.ForfurtherdetailsoftheTCSCentre’sactivitiespleasecontact:

Theory,Culture&SocietyDepartmentofSociologyGoldsmiths,UniversityofLondonFloors8-11WarmingtonTowerNewCross,LondonSE146NW,UKe-mail:tcs@sagepub.co.ukweb:www.theoryculturesociety.org

Recentvolumesinclude:

CosmopolitanismZlatkoSkrbisandIanWoodward

TheBodyandSocialTheory3eChrisShilling

ImmaterialBodiesLisaBlackman

FrenchPost-WarSocialTheoryDerekRobbins

TheDomesticEconomyofTheSoulJohnO’Neill

©WilliamDavies2014

Firstpublished2014

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Contents

Abouttheauthor

Acknowledgements

Preface

1 TheDisenchantmentofPolitics:Neoliberalism,sovereigntyandeconomics

2 ThePromiseandParadoxofCompetition:Markets,competitiveagencyandauthority

3 TheLiberalSpiritofEconomics:Competition,anti-trustandtheChicagocritiqueoflaw

4 TheViolentThreatofManagement:Competitiveness,strategyandtheauditofpoliticaldecision

5 ContingentNeoliberalism:Financialcrisisandbeyond

Afterword:CritiqueinandofNeoliberalism

References

Index

AbouttheAuthor

WilliamDaviesisaSeniorLectureratGoldsmiths,UniversityofLondon.HecompletedaPhDinSociologyatGoldsmithsin2009.HisarticleshavebeenpublishedinEconomyandSociety,TheBritishJournalofSociology,TheoryCultureandSocietyandTheNewLeftReview. Inaddition to academic research, he has worked for a number of public policy think tanks,authoring reports including Reinventing the Firm (Demos, 2009). His blog is atwww.potlatch.org.uk.

Acknowledgements

Manyoftheideas,concernsandargumentscontainedinthisbookbeganaspartofmydoctoralresearch, carried out between 2005–2009, at Goldsmiths, University of London, whichresultedinmythesis,‘CompetitionandCompetitiveness:ACulturalPoliticalEconomy’.Forthisreason,IoweparticularthankstomytwoPhDsupervisors,ScottLashandMichaelKeith.IwouldalsoliketothankthevariousfriendsImadeduringthoseyears,bothatGoldsmithsandvia theNYLONresearchnetwork thatbrings togethergraduate students inLondonandNewYork.I was able to carry on developing ideas and reading widely, thanks to the opportunity

afforded by a two-year post-doctoral fellowship at the Institute for Science Innovation &Society(InSIS),UniversityofOxford,between2009–2011.ThiswasfollowedbyayearspentatKelloggCollege,UniversityofOxford,whenIbeganworkingonthismanuscript.Iwouldliketothankallthosewhoprovidedasupportiveintellectualandcollegialenvironmentduringthoseyears,especiallymyInSIScolleaguesJavierLezaunandLisaStampnitzky,withwhomIsharedaninterestinpolicyexpertiseandfromwhomIlearntalot.I finished the manuscript following a move to the Centre for Interdisciplinary

Methodologies,University ofWarwick.Again, I’d like to thank colleagues there, andCeliaLury in particular, for providing a stimulating environment and enough time to help mecompletethisbook.EmmaUprichard,GurminderBhambra,AliceMahandClaireBlencoweofferedvaluablefeedbackonChapter1.NateTkaczofferedusefulreferencesforChapter2.AtSage’srequest,NicholasGanereadthemanuscript,andofferedsomeexcellentcommentsandsuggestions;Iwasveryfortunatetohavesuchathoughtfulandknowledgeablereader.ElementsofChapter3havealreadybeenpublished,as‘Economicsandthe“Nonsense”of

Law:theCaseoftheChicagoAntitrustRevolution’inEconomy&Society,andas‘EconomicAdviceasaVocation:SymbiosesofScientificandPoliticalAuthority’,inTheBritishJournalof Sociology. The main arguments within Chapter 5 have appeared as ‘The EmergingNeocommunitarianism’ inPolitical Quarterly (which subsequently won the Bernard CrickawardforbestPoliticalQuarterlyarticleof2012)andas‘WhenisaMarketnotaMarket?:‘Exemption’,‘Externality’and‘Exception’inthecaseofEuropeanStateAidRules’inTheory,Culture&Society.Iamgratefultotheeditorsandreviewersofthosejournalsforhelpingmedevelopthisworkandbuildingmyconfidenceinit.MonikaKrausehasreadvariouspiecesofmyworkovertheyears, includingsomewhich

havefoundtheirwayintoChapters4and5.She’sbeenanexcellentfriendandcritic,includingat those moments when one gets stuck with a piece of writing. Henry Paker is partlyresponsibleformebecomingfascinatedbythelatentabsurdityofcompetition(specifically5-a-sidefootball)inthefirstplace.I would also like to thank my family and friends for always being supportive of my

academicambitionsandcareeroverthepasteightyears.Finally,IwouldliketoexpressmyloveandthankstoLydia,mywife,andMarthaourdaughter.ItismyhopethatMarthawillone

day live in a society which offers more choices than merely ‘winning’ or ‘losing’ in acompetitivegame.September2013

Preface

During the early 2000s, Iworked for a number of policy think tanks inLondon, all looselysupportiveofthe‘NewLabour’governmentofthetime.ThemorallegitimacyofTonyBlair’sgovernment received its most crushing blowwith the disastrous decision to invade Iraq in2003.ButofcoursethiswasnotwhatledtotheLabourParty’seventuallossofpower.Blairhobbledon,winning the2005electionandgoverningfora further twoyearsbeforehandingover the leadership to his long-term rival,GordonBrown.Nodoubt theBritishpublicwasgrowingboredofbeinggovernedby the sameparty foradecade,andBrownneverhadhispredecessor’sgiftsforcommunicationandcharm.Yettherealimpetusforpoliticalchange,aswasalsothecaseintheUnitedStates’presidentialelectionof2008,arosethankstothelargestfinancial crisis since 1929. New Labour could survive Iraq – just – but not an economicmeltdown.In time,wemay lookbackenviouslyat thatpre-2007 (orat leastpre-2003)NewLabour

era. It will go down in history as one of those periods inwhichwealth appeared to growalmost effortlessly, allowing a progressive government to divert substantial funds towardsvariouspublicandculturalgoodswhilestillallowingprivateenterprisetoprosper.Thiswasthe‘win-win’modelproclaimedinthemid-1990sasthe‘ThirdWay’(Giddens,1998).Itwasduringthissunnyerathatsomethingbegantointrigueme.Allmannerofpolitical,social,moralor cultural goals could be declared and pursued by policy makers at this time, but theirlegitimacyseemedtodependontheirconformitywithparticularformsofeconomicrationality.Thisrationalitywas,onthefaceofit,afreemarketone.Policymakersspokeofprioritizing‘consumers’, ‘efficiency’ and ‘competition’, but this rhetoricwas being draped over publicinvestments, cultural institutions and state agencies. Often, businesses themselves weredemandingthatgovernmentdomoreandspendmore(especiallyinareassuchaseducationorinfrastructure) inorder to increase something called ‘national competitiveness’. Itwouldbedifficulttocharacterizethisasaneraof‘laissez-faire’orconservative,smallgovernment.Andyettherationalityseemedtobethatofeconomicliberalismnevertheless,especiallyinvolvingappealstothevirtuesofcompetitivebehaviour,cultureandmindset.Thequestion that I’darrivedatwasaclassicallyWeberianone:howdoes rationality (in

this,instanceaformofliberaleconomicrationality)generateandconstitutepoliticalauthority?Iwasalsograpplingunwittinglywithaparadoxthatisfundamentaltoneoliberalism,namelyhowtheeconomiccritiqueofthestatecanbeemployedpreciselysoastolegitimate,empowerandexpandthestate.NewLabourweremastersofthis,somehowmanagingtooverseearapidincreaseinthesizeofthestatewhileconstantlyevaluating,measuringandcriticizingthatstateinthenameofefficiency,marketsandcompetitiveness.Ileftthepolicyworldin2005todoaPhD in sociology at Goldsmiths, University of London, in the hope of addressing thesequestions. Ibecamefascinatedby thenetworksofadviceandexpertise that linkedacademiceconomists, government agencies, regulators and think tanks. I was particularly keen tounderstand how some vision of competition was imagined and constructed by the experts

working in thisworld inways thatweren’t simply reducible to themarket.Competitionandcompetitiveness appeared to have become unquestionable social and economic goods, asmanifest in the urban boosterism and relentless political and cultural celebration of sport,which were becoming tedious features of British public life at the time. Concerns withinequalityorthevulgarityoffinance-drivencapitalismwerepushedaside,thankstometaphorsliftedfromthesportsworld:wehavetoattractandrewardthe‘DavidBeckhams’oftheglobaleconomy;wehavetocreatea‘levelplayingfield’.Therhetoricofcompetitivenessseemedtoserve a crucial function in winning certain moral and political arguments, on behalf ofeconomicelites,andIwantedtounderstandhowandwhy.Thisbookincludesandbuildsonthe arguments and research carried out for that thesis. The financial crisis struck as I wasreaching the end of my doctoral research, and Britain then lingered in a state of macro-economicstagnationthatwaslengthierthananyrecessionsincethenineteenthcentury.Whatstunnedmanyofusduringtheautumnof2008wasnotonlythatthestate(personified

by a small coterie of elite leaders) was suddenly the dominant force in sustaining globalfinancial capitalism, but also how different this state looked from the one that I’d beenintriguedbyafewyearsearlier.Nolongerwastherhetoricaboutmeasurable‘efficiency’or‘competitiveness’, but of emergencymeasures to enableWestern finance to continue at all.This was the all-powerful, sovereign state, which apparently had been hovering in thebackground all along, ready if needed, to prop up theworld ofmoney and economics, andusing exceptional powers if necessary. It was the state that was normally only seen duringtimes of war. The economically rationalized state had prided itself on trimming budgets,balancingthebooksandoptimizingitsmanagement,butthestatewassuddenlyrevealedasamorefearful,all-powerfulforce,bereftofanyquantitativelogic,otherthantopropupfinanceatallcosts.Theeconomicallyrationalizedstatehadfocusedonsavingsandimprovementsthatweremeasured in the hundreds ofmillions of pounds; the emergency state was capable ofinjecting hundreds of billions of additional finance and guarantees, simply by force ofdecision.This suggested that the relationshipbetween financializedorneoliberal capitalismandthestatewasfarmorecomplex–andmoreintimate–thanmanycriticshadsupposed.Notlongafter, something equally shockingoccurred.This emergency state steppedback into thesidelinesagain,perhapsonlya littlemorevisible thanbefore,buteffectivelysuggesting thattherescuewasover,andnowwecouldreturntoourpre-2008world.Theeconomiclanguageof‘competitiveness’and‘enterprise’isnowback,asifnothinghaschanged.

These observations relate to a couple of themes which run throughout this book. The firstconcerns the question of uncertainty, which – as I shall explore – is a key concept forneoliberalism.Whatdoesitmeantodaytosaythatthefutureis‘uncertain’?Inonesense,thisclaimcanbeabasisforpoliticalandexistentialhope.Thefactthatthefutureisundetermined,is yet to be made, is what allows us to dream, to reinvent and to reorganize. It allowsindividualsandsocietiestobeimagineddifferently,whichcarrieswithitprofoundrisksandresponsibilities.Uncertainty in this sense obliges us to confront the possibility of the futurebeingworsethanthepresent,aswellasthepossibilityofitbeingbetter.Butitdoesatleastremindus thatwe are not trapped in the present.But typically today, ‘uncertainty’ refers tosomething else altogether. In amore specifically economic sense uncertainty is an effect of

multiple,competingactors,operatingaccordingtovariousconflictingstrategiesinidentifiablemarketplaces, established institutions and global arenas. This is uncertainty in the sense of‘pricevolatility’,‘financialturbulence’andentrepreneurial‘innovation’,whichhasacertainnormalityaboutit.Itimposesprecarityandstressuponindividuals.Tosomeextentitcanberepresented in terms of risk through the application of a probabilistic calculation (Knight,1957).This latter form of uncertainty undeniably produces things which are surprising and

previouslyunknown.WhoknowswhatAppleorSamsungwillproducenext?Whoisevensurethattheywon’tbothhavebeenovertakenbysomeasyetunheardofrivalwithinadecade?Butsurveyingourmodelofpoliticaleconomyinthewakeoftheglobalfinancialcrisis,thereisaneeriesensethatforallthetalkofuncertaintytoday,thingsappeartohavebecomeatediousandpainfulprocessionofthesame.Speculationandimaginationregardingthefuturehavefreerein,solongas theyarenot turneduponthepoliticalconditionsthatseektoguaranteeandsecurethemwithincertainlimits.Whileweviewourownfatesassubjecttounpredictablebuffettingbycompetitive forces, the ‘game’withinwhich these forcesoperate feelsutterlypermanent.Individualsaretrainedand‘nudged’tolivewithcertainformsofeconomicuncertainty,intheassumption that they personally need to become more ‘resilient’ in the face of unexpectedshocks to their careers, pensions and domestic lives. We must be ready for anything; butsomehow this is never cause for hope of real change. Our vision of uncertainty, indeed ofmodernity,appearstohavebecomestuck.Sohowhasthisoccurred?Howisitthatchangeitselfhascometooccurinafashionthat,

while not predictable, seems terribly familiar? How has the narrower, economic vision ofuncertainty (as the effect of competition) come to colonize the more fundamental, politicalvision of uncertainty?The genius of the neoliberals, andFriedrich vonHayek in particular,was to produce amodel of political economy that incorporated uncertainty at its heart, butnevertheless elevated certain types of expertise and government as the guarantors of thatuncertainty.Suchamodelisnotthreatenedbydisruptiveandunforeseenevents;itisstrangelyalmoststrengthenedbythem,ashasoccurredfollowingtheglobalfinancialcrisis(Mirowski,2013).Politicalregimeswhichpledgetocontrolthefutureareunderminedwhentheyfailto,but political-economic systems which assume the uncontrollability of the future, and whichinstallcertainrules,methodologies,techniquesandmeasuresonthisbasis,donotruntheriskoffalsification.Theyareconsequentlymuchhardertode-legitimate.Thepoliticalproblemofthe present is that normative and political discourse and action are containable withincompetitive arenas, overseen by various types of power and authority. This suffocatingsubsumption of both liberal-legal normativity and of political decision making within aneconomized vision of competitive processes iswhatChapters2, 3 and 4 seek to trace andanalyse.Thesecondtheme,followingonfromthis,concerns thestate.Whatare therationalityand

authorityof theneoliberal state?Whatare theybasedon?Are theyconstitutedbyacareful,economizinglogic,inwhichwasteismonitored,productivityoptimized,andagentscarefullyregulated? Or is this a more excessive, violent force, that transcends any economic orevaluative logic? The answer, I suggest, is that it is both at the same time, and that thiscontradiction is the central fact about the ontology and authority of the neoliberal state.

Sovereignty,inthesenseofanimmeasurableand‘ultimatepower’,isweddedtoeconomicsofvariousformsandinvariousways.Legalandexecutivepowerblendwithformsofeconomicrationality,inanunwieldybalancebetweentheimmeasurableandthemeasurable.Proceduresofmeasurement take on a quasi-sovereign authority, asChapter1 proposes. The sovereign-economicambivalenceoftheneoliberalstateisoneofthekeylessonsofthefinancialcrisis–it transpired that this state’s economically rational role is to offer an irrationally largeguaranteetomaintainthestatusquo.ThisisaddressedinChapter5.Much of this book is descriptive and historical, and not explicitly critical. Given the

historical moment, this will disappoint some readers. But I would suggest that we need tounderstand how power works, how it achieves authority, and the role of economics (andbusinessstrategy)infacilitatingthis.Itisnogoodsimplycriticizingwithoutalsounderstandingthe role of critique within capitalist society and its capacity to be adopted by dominantpowers; this is the argument that has beenmarshalled by Luc Boltanski and his co-authorssince the early 1980s.And it is no good simply denouncing ‘neoliberalism’ in a pejorativesense, without also understanding the genealogy, normativity and subtlety of the ideas thatunderpinit.Tothisend,weareallfortunatefortherecentsurgeinhighqualityscholarlyworkon the history of neoliberal thought, from which this book has benefited tremendously(Foucault, 2008;Mirowski& Plewhe, 2009; Peck, 2010; Bergin, 2013).Academically,mygoalhasbeentobringthishistoricalapproachtoneoliberalismtogetherwiththesociologicalapproachofBoltanski,whoseworkhasbeenaconstantchallengeandinspirationtome.Butbeyonddisciplineortheory,Isimplyhopetoshakeandde-naturalizesomeoftheassumptionsthat neoliberal thought has propagated, but which have permeated our political and moralimaginationsandcometostipulatehorizonsofhumanactivity.

1

TheDisenchantmentofPolitics

Neoliberalism,sovereigntyandeconomics

Friedrich Von Hayek believed that the intellectual, political and organizational forces ofliberalism began a downward trajectory around 1870 (Hayek, 1944: 21). In place of thedecentralized structure of the Victorian marketplace and British classical economics, cametrends towards bureaucratization, management and the protection of the ‘social’ realm, allaccompaniedbyagrowingauthority forGerman institutionalist andhistoricist ideas.By the1940s thishad reached thepointof emergency.Havingwitnesseda financial crisisusher inFascism, Keynesianism and then a world war, Hayek viewed the choices of politicalmodernityinstarklybinaryterms:

Wehaveineffectundertakentodispensewiththeforceswhichproducedunforeseenresultsandtoreplacetheimpersonalandanonymousmechanismofthemarketbycollectiveand“conscious”directionofallsocialforcestodeliberatelychosengoals.(1944:21)

Reversing this trend would mean restoring the political authority of ‘impersonal’ and‘anonymous’mechanisms, andof ‘individual’ and ‘unconscious’ forces inpublic life,whichlackany ‘deliberatelychosengoals’.WhenHayek lookedback to thehighperiodofBritishliberalism,whathemournedwasasocietythathadnoexplicitlycollectiveorpublicpurpose,andwhosedirectioncouldnotbepredictedordetermined.Thecentralfunctionofmarketsinthis nostalgic vision was to coordinate social activity without intervention by politicalauthoritiesor‘conscious’cooperationbyactorsthemselves.Andiftherewereotherwaysofcoordinating individuals’ unconscious goals, impersonally and anonymously, thesemight beequallywelcomeasmarkets.Thevirtueofmarkets,forHayek,wastheircapacitytoreplaceegalitarianandidealistconceptsofthecommongoodthathebelievedcouldleadtotyranny.Hayek’s thought is widely recognized to have played a key role in inspiring and co-

ordinatingtheintellectualandpoliticalmovementwhichcametobeknownas‘neoliberalism’(Mirowski&Plehwe,2009;Stedman-Jones,2012;Bergin,2013).Thismovementachievedanumberofsignificantpoliticalandpolicyvictoriesfromthelate1970sonwards,resultinginaroughlycoherentparadigmthat spreadaround theworldover thesubsequent thirtyyears. Itsmajor crisis, if that is what it actually was, began in 2007, when it emerged thatWesterninvestmentbankshaddrasticallyunder-calculatedtherisksattachedtotheUShousingmarket,the fall-out fromwhichwas amacro-economic stagnationmore enduring than any since the1880s.Whiletheneoliberalpolicyerawaspunctuatedbyunusuallyfrequentfinancialcrises(Harvey,2005),whatwasmostsignificantaboutthe2007–09bankingcrisis–inadditiontoitsscale–wasthefactthatitoriginatedinWallStreet,bringingvastfiscalandsocialcoststoa

nationthathadplayedakeyroleinpropagatingneoliberalpolicies.Butthefactthatthispolicyparadigmappearslargelyintact,severalyearsafterthedawningofthefinancialcrisis,isnowanobjectofscholarlyinterestinitsownright(Crouch,2011;Engelenetal.,2011;Mirowski,2013).Running in parallel to this economic breakdown was a series of events that raised

widespreadmoral concerns about the coherence of key public institutions and societymoregenerally.Britain,forexample,sawasuccessionofdisturbances,apparentlyaffectedbyformsof hedonistic self-interest: in 2009Members ofParliamentwere discovered to be routinelylyingabouttheirexpensesinordertoinflatetheirpay;in2011journalistswerediscoveredtobeengagedinthecriminalhackingofphones,possiblybeknowntothepolice;inAugust2011disparateriotseruptedacrossEnglishcities,featuringseeminglyhedonisticactsofdestructionand thewidespread lootingofbrandedgoods,with scarcecollectiveorpoliticalgrievance;andin2012itemerged that individualsworking inmajorhighstreetbankshadconspired toalter the ‘LIBOR’ rate, which dictates the price at which banks lend to each other, andinfluences the rate at which bankswill lend to customers, and questionswere raised as towhethergovernmentofficialshadactivelyencouragedthis.Theseunconnectedeventsseemtosuggestanormativeandpoliticalcrisis,wherebytheverypossibilityofdeliberatecollectiveaction is thrown into question. A form of institutionalized anti-institutionalism seemed tohavebecomeestablished.Theroutinenatureofsomuchofthisactivitymadeitimpossibletodismiss as mere ‘corruption’ or ‘criminality’. Meanwhile, concerns about the effects of‘consumerism’, inequality and lonelinessuponhealth andmental health (which in turnbringmajor economic costs) have begun to raise elite concerns about the sustainability of thecontemporarypolitical-economicmodel(Davies,2011a).‘Epidemics’ofdepression,anxiety,obesity and addictive behaviour register as an indictment on societies that have madecalculatedself-interestandcompetitivenesstacitlyconstitutionalprinciples(Davies,2012).Theinability toachieveanewpoliticalsettlementorneweconomicparadigmisbysome

measuresa testimony to the successof theneoliberalproject.Hayek’scomplaintcouldnowevenbe reversed:wehave ineffectundertaken todispensewith the forceswhichproducedforeseen results and to replace the collective and ‘conscious’ direction of all social forcestowardsdeliberatelychosengoalsbytheimpersonalandanonymousmechanismofthemarket(or market-like behaviour). Having consciously opened ourselves up to spontaneous anduncertain processes, we are now unable to escape from them again. The powerlessness ofpoliticalormoralauthorities to shapeordirect societydifferentlydemonstrateshowfar theneoliberal critique of economic planning has permeated. Whether Hayek would have stilltrusted ‘unconscious’ social forces,whenconfrontedwith the libidinous,destructive rushofcontemporaryconsumerismandfinancialization,isanotherquestion.Theframingofneoliberalcrises – including financial crises – in psychological and neurological terms (discussed inChapter5)canbeseenpartlyasa lastditcheffort todistinguishwhich ‘unconscious’ forcesaretobetrustedandwhichonesarenot.

Definingneoliberalism

NeoliberalismisclearlynotaunifieddoctrinetotheextentthatKeynesianismis.WhileHayekisoneoftheobviousfigureheadsoftheneoliberal‘thoughtcollective’(Mirowski&Plehwe,2009)hiswork is at oddswithmanyother neoliberal formsof policy andgovernance.TheoriginsoftheneoliberalmovementcanbetracedtothecontributionsofHayekandLudwigVonMisestothe‘socialistcalculationdebate’ofthe1920sand1930s(Mises,1990;Hayek,2009).The intellectualprojectof reinventing liberalismwasscatteredbetweenLondon,NewYork,Chicago,FreiburgandVienna,upuntilthe1970s(Peck,2010).Theapplicationandadaptationof these ideasspreadno lesshaphazardly,servingvariousmastersas theywent.Butwhat, Isuggest, is the common thread in all of this – and what makes the term ‘neoliberalism’ anecessary one – is an attempt to replace political judgement with economic evaluation,including,butnotexclusively,theevaluationsofferedbymarkets.Ofcourse,bothpoliticalandeconomic logics are plural and heterogeneous. But the central defining characteristic of allneoliberalcritiqueisitshostilitytotheambiguityofpoliticaldiscourse,andacommitmenttothe explicitness and transparency of quantitative, economic indicators, of which the marketpricesystemisthemodel.Neoliberalismisthepursuitofthedisenchantmentofpoliticsbyeconomics.The language of politics, unlike the language of economics, has a self-consciously

performativedimension.Itisusedwithapublicinmind,andanawarenessthatthemembersandperspectivescontainedinthatpublicarepluralanduncertain.Thepraxisandaestheticsofdiscourse are acknowledged inwhatwe consider to be ‘political’ situations.These includelegalprocess,inwhichtextandspeechresonateinpublicsettings,andseektodosomethingasmuch as represent something. This doesn’t mean that economics as a discipline is notperformative, requires no public or has no praxis. On the contrary, a great deal of recentscholarshiphasdemonstratedthateconomicsisoftenpowerfullyperformative(Callon,1998;Mitchell, 2002;MacKenzie, 2006;MacKenzie et al., 2007) and employs political rhetorics(McCloskey, 1985). Quantification andmeasurement have their own affective and aestheticqualities(Porter,1995),buttheexampleofmarketpriceindicatestoaneconomicsensibilitythat ambiguity and performativity can be beneficially minimized or constrained. From aneoliberal perspective, price provides a logical and phenomenological ideal of howhumanrelations can be mediated without the need for rhetorical, ritualized or deliberatelyperformativemodes of communication. Indeed, pricemay even suggest that peaceful humaninteractionisfeasiblewithoutspeechatall.Thereductionofcomplexanduncertainsituationsto a single number, as achieved by a market, appears as a route out of the hermeneuticpluralismandassociateddangersofpolitics.Whethergeneratedbymarketsorbyeconomics,aprice is an example of what Poovey terms the ‘modern fact’, a simple ‘preinterpetive’ or‘noninterpretive’representationofastateofaffairs(Poovey,1998).Iftodaypoliticsandpublicinstitutionsappeartohavedisintegratedintomerelycalculated

andstrategicbehaviour,oneresponsewouldbetoviewthisasaside-effectof‘modernity’or‘advancedcapitalism’orplain‘greed’.Butperhapsamorefruitfulonewouldbetoexaminethisasaself-consciousprojectofrationalizationonthepartofintellectualsandpolicyelites.Thedisenchantmentofpoliticsbyeconomicsinvolvesadeconstructionofthelanguageofthe‘commongood’orthe‘public’,whichisaccusedofapotentiallydangerousmysticism.Inthefirstinstance,asmanifestintheworkofMisesandHayek,thisisanattackonsocialismand

thetypesofstateexpertise thatenact it,but it isequallyapparent inacritiqueof the liberalideaofjustice,asintheworkofRichardPosnerandothers.Withsomereservations,itisalsomanifestasacritiqueofexecutivepoliticalauthoritywhichiscontrastedunfavourablywiththeeconomically rational authority of the manager. The targets of neoliberal critique areinstitutionallyandontologicallyvarious,whichelicitsdifferentstylesofcritique.Ineachcase,substantive claims about political authority and the public are critically dismantled andreplacedwithtechnicaleconomicsubstitutes.Thesesubstitutesmayneedtobeinventedfromscratch, hence the constructivist and often experimental dimensions of neoliberalism, aselectionofwhichwillbeexploredindetailinsubsequentchapters.As themore observant critics of neoliberalism have noted, it did not, therefore, seek or

achieve a shrinking of the state, but a re-imagining and transformation of it (Peck, 2010;Mirowski,2013).IntheseventyyearsseparatingthegoldenageofVictorianliberalismandtheintellectual birth of neoliberalism, the character of the state and of capitalism had changedmarkedly.TheriseofAmericanandGermanindustrialcapitalismhadbeenachievedthankstoneweconomiesofscaleandorganizationalefficienciesassociatedwithlargecorporationsandhierarchical structures, including the birth of management (Chandler, 1977; Arrighi, 2009).Scienceandexpertisewerenowformallychannelledintobusiness.Technicaladvancementsinthefieldsofstatisticsandnationalaccounts,followedbythebirthofmacroeconomicsinthe1930s,meant that ‘theeconomy’hadappearedas a complexobjectofpoliticalmanagement(Mitchell, 1998;Suzuki, 2003).And the on-goinggrowthof a ‘social’ realm,measured andgoverned by sociology, social statistics, social policy and professions, meant that theAmerican and European states of the 1930s had far more extensive capacities andresponsibilitiesforauditandinterventionthantheBritishliberalstateofthe1860s(Donzelot,1991;Desrosieres,1998).Thepragmatismoftheneoliberalpioneerspreventedthemfromproposingaromanticreturn

toahalcyonageofclassicalliberalism,insteadcommittingthemtoareinventionofliberalismsuitable for a more complex, regulated, Fordist capitalism. Hayek believed that ‘thefundamental principle that in the ordering of our affairs we should make as much use aspossibleof the spontaneous forcesof society,and resortas littleaspossible tocoercion, iscapableofaninfinitevarietyofapplications’(1944:17).Victorianlaissez-fairewasonlyoneempirical manifestation of the liberal idea. Restoring economic freedom would not beachieved simply throughwithdrawing the state from ‘themarket’, but through active policyinterventions, to remould institutions, state agencies and individuals, in ways that werecompatible with a market ethos (however defined) and were amenable to economicmeasurement. The state is therefore a powerful instrument of neoliberalism, though also anobject of its constant critique; this is one ofmany contradictions of neoliberalism, and onewhichhasbeenraisedtonewheightssincethebankingcrisesof2007–09.Hayek’sowninterpretationsofbothliberalismandthepoliticalpublicspherewerehighly

idiosyncratic.Liberalism isassociatedprimarilywith theuncertaintyofoutcomes.Freedom,by this account, requires ignoranceof the future, and thepreservationof freedomrequiresadogmatic agnosticism on the part of public institutions.1 By contrast, political activity isinterpreted as a project of determining outcomes and reducing uncertainty. At least in themodernera,politicsisviewedasaninstrumentofplanningandthepursuitofcertainty,though

thisisconcealedbythedeceptivenatureofpoliticallanguage.Thispessimisticviewdirectlyinvertsthe(equallypessimistic)perspectiveofHannahArendt,forexample,whosawliberalgovernanceoftheeconomicand‘social’realmasapoor,expertlymanagedsubstitutefortheinherentuncertainty andvitalityofpolitical action (Arendt, 1958).Bothpositions celebrate,andarguablyromanticize,uncertainty,butseeitsrationalistenemiesindifferentplaces–theHayekian neoliberal fears the politician, while the Arendtian political actor fears theeconomist.Most analyses of neoliberalism have focused on its commitment to ‘free’ markets,

deregulation and trade. I shan’t discuss the validity of these portrayals here, although somehave undoubtedly exaggerated the similarities between ‘classical’ nineteenth-centuryliberalismandtwentieth-centuryneoliberalism.Thetopicaddressedhereisadifferentone–thecharacterofneoliberalauthority:onwhatbasisdoestheneoliberalstatedemandtherighttobeobeyed, ifnotonsubstantivepoliticalgrounds?Toa largeextent, it ison thebasisofparticulareconomicclaimsandrationalities,constructedandpropagatedbyeconomicexperts.Thestatedoesnotnecessarily(orat least,notalways)cedepowertomarkets,butcomestojustify its decisions, policies and rules in terms that are commensurable with the logic ofmarkets. Neoliberalism might therefore be defined as the elevation of market-basedprinciplesandtechniquesofevaluationtothelevelofstate-endorsednorms(Davies,2013:37).Theauthorityof theneoliberal state isheavilydependenton theauthorityofeconomics(andeconomists)todictatelegitimatecoursesofaction.Understandingthatauthority–anditspresent crisis – requires us to look at economics, economic policy experts and advisors ascriticalcomponentsofstateinstitutions.Max Weber argued that modernity disenchants the world through positivist science and

bureaucratization, subsuming the particular within the universal, reducing qualities toquantities.InWeber’sanalysis,modernscienceandbureaucracylackany‘outward’orpublicsenseoftheirownintrinsicvaluetohumanity,makingthemcold, impersonalandanonymousforces – those same characteristics ofmarkets thatHayek deemed valuable (Weber, 1991a,1991b).Boththescientistandthebureaucratruntheriskofnihilism,butcounterthisthroughholdingontoprivate,‘inward’vocationswhichconditionandsustaintheirpracticesofemptyrationalization. In this respect, ‘disenchantment’canneverbecomplete,as itdependsfor itsprogress on unspoken ethical commitments on the parts of thosewhopropagate it.To someextent theseethicalcommitmentsmustbeshared, ifrationalistdepictionsof theworldaretoholdtogetherasaconsensuallysharedreality.Thisbecomesself-evidentwherethequestionofscientificandsocialscientific‘methodology’arises.Inorderforobjectiverepresentationstobegenerated,certainpresuppositionsandpracticalproceduresmustbeadheredtothathaveanormatively binding force.The stronger the claim to value neutrality, themore rigidly thesepresuppositions and procedures must bind, so, for example, neo-classical economists arebound by far tighter rules of conduct than social anthropologists. Paradoxically, therefore,valueneutralityisanethosinitsownright(DuGay,2000),andeffortstoeradicateallvaluesareultimatelyasdangeroustorationalizationastheyaretoethics,asNietzscherecognized.Whatisdistinctiveaboutneoliberalismasamodeofthoughtandgovernment,however, is

itsacutedesire to invert therelationshipbetweentechnical rationalityandsubstantiveethos.Where Weber saw modern rationalization and capitalism as dependent on certain ethical

precepts, Hayek and his followers believed that various technical forms of quantitativeevaluationcouldprovidetheconditionsandguaranteeofliberalvalues.Thistechnocraticturndivertstheattentionoftheliberalawayfrommoralorpoliticalphilosophyandtowardsmoremundanetechnicalandpragmaticconcerns.Prosaicmarketinstitutionsandcalculativedevicesbecome the harbinger of unspoken liberal commitments. This style of political reasoningsurvives, for example, inThomas Friedman’s ‘golden arches theory of conflict prevention’,whichobservesthatnotwonationspossessingaMcDonalds’outletwithintheirbordershaveevergonetowarwitheachother:theKantianliberalidealof‘perpetualpeace’comestobepursuedviathemundanetechnologiesofhamburgerproduction(Friedman,2000).This offers one route to understanding the contradictory nature of neoliberal authority.

WhetherintheworkoftheChicagoSchoolofeconomics,the‘NewPublicManagement’and‘shareholdervalue’movementsofthe1980sorthe‘nationalcompetitiveness’evaluationsthatframedpolicydebatesinthe1990s,neoliberalismhassoughttoeliminatenormativejudgementfrompublic life to thegreatest possible extent. In the traditionof JeremyBentham, intrinsicvaluesaretobereplacedbyextrinsicvaluation(i.e.measurement).Convertingqualitiesintoquantities removes ambiguity, emptying politics of its misunderstandings and ethicalcontroversies, over which, Milton Friedman believed, ‘men can ultimately only fight’(Friedman,1953).JustasBenthamreducedall formsofexperience todifferentquantitiesofutility,Friedmanandhiscolleaguesreducedallvalues, tastes,beliefsandpolitical ideals tothestatusof‘preferences’,eliminatingthedistinctionbetweenamoralstanceandadesire.Inthisrespect,theysharedtheanti-metaphysicalethosofbehaviourismwhichpermeatedmuchofAmerican social science over the first half of the twentieth century (Mills, 1998).Neoliberalismhasbeenanacutelymodernizingforce,intheWeberiansenseofrationalization.But thisformofrationalization, thisdisenchantmentofpoliticsbyeconomicsstill restson

certainvocationalcommitmentsandintrinsicnotionsofthecommongood,albeitunarticulatedones.Therenderingofeconomy,stateandsocietyasexplicitandasquantifiedaspossibleisan implicitly moral agenda, which makes certain presuppositions about how and what tovalue.Thesepresuppositionsare,bytheirverynature,ambiguousandtacit–butwithoutthem,anytechnicalevaluationormeasurementbecomesarbitraryandnihilistic.Nomethodologyormeasurementdevicecanprovideempiricalevidenceforitsownvalidity.Neoliberalismisnotonlyconflictedinitsrelationshiptothestate,butalsoinitsrelationshiptoitsownprerequisiteethos:awhollycalculable,measurableworldisonlypossibleonthebasisofparticularnon-calculable, immeasurable values or vocations. Hence, efforts to replace politics witheconomics, judgement with measurement, confront a limit beyond which they themselvescollapse. One of the critical questions, on which neoliberalism stands or falls, is whyeconomicsshouldbeabetteranalyticalbasisforgovernmentthanotherpoliticalorscientificforms of authority. Further questions follow, including which tradition of economics, andwhichconventionsofcalculation,are tobeapplied indifferentspheresofgovernment.Atacertain point, neoliberal discourse encounters moral questions which, at least in its morepositivistmanifestations,itisunabletounderstandoranswer.

TheCrisisandCritiqueofEconomicReason

Where should one stand when confronted by contemporary pathologies of capitalism orindividualism?Thisisnotonlyapoliticalandethicalquestion,butalsoamethodologicalone.Toadoptasociologicalperspectiveonthecrisesofneoliberalismistoassumethatthecausesand meanings of these events are to be found in socio-economic structures, institutions,inequalities and power dynamics. To a greater or lesser extent, it involves looking behindeconomicandpsychologicalexplanations,insearchofadeeperreality.Itisthiswhichgrantssociologyitscriticalthrust:thenarrativesthatliberalismprovidesaboutitself,focuseduponindividualreason,arefoundtobedeficientatbestordeludedatworst.Similarly,toadoptthestanceofcriticaltheoryinvolveschallengingtheseparationofethicsfrominstrumentalreason,by re-describing technical rationality in the language of exploitation, domination andunhappiness.Thisisamoreexplicitlypoliticalstance,whichseekstousecritiquetocatalysecrisis, to render the sustained no longer sustainable. The normative dimension of empiricaljudgementisbroughttothefore,whichassumesacertainnormativeauthorityonthepartofthetheorist.Thesetheoreticalperspectivesnecessarilyrestoncertainpresuppositionsthatvarybetween

thetechnical(e.g.howtomeasureinequality)andthephilosophical(e.g.anidealofegalitariancommunity).Onemightgo further and say that they also rest on certain epistemological andpoliticalassumptionsabouttheroleandresponsibilityoftheoryinpubliclife.Asadmirableasthese might be, they have the effect (often intentionally) of obscuring the alternativepresuppositionsandassumptionsthataretakenbyotheractors,experts,theoristsandcritics.Ina rush to explain or to criticize, there is a risk that interpretation gets lost.Along theway,forces of rationalization, economization and individualism come to appear systemic ordetermined, rather than politically and rhetorically performed. With respect to our presentpredicament, the continued survival of certain neoliberal doctrines and presuppositionssuggests that thesemaynot simplybe ‘false’or ‘exploitative’depictionsof reality,buthavebecomenormativeritualsintheirownright,throughwhichactorsmakesenseofandcriticizetheworld around them. This iswhat PhilipMirowski has termed ‘everyday neoliberalism’(Mirowski,2013).Aworld inwhichpoliticshasbeenheavilydisenchantedbyeconomics (ofvariousstyles

andtraditions,asweshallsee)requiresitsownmodeofenquiry,whichisalerttothefactthatpoliticallogicnolongerprovidesthestructuresofcollectiveexperienceandactionformanypeople.Sociologistsshouldrecognizethatthedeclineofsocialismrobbedmodernityofoneofitsmajor sources of large-scale organization (Eyal et al., 2003).AsSlavojZizek argued inresponsetotheEnglishriotsof2011:

Thefact that theriotershavenoprogrammeis therefore itselfa fact tobe interpreted: it tellsusagreatdealaboutourideological-politicalpredicamentandabout thekindofsocietyweinhabit,asocietywhichcelebrateschoicebut inwhichthe only available alternative to enforced democratic consensus is a blind acting out. Opposition to the system can nolongerarticulateitselfintheformofarealisticalternative,orevenasautopianproject,butcanonlytaketheshapeofameaninglessoutburst.(Zizek,2011a)

Individuals find themselves in a paradoxical condition of sharing their renunciation of anysharednarrative,denyingthemselvestheuseofsocialreason.Forsure,sociologyorcriticaltheory might provide them with such a narrative, and thus reintroduce a form of politicaldiscourse where it appears absent. On the other hand, if we are to seek to understand the

present, the performative and critical power of neoliberal discourse needs to be takenseriously, as a basis onwhich crypto-political and collective action does nevertheless takeplace.AsBrunoLatourargues,politicalnarrativeseekstobringanewcollectiveentityintobeing through its performance, and cannot therefore also seek to represent reality entirelyaccurately (Latour, 2003). By seeking to render public life ‘factual’ and ‘explicit’,neoliberalismseekstoconstrainnotonlytheambiguitybutalsotheinventivenessofpolitics,for better or for worse. Yet it nevertheless provides routines, rituals, shared experiences,governmentandformsofcollectiverepresentation;collectivitycannotdisintegratealtogether.Thequestionishowpoliticsremainspossibleatall,andinparticular,howthestateremainsauthoritative,onceheavilydisenchantedbyeconomicrationality.Simplyreplacingonesetof‘economic’ factswithanother setof ‘sociological’oneswill notgrasp theunwieldyway inwhich political-economic action takes place, once governed or authorized by a neoliberallogic.

Critiqueorinterpretation?Toaddress this, I adopt theapproach thathasbeenvariouslyknownas ‘convention theory’,‘pragmatic sociology’ and the sociology of ‘critical capacity’ (henceforth as ‘conventiontheory’),asdevelopedbyanumberofParisianscholarsledbyLucBoltanskisincetheearly1980s.Thepremiseofconventiontheoryisthat,forthemostpart,individualsareobligedandabletojustifytheirownactions,andtocriticizethoseofotheractorsaroundthem(Boltanski&Thévenot,1999,2000,2006).Thecoherenceandthecritiqueofsocio-economiclifearenotonly the work of social scientists, scholars or critical theorists operating as post hoc orexternal observers, but also by individuals themselves acting in social and economicsituations, whose interpretations and judgements should be taken seriously. These includeexperts acting in firms, statistical agencies,publicpolicy settingsandprofessional services,whoemploytechniques,argumentsandrhetoricsthatarenotdissimilartothoseemployedbyuniversity social scientists. The codification of social scientific techniques and disciplinesoccurs only latterly, after certain forms of knowledge, measurement and evaluation havealreadyariseninsociety,beyondtheacademy.AsEveChiapellohasshown,forexample,therise of an economic science in the eighteenth century built directly upon conventions ofvaluation (including the categories of profit and capital) which accounting had alreadyestablishedforpracticalpurposeswithineconomiclife(Chiapello,2009).Theappearanceofprofessional social science at the close of the nineteenth century occurred only after itsproblems,objectsandmeasuringdeviceshadalreadyarisenaspracticalconcernsofmoderninstitutionsandgovernment (Wagneretal.,1991;Wagner,2001).Thepracticalandpoliticalrequirementsofexpertsocio-economicknowledgearebothhistoricallyandanalyticallypriorto its methodological codification and professionalization. Precisely because modernliberalism potentially generates excessive uncertainty, expert disciplines, statisticalframeworks andmodels have been introduced tomake societymanageable and predictable.Buttheproblemofuncertaintyispriortopoliticalandexpertresponses,andisneverentirelyeradicated.

By this account, institutions, populations and situations ‘hold together’ as coherent,objectiveandmeaningful for thosewho inhabit them,because theysharecertaincriticalandcognitive apparatuses, which are recognized internally as legitimate. These apparatusesoperate at various scales: to speak of ‘population’, ‘the economy’ or ‘society’ as coherentempirical objects requires certain standards ofmeasurement to be scaled up to the nationallevel. Shared evaluative techniques allow actors to speakmeaningfully and factually aboutwhat is ‘going on’. Principles of equivalence emerge and are enforced, through whichdifferentpeoplecanbereferredtoasthesame(forinstancebecausetheyhavethesame‘IQ’score)orasdifferent,enablingdifferentvarietiesofinequalitytobecomevisible,whichmayormaynotbeconsideredlegitimate.Distributionsofgoodsandopportunitiesareunderpinnedbyconventions thatstipulatewhoisowedwhat,whodeservesreward,what is tobesharedand with whom. Even apparently amoral or immoral forms of economic distribution ororganizationcanonlypersistinanystableorremotelypredictableform,iftheyhavecodesandtacitly acknowledge norms through which to evaluate procedures. The task of conventiontheory is to identify and illuminate the normative, technical and critical resources that areemployed, in theproductionof thesecoherent–or incoherent– situations.This implies thatanycriticalanalysisofneoliberalismasahistoricalperiod,composedofspecificpoliticalandeconomicinstitutions,mustalsodrawonaninterpretationandgenealogyofneoliberalwaysofthinking,measuring,evaluating,criticizing,judgingandknowing.Conventiontheoryinvitesustocombineethnographiesofactorsandinstitutionswithhermeneuticandhistoricalexcavationsofintellectualparadigmsandpoliticalphilosophies.Not all action can be interpreted in terms of adherence to norms, and nor should all

economic distributions be assumed as internally justifiable.While the sense of justice andinjusticecanbeseenasaninnatehumancapacity,whichcanariseinanysituation, thereareothercapacities–orwhatBoltanskiterms‘competences’–thatotherwiseconditionactionandrelations.Boltanskinotesthatrelationsofloveandviolencearenon-critical,inthesensethatindividuals immersed in themloseanydistance fromasituation,andmakenoappeal toanybroadernormbeyondthesituationorpersonathand(Boltanski,2012).Inthatsense,whatloveandviolenceholdincommonisarefusalofallprinciplesofequivalence;theyrefusetoseeaparticularpersonorsituationasanexampleofalargerclass,ortocomparethemtoanythingelse.Alternatively, individualsmaygo togreat lengths toavoidordelaycritical scrutinyorjustification.Entrepreneursmightbeseenasanexampleofindividualswhooperatebetweenoroutsideofexistingconventions(Stark,2009).Rapidtransformationsofcapitaliststructuresmeanthatindividualscanavoidbeingheldtoaccount(Boltanski&Chiapello,2007:42).Butfor social relations to be organized into reasonably persistent, reliable and peacefulinstitutions,atsomepointtheremustbeasharedsenseofnormativity,asharedbasisonwhichtodistinguishbetweenpeopleandbetweenthingsandmakeevaluationsoftheirrelativeworth.Acommon frameworkofvaluation isneeded if complexeconomicpractices are toproceedwithoutconstantlybreakingdownintoargumentandnegotiation.The development and application of convention theory have been discussed at length

elsewhere(Wagner,1994,1999;Wilkinson,1997;Biggart&Beamish,2003;Blokker,2011).HereIwantonlytoidentifytwoofitscentralcharacteristics,andtoexplorehowthesemightcontribute to a critical analysisofneoliberalism. Inparticular, howmight convention theory

advance our understanding of neoliberalism as a form of ‘disenchantment of politics byeconomics’?Howmightithelpinterpretthepoliticsoftheapparentlyapolitical–evenanti-political–eventsthatcharacterizecontemporarysocio-economiccrises?

PragmatismagainstempiricismThefirstwayinwhichconventiontheorywillaidusisinhighlightingthelimitsandconditionsof empiricism (or objectivity) in the social, economic and political spheres, and hence thelimits and conditions of disenchantment. It does this by excavating the normative andinstitutional underpinnings of technical and positivist forms of social scientific knowledge,includingofeconomics.Thisispartlyachievedthroughgenealogiesofthesocialsciencesandassociatedmeasuresand tools, for instanceshowinghowparticular formsofknowledgearepragmatically related toparticularpoliticalproblems.The idealofpositivistsocialscience,especiallyprevalentinneo-classicaleconomicsandbehaviouristsocialscience,istoproduceforms of socio-economic knowledge that are entirely value neutral and therefore objective.TheChicagoSchoolplacedaparticularemphasisonthis.Quantitativeandstatisticalanalysesof social and economic activity supposedly exclude value judgements, regarding what is‘ultimately’ or intrinsically valuable, replacing thesewith technical, extrinsic valuations. Asinglemeasureof value is substituted formultiplevalues. Facts replace judgements. In thisrespect,thebirthofpoliticaleconomyandstatisticsinthelateeighteenthcenturybroughtabouta split between social theory and political philosophy, in which the former served as anempirical reflection on the direction and government of modern societies, while the lattercontinuedtoposenormativequestionsregardingthegoodorjustsociety.Convention theory questions the completeness of this separation, by highlighting the

dependence of objective, empirical socio-economic analysis on critical and normativepresuppositions. InWeberian terms, it unearths the private, silent ‘vocation’ of the modernsocial scientist, and articulates and publicizes it. It challenges the notion that politicalphilosophy can ever be fully excluded from social theory, or indeed from social situationsthemselves.Economicsandsociologyarebothattempts tocreate formsofpoliticalphysics,separate from thepoliticalmetaphysics that gavebirth to them.They seek to replacemoralrules(whichpeoplemightobey,solongastheyunderstandandrecognizethem)withscientificrules(whichpeopleobeyunwittingly,asthenaturalworlddoes)(Boltanski&Thévenot,2006:28–31).Butindoingso,theysimplyshiftquestionsofnormativityelsewhere,intospheresofexpert procedure and methodology, while often ignoring the irredeemably normativeconstitution of socio-economic life. For reasons explored by Wittgenstein, what governsindividual action can never be fully explicated, not even by the individual concerned. The‘right’andthe‘wrong’action(whetherarticulatedinamoralsenseornot)issomethingthatiscommonlyunderstoodbyactors in the situationconcerned,but cannotbeentirelyprovedbyreferringtoanyexplicitrule.Noamountof‘evidence’canconfirmwhatoneoughttodoinagiven situation. There is always already a partly agreed-upon presumption, that a rule hasvalidity and binds in certain ways, before the rule is actually invoked. In this sense, its‘physical’manifestationandapplicationhavea‘metaphysical’context,wherethesetermsare

taken to refer to that which can and cannot be expressed as a fact. Both the error and thepoliticalutilityofthesocio-economicempiricistaretoforgetthe‘metaphysics’ofwhatthey’redoingandofthepeopletheyarestudying.When we speak of a rule or individual possessing ‘authority’ we make a type of

metaphysical claim regarding something that we are unable to entirely articulate or prove.Therearenecessarilysilentandinvisiblequalitiestoauthoritywhichcanbealludedtowithexplicitlymorallanguage(thisruleorindividualis‘good’or‘fair’),butpartofthefunctionofsuchlanguageistoleavesomethingout.Therearereasonstoobeythelaw,forexample,suchasthefearofpenalties,butifthelawissolelyauthorizedbysuchreasonsitwouldceasetobethe law (cf.Hart, 1961).AsWittgenstein remarked, ‘if amancouldwrite abookonEthicswhichreallywasabookonEthics,thisbook,would,withanexplosion,destroyalltheotherbooksintheworld’(Wittgenstein,1965).Themetaphysicaldiscoursesofmoralandpoliticalphilosophydonot,fromapragmatistperspective,actuallysucceedingraspingthatwhichtheyreferto(suchasauthority,fairness,virtue),buttheymakesenseinspiteofthis.Bycontrast,theempiricist discourses of the social sciences (and associated formsofmanagement, statisticsandgovernanceofpopulations)seektooperatepurelyatthelevelofthesensible,thephysicalandthemeasurable.Buttheymustalsoofferreasonshowandwhytodoso,whichdrawtheminto moral appeals, which extend beyond the limits of the empirical. If, for example, atraditionalinstitutionsuchasaprofessionistobereplacedbyaparticulartypeofempiricistauditofmerit,thissubstitutioncanonlysucceedifthatauditcanserveasaninstitution,withalloftheprocedures,rulesandunspokennormsofobediencethatgowiththat.Consider the case of orthodox economics. Considerable moral and metaphysical

presuppositionsareatworkintheassumptionthat thevalueofgoodscanbeestablishedviamonetaryexchange.Certaincontingentcritical presumptions structure the technicalmethodsforevaluatingefficiencyinthelanguageofprice.Moralvaluescontributetoanydefinitionofeconomicvalue–which,takenasaunity,canbedescribedasan‘orderofworth’.Contrarytothe positivist notion that economics has noapriori notion of the collective or the commongood,Boltanski andThévenot show that it rests on a particular philosophical anthropology,regarding thecommonhumanityof individualsoperating in themarketplace, recognizingoneanotherasautonomousselves,separatefromtheirproperty(Boltanski&Thévenot,2006:43–61).Inthefirstinstance,justificationsforliberalmarketsmustdrawonmoralclaimsaboutthenature of the common good, which must be more than merely utilitarian or calculative(Hirschman,1977;Fourcade&Healey,2007).Thismustincludethecapacitytorecognizeandsympathizewiththeindividualwithwhomoneisexchanginggoods,andrespecttheircapacitytoexpresspreferences.Empiricaltechniquessuitedtothegovernance,measurementandauditof the market sphere emerged later, but remained implicitly indebted to a particular moralworldview.Markets, and subsequently the discipline of economics, appear to bring about apurelyobjective,neutralrepresentationofvalue,bothofhumans(inthelabourmarket)andofthings. Yet this objective assessment only ‘holds together’ on the basis that certain moral,metaphysical assumptions about the nature of individuals have already been adopted. Thenormative substrate of empirical representations can be teased out by noting how technicaltermssuchas ‘price’aredescendedfrommoral termssuchas ‘price’and‘praise’ (Beckert,2011; Stark, 2011).Actors have to suspend various alternative possible interpretations, and

ignore various discrepant events, in order to affirm to each other that they are in amarketsituation,tobeanalysedusingmarket-basedrhetoricandtools.Itistheircommonlyunderstoodcontextthatmakescertaintypesofsocio-economicfactpossible,andnotviceversa.Fromaconvention-basedperspective,whatremainsinconstantneedofexplanationishow

liberalmodern societies are as coherent and predictable as they are. Once individuals arerecognizedaspossessingtheirownpowersof(moreorless)autonomouscriticaljudgement,againstanuncertainontologicalbackdrop,theremarkablethingisnotthatcrisesorparadigmshifts occur periodically, but that they don’t occur the whole time. At the root of ‘normal’socio-economic order is the fact that individual actors are able to reach sustainableagreements,whichtheydosobyproducingvariousformsofjustificationforactions,includingtheprovisionofempiricalevidence.Thedistinctionbetweennormativecritiqueandempiricaltechnique is a rhetorical rather than an ontological one. Both moral and empirical claimsregarding the ‘worth’ of humans and things depend on being tested, if they are to winagreement from others. A law court and an accounting audit both have similar formalproperties,eventhoughonlyoneofthemisexplicitaboutitsconcernwith‘justice’.Itiseasierandquickertoreachagreementonthe‘right’waytoactbypointingtonumbers,statisticsandevidence thanbyappealing to ‘ultimate’moralprinciplesalone,whichare lessamenable totesting. Empirical claims are more persuasive, but their authority partly resides in theircapacity tohide theirmetaphysicalunderpinnings.Thepositivist social sciences,alongwithvarious forms of ‘governmentality’ and statistics, seek to replace critique with technique,judgementwithmeasurement,buttheyareconstantlyparasiticalonhigherorderclaimsaboutwhatoughttobemeasured,andhowitislegitimatetorepresentthisobjectively.

PragmatisminpursuitofpluralismFollowingonfromthisisasecondcrucialfeatureofconventiontheory.Thisistherecognitionthattherearealwaysmultipleandincommensurablemoralspheresavailabletoactorsseekingto justify their actions and to criticize those of others. There are multiple ‘ultimate’ moralprinciplesthatcanbeappealedto,andnotrulyultimateperspectivefromwhichtoascertainthevalidityofanysingleoneofthese,orfromwhichtoarbitratewhenrivalmoralprinciplescomeintoconflictwitheachother.BoltanskiandThévenotidentifysixdifferentmoral‘ordersofworth’,whichtheyassociatewithrespectivepoliticalphilosophiesregardingthe‘commongood’ of humanity.The very fact that there ismore than one variety of political philosophydemonstrates an existential political problem of pluralism that political philosophy itselfcannot solve, though can at least acknowledge (e.g. Walzer, 1983). The practice andexperienceofpolitics,unlikethatofpoliticalphilosophy,areofnavigatingbetweenmultipleaccounts of the common good, striking compromises, reaching agreements, in spite of theinevitabledisagreementsregardingtheworthofdecisions,actionsandthings.If therearemultipleand incommensurable formsof ‘politicalmetaphysics’, then thereare

also multiple and incommensurable forms of ‘political physics’. Methodological disputesbetweeneconomicsandsociology,forexample,cannotberesolvedbyappealing to‘higher’normative or empirical arguments: the two disciplines operate side by side, in parallel

technicalandcriticalspheresofevaluation.Theypossessdifferentprinciplesofequivalence,differentpresuppositionsaboutwhatpeopleholdincommon,andthereforehowtheycanjustlybedifferentiated.Themostthatcanbehopedforissomeformofcompromiseandpragmatictranslationbetween the two.Whenan economist defends apolicyor activity in termsof its‘efficiency’, or a sociologist explains an event in terms of ‘class stratification’, these aremanifestationsofrivalexpertconventions,whichlackanyestablishedtechniquesoftranslationfromonetotheother.Individualsmaybecapableofmediatingbetweenthetwo–arhetoricalskill that Boltanski and Thevenot term ‘prudence’– or theymay be able to inhabitmultiplecriticalandtechnicalspheressimultaneously,facilitatingwhatDavidStarkterms‘heterarchy’(Stark,2009).Buttheycannotadoptaviewfromthe‘outside’whichwillinformthemofthebest basis on which to evaluate a situation, either normatively or empirically. As Weberobserved‘weareplacedinvariouslifeorders,eachofwhichissubjecttodifferentlaws’,andany hope for discovering a final, once and for all justification beyond these, will end indisappointment(quotedinDuGay,2000:74).The question of the objective reality of socio-economic events can be answered with

scientificdata,untilanewsituationoffundamentaluncertaintyarises.Uncertainty,asthefirstgenerationChicago economistFrankKnight described it, is an existential fact of social andeconomic life, which underlies all apparently scientific calculations of the future (Knight,1957).Itcanbehiddenordealtwithinanumberofways,oneofwhichistorepresentit intermsofmathematicalprobabilityorrisk.Anotherwouldbetoallowmarkets toconvert theuncertaintyintoaprice.2Theattempttoconvertuncertaintyintorisk,whichKnightviewedasthe central purpose of economics, can succeeduntil a situation ariseswhich is of sufficientnovelty or ambiguity that established cognitive and calculative techniques are ill-adapted tomeasure or model it. Calculations of risk become defeated by uncertainty. Pragmaticsociologistsfocusonuncertainsituations,wherequantifiedobjectiverealitybreaksdown,toexaminethedisputesthatthenbreakoutoverhowandwhattomeasure.Itispreciselyunderconditions of uncertainty when the multiplicity and incommensurability of rival normative-empirical worldviews become visible, and when actors themselves become aware of theconstructed nature of socio-economic reality (Boltanski, 2011). Economic crises exhibitpreciselythiscondition,enablingmultipledefinitionsandmeasuresofsocio-economicrealityto emerge simultaneously, offering rival accounts ofwhat is going on.Crises are only fullyresolvedonceasinglecognitiveapparatusandnarrativehasbecomesufficientlydominant,astoprovideasharedrealitywhichvariouspolitical,businessandexpertactorscanallagreeonandinhabit.Via an examination of moral incommensurability, convention theorists hope to explain

technical and empirical incommensurability as a basic problem of all institutions andorganizations:theycontainmultiplewaysofrepresentingthemselves,testingtheirperformanceanddemonstratingtheirworth.Particularmetaphysicalaccountsofthecommongoodproducetheir own techniques for the testing and demonstration of value. Where a group of actorsaccepts both the metaphysical account and the associated techniques, then a shared socio-economic reality becomes possible. If, for example, Gross Domestic Product (GDP) isrecognized as both a technically authoritativemeasure of economic activity, and a morallyauthoritative indicator of economic progress, then it successfully produces a reality which

politicians,policymakersandpublicactorsallinhabitandcanbejudgedby(Perlman,1987;Desrosieres,1998). In the languageofconvention theorists, thesituation‘holds together’ forallconcerned,even if dissentingvoices challenge its technical and/or normative legitimacy.Butincommensurablevaluesandtechniquesofvaluationmayarise,tochallengetheauthorityofsuchanindicator–forexample,highlightingthefactthatGDPfailstomeasureunpaidworkbywomeninthehomeorthecostsofenvironmentaldegradation.Withmultiplenotionsofthecommon good in play, and multiple techniques by which to assess it, the macro-economicrealitymightequally‘fallapart’,andthepositivistandtechnocraticideal,ofpurely‘objective’socio-economicpublicdiscourse,nolongerholds.Intheseways,conventiontheoryrearrangestherelationshipbetweencritiqueanditssocio-

economic object to recognize thatmodern society is repletewith its own internal forms ofjustification,critiqueandevaluation,whichinevitablycomeintoconflictwitheachother.Thesemblance of coherence or incoherence of institutions is really an effect of agreements anddisagreementsthatareconstantlybeingrenegotiatedbytheactorswhoinhabitthem.Onewayin which capitalism reproduces itself is by maintaining its own internal varieties of anti-capitalism,therebyensuringthatthejustificationforcapitalistactivityisneverreducibletoitspurely economic or monetary rationales (Boltanski & Chiapello, 2007). Confronted withcontemporary neoliberal crises, apparently rooted in economistic, or even nihilisticworldviews, the task for the convention theorist is not simply to impose critique orsociological rationalization from without, but to interpret critical events (crises) via thecritical capacities (critique) of the actors involved. Even anti-political events possess aresidue of idealism, some normative account of justice and of political authority, whichrequireshermeneuticexcavation.Oneconclusionthatmightneverthelessbedrawn,onthebasisofsuchapragmatistenquiry,

is thatneoliberalism’smodesofevaluationandconsensus-formationhaveceased toperformadequately.Neoliberalism’sparadoxicalantipathytowardsnormativeandpoliticaldiscoursemeans, inevitably, that itwill struggle tomaintainnormative-politicalorder, sooneror later.Problemsparticularlyarisewhenthemethodologicalpresuppositionsofpolicy-makingelites(forinstance,viewingcrimeintermsofcost-benefitanalysis)becomeinterpretiveapparatusesthatareavailabletonon-expertactors‘inthewild’(suchthatthecriminalalsocomestoviewcrime in cost-benefit terms). To recognize that actors possess justifications and criticalcapacities,evenwhentheyactdestructivelyandegotistically,isnotnecessarilytoassumethattheirargumentsareaccepted(oracceptable).Ifneoliberalismisnowincrisis,whichitmayormaynotbe,apragmatistperspectivewouldhighlightthewaysinwhichchronicuncertaintyhasundermined the coherence and objectivity of its justifications. The technical and normativepresuppositions of neoliberalism (which we shall investigate in due course) arguably nolonger provide the basis of workable consensus. This may be partly because its ownprotagonists have failed to understand the normative, and therefore partly tacit and non-empirical,natureoftheruleswhichitappliesandtheauthorityclaimsitseekstomake.Toputthatanotherway,perhapspolicymakersandexpertsdon’tquiteunderstandwhatthey’redoing.But before we can consider that proposition further, we need to return to the institution

whichsitsattheheartofneoliberalcontradictionsanditscrisesofauthority,namelythestate.How can convention theory be extended into governmental and sovereign domains? What

changeswhen critical and technical evaluations are backed up by sovereign power and notsimplybymethodologicalauthority?

ConventionsofSovereignEconomization

Theachievementofnineteenth-centuryliberalismwastoproduceasenseofeconomicactivityasseparatefromandexternaltosocialorpoliticalactivity(Polanyi,1957).The‘social’realmarose as a set of identifiable policy problems or ‘externalities’, which were not fullycalculated by market exchange, but nevertheless side-effects of it. The split between neo-classicaleconomicsandsociology,echoedintheconceptofmarket‘externalities’thatbelongstowelfareeconomics,wasa formalizationof the interpretiveandcognitiveapparatuses thathad emerged to deal with these parallel worlds of ‘economy’ and ‘society’ (Pigou, 1912).Meanwhile, the liberal state also sat outside of these twodomains,with the effect of beingseparateandautonomous.Withintheliberalimaginary,thescienceofeconomicsisamodeofevaluation and measurement which belongs properly to the ‘economic’ realm, typicallyidentifiedwithmarketexchange.

EconomicimperialismAdefiningtraitofneoliberalismisthatitabandonsthisliberalconceitofseparateeconomic,social and political spheres, evaluating all three according to a single economic logic. ForHayek,therewasno‘separateeconomicmotive’;enterprising,calculated,strategizingactivitydidnotonlybeginwhen the individual entered themarket (Hayek,1944:93).Despitewidevariations in how agency is conceived, this basic assumption that all action is principallyeconomic action is common to all neoliberal styles of theory (e.g. Friedman, 1962; Becker,1976). This effects a collapse of the separate logics ofmarket, society and state, using thelanguage and techniques of the former to enact a blanket economic audit of all three. InFoucault’swords,neoliberalism:

…isnotaquestionoffreeinganemptyspace,butoftakingtheformalprinciplesofamarketeconomyandreferringandrelatingthemto,ofprojectingthemontoageneralartofgovernment.(Foucault,2008:131)

Evenwhenindividualsororganizationsarenotactinginamarket,theprojectofneoliberalismistojudgethemandmeasurethemasiftheywereactinginamarket.Ifliberalismtreatedthe‘economic’,the‘social’andthe‘political’asseparatespheres,withtheirowndiscretemodesof evaluation, neoliberalismevaluates all institutions and spheres of conduct according to asingleeconomicconceptofvalue.Indoingso,ithaseffectivelycollapsedtheboundaryarounda distinct market sphere, and in doing so, abandons the notion of the social or public‘externality’thatexistsbeyondthelimitsofcommercialexchange(Coase,1960).Within the academy neoliberalism has been characterized by aggressive economic

‘imperialism’, whereby techniques that initially arose for the analysis of markets andcommercialactivitywereappliedtothestudyofsocial,domesticandpoliticalactivity(Fine&Milonakis,2009).GaryBecker’spioneeringworksincethe1950son‘humancapital’andthe economics of crime, addiction and the family presaged a later popularization of such

approaches, as manifest in the popular economics book Freakonomics. A pragmaticperspectivewouldrecognizeeconomicsasasetoftechniquesandnormativepresuppositions,that first emerged alongside liberal markets for practical purposes, and was only latterlycodified and professionalized following the emergence of neo-classical economics in the1870s. But once codified, and seemingly emptied of its normative content, these sametechniques can travel beyond their initial sphere of application, namely the market, andevaluate all activity, as if it were oriented around price and exchange. Viewing the world‘like’amarket,andgoverningit‘asif’itwereamarket,arehallmarksofneoliberalism.Contrary to the view that neoliberalism represents a form of ‘market fundamentalism’ or

simplyarevivalofnineteenth-centurylaissez-faire,infactthekeyinstitutionofneoliberalismis not a market as such, but particular market-based (or market-derived) forms ofeconomization, calculation, measurement and valuation. A particular vision or nostalgicimaginationofafreemarketmayprovidesomepoliticalornormativeorientationtoneoliberalthinkers,but it is thescientific techniques,devicesandmeasures thataremoreoftenused todrivemarket-likebehaviourandperformanceevaluationfurtherintoasocietyandpoliticsthataremoredistinctivelyneoliberal.Neo-classicaleconomics,whichrestsontheassumptionthatvalueresidesintheoptimalsatisfactionofstableandexogeneousindividualpreferences,hasbeenoneoftheforemosttechniquesviawhicheconomizationhasproceeded,especiallythanksto the work of the Chicago school of economics. Various other techniques of social andpolitical audit, quantification and risk management have followed in its wake. MarionFourcade has explored how even nature has become valued ‘as if’ it were a private,exchangeablegood,using techniques suchas ‘willingness topay’ surveys (Fourcade,2011).TheBritishTreasuryhascodifiedvarioustechniquesforcalculatingthehypotheticalpriceofnon-marketgoods,publishedtheminasingledocument,andnowinsiststhatalldepartmentsofgovernment justify their spending decisions using thesemeasurement devices (HMT, 2013).TheseproducewhatCaliskanterms‘prostheticprices’,which,incontrasttothosegeneratedatthemomentofmarketexchange,areconstructedthroughmodelsandothercalculativedevices,asstrategiestodictatehowworthisconstructed(Caliskan,2010).Inallcases,neoliberalismis typically less concerned with expanding markets per se, than in expanding the reach ofmarket-basedprinciplesandtechniquesofevaluation.Institutions which claim ‘authority’ or ‘legitimacy’, without any relationship to markets,

calculationorindividualchoice,becomethemostcrucialobjectofeconomiccritique,foritisthese whose rationale is least visible or explicit. Trade unions, guilds, cultural critics,families, artists, democratic procedures, law, traditions and professions all make claims toauthorityandjustification,byappealingtotacitand/orincalculablenotionsofwhatcountsasjusticeorthecommongood.Theyare,inasense,‘enchanted’byvirtueoftheirimplicitappealtoparticularvarietiesofpoliticalmetaphysics,whichexceedsorrefusesmeasurement.Theytypically abstain from offering factual, quantitative justifications for their existence andactivities, and employ language in ways that are self-consciously performative rather thanpositive.Neoliberalcritiquecannotsimplyabolishallof these institutions,or replaceallofthemwithmarkets,but the targeteduseofeconomicscanseek to replacenormative,criticalevaluation with economic, technical evaluation. Economization represents a replacement ofmultiple varieties of ‘political metaphysics’ with a single economistic variety of ‘political

physics’.Incommensurablevaluesandvisionsof‘thepublic’,‘social justice’,‘fairness’and‘right’ are all calculated and evaluated, in terms of the quantitative language of efficiency,price and preference. Any source of intrinsic authority is emptied out, and replaced withextrinsic evaluation, yet this necessarily bestows intrinsic authority upon the economictechniquesviawhichthatevaluationiscarriedout.

TheproblemofsovereigntyAmongst all of this, neoliberalism’s greatest dilemma concerns political sovereignty, in thesenseofanultimatesourceofpoliticalpowerorauthority.Sovereigntyrepresentsaparticularform of ‘political metaphysics’, but one which makes claims about the ‘final’ source ofpolitical power, rather than the ‘final’ measure of the common good. It is in the nature ofsovereigntythatitsfullphysicalpotentialisneverquiterevealed,whichishowitsucceedsinstrikingfearandestablishingorder.AsintheclassicHobbesiandefinition,thesovereigntyofthemodernstateexistsasaformofinvisiblepotentiality,whichenablesindividualsinafreesocietytotrustoneanother,seeingaseachbelievesthatthispotentialityisrealandcapableofenforcing order. A state which revealed its full capacity for violence would have becomemerelyphysical(andtherebyfiniteandmeasurable),andlost thesenseoftranscendencethatgaveitanauraoflimitlesspower.Sovereigntyismetaphysicalinthesensethatitworksthroughbeinglargelywithheld,andis

exercisedpartlytoprovideproofthatitexists.Solongaseveryonecontinuestobelieveinasource of sovereignty, then no further tests or visibility are required. Sovereignty can beperformed, but it cannot be empirically proven or tested. A sovereign relies on particularrituals,texts,objectsandbodies,whicharepresumedtomediatebetweenthevisibleworldoffinite objects, and these unseen reserves of power. The clothing of sovereign actors or thewords they recite in a certain order are a constant reminder of the state’s unseen, unspokencapacity toenactviolence, inexcessofanything thatcanbecalculatedor rationalized.Thisisn’t to say that differentvarieties of sovereignty can’t alsomake claims about the commongood. The notion of ‘popular sovereignty’ assumes that the ultimate source of power liesoutsideofthestateinthepopulace,while‘legalsovereignty’dependsonatacitunderstandingthatthelawshouldbeapplied toeveryone in thesameway.Thesemetaphysicalentitiesgetentangled with the potentiality of violence, to produce the sovereign political symbols andofficeswhich sit at theheartof themodern state. Inall cases, sovereigntydependson therebeing more to political institutions than meets the eye in terms of physical force. Politicalstrategieswhichseektorenderstateandsocietyentirelyvisiblealso,therefore,seektoemptythemofsovereignauthority.As Foucault highlights, the typical neoliberal stance towards any claim to sovereign

authority is to ridicule it. In a close parallel to the positivist critique of metaphysics, ‘theeconomic critique the neoliberals try to apply to governmental policy is also a filtering ofevery action by the public authorities in terms of contradiction, lack of consistency andnonsense’(Foucault,2008:247).Ifsovereigntyistoexistatall,thenitcannotbydefinitionberenderedcalculableormeasurable:itexceedsthelimitsofmereutilitarianpolicy.Tobesure,

Foucaulthimselfwasclearthatimmanentpracticesofexpert,utilitariangovernmentalitymustco-exist with sovereign institutions, such as law or parliament, rather than displace them.3Sovereigntyandgovernmentalityexist inparallelplanesofpoliticalontology,oneexceedingany empirical manifestation of power, the other rooted entirely in tangible practices ofmeasurement, construction anddiscipline.But thepolitical riddleof neoliberalismhasbeenthat it seeks to criticize and reinvent sovereign bodies, using positivist and evaluativetechniquesthatnecessarilymisrepresentwhatmakesthosebodiessovereigninthefirstplace.Itmakesthemodernstateanobjectofeconomicrationalization,andnotonlyanagent.Atthesametime,asapracticalpoliticalproject,neoliberalismhasbeenheavilydependent

onsovereigninstitutionsinordertocarryoutitsreinventionofliberalismandtransformationof society. The necessarily excessive, incalculable nature of sovereignty makes it animpossible object of complete economization, and for this reason it is an object thatneoliberalshavebeendrawn to likemoths to a flame, as it represents constantlyunfinishedbusiness.Neoliberalismseekstoplacesovereigntyoneconomicallyrationalfoundations,butthenbecomesentangled inquestionsregarding theauthority–ultimately thesovereignty–ofeconomic methodology as a basis for political critique, decision making and rule. Thediscourseandtechniquesofeconomicsarenotself-justifying:noformalrulecanalsoindicatehow,orwhether,itshouldbeobeyed.Asaresult,positivisttechniquesofrationalizationwilldependonsilent,unseensourcesofobligation,betheytacitlyunderstoodnormsofcooperationortacitlyunderstoodsourcesofpoliticalpower.

SpheresofeconomizationThe insight of convention theory, that ‘political physics’ is always derivative of ‘politicalmetaphysics’,becomesapowerfulbasisonwhichtounderstandthelimits,failures,varietiesand crises of this sovereign economization. Positivist economic techniques,which are usedwithabandonacrosssocial,economicandpoliticalrealms,mustneverthelessbeaccompaniedby some intrinsic justification for their use.Where the numerical, formal representations ofeconomics lack some tacit, unspoken moral authority, they lose the capacity to produce ashared socio-economic world, recognized by multiple actors as ‘real’.Where they are nottacitly backed up by sovereignty, they lack the power and legitimacy that are necessary togovern populations and economies. But seeing as how neoliberalism specifically seeks torationalize, quantify and de-mystify sources of sovereign authority, such as law, executivepoweranddemocraticritual,itinadvertentlyunderminesitsowncapacitytogovernwithanyform of metaphysical authority. The numbers and calculations it produces, by way of analternative to notions of ‘justice’, ‘common good’ and ‘public interest’, potentially come toappeararbitraryandmeaningless,intheabsenceofsomehigherclaimregardingtheirpoliticallegitimacy. In this respect, in its entanglements with sovereignty, neoliberalism desperatelysawsat thebranch it sitson.Exactlyas JamiePeckargues, ‘neoliberalism’scursehasbeenthatitcanliveneitherwith,norwithout,thestate’(Peck,2008:39).And yet neoliberalism has succeeded in constructing and sustaining forms of political

authority,includinglegitimateformsofstatesovereignty.Ithas,tosomeextent,foundwaysof

coping with its own contradictions, for otherwise it would be incapable of governing ascoherentlyas itdoes(orhasdone).Itsmarket-basedprinciplesandtechniquesofevaluationdo,inpractice,succeedinbeingweddedtothestate,andemployedasabasisforauthoritativepoliticalaction.Aswillbeexploredinlaterchapters,thisisonlypossiblebecauseeconomictechniquesthemselvesbecomeimbuedwithaquasi-sovereignformofauthority–thatis,theybecome ritualized and rhetorically powerful. They come to provide the procedures,constitutionalframeworksandaestheticflourisheswhichunderpinmodernpoliticalauthority.Like the revolutionary pigs in George Orwell’s Animal Farm, who eventually becameindistinguishablefromtheirformermasters,economicsentersthepoliticalrealmwithanethicof cold, positivist rationalism, but gradually takes on the qualities of the ‘nonsensical’sovereignpowersthatitwastaskedwithdisplacing.Wheneconomicsisusedasasubstituteforlaw,eventuallyitbecomeslaw-like.Ifeconomicsistoprovideasubstituteforexecutivedecision, it must somehow acquire the same form of charismatic authority as the decisionmaker. The financial crisis has rendered this fusion of sovereignty and economics farmoreexplicit, as national states have had to draw on exceptional political resources in order toreinforce an otherwise collapsingmarket logic (Davies, 2013). The ontology of neoliberalpower is therefore rivenwith a fundamental ambiguity (or even aporia),whereby it hoversbetweenthemeasurableandtheimmeasurable,theempiricalandthetranscendent.Positivismbecomes imbued with metaphysics, so as to maintain its epistemological and politicalauthority,withoutceasingtobepositivist.Whatwewitness in theneoliberaldisenchantmentofpoliticsbyeconomics is thereforea

series of movements, which can be described in the following sequence. Firstly, a set ofeconomic techniques for measurement and evaluation arises in and around markets. Thesetechniques are dependent on and derivative of various normative presuppositions aboutintrinsicvalue,whichhistoricallycontributed to the justificationandspreadof freemarkets.Secondly,thesetechniquesformeasurementandevaluationbecamecodifiedasthebasisofaprofessionalscientificdiscipline,fromthe1870sonwards,followingthebirthofneo-classicaleconomics. From this point forward, it was no longer inevitable that economics had anynecessaryrelationshiptoeconomicinstitutions,althoughitremainsimplicitlyderivativeofacertainmarket-basedmoralphilosophy. Itbecamereinventedas thestudyof rationalchoice,which in its more behaviourist twentieth-century manifestation, was purely focused uponobservablephenomenatobemodelledmathematically.Thirdly, these techniques became applied to evaluate and criticize the state (and various

other social andpolitical institutions) from the1950sonwards.Debunking claims regardingthe‘fairness’oflaworthe‘publicethos’ofbureaucracy,andofferingquantitativeanalysesintheir place,was themajor achievement of neoliberal critics during theKeynesian era.Andfourthly, as these techniques infiltrated sovereign, political institutions from the 1970sonwards,theybegantoacquireformsofpoliticallegitimacythattheythemselvesareunabletoexplain.Under‘actuallyexisting’neoliberalism,techniquesofeconomicrationalizationrarelycolonizeor invade thepolitical,publicandsovereign realms,as themetaphorof ‘economicimperialism’wouldhaveit,withoutsomejustificationoftheirown.Disenchantmentisneverquite as successful as that. Instead, they adapt to the particular rhetorical, normative andpragmaticpurposesoftheactorswhousethem.Theyborrowelementsofthemodernauthority,

which theyareoutwardlyhostile to.The ‘politicalphysics’ofeconomicsadapts toco-existwith the ‘political metaphysics’ of modern political authority, and the normativepresuppositionsofthepolicymakers,lawyers,politiciansandpublicactorswhoarethetargetofneoliberalrationalization.Itfollowsfromthisthattheeconomicrationalizationofpoliticsandthestateisanecessarily

heterogeneous, multi-faceted project. Neoliberal economization encounters political andsovereigninstitutionsshapedpartlybyaliberallogicofseparation.Separationofpowers,thecornerstoneofliberalconstitutionalism,leavesahybridsovereignpoliticallegacythatcannotsimply be re-integrated via a blanket economic audit. The task of extending economics intopolitical and sovereign realms is obstructed by the fact that there are multiple andincommensurable notions of authority at work in modern polities. Conventions ofeconomizationmustadapttotheirspecifictasksandobjects,meaningthattheytoodevelopinincommensurableways.Viewedpragmatically, the economic ‘imperialism’ of neoliberalismcomestoappearfarlesshomogeneousandall-consumingthanitscriticsmightfear.Differentpolitical and sovereign objects require different conventions of evaluation in order to berendered measurable and economically calculable. The judiciary represents a differentchallenge for neoliberalism than the executive, and the legislature represents a differentchallenge again.Arguably, neoliberalism overcomes the separation of sovereign powers byasserting the ‘ultimate’ (extra-juridical, undemocratic) authority of executive decision: thisSchmittianpropositionisexploredinlaterchapters.Theepistemological taskis toeradicate‘separate’politicalandsocialrealms,externaltoeconomicanalysis,whilethetoolsareasetoftechniquesandprinciplesthathave(inthepast)beenassociatedwiththemarketsphere.Butbeyond that, there is ample scope for adaptation, flexibility and innovation.New techniquescan be invented, and new interpretations of ‘market’ principles can be offered. Neoliberalappeals to ‘themarket’ have often been used to defendmonopolistic corporations; this is aflexible rhetorical project. The interplay of state, economic expertise and normativejustifications isafluidandcontingentone.There isnosingle,ultimatedoctrineofeconomicrationalitywhichallpublic,politicalorsovereignactionscanbemeasuredagainst,althougheconomicexpertswillspeakandactasiftheirdoctrineis‘neutral’and‘objective’.Thanks to the plurality of sovereign domains and the plurality of conventions of

economization,neoliberalismconfrontstheproblemofincommensurability.Thereismorethanone way of calculating the most ‘efficient’, ‘competitive’ or ‘welfare-maximizing’ policy.Different formsof political authority conditionhowdifferent formsof economic calculationproceed, contributing to different normative stances towards the problem of economicuncertainty:someofthesewillbeexploredinlaterchapters.Economictechnocracyencountersitslimits,whenrivalvarietiesofmeasurementandcalculationclashwithoneanother.Thesedraw their authority from different political sources, as they employ economics to providedifferent types of legitimacy.Todo so, they assumedifferent implicit accounts of economicagency,derivingfromdifferentimplicitaccountsofhow‘free’marketsought,inprinciple,towork. The realpolitik of the neoliberal state means that economic calculations, moraljustificationsandpoliticalimperativesareconstantlyimpactingupononeanother.Theimageofahomogeneouslyeconomizedpoliticalorpublicrealmthereforeremainsanillusion,thoughonewhichservesvariouspoliticalinterests.Followingitsdisenchantmentbyeconomicsand

mantrasof‘transparency’and‘evidence’,politicsmutatesintosomethinglessvisible.

StudyingtheNeoliberalExpert

Theneoliberal state isanaggressivelyutilitarianstate, in thesense that it seeks tomakeallpolitical, legalandpublicactionsubject toquantitativeempiricalevaluation.ManyChicagolawandeconomicsscholars(thetopicofChapter3)acknowledgetheirdebttoBentham,whothey view as the pioneer of extending economic critique into the state (Kitch, 1983). Oncerendered economically rational, the state is no threat to neoliberals, but instead their mostimportant weapon. But the question then surely arises: how is this different from therationalized, bureaucratic, welfare state? To what extent does this (heterogeneously)economized sovereign statedefend the formof liberty (i.e. uncertainty)demandedbyHayekandhiscontemporaries?Whatistopreventtheseexpert,economizedpublicinstitutionsfromthemselves replacing ‘the impersonalandanonymousmechanismof themarketbycollectiveandconsciousdirectionofallsocialforcestodeliberatelychosengoals’,justasthesocialistplanner had? The promotion of instrumental rationality, as a defence against politicalromanticism and/or socialism, is a concern that placesmany neoliberals close toWeber intheir sociological orientation (Gamble, 2006).But to argue that neoliberalismmerely seeksgreatermeans-endsrationalityingovernmentis tomisstheprecisemodesofauthoritythat itseeks.The planner is the first and primary enemy of neoliberal political thought (Hayek, 1944,

1945;Friedman,1962).Producingabasis formodern,expertpoliticalauthoritywithout thepotential to justify centralized economic planning was an over-arching goal of Hayek’sintellectualcareer,andshapedtheprojectoftheChicagoeconomistswhofollowedhim(evenwhile they departed from him in important epistemological andmethodological ways). Thespectreoftheplanner–imposingasinglesetofvaluesuponthecollective–hauntsneoliberalthought and policy practice as the enemy of freedom. And yet under ‘actually existing’neoliberalism,onecouldpoint toagreatdealofevidence thatBenthamiteutilitarianismhasindeedledtoextendedgovernmentalinterventions,andeffortstointerveneinprivatechoices:thiswasundoubtedlytheexperienceofmanypublicsectorworkers,professionsandpublicly-funded academics from the 1980s onwards. Hayekians might argue that the experience of‘applied’ neoliberalism owed very little to Hayek’s critique of centralised expertise, butneoliberalismisnotonlyaparticularformofbureaucratization,andnotonlydistinguishedbythefact that ituseseconomics(andothertechniquesassociatedwiththemarketsphere)withwhich to carry out its evaluations and audits. Its authority claims, what knits its disparateadherentstogether,andthebasisofitsavowedliberalism,alsoderivefromaparticularvaluethatispresentinmarkets,butcanbepushedintoallothercornersofsociety:competition.The great appeal ofmarket competition, especially forAustrian neoliberals, was that its

outcomewasunpredictable(Hayek,1963,2002).Thesensethatitmight,moreimportantly,beeconomicallyefficientwasonly takenup subsequentlyby theChicagoSchool (Bork,1978).Andyetastheworldofsporttestifies,vibrantcompetitionsstillcreateaneedforexpertsandauthorities, to create the rules, arenas, events, league tables and prizes for thosewho enterthem,andtotrain,motivate,disciplineandpunishcompetitors.Oncewearespeakingofthese

deliberatelyconstructedcompetitions,andnotsomeexistentialorbiologicalideaofemergentcompetition,wegetaclearerviewofthestrangeformsofauthoritywhichneoliberalismhasgeneratedanddependedupon.Weseenewbreedsofexpert–coach,regulator,riskmanager,strategist, guru – offering toolkits and advice on how to navigate and act upon a constantlychangingandunpredictableenvironment.Thesetechnocratsdonotfittidilyintocategoriesof‘science’or‘politics’,astheyareneither‘objectively’disengagedlikethescientist,norgoal-orientedlikethepolitician.TheyareexamplesofwhatMirowskihastermedneoliberalism’s‘anti-intellectual intellectuals’: expertswhodeclare that stable consensus is impossible, butnevertheless assert their capacity to rule over the unstable dissensus that results.What theyoffer are evaluative techniques through which to quantify different options, rank differentcandidates, give scores to different agencies. In a world organized around the pursuit ofinequality,thatis,byanethicofcompetitiveness,theseexpertsareabletorepresenttheworldinnumericalhierarchiesofrelativeworth.Itisnotjustcoldinstrumentalreasonthatunderpinstheauthorityofeconomicsintheneoliberalstate,butalsoitscapacitytoquantify,distinguish,measure and rank, so as to construct and help navigate a world of constant, overlappingcompetitions. The pragmatic utility of economic methodologies is to provide commonmeasures and tests against which differences in value can be established. People do not‘naturally’appearasunequal(norshouldweassumethey‘naturally’appearequal).Theveryquestionoftheirsamenessandtheirdifferenceisonethatonlyarisesthankstocertainmoralandtechnicalclaims,offeredbyvariousactorswithvaryinglevelsofauthorityandexpertise.Theexpertonwhichneoliberalismismostdependentis theonewhoisabletoevaluateandscorecompetitors,withoutbringingaboutsomeexcessivelypeacefulresolutiontothecontest.Experts of this nature have a paradoxical form of authority that is itself unstable. These

expertsproduceavisionof society inwhichalldifferencesare representedas comparativeinequalities. But this alsomeans that inequalities in power are also merely empirical andquantitative, meaning that they cannot possess any legitimacy. Those offering orders –bureaucrat, politician, manager – are to be obeyed simply because of asymmetries inempirical,physicalpower,notbecauseofthereasonsthatmightbegivenforobedience.Inthebuilduptothefinancialcrisisof2007onwards,itwascommonlyremarkedthatoneproblemwasthatfinancialregulatorsandcreditraterscouldnotcompetewiththevastsalariespaidbythebankstheyweretaskedwithevaluating.Thisis theendgameofneoliberalism:normativeauthoritycollapses intoempirical inequalities ineconomicpower,and then thesystem itselfbecomes untenable, save for where new reserves of power can be found throughwhich toenforceit.

OutlineandapproachofthebookThe interpretive turnawayfrom‘criticalsociology’ to the‘sociologyofcritique’ invites thequestionofwhatisaddedtothecriticalandevaluativeaccountsprovidedbytheactorsbeingstudied.Why read a pragmatist interpretation of neoliberal theory, and not simply read theneoliberal theory itself? Why perform social science at all, if not to impose a differentyardstick of measurement or critique from the one that is already in use by the actors

concerned?Itneedstobestressedinresponsetothesequestionsthatthestudyofconventionsremainstheoretical:itstillseekstousetheaffordancesavailabletotheexternalobserver,inordertoproduceanarrativethatwasnotpreviouslypresent(Boltanski,2012:31–32).Aboveall, there is the pragmatist assumption that, while individuals are possessed of a criticalautonomynotaccordedtothembycriticaltheory,theyneverthelessremainlimitedinthetypesofactions,decisions,statementsandroutinesthatareavailabletothem.Conventionsexistassetsofrulesthatconditionandlimittheformsoffreedomthatareavailabletopeople,althoughthe ability to switch from one normativeworldview to anothermeans that freedom extendsbeyondthetramlineslaiddownbyanysinglemoralsystem.Discoursealwayspresumesandcommunicatesmore than itexplicitlyexpresses,and the taskofhermeneutics is tobring thisbackgroundcontextandpresumedunderstandingintotheforegroundasareminderofwhatcanotherwisegetforgotten.But how to identify these conventions? How do they come to light, and what counts as

evidence of them? In the first instance, they can be described via what Weber termed‘theoretical constructs’ – artifices introduced by the sociologist, in order to make differentformsofmeaningfulactiondistinguishablefromoneanother.Noamountof‘data’isadequatetoprovethatthesearerealorvalid:actorsthemselvesmaynotrecognizethem.Thesemodelsor ideal types are hermeneutic devices, whose validity is to be judged in terms of howsuccessfullytheycontributetotheunderstandingofothers’actions.Aninterpretivemodelcanonlybeconstructedwithadegreeofspeculationandimagination.AsBoltanskiargues:

We are in a position to understand the actions of persons when, by putting this model to work, we have grasped theconstraintsthattheyhavehadtotakeintoaccount,inthesituationinwhichtheyfoundthemselves,inordertomaketheircritiquesortheirjudgementsacceptabletoothers.(Boltanski,2012:33)

The task is to describewhat is presupposedwhen claims about socio-economic reality arebeingmade.Thisispartlyaquestionofidentifyingthemethodologiesandmeasurementsthatarebeingused inmaking theseclaims,butprior to that thereare theassumptionsofwhat iswortharguingoverormeasuringinthefirstplace.Whereexpertsseektohideorforgetsuchpresuppositions, or deny normative or political dimensions of their actions, this type ofexcavationacquiresacriticaldimension in itsownright, that, likegenealogy,brings to lightthe fluidity, politics and contingency of taken-for-granted types of truth. This requires us toread positive economics ‘as if’ it were political theory, inverting the neoliberal project ofmeasuringpoliticalactors‘asif’theyweremarketactors.Conventiontheoryhasoftenbeenputtoempiricaluseinthestudyofthemicro-dynamicsof

organizational life, so as to showhowdifferent notions of value are present in specificallysituateddisputes(e.g.Jagd,2011).Butitcanbescaledupinordertounderstandthemultipleandconflictingwaysinwhichsocialandmoraltheoryframesbroaderdisputesoverquestionsofjusticeandtruth,organizingtheveryproblemofmodernity(Wagner,2008).Thefocusinthisbook is on themultiple types of political authority that neoliberal critiquemakes available,specificallytothestate.Thesetypesareneverprescriptiveastoexactlywhatthestateshoulddo.Rather,theyareimmanentmoral-politicalphilosophiesthatprovideloosecoherencetothetechniques, methodologies, measurements and interventions of state actors, providingeconomiccritiquesof thestate foruseby stateactors.Borrowing theapproachofBoltanski

andThévenot’sOnJustification, I approach them through rhetorics of political philosophy,usingconflictingphilosophiesofthecommongoodtoidentifyrivalwaysinwhichthestatecanpursueeconomicallyrationalprogrammes.Threeinparticularareexploredinlaterchapters:the liberal-juridical; the violent-executive (which tips into the exceptional); and thecommunitarian.These provide latent notions of authoritative political action that shapehoweconomisticevaluationproceedsinandaroundthestate.Ifacentraltaskofneoliberalismistomakethestate‘market-like’,reducibletoquantitativeindicatorsandfacts,theremustbewaysorstylesinwhichthisdisenchantmentispossiblewhilestillmanagingtoappearlegitimate.The analysis in subsequent chapters is basedon readingsof texts and, in some instances,

interviews with government officials and advisors in Washington DC, London and theEuropeanCommission.Empirically,thefocusisuponcasesofexpertdiscoursewhichbridgebetween economics and public administration in various ways and at various historicalmoments.Theexperts that interestmearecriticsof thestate, thoughsomealsoworkfor thestate, be it as permanent officials, temporary advisors or consultants. They implement theirtechniquesandmeasuresinordertoevaluateaspectsofthestateonthebasisofvariousformsof economic rationality.Manyof themmovebetween academia, think tanks andgovernmentagencies, circulating ideas, evidence andmethods as they go. This interpretive approach topolicy elites is now an established tradition in political science (Yanow, 2000; Bevir &Rhodes, 2004; Fischer, 2009). The intriguing thing about policy experts and critics, from aconvention theory perspective, is that in their individual statements and actions one canidentify the justificatory resources that are available to the state more generally. If thedistinctionbetween the ‘micro’ and the ‘macro’ is a technological and rhetorical one ratherthananontologicalone,thenthereis‘macro-political’interestinstudyingstatementslikelytohave large-scale rhetorical and performative power (Latour, 2005; Boltanski, 2012). Theontologyofthestateassuchisnotdirectlyaddressedhere,insteadthequestionsarethoseofhow sovereignty can be rendered economically empirical while still retaining sufficientmetaphysicalandperformativeaurainordertoholdtogetheraslegitimateandpowerful.Thisisbyitsverynatureaparadoxicalventure.Therestofthebookisdividedasfollows.Chapter2addressestheideaofcompetitionasa

central organizing principle and ideal of neoliberal political authority. The neoliberal stateacquires authority fromgenerating and overseeing competitive activity, and this competitiveactivity then facilitates certain varieties of political authority. The chapter explores theparadoxicalqualitiesof competitionas a formoforganization, inwhichactors are formallyequalattheoutset,andcontingentlyunequalattheconclusion.Yethowthatformalequalityisdefined,andhowmuchcontingentinequalityispermitted,isopentovariousinterpretations.Chapter3 explores theChicagoLaw andEconomicsmovement,which transformed legal

andregulatoryunderstandingofcompetition,inwaysthatshapedreformsintheUSAduringthe1980s and in the European Commission from the 1990s onwards. Law and Economicsdemonstrates the various properties and paradoxes of neoliberalism already explored inChapter1: it isaclearattempt toreplace thesubstantiveethosandmetaphysicsof lawwithpurelytechnicalmeasures.Yetindoingso,itpotentiallyunderminesitsownauthority.Chapter 4 carries out a similar analysis of ‘national competitiveness’ agendas from the

1980s onwards. Where Law and Economics saw neo-classical economics colonizing law,

‘competitiveness’expertsusedthefieldofbusinessstrategytocolonizetheexecutivebranchofgovernment.Nations,regionsandcitiesarere-imaginedascompetitiveactors–likefirms–and the question of political decision making is posed as one of strategic navigation ofeconomic uncertainty. Ultimately, the global economy comes to be treated as a competitivegameinwhichnationsaretryingtowin.Chapter 5 looks at ways in which ‘anti-critical’ thought and evaluation aremobilized in

order to avoid or delay a crisis. In recent years, and especially since 2007, various effortshavebeenmadetoreinforceexistingmodesofeconomicrationalizationanddefendthemfromcritique. Two in particular stand out here. Firstly, there are various ‘neo-communitarian’policy strategies through which ‘normal’ economic reasoning can be sustained, despitepsychological or neurological or sociological pressures against calculation: these includebehavioural interventionsaimedathelping individuals toact ina rationaleconomicfashion.Secondly,therearetheexceptionalsovereignmeasureswhicharetakentoensurethatexistingformsofeconomicrationalitysurvivevariousforces(suchastheglobalfinancialcrisis)thatmightotherwiseoverwhelmthem:theseincludethesuspensionof‘normal’marketlaw.Thelastchapterconsidersthefateofcritique.Pragmaticsociologyhasbeencriticizedfor

capitulating to expert governance and capitalistmanagement, and abandoning the critique ofexploitationanddomination.Thisposes thequestionofwhether theremightberouteswhichmoveintheoppositedirection,fromthesociologyofcritique,backtoamoreorthodoxcriticaltheory (Boltanski, 2011). The book concludes by seeking the political routes beyondeconomism and/or sovereign domination, and what other sources of authority might beimaginableandviable.

_____________________________1‘Tobeneutralmeanstohavenoanswertocertainquestions’(Hayek,1944:80).2Thereisanimportantdistinctionhere,whichoftengetselided,betweentreatingeconomicsasthecalculativetechnologyandtreatingmarketsasthecalculativetechnology.Markets,especiallyfromaHayekianperspective,absolvetheneedforeconomicriskmodelling,becausevariousjudgementsaboutthefuturearechannelledintotheprice.Conversely,economicmodelsseektoquantify uncertainty, as an alternative to consultingmarkets. However, models often play an important performative role inguidingmarketactorsbyproviding‘prostheticprices’toinfluenceactualprices(Caliskan,2010).

3‘Weshouldnotseethingsasthereplacementofasocietyofsovereigntybyasocietyofdiscipline,andthenofasocietyofdisciplinebya society, say,ofgovernment. In factwehavea triangle: sovereignty,disciplineandgovernmentalmanagement,whichhaspopulationasitsmaintargetandapparatusesofsecurityasitsessentialmechanism’:M.Foucault(2007)Territory,Security,Population:LecturesattheCollegedeFrance,1977–78,Palgrave,pp.107–108.

2

ThePromiseandParadoxofCompetition

Markets,competitiveagencyandauthority

Since the banking crisis of 2007–09, public denunciations of ‘inequality’ have increasedmarkedly.Thesedrawonadiverse rangeofmoral, critical, theoretical,methodological andempiricalresources.Marxistanalyseshavehighlightedgrowinginequalitiesasasymptomofclass conflict,whichneoliberal policies havegreatly exacerbated (Harvey, 2011;Therborn,2012). Statistical analyses have highlighted correlations between different spheres ofinequality, demonstrating how economic inequality influences social and psychologicalwellbeing(Wilkinson&Pickett,2009).DatashowingextremeconcentrationsofwealthhaveledpoliticalscientiststoexaminetheUSpoliticalsystem,asatoolthroughwhichinequalityisactively increased (Hacker&Pierson, 2010).Emergent socialmovements, such asOccupy,draw a political dividing line between the ‘99%’ and the ‘1%’who exploit them. Politicalleaders and public intellectuals have adopted the language of ‘fairness’ in their efforts tojustify and criticize the various policy interventions which influence the distribution ofeconomicgoods(e.g.Hutton,2010).Itisimportanttorecognizethatthesecritiqueshavetwoquiteseparatetargets,althoughthe

distinctionisoftenblurred.Firstly,thereisinequalitythatexistswithinreasonablydelineatedandseparatespheresofsociety.Thismeansthattherearemultipleinequalities,withmultiple,potentiallyincommensurablemeasures.Theinequalitythatoccurswithinthemarketsphereisseparatefromtheinequalitythatoccurswithintheculturalsphere,whichisseparatefromtheinequality that occurs within the political sphere, and so on. Each sphere can potentiallydevelop its ownmetrics and norms of evaluation (or even its own currencies) to rank anddistinguishworth. For example, the education system is insulated from themarket, but stillproducesinequalitiesofoutcome,basedonitsownphilosophyandtestsofindividualworth.MichaelWalzer describes this form of inequality as ‘monopoly’ (Walzer, 1983). Secondly,there is inequality that erodes these distinctions and separations, enabling a single form ofinequalitytodictatetheothers,andonesourceofprivilegetobeconvertedintoothersources.This is most obviously manifest where economic inequality dictates political and culturaladvantages,andmetricsbasedaroundmarketpriceendupdictatingvaluesbeyondthelimitsofthemarket. For example, access to themedia is heavily influenced bywealth.This iswhatWalzerdescribesastheproblemof‘dominance’.Beingfungible,moneyisoftenthefacilitatorofashiftfrom‘monopoly’to‘dominance’.Marketpowercanbeconvertedintootherformsofpower.SinceRousseau, socialist critiquehas argued that economic inequality necessarily breeds

politicalinequalitybecauseofthenatureofprivateproperty;tolerating‘monopoly’withinthe

economic spheremust eventually lead to ‘dominance’ of power across spheres (Rousseau,1984). However, liberal critiques have focusedmore onmaintaining separate andmultiplespheres and measures of inequality. Unequal market outcomes are justified if they don’tdetermineoutcomeselsewhere.Thecritiqueofneoliberalism,asmanifestintherhetoricofthe‘99%’,oftenmovesbetweenthesetwodifferentcriticalregisters.Ontheonehandeconomicinequalityisdeemedtobesimplyexcessiveperse(acritiqueofmonopoly),ontheotherelitesare accused of having translated their economic power into political or cultural power (acritique of dominance). Much contempory critique portrays neoliberalism as based ondeception,wherebytherhetoricofopportunitywasusedstrategicallytohidethestrategiesofaverysmallinterestgroup.Andyetthepoliciesandeconomicrationalitiesthatfacilitatedthisrisinginequalitywerescarcelykeptsecretordevelopedbehindpeople’sbacks.Unlessonesubscribestoanotionof‘falseconsciousness’,thisraisesanimportantquestion:

why have somany critical denunciations arrived so late in the day?How did this extremeinequalitydevelop,withsolittleopposition?Oneansweristhatcapitalismhasdrawnonanti-capitalistcritiquetoconstantlyrenewandjustifyitself(Thrift,2005;Boltanski&Chiapello,2006).Capitalism that privileges constant flux ismore resistant to staticmodes of critique.Alternatively,onemightsuggestthat,following1989,thepopularcritiqueofinequalityshiftedfrom a socialist denunciation of economic ‘monopoly’ to a liberal denunciation of‘dominance’: economic inequality was tolerated, but only on the basis that it was‘meritocratic’, enabling ‘socialmobility’,which required a separation of themarket systemfrom the political and educational systems. This was the moral-political economy thataccompanied the Belle Epoque of the Blair and Clinton governments. It was this liberalpromiseofcapitalismthathas,arguably,beenmanifestlybrokensince2007.However, we need also to consider the role played by a more enthusiastic normative

perspective on inequality. From this perspective, that of neoliberal theorists themselves,inequalityissomethingtobeactivelygenerated,represented,tested,celebratedandenforced,asamarkofadynamicandfreesociety(Stedman-Jones,2012).Thisisoftenconcealedbythefact that the term ‘inequality’ has rarely been used in this affirmative sense, perhapsunsurprisingly since it refers only to an absence of something else (equality, howeverunderstood). Instead, rhetorics and theories of competition and competitiveness have beencentral toneoliberalcritiqueand technicalevaluationsfromthe1930sonwards.Toargue infavourofcompetitionandcompetitivenessisnecessarilytoargueinfavourofinequality,giventhat competitive activity is defined partly by the fact that it pursues an unequal outcome.Processes and rules which facilitate (or aim to facilitate) competition can themselves beunderstood as offering a normative sanction for inequality in some way. A society thatcelebratesandencourages ‘competitiveness’asanethos,be it in sport,business,politicsoreducation,cannotthenbesurprisedifoutcomesarethenhighlyunequal.Criticaldenunciationsofinequalityas‘illegitimate’maymissthewaysinwhichinequalityis‘legitimate’becauseitispubliclyandenthusiasticallylegitimated.Yetcompetition isn’tonlydefinedby inequalityofoutcome.As thischapterwillexplore,

‘competitors’mustbeginwithsomethingincommonwithoneanotheriftheyareto‘compete’.Inamarketplacethepricesystemprovidesacommonframeworkandlanguagewhichallshareandmust recognize if competition is to take place. Paradoxically, competition also requires

some sense of equality, at least at its outset, which may require political intervention tomaintainorproduce.Neoliberalismbeginsfromacritiqueofsocialistequality,butthisdoesnotmeanthatitoperateswithoutanyphilosophyofequivalenceatall.Itdependspreciselyonconstructing or imputing certain common institutional or psychological traits, aspreconditionsofthecompetitiveprocess.Theseserveasprinciplesofequivalence,viawhichlegitimate forms of non-equivalence can be quantified, constructed, represented andcelebrated.Thegreatappealofcompetition,fromtheneoliberalperspective,isthatitenablesactivity

toberationalizedandquantified,butinwaysthatpurporttomaintainuncertaintyofoutcome.The promise of competition is to provide a form of socio-economic objectivity that isempirically andmathematically knowable, but still possessed of its own internal dynamismand vitality. For Hayek, competition was a ‘discovery process’, and a ‘process of theformation of opinion’ (Hayek, 1963, 2002).The questionwhich defines different styles andtraditions of neoliberalism is this: what is the technical instrument through whichinequalitiesaretobeproduced,measuredandlegitimated?Whatremainsstatic,amidsttheflux of uncertainty? With what device is constant flux to be rendered empirical? In someinstances it will be the market price system itself (as favoured by Hayek), but in otherinstancesitwillbeeconomicmethodsandtheorieswhichareusedtogaugethe‘efficiency’or‘competitiveness’ofinstitutions,communitiesorindividuals,withoutthisbeingtestedbyanymarketassuch.Iftheessentialtraitsofamarketcanbeidentified,theycanalsobeextractedand reinvented in non-market contexts. As the previous chapter argued, reconfiguringinstitutions to resemble markets is a hallmark of neoliberal government. The questionaddressedbythischapteriswhatprinciples,techniquesandsourcesofauthorityareemployed,inordertogenerateandgoverncompetition,bothinsideandoutsideofthemarket.Thechapterisorganizedasfollows.Firstly,Iexplorethejustificationsforcompetitionthat

weremade by a set of thinkerswho I shall refer to as the ‘early neoliberals’. ThesewereprimarilyEuropeaneconomistsandphilosopherscriticizingsocialistandKeynesianplanningbetween 1929–45, including Hayek and Mises, Henry Simons in Chicago, and the ‘ordo-liberals’inFreiburg.Thesethinkersidentifiedcompetitionasthemarket’sessentialnormativecharacteristic,andusedthisasabasisonwhichtoadvocategreatermarketfreedoms,activelyproduced by the state. Secondly, I briefly review the theoretical innovations of twocontemporaries of the neoliberal movement, who produced empirical justifications for andmeasuresofnon-marketcompetitiveactivity.TheseareRonaldCoaseandJosephSchumpeter,bothofwhomoffer theoriesof capitalist competition that extendbeyondmarket institutions,which would prove crucial for subsequent neoliberal policy making. Thirdly, I addresscompetitive activity in formal and pragmatist terms to try and understand what types ofauthorityitrequiresandfacilitates.Bywayofpoliticalidealtypes,Idescribetwosourcesofauthority affordedbycompetition: there is aquasi-liberalone,wherebyapriori fairness isimposedupon thecontest,andaquasi-violentone,whereby inequality issoughtatallcosts.Politically, competition is characterized by the confluence and tension between these twoformsofauthority.InconclusionIaskwhatitwouldevenmeanforneoliberalismtoencountera ‘crisis’, given that uncertainty and inequality are entirely in keeping with the neoliberalproject.

TheJusticeofMarketCompetition

Markets are places or spaces in which competition takes place, between suppliers andbetween customers, such that there is choice regarding opportunities for exchange. Everyempirical claim that liberal economics has made for markets, as welfare-producinginstitutions,datingback toAdamSmith,hasdependedon the recognition thatcompetition isoneoftheirdefiningcharacteristics(Smith,1999:159).Itistherecognitionthatthesamegoodhasmorethanonepotentialproducer,andmorethanonepotentialpurchaser,thatallowsthemarketpricemechanismtomagicallyriseandfalluntilithassettledatapointwhereexchangecan takeplace.Where there isonlyoneavailableproduceroronlyoneavailablepurchaser,thatindividualorinstitutionhasthepowertofixthepriceatalevelthatsuitsthem,constitutingamonopoly.Welfare economists define this ‘market power’ – where one party can set theprice unilaterally – as one particular class of ‘market failure’ (Pigou, 1912). Weber alsoadoptedaclassicalliberaldefinitionofamarket,asexistingwhereverthereis‘competition,even if only unilateral, for opportunities of exchange among a plurality of potential parties’(Weber,1978:635).Competition,alongwiththeinstitutionofmoney,guaranteesthatmarketsarea‘positivesum

game’.Aslongastwopartiesbothactintheirowninterestandhavemultiplepartiesavailableto carry out exchanges with, the outcome will be an increase in the welfare of all. Thisutilitarianargument,with its assumptionsaboutcompetitionand thepotential equivalenceofmoney and goods, sits at the heart of the liberal defence ofmarkets, as publicly beneficialinstitutions.Itcanevenworkinreverse,withmarketcompetitiondefinedasthemaximizationof utility (e.g. Walras, 1954: 235). But surprisingly, it scarcely features at all in earlyneoliberal thinking.Competition isundoubtedlyvalued,but for itsprimarilymoral,politicaland epistemological qualities, not its utilitarian or economic ones. As Hayek argued, theneoliberal:

regards competitionas superiornotonlybecause it is inmost circumstances themost efficientmethodknownbut evenmore because it is the onlymethod bywhich our activities can be adjusted to each otherwithout coercive or arbitraryinterventionofauthority.Indeed,oneofthemainargumentsinfavourofcompetitionisthatitdispenseswiththeneedfor“conscioussocialcontrol”.(Hayek,1944:38)

Hayek’s political pessimism stemmed from his belief that ‘conscious’, deliberate economicplanninghadcometoreplacefaithin‘unconscious’,unintendedoutcomes.Planningwaswhathad usurped liberalism,with themost severe political consequences.And yet by proposingcompetitionasthealternativetoplanning,Hayekandtheearlyneoliberalswereadamantlynotproposing a straightforward return to Victorian laissez-faire or a ‘small state’ (Foucault,2008).Thecrucialaspectofcompetition ingeneral,andofmarketcompetition inparticular,was that it offered a policy alternative to both planning (whether of the socialist, NationalSocialistorKeynesianvariety)andtraditionalliberalism.InHayek’sview,thesuppressionofcompetitionwasthedefiningcharacteristicofallformsoftotalitarianism,hencetheclaimthatliberal and democratic societieswhich suppressed competitionwould not remain liberal ordemocraticforlong.IwanttosuggestthatwhatHayekandhiscontemporariesseizedonwerecertain crucial paradoxes of competition, through which they hoped to triangulate betweentraditional nineteenth-century liberalism and various forms of twentieth-century planning.

Underlyingthisisaquestforamodeofinstrumentalrationalitythatpreservesuncertainty,andamodeofscientificenquirythatdoesnotresultinstableauthoritativetruths.Theparadoxesofcompetitioncanbemappedinvariousways.Firstly, promoting competition offers a role for the state that is crucially both active (in

commonwithsocialiststates)anddisengaged(incommonwithVictorianliberalstates).The1890s represent a crucial decade in the genealogyof neoliberalism, for itwas then that theGerman,AustrianandUSgovernmentsintroducedthefirstpiecesofmoderncompetitionlaw,startingwiththeAmericanShermanActof1890.Liberalpoliticaleconomistshadarguedthatcompetitionarosenaturallyandinevitably, thanks to theproximityofmultipleproducersandcustomers to one another and the use ofmoney.However, the conglomerations, cartels andincorporations of the ‘Second Industrial Revolution’ of the 1880s and 1890s changed that,demonstrating that large, professionally-managed hierarchies could easily dominatemarkets,eradicatingcompetitorsthroughsheerforceofwill.Thisthencreatedanewroleforanactivestateinartificiallyandlegallyestablishingtherulesofthemarket:thestateactivelyintervenedvia anti-trust, but without seeking to determine any particular outcome. Hayek was evenpreparedtodescribecompetitionpolicyasplanningofasort,butauniqueform,whichdidnotimposea‘conscious’objectiveorparticularmoralvisionuponthecollective.1Enforcingandpromotingcompetitionrepresent interventions in theformof theeconomy,butnot itscontent(Foucault,2008).Secondly,competitionrepresentsaparadoxicalcombinationofequalityandinequality.The

structureofanorganizedcompetition(including, in the liberal imaginary,amarket) involvescontestantsbeingformallyequalattheoutsetandempiricallyunequalattheconclusion.Theneoliberallegalscholar,WilhelmRöpke,toyedwiththisenigma,proposingthat‘inequalityisthe same for all’ (quoted in Foucault, 2008: 143). The neoliberals of the 1930s and 1940swereadamantthatcompetitionpossessednormativityofasortthatwasnotunliketheliberalnormativity of justice. This similarity between a form of Kantian, juridical liberalism andtechnocratic,economicneoliberalismderivesfromthefactthatbothhaveanaprioriviewofindividuals as equal.Hayek observed that ‘although competition and justicemay have littleelse in common, it is as much a commendation of competition as of justice that it is norespecter of persons’, in the sense that it treats them all blindly and equally (Hayek, 1944:105).Yetasanorm,competitionisunlikeanyother:themostimportantruleofanycompetitionisthatthecontestantsmaynotcooperateorseektoactinanaltruisticormoralfashion.Itisaninjunction to ignoreallmoral injunctions,and toactcombatively inpursuitof inequality.Solongasallthecompetitorsobeythissinglenorm,thentheoutcomewillbeunpredictable.Solong as they recognize each other as equals at the beginning of the contest, then they havecompletelibertytomaximizerelativeinequalityoverthecourseofthecontest.WhereSmithhadviewedcompetitionassomethingthatemergedorganicallyfrommarkets,

the early neoliberals viewed competition as something to be designed, legislated for andplannedbyathirdparty.Sincetheeraofclassicalliberalism,managementhadappearedasaformofexpertisespecificallydedicatedtocontrollingeconomicprocesses:theenforcementofcompetitionwasnecessarytocounterbalancethisnewpower.Competition’squasi-normativelegitimacyderivedinpartfromthefactthatithadrules,regulationsandlimits–thatis,ithadauthoritieswhowere available to enforce it, using sovereign law.Thepromiseof anti-trust

was absolutely crucial in this regard, offering a uniquely paradoxical route out of theHobbesianchoicebetween statepower andanarchy.Anti-trust is a strangecaseof the stateacting toprevent theoutbreakof economicpeace.Simonswent as far as suggesting that theFederal Trade Commission (one of the two US anti-trust authorities) become the mostpowerful executive branch of government (Simons, 1937). The ordo-liberal school, thatexisted aroundWalter Eucken in Freiburg, identified cartels as a necessary precondition ofNazipoliticaleconomy,andconsequentlyadvocatedlegislativeattacksoneconomicpowerasa central component of any revitalized postwar liberalism. During this time, European andAmericanneoliberalssharedaworldview,inwhichaforcefulruleoflawwouldberequiredin order for themarket to retain its competitive form.This had the benefit of defending theliberal properties of markets from monopoly and cartels, but it also had the benefit ofrestrainingthestatefromimposinggoals,plansor‘conscious’directiononsociety.Asthenextchapterwillexplore,fromtheearly1950sonwardstheChicagoSchoolbecamepreoccupiedwith the dangers of state power, and increasingly downplayed the dangers of monopolies’economicpower.Acriticalquestion,whichcutstotheheartofhowneoliberalismisrealizedinpractice,is

this:iscompetitiontobedefinedbythedegreeofformalequalityguaranteedatitsoutset,orbythe degree of contingent inequality that is produced as its outcome?Ultimately, competitionmustupholdadegreeofeach,onewayoranother,orelseitsperceivedfairnessorvitalitywillcollapse. But we will see how neoliberals changed their emphasis on different aspects ofcompetition,gradually relinquishing thepriorityof formalequality (which, in theUSA,alsounderpinnedtheJeffersonianidealofsmall-scaleproducersinamarketplace)andincreasinglyfocusinguponcontingentinequalityofoutcomeasthecriticalfeatureandtestofacompetitivesystem.Following this, we might add a third way of understanding the paradoxical qualities of

competition, as both an object of knowledge and policy: as a socio-economic practice orinstitution, it defies or transcends the disciplinary division between sociology and neo-classicaleconomicsthatemergedfollowingthemarginalistrevolutionineconomicsduringthe1870s(Fine&Milonakis,2009).Insimpletermsthissplithadproducedrivalsocialsciences,one focused upon individual rationality, calculation and value, and the other focused uponinstitutions, norms and values. The challenge of socio-economics, ever since the demise ofclassicalpoliticaleconomy,hasbeentofindapathbetweenanexcessively‘under-socialized’viewoftheworld,inwhichalloutcomesareexplicableintermsofindividualcalculation,andanexcessively‘over-socialized’viewoftheworldinwhichallactionisexplicableintermsofobediencetorules(Granovetter,1985).Thecompetitiveprocessisnotreducibletoeitherneo-classical or sociological analysis alone, but defies the methodological assumptions ofeach. It involves adherence to norms, but the primary one being that cooperation betweencompetitors is not permitted, and it involves individual calculation, but the presence andrecognition of competitors cannot be excluded from any meaningful analysis of how thecompetitionplaysout.Economistshadlongstruggledtoconceptualizeaprocessthatseemedon the one hand like ‘peace’ and on the other like ‘war’ (Dos Santos Ferreira, 2012). Theinvention of game theory in the late 1940s partly accommodated the strategic element ofcompetitionwithinaneo-classicalframework,butremainedunabletoexplainthenormativity

ofhowcompetitiveritualsareestablished.Onewayofunderstandinga‘neoliberal’ isasaneconomistwhowrestles tirelesslywithsociologicalquestions, thoughwithouteverresortingto sociological methods or evidence themselves. There is, as Foucault notes, a distinctlysociological concern with the structures of capitalism running through Austro-Germanneoliberal thought,butadeep fearofwhereanexpressly social logicmight leadpolitically(Foucault, 2008: 163). Clinging to the idea of competition is a way of coping with thisdilemma.

Competitivemarketsorcompetitiveness?The idea and formal characteristics of amarket aremore important to the initial neoliberalprogramme thananyparticular institutionsorhistoricalexamplesofmarkets.Theearlyneo-liberals inherited a neo-Kantian worldview, which privileged a priori and epiphenomenalideas in the construction and shape of social reality (Gerber, 1994, 1998; Gamble, 1996).Theirquestionwashowtorenderthemarket’sformalcharacteristicstangibleandenforceable.Following Foucault, I’ve argued that competition is the normative property of markets thatappealed to the early neoliberals (Foucault, 2008: 119). Anti-trust policy, backed by thesovereign, legal power of the state, represented a type of active government that the earlyneoliberalswereunanimous in their support for.However,astrangequestion thenarises,ofwhethermarket institutions (legallymandated and enforced or not) are even necessarily thebestmeansofrealizingthemarketprinciple,andifthecriticalmarketprincipleiscompetition,might there beother,non-market institutions, policies and interventionswhichmight just aseasilydeliverthespecificvirtuesofcompetitivepractices?Forexample,intheeraofappliedneoliberalism, sport very often served as a better manifestation of the market ethos thanmarkets themselves, with politicians and business leaders defending economic inequalitythroughanalogiestosportingcontestsand‘talent’.Leaguetablesareanotherwayofgivinganempiricalandtechnicalformtothecompetitivemarketideal.Ismarketcompetitionnecessarytodelivercompetitiveness?Thepositiontakenbytheearlyneoliberalswasthatopen,decentralizedmarkets,supported

bya strong ruleof law,were necessarily thebest vehicle for delivering a free, competitivesociety. A spontaneously generated price therefore becomes the supreme form of socio-economicfact.Competitivenormswouldbestbedefendedthroughdefendingmarketsandthepricesystem,forapriori,liberalreasons.Thiswasespeciallypronouncedinthetraditionofordo-liberalism(whichwillbeaddressedfurtherinthenextchapter).Themarketwouldbethepreserve of liberty, and law would be the preserve of the market. From the ordo-liberalperspective, certain behaviours and actions are ruled out by anti-trust, on the normativegroundsthattheycontradicttheprincipleofthecompetitivemarketorder.Thereisnecessarilyalimittohowmuchinequalitycanbepermittedfromthisperspective:theoriginsofmodernanti-trustlaw,includingintheUSA,stemfromtheneedtoprotectweakercompetitorsfromthethreatoflargecorporations(Thorelli,1954;Amato,1997).Oneconsequenceof this legalisticdefenceof themarket system is that it alsoprovidesa

basisonwhichtodesignatethelimitstospecificmarketsandtothemarketsystemingeneral.

This normative defence of market competition is potentially compatible with a Walzerianjustificationofmultiplespheresofinequalityorrivalmodesof‘dominance’.Inequalityinonemarketcanbejustifiedonthebasisthatitdoesnottranslateintoinequalityinanothermarket(this isaproblemthat isaddressedtechnically,whereanti-trustagenciesseektocarryouta‘market definition’when assessing the dominance of a firm). Furthermore, inequality in theeconomicspherecanbe justifiedon thebasis that itdoesnot translate into inequality in thepoliticaloreducationalsphere.TheGerman‘socialmarket’economyisonemanifestationofthistraditionofneoliberalism,whichassertsastrongcommitmenttomarketcompetition,butunderpinned and defined by legal institutions which are set firmly by the state. Moreover,Germanneoliberal thought showeda strongawarenessof the corrosive social effectsof themarket,which justifiedrobustandseparatesocialpolicies(Ptak,2009). InChicago,Simonshadproposed that industries thatcouldnotbe runon thebasisofdecentralized,competitivemarket principles (and therefore tended towards monopoly) should be taken into publicownership.Hayekwascognizantofthevariouspublicgoods,suchastransportinfrastructure,that the price systemwas not suited to deliver (Hayek, 1944: 40). This recognition that themarkethadcertaintechnicalandmorallimitswasprominentinneoliberaldebatesupuntilthe1950s.WhiletheDepressionwasstillarecentmemory,manyneoliberalssoughtcompromisesbetween economic liberalism and elements of socialism that they accepted as necessary(Bergin,2013).Someofthemevenunderstoodtheirprojectassharingasimilarlyprogressivespirit as socialism, albeit with a desire to open up space for competitive forces. Foucaultpoints to theFrench tradition of neoliberalism,which (anticipating the active labourmarketpolicies of theAnglo-American ‘ThirdWay’ in the 1990s) suggested a role for the state inhelpingpeoplebackintotheeconomicgame,onoccasionswhentheyhavebeenexcludedfromit(Foucault,2008:202).ThesevariousattemptstodelineateandregulatethenormativelimitstomarketwereatoddswiththeChicagoSchoolofthe1950sandonwards,andespeciallywiththeAmericanconservativetraditiontowhichAmericanneoliberalismbecamelooselyallied.The early neoliberal programme was preoccupied with such constitutional, or at least

institutional, questions. There is remarkably little concern with economic or utilitarianquestionsorefficiencyduringthisperiod,andthewritingretainsanexplicitlynormativeandcritical character. This can be interpreted in two ways. Firstly, the terms of much publicintellectual debate at this time were being set by socialists, and subsequently, Keynesians.Hayekwasnotoriouslyparanoidabouttheextenttowhichsocialistopinionshadpermeatedthepublicsphere,whichinspiredhimtoestablishtheMontPelerinSocietyasanefforttoresistthis intellectual tide (Plehwe, 2009). Providing non-socialist answers to sociologicalquestionswas the priority. Focusing the state upon competition, rather than upon plans andoutcomes,appearedtodopreciselythis.Secondly,therewasastrongsensethattheeconomicsprofession and neo-classical economics had done very little to defend economic liberty.Lawyers,philosophersandpublicintellectualsofferedgreaterhopeforthedefeatofsocialismandreformofsocietythantechnicalexperts.Thesplitbetweeneconomicsandsociology,thathad followed the demise of classical political economy,was a symptomof the neutering ofeconomicsasaweaponofliberalism(Schumpeter,1954:756).However, as the neoliberal intellectual movement became increasingly dominated by

economists and business interests, its emphasis began to switch from a concern with the

normativeconditionsoflegitimateinequality(suchaslawandthepricesystem)toonewiththecontingentcapacityforinequality.Casesofthistransitionwillbeexploredingreaterdetailinthe next two chapters.2 The question is how it remains possible to speak of ‘competition’,without there being clearly visible institutional rules and limits to that competition. As weshall now explore, particular theories of competitive agency came to the fore, while theemphasis on regulatedmarkets as quasi-egalitarian arenas of competition faded from view.Thesetheoriesdevelopedinparalleltotheearlyneoliberalmovement,thoughlargelyoutsideofit.

JustifyingCapitalistPower

Where ‘competition’ is a term that can only be applied to the institutional form taken bymarkets,therecanbenobasisonwhichtoknow,justifyandevaluatethepracticesandoutputsthataccompanyenterprising,entrepreneurialandprofit-seekingbehaviourinandofitself.Bythis standard a ‘competitive’ action can only be defined negatively, as onewhich does notdisruptordistortthepricesystemoronewhoseoutcomecannotbepredicted,butthisdoesnotenablethevalueofdifferenttypesofcompetitivebehaviourtobejudged.ForHayek,thiswaspreciselythepoint.Competitionisadynamicprocesswhichfacilitatestheattainmentofnewknowledge:itcannotitselfbesubjectedtoobjectiveempiricalanalysis.Weknowwhenitisabsent, but there can be no scientific viewof itwhen it is present (Hayek, 1963, 2002). InFernandBraudel’ssenseofthedistinction,theearlyneoliberalswerecommittedto‘markets’,butriskedignoringorevenopposing‘capitalism’,wheretheformerimpliestransparencyandaprioriequality,and the latter implieshierarchyand inequality (Braudel,1979).There isalackofempiricaleconomicnuanceinthisdefenceofmarketcompetition.Howelsecouldeconomiccompetitionbeconceived,inwaysthatweren’tsimplydeduced

fromtheformal institutionalcharacterofmarketsandthepricesystemitself?Howmight thejustification of inequality be detached from a normative commitment to particular legal orsociologicalprinciples?Ortoposethesequestionsanotherway,withwhatjustificationmightpower, hierarchy and control be admitted into the competitive economic game? Unless thecapacitytoplanandmonopolizeisadmittedasalegitimatefeatureofthecompetitiveprocess,thenanyvisionofcompetitionremainsabstractedfromtherealitiesofcorporatecapitalism.Inmanyways,thestoryofpost-1945neoliberalcritiqueisofitsmutationfromajustificationformarkets to a justification for business, where the former represents a check on publiceconomicplanning,but the latterproduces freedomsforprivateeconomicplanning (Crouch,2011).Given the complexity and flux of modern capitalism, the pragmatic question is at what

momentsandwithwhattechnicaldevicesandmeasuresissocio-economiclifetoberenderedempirical and numerical? Given that uncertainty must be reduced occasionally or to someextent,whatisalegitimatemeansofdoingso?FromaHayekianperspective,thepricesystemis the supreme instrument for rendering dynamic situations empirical, but one whoserepresentationsarethemselvesinconstantflux.Buteconomicsisitselfapracticalinstrumentfor rendering uncertain situations empirical: alternatively, uncertainty is actively reduced,throughtheforceofentrepreneurialormanagerialwill(Knight,1957).Lessdogmatictheories

of competition are thosewhich recognize the role ofmanagerial and entrepreneurial powerwithintheprocess,andemployeconomicmethodstorepresentwhatisgoingon.I want to explore two ways in which economic competition is rendered knowable and

testable,soastostillprivilegeinequalityofoutcome,butwithoutanormativecommitmenttothemarketpricemechanismoranyotherinstitutionalapriori.Inaspiritofcapitalistrealism,whichwouldprovecrucialfor the theoreticalandpracticaldevelopmentofneoliberalisminthe secondhalf of the twentieth century, eachof these seeks to abandon the abstract faith inliberalmarkets.YetasIwillseektoshow,inplaceof thatnormativecommitment tomarketinstitutions, they inadvertently inject an alternative commitment to a particular vision ofindividual agency – one whose validity is primarily testable by expert economic analysis,ratherthanmarkets.Thefirst,belongingtoRonaldCoase,providesajustificationforcapitalistpower through presuming an ideal vision of the rational, maximizing individual, borrowedfrom neo-classical economics. The second, belonging to Joseph Schumpeter, does the samethroughpresuming an ideal vision of the heroic, creative entrepreneur.By switching from aformal-structural emphasis on competition as an essential property of markets, to apsychological emphasis on competitiveness as an essential trait of individuals, theseeconomistsoccasionedakeyshift inhowcompetition (andcompetitiveness)would laterbeconceived.At thesametime, theyimplicitlyofferedjustificationsandempiricalmeasuresofmonopolythatcoulddissolveanynormativeboundaryaroundthemarketsphere.‘Freedom’isrecast as the freedom to exploit, rather than to exchange. The mere possibility of futurecompetition,asjudgedbytheexperteye,becomesmoreimportantthantherealityofexistingcompetitionasmanifestinamarket.Thesejustificationsandmeasuresbegantobetakenupbystates and policy makers from the late 1970s onwards, providing the expert governmentalinfrastructurethatwouldconstituteappliedneoliberalism(examinedinChapters3and4).

RonaldCoaseandtheefficiencyofpowerRonald Coase was a British economist, taught and influenced by Hayek at the LSE in the1930s,butrarelyassociatedwithneoliberalismuntilmuchlaterinhiscareer.HeemigratedtotheUnitedStates in 1951, taking a position at theUniversity ofVirginia, before joining theChicagoLawSchool in1964.His lastingcontribution toneo-classical economics lay inhistheoryoftransactioncosts.Thisstartedoutfromtheintuitionthatcapitalistindustrialstructuresonlyrarelyconformtothevisionofacompetitive,liberalmarketasimaginedintheabstractformulationsofneo-classicaleconomics.Yetratherthanabandonneo-classicaleconomicsinfavourofamoreinstitutionally-nuancedtheory,hisinnovationwastoreinventitforempiricaluse, in such away that it could interrogatemarketandnon-market structures side by side.Evaluationbyeconomicsreplacesevaluationbymarkets.Therationalchoicepresuppositionsof neo-classicalmethod serve as the principle of equivalence, againstwhich behaviour canthenbejudged.In a seminal essay, ‘TheNatureof theFirm’,Coase addressed thequestionofwhy firms

existatall,ifmarketsareasefficientasclassicalandneo-classicaleconomicshadmaintained(Coase,1937).Retainingamethodologicalpresuppositionofindividual,rationalchoiceonthe

partofindividuals,Coasesuggestedthatalleconomicactivity–includingmarketexchange–produces costs of coordination and communication amongst individual actors, given themanifold uncertainties that they all face. Even competitive markets possess their own‘transaction costs’, in the creation of contracts, enforcement of property rights, regulation,discovering reputations and so on. In many cases, these costs may be sufficiently low thatexchange mediated by price is still the most efficient form of coordination. But in somecircumstances,marketsmaybemorecostlythanothertypesofinstitution,rootedinnon-marketnormsofcooperationandhierarchy.Firmsexist,Coasereasoned,totheextentthatorganizinginhierarchies,withwagesandjobsecurityacceptedinexchangeforobediencetomanagers,ismore efficient than trading in markets. Given that cooperation between humans carries fargreateruncertaintiesthanpropertyrights,betweenhumansandthings,hierarchicalorganizationplays a crucial role in delivering efficient economic outcomes. By the same token,marketsexisttotheextentthatprice-basedexchangeismoreefficientthanhierarchicalorganizationorsomeothermodeofcooperation.Therearemultipleinstitutionalmeansofhandlinguncertainty,whichneedtobejudgedthroughempiricalevaluation.The critical move made by Coase was to separate neo-classical price theory from the

marketpricemechanism (Davies,2010).Heassumed, in theneo-classical tradition, that allindividuals are constantly engaged in calculating the net cost or benefit to themselves ofdifferentcoursesofaction,asrationalmaximizers.Buthealsoabandonedtheassumptionthatmarketsaretheprinciplearenainwhichthistypeofpsychologicalcalculationdoesorshouldoccur.Exhibitingan implicitlyneoliberal trait, transactioncost economics is instrumental inextending amarket-based principle and technique of evaluation beyond the limits ofmarketinstitutions. All institutions – markets, firms, social networks, states – come to appear asequally amenable to a neo-classical analysis, with the crucial proviso that the costs ofcoordination and communication are included in the overall audit of their efficiency. ForCoase, it was no longer a question of what counted as efficiency in an abstract sense (aquestionwhichinvariablyproducedtheanswerthatmarketsareefficient),butoneofhowtogaugetherelativelevelsofefficiencyofdifferentempiricalindustrialstructures,includingrealpeople,withrealproblemsoftrustandcommitment.Remarkably,eventhepricemechanismofthemarketbecomessubjecttotheefficiencyauditofpricetheory.‘Efficiency’becomesanalwaysrelativeandmeasurableterm.In another paper, which later became one of the most-cited articles in the history of

economics, ‘The Problem of Social Cost’, Coase addressed the question of how regulatorsshouldrespond to theproblemof ‘externalities’– that is,when theactionsofoneagent (forexample,afirm)imposecostsonanother,theclassicexamplebeingpollution(Coase,1960).TheBritishtraditionofwelfareeconomicsdefined‘externalities’asanotherformof‘marketfailure’, like monopoly, which typically required intervention by a third party (such as aregulator) inordertoredressthis inefficiencyandget themarketfunctioningcorrectlyagain.YetCoasearguedthatthisapproachhadcruciallyneglectedtoincludethefullcostsassociatedwith differentways of resolving the problem. It included the cost of the ‘externality’ to theinjured party, but forgot to include the costs associated with regulation, including thoseimposedupontheregulatedactor.Itfailedtoaccountforthefactthatpollution,say,hasclearbenefits to the polluter. In many cases, Coase reasoned, it may be more efficient (in the

aggregate)toletoneagentimpose‘socialcosts’uponarival,andleavethemtoworkoutthedamages or redress between themselves, than to employ law and regulation as ameans ofrestoringsomevisionofa‘perfect’competitivemarket.Aslongastheirpropertyrightsweresufficientlywelldefined,theycoulddiscoverthemostefficientresolutionbetweenthemselves.Thereisnonormativeorapriorinotionofanefficientorperfectlycompetitivemarket in

Coase’swork,insteadtherearetoolsforevaluatingparticularindustrialstructuresonacase-by-casebasisusingempiricaldata.NoristhereanysenseofmoralresponsibilityinCoase’sworldview,onlyaquestionofoptimalaggregatewelfare.Whereoneparty isdominatingorexploitinganother,observers shouldnotautomaticallyprioritize the interestof the latter,butassess the situationempirically.Coase’sunspokennormative implication is thatmonopolistsanddominatorshaverightstoo.AsonestudentofCoaseexplained,‘ineconomicterms,boththeinjurerandtheinjuredmaybesaidtohavecausedanaccident’(Priest,2005).Theultimatearbiter of value is no longer the institution of market price or the perspectives of thecompetitorsinvolved,buttheobjectivemethodologicalperspectiveprovidedbyneo-classicaleconomics,whichassessesutilityintheaggregate.From the Coasian perspective, legitimate ‘competitive’ activity is any activity that is

efficiency maximizing (in the precise neo-classical sense of consumer welfare), but theinstitutional structure of that activity becomes an open empirical question. It may in theoryinclude monopolistic or predatory activity. By abandoning any ideal vision of a free,competitive order (such as the one held by the early neoliberals),Coase pointed towards astarklyrealisticvisionofhowfreecompetitionoccurs, inwhich largecorporationsassertedtheirinterests,expandedtheirpropertyentitlementsandmobilizedtheirlegalmuscleaspartofthecompetitivegame.Buthealsoprovidedasourceofjustificationforthis: that itcouldbecalculatedasefficientintheaggregate.Iftheearlyneoliberalshadhopedtouselawtomakethe economy conform to a particular liberal ideal, Coase demonstrated that contingent,capitalistactivity,byprofit-seekingactorsalreadywastypicallyideal.Certainly,itcouldnotnecessarilybeimproveduponthroughtheinterventionofregulatorsorlaw-makers.Admittedinto regulatory practice, this theory serves as a major filip to large corporations (Crouch,2011).

JosephSchumpeterandthecreativityofpowerCoase demonstrated that non-market institutional arrangements could, by neo-classicalevaluation,bemoreefficientthanmarkets.Theexerciseofpower,hierarchyandcooperationcouldreducetransactioncosts,improveconsumerwelfareandtherebybedeemedcompetitive.The arena of competition was far broader than any individual market. Joseph Schumpetereffectively produced a similar justification for non-market, monopolistic modes ofcompetitiveness, but from entirely differentmethodological premises. Both the agent at theheartofSchumpeter’smethodandthestyleofeconomicreasoningwereradicallyunlikethoseof neo-classical economics, and far closer to those of his compatriot Hayek. In theirrelationships with the neoliberal ‘thought collective’, Schumpeter and Coase’s careersfollowed opposing trajectories.WhileCoase became increasingly integral to the neoliberal

critiqueofthestatethankstohisgrowingproximitytotheChicagoSchool,Schumpeterbeganas a contemporary ofHayek andMises inVienna, but later poured scorn onHayek’sMontPelerin Society and distinguished himself at Harvard, the centre of the US economicsestablishment at the time and notoriously snooty towards Chicago. What Schumpeterianeconomics provides for the re-theorization of competition is an appreciation of the radicaldifferences in the psychological properties of the competitors. These are not a basis forobjective evaluation, but simply emerge contingently andunpredictably. In pragmatist terms,whatSchumpeteroffersisthereforenotsomuchanormativeprincipleofequivalencebetweencompetitors, but an awareness of the facticity of difference between them. Some actors aresimplymorepowerfulandcapablethanothers.Schumpeter’sgreatwork,Capitalism,SocialismandDemocracy,waspublished in1942,

two years before Hayek’s Road to Serfdom and offering a similarly pessimistic view ofcapitalism’s future, as being gradually stultified by bureaucracy and a rationalist desire tocontrol the future. But unlike Hayek, he understood that this ethos was as powerful withinprivate enterprises as within government bureaucracies and planning agencies. Thecompetitivepracticesof largecorporationsoftencreatedlittlewealth,butallowedanarrowdefinitionofefficiencytostiflecreativityandradicalproductivityimprovements.Bureaucratsandprofessionalmanagersactedefficientlyintheshortterm,whileunderminingthelong-termviabilityofcapitalism.Eventually,Schumpeterbelieved,adeadeningrationalityofhierarchyandroutinewoulddestroycapitalismaltogether(Schumpeter,1976).Thecapacitytoinjectuncertaintybackintothecapitalistsystemcamenotfrommarkets,but

fromthepsychologyofunusualindividualswillingtodefyexistinginstitutionallogics,namelyentrepreneurs.Theentrepreneurenacts ‘newcombinations’of technologiesandpractices, soastoinjectnoveltyintocircuitsofcapitalism(Schumpeter,1934).Agreatdealhangsonthepsychology of the entrepreneur, which is to refuse ordinary routines and boundaries. Theentrepreneurialmentality does not seek successwithin a given set of institutional rules, butthroughtheinventionofnewinstitutionalrules,whichotherswilllaterhavetoplayby.Forthisreason, entrepreneurs cannot be easily classified or theorized, because by their nature, theymovebetweenexistingcodes,normsandinstitutions(Schumpeter,1934:77–78;Stark,2009).Nor do they reside in any particular institutional domain of society. In his later life,Schumpeterwasevenpreparedtoacceptthatentrepreneurshipmaybemostlikely‘withintheshellofexistingcorporations’,whereroutinizationcouldbedisruptedfromwithin(quotedinMcCraw, 2007: 496). What is clear in Schumpeter’s analysis is that the entrepreneurialpersonalityisuncommon.Itactsagainstexistingconventions,whichstructuresocio-economicrealityfor themajorityofpeople,rather thanwithinthem.Entrepreneurshipoperates throughcounter-actingnorms,andforthisreasoncanneverbestabilizedintoanynormofitsown.According toSchumpeter, the competitive spirit of entrepreneurship cannot be reduced to

thequestforeconomicgains.Thementalityofentrepreneurshipissuchthatitlooksbeyondthespecificrewardscurrentlyonoffer, towardsafargreaterformofcompetitivesuccess in thefuture, inwhich the very landscape of capitalism has been re-shaped by the entrepreneur’swill. It ismore like ‘thewill to conquer: the impulse to fight, to prove oneself superior toothers,tosucceedforthesake,notofthefruitsofsuccess,butofsuccessitself’(Schumpeter,1934: 93). In the process of inventing a new productive landscape, existing ones aremade

redundant–theprocessfamouslydescribedas‘creativedestruction’.Thisprocesscannotbeframed by any existing set of rules ormarket institutions, because rules and institutions areinternaltotheprocessitself.Theentrepreneur’sgambitistoforegoapositivevaluationinthepresent,tobeabletodictatetheverytermsofvaluationinthefuture.Allthatremains‘outside’oftheprocessofcreativedestructionistheprinciple–orratherthepsychologicalpossibility–ofentrepreneurshipitself.Capitalismmustofferanoutletformilitaristicinstincts,orelseitwillsubsideintobureaucratizedsocialism.Schumpeter’swork expands the field of competition in twoways, accommodating power

and strategywithin thecompetitiveprocessas it does so.Firstly, the relevant time-scale ofcompetition is greatly expanded, so as to include strategies and investments that only reapdividends over the long term. The entrepreneur looks beyond markets as they exist in thepresent towardsmarkets thatcouldexist in thefuture.Itspots typesofhumanneedordesirethatarenotpresentlyservedandwhichconsumersmaynotevenbeawareof.Giventhelengthytime horizons of such competitive strategy there are necessarily far greater uncertaintiesinvolved, meaning that a rationalist risk assessment or calculation of future return oninvestmentbecomesunhelpful.Buttherewardforsuccessfulentrepreneurshipisamonopoly,bringingverygreatprofitsindeed.Thismonopolyisjustifiedinviewoftheuncertaintiesthathave been confronted, and also because it – like everything else within capitalism – willeventuallybesupersededby thearrivalofnewcompetitorsandnewmonopolists. Incertaincasesentrepreneursandinventorswillneedgovernmentsupporttoensurethattheywillreapadequatemonopolistic rewards from their innovations, hence the case formany intellectualpropertyrights.Secondly, this expands the arena of competition to include a greater variety of cultural,

political, technological and sociological factors. The orthodox classical and neo-classicalview of a competitivemarketwitnesses firms all producing similar or substitutable goods,striving to reduce the costs of production in order to cut prices and grow market share.Technologyandculturearetreatedas‘exogeneous’,externaltothecalculationsofproducersand consumers. The entrepreneur, by contrast, strategically draws on social networks,scientific research, technological insight and imagination tomake their ‘new combinations’.They necessarily employ forms of ‘restrictive practices’ to ensure that their competitiveadvantages(whentheyarrive)aren’timmediatelyreplicatedbycompetitors.InSchumpeter’sanalysis,neo-classicaleconomicsonlyexacerbatesthecrisisofcapitalism,

byofferingexcessivelyrationalized,short-termevaluationsofeconomicpractices.Thisservesthe needs of a professionalized bureaucracy and management class, who seek to governeconomy and society using numbers, but it excludes (or misrepresents) the power of theentrepreneur,whoactsonthebasisofvisionanddesireratherthanscientificcalculation.Thegameof capitalism ‘is not like roulette, it ismore like poker’ (Schumpeter, 1976: 73).Themost important forces within capitalism, from this perspective, are those which cannot becalculatedormodelled, but require strategic navigation and inspiration.Theoutcomeof thecompetitiveprocess isdeterminedby‘non-economic’virtuesandassets,suchas theculturalandpsychologicalpropensitytoinnovateandcooperate.

CompetitivepsychologiesItismeaninglesstospeakof‘competition’unlessthereisnotonlysomesenseofequivalenceamongstthosedeemedtobethecompetitors,butalsosomeoutletforcontingentdifferencestobe represented. The very notion of ‘inequality’ as an outcome assumes that there must besomething equal about those whose difference is being measured, proven, justified orcriticized. The appeal of markets, to the early neoliberals, was that they could potentiallyprovidethiscommonworld,withinwhichallformsofdifferenceandpluralitycouldthenbeexpressed,inquantitative(i.e.price)terms.TheimportanceofCoaseandSchumpeter,tomyanalysis,isthattheyreplacethisinstitutionalformatforcompetition(namelythemarket)withpsychological formats of competition. What ultimately facilitates, drives and justifiescompetition and competitiveness is found in individual psychological capacities. A crucialdifferencebetweenthemisthat theCoasianpsychologicalcapacitiesaredeemedcommontoall, whereas Schumpeterian psychological capacities belong only to a strange minority.Coase’s neo-classical methodology presumes that human beings are all possessed of thecapacity to negotiate agreements; Schumpeter’s romantic belief in entrepreneurship assumesthatonlyarareminorityareabletoacttowardslong-termtriumphs.CoaseoffersaprincipleofequivalencewhileSchumpeteraffirmsthefacticityofdifference.Appliedneoliberalismisarguably based on some entanglement of these two anthropological worldviews, wherebycertainpowerfulactorsareable topurchaseandacquire agreatercalculativeandstrategiccapacitythanothers,thankstoconsultantsandprofessionaladvisors.Instyleofreasoningandintheirpolicyimplications,CoaseandSchumpeter’stheoriesare

strongly divergent. But what each provides, in very different ways, is a theoretical andmethodologicalbasisonwhichtojudgeandcriticizeinstitutionsthatchallengesthefinalityofthepricesystem.Thesetheorieshaveanumberofcommonfeatures.Firstly,theyrecognizethelegitimateroleofpowerandrestraint intheeconomy,asameansofreducinguncertaintyonthe part of economic actors. Laws, intellectual property restrictions, contracts, hierarchies,leaders and social networks all becomepositively valuable.Monopoly becomes potentiallylegitimate, albeit with different sources of justification (Coase because it is ‘efficient’,Schumpeter because of the long-term vision that achieved it). Economic planning, the bêtenoire of the early neoliberals, is sanctioned by these economists, though the planners inquestion are running businesses, not public administrations. The uncertainty of the future isreducedthankstomanagementandleadershipwithintheprivateeconomy.Secondly, they implicitlybestowanewauthorityuponeconomicsasa sourceofcritique,

justification and affirmation. For Hayek markets are themselves information processors,generatingquasi-objectiverepresentationsofwhatisgoingonintheeconomythatnoexpertorgovernment can rival. Themarket could not be ‘wrong’ because there was no independentstandard bywhich to prove this: competitive activity could only be ‘wrong’ if it sought tosubvert the authority of the price system. Coase and Schumpeter offer theories which canthemselvesbeusedasastandardofcriticalandobjectiveevaluation.Coase’seconomicscanbe used to evaluate whether industries, rules and contracts are organized to maximizeutilitarianoutput.Schumpeter’seconomicscanbeusedtojudgewhethertheyareorganizedinaway that is open to being transformed. Economic theory andmethodology then provide a

criticalmeasureagainstwhichcapitalismcanbejudged.There isnoneedforactualmarketcompetition tochallengeamonopoly ifeconomicanalysiscandemonstrate that thepotentialforcompetitionstillexists.Thisinturnfacilitatesthegrowingpoliticalauthorityofeconomicexpertsinthegovernanceofawidevarietyofinstitutionsandprocesses.Chapters3and4willexplore how Coasian and Schumpeterian economics provide the neoliberal state with thetechnicalinstrumentswithwhichtojudgetherationalityofsovereigninstitutions.In the language of convention theory, Coase and Schumpeter provide rival ‘critical

capacities’bywhich theworldcanbecriticized,measuredand tested.Theserestoncertainassumedmetaphysical propositions aboutwhat is common and uncommon to human beings.ForCoase, it isassumed(asapropertyofneo-classicalmethodology) thatallhumanbeingsareengagedintherationalpursuitofpreferencesatisfaction,whetherinsideoroutsideofthemarket,andcannegotiate(ordominate)inpursuitofit.Valueistobefoundinmaximizingthissatisfaction, andwewill see in the next chapter how regulators have imported theCoasianmeasurebyapplyinga‘consumerwelfarestandard’asabasisonwhichtoevaluateindustrialorganization.ForSchumpeter,itisassumedthatsomehumanbeingshaveacapacitytoimposethemselves on others through more or less peaceful means. This is an anti-equivalanceprinciple, which sees the stabilization of conventions as a potential inhibitor of capitalistpotency,andthereforethedisruptionofnormalityasagoodinitsownright.Theseassumptionsbecome the unspoken ‘metaphysical’ presuppositions uponwhich certain types of empiricalstatementswilldepend.Theempiricistreductionofthesocialandpoliticalworldtoeconomicfactsdependsonmethodologiesandtheories,buttheseinturndependonpresumptionsaboutagency and the character of shared (and unshared) humanity. If, in whatever way, thesephilosophical anthropologies come to appear untenable, then methodological and expertedificeswillcollapse.Without a fixed arena, within which legitimate competitive activity is to take place, it

becomeshardertodistinguishillegitimatecompetitiveactivity.Attemptstosubvert,bypassorcontrol themarketareno longerapriori bad.Both theoriesarecognizantof thedestructiveaspects of capitalist competition, which they make justifiable on the basis that they arebeneficialintheaggregateand/orinthelongterm.Onthebasisthatindividualsareassumedtobeactingintheirowninterests,andwillemployvariousformsofdominationinordertodoso,itbecomesdifficult tostatewhenpreciselymonopolisticandpredatoryactivityceases tobebeneficial. If an individual signs a highly restrictive employment contract, but does so in acalculatedway,mustthisthereforebedeemedefficient?Howlongshouldapatentlast,beforebeneficial restriction becomes harmful restriction? These are the sorts of problems whichwouldlaterbedevilneoliberalpolicymakers.

MetaphysicsofNeoliberalAuthority

The rhetoric and performance of neoliberal authority involve appeals to ‘evidence’ andeconomicevaluationas the testof legitimatecompetitiveactivity.Agreatdealofexpertandinstitutionalworkgoesintomakingtheseappealspubliclyviable,asweshallsee.However,empiricalevidencealwaysarisesfrominstitutionalandpragmaticconcerns,andonthebasisof certain vocations and perspectives.Value neutrality and scientific objectivism have their

ownethicalandinstitutionalpreconditions.Whatcountsasavalidempiricalrepresentationofadynamic,competitivesituationwilldependheavilyonone’sownpositioninrelationto it.Considerthevariousperspectivessurroundingagameofprofessionaltennis,andthedifferentmattersof‘fact’thatareatworkasaresult:eachplayerstrivestofocustheirmindsonwinningthe next point; their coach needs to form an expert view on how their performance can beimproved;theumpireneedstomakesurethattherulesarebeingenforcedcorrectlyandfairly;the audience keep looking at the scoreboard; and the gambler in the betting shop is onlyinterestedinthefinalscore.Indynamicsituations,withmultipleperspectivesatplay,thereisrarely an ‘ultimate’ empirical representation that is valid for all. On the other hand, theneoliberalpromiseofcompetitiveformsoforganizationisthattheywillperiodicallyproduceclearlydistinguishable‘winners’and‘losers’thatallwillagreeon.Beforewe can look at howempirical economic claims can act as a source of neoliberal

politicalauthority,wefirstneedtoconsiderthepragmaticsofcompetitiveactivityinordertobetterunderstand thedifferent formsof judgementanddiscourse that suchactivity facilitatesand requires. Prior to any empirical question as to the qualities or quantities of a givencompetition (orcompetitiveact) arecertainpresuppositionsaboutwhat it evenmeans tobeinvolvedinacompetitivesituation.Ifwecanbringsomeofthesepresuppositionstolight,wecan also begin to understand the forms of authority that hover in and around competitivesituations.Todo this, I adopt a pragmatist approach to the performanceof competitions, asfound in thework ofGoffman (Goffman, 1997). The conventionswhich underpin empiricalevaluationsandproofsderiveinpartfromthepracticalcircumstancesthatgiverisetothem.Commonalities in these circumstances need bringing to light, such that conventions ofempiricalrepresentationcanbeidentifiedandinterpreted.Thestartingpointforthisinterpretation,andthereasonwhythisleadsustowardsquestions

ofauthority,istherecognitionthatallcompetitionshaverules.Tofavourcompetitionisnevertofavouranarchy.Theremustbeaveryminimalsenseofaprioriequality,orsomeelementoffairness, inacompetition, if it is tobe recognizedas ‘real’andnot ‘rigged’.Aprincipleofequivalencemustbelogicallyprior tothefacticityofdifference, if it is‘competition’ that isgoingon,andnotbruteviolence.However,asalreadydiscussed,therulesofcompetitionareveryunliketherulesofvirtuallyanyothertypeofinstitution,inthattheymustdebarpeacefulorcooperativeactivity.Thisproducesthefurthercuriosity,that(unlike,say,aplayorritualorothertypeofperformance)theoutcomeofacompetitioncannotbeknowninadvance:thiswaspreciselyitsappealtoHayek.Ifonecompetitorweretooobviouslysuperiortoanother,thenthe outcomewould cease to be unexpected.Competitionwould thereby lose its exploratoryepistemological quality. The initial sense of fairness and the uncertainty of outcome arethereforeco-dependent.Theneedforcontestantstobeginasformalequals(insomehoweverweaksenseoftheterm),andconcludeasempiricalunequals,pointstowardscertainminimalconstraintsonwhatitmeanstoconductcompetitiveactivity.Thistensionbetween‘equality’and‘inequality’sitsattheheartofanycompetitiveeventor

activity. Wittgenstein observed that any game ‘has not only rules but also a point’(Wittgenstein,2001:564)butinfactacompetitivegamehastwo‘points’:oneistoensurethatcompetitorsremainconstrainedbysomenormsofequality,playingbythesamerules,theotheris toensurethat theyresist thesenormsatallcosts, insearchofinequality.Ifeitherof these

‘points’werelacking,itwouldbeimpossibletodescribewhatwasgoingonas‘competition’.It would tip either into a form of completely peaceful, normative fairness or into violent,existentialcombat.Theappealofacompetitionliesinthetensionthatismaintainedbetweenthesetwoouter-lyingpoliticalteleologiesoridealtypes.Onewayofdefiningcompetition,andtheformsofauthoritythat itcreates, is that it isneverquiteasfairas‘justice’,andnoris iteverquiteasbrutalas‘violence’.Theidealtypesof‘justice’and‘violence’mustsomehowbeatworkwithinacompetitionifitistobeattractivetocontestantsandaudience,buttheymustalsoremaininanirresolvabletensionwithoneanother.The enigma of any game, asWittgenstein saw it, is that its rules cannot fully express its

point.Thereisagapseparatingwhatiswrittendownasrulesandtheactionsofapersonwhoisobeying them.Whatoneunderstands by rulesalwaysexceeds their linguistic expression:interpretationbridgesthegapbetweenstatementsandactions.The‘authority’ofarule-giverorcommander lies in a shared and largely unspoken understanding that certain statements,institutions, decisions or individuals should be obeyed. It is also necessary that there is ashared and unspoken understanding about what obedience might practically involve. Thisconsistsofaparticularrelationshipbetweenwhatismadeexplicitandwhatremainstacit.Thesameistrueofstatesovereignty:inorderforasovereigntodemonstratetheirimmeasurablepower,itisnecessarythatviewerscaninterpretthisdemonstrationassuch,ratherthanrequirethestate’sfullphysicalcapacitytobeputondisplay(which,inexhaustingitself,wouldbetocontradictwhatitsoughttodemonstrate).Different modes or ideal types of authority rest on different ways of understanding the

relationship between themanifest statements of rules or orders, and the unseenor unspokenethos or potentiality which accompanies them. What we are grasping towards here is notparticular empirical policies, regulations or decisions, but the types of immanent politicalphilosophythataccompanythem.Forexample,Weber’sfamousthreeformsofauthority–thebureaucratic,thetraditionalandthecharismatic–refernottoactionsorvisibledemonstrationsof power, but to shared presuppositions on the part of those who willingly obey power.Authorityconsistsinnothavingtophysicallycompelobedience,buttorelyonacommonsenseofwhat is legitimate andwhodeserves tobeobeyed.The justice (or empirical value)of agivencourseofactioncanonlybeprovedinanyultimatesense, if there isalreadyasharedsensethatthejudgeisviewingthesituationfromtherightposition,intherightway.Thesilentpragmatics of authority necessarily precede their spoken statements and empirical proofs.FollowingthehermeneuticapproachofBoltanskiandThévenot,thetaskhereistounearththelatent forms of political philosophy that render power legitimate, but in the particularcircumstancesofcompetitivesituations(Boltanski&Thévenot,2006).

TheliberalspiritofcompetitivenessEvenintheclassical,liberalvisionofcompetition,asanaturalandemergentoccurrence,thereisanimplicationofnormsconstraininghowcompetitiontakesplaceandguaranteeingasenseoffairness.Anysocialcompetitionhaspracticeswhicharedeemed‘anti-competitive’insomesense, even if these aredeterminedby the competitors themselves (as in a friendlygameof

football) rather thanby thirdpartyauthoritieswith thepower toenforce the rules.Formsofcombatwhichlackanynormsorlimits–forexample,whereanindividualattacksanotherinthestreetunexpectedly–cannotbedescribedas‘competition’,eventhoughtheymayclearlythriveoffandgenerateinequality:wewouldhesitatetodescribeasuccessfulattackerasthe‘winner’ in sucha scenario.There areof courseborderline cases.Abrawlmayacquire anaudience which start to comment on who is ‘winning’. And modern warfare has beenconductedwith someveryweak sense of normativity, for instance regarding thewearing ofcombat uniforms and official ‘declarations’ of war, but without ever being described as a‘competition’.Humancompetitionisneverentirelyexistential.Toput thisanotherway,competitionfacilitatesandrequires judgementorcritique.While

competitors may get so immersed in their situation that they lose the capacity to distancethemselvesfromit,andtakeacriticalorobjectiveviewofwhatisgoingon,thisisliabletobeinterruptedwhentheyfeelthatsomething‘illegal’or‘unfair’hasoccurred,orelsewhenotherstakethatview.Criticalmomentspunctuatecompetitiveprocesses,whenactivityisevaluated,notsimplyforitsvaluebutforwhetheritiscompatiblewiththerules.Thismakessomeformofinterventionorinterruptionnecessary.TheFrenchneoliberal,LouisRougier,arguedthatthestateneededtoperceivetheeconomic‘game’‘not[with]theindifferenceofaspectator,butthe neutrality of an arbitrator’ (quoted in Bergin, 2013: 76). The Hayekian view of themarketsoughttomakethepricesystemtheonlyultimatejudgeorcriticofbehaviour,andyetitwouldremainnecessarythatcertainauthorities(anti-trustregulators)werepresenttopreventcompetitors seeking to undermine the price system itself. A standard of judgement, such as‘consumer welfare’, is needed against which competitive behaviour is to be criticized andperiodicallystopped.Therulesofanycompetitionmustdotwothings.Firstly,theymustupholdthecentralnorm

ofallcompetitions,whichisthatthecontestantsmaynotcooperate.Inthemarketrealm,thisismanifestasanti-cartellegislation.Inmanyotherrealms,suchaseducationaltests,cooperationwould constitute ‘cheating’ or ‘fixing’. Secondly, they must define the limit to acceptableinequality,asitoccurswithinthetemporalandspatiallimitsofthecontest.Competitorsmaynot cooperate, but nor may they use any contingent power available to them. They willinevitablyseek to twist the interpretationof therules in their favour,but theycannotseek torewritetherulesaltogetherorsuspendthemwithoutunderminingtheresidualsenseoffairnessthat distinguishes any competition from brute combat or corruption. Equally, competitorscannot seek to force rivals out of the game permanently,which in the language of anti-trustwouldbeclassedas‘abuseofdominance’.Wemightthereforesaythatacompetitionmustbeimbuedwithaliberalspirit,inasmuchas

theabstractideaofequalitybeforetherulesmustexertsomeinfluenceoverhowthecontestisperformedanditsrulesinterpreted.‘Spirit’isusedhereinthesamesenseofWeber’s‘spiritofcapitalism’, as referring to a philosophical idea that justifies practical engagement on amoralandpsychologicallevel(Weber,2002).Inpragmaticterms,the‘spirit’alwaysexceedswhat can be articulated or stated as a rule. The liberal spirit of competition can best beidentified with the hypothetical ‘original position’ proposed by John Rawls, in whichindividuals are imagined creating the rules of society, but behind a ‘veil of ignorance’regarding how the contingent inequalities in wealth, ability and power are likely to be

distributed(Rawls,1972).ThistheoreticaldevicewasinventedbyRawlsasaphilosophicalartificeto‘nullifytheeffectsofspecificcontingencieswhichputmenatoddsandtemptthemtoexploit social and natural circumstances to their own advantage’ (Rawls, 1972: 136). Theoriginalpositionisaformofgame,inwhichnocontingentempiricalidentities,skillsortraitsareallowedtoinfluencetheoutcome(inthatsense,itisacompetitivegamewhichnevergetsstarted).Thismethodfordefiningjusticestillaccommodatesinequality,butonlyonthebasisthatnobodywouldreasonablychoosetoliveinasocietyofcompleteequalityofoutcome(itishere that Rawlsian liberalism borders on Hayekian neoliberalism). Rawls argues that‘injustice,then,issimplyinequalitiesthatarenottothebenefitofall’(1972:62):itisfromanideal notion of equality that a justifiablemodel of competition can be deduced, byRawls’slogic.Thischainofreasoningsomewhatinvertsthatoftheneoliberals,forwhomthecommongoodcanbeguaranteedbyparticularempiricalvisionsandtechniquesofcompetition.A competition must in some way perform this abstract idea of equality. Inevitably,

contestantswillbringvaryinglevelsofskill,powerandenthusiasmtoanycompetition,whichought(ideally)toinfluencewhattypeofunequaloutcomeresults.Thecontestantswillseektoensure that the competition is conducted in ways that maximize their own contingentadvantages,buttherulesmustbeappliedsuchthat,tosomeminimalextent,thosecontestantsarerestrictedtoanequalextent.Sohowthendoesacompetition’sspiritofaprioriequalitydiffer from that imposed by liberal law? In what precise sense does the fairness of acompetitiondiffer fromthefairnessof justice?Thecrucialdistinction lies in thequestionofuniversality. While law only becomes tangible or visible when it is imposed on specificpersons, in specific times and places, it is accompanied by a metaphysical sense that itneverthelessappliestoeverybody.Thisisitspartlyunspokenmetaphysicalcomponent,whichdistinguishessovereignrulefromjustgovernmentalrules.It isnot justaruleofagameoraparticularinstitution,itisalsothelaw.Ifitfailstomaintainitsuniversalisticauraofapplyingtoallpeopleequallyallthetime,thenitceasestoberecognizedas‘justice’,andbecomesaset of technical and disciplinary instruments.The performance of justice strives for finality.Unlike,say,theSchumpeterianentrepreneur,thevictorinthecourtroomisnotsimplyenjoyingafewyearsofdominance,buthasinprinciplesettledadisputeforever.Bycontrast,therulesofacompetitionarelimitedintimeandspace.Theyapplyequallyto

allcontestants,butnottothosewhoexistoutsideofthelimitsofthecompetitivearena.Likeatheatricalplayacompetitionisamanagedevent,inwhichasenseorspiritoffairnessisondisplay,butitisunderstoodbycompetitorsandnon-competitorsalikethatthisismoreorlessbracketed from the broader fairness or unfairness of ‘society’ at large.Where a legal trialseeks to be once and for all, performances such as audit or sports seasons come roundperiodically– they lackan‘ultimate’quality.Onewayofunderstanding thisbracketing is torecognize that competitionscan restonempirical evaluations (‘has the studentanswered thequestioncorrectly?’,‘didtheballcrosstheline?’)oronaestheticevaluations(‘whichfigureskater deserves the gold medal?’, ‘which novel deserves the prize?’) but never on moralevaluations.Thequestionofwhatcompetitorsintendedtodoislargelyirrelevant,whereasinthe courtroom it is crucial. A game in which the winner was the ‘best’ or ‘most virtuous’person would not be a game at all, but the ideal political society. The very act ofcircumscribingactivitieswithinacompetitivearena,subjecttospecificrulesofcompetition,

is an invitation to abandon ethical questions of how one ‘ought’ to behave or how society‘ought’tobe,infavourofstrategiceffortstodefeatopponentsandmaximizeone’sscore.‘Fairplay’may still be recognized, but only in a secondary sense, as impliedby the term ‘moralvictory’,whichisanythingbutanactualvictory.Ifthepursuitoffairnesscametopredominateoverthepursuitofvictory,thecompetitionwouldhaveended.Thecapacityofcompetitiontokeepethicsatbay(‘valuesoverwhichmencanonlyfight’,asFriedmanputit)isanotherwayofunderstandingtheenthusiasmthatneoliberalshavealwaysexpressedforcompetitiveformsofinteraction.Butthisalsomeansthat‘gaming’(inwhichthecompetitorsfocusontheexplicitstatementandimplementationtechniquesofrules,andnottheirspiritor‘point’)isoneoftheconstantthreatstoneoliberalauthority.Acentraldefiningquestion,commontobothliberaltheoriesofjusticeandtothedesignand

theoryofcompetitions,is‘whatdopeoplehaveincommon?’.Whileliberaltheoriesofjusticeposethisquestioninrelationtoallhumanbeingsandessentialhumancapacities,competitionsposeitinrelationtoalimitedsetofcontestantsandtoempiricaloraesthetichumantraits.ForliberalphilosopherssuchasRawls,commonhumanityconsists inthecapacitytoreason:theoriginalpositionispopulatedbyasetofhumanbeingswhoarestrippedofalltheircapacitiesandidentities,otherthantheirsharedpowersofreasoning.Inananalogousfashion,arrangingacompetition involves identifyingaparticular commonhuman trait (enterprise, speed,beauty,efficiency)andthenformulatingasetofrules, techniquesandmeasurementdeviceswherebydifferent people can be judged and compared according to that trait. This can otherwise bereferredtoas‘commensuration’,inwhichasinglemeasureofvalueisusedtorendermultiple,diverse phenomena comparable and rankable (Espeland & Stevens, 1998). In competitionshumansarenotallequalbeforethelaw,butadesignatedsetofhumansareequalbeforethemeasure.The appeal of any competitive game depends partly on how much it is sealed off from

broaderpoliticalquestionsof justiceand injustice, and the intrinsicnotionsofhumanworthwhichtheyrelateto.Ifitisentirelysealedoff(anditappearstorewardarbitrary,meaninglesshumantraits)thenitlooksirrelevantandfutile(Goffman,1997:131).Onewayofresistingtheimposition of competitive rules is to argue that they have nothing to dowithwhat is reallyvaluable in society, as people might argue of intelligence tests for example. But if it isinsufficiently sealed off (and it appears to be governed by external political and economicforces) it loses its integrity, as a separate sphere, in which universal critical and moralquestions are suspended.Anotherway of resisting the imposition of competitive rules is toarguethatthegameisexcessivelypenetratedbyexternalpolitics,forexampleintheclaimthata firm has been protected from competition by the state or that nepotism has determined alabourmarket outcome.A competitive game that remains ‘interesting’ (both for participantsand observers) is one that strikes a balance between being overwhelmed by ‘external’influencesand seemingexcessivelydivorced from them.The samecanbe saidof economiccompetition(Knight,1935).In the absence of some rule-giver or referee, competitors themselves have to uphold the

‘liberal spirit’ of competition. Smith’s moral vision of the marketplace was of just such acompetition,overseenbyanimaginary‘invisiblehand’,butultimatelydependentonthemoral‘sympathy’oftraderswithoneanother(Boltanski&Thevenot,2006).Yetwithathirdparty,

thequestionofhowliberal,howfairtomakethecontestistakenoutofthecompetitors’hands.Anauthorityisintroduced,whotakestherulesastheyexist,andenforcesthemwithaquasi-judicialspirit.Therulesthemselvescannotinsistthattheyareinterpretedandimposedfairly.Butbyappealingtoanunspokenideaofjustice,whichtranscendsanyparticularcompetitionorwritten rules, the figure of a referee attains some authority over the contest, by virtue ofactingina liberalspirit,evenifnocompetitioncanbeentirely liberal innature.Thisfigureonlygainstheirliberalspiritbyvirtueoftheirpracticalposition,astheindependentoutsider.If they lose this position (if, for example, a football referee is seen socializing excessivelywithoneof theteamsbeforethegame)thennodegreeoffidelitytotherulescanrestorethesenseofinjusticethatmaysurroundtheirjudgements.Thereisanunavoidablegapbetweentherulesandthe‘spiritoftherules’(orwhatWittgensteintermsthe‘game’andits‘point’),butthetask of the liberal competitive authority is to minimize how this gap is exploited by thecompetitors.Keepingtheapplicationandinterpretationoftherulesasclosetothespiritofapriori formal equality, as if imbued with Rawls’s original position, ensures that the rule-enforcerretainsauthorityandthatthecompetitioncontinuestoseemsufficientlyfair,ifneverutterlyfair.

TheviolentthreatofcompetitivenessIf a competition were only imbued by a liberal ‘spirit’ of fairness, then it would lack anyvitalityor surprise. Itwouldnotputcompetitors to the testorgenerateempirical inequality.The competitorswould seek to ensure that the outcomeswere the fairest reflection of theirrespectiveinequalities–butindoingso,theywouldbecooperatingandthereforebreakingthefirstnormofanycompetitivesituation.Justasitmustbeassumedthatcompetitorshavesomeabstractsenseofequalitybeforetherules,andareequalatleastuntilthecontesthasstarted,soitmustbeassumedthattheydesirevictoryorrelativesupremacy,almostregardlessofhowitis achieved. The rules and referee can be relied upon to impose minimal constraints ofequality;thetaskofthecompetitorsthemselvesistomaximizeinequalityinwaysthatbenefitthemselves.Todothis,theyneedastrategy.Thestrategicmindsetdoesnotlookattherulesintermsof

how they formally define victory, but looks atother competitors and asks how theywouldleast like the game to be played. It is purely focusedupon finding the sources of inequalitymost likely to result in victory, andwhichwon’t be immediately debarred by the rules (orrather,byaquasi-judicial interpretationoftherules).Forsure, itmaybethatvictorycanbeachieved throughstrategic formsofcheating,and that thecompetitorcangetawaywith this.While no rule can ever stipulate that cheating is permitted, it is implicit in any competitivesituationthatitcanandwilloccur.Forexample,therearesportssuchasicehockey,inwhichillegal, violent activity is a constant and relatively ‘normal’ occurrence, which players,spectators and umpires are generally tolerant of, or even excited by. Cheating even has alegitimacyofasort,ifitismotivatedbyadesiretowin.Tobe‘competitive’istoignorehowagame‘should’beplayed,orwhathumantraitstherulesareaimingtoreward,andtofocusonhowone’s own contingent traits can be employed against those of the opponents (Massumi,

2002:77).This ismost acute in ‘zero sum’competitions, suchas sports, inwhichone sidewins and the other loses, but they cannot bothwin.But it is also present in ‘positive sum’competitions,suchasschoolexams(inwhichthereisnolimittohowmanypeoplesucceed),in that individualsmight trainfor the testsbyfocusingontheparticularcharacterof the test,rather than on the ‘ability’ it is supposed tomeasure. Performance audits always invite thisformof ‘gaming’andunintendedconsequences– in fact aneffectiveauditor test isnotonewhichsuccessfullymeasures‘real’worth,butonethatproducesincentivesfortherightkindofgamingorminimizesdestructivegaming.Aneffectivecompetitivestrategyisthereforeradicallyanti-normative.Whiletherules(and

anyexternalenforcerofthem)seektoupholdthe‘spirit’offairnessinhowthecompetitionisconducted, the strategic competitor not only ignores this spirit, it also seeks to subvert theinterpretation of the rules inways that are advantageous to themselves. If the ‘point’ of thegame,fromtheliberalperspective,istomaintainsomeminimallevelofequalityinthefaceofmeasurement,the‘point’ofthegamefromthestrategicperspectiveistodotheopposite.Whatjustifies such hostility to fairness and equality? Perhaps ‘justify’ is the wrong word here,implying as it does that there is a higher normative principle at work. The competitivecommitmenttowardswinninganddefeatingisreallyanentirelyimmanentandexistentialone.It rests on no idea of how the contest ought to be conducted, but purely on the contingentsituation at hand. It stems from no higher principle, but from the existential fact of radicaldifference.This iswhatCarlSchmitt termed ‘thepolitical’,which ishostile toall formsofmoralconstraint:‘Thespecificpoliticaldistinctiontowhichpoliticalactionsandmotivescanbe reduced is that between friend and enemy’, Schmitt argued, but this is offered as ananthropological truth, and not a moral principle (Schmitt, 1996: 26). Within Schmitt’sexistentialsenseofthepolitical,thepursuitofradicalinequalityattainsalogicandmotivatingpowerallofitsown,independentofanyprincipleofjustification,whichisultimatelymanifestinmortal combat. The question ofwhy orwithwhat justification ‘we’ should triumph over‘them’becomesmeaninglesswherewarfareisconcerned,which‘hasnonormativemeaning,butanexistentialmeaningonly,particularlyinrealcombatwitharealenemy’(Schmitt,1996:49).Brute,unreasoningviolence indefenceof friends,andagainstenemies, isdescribedbySchmitt as a basic fact of being human. It is also this ontological definition of politics-as-difference which liberals blindly deny or suppress, with their appeal to justice-as-commonality.Competitivestrategyisimbuedwiththemotivatingpowerofthe‘friend-enemy’distinction.

Indeed,thereisagenealogyconnectingtheanalysisofmilitarystrategyandtheacademicfieldofbusinessstrategy.InSchmitt’saccount,theexistentialfactofthe‘friend-enemy’distinctionunderpins politics as a radically contingent form of decision making which resists theimposition of rules or laws. The true character of ‘the political’ becomes manifest in thedecision to try and destroy the enemy using violence. There is noa priori limit towhat ispolitically possible or permissible, only contingent limits of power, which have to bestrategically factored in to decisionmaking. The critical defining decision available to thepoliticianiswhethertowagewarornot.A wholly strategic competitor acts according to political necessity, in response to the

contingent inequalitiesandthreatswithin thecontest, rather thanoutofanysenseofapriori

fairness or common humanity. ‘The political’, in Schmitt’s specific existential sense of theterm, is a necessary animating force in a competition, for otherwise the abstract normativequestionsofwhy victory is desirable, orwhy the rules are as they are,will undermine thevitality of the contest. The event of political violence closes down the space of judgement,which the liberal spirit of competition opens up: it generates instinctive and unreasonablebehaviour, without objectivity or critical distance. In situations of violence – or the near-violence of ‘the political’ – all notions of equivalence,measure or justification are refused(Boltanski,2012).Theessentialdifferenceandinequalitybetween thecompetitorsarewhatmatteratsuchmoments,andnottheiressentialcommonalityandequality.Violencecannotproperlybedescribedasacompetitive‘spirit’,inthesenseusedbyWeber,

for that term implies amoral justification or regulatory principle,which in turn implies anappeal to the common interest. Insteadwe should speakof theviolent threat that underpinsvigorouscompetitivestrategy,thelurkingsensethatmaterialforcecouldpossiblybeusedinorder to achieve victory. This is metaphysics of a sort, though certainly not in anydeontologicalsense.Rather,itismetaphysicsasexistentialpossibility,asfutureactionsthatdonot yet exist, and are undertermined by anything other than sheerwill.The violent threat ofcompetitioncommandscompetitorstointerprettherulesinapurelyself-interestedfashion,tosee how the game might be played in ways that maximize advantage over the ‘enemy’,ultimatelysoastosurvive.Therules’normative,liberalnature–ofbeingthesameforall–isresisted,andtheyareinterpretedinwaysthatareasunfairaspossible.Butacompetitionisstillareduced,delimitedversionofviolence, justas it isareduced,

delimitedversionofliberalism.Itisnotuniversalisticenoughtobeidentifiablewith‘justice’,but nor does it ever attain the contingency of sheer combat: it hovers in a governed spacebetween the two.Schmittcomplained thatwhen liberalssought topacify ‘thepolitical’withrules, they reduced it to mere ‘competition’, which lacked any existential, violent quality(Schmitt,1996:72).Economiccombatorsportmayinvolveinequality,butnevertheradicalinequality sought in warfare (which is precisely why liberals value them). A strategiccompetitorthuspushesashardaspossibleagainsttherules,seekingtodefinethecompetitionandinterpretitsrulesinwaysthatmakevictorymostlikely.Inviewinginequalityasthe‘point’ofacompetitivegame,andnotequality, theystrainbeyond the limitsofwhat is legal,usingextraneoustactics,gamingandsubtleformsofcheating,noneofwhichare(orcanbe)codifiedin the rules.But they are inevitably still limited by the rules and the authority that enforcesthem:measureorjudgementstillhasthefinalword,andnotbruteforce.Intuitivelyspeaking,they are also likely tomaintain their own senseof ‘right’ and ‘wrong’ in the conductof thecompetition, which even the most strategic political combatant may struggle to throw offpsychologically.Just as competitors can delegate responsibility for upholding the ‘liberal spirit’ of

competitivenesstoanindependentthirdparty,sotheycanalsodelegateresponsibilityforthe‘violent threat’ toaheavilypartial coachof somekind.Sports coaches,businessgurus, lifecoaches, ‘leaders’, business lobbyists, motivational speakers and national businessrepresentatives are all examples of authorities whose task is to boost the competitiveperformanceofthosetheyrepresentorlead.Theytakethestrategicdecisionsonhowto‘win’,and develop psychological and cultural approaches to enhance the competitive desire and

teamworkoftheir‘friends’.Thisisanimmanentviewofcompetition,inwhichtherulesareonlyeverconstraintstobegotaround.Fuelledbythe‘violentthreat’ofcompetitiveness,thisauthoritycommandsobediencefornojustifiablereason,butpurelyonthebasisthattheyhavethe ability and will to succeed. Their decisions are obeyed purely because they are in thepositionofdeciders.Thestrategicviewfrom‘within’competitivesituationsmaystillemployempiricalevidence

and tests, in order to achieve agreements amongst ‘friends’ or to motivate them against‘enemies’. It is no coincidence that world wars have been times of great innovation ineconomicandpsychologicalmeasurementandstatistics,astheseareusefultoolswhenseekingtoplanformoreexistentialcontests.Butpragmaticallyspeaking,thecharacterandpurposeofsuchempiricalclaimsareverydifferentfromthosemadebythoseseekingtoadjudicateovercompetitions.Thosewhoseauthorityderivesfromthe‘violentthreat’ofcompetitionwilluseevidenceandnumbersinwayslikelytobedivisiveinordertodemonstratehowandwhy‘we’needtotriumphover‘them’andhowwemightdoit.Thepragmaticpoweroffactsandfigures,in such situations, is to energize, orientate and disrupt, rather than to achieve peacefulagreement.Often,theperceivedobjectivityorneutralityofthisempiricaldataislessimportantthanitsaestheticimpact.Numberswhichinciteparanoiaregardingfallingcompetitiveness,ortriumphregardingvictories,performeffectively.Thosewhichoffercold,impartialjudgementsonthesituationmaybequiteuselessforthosestrivingtonavigateuncertainsituations(Knight,1957).

TheAuthorityofEconomics

To understandwhat drives inequality under neoliberalism,we first need to understand howneoliberals conceive of equality (or, perhaps more helpfully, equivalence) and how it ismanifest in practical terms.What will be the common framework, measure or test throughwhich shared differences will become apparent?What is assumed about human beings, inorderthatvalidquantitativerepresentationsofdifferencecanbecomepossible?Forthe‘earlyneoliberals’ such asHayek, themarket itselfwould become the common evaluative device,whichwascapableofconvertingalldifferencesintoacommonlanguageofprice.Aslongasthey were constructed and run competitively, there would be no need for any ‘external’ oradditionalevaluationofhowthecompetitorswereperforming.Thisneverthelessassumesthatcompetitionislimitedtospecificinstitutionalarenasandleavesopenamplescopetoimposealternative institutional arrangements, where markets are either unwelcome politically, orimpractical(Davies,2013).Hayek’ssupportforthewelfarestate,Simons’commitmenttothenationalization of key industries, the ordo-liberal enthusiasm for the ‘social market’demonstrate that the early neoliberals were offering a justification for what Walzer terms‘monopoly’(separateinequalitiesinseparatespheres)andnot‘dominance’(thepowerofonesphereoverallothers).As the next chapter explores, it was Coasian economics (in tandem with the Chicago

School) thataltered thisprofoundly.Theobjectiveperspectiveof theeconomist– implicitlyworkingforauniversityorstateregulator–wouldprovidethecommonstandardagainstwhichactivity could be judged. Of course economics does not replace the price system, indeed

economics isveryoftenentangledwith thepricesystem(Callon,1998;Caliskan,2010),buttheaprioriequalityofcompetitorsbecomespresumed,asamatterofeconomicmethodology,which stipulates that all agents are endowed with equal psychological capacities ofcalculation. It is because this assumption ismaintainedwhenevaluating all institutions andactionsthatitmassivelybroadenstheterrainoflegitimatecompetition,andopensupvast,newpossibilities for legitimate inequality and legitimate restraint. Walzerian dominance issanctioned, and not simply monopoly. The Coasian vision of fair competition rests on anentirelyunrealisticpremise,namelythatindividualsshareacommoncapacitytocalculateandnegotiate,renderinginterventionbypublicauthoritiestypicallyunnecessary:thesocialrealityoflawyers’feesisaloneenoughtounderminethisfantasy.Yetinonesense,thisisamodeofeconomiccritiquethatisimbuedwiththe‘liberalspirit’describedearlier.Itseekstoevaluatethe efficiency of activities, on the basis of the assumed equal rationality of all, and theneutralityoftheempiricalobserver.LikeCoase,Schumpeterfacilitatesagreatexpansionofthespace–andtime–inwhichthe

competitiveprocesstakesplace.Various‘social’and‘cultural’resourcesbecomedrawnintothedomainofcompetition,withthegoalbeingtodefinetherulesthatallothersmustplayby.Monopoly is undoubtedly the goal of competitiveness. But unlike Coase’s economics,Schumpeter’s makes nomethodological assumption regarding the common rationality of allactors.Instead,itmakesaromanticassumptionregardingtheinventivepowerofsomeactors(entrepreneurs), and the restrictive routines of most others. Any objective judgementsregarding valid or invalid actions will be rooted in static methodologies or rules.Entrepreneurshavenorules,andrespectnorestraint.Theyseeknoauthorityorvalidationforwhat theydo,butaredrivenbyapuredesire todominate. In thissense theirown immanentauthoritycomeswitha‘violentthreat’,whichisendorsedbytheneoliberalstateasChapter4discusses.Thesetheoriesofcompetitionarenot‘ideological’andnoraretheysecretive.Theyarenot

ideological because they do not seek to disguise how reality is actually constituted or todistractpeoplefromtheirobjectiveconditions.Theyhavecontributedtotheconstructionandconstitutionofeconomicreality,inasmuchastheyprovideobjectiveandacceptablereportsonwhat isgoingon, thatsucceed incoordinatingvariousactors.Moreover, theyaresometimesperformative,notleastbecauseofhowtheyinformandformatmodesofpolicy,regulationandgovernance. Inequality has not arisen by accident or due to the chaos of capitalism or‘globalization’.Theoriesandmethodologies,whichvalidatecertain typesofdominatingandmonopolistic activity, have provided the conventions within which large numbers ofacademics, business people and policy makers have operated. They make a shared worldpossible in the first place. But nor are any of these theories secret either. They have beenpublished in peer-reviewed journals, spread via policy papers and universities. Withoutshared,publicrationalitiesandmethodologies,neoliberalismwouldhaveremainedaprivateconspiracy. Inequality canbedenouncedbycriticsofneoliberalism,but it cannotbearguedthat–inanerathatprivilegesnotonlymarketcompetitionbutcompetitiveness ingeneral–inequalityisnotpubliclyacceptable.

_____________________________

1‘Planningandcompetitioncanbecombinedonlybyplanningforcompetition,butnotbyplanningagainstcompetition’(Hayek,1944:43).

2BerginoffersacompellingaccountofthetransitionthatoccurredwithintheMontPelerinSociety,asMiltonFriedmanbecamean increasinglydominant figure in theSociety from1961onwards, alienatingmanyof the elderEuropeanmembers, such asRopke,intheprocess(Bergin,2013).TherisingnumberofAmericaneconomistsintheMontPelerinSocietywasonesymptomof its gradual relinquishing of its initial philosophical and social ambitions, and corresponded to its increasingly laissez-faire,capitalistoutlook,incontrasttotheearlyconcernwithdesigninganewliberalorder.

3

TheLiberalSpiritofEconomics

Competition,anti-trustandtheChicagocritiqueoflaw

Henry Simons is a central figure in the development of the American tradition ofneoliberalism, which developed at the University of Chicago between the 1930s and the1970s.YetSimonswasneverhighlyreveredasaneconomistandhewasgenerallyconsidereda maverick, with personal difficulties which led to his suicide in 1946. His 1934programmatictext,APositiveProgrammeforLaissez-Faire,wasviewedasfar-fetchedinitsambitionstorecreatealiberaleconomicorder,againstthebackdropoftheNewDeal(Simons,1937).WhilethebookwasgreatlyadmiredbyHayek(aclosefriend),CoaselaterdescribedSimonsasa‘utopian’.ButitwasSimons’awkwardqualitywhichledJacobViner,thenheadof the Chicago economics department, to seek an appointment for him in an alternativedepartment. The University of Chicago had recently established a law programme whichneededsomeonetorunit.VinerproposedSimonsfortheposition(hopingtomakehimtheLawSchool’sproblem)towhichhewasappointedin1939,makinghimthefirsteconomisttoeverrunaUSlawschool.BysubsequentlytransferringandattractingmoreeconomiststotheLawSchool–mostimportantly,AaronDirector–Simonsgavebirthtothe‘LawandEconomics’movementanddiscipline.Over the subsequent forty years, Chicago Law and Economics would grow from these

accidentaloriginstowidespreadprominencewithinAmericanlegalthinking.Overthecourseof this journey, various transformations would occur, as this chapter will explore, withprofound implications for the understanding of law, regulation and the definition of‘competition’.Theauthorityofeconomicsandeconomistswithinmanystateagencieswouldgrow,tosomeextentattheexpenseoftraditionallegalexpertise.Judgeswouldlearntoreasonlikeneo-classical economists, leadingTheWashingtonPost to raise the alarm in 1980 thatfederal judgeswerebeing ‘brain-washed’byChicago ideas.A radically empiricistviewoflaw would emerge, which understood its sole function to be the alteration of economicincentivesforthepromotionofefficientoutcomes.Inanarchetypicallyneoliberalfashion,thesovereign and normative dimensions of law were treated as metaphysical nonsense, whichwereonlyusedbyjudgesandotherpublicactorstoconcealtheirowninterestsandobjectives(Davies, 2010). The question of ‘just or unjust’ became replaced by one of ‘efficient orinefficient’.Thiscriticalandtechnicalprogrammeregistereditsgreatestsuccessesinthefieldof anti-trust, where it greatly reduced the remit and authority of competition agencies,beginningintheUSAinthelate1970s,beforepermeatingtheEuropeanCommissionfromtheearly1990sonwards(Pitofsky,2008;Buch-Hansen&Wigger,2010).ChicagoLawandEconomicsexemplifiesthekeyaspectsofneoliberalismexaminedinthe

previoustwochapters.Firstly,itattemptstoreducepoliticalmetaphysicstopoliticalphysics,disenchantingpolitics (or in thiscase lawand judicialauthority)byeconomics. Itexplicitlyseekstoemptyouttheethical,performativeandaprioricomponentsoflaw,andleaveonlyitspositive, measurable, empirical elements. In this respect, it is radically utilitarian in themanner of JeremyBentham, asmanyof its pioneers and adherents recognize (Posner, 1981;Kitch,1983).Itdoesthisthankstoaudaciousactsofdisciplinaryandprofessionalimperialismon thepartofneo-classical economists,whonotonly taught and trained lawyers (followingSimons’ appointment) but also provided an entirely new basis on which to think about theauthorityoflawandofjudges,namelythemeasuredefficiencyofrulesandrulings.Empiricaloutcomesarethebarometerofjustice,andnotconsciousintentions,actionsorprocesses.Thisrepresentsamajordeparturefromthelegalepistemologyoftheearlyneoliberals.Secondly,andconsequently,thisgivesrisetoarapidinflationintheauthorityandpowerof

neo-classical economics, from a positive academic science of rational choice, to a quasi-constitutionalprocessforpublicdecisionmaking.Thecaseofanti-trustexhibitsthis,andwillbeaddressedindetailhere,buteffortstoreplacenormswitheconomictestsextendacrosstheneoliberalstate.Toholdsuchauthority,neo-classicaleconomicsandeconomistscannotsimplyoffer up their techniques andmeasuringdevices for use by the state, theymust also operatewith justifications and critical bases on which to employ these techniques and devices asopposed to others. Within anti-trust and regulatory agencies, economists must becomeembeddedinasetofinstitutionalconditions,whichwillallowtheirmethodstobeconductedinaneutral,independentacademicfashion,whilealsobeingprofessionallysubservienttothelegal experts who put anti-trust cases together. The authority of the neo-classical methodrequires constant affirmation and institutional support. It must be projected in implicitlynormativeterms,despiteitsclaimstobefreeofanynormativity.Anduponarrivalinthestate,this style of reasoning is projected in implicitly sovereign terms, despite its claims to behostiletoallnonsensicaltalkofsovereignty.Thirdly, Law and Economics makes a particularCoasian definition of ‘competition’ the

empirical test of valid action on the part of firms and states. To be sure, this definition of‘competition’comestobeequatedwiththatof‘efficiency’,inthenarrowneo-classicalsenseof the term, usually understood as ‘consumer welfare’. But the idea of competition, as anuncertain and unequalizing dynamic, continues to do crucial work in how the neo-classicalcritiqueoflawandofthestateisconducted.IfLawandEconomicswasmerelyutilitarianinaBenthamitesense, therewouldbenoclearreasontodistinguishthisparadigmfromsocialistplanning.ItisbecauseLawandEconomicscombinesBenthamiteempiricismwithaparticular(Coasian) idea of free competition that it preserves a central feature of neoliberalism, andremains hostile to state interventions. It strives to square the circle between liberalism andutilitarianism,throughanidiosyncraticappealtotherationalityofindividualdecisionmaking.Atworkhereisthelatentmetaphysicsoftheneo-classicalmethoditself:thepresuppositionofcalculating,individualrationalityservesasaregulativeliberalprincipleinthewayinwhichoutcomesareevaluated.Itisthismethodthatisresponsibleforproducingempirical,numericalfactsoutofanuncertainprocess,andtherebyalsoproducingasharedsenseofwhatisgoingon.Finally,wecan see that this traditionofneo-classical economics acquires and requires a

‘liberal spirit’ of authority, once it is embedded in anti-trust agencies, law courts andregulators.Theneo-classicaleconomistbecomesanadjudicator,externaltothecontest,taskedwith upholding some minimal idea of a priori freedom and the equality of competitors.Economistsbecomequasi-judicialintheirauthority.Theyensurethatallcombatantsareequalbeforethemeasureofefficiency,inthesamewaythatjudgesensurethatallcitizensareequalbeforethelaw.Theyperformcrucialworkinregulatoryagenciesindelineatingpreciselywhatcounts as evidenceof competition,while actively excluding agreat deal of information thatlawyersmight otherwise have considered. From a pragmatist perspective, the neo-classicaleconomist oversees the procedures throughwhich efficiency and inefficiency canbe spokenaboutinempiricaltermsinlegalsettings.Theyperformanactiveroleinthecommensurationofevidence,takingheterogeneoussituationsandinstitutionsandprocessingtheminwaysthatmake themnumericallycomparable inacourtof law.ChicagoLawandEconomicsscholarswould dispute such a normative characterization. But by examining how neo-classicaleconomicsisappliedandjustifiedempiricallyinparticularlegalsituations,wegetaglimpseofits‘liberalspirit’–thatis,itspurportedfairnessandblindness.Thischapterdetailsthegenealogyoflawandeconomics,asastrategicandhighlyeffective

processofeconomization,firstoflegalthinkingandthenoflegalandregulatoryinstitutions.Itdemonstrates how this attempt to strip the state of its metaphysical ‘liberal’ authority musteventuallybestowaquasi-judicialauthorityuponeconomists,andanormativestatusupontheprocedures of Chicago price theory if it is to function effectively. The psychologicalassumptionsofthattheorybecomeimplicitlyregulatoryprinciplesforhowthestatecomestounderstand justice, at least in the ‘economic’ sphere,but increasinglybeyond.Neo-classicalmethodology becomes a form of authoritative procedure, which must be performed in acredible fashion, before an audiencewhich recognizes its authority, if its findings are to beaccepted.Thispragmatistanalysis requiresus topaycloseattention to the formsof rhetoricandpersuasionthathavecharacterizedLawandEconomics,andhowlawyershavegraduallyceded authority to economists, or rather, learnt to speak and think like economists (just aseconomists have instinctively come to act in a ‘lawyerly’ fashion in law schools and stateagencies).Themostsignificantoutcomeoftheseprocesseswasawholesalereappraisalofmonopoly,

resulting in amodel of applied neoliberal policy and law inwhich large concentrations ofcorporatepowerandhighprofitabilityweretypicallyjustifiedonefficiencygrounds.Themerepossibility that a dominant firmmight be challenged in the future came to be viewed as asufficientmeans of constraining their power.Whether or not such a possibility existedwasdeemed testable through abstract economicmodelling, rather than any actualmarket events.WhiletheChicagoSchoolretainedadogmaticfaithinpricetheory,asamethodologicalbasisonwhichto judgeindividualbehaviourandinstitutionalefficiency, this involvedadecliningcommitmenttothepricemechanismasafeatureofdecentralized,competitivemarkets.Astheauthorityofeconomistscame tocondition thatof lawyers, ‘price’went frombeingavisiblephenomenonatwork in a liberalmarket society, tobeing ametaphor throughwhich expertswouldanalysedifferentformsofindustrialorganization.IntheChicagoSchoolepistemology,thecoretenetsofeconomicliberalism(choice,competition,price,freedom)areconvertedintomethodologicalpremises,whicharenotnecessarilyinstitutionallymanifestorapparenttothe

actors themselves. Equally, institutional formswhich appear entirely illiberal to the actorsthemselves,and indeed to lawyers,mayactuallybedeemedefficientandcompetitiveby theChicagopricetheorist.Theliberalspiritofcompetitionbecomesincreasinglyovershadowedbytheviolentthreatofcompetition.Thisthensowstheseedsoflegitimacycrises.The chapter is in three parts. In the next section, I examine the development of Law and

EconomicsattheUniversityofChicago,betweenSimons’appointmenttotheLawSchoolandthefirstLawandEconomicstextsoftheearly1970s.TheinfluenceofCoaseiscrucialinthisregard, in enabling theChicagoSchool to lose its final vestigesofEuropeanneoliberalism,whichhadinvolvedadegreeofaprioricommitmenttotheformofmarkets,theinstitutionofprice and the rights of market actors. Secondly, I examine how Law and Economicstransformed the legal and policy thinking regarding competition, in ways that led to rapidgrowthintheneo-classicaleconomiccapacitiesofstatesfromthe1980sonwards.Thirdly,Ilookatwhat thismeansforhowcompetition isdefinedandenforced inpractice in theUSAandEU.Thischapterdrawspartlyoninterviewswitheconomistsandlawyersworkinginanti-trustagencies,quotesfromwhomareincludedinthefootnotes.

TheFusionofLawandEconomics

Thefusionof lawandeconomicswasanabidingpreoccupationforneoliberal thinkersfromthe 1930s onwards. The paradoxes of competition reappear at the interface of legal andeconomic analysis. Law is concerned with generalities, whose legitimacy is potentiallyindependent of economic incentives or outcomes. Economics (at least in its neo-classicalvariety) is concernedwith utilitarian questions of efficiency and effects. Enacting anti-trustpolicy necessarily involves a degree of conflict or compromise between these twoepistemologicalandprofessionalworldviews,whichwilldeterminetheextenttowhichanti-trustisviewedintheproceduraltermsofmarketfairnessortheutilitariantermsofoptimizingoutput.Priortotheemergenceofneoliberalism,therewereanumberofeffortsmadetobringlawandsocialsciencetogetherthroughpragmatismandcompromise,asmanifestinAmericanlegal realism (Fuller, 1934; Pearson, 1997). But from the mid-1930s onwards, neoliberalsrenewed theseeffortswithgreatercriticalurgencyand inter-disciplinary assertiveness.Thiswasmanifestintwotraditions,whichareinsomerespectsinversesofoneanother:inanordo-liberal project of extending legal analysis into economics, and then in aChicago Schoolprojectofextendingeconomicanalysisintolaw.Ifthesyntheticobjectivewasthesameforboth,thestylesandpolicyimplicationsdifferedmarkedly.

Ordo-liberalism:lawasmarketorderTheordo-liberal tradition achievedonedistinctive fusionbetween law and economics.Theordo-liberal Freiburg school was led by Walter Eucken from the early 1930s onwards,successfullyavoidinginterferencefromtheNazigovernment.Itwasinfluentialinadvisingtheallies on the reconstruction of the German economy following the war, in particular inhighlighting the importance of cartels in facilitating the Nazi takeover of the economy, andhenceofanti-cartellegislationinapostwarliberalGermany.Theschoolhadbeenplanningfor

postwareconomicreconstructionoverthecourseof1942–43andwasinstrumentalinaddingstrong anti-trust provisions toGermany’s 1948 constitution and creating the conditions of aEuropeancompetitionframework(includingthepreventionofStateAid)inthe1957TreatyofRome(Gerber,1998;Ptak,2009).ThistraditionshapedtheEuropeanCommission’sstyleofcompetitionenforcementrightupuntilthe1980s(Buch-Hansen&Wigger,2010).Ordo-liberalismprivilegedanexplicitlymoral-philosophicalideaofacompetitivemarket,

inwhichno individual firmor other actor could exert power over others.Eucken’s idea of‘complete’competitionwasone inwhich theprice systemdirectedall economicprocesses,and no individual competitor could unilaterally influence price. Empirically speaking,economicagentswererecognizedtobemotivatedbythecreationandpursuitofplanssoastoreducetheuncertaintyofthefuture.AsEuckenwrote,‘Atalltimesandplacesman’seconomiclifeconsistsofformingandcarryingouteconomicplans’(quotedinLabrouse&Wiesz,2001).However,thisposedthethreatofcertainfirmsacquiringdominanceoverothers,andultimatelyoversociety.Thetypeofeconomicequilibriumsoughtbytheordo-liberalswasaninstitutionalone, whereby an essential economic order would be established through law in which nosingleinterestwasinpower.Nobody,neitherstatenorfirm,shouldbeabletoplanwithgreatconfidence.Monopoliesandcartelsneededbreakingup,regardlessofthebenefitstheymightproduce(Bonefeld,2012).Policymakersshouldbe limited to ‘indirect regulation’– that is,interventionsaimedattheformalstructureoftheeconomyanditsrelationtosociety–andnottospecificoutcomes.Inthisregard,HayekandSimonswerehighlysympathetic.Theordo-liberalswerekeenscepticsofneo-classicaleconomics,whichtheybelievedhad

abandonedanycritiqueofindustrialcapitalism,oranynormativeconcernwiththedesignandconstruction of a liberal market. The task for the ordo-liberals was to translate liberaleconomicconceptsintoalegallanguage,whichcouldthenbeusedasthebasisforeconomicandpoliticalgovernance,notsimplyinparticularinstitutionsormarketsbutacrosssociety.Asthe ordo-liberal Franz Böhm imagined, liberal capitalism would need an ‘economicconstitution’–asetofsovereignlawswhichmadethecompetitivemarketorderthetemplateforsocietyatlarge(Gerber,1994).Liberalpoliticalprincipleswouldbecomefusedwithandpreservedbyneoliberaleconomicinstitutions:

Civil rights and liberties have no value in themselves; they only acquire their significance through the institution ofcompetition…Theserightsandlibertiesaretheprerogativesofcombatantsandtheyforfeittheirraisond’etrewhenthecombatceases.(QuotedinGrossekettler,1996)

The‘liberalspirit’ofeconomiccompetitionshinesthroughthissortofclaim,suggestingthatliberalmetaphysical notions of right canbe rendered tangible or physical via the particularinstitutionofamarket.Thefusionofaliberalphilosophyofjusticewiththesocio-economicinstitution of a market would occur through a reorientation of the judiciary, towards theupholding of economic competition. Economic competition becomes a substitute for andguarantee of political liberty. As Foucault explores in his detailed exposition of ordo-liberalism, in thepostwarperiod, theGermanmarketwashistoricallyand logicallyprior tothe state, being put in place underAmerican reconstruction and rule (Foucault, 2008: 102–105). This precedence means that, for German neoliberals, the market can coherently betreatedastheconstitutionalprincipleonwhichthestate’sauthoritydepends.

Ordo-liberalism was inspired by a sense that economics had failed to defend economicliberty, and consequently political liberty. Neo-classical economics was deemedsociologicallyignorantregardingtheimportanceofpower,regulation,industrialconcentration,technology and normswithin twentieth-century capitalism. But rather than divert economicstowardsnormsandinstitutions(asCoaseandthelaterChicagoSchoolofLawandEconomicswould do), ordo-liberalism diverted legal attention towards the sanctity and vitality of theprice system. This therefore represents one particular strategy for the fusion of law andeconomics.Inpractice,itwouldmeananactiveroleforthejudiciaryinshapingtheinstitutionsofcapitalism,upholdingadegreeofapriorifreedomonthepartofcompetitors,andblockingmonopolisticpracticesonprinciple.Theroleofthestateintheordo-liberalworldviewwastodefend the liberal spirit of competition at all costs, maintaining a sense of fairness in themarket and placing unambiguous regulatory limits around the ‘violent threat’ of combativeeconomicpractices.The executivebranchofgovernmentwas treatedwith suspicion, but anactivejudicialbranchwascentraltohowan‘economicconstitution’wouldbeupheld.Fromtheordoliberalperspective,thedeclineoftheWeimarRepublicintoNationalSocialismwasexplicableintermsofaweakstatepermittingthegradualpollutionofmarketmechanismswithsocial and political agendas (Bonefeld, 2012, 2013). A strong state would be needed topreventthisinfuture.Ordo-liberalismwonitsgreatestpoliticalachievementsinthewakeofWorldWarTwo,but

its influencehaswanedever since.Thisparticular fusionof lawandeconomicsgranted thestate the right to intervene economically without concern for the empirical consequences,offering justifications based on the ideal ‘order’ and structure of free market capitalism.Legalismremainedpriortoeconomism:whilelawwasappliedtotheeconomy,lawitselfwasnotsubjectedtoaneconomiccritique.Ifanything,neo-classicaleconomicswassubjectedtoalegalisticcritique.Hence,frommanyneoliberalperspectives,ordo-liberalismremainsmiredin themetaphysical nonsenseof universal rights, freedomandapriori equality, even if thisnonsense becomes channelled into the marketplace via the political establishment of an‘economic constitution’. Certainly for Eucken, the order of a competitive market was ametaphysical essence and not an empirical ormeasurable phenomenon (Ptak, 2009). Underordo-liberalism,priceacquiresamagical,metaphysicalqualityakintosovereignty,actingasthe technical guarantor of liberty and consensual interaction. The dynamism of the marketwould counteract the quantitative rationalism of economic calculation, which threatened tostripmodernityofitsvitality(Bonefeld,2013).Itistheabsenceofthisstronglyliberalformofneoliberalism that characterizes the ‘actually existing’ neoliberalism that was implementedfrom the 1970s onwards. The neoliberal state lost its judicial right to intervene in thecompetitive game, purely on principle, andwas instead restricted to justifications based inempirical considerations of efficiency. This was thanks to the Chicago School’s owndistinctivefusionoflawandeconomics.

Chicago:economicsaslegalauditBothHayek andSimonswere socially and intellectually close to theFreiburgordo-liberals

duringthe1930sandearly1940s.Theytoowereentrancedbythemagicofthepricesystem,which facilitated coordination without any ‘conscious’ collective will. Simons viewedmonopolyas thegreatestobstacle to renewing liberalismandrepeatedly tried tohireHayekduring the early 1940s, though without success. Following the publication of The Road toSerfdom,theconservativeVolckerFundofferedtofundaprojectwhichwouldtakeHayektoChicago,andproduceaUSversionof thebook.Thiswasbelatedlyestablishedas theFreeMarketStudy,whichwasledbyDirectorbetween1946–52,althoughHayekwasonlyabletofinallymove to Chicago in 1950 (VanHorn&Mirowski, 2009). Notably, the FreeMarketStudywasalsoconducted in theLawSchool,andnot theeconomicsdepartment,whichwaspartlyamarkofhowideologicalitappearedtomainstreameconomists.Influenced by Simons andHayek, the ‘second generation’Chicago School (dominated by

MiltonFriedman,GeorgeStiglerandDirector)hadalsoworkedaroundtheassumptionthatthestrong ruleof economic lawwouldbe a crucial ingredient for any futureneoliberal system.Theassumption,whichheldatleastuntiltheearly1950s,wasthateconomicfreedomwouldrequire a vigilant state (especially in the realm of anti-trust) to prevent monopolistic andcooperative practices from subverting or circumventing the price system. As late as 1968,Stigler was a contributor to the Nixon administration’s Neal report on anti-trust, whichrecommendedtheactivedeconcentrationofindustriesbygovernmentagencies.Yetbythemid-1970s, thiswasveryfar fromthepositionof theChicagoSchoolor itsLawandEconomicsmovement. Contrary to visions of American neoliberalism as ‘market fundamentalism’, theChicago position swung away from the ordo-liberal and early neoliberal one, towards anidiosyncratic view of competitionwith scant intrinsic respect for the price system and fargreater sympathy formonopolies.Within this view, the competitiveness of individual firmscouldbeevaluatedbyeconomists(usinghypothesesandmodels),andnotnecessarilyby thepresenceofcompetitors.The genesis of Chicago Law and Economics contains two critical paradigm-shifting

moments.ThefirstarosewhenDirector(appointedheadoftheLawSchool,followingSimons’death)wasinvitedbythelegalscholarEdwardLevitoassisthiminteachingtheschool’santi-trustclass.Thereisevidencethatfrom1950onwardsDirectorhadbeengrowingincreasinglysuspiciousofhiscolleagues’faithinanti-trustastheguarantoroflibertyand/orefficiency(VanHorn,2009,2011).Itseemedtopresumetoomuchcertaintyonthepartofgovernmentlawyers,andnotenoughcommonsenseonthepartoffirmsortheirmanagers.Theeconomicrationaleforanti-trustlaw(thatis,itsmeasuredeffectsonpriceandefficiency)hadnotbeensubjectedtoatrulyeconomicanalysis.Intheclassroom,Leviwouldofferlegalisticexplanationsofwhyactiveanti-trustwasanecessarypreconditionofacompetitivemarket,whichotherwisetendedtowards inefficientmonopoly. Directorwould then respond, dismantling the argument usingneo-classical economics, showing how legal interventionsmight conceivably undermine theefficiency of themarket. He was particularly scornful of the use ofmerger law to preventverticalintegration(betweenfirmsandsuppliers),whichwouldbecomeamajorfocusfortheChicagocritiqueofanti-trust.Asoneattendeeoftheclasslaterreminisced,‘forfourdaysEdwoulddo this, and foronedayeachweekAaronDirectorwould tellus thateverything thatLevihadtoldustheprecedingfourdayswasnonsense’(Kitch,1983).TheclassalsoincludedRobertBork,theconservativelawyerwhowouldlaterdomorethananyonetopushChicago

LawandEconomicsintopublicpolicycircles.Anironyofthissituationwasthatthelawyer–inthiscase,Levi–wasmoreweddedtothe

market price mechanism than the economist. In common with the ordo-liberals and theAmerican anti-trust authorities at the time, Levi assumed that any business strategy thatdisrupted the a priori form of a competitive, decentralized market was anti-competitive.Director’s insightwas that in empirical industrial situations therewereplentyof conditionsunder which monopolistic practices could be efficient in terms of measured output: forexample,themonopolymightsimplybeanoutcomeofafirminnovatingorcuttingcostsmoreeffectivelythantheircompetitors.Consumerwelfaremightbehigherwithoneortwoefficientproducers,thanwithachoiceoftencompetingandinefficientproducers.Directorwasedgingtowards the same institutional insights that Schumpeter and Coase had already arrived at(DirectorhadinfactmetCoasemorethanonceattheLSEinthe1930s).The second critical event was a seminar hosted at Director’s home in Chicago in 1960,

when Coase presented his paper, ‘The Problem of Social Cost’, to 20 senior Chicagoeconomists, including Friedman and Stigler. Stigler later described it as ‘one of the mostexciting intellectual events of my life’ (Kitch, 1983). As explored in the previous chapter,Coase’stheoryoftransactioncostsmeantradicallyabandoninganyidealorapriorivisionofanoptimal institutional arrangement,making the efficiencyof decentralizedmarkets (and allindustrial structures) an open empirical question, to be gauged through careful empiricalapplicationofpricetheory.AsacritiqueofPigou’stheoryofexternalities,Coasehadarguedthatindustrialstrategieswhichunderminecompetitioncouldpotentiallybeefficient,relativetothealternatives (especiallywhen thosealternatives includedcostly regulatory interventions).Giventhathewas,toallintentsandpurposes,offeringacritiqueoftheliberalcommitmenttodecentralized open markets, it was little surprise that he had an initially unsympatheticaudience inChicago economists.A vote taken at the beginning of the evening revealed thatthere was unanimous opposition to Coase’s argument. In his acute scepticism towardsregulation, he had, in the words of one observer, ‘out-Chicago’ed Chicago’ (Priest, 2005:356).Yet this paper succeeded in creating a new framework for the economic analysis of law,

whichwouldbecomethedistinguishingfeatureofChicagoLawandEconomics.Coase’spapersuggested thatmost neo-classical economists suffered froman idealistic visionof economicprocesses as occurringwithout transaction costs, but occasionally encountering problemsof‘externality’whichcouldbe resolved through regulatory intervention.What thismissedwasthat,inreality,alleconomicactivity,bothregulatedandunregulated,carriescosts.Thetaskfortheeconomist shouldbe toevaluate the legalarrangementswhichare the leastcostly in theaggregate, relative to other viable courses of action, as opposed to unrealistic visionsof a‘perfect’ortransactioncostlessmarket.Aclarificationofpropertyrights(suchthattwopartiescouldsettledamagesbetweenthemselves)mightoftenserveasamoreefficientalternativetoregulatory intervention. Coase offered a new paradigm of analysis, one that was far morescepticalofthestatethantheearlyneoliberalsandchimedwiththelaissez-faireor‘anarcho-capitalist’ sympathies of Friedman,who circa 1960was becoming the dominant figure, notonlywithin theChicagoSchool, but also theMontPelerinSociety (Foucault, 2008;Bergin,2013).TheseminaratDirector’shousewasaturningpointinitself,asCoasegraduallywon

overtheassembledgroup.Avoteattheendoftheeveningshowedunanimoussupportforhisposition.Members of the Chicago Law and Economicsmovement later joked that law andeconomics could be divided into ‘BC’ and ‘AC’ – before Coase and after Coase (Stigler,1992).TheLevi/Director anti-trust class andCoase’s seminar presentation both highlight certain

characteristic features of how the Chicago Law and Economics operated rhetorically andculturally.Firstly,ashasbeenwidelyremarkedon(andcelebratedbyitsprotagonists),therewasamachoethosofintellectualcombat(VanOvertveldt,2006):anargumentorideacouldonlysurviveinthisclimateifitcouldwithstandacombinationofrationalistattackandauditbycommonsense–wherecommonsensemeantthebasicpsychologicalassumptionsofneo-classicalprice theory.Legalargumentsaboutwhatamarketoreconomy‘ought’ to look likewere revealed as a form of metaphysical ‘nonsense’ before the tribunal of economicrationalism. Levi’s argument about the normative necessity of anti-trust was revealed byDirectortobejustsuchnonsense;Coase,ontheotherhand,turnedthetablesonChicago,andwas even more immune to normative claims than they were. In this respect, Chicagoeconomists were already behaving like lawyers in a courtroom, marshalling evidence andcounter-evidence, seeking holes in opponents’ arguments and attempting to demolish oneanotherwiththeirrhetoric.The ethos which unites the style of Chicago School argument with its content is a

valorizationofcontestability.FromtheChicagoanneoliberalperspective,thisholdsasmuchinintellectuallifeasineconomiclife.Thereisnolimittohowmuchinfluenceandpoweragood argument or a good business should be allowed to have, so long as there remains thepossibilitythatothersmaycontestit.ThiscorrespondscloselytoPopper’sideaofthe‘opensociety’. Accepted arguments must be falsifiable in principle and monopolies must bechallengeable inprinciple.Tocompete (intellectuallyoreconomically)becomesfar tougherunder theseconditions,as itpotentially involvesdefying theentirestatusquo–asFriedmanandhiscolleagueswereself-consciouslydoing.Whatthisphilosophytypicallyexaggeratesishowcontestablemonopolisticpowersareinpractice.Secondly, through a series of accidents and disciplinary experimentation, neo-classical

economists arrived in positions of teaching and training lawyers. Simons’move to theLawSchool precipitated this,withDirector’s appointment cementing it, resulting in a number ofChicago economists (includingStigler andGaryBecker) spending someor all of their timeteachinglaw.ThecrucialthingaboutDirector’sinterventioninLevi’santi-trustclasswasnotthatitalteredhoweconomiststhoughtaboutregulationandlaw,buthowlawyersthoughtaboutthem.Infacttheeconomicestablishment(thendominatedbyHarvard)waslargelyimpervioustotheChicagowayofthinkinguntilthe1980s,whichwasviewedasobsessivelylibertarian.And yet by privileging clarity of thinking and simplicity of reasoning (derived from neo-classical economics), the Chicago approach appealed to lawyers in the traditions ofpragmatismandpositivism,especially thosewithconservative sympathies suchasBorkandPosner.The legal realist traditionof the1920sand1930shadattempted toprovideasocialscientificexplanationandjustificationfor law,butneverusingneo-classicaleconomics,andneverwithquitesuchhostilitytomoralreasoning.TheChicagofusionoflawandeconomicsoccurredthroughpersuadinglawyerstoabandon

their concernwithmetaphysical notions such as ‘justice’ and ‘right’, in favour of empiricalquestions ofmeasurable output, but this required certain rhetorical skills on the part of theeconomistswhospreadthismessage.RichardPosner,whowouldbecometheleadingfigureofChicagoLawandEconomics,wasalawyerwhohadneverstudiedeconomics,butstumbleduponit inthe1960s,discoveringthatpricetheorysimplymadegreater‘sense’thanwhathislegal colleagues were arguing (Teles, 2008). Its resolutely simple premise – that the bestactionistheonewhichmaximizeswelfare–coupledwiththeassumptionthateachindividualknowswhatwelfaremeans for them,coulddevastate farmorephilosophically sophisticatednotionsofjustice.Theabilityofeconomists,suchasDirectorandCoase,tocommunicatethisstyleofreasoningbeyondtheeconomicsprofessionwasfundamental,asPosnerrecognized:

[Coase]haswhattoalawyerisquiteimportant,anunusuallylucidandsimplestyleofwriting…WhenIreadit,havingnoknowledgeofeconomicsatall,itseemedtometomakeperfectlygoodsense.Thefactthatitwasverywellandclearlywrittenenabledhimtocommunicatewithmeinawaythatmosteconomistscouldnot.(Kitch,1983:226)

Where the ordo-liberals sought to impress upon the judiciary the importance of particulareconomic institutions and structures (competitive markets, the price mechanism etc.), theChicagoLawandEconomicsmovementsoughttoimpressuponlawyersaparticularutilitarianstyleofthinkingandreasoning.InheranalysisofCoase’srhetoric,DeirdreMcLoskeypointsout that his style is a ‘lawyerly’ one, pepperedwith terms such as ‘in fact’, disparaging ofabstract‘blackboardeconomics’,andconstructedaroundacarefulbuildingupofanargumentbased on stories and metaphors (McCloskey, 1985). The Law and Economics project was(oftenexplicitly)oneofreplacingthepoliticalmetaphysicsofjusticewiththepoliticalphysicsofneo-classicaleconomics.Thechallengewasalwaysviewedasarhetoricalandpragmaticone,asStiglerindicated:

Thedifferencebetweenadisciplinethatseekstoexplaineconomiclife(and,indeed,allrationalbehaviour)andadisciplinethatseekstoachievejusticeinregulatingallaspectsofhumanbehaviourisprofound.Thisdifferencemeansthat,basically,theeconomistandthelawyerliveindifferentworldsandspeakdifferentlanguages.(Stigler,1992:463)

This betrays the lingering influence of Hayekian constructivism, the notion that expertdiscoursesanddisciplinesareresponsibleforshapinghowtheworldappearstous.ThetaskofChicagoLawandEconomicswastofuselegalandeconomicprofessionaldiscourse,suchthat‘efficiency’becameaproxyfor‘justice’.Thisdisciplinaryandprofessionalimperialismwouldyieldinevitableconsequences,bothforregulationandpolitics,althoughfewexpectedthe scale of transformation thatLawandEconomicswould effect (especially in the field ofanti-trust)fromthelate1970sonwards.Chicago Law and Economics has two core dimensions. The first uses neo-classical

economics to analyse the empirical economic effects of law. ‘The Problemof SocialCost’provided an analytical framework with which to do this, building on an earlier paper ofCoase’s, which had critically analysed telecommunications regulation in the United States.WhatdistinguishedtheChicago(andCoasian)viewoflawwasitscompletedisregardforitssovereign or normative character. Law becomes reduced to its technical and empiricalelements,such that its ‘basic function…is toalter incentives’ (Posner,1981:75).Anythingthatwastacit,invisibleordeontologicalwasassumedtobeaformofmetaphysicalnonsense.Theconcernoflawyersshouldbethesameasthatofeconomists:costs,incentivesandutility.

FollowingBentham,utility is tobe evaluated in the aggregate (noton themargins),withnocost left out of the assessment, such as that of legal or other public action. This has someuncomfortable ethical implications, primarily that if one party can gain sufficiently from aparticular action at the expense of other parties, this is potentially justifiable in terms ofaggregatewelfare.Freedomisrecastasthefreedomtoexploit–thesocialrelationofcapital,notthesocialrelationofthemarket.Rights,normsorconsciousintentionsdonotcomeintoit.Justifiableregulationisthereforeutilitymaximizing(accordingtoeconomicanalysis)butnotnecessarily‘fair’inanyvernacularsenseoftheterm.Theverybasisforlegalauthorityshiftsfromaliberallanguageofuniversalitytoaneconomiclanguageofefficiency.This aspect of Law and Economics was used to transformative effect as a critique of

regulation and anti-trust. Director’s scepticism towards the claims made by anti-trustauthorities,whichhedevelopedoverthecourseoftheSchool’sAnti-trustProjectof1953–57,inspired micro-economists to start questioning the empirical effects of various other stateactivities. During the 1960s, Stigler’s work on regulation and Becker’s work on crimeheralded a radically anti-normative vision of rules and law, in terms of the behaviouralincentivestheycreated.Inthe1970sthisapproachproducedthebooksthatwouldbringaboutarevolutioninanti-trustpolicy,Posner’s1976AntitrustLawandBork’s1978TheAntitrustParadox, which systematically dismantled the claims that were being made by Harvardeconomists,liberalsandgovernmentofficialsinfavourofaggressiveanti-trustinterventions.The second dimension of Chicago Law and Economics used neo-classical economics to

explain how lawwas created and enacted, with Posner the leading exponent of this. Onceagain,thesinglepresuppositionadoptedbyLawandEconomicsscholarsinthisregardisthatindividuals act rationally to maximize their own interests, whether inside or outside ofmarkets.Neo-classical economics can just as easily be applied to explain the behaviour oflawyers or bureaucrats as firms or consumers: asCoase put it ‘economists have no subjectmatter’ (Coase, 1988: 3). Rather than treat public servants and judges as exceptions to thestandardneo-classicalpsychologicalmodel,Chicagoneoliberalsassumethattheyareequallyself-interested.Intandemwiththe‘publicchoice’schoolofpoliticalscience,whichemergedinthe1950sattheUniversityofVirginia,Chicagoeconomistsanalysedlegalandbureaucraticdecisions in terms of the private interests that they served, and assessed their impact onaggregateefficiency. InHayekianstyle,Chicagoscholarsdemonstratedhowactionsmade inthe name of the public were, paradoxically, usually less efficient than those made in anunplanned, contingent fashion. Posner’s famous argument – that common law is efficientbecauseitgrowsorganicallyfromparticularprivatecases,ruledwithoutregardforthe‘publicinterest’–highlightstheconservativebiasofthismethodology(Posner,1981).Self-interestedandinstinctivedecisionsare,almostbydefault,efficient,forwhyelsewouldtheyhavebeenselected? But decisionsmade on behalf of others (or the public in general) are very ofteninefficient, resting on erroneous views of what individuals privately value. Yet theseinefficiencies are too often concealed, due to a lack ofmeasurement and explication in thepublic realm. The vocation of the Law and Economics scholar is to bring the underlyingpsychologicalincentives,benefitsandcostsofthelegalsystemtolight.

Priceassovereignorasmetaphor?The divergence between ordo-liberalism and the Chicago School is profound, mostimportantly for how we are to understand the phenomenon of a price. This has majorimplications for the particular form of neoliberal authority, in particular for how its liberalspiritisinterpreted.Wherethefusionoflawandeconomicsisconductedfromalegalvantagepoint,aswas thecase forordo-liberalism,pricesattainaconstitutionalquality inmediatingsocialandeconomicrelations.Thehopeoftheordo-liberals(andtoagreatextentSimonsandHayek) was that the price system could acquire a form of political sovereignty that wouldmaintainallpoliticalforcesinastateoffinelybalancedequilibriumasaguarantorofliberty.Pricetherebyattainsamoralandpoliticalaura,whichmakesitthefinalarbiterofvalueacrosssociety.FromHayek’smoreconservativeperspective,onegreatqualityofmarketpricesisthatthey are explicit. The public appearance of price – just like the public appearance ofsovereigntyviaflagsorpalaces–isthereforecrucialtoitsvalue.By employing constitutional law in the service of market competition, ordo-liberalism

makesthepricesystemtheguaranteeoffreedom.Priceisnotsimplyonetechnicalinstrumentamongstmany,butbecomessymbolicoftheoverallorderofsociety.Toabusethepricesysteminanyparticularinstancewouldbetooffendtheessentialorderofafreesociety.Thuswhenupholdingcompetitionandattackingdominantfirmsstatesaresafeguardinganormativeideal,and not promoting any empirical outcome.The ordo-liberal critique ofmonopoly implicitlyrevivesanearlymodernbelief,thatthereissuchathingasa‘justprice’forsomething,whicharisesthroughafairprocess.Itfollowsthatotherpoliticalsolutionsmustbefoundforthosegoodswhichthepricesystemcannotbetrustedtodeliver.AnumberofChicagoSchooleconomistsretainedaspectsofthisclassicallyliberalrespect

forprices,asasystemofpublicsymbols,untilthe1960s.Butinmuchoftheirwork,‘price’mutates from an institutional phenomenon to a metaphorical category. Where ordo-liberalsmaintainedadogmaticallegiance to thepricemechanismof themarket,Chicagoneoliberalsdivertedthistowardsthepricetheoryofneo-classicaleconomics.Pricetheorysimplystatesthat,facedwitharangeofoptions(betheyinamarketornot),individualswillselecttheonewhichdeliversthegreatestwelfaretothemselves,howeverunderstood.ForeconomistssuchasGaryBecker,thisissimplyoneparticular‘approach’toexplaininghumanbehaviour,evenwhen individuals themselves are not ‘conscious’ that they are acting in this way (Becker,1976).Anysituationcanthereforebeanalysedasif itwereamarket,evenwhen itappearsthatchoice-makingbehaviourisneitherfreenorcalculated.Inapragmatistandconstructivistfashion,ChicagoLawandEconomicsabandonstheanalysisofmarketsandpricesaslegallyand publicly understood, and picks up an analysis of market-like behaviour, analysedaccording to apsychologyof price,whichmaynot be apparent to the agent being analysed(Foucault,2008:223).Incontrasttotheordo-liberalposition,inwhichpriceshaveanexplicitnessandpublicaura

about them, Chicago epistemology privileges the economist’s analytical insights over theintuitions of market actors themselves. More importantly, the two are operating in entirelyparallelperspectivalrealms,withthelatternotreally‘knowing’whatisgoingon.Friedman’s1953 statement of methodological principles affirms this very point: in his well-known

analogy,abilliardplayermaybeabletodirectballsexpertlyroundthetablewithoutknowingthelawsofgeometry,andabusinessmancanachieveprofitswithoutunderstandingthelawsofeconomics(Friedman,1953).TheHayekianfaithin‘unconscious’processesisconvertedfroma sociological level, whereby competition accidentally produces the best outcome, to apsychological level, inwhichpragmatically engaged individuals arenot really consciousofwhattheyaredoingorwhyitworks.WhenIinterviewedoneprominentLawandEconomicsscholar,heinformedme:

IneverteachlawandeconomicsasatoolsayingwhyI’msmarterthanyouare.Itrytoteachitasatoolthatsays‘alotofthingsthatyou’vedonearereallyclever,andyoudon’tevenknowwhy,andletmeexplaintoyouwhatIthinkisdrivingyou,andtellmeifitresonateswithyouoncewemakeitexplicit’.

Economicsacquiresaquasi-therapeuticrole,inbringingunconsciouscausalityandrationalitytothefore.‘Price’becomesamethodologicaltool,throughwhichotherwiserandom,uncriticalandcomplexbehavioursarerenderedempirical,quantifiableandjudgeable.Oncepricebecomesametaphoricalcategory, the institutionalandhistorical specificityof

the actual marketplace is lost, and economics becomes a basis on which to interpretpsychologicalprocessesacrossallsocial,economicandpoliticalspheres.Divorcedfromanyliberal normative commitment to open competitive markets, the Chicago price theorist is aresolutelyscepticalandempiricist technician,who is free toapplyanefficiencyaudit toallinstitutions–public andprivate– equally, regardless ofwhether they appear ‘economic’ incharacter.Yetbysubjectingthemtoeconomicanalysis,theyareeffectivelyrenderedeconomicafterall,bybeingreducedtoquantifiedandmeasuredeffects.Thishumilityconcealsadeephostilitytowardspoliticalmetaphysicsandtheelitismoflegalliberalism.Atthesametime,itundermineswhatevervestigesofmoralauthorityremainedintheneoliberalvisionofsociety.Ifmetaphysicsremainsatall,itisintheformofneo-classicalmethodology,whichpresumesacertain transcendental idea of individual agency, in a crypto-liberal fashion. But expertmethodologyisafarweakerguarantorof the‘liberalspirit’ofcompetitionthanrobust legalrulesofmarketconduct,astheearlyneoliberalsandordo-liberalshadpursued.

Neo-classicalEconomicsAscendant

Along-standingmantraofanti-trustauthoritiesisthattheirfunctionisto‘defendcompetitionnotcompetitors’.Beingsmallandvulnerableshouldnotautomaticallygrantafirmtherighttolegalprotection.IntheUSA,theanti-trustagenciesandthecourtspaidlipservicetothisideaduring the 1950s and 1960s, but in practice they regularly penalized firms for growingexcessively large and profitable (Amato, 1997). The era of the ‘Warren Court’ propagatedgreatpoliticalconfidenceinthecapacityandnecessityofthestatetodefendthepublicfromcorporate power. Three pieces of legislation underpin US anti-trust enforcement: the 1890ShermanAct; the1914ClaytonAct(whichhadcreatedtheFederalTradeCommission);andthe 1936 Robinson-Patman Act. Drawing on these legislative resources, the Federal TradeCommission(FTC)andtheDepartmentofJustice(DOJ)anti-trustdivisionintervenedtoblocka wide range of industrial strategies on the part of US firms. These included: blockinghorizontal mergers (between competitors) and vertical mergers (between suppliers andcustomers); busting cartels and price-fixing; breaking up monopolies and excessively

concentratedindustries;blockingproductbundling(thesaleofmultipleproductsasapackage)and tying (where a product in onemarket is sold in combinationwith a product in anothermarket);preventingexclusionarypractices(seekingtokeepcompetitorsoutofamarket);anddefendingsmallbusinessesfromaggressivecompetition,suchaspredatorypricing.During this period, the FTC and the DOJ were heavily dominated by lawyers, whose

professional vocation was to bring cases against firms to court and then win them (Muris,2003;Schmalensee,2007).Theentirethrustoftheseagencies,atleastuntilthelate1960s,wastowardspunishingfirmswhoappearedtobedisruptingthepatternofnormalcompetition,asunderstoodbylawyers.Accompanyingthelegalinterventionismoftheanti-trustagenciesinthepostwarperiodwasadominantparadigmofcompetitioneconomics,emanatingfromtheworkof Harvard economist Joseph Bain, known as the Structure Conduct Performance (SCP)approach. Drawing on empirical cases, Bain’s theory paid great attention to the particulartechnological and institutional characteristics of industries, in an effort to understand howfirms sought to raise the barriers to new market entrants. Markets that were effectivelycompetitivecouldstillbecriticizedonthebasisthattheypossessedlatentstructuralpotentialto reduce future competition. In commonwith both ordo-liberalism andwelfare economics,thisrestedonanidealistepistemologyinwhichthemarketpossessedanessentialformwhichwasefficientandalsoneededprotectingbythestate.OnedecisiveclaimmadebyeconomistsworkingwithintheSCPparadigmwasthathighprofitssignifiedthepresenceofmonopolyorexcessiveconcentration,meaning that firms facedan incentive tokeep theirprofitsdownorelseriskananti-trustintervention.EconomistswhoworkedintheFTCduringthe1970srecallfirms seeking to deny that they were successful, for fear that this would attract anti-trustinvestigations.1Economistsentering theFTCand theDOJduring the1950sweresteeped inSCPthinking,whichbredsuspicionaboutlargeandsuccessfulfirms,andmeshedwellwiththeliberal-legalvocationofcompetitionlawyers.

TheChicagocritiqueofanti-trustTheChicagoSchoolwasresolutelyhostilebothtothezealousinterventionismofgovernmentlawyersandtotheapparentidealismofBain’sSCPapproach.Bothofthesewerechargedwiththe error highlighted by Director and Coase, of exaggerating the potential inefficiencies ofprivate action by large firms, while ignoring the costs, errors and imperfections of publicpolicyand law.Bainviewedhighprofitand industrialconcentrationas theconsequencesofanti-competitivebehaviour:Chicagosawthemaspositiveside-effectsofefficiency(Pitofsky,2008).Bythelate1960s,withtheanti-trustagenciespursuingfirmsinanincreasinglyerraticfashion,andthecourtsendorsingthem,Chicagoeconomistswerebecomingexasperatedwiththelegalhostilitytowardsbusiness.Theblockingofverticalmergers(betweensuppliersandcustomers)wasviewedasespeciallyillogicalwithintheChicagoSchool,acritiquethatBorkhadfirstdevelopedduringtheanti-trustprojectin1954(Bork,1954).Coasejokedthathewassickofteachinganti-trustbecause‘whenthepriceswentupthejudgessaiditwasmonopoly,whenthepriceswentdown,theysaiditwaspredatorypricing,andwhentheystayedthesame,they said it was tacit collusion’ (Kitch, 1983: 193). Chicago Law and Economics scholars

wereconvincedthatthesituationwashopeless.And yet by the late 1970s this had changed quite dramatically, thanks to a series of

intellectual,politicalandinstitutionalparadigmshifts,allofwhichcontributedtothegrowingauthorityofChicago-styleneo-classicaleconomicsinthelegalregulationofmarkets.Thesealldependedontherhetoricalpowerofeconomiststoshapelegalthinking,whichproducedaneweconomicrationalizationofanti-trust,andgreatlyreducedthescopeofregulatoryintervention.Thanks to the influenceofChicagoLawandEconomics, the liberal authority of the state tocorrect,delimitordiscipline thedecisionmakingofbusinesseswasweakenedsignificantly.From the early 1990s onwards, this same influence slowly permeated the EuropeanCommissionwith similar consequences.These events andprocesseswere crucial factors inshaping the character of ‘actually existing neoliberalism’ (in contrast to the proposed,morenormativeneoliberalismoftheearlyneoliberals)thatsweptacrosstheUSAandEuropefromthe1970sonwards.Thanks to the inspirationofDirector and the influenceofCoase, theChicagoSchoolhad

shiftedstronglyawayfromtheordo-liberaldefinitionofcompetitionasaformalpropertyofmarketstowardsanempiricistdefinitionasthemaximizationofutility.IntrueCoasianfashion,thisstandardwasonlyeverarelativeone,inthesensethata‘competitive’outcomewasthebest available one, and not a perfectly efficient (i.e. transaction costless) one. This was adeeply agnostic definition of competition,which dispensedwith preconceptions (both legaland economic) about how markets ought to be structured or regulated. It is this thatunderpinnedPosnerandBork’sprogrammaticcritiquesofanti-trust,bothofwhicheffectivelyturnthegazeofeconomiccritiqueawayfromprivateindustryandtowardspublicagenciesandlegalinstitutions.PosnerandBorkhadbothworkedasgovernmentlawyers,PosnerintheFTCin themid-1960s andBork in theDOJ in the early 1970s, and been influenced byChicagoprice theory. They had therefore seen the apparently illogical way in which anti-trust wasinterpreted and enforced at first hand, and set out to refound it on rationalist, neo-classicalprinciples.Notbeingtrainedeconomists,theywerealsoentirelyuntouchedbytheinfluenceofBainandtheHarvardSCPparadigm.Their books both startwith the assumption that the sole goal of an anti-trust intervention

shouldbetoincreaseefficiency,typicallyunderstoodintheneo-classicalsenseof‘consumerwelfare’. Itwas this core foundingprinciple that they suggestedhadgot lost in amongst thelegalese and liberal idealismofAmerican anti-trust enforcementover the1950s and1960s.But in a classically Chicagoan fashion, they stress the importance of costing in theimplementationoflawandthethreatofregulatorsunderminingefficiencythroughthepursuitofsomeidealmarketstructure.Lawyershadtypicallyignoredthecoststhatregulationimposedupon the actors being regulated. As Director had first argued in Levi’s anti-trust class,monopolycouldresultinefficienciesthatgovernmentlawyerswereblindto.Posnerargued:

To the extent that efficiency is the goal of antitrust enforcement, there is no justification for carrying enforcement intoareaswhere competition is less efficient thanmonopoly because the costs ofmonopoly pricing are outweighed by theeconomiesofcentralisingproductioninoneoraveryfewfirms.(Posner,2002:2)

Bork in turn offered a brilliantly simple basis on which to re-found anti-trust policy:‘“competition” for purposes of anti-trust analysis, must be understood as a term of art

signifying any state of affairs in which consumer welfare cannot be increased by judicialdecree’(Bork,1978:51).Inpractice,thisrepresentsasignificantincreaseinthefreedomanddiscretionofmanagersandcapital.IntrueChicagoanstyle,whatbusinessmenthinkorsaytheyare doing is deemed insignificant in comparison towhat economists canprove is ‘actually’goingonatan‘unconscious’level(Bork,1978:121).Whatmayappeartobeanti-competitiveor irrational behaviour can still be critically evaluatedas if itwere driven by competitive,rationalinstincts.The particular differences between industries or specific firms are downplayed by the

criticalapparatusofChicagopricetheory.Qualitativeinsightsintotechnologyorcasestudies(astheHarvardtraditionhadprivileged)becomeusurpedbyaquantitativeanalysisofmarketdata.This is theprecise sense inwhicheconomicsbecomes judicial. It isno longer simplyfurnishinglegalanalysiswithadditionalempiricaldata,ratheritsformalisticmethodologicalpremiseenablesallfirms,inallsectors,tobejudgedaccordingtothesingletestofeconomicefficiency. Economics serves judgement over capitalism – ‘a unified framework forunderstanding all human behaviour’ – and is blind to other types of moral appeal or theheterogeneityof institutional logics (Becker,1976:14).The fact thatanti-trust thenbecomesmuchsimplerinitsaimsisviewed,evenbycriticsofChicago,asawelcomeachievementofLawandEconomics(Rubinfeld,2008).Asarhetoricalproject,ChicagoLawandEconomicssoughttohighlighttheepistemological

and metaphysical nonsense at work within liberal legalism, and to replace both with autilitarian calculusof efficiency.AsChicago-influenced lawyers,Bork andPosnerwere thefruitsofthisrhetoricalstrategy.Butforthelegalmainstreamofthe1960sand1970s,LawandEconomicsrepresentedaradicalaffronttolegalepistemology.Mostofall,theimplicationofLawandEconomics(andofCoase’sepistemologyinparticular)wasatransformationinwhatshouldcountas ‘evidence’ ina legal setting.FTCandDOJ lawyershad traditionally foughtcasesbyhuntingdown‘hotdocuments’fromfirms–thatis,piecesofevidencethatprovedanintention to distort competition, reduce choice, crowd out competitors or interfere with theprice-setting functionof themarket.This legal epistemologyassumed that actorsknewwhatthey were doing, and that guilt resided in a deliberate departure from the norms of acompetitivemarket.By contrast, the neo-classical epistemology that ran through Law and Economics, as

manifest in Bork and Posner’s books, ignored intentions, practice and norms in favour ofmeasured effects as calculated by economists. Moral responsibility for the outcome wasvirtually irrelevant in most instances. From this perspective an industrial strategy thatappeared competitive to a lawyer (because, for instance, it consciously avoided marketdominance) could be effectively inefficient, and hence uncompetitive, from a neo-classicalperspective.More typically, actions which appeared anti-competitive to a lawyer (such asverticalmergersandvariousother routes toconglomerationorpricemanipulation)couldbecalculatedaseffectivelyefficient,andhencecompetitive.Lawyersandliberalregulatorshadassumed some sort of zero-sum game between the public interest and the private interest,whichSCPeconomicsendorsedbyhighlightingtheproblemofhighprofitability.However,forBork this missed ‘the obvious fact that more efficient methods of doing business are asvaluabletothepublicastheyaretobusinessmen’(Bork,1978:4).Anefficientmonopolywas

morecompetitive,byBorkandPosner’sstandard,thananinefficientmarket.Yetthisflewinthefaceoflegalorthodoxy.

TheChicagoanti-trustrevolutionHowthendid theChicagodefinitionofcompetitioncometooust theformal legaldefinition,andtheSCPeconomicsthataccompaniedit?Thepowerandauthorityofgovernmentanti-trustlawyers were effectively challenged on two fronts simultaneously – by Chicago-influencedjudges and economists in the courtroom, and by economists within anti-trust agenciesthemselves.The dissemination of Law andEconomics ideaswithin theAmerican legal establishment

was actively engineered by Chicago scholars during the early 1970s. Henry Manne beganrunning a seriesof summer schools in1971 to train lawyers in thebasicprinciplesof neo-classicalpricetheory,andwasfundedtodosobyagroupofcorporationsconcernedbythegrowingreachof theanti-trustagencies (Manne,2005).From1975onwardsasecondcampwas established for law professors, and the following year a summer campwas offered tofederal judges. The consulting firm Lexecon was established by Chicago economists toprovide economic analysis to firms engaged in competition battles, thereby enabling thosefirmstomarshalLawandEconomicsreasoninginthecourtroom.AwatershedoccurredwiththeSupremeCourt’sGeneralDynamicsrulingin1974,wheretheFTCwasdefeated,havingbroughtacaseclaimingthatthecoal-miningindustrywasbecomingexcessivelyconcentrated.TheSupremeCourtoverturnedtheFTC’sruling,onthebasisthatindustrialconcentrationwasnotinefficientperse–autilitarianrebuketotheFTC’scriticalassumptionthatactionsweretobejudgedintermsoftheirimpactontheoverallstructureofthemarket.WhileFTCandDOJlawyers continued to operate in the paradigm that had accompanied aggressive anti-trustinterventions for the previous three decades (with little resistance from their in-houseeconomists),justiceswerebecomingswayedbytheChicagocritiqueofpubliclaw.In1978,theSupremeCourtcitedboththeBorkandPosnerbooksforthefirsttime,initsGTESylvaniaruling, indicatingthegrowingstatusofutilitarianreasoning(Miller,1989;Amato,1997).Bythelate1970s,firmsbeingprosecutedbytheUSanti-trustagenciesdiscoveredthatmorethanhalfof thecasescouldbeoverturnedonappeal (Miller,1989).ThePosnerandBorkbookswereregularlycitedinargumentsinfavourofverticalintegration,andtheFTCandDOJhadbeguntoabandoninvestigatingsuchmergercasesbytheendofthe1970s(FTC,2003).While the courts exerted an influence fromwithout, economistswithin the FTC andDOJ

could not put up great resistance to the interventionist instincts of lawyers until the 1980s,followingRonaldReagan’sappointmentofWilliamBaxtertoruntheDOJ.Onereasonforthiswas that the economic orthodoxy of Bain and the SCP paradigm was more sympathetic toactive anti-trust than the Chicago approach which would succeed it. As Kuhn noted ofscientificrevolutions,thereisagenerationaldimensiontoparadigmshifts:anentirecohortofHarvard-influencedeconomistsneededtoretirebeforetheChicagoworldviewcouldbecomeproperlyentrenched.ButthediminishedauthorityofeconomicsingeneralwasalsoafactorininterventionistethosoftheFTCandDOJuntilthelate1970s.FromaChicagoanperspective,it

wasn’t simply that anti-trust authorities were employing the wrong economic rationality(although that was one complaint), but that they were operating without any economicrationalityatall.TheFTC’seconomicexpertisehasalwaysbeencontainedinasingleBureauofEconomics,

whichoperateswithaquasi-academicethosofpursuingeconomicanalysisinapoliticallyandlegallydisinterestedfashion.Forinstance,theBureaupublisheseconomicstudiesofparticularindustries, unconnected to any particular legal cases, to produce insights into their specificcharacteristics. In theearlyyearsof theFTC,economistshadactuallyoutnumbered lawyers,but this was reversed during the 1920s. During the 1950s, the authority of the Bureau ofEconomicswasprogressivelyundermined,witheconomistsbeingtransferredintolegalteamswhere they were unable to pursue their analyses independent of legal requirements toprosecute,andtheproductionofeconomicstudiesdeclinedmarkedly.Thestatusofeconomicevidence (framed in terms of SCP) in the courtroomwas at an all-time lowduring the late1950sandearly1960s,withaflippantFTCmaximbeingthat‘oneincriminatingletterinthefilesisworththetestimonyofteneconomists’(FTC,2003).‘Hotdocuments’countedformoreinthecourtroomthancalculationsofpriceeffects.Yetthesetrendsbegantoreverseinthemid-1960s, with a new Director of the Bureau of Economics recruiting heavily and economicstudies being revived. Economic studies, that were scarcely conducted at all in the early1960s,madea revival from the late1960sonwards (FTC,2003).Economists thathadbeentransferredintolegalteamsweretransferredbackintotheBureauofEconomics.Thevoiceofeconomistswasthusbecominglouderbytheendofthedecade.These various institutional changes created the conditions for a form of disinterested

empiricalanalysiswhichwasantagonistic to liberal interventionism,andespeciallysoonceeconomists had begun to internalize the Chicago critique of anti-trust laid out in Bork andPosner’sbooks.FollowingBaxter’sappointment to theDOJeconomistswereencouraged tospeak out against anti-trust cases, if they believed that these rested on erroneous economicfoundations. In 1982 newmerger guidelines were published by theDOJ, based upon clearChicagoprinciples, includingarecognition–thirtyyearsafterDirectorhadmadethecase–that vertical integrationwas rarely anti-competitive. In theDOJ, the ratio of economists tolawyers shifted from one in twelve in 1980 to one in eight in 2000 (Posner, 2002).Professionalantagonismsdevelopedbetweeneconomistsand lawyers in theearly1980s,astheformerbecameincreasinglyscepticaltowardstheargumentsoftheirlegalcolleaguesandconfident about criticizing them. A Chicagoan epistemology held sway, and as an FTCeconomistrecalled,:‘TheBureauofEconomicswentfrombeing‘‘loved’’bythelawyersandsupportinglitigationtobeingtheunpopularqualitycontrolenforcerswhowouldsayinaveryvigorousway,waitaminute,herearethereasonswhythismaynotmakesense’(FTC,2003:97).Asidefromtheprofessionaltensions,theChicagorevolutionwasrapid.Theentirescopeofanti-trustenforcementwasdrasticallyreduced,andthestatusofeconomistsinthecourtroomand inside the agencies grewmarkedly. The legal presuppositions of the 1950s and 1960s,which chimedwith SCP economics in their suspicion of large highly profitable businesses,wereabandoned.Bythetimeofthe1988Sharpruling,itwassimplyassumedthatmeasuredefficiencywasthesoletestoflegitimatecompetitiveactivityoranti-trustintervention(Amato,1997).US corporations, and nominally consumers,were the immediate beneficiaries,while

small businesses were the potential losers. Whether the pursuit of ‘efficiency’ (defined as‘consumerwelfare’)does inpracticebenefitconsumers isamootpoint(Fox,2008;Crouch,2011).Asimilar seriesof shifts tookplace in theEuropeanCommission’s competitionauthority,

DGCompetition,approximatelytwentyyearslater.ThecompetitionauthorityDGCompetitionhadmaintainedastrongly legalistic,ordo-liberalapproach tocompetitionenforcement, fromitsoriginsinthe1950s,throughtothe1986legislationwhichcreatedasinglemarket.Aswehaveseen,ordo-liberalismprioritizeddismantlingdominantfirms,purelyontheprinciplethatthisdisruptedtheorderofthecompetitivemarket.Ordo-liberalinfluenceswereweakerbytheearly1990s,andthe1990mergerguidelinesbetrayedsignsofChicagoinfluence.In1991theUSgovernment andEuropeanCommission signed a bilateral agreement on anti-trust,whichaimed to prevent mercantilist attacks on one another’s firms. Yet DG Competition was notequippedtocarryoutsophisticatedneo-classicalanalysistothesameextentthattheFTCandDOJ were, and was accused of continuing to target US firms for the benefit of Europeancompetitors.Politicalpressurewasappliedon theEuropeanCommission to importChicagoprinciples, via theprofessional networksof theFTCandUS law firms, and the intellectualreach of economic journals and seminars (Dezalay&Sugarman, 1995).The creation of theInternationalCompetitionNetworkin2001mightbeseenasaneffortbytheUSAtouse‘softpower’ and intellectual influence to disseminateChicagoSchool thinking amongstEuropeancompetition experts. High profile cases, particularly against GE Honeywell, raised severealarms inWashington thatDGCompetitionwas still actingwithout the appropriate form ofauthority.AswiththeFTCandDOJinthelate1970s, thecrucial turningpointcamein2002,when

two major cases were overturned on appeal, on account of DG Competition’s inadequateeconomicanalysis.ThissignalledthetypeoflegitimacycrisisthattheUSauthoritiesandfirmshadbeenwaiting for. In response,DGCompetitionhired aChiefCompetitionEconomist in2003,whosetaboutestablishingaChiefEconomist’sTeam,modelledontheFTC’sBureauofEconomics, though substantially smaller (not least due to the smaller supply of Europeaneconomists working in the Chicago, Coasian tradition) (Roeller & Buigues, 2005). Whereeconomists had previously been distributed around DG Competition, and tasked withsupporting lawyers in their cases, now the agency had its own, quasi-academic empiricalresearch capacity to keep its lawyers in check. This empiricist, Chicagoan paradigm isreferredtoasthe‘effects-basedapproach’inBrussels.

TheJudicialEconomistatWork

The liberal spirit of neoliberal authority infuses how the empirical representation ofcompetitiveprocessesisperformed.Objectivejudgementsmustbeimposedfromapositionofexteriority and neutrality, if they are to succeed in establishing legitimate inequalities. Theauthority of a given critique depends partly on the pragmatic situation of the critic: it alsodependsoncritiquebeingperformedwithanappropriateethos,styleorvocation.TheapplicationofChicagoSchool ideas ina legalcontext,suchasananti-trustauthority,

requireshighlysophisticatedinstitutionalarrangements.Italsorequiresparticularprofessional

normsonthepartofeconomists,whoareexpectedtoactasdispassionateacademicanalystsandas legalassistantssimultaneously.AsPosnerforesawinhis landmarkstatementonLawandEconomics,‘theeconomictheoryoflawpresupposesmachineryforascertainingthefactsnecessary to correct application of law’ (Posner, 1981: 7). Thismachinery is complex andrequiresconstantmaintenance.TheChicagoSchoolcritiqueoflawingeneral,andofanti-trustlawinparticular,beganwithSimons’unlikelymovetotheChicagoLawSchool–butitcouldonlybe completedwithparticular institutions andpracticeswhichwould allowgovernmentlegalexpertstoconfrontaconstanteconomicauditoftheirreasoning,byeconomistscapableofcommunicatingtheirlogicacrossprofessionalboundaries.This particular dimension of neoliberal authority is dependent on two professional

disciplinesdiscoveringasharedlanguage.Lawyersmustlistentoandunderstandeconomists,andeconomistsmustadoptalawyerlystyleofreasoning.Thecourtroomandtheseminarroomcometosupportsimilarformsofexchange:intellectualcombat,attemptstofalsifyknowledgeclaims,thetestingof‘sense’.Withintheanti-trustagencythelawyerretainsnominalauthorityover the economist, inasmuch as the economistworks for the lawyer on putting legal casestogether. Yet, pragmatically speaking, the economist attains the rhetorical power to shapedefinitions of evidence and uphold certain norms of methodological and epistemologicalreason.Theycometoactasthestate’sin-houseauditors,remainingconstantlywatchfuloftheirlegalcolleagues,inordertoensurethatmetaphysicalandsubstantivenotionsof‘justice’and‘fairness’arenotcreepingbackintotheapplicationofeconomiclaw.Therealityofmeasuredeffectsmust trump that of presumed intentions and agency. Following the various rhetoricalvictoriesoftheChicagoLawandEconomicsmovement,thistraditionofneoliberalismfinallydependsuponvariousinstitutionalandvocationalarrangementswithinregulatoryagencies,toensurethatthefusionoflegalandeconomicthinkingsucceedsintheday-to-dayapplicationoflaw.ThereisaparadoxattheheartoftheCoasianframework,whichplaysoutintheapplication

ofChicago-styleneoliberalpolicy,anditconcernsthepossibilityofattaininganindependent,objective view upon economic reality. On the one hand, Coase suggests that an optimaloutcomeisasubjectivematter,tobegaugedonlyfromtheperspectiveofthosepartiesaffectedbyit.Thisisasceptical,Hayekianepistemologicalposition,whichwouldrequireonlythatthestatecreatestherightaprioriconditionsfordecentralizedinteractions,suchasprotectionforthepricesystemandproperty rights.Competition, from theHayekianperspective, is itselfa‘discoveryprocess’whichgeneratesknowledge,butcannotbeanobjectofknowledge(Hayek,2002).Butontheotherside,Coasearguesthattheempiricaluseofneo-classicaleconomics(whatisoftenreferredtoasindustrialorganizationeconomics)canbeemployedtoassesstherelativeefficiencyofdifferentinstitutionalarrangements,drawingonpricedataand‘revealedpreferences’ (i.e. behaviour) (Buchanan, 2005). It is this that allowsCoasian economics tobecomeausefultoolforregulatorsandstatelawyers.The‘objectivism’or‘scientism’,whichHayekdeplored,creepsbackin to theneoliberal tradition,elevatingneo-classicaleconomicanalysis to an unprecedented authority in determining the optimal institutional and legalarrangements(Hayek,1942).Anepistemologywhichoriginallydoubtedthepossibilityofanyimpartialviewoftheworld,saveforablindlyliberalcommitmenttopriceandcompetition,mutates into one which credits neo-classical economics with an objective perspective.

Ironically,whereeveryotheractorisconsideredbyChicagoscholarstobedrivenbyrationalself-interest–thebureaucrat,thejudge,theparent,thetradeunionist,thepolitician–theneo-classicaleconomist iselevatedtoaquasi-judicialstatus,fromwherehecanevaluatesocio-economicbehaviouranddatainanentirelydisinterestedmanner.AsMirowskihasargued,thesingle political choice offered by neoliberalism is either to credit the policy analyses ofeconomistsortohavenogovernmentpolicyatall(Mirowski,2013).Perversely,byhavingnoconcernwithconceptsof‘justice’or‘right’,theneo-classicaleconomistisallegedtobeevenmore judicially independent than the lawyer or the judge, who labour under certainmetaphysicalprejudices.Theeconomist’svocationalandepistemologicaldistancefrommoralreasoningisthecrucialingredientinneoliberallegalauthority.The dominant Chicagoan epistemology is one of Popperian scepticism – that objective

knowledgeiswhateverhasnot(yet)beenfalsified,butcouldbe.Bythisstandard,avalidanti-trust intervention is one in which economists cannot find a flaw: it is considered to make‘sense’. Since the Chicago critique of anti-trust triumphed, this sceptical yet objectivistepistemologyhasbeenimportedintoanti-trustagenciesthemselves.Theeffectofthishasbeentoheightenconcernregarding‘falsepositives’(erroneousanti-trustinterventions)andreduceconcern with ‘false negatives’ (erroneous non-interventions). An authoritative anti-trustinterventionisfirstandforemostonewhichpassesthetestofmakingeconomicsense,thatis,itsempiricalrationalitycannotbefalsified.WithinthedominantChicagoparadigmcartelsarethesoleexception,whichremainillegalregardlessoftheireconomicimpact,andarethereforesubject to criminal investigations: legal epistemology survives in these cases. Yet in othermatters–mergers,marketdominance, tacitcollusion,preventativeandpredatorypractices–lawyersaredependentonneo-classicalanalysis,demonstratingthatthebehaviouroffirmsisproducinganoutcomethatislessefficientthanthealternativeofregulatoryintervention.Theauthority of such economic evidence depends on its apparent objective, quasi-academicquality,whichenablesittosubjectlegalreasoningtoaconstantdispassionatecritique.Howisthis independent empirical view from the ‘outside’ institutionally facilitated, and how is itchannelledintothelegalcommunity?Let’stakethesetwoquestionsinturn.

InstitutionalconditionsofeconomicobjectivismKantarguedthatthepoliticalinjunctionofanEnlightenedleadershouldbe‘argueasmuchasyou like and about whatever you like, but obey!’ (Kant, 1991: 59). Anti-trust agencyeconomistshaveasimilarobligationtotheirlegalsuperiors,meaningthattheymustsomehowcombineintellectualcuriosityandpubliccritiquewithaprofessionaldedicationtoservingthestate.InWeberianterms, theycombineascientificvocationtowardsthepursuitofeconomicobjectivity with a political vocation to their public office (Davies, 2011b). The testing ofefficiencyinavalueneutralwaybecomesascholarly-lawyerlyvocationinitsownright.Economics teams in the FTC, DOJ and DG Competition consist of PhD-level industrial

organizationeconomists,manyofwhommightotherwisehavepursuedcareersasacademics.EachteamisledbyaChiefEconomist,whoistypicallyaseniorandhighlyreputedacademicon a fixed term contract (of 2–3 years) such that they do not become influenced by any

government career ambitions, but retain a vocation primarily to academic research. Theseeconomicsteamsremainquasi-independentfromthelegalteamsworkingonparticularcases,andobserveanumberofacademicritualsandnorms,thatowenothingtotherequirementsoflawyers or public office. Economists are encouraged to engage with a larger public ofacademiceconomists,viajournalpublishing,conferenceattendanceand‘brownbaglunches’in which noted industrial organization economists are invited to present at seminars.Economists in the FTC and DOJ publishmemoranda on particular cases, with their namesattachedtothem.SomeFTCeconomistsmightspendasmuchas30%oftheirtimeconductingandpublishingresearch,unconnectedwithanyimmediate legalcasesof theagency.Specificindustrialsectorsareresearchedandwrittenabout,usingempiricalneo-classicaleconomics,regardlessofwhetheranti-trustsuitsarebeingconsideredforthesectorconcerned.Inresponsetopreviousdoubtsaboutitsimpartiality,DGCompetitionintroducedadditional

institutional mechanisms to try and anchor its economic expertise outside of the legalcommunity.Alongwith the creationof aChiefEconomist’sTeam, theDGhas anEconomicAdvisoryGrouponCompetitionPolicyof20senioracademics,whichcanbecommissionedby European Commissioners, the Competition Director General or the Chief CompetitionEconomisttoofferan‘opinion’onmattersrelatedtocompetitionintheEuropeanCommunity.Mostdramatically,DGCompetition’sownChiefCompetitionEconomistisformallyentitledtopublishacritical‘opinion’oncompetitionenforcement,ifhebelievesthateconomiclogicisnot being applied or followed adequately (Roeller & Buigues, 2005). This extraordinarymeasure effectively offers an in-house economist on a fixed-term contract the authority totriggeraconstitutionalcrisisinDGCompetition:itwouldnecessarilybeaccompaniedbyhisown resignation and most likely force the Director General’s as well, throwing the entireauthorityoftheagencyintodoubt.Notionally,atleast,theauthorityofDGCompetitionstandsorfallsonthejudgementofasingleacademic,whosejudgementsdependuponaparticularsetofmethodologicalprinciplesofevaluation.Competitionagencyeconomistsarethereforesurprisinglyactivemembersofacademicand

policy public spheres. There are two justifications for this. The first is that the academicpublicspherewillprovideanti-trusteconomistswithaccesstolatesttheoreticalandempiricalanalysis,whichcouldatsomepointbecomecrucial in the implementationofanti-trustrules.Academicjournalsandconferencesaddresshighlyesotericmatters,whichlawyerswouldbetypically unable to understand. New theoretical approaches to the analysis of industrialorganizationareintroducedwithoutanyregardfortheirpracticalimplicationsforanti-trustorempirical efficiency. Anti-trust agency economists may discuss these matters in internalseminars and brown bag lunches, with equally little concern for their potential practicalusefulness. However, at some point – perhaps several years later – these theoreticalinnovationsandmethodsmightbecomecrucialinhowananti-trustcaseisputtogether.2Theywill need tobe rendered sufficiently simple that agency lawyers, andultimately judges, canunderstandtheirimplications.Butifgovernmenteconomistsdonotstayclosetotheforefrontof academic research on industrial organization, and remain focused only on assisting legalteamswithcasesathand(asoccurredduringthe1950sandearly1960s),thenthereisariskthat anti-trust agencieswill encounter neweconomic ideas for the first time in the hands ofopposinglegalteamsinthecourtroom.ThisispreciselywhathappenedwithChicagoSchool

theories in the 1970s, which were used successfully by private economics consultants todefend firms in court, before they had exerted any influence over the FTC or DOJ. Thevanguardofacademiceconomicresearchisthereforeacruciallegalresource,forcasesfiveortenyearsdowntheline.Asecondjustificationforeconomists’engagementwiththesepublicspheresisthatcritique

heightens their epistemological authority, and by proxy the authority of the anti-trust agency.Just as Coase successfully transformed the Chicago School’s definition of competition inDirector’s home in 1960, by subjecting himself to a barrage of intellectual attacks, publicspheres are instrumentally harnessed by anti-trust agencies, as potential tests of theoreticalcoherence.3Anti-trusteconomistsspeakofpresentingatacademicconferencesinordertobekept‘ontheirtoes’.Chiefeconomistsarehired,withstrongacademicreputationswhich,itisassumed,theywouldnotbewillingtorisk,toactascanariesinthemineshaftsofanti-trustlawenforcement.Thereisatleastthepotential forelectedpoliticianstochallengetheactionsofanti-trustagencies,drawingontheopinionsandpublicationsoftheagencies’owneconomists.DG Competition’s Chief Competition Economist has exceptional powers of veto over theagencies’ decisions that have already been noted. Creating the professional conditions foreconomiststospeakandactindependentoftheirlegalandbureaucraticsuperiors,withoutfearfortheircareers,isacriticalingredientinestablishingatleastaveneerofneutralempiricismon the part of the anti-trust agency overall. The manufacturing of transparency around anagency’seconomicreasoningisacrucialingredientinitsnormativeauthority.These economists are therefore in a peculiar position of authority, in which they hold

governmentofficeswithsecuretermsofemployment(saveforchiefeconomists),intheclassicmannerofWeberianbureaucrats.ButentirelyunlikeWeber’sdefinitionofabureaucrat(whoforegoes the pursuit of status or honour in exchange for permanence of office), governmentanti-trusteconomistsalsopublishopinionsandanalysesintheirownnames,beyondthelimitsof their bureau. Debate is open and uncensored, while it goes on in seminar rooms,conferencesand theofferingofpublished ‘opinions’.Theyhaveamandate to scrutinizeandtestthestate’slegalactivities,fromarationalistneoliberalperspective.Yettheyarealsointhepayofthestate,andmustobeylawyerswhentheyaredraftedintoindividuallegalteamstoworkonspecificcases.

EconomizinglegalreasonThe rhetorical and interpretive work in fusing legal and economic reason occurs wheneconomistsaredraftedintolegalteamstoworkonspecificcases.Alegalteammayconsistoffive or six lawyers, and one or two economists to assist in putting evidence together, andadvisingonwhat typesofclaimsare likely to standup incourt.Oneof themost significantconsequences of the rise of Chicago Law and Economics in anti-trust policy has been foreconomiststobeconsultedmuchearlierinthedevelopmentofcases.Intheerawhenlawyersweremoreautonomousintheinterpretationandapplicationofanti-trustlaw,economistswereonlybroughtintoworkoncaseswhenitwasalreadyestablishedthatthesewouldbepushedthrough to conclusion. The economist’s taskwas to furnish a legal teamwith evidence that

competitionwasbeing impeded in someway, itwasnot toadviseonwhether thecasewaseconomically rational ornot.But the rising authorityofneo-classical economics indefiningcompetition, with its own idiosyncratic epistemology focused upon ‘effects’ rather thanactions, hasmeant consulting economists at theoutset of case formation.4 In an economizedlegalworld, the lawyer canno longerbelievehisowneyes: certainbehaviourswhich lookanti-competitivemay in fact bedeemedcompetitive, in termsof its aggregate effects.5As aresult, theeconomistmustbeconsultedfarearlierintheprocess, todiscoverwhetherornotthereisevenaprobleminthefirstplace.Thisway,economicadvicecansavelawyersfrompursuing cases which later fall apart in court, due to inadequate economic reasoning.Scepticism and falsification at the outset act as safeguards against falsification at theconclusion.Assumingthattheeconomistdeemsacasetobeworthpursuing,whatthendoestheirrole

consistof?Whiletheyremainmembersoftheeconomicsteam,interactingwiththeirpeersinthatcommunity, theycontribute tocasesas instructedby lawyers.6During the transition to aChicagoSchoolviewofanti-trust,frictionsbetweeneconomistsandlawyerswerefrequent,aslawyers gradually came to recognize that they needed to take advice from economists thatcouldbeseenasobstructive.Duringtheearly1980sintheFTCandDOJ,andtheearly2000sin the European Commission, economists developed reputations as ‘case killers’, offeringvariousreasonswhythelawyers’argumentwasfaulty–justasDirectorhaddonewithregardtoLevi in theChicagoLawSchoolclassroomof theearly1950s.Moresuccessful formsofinter-professionalcooperationwitnesseconomistsadvising lawyersonhow to thinkaboutaparticular case,what sortsofquestions to ask,what typeof ‘second request’ (where a firmbeinginvestigatedisaskedtoprovideparticularformsofevidence)toputin,whatmightbetherightwayofstructuringaparticularproblem.Inthisregard,theauthorityoftheeconomistinthelegalprocessinvolvesdelineatingwhatis

relevant toananti-trustcase.Beforeanyevaluationofwhethercompetition isor isn’tbeingimpeded, there is anapriori question ofwhatwould even count as evidence of this.Whatwouldsuchevidence look like,andwheremight itbe found?Equally importantly, legalisticpresuppositions regardinghowcompetition ‘should’be institutedneed tobedismantled andexcluded from the empirical investigation.A precise grammar is introduced and policed byeconomists,whichestablishesthelimitswithinwhichlawyersarefreetoact.Thereplacementofpolitical ‘metaphysics’ (languageof freedom,rights,conscious intentions, justice,agency)by political ‘physics’ (language of effects, price, unconscious intentions, efficiency andconsumerwelfare)isachievedthroughdesignatingthatonlythelatterisrelevanttoanenquiry.Whereoncetheeconomistprovidedeconomicevidence,withinthelimitsandrequirementsofalegalprocedure,nowtheeconomistemploysthepresuppositionsofneo-classicaleconomicmethodology in order to shape what those limits consist of. The lawyer works within therhetoricalandprocedurallimitsasdefinedbyaparticularChicagodefinitionofcompetition,andpursuestheirownvocationandprofessionalgoalsfromwithintheselimits.The methodological presuppositions of neo-classical economics come to serve as the

legitimate procedure for legal reasoning and decision making. For Law and Economicsscholars suchasPosner, the advantageof thesepresuppositions is that they lack substantiveconceptsoffairness:theirmetaphysicalemptinessistheirprimevirtue.Butmethodologiesare

neverthelessnorms,whichgoverntheactionsandrhetoricofthosewhoabidebythem.Fromawholly pragmatist perspective, the political virtue of neo-classical methodology is that itimposes very tight restrictions upon government lawyers, in terms of how they are able todefine a breach of competition.7 While government economists might engage in scientificpublicspherestodebatethe‘facts’ofcertainindustrialscenarios,oncetheeconomistengageswithalegalcaseorentersthecourtroom,theirauthorityconsistsinhowsuccessfullytheycancarryout certainmethodological rituals, prove certainpropositions to a legal audience, anddemonstratetheirrelevanceofcounter-claimsmadebydefendants.ThedifferencemadebytheChicago School is that, before any voice can be legitimately heard with respect to acompetitioncase,thespeakermustfirsthaveassumedcertainpresuppositionsaboutthenatureofagencyandwhatcountsasatestofcompetitiveness(namelymeasuredefficiencyoutput).

Conclusion:TheJusticeofEfficiency

Theauthorityofeconomics,injuridicalandregulatorysettings,doesnotdependoneconomistsestablishing certain objective factswith complete agreement.The sheer complexity ofmuchChicagoSchoolmodellingmitigatesagainstempiricalproofsbeingprovidedinaverywidelyacceptablefashion.Thecapacityofeconomicstobringdisputestoanend,asisthefunctionofany judgement, is dependent on procedures being adequately followed, which are acombinationofthemethodological,thelegalandtheinstitutional.Publicsmustbepermittedtowitness this happening, in order that judgements can be cast over capitalist competition inways thatare recognizedas liberal inspirit, that is,with someapriori assumption that thecompetitors are to be evaluated equally. What this chapter has sought to highlight are thevarious ways in which law and economics become meshed, epistemologically,methodologically,normativelyandinstitutionally.The most obvious historical consequence of the Chicago revolution in anti-trust (and in

regulationmorebroadly)wasfargreaterfreedomfordominantcompetitorswithintheoverallcontest of capitalism. The new assumption, that efficiency is the goal of anti-trust and thatmonopolisticandexploitativepracticesareoftenefficient,ledtoamodeofregulationthatwasfarmoresympathetictotheinterestsoflargebusinessesthanduringthe1950sand1960s.Thiscreated the regulatory climate that would permit the rise of ‘shareholder value’ as thelegitimategoalofcorporategovernanceduringthe1980sand1990s.Necessarycorroborationtothisisprovidedbytheclaimthatthe‘barrierstoentry’arefarlowerthantheymayappear:newcompetitorscouldarrive tochallenge themonopolist, ifonly theyhave thestrengthandbelief. The self-mythology of theChicago School as bringing precisely such a challenge toHarvardandtheliberalestablishmentmesheswiththisunderstandingofcapitalism.Throughfusionsoflawandeconomics,theneoliberalstatediscoverstheliberalspiritofits

authority, in the sense explored in the previous chapter.As a replacement for the pursuit ofjustice itself, neoliberalismoffers the goal of competition as a formof quasi-justice,whichlacks a substantive concept of the common good.Ordo-liberals, and to some extentHayek,found the liberal spirit in themachinations of the price system and themarket order itself.Therewasasenseoffairnessabouthowchoice,exchangeandpricefluctuationsoccurred,thatwas honest regarding its metaphysical nature. Certain aspects of competition couldn’t be

entirelyarticulated–asEuckenargued,‘itnotonlyincludestraditions,lawsandcustoms,butthespirit inwhichmen liveandkeep to“rulesof thegame”’ (quoted inLabrouse&Wiesz,2001:100).Toputthatanotherway,priceswerenotsimplyparticularempiricalinstrumentsamongstmany,asnumbersonaparticularscreenorshopcounter,theycarriedahigherformofauthority and sovereignty, that derived from theoverall socio-economicorder that regulatedthem. They were the ultimate empirical representation of otherwise uncertain processes.Behind the ordo-liberal defence of priceswas a quasi-Durkheimian faith in the society thatlegislatedforthemanddefendedthemfromplanning.Forordo-liberals,thesanctityofthemarketorderitself,asperceivedbylawyers,isthetest

of‘fair’and‘unfair’play.Inequalityhasalimit,whichisreachedwhenasingleplayerattainspoweroverothers,viathepowertodictateprices.ChicagoLawandEconomicshasnotruckwith such metaphysical concepts of fairness, offering neo-classical economics as the soleauthoritative principle by which legitimate behaviour should be evaluated. What Chicagoeconomists rarely reflected on iswhy this should be so, other than the positivist belief thateconomicreasoningmakesmore‘sense’thanlegalreasoning.Itissimplyassumedthattheneo-classicalmethodpossesses a formofneutrality, thatmakes it suitable for the reinventionoflegal process. Themethod itself is therefore credited with possessing a liberal spirit. It ispricetheory,notthepricemechanism,whichisthetestoffairness.Thishastwofinalimplicationswhicharerelevanttoneoliberalism’ssubsequentlegitimacy

crises.Firstly,ChicagoSchoolepistemologyrendersthephenomenologyofeconomicactivityalmostirrelevant.Whatindividualbusinessmenorconsumersorthepublicthinkisgoingonismerelytheir‘conscious’perception:whatisreallygoingonistobeassessedbyexpertneo-classicalanalysis,focusedonlyonapresupposedorunconsciousrationalityoftheactorsandthemeasurableeffectsonoutcomes.Thismeansthattheauthoritativefactsofeconomicactivityare entirely invisible to those who conduct it. If something seems ‘unfair’ or mispriced orexploitative, this is irrelevant. Price loses any form of moral authority over people, andbecomes purely ametaphor ormethodological trope. There is a right and a wrongway toconductneo-classicaleconomics,butthereisnorightorwrongwayforbusinessestobehave.This effectively legitimates any type of industrial behaviour, no matter how apparentlyunreasonable,butsolongasitmeetstheexperttestofbeingobjectivelyefficient.The seeds of themarket’smoral crisis are sown, once prices lose any relationship to an

intrinsicnotionoffairness.Budgetairlinesthatadvertiseatoneprice,andthensellatanother,shareasimilardisdainforthemoralauthorityofthepricesystemasteenagelooters,forwhomtheft issimplymoreefficient thanshopping.Visible, institutionalizedpricesbecomejustonemore empirical phenomena, within the shifting sands of capitalist evolution, rather thanlegitimate arbiters of worth, as Hayek had once hoped. As a result, the entire system ofexchangeandproductioncomestolooklikeanopportunityforexploitation,withoutanysenseofhowthingsoughttobedone–notevenwhenitcomestotheconductofmonetarypayment.Money’s great phenomenological appeal, that it is explicit and unambiguous, is itself lostwithinasystem,inwhichthewinneriswhicheveractorcanhidebehindthegreatestdegreeofcomplexityandthemostadvancedstrategy.Secondly,thiseconomizedversionofliberalauthoritydependsonasomewhatimplausible

assumption about the neutrality and independence of neo-classical methods, as practical

procedures in public life. The entire authority of the competition agency (and subsequently,other regulators) comes to depend on the notion that economics cannot be manipulated, isimpervioustopoliticalorcontingentinfluence,andisconductedfromsomesortofexternalortranscendental standpoint. This is its ideal typical perspective, as this chapter has detailed,reinforcedbyengagementintheacademicpublicsphereandvariousinstitutionalmechanisms,such as chief economists on fixed term contracts. The fact that there is also amarket foreconomics consultancy, through which dominant businesses can access technical argumentswithwhich to defend themselves from regulation, renders the authority of the judicial neo-classical regulator hugely compromised. Moreover, as the 2007–09 financial crisisdemonstrated,regulatorsarenotasimpervioustocompetitororpoliticalinterests,andnordoacademic economists exist outside of the economic forces and influences that they seek todescribe (Häring & Douglas, 2012). Although this hasn’t been addressed here, there wereclearlygeopoliticalandeconomicdriverscreatingpressureon theEuropeanCommission toimport Chicago School analysis into its competition regulation. The Coasian paradox, thatthereissimultaneouslynoneutralmodelofcompetition,butthatneo-classicaleconomicscanoffer an objective viewof it nevertheless, eventually collapses.As became revealed in theaftermathofthecrisis,economistswereascompromisedbyinterests,competitiveforcesandpressuresasanyoneelse.Inasense,theywereconsistentwiththeirownworldview,inwhichincentives came to trump whatever vocation theymight have had to the academic, Kantianpublicsphere(Mirowski,2013).Theytooareinternaltothegame,evenwhiletheycontinuetocredittheirmethodswithaquasi-liberalfairness.

_____________________________1‘Irememberhavingacaseoncewherewewereprettymuchdecidingthatthemergerwasn’tproblematic…anditlookedliketherewereefficiencies thatwouldcertainly justify,evenif itwasmoretroublesomethanit lookedlikeonthefaceof theevidence.Wehadaconversation,sortofawrapupwith thepartiesandsowestarted toget into theefficiencies.And theydenied any efficiencies, youknow,because theywere thinking about, boy, ifwe say this is efficient, youknow,deeppockettheory,youknow,thecommission’sgonnacomedownonus,thisisabadmerger‘causeit’sgonnacreate,youknow,it’sgonnagiveusanadvantageoverourrivalsandthat’sabadthing’(FTCeconomistA).2‘Youngereconomistsareurgedtotryandpublishinrefereedjournals,toattendeconomicconferences,certainlyintheareaofindustrialorganizationeconomicsbecausethisisanareawhereexistingdevelopmentsintheoryinformideasthatmayunderliefuturecases’(FTCeconomistB).

3 ‘It’s an outside test, you know. The danger, you know, when I look at some people who work in the government andeconomistswhoworkinthegovernment–Ilookatsomeoftheotheragencieswherepeoplearen’tasactive,andyougetalittle,youknow,youonlytalktoyourcolleagues,andyouonlytalkto,youknow,verynarrow,smallgroupofpeople,gettingoutthereandpublishingandpresentingworkatseminars,presentingworkincommerce,thatputsyououtthereinthelargerbodyoftheprofession,andprovidessomeoutsidevalidation,okay,youknow,thewaywe’rethinkingaboutthismakessense,orarewejust,youknow,arewejusttalkingtoourselves–andtalkingourselvesintosomethingthatdoesn’tmakeanysense’(FTCeconomistC).4‘Youcaninfluenceveryearlyoninacase,andyoucaninfluenceattheend…AlotofitwasbymeorbymembersoftheCETworking on cases and trying tomake sure that the economic analysiswas done right. There are always two rules inorganizations–youcaneitherbehelpingalongtoensurethatnomistakesarelikelytotakeplaceoryoucanenterattheendandopposeit,andsayI’mnotgoingtoacceptthis.Andthentheanalysiswillneedtoberedoneordifferentactionswillneedtobe taken fromwhat theywant us to take in the beginning. I think that 90%of the time I think it’s trying tomake sure thatnothinggoeswrong’(DGCompetitioneconomistA).

5‘Youknow,someagreementnottocompetemightlookanti-competitivebutwhenyouthinkaboutwhatitsfunctionisitmaybepro-competitive’(FTCeconomistD).6‘Inlitigation,lawyersarestillrunningtheshowinthesensethatyou’reinalegalsetting,ajudgeismakingadeterminationof

things and sometimesknowing all the facts, althoughmaynotmatter to the economic conclusion, looks like itmatters to thecourtandthereforeyouhavetoknowmanymoredetailsthananacademicwhoisdoingapaper’(DOJeconomistA).

7‘Economicshashadatremendouslydisciplininginfluencefromantitrust.And,youknow,itsays,youknow,here’swhatyouhave to show – to show an antitrust violation, you’ve got to show that quantity’s going to fall, prices are going to go up,consumersaregoingbeharmed.Andifyoucan’tshowthat,moveon,youknow.Ifyougetintothisbusinessofsaying,well,this isreallygoodforconsumersonthewhole,but it’sbadfor thiskindofproducer,orsomething,youknow,you’velost thatdiscipliningeffect,andallofsuddennowyou’retryingtoweighfairnessversusefficiency’(FTCeconomistE).

4

TheViolentThreatofManagement

Competitiveness,strategyandtheauditofpoliticaldecision

In 1974, European political leaders attended a meeting of business leaders in Davos,Switzerland, that had been convened annually for the previous three years by the Swissmanagement scholar, Klaus Schwab. The meeting was then known as the EuropeanManagement Forum, but changed its name to the World Economic Forum in 1987, inrecognitionof its expandingeconomicandpolitical scope.Schwabhad initiallyconvenedagroup of business executives to address concerns surrounding the on-going productivity gapseparatingEuropeanfromAmericancorporations.Butseeingthisasaproblemwithbroaderpublic significance, politicians were soon invited to the Davos meetings, in the hope ofarticulatingasharedagenda for raisingbusinessperformance. In lateryears, ‘Davos’wouldcometosymbolizehighlyexclusivecross-sectoralnetworks,linkingpublic,privateand‘third’sectors,conveningcelebritieswithCEOsandpoliticians(Lapham,1998).Whatunitesthemisthattheyareallhighprofiledecisionmakers.InadditiontotheannualDavosmeeting,theWorldEconomicForum(WEF)isbestknown

forproducingitsGlobalCompetitivenessReport,whichitbegantopublishannuallyin1979,overseenbySchwabandtheHarvardBusinessSchool(HBS)strategy‘guru’,MichaelPorter.Thesereportsmeasure,compareandranknationsaroundtheworld,accordingtoavarietyofeconomic,social,culturalandpoliticaltraitsthatunderpinbusinessproductivitygrowth,someofwhich(suchasasociety’sentrepreneurialvalues)wouldseemtodefyquantification.Theauthors,togetherwithanetworkofassociatedthinktanksandconsultancies,thensellandpushadvicetopolicymakersinindividualnations,onhowtheycancarveadistinctivenationalpathtowards greater competitiveness. The term ‘competitiveness’ is often understood assynonymouswiththeeconomicterm‘productivity’,ormorelooselywithanation’scapacitytogenerate wealth (Thurow, 1985; Porter, 1990; Aiginger, 2006a). Existing prosperity, asmeasuredbyGDPforexample,isviewedasthelegacyofpastdecisionsandinvestments,andno guarantee of future success. The concept of competitiveness is designed to capture theingredientsforfutureprosperity.Thenotionofmeasurablenational‘competitiveness’becameakeyrhetoricalandpolitical

trope for US and European governments over the course of the 1980s and 1990s, offeringdecisionmakersawayofcriticallyanalysingpublicinstitutionsandresources,thatbeganfromthepremisethatbusinessesnowoperatedinamuchfiercerandglobalcompetitivelandscape,andhadnewpossibilitiesformobility.Itwouldlaterbecomeequallydominantintheframingofpolicyatotherspatialtiersofpolicymaking,includingtheurban,regionalandcontinental(Brenner&Wachsmuth, 2012).The central questionposedby competitiveness analystswas

how public policy could be reoriented, to ensure that local enterprises were best able tocompeteproductivelywith those located inother locales.Theurgencyof thischallengewasasserted as more than merely ‘economic’, but of the highest political priority. Thecompetitivenessparadigmsimultaneouslynarrows the scopeofpoliticalaction (bystressingthe lack of alternatives to competitiveness)while heightening the urgency to act in specificareas such as science policy, research and development (R&D), infrastructure, security,intellectual property rights and cultural policy. Investing in knowledge, and facilitating itstransfer from universities into businesses, becomes one of the highest priorities for stateswishingtowinthe‘race’ofglobalcompetitiveness(Cerny,1990;Jessop,2002,2012).Ofcoursethenotionofpoliticiansbeingactivelylobbiedbylocalbigbusinessoractingon

itsbehalfdatesbackfarearlierthanthe1970s.Regulationandpublicpolicyalwaysadvantageone set of firms and interests over another (Jessop, 1990; Fligstein, 2001), and ‘industrialpolicy’ has long involved governments supporting ‘national champions’ and defendingsymbolically important industries, suchasautomobilemanufacturing.Thesignificanceof thenewcompetitivenessparadigmlayratherinitsself-consciousconstructionofacommongloballanguage through which business and political leaders could discuss how public policyinfluencedcorporateandentrepreneurialperformance,andameasurementframeworkthroughwhichallpublicpolicy,public investmentandexecutivepoliticaldecisionmakingcouldbesubjected to a blanket economic audit. A new social science was invented to produceempiricalrepresentationsofcapitalism,thatservedtheneedsandanxietiesofdecision-makingelites.Thefateofnations(bothasterritoriesandcultures)becamecharacterizedasintimatelyentangledwiththefateofenterprises,andviceversa.Anewvisionofpoliticalauthoritywasinvented,inwhichthenation(orcity,regionetc.)wascomparabletoacorporation,ofwhichthe political leader was the CEO and the citizens were employees. This ‘corporation’contained various social, economic and cultural resources, which had to be analysedstrategically,intermsofhowtheycouldbeharnessedforfutureprosperity.Seeingasmanyofthese resources (such as talented elites, world-leading firms, scientists and artists) wereinternationallymobileandlimitedinnumber,acompetitivestrategywouldnecessarilyinvolveefforts to attract and keep these resources in a certain locale. An ontological parity wasproposedbetweentheauthorityoftheCEOtomanageandtheauthorityofthepoliticalleaderto govern, inflating the first with charismatic authority (as the management obsession with‘leadership’indicated),anddeflatingthelatterthroughanexpansionofmanagerialrationalityintothepoliticalsphere.Bothformsofleadershipcometobedefinedbycommonproblemsofanuncertainfuture,heightenedglobalcompetitionandarequirementtotakestrategicdecisionsfor collective long-term prosperity.And yet they are also underscored by a darker form ofpolitical authority, which became manifest in the strategic abandoning of unproductiveresourcesandveiledhostilitytowardschallengers.The recurrent neoliberal problematic is that of how to represent or stabilize uncertainty,

withoutdeterminingitthroughpoliticaldictat:competitiveprocessesoffertosolvethis.Inhistaxonomyofapproachestouncertainty,Knightrecognizedthatbusinessesdon’tonlydependonexpertknowledgetorationalizeuncertainty(i.e.representingitasrisk),butcanalsoactivelyreduceitthroughexertingcontrolovertheirenvironment(Knight,1957:240).AsSchumpeterargued, the greatest rewards gonot to thosewhoplaywithin established rules, but to those

whosetnewrulesthatothersthenhavetoplayby.Whilethenotionofgovernmentplanningistaboototheneoliberalmind,thenotionofentrepreneurialorbusinessplanningisnot,becausewheretheformerisallegedtorepressdifference,thelatterseekstoenactchangeofsomesort.Planning for the new represents an alternative – and paradoxical – means of approachinguncertainty, that is a further exampleof amarket-basedethos that canbeextended intonon-marketdomains.Ifthestatecanalsoplantounleashchangelikeanentrepreneur(asopposedtoplan to determine the future) then even public planners retain some authority within thisconvention of neoliberalism. Public spending on R&D is compatible with a Hayekianepistemology, inasmuch as the outcome of such investment is by definition unknown andunknowable(Davies,2011c).Yetthelegitimacyofsuchplansstillrequiresaspecificmodeofcritique and evaluation, so as to assess whether they are in the service of productivedynamism,orsomelesscompetitivepoliticalagenda.Providingthiscritiqueandevalutionisthepurposeofcompetitivenesstheoriesandmethodologies.Given the one-off nature of innovation, and the qualitative differentiation involved in

successful competitive strategy, there is something paradoxical about efforts to quantify andcompare how well nations are performing in these respects. International competitivenessrankings render all national differences commensurable, but thereby eradicate theincommensurable qualities that make particular strategies valuable in the first place. Theythereforewrestlewith theproblemofhowtovalueandcompareuniqueeconomicqualities,offeringwhatKarpik terms ‘judgement devices’,which combine qualitative judgementwithcalculation(Karpik,2011).Returning to the themes of previous chapters, national competitiveness displays familiar

characteristicsofneoliberalismmorebroadly,initsefforttoreinventsovereignstateauthorityineconomicallyrationalterms.1However,whereLawandEconomicssoughttorationalizethejudicial branch of government and regulators using neo-classical economics, nationalcompetitivenesssoughttorationalizetheexecutivebranchofgovernmentusingtechniquesandideasderivedfrombusinessstrategy.Wheretheformerseekstoeconomizerules,producingaform of neoliberal authoritywith a ‘liberal spirit’, the latter seeks to economizedecisions,producing a form of neoliberal authority with a ‘violent threat’. We can see this in fourdimensions,asalsoexploredinrespecttoLawandEconomics.Firstly,nationalcompetitivenessseekstoreducepoliticalmetaphysicstopoliticalphysics,

disenchantingexecutivepoliticalleadershipthroughanexpansionofeconomiclogic.Anumberoftheoristshaveanalysed‘thepolitical’asasingularlydisruptiveandunpredictableformofaction,rootedinthecapacityofindividualstotakedecisionsortoactpublicly(Arendt,1958;Schmitt,1996).Weberdescribedcharismaticpoliticalauthorityasa‘typicallyanti-economicforce’,possessinganexcessive,non-rationalcharacter,whichstemmedfromthewillpoweroftheleaderhimself(Weber,1978:245).IncommonwithSchmitt,Webersawthebaredecisiontoemployviolenceasthedefinitiveelementofthepoliticalcondition,atleastinthemodernera (Weber,1991b).Liberal economicshad longbeensuspiciousof theexecutivebranchofgovernment, which it viewed as economically illogical and prone to mercantilist acts ofprotectionism and intervention. The task of liberal economicswas to assert the primacy ofpositive-summarket competition over zero-sum political competition (Foucault, 2008). Theexecutive would be persuaded to retreat, to stay out of the economic realm, as the liberal

alternativetoactivelyinterveninginit.Thealternativeofferedbyneoliberalismistoreinventexecutiveauthority,inwaysthatare

compatiblewithmarketlogic.Thisisnotachievedthroughtheexpansionofeconomicsinanyorthodoxsense,butthroughtheoriesofbusinessstrategy,focusedmoreupondecisionmakingin uncertain, dynamic situations than upon static quantitative analyses. Politics is not quitedisenchanted by economics, but more specifically by management. The theory ofcompetitiveness fuses together the entrepreneurial, strategic decision of the business leaderwiththepoliticaldecisionoftheexecutivebranchofgovernment,evaluatingthemaccordingtothe single measure of strategic success, vis-à-vis competitors. In re-imagining the politicalleader as a CEO or entrepreneur, political and nationalist energies are harnessed anddiverted, rather than thwarted, as liberal economics had sought to do. As with Law andEconomics, this is a radically utilitarian move, in that the authority of the state comes todepend on its capacity to produce measurable economic benefits, in the same way thatfinancial strategy requires a CEO to demonstrate value to shareholders. Competitivenessevaluations are audits of the value of public institutions and action. And in a typicallyneoliberal fashion, this subjection of the state to quantitative audit does not only occur in anarrowly ‘economic’market realm, but also beyond, to encompass areas such as educationpolicyorthearts.Secondly, and consequently, this leads to an inflation in the authority and power of

competitive strategy experts, techniques and discourses. As will be explored, the field ofbusinessstrategydevelopedoverthepostwarperiod,toprovideadvicetobusinessdecisionmakersseekingtounderstandandinfluencethecompetitiveenvironment inwhichtheirfirmssat.Thejumpwhichoccurredinthelate1970s,thankstobodiessuchastheWEFandPorterespecially,wasthatstrategyexpertsexpandedtheirremit,toprovideadvicetopublicpolicymakers.Thiswasn’tsimplyadiscursiveormethodologicalshift,itwasalsodependentontheexpansionof think tanks,businessschoolsandpolicycommissions–partofwhatThrifthastermed ‘the cultural circuit of capital’ – which brought politicians, strategists and businessleaders together to learn from one another as equals (Thrift, 2005). The authority of thestrategist, inamongstall this,was toprovideaclear-sightedviewof theglobalcompetitivelandscape,thatregulatedtheuncertaintyandanxietyofleadersinallsectors.Moreover,expertadvicewas tailored to the particular needs and qualities of the client nation, seeing as thepromisethataccompanieditwastodefinethenation’suniquepathtowardscompetitiveness.As Jessop argues, the ‘competition state’ is required to develop its own distinctive ‘self-image’ in theworld (Jessop,2002:124).Theguruorexpert therefore serves tohelpdefinenational identity within a global economy: a service that in some instances becomes quiteexplicit,asthecaseof‘nationbranding’expertsindicates(Aronczyk,2012).Thirdly, national competitiveness made a particular Schumpeterian definition of

‘competition’ the test of valid action, on the part of firms and states. This definition wasaccompaniedbyvariousmeasuresandmethodologies,whichpurportedtoquantifyandrankanation’scapacitytoinnovate.TheachievementoftheSchumpeterianentrepreneuristoofferaproductorservicethatothersdon’torcannot,atleastintheshortterm.AsChapter2argued,Schumpeter’stheoryrestsonaphilosophicalanthropologyofdifferentiation:asmallminorityof individuals have an uncommon psychological capacity to operate outside of existing

conventions. On this basis, they are entitled to themonopolies that they create. One of thecentralmessages that the competitiveness gurus sought to disseminate amongst policy elitesoverthe1980sand1990swasthatwesterneconomiescouldnolongercompeteinternationallyon price, but now needed to compete on quality, innovation and differentiation. Doing soinvolved identifying those elements of a population or locality that couldn’t be easilymimickedbycompetitors, and thenconverting those intoa sourceof competitiveadvantage.Ultimately,theglobal‘game’becomesoneofwhosesociety–andnotonlywhoseeconomy–can becomemost adaptable, networked and future-oriented. The Schumpeterian idea of thedisruptive,self-governingentrepreneurprovidesthephilosophicalanthropologyunderpinningthisvision,andtheraceistoseewhichnationcanbestreleasethiseconomicheroism.It is only this emphasis on Schumpeterian or entrepreneurial competitiveness that

distinguishes this agenda from anti-market mercantilism or protectionism. It is preciselybecause the global free movement of goods, capital and elites is deemed unstoppable thatpolicymakers are encouraged to consider which particular productive niche their cultural-politicaldomainmightbeabletooccupy.Anassumptionofanewglobalhorizonforbusinessisinbuiltintothenewlydesignedmethodologiesofthecompetitivenessexperts(Jessop,2002:116).Thelessonisnottoprotectorsubsidizelocalindustryordevaluecurrencyasadefenceofcompetitiveness,althoughorthodoxeconomistshavespottedhintsof suchmercantilism intherhetoricofcompetitiveness,and this rhetorichasprovedconvenient for thosebusinessesseekingsomeformofdirectstatesupport(Krugman,1994).Finally,we can see that this traditionofmanagement theory acquires a ‘violent threat’ of

authority,asdescribedinChapter2,onceitisfusedwithexecutivepoliticaldecisionmaking.Thecompetitivestrategist’sadviceisnevermerelyempirical,butcarriesthepresumptionofexistentialdangeroropportunity:entirenations(orfirms)willtriumphordwindle,dependingonhowwelltheyandtheirleaderslearnthelessonsofcompetitivestrategy.Schmitt’s‘friend-enemydistinction’isreinvented,intermsofastrategicdifferentiationbetween‘us’and‘them’,in theglobalcompetitivegame.Charismaticauthority,whichWeber termed‘anti-economic’,reappearsinthepolicyseminarorthinktankconference,asnationaleconomicstrategyveerson the edge of national military strategy. As Harvey observes, ‘the neoliberal state needsnationalismofacertainsort tosurvive’(Harvey,2005:85,emphasisadded).Intheformofthe policy guru, network or think tank, advisors themselves come to embody the types ofcultural and personality traits that are needed to succeed in the new era of globalcompetitiveness.GurussuchasPorterarebrandsandentrepreneursintheirownright.Whilethepolitician’s authority becomes rationalized in strategic,managerial terms, the strategist’sauthoritybecomesimbuedwiththedistantthreatofradicalpoliticalaction.This chapter charts the development of the national competitiveness paradigm, via the

businessschools,thinktanks,gurusanddocumentsthathavepropagatedit.Unliketheinfluenceof Chicago Law and Economics over anti-trust, there is no clear example of a particulargovernmentagencybeingtargeted,infiltratedortransformedbythisconventionofmanageriallogic.Theambitionofthecompetitivenessexpertsisbothhigherthanthatandyet,fromanotherperspective,moremeagre.Theambitionishigher,inthatcompetitivenessispropagatedasanideal that matters urgently to everyone everywhere, no matter which sector, discipline orpolicyfieldtheyworkin.Thereisanevangelicalelementtothistradition,thatseekstoconvert

decision makers everywhere to a style of thinking and set of beliefs, using evidence in apragmaticway to do so.But for the same reason, competitiveness analyses have very littlepotentialtoactuallydetermineorunderpinpolicymaking,seeingastheirprincipleroleistoenergize, enthuse, or if necessary frighten. Constructing a common reality, recognized bybusiness executives and politicians equally, is the principle goal of any competitivenessagenda, part of which necessarily consists in simply getting them all in the same room toconversewithoneanother.The chapter is in three parts. The next section examines the theoretical underpinnings of

nationalcompetitivenessanalysis. Inparticular, I lookat three ingredients that facilitated theexpansionofbusinessstrategyintothedomainofpublicpolicy,namelybusinessstrategy,thebenchmarkingofnationscarriedoutbyRichardFarmerandBarryRichmaninthe1960s,andPorter’sengagementwithpublicpolicyduringthe1980s.Thesecondsectionexamineshowaneconomized vision of nation and political leadership was disseminated via cross-sectoralbodies such as think tanks and commissions. The third section explores the particularinstitutional, vocational andmethodological dynamics bywhich this knowledge is producedanddistributed,and the typeofpoliticalandepistemologicalauthority that isclaimedfor it.Thisisnotknowledgethatisofferedwithaspiritofdisinterested‘objectivity’or‘neutrality’,rather it isknowledgeaimedataffirmingandencouraginganationaldifferentiationwithinacommonly acknowledged global contest. The chapter concludes by identifying the seeds ofauthoritycrisisthatliewithinthistraditionofneoliberalreason.

TheFusionofPoliticalandManagerialDecision

A common trait of politicians and managers is the capacity to take decisions on behalf ofcollective bodies, be they firms or societies. These decisions need to be recognized aslegitimate,toagreaterorlesserextent,andbackedupwithpower,toagreaterorlesserextent.Buthistorically,managementisaveryrecentformofpower,datingbacktothesecondhalfofthenineteenthcentury,whenprivatebusinesscorporationsbegantoemergeintheUnitedStatesandGermany,with increasingly separate ownership and control (Chandler, 1977). The newclassofprofessionalmanagerswassoonsupportedbythecreationofbusinessschoolsintheUSA,beginningwithWhartonin1881,whichinitiallysoughttoanchormanagerialauthorityinbroader notions of the public good, training future business leaders in ethics aswell as therudiments of business efficiency (Khurana, 2007).During the twentieth century,managementand business schools drew on examples of effective political and military hierarchy andcooperation, importing psychological findings from wartime experiments in teamwork andleadership (Baritz, 1960; Rose, 1990). As a science and theory of authority, the field ofmanagementhasspentthemajorityofitshistoryimportingexamplesandlessonsfrompoliticsandthemilitary,andnotviceversa.Duringtheneoliberalera,however,thedirectionoftravelwasreversed.Thiswasseenina

numberofeffortstoreinventpublicsectoragenciesalongprivatesectormanageriallines,suchas‘NewPublicManagement’(Hood,1991,1995a,1995b).Theinventionofprivatizationandpublic-private partnerships was a very visible example of the state being refashioned as aprivate actor. As Chapter 1 stressed, the crucial advances made by neoliberalism did not

necessarily involve extending the market into every reach of state and society, but ofreconstructing state and society in ways that are amenable to market-based techniques ofevaluation. National competitiveness evaluation is one further example of this, in which apolitical community is treated as a quasi-firm to be managed and measured in a strategicfashion,inthehopeofout-competingrivalcommunities.Nationalcharacteristicsandpoliticalwill become resources, to be evaluated and strategically employed, using techniques drawnfrommanagementandbusinessschools.Sohowdidthisreversalcomeabout?Howdidastyleofreasoning,aimedatthemanagers

of enterprises, come to infiltrate the political and policy realm? Weber argued that acomparison of public and private sector bureaucracy was always more plausible in theAmerican context, which can therefore be seen as one of the seeds of the neoliberalcolonization(Weber,1991b:197).Butgiventhecopiouswaysinwhichgoverninganeconomyor society is unlike running a firm (many of which have been explained vociferously byorthodox economists), there is something deeply curious about this colonization of politicalreason by managerial reason, whose effects we shall explore later in this chapter.Genealogically,threetheoreticalandmethodologicalpreconditionscanbeidentified.

ThescienceofstrategyTheriseofmarketresearchbasedonascienceofconsumerattitudesandbehaviourduringthe1920sdemonstratedthatfirmsneedn’tonlydependonthelawsofsupplyanddemandfortheirsuccess. It was possible for firms to understand and influence the nature of their externalenvironment,andaltertheiractivitiesaccordingly.YetprewarmanagementintheUnitedStateswasrarelyconcernedwith thebehaviourofcompetitorfirms.Andin theimmediatepostwarperiod,surginginternationaldemand,andcomparativelyhomogeneousconsumergroups,meantthat US corporations remained profitable without giving much consideration to theircompetitive environment. The liberal economic assumption – that no individual marketcompetitorisabletoinfluencetheoverallshapeofthemarketplace–washeldintactand,ifnecessary, enforced by highly interventionist anti-trust regimes. Accordingly, managementtheorywasprimarily‘intra-organizational’(Knights&Morgan,2011).YetWorldWarTwodidspawngrowingtheoreticalinterestinagenericscienceofstrategy,

understood as the rationality of shaping anddominating competitive environments, includingthose of war. Game theory, beginning with the 1944 publication of Theory of Games andEconomicBehaviour,canbeseenasthefirstefforttobringallformsofcompetitionwithinasingle blanket theory of competitive strategy (Von Neumann & Morgenstern, 1953). Whilehistory had provided a number of influential theories of military victory which were laterstudied inbusinessschools forstrategic insight (mostprominentlyClausewitz’sOnWar andSun Tzu’sArt of War), the attempt to codify and rationalize the principles of competitivestrategy scientifically arosewithin the national-existential agenda of theColdWar.Militaryhistorian LiddellHart’s 1929work, Strategy: The Indirect Approach, was re-published in1941,andlaterprovidedaninfluentialtemplateforunderstandingthedynamicsofcompetitivesituations. Hart’s founding principle was that a successful military strategy is one that

minimizes the need for conflict altogether. The victorious competitor is one who positionsthemselves so as to avoid direct competition, except where necessary, an idea that wouldresurface in efforts to divert corporate or national strategies towards areas of specializedproductionwheretheyareleastlikelytobechallenged.Theassociationoftheterm‘strategy’withmilitarydecisionmakingheldrightupuntil themid-1960s,whennewbusinessstrategyconsultancyfirms(suchasBostonConsulting)begantobeestablished.HBSwouldbecometheleadingacademiccentreofbusinessstrategythinkingintheworld.

But strategy was initially approached as an issue that was not amenable to theoreticalreasoningormodels,duetotheinherentlycontingentone-offnatureofstrategicchallenges.The‘casemethod’ofteaching–inwhichstudentsstudyalargevolumeofmaterialonspecificandcomplexhistoricalexamples,onwhichtheyarethenexpectedtoformanddefendjudgements–was used to introduce business students to the problem of decision making, in inherentlyuncertainandunprecedentedsituations(Garvin,2003).Partofthepurposeofcaseteachingistointroducestudentstosituationsinwhichempiricaldataareneverfullysufficienttovalidateagivenjudgement.Forthosewithinthecontest,uncertaintyinvitesadecision,andnotsimplymoreevidence.AsSchumpeterargued:

Asmilitaryactionmustbetakeninagivenstrategicpositionevenifallthedatapotentiallyprocurablearenotavailable,soalsoineconomiclifeactionmustbetakenwithoutworkingoutall thedetailsofwhatistobedone.Herethesuccessofeverythingdependsuponintuition.(Schumpeter,1934:77)

As Hayek also argued, the partiality of economic knowledge means that the conditioneconomicactorsfindthemselvesinisapracticaloneofwhattodo,anditisbynomeansclearthat cold, ‘objective’, empirical knowledgenecessarily serves the actor best.As JohnGrayargues, Hayek seems to have been appealing to a form of tacit or embodied knowledge,unmediatedbymethodology,whichenablesmore instinctiveactionuponuncertain situations(Gray,1998).Caseteachingnurturesthispragmaticcapacity.The casemethodwas imported from the Law School (where it had been used since the

1890s) to the Business School in 1920, and provided a template for the work on businessstrategy that was developed byGeorgeAlbert Smith andRolandChristensen in the 1950s.Students were encouraged to question howwell individual firmswerematched to specificmarkets, on the basis of specific qualitative issues, such as technologies and supply chains(Ghemawat,2000).Thisremainedateachingmethod,aimedatdevelopingthejudgementandconfidence of future leaders, as opposed to a set of transferable theories.The purpose of acase is for students to arrive at theirown theoretical principles via a process of empiricalinduction (albeit, facilitated by a teacher), and not to inform them of the rules of howcompetitivenessdoesoroughttowork.A number of things changed in the US business environment in the early 1960s, which

createdamarketdemandforstrategicexpertiseandmoregenericmethodsofevaluation.AsUSfirmsgrew,theybecamespreadoverlargerdistances,requiringmoresophisticatedformsofmanagement coordination,which could not be simply dealtwith through hierarchy. Theyalso became increasingly multi-divisional, and the separation of ownership and controldeveloped with the dispersal of share ownership. In contrast to the emphasis on ‘humanrelations’thathadcharacterizedmanagementtheoryduringthe1930sand1940s,management

theoryexperiencedarationalistturninthelate1950s,importinginsightsfromthebehaviouristsciences that had expanded on the back of Pentagon funding (Barley & Kunda, 1992;Mirowski,2005).Bythemid-1960scorporationswereconducting‘SWOT’analysesoftheirsuitability for specific markets, while new consultancies emerged to produce quantitativeanalysesoftheinteractionsbetweenfirmsandtheirmarkets.Benchmarking(inwhichfirmsarecompared to each other, across a range of numerical indicators) developed, to provide astatistical basis on which to assess a firm’s advantages and disadvantages. Managementbecame inter-organizational, in addition to being intra-organizational: competitors couldnotbe controlled, but they could be strategically analysed and their decisions anticipated. Theinternal functions of the firm would now be critically assessed, in terms of whether theystrengthened or weakened the firm’s position in relation to those of other similar firms.Regardless of academic doubts about the plausibility of any theory of business strategy, thedemandforsuchtheoriesfrombusinessrose.What is methodologically significant about business strategy for the transition to

neoliberalismisthatitoffersanentirelynewexpertperspectiveonthemarketplacethatwasinimicaltoliberaleconomics.Inanaïveliberalview,thefunctionofmanagementistorunafirmasefficientlyaspossible, toreducepricesorraiseoutput,forthebenefitofconsumers.Competitionarises‘naturally’asaresultofmultipleenterprisesallseekingtoservethesamecustomers.Theadditionofanti-trustactstoensurethatfirmsdonotgainanycontrolovertheprice mechanism of the market, and focus on delivering value to consumers, as the ordo-liberalsforexamplehadenvisaged.Butbusinessstrategistsproposethatfirmsalsofocusonother firms, inorderboth to reorganize themselves and influence themarket, such that theiradvantageisnotpurelydependentonsupplyanddemand,andtheyshapethestructureofthemarkettotheirownadvantage.Themarketisnolongeractedwithin,butactedupon,andthehorizonofcompetitiveactivityisthatmuchbroaderthananyindividualmarket.AsSchumpeterhadenvisaged, thearenaofcapitalistcompetitionextends to includenon-market institutions,networks, ideas and culture. Schumpeter had initially believed that it was individualentrepreneurs who would transformmarkets in this strategic way, but in his later work herecognized that innovation ‘within the shell of existing corporations offers a much moreconvenientaccesstotheentrepreneurialfunctionsthanexistedintheworldofowner-managedfirms’(quotedinMcCraw,2007:496).Corporatemanagerscouldseeknewpathstodominatemarketsandreducecompetition,withoutsimplytryingtofixprices.The notion of corporate strategy greatly increases the requisite authority and celebrity of

senior management, and nurtures the analogy between business leadership and politicalleadership.Traditionally, the taskof theprofessionalmanagerhadbeen toensure thata firmwas fulfilling itsvarious functionsasefficientlyandcompetentlyaspossible.Authoritywasprimarilybureaucraticand–inkeepingwith thenatureofbureaucraticauthority–relativelyanonymousinnature.Butstrategyposesmorefundamentalquestions,ofwhat thefirm’scoreproductshouldbe,whichmarketsitshouldbein,whatitslong-termobjectiveis,andhowitintendstosurvive.Theconditionofrivalrybetweencompetitorsmeansthatthemanager–or‘leader’astheyincreasinglyunderstoodthemselves–isresponsibleforthesurvivalandcoreidentityofthefirm,andnotsimplyitscompetentoperation.Theydecidewhereandwhatthefirmistobe,whichcompetitorsitintendstofight,andwhichitintendstoavoid.Definingthe

firm’s identity in intangible terms(via itsbrand, itsvalues),asopposed to technologicalorproductterms,offersmanagersasourceofstability,whichdoesnothingtodenyorreducethedisruptions and uncertainty that are afflicting the firm’s tangible economic, social andtechnological identity. Everymaterial aspect of the firm is potentially expendable, once itsimmaterialaspectissufficientlysecure.Withthe‘shareholdervalue’revolutionofthe1980s,thesemanagersalsobecameresponsibleforofferinganarrativeabouttheirfirmtoinvestors,which, if convincing, could allow them to inflate their own pay dramatically (Froud et al.,2006).Thequestionofthe‘fairness’ofthisrisingpaydoesnotarise,solongastheysucceedindemonstratinguniquepersonalqualities thatothers lack:psychologicaldifferentiationactsas an immanent justification of inequality. Drawing on an extensive infrastructure ofconsultancy,businessschools,managementtheoryandmarketanalysis,managerialauthorityisimbuedwitha‘violentthreat’,wherebytheexistentialfateoftheenterpriseisdependentonthedecision of the heroic individuals at its top. As with the Schmittian political leader, thecommandissuedbythestrategicmanagermustbeobeyed,onthepurelyimmanentgroundsthat‘we’are incombatwith ‘them’,andexistence is at stake.The injunction is toobey,orelsepossiblyperish.

ThebenchmarkingofnationsIf statistical measures of macro-economies and societies emerged gradually from the latenineteenthcenturyonwards,nationalperformanceindicatorsonlybecamepubliclyrecognizedintheaftermathofWorldWarTwo(Alonso&Starr,1987;Innes,1989;Desrosieres,1998).GDPandunemploymentfiguresbecamepublishedatregularintervals,aswaysoftestingthevalue of economic policy. Qualitative differences between nations could be represented asquantitative comparisons, thanks to the commensuration provided by these indicators(Espeland & Stevens, 1998). But the question then quickly arose of how else availablestatisticsmight be compiled and represented, to test societies and policies differently,withdifferentnormativeassumptions.Theideaof‘social’indicators,tocaptureandcomparenon-economicvalue,was initiallypioneeredby theEisenhoweradministration,beforebecomingadoptedbycivilsocietygroupsinthe1970s.Thenotionthatanation’scompetitivenessmightbe measured or ‘scored’ represents a similar example of such statistical innovation. Thepioneeringwork in this regardwasdoneby twomanagement scholars,RichardFarmer andBarryRichman, in1965–66 (Farmer&Richman,1970,1971).FarmerandRichman’sworkprovidedtheexamplethattheWEF(andsubsequentcompetitivenessthinktanks)wouldbuildon,inconstructingentirelynewmethodologies,forthecomparisonandrankingofnations.Anticipating the concerns of Schwab and the WEF, Farmer and Richman approached

comparative political economy, by arguing that differences in the economic performance ofnationsmust ultimatelybe explainedbydiscrepancies inmanagement, but that thesemust inturnbeexplainedintermsoftheconditionsthatnationsoffertomanagement.Managementis‘thesinglemostcritical socialactivity inconnectionwitheconomicprogress’, impactingonalltypesoforganization(whetherpublicorprivatesector)andalltypesofnationalpoliticaleconomy(includingcapitalistandcommunist)(Farmer&Richman,1970:1).Therequirement

tomanage therefore becomes a form of global a priori, yet there is no theory available toaddressthis,especiallyasorthodoxeconomicslargelyoverlooksthisall-importantentity.Thelack of any ‘general theory’ of management, for use by all managers in all sectors andsocieties, meant that the most important discrepancies in economic performance wentunexplained.In pursuit of a ‘general theory’ of management, Farmer and Richman constructed a new

methodology for the measurement and comparison of nations, with two key characteristics.Firstly, they deliberately ignored ‘the personality, motivation and capabilities of individualmanagers’, in favour of the ‘external constraints’ that shape and limit managers’ decisionmaking,where‘externalconstraints’referstothenationalcontextinwhichmanagersoperate(1970:32).Inonesimplemove,theworldisstoodonitshead,suchthateverythingthatgoeson outside of the limits of the organization is treated as simply a conditioning factor, to beunderstood in terms of how successfully it supports management. This is a boldmethodological jump, which instantly colonizes every non-business sphere – including thepolitical realm – with a managerial mode of evaluation. Nothing remains external tomanagerial logic, once the nation itself is evaluated in terms of the ‘external constraints’ itofferstodecisionmakersinenterprises.The‘social’becomesrepresentedastheservantofthe‘economic’,orasapotentialresourceforproduction(Jessop,2002).On thispremise, there isno longerany‘separate’economicrealm,butvariousspheresof

social,economic,politicalandculturalactivity,whichcombinetocreateaparticularnational(or local) ecology of innovation and business dynamism. As the WEF’s first globalcompetitivenessreportargued:

Traditionally, competitiveness is definedmainly in terms of the cost of production and productivity.However,we knowtodaythatmanyotherelementscomeintoplay:theinternaldynamismofacountry,itssocio-politicalconsensus,thequalityofitshumanresources,itscommercialspirit,themannerinwhichitpreparesforthefuture,etc.(EuropeanManagementForum,1979)

Thequestion ishow toevaluate somanydifferent fieldsof society, inways thatwillproveuseful. Farmer and Richman worked with four categories of evaluation: ‘education’;‘sociological-cultural’; ‘political-legal’; and ‘economic’. Each of these is made up of sub-categories. As competitiveness institutes and think tanks multiplied over the course of the1980s,moreandmorecompetingmethodologiesandweightingsystemswouldbedevelopedalong these lines, identifying the ‘pillars’ or ‘factors’ that make up competitiveness. Thecompetitiveness ‘scoreboards’ producedbyWEFand IMD, and similar indexes such as theWorldBank’s‘EaseofDoingBusiness’rankings,distinguishthemselvesbytheparticulardatasources they select, and how these are condensed down to the point of producing a singlenumerical evaluation of a nation. Competition between rival ‘judgement devices’ emerges(Karpik, 2010: 53). The goal in any case is to synthesize multiple statistical data, onheterogeneous socio-economic-political fields, and ultimately produce a single ‘score’ of anation’soverallperformance.Secondly,theirmethodologyprivilegedquantificationandcomparability,regardlessofhow

qualitative or apparently incomparable the objects being studied. Farmer and Richmanpurported to start with no presupposition about what constituted ‘good’ management, butsimply wanted to produce a framework through which divergences in national managerial

potentialwouldcometolightstatistically.Ifanevaluationframeworkcouldbeproduced,thatcould engulf all cultures and political systems, it could seemingly offer a perspective fromoutsideofanyindividualpoliticalordisciplinarytradition.Quantitativecomparisonbecomesanend in itself, theassumptionbeing thatany individualnationmustaspire to learnfromorout-performother nations.Producing tabular rankingsof nations,with a ‘winner’ at the top,becamethemostpubliclycompellingtechniqueofnationalcompetitivenessreports.Theactofsynthesizingdatasourcesservesasaninternationalcomparisonandobjectivetest,whoseownnormative principles or authority retreat from view. The intrinsic valuation of nationaldifferenceisreplacedbyanextrinsicevaluation.Aquestionwhichcompetitivenessexpertssubsequentlyhadtoconfrontwashowtoextend

quantificationintotheculturaldimensionsofparticularnationsandplaces.Howtoquantifyanation’sbusiness‘values’forexample?FarmerandRichmanusedamethodcalledtheDelphiSurvey,whichbecamepivotalforcompetitivenessevaluations.Thetechniqueisusedtopollaselectgroupofelites–business leaders,policymakersandacademics–on the ‘constraintswhichdodirectlyinfluenceinternalfirmmanagementinagivencountry’(Farmer&Richman,1970:329).Therespondentsareaskedfortheirsubjectiveevaluationsofaparticularnation,assuming that they (especially the business leaders) are sufficiently mobile as to havecomparative experience of different nations. Where their opinions differ strongly, thedifference itself is quantified, simplified and then sent back to the respondents for re-evaluation. The re-evaluations are received, compared, processed, and any remainingdifferenceshighlightedagain.Thisprocesscontinuesuntilthedifferenceshavebeenresolved,andsubjectiveevaluationshavebeenconvertedintoanobjective‘score’thatcanbeattributedto a specific nation. The process is self-evidently a little clumsy – Farmer and Richmandescribeitasawayofattributing‘personalprobabilities,whicharethenusedasestimatesofthe objective probability statement’ – but it succeeds in the all-important task of convertingqualities into quantities, and thereby making nations entirely commensurable and rankable(1970:333).Whatisbeingconstructedhereisacommonempiricalworld,butonethatisonlyinhabitable by a small group of elite decision makers. Once again, the Schumpeterianphilosophical anthropology, which states that dynamic individuals operate outside of thenormative framework of everybody else, is put towork in constructing a form of objectiverealitywhichisonlyrecognizablebybusinessandpoliticalleaders.This is a manifestly constructivist and pragmatist project, in which methodologies are

adoptedandadaptedinordertogenerateaquantitative,utilitarianauditofnations.AlthoughFarmer and Richman’s own work never gained great public policy influence, they hadidentifiedanimportantnewmeansofputtingpublicinstitutionsandpublicgoodstothetest.Aparticularnormativeworldview,belongingtothemanagersofenterprises,isconvertedfromaform of moral judgement, into a scientific tool, through which the worth of nations can beobjectivelygauged.Thequalityofacertainspaceorculturebecomesfirstquantifiedandthencompared,usingbenchmarking techniques that implicitlyprivilege themanagerialgaze.Thisgaze is no longer just turned inwards upon the internal dynamics of a single firm, but alsooutwardsuponthesocietyinwhichitsits.Thequantitativecomparison,andhenceranking,ofnations represents a symbolic step away from the liberal, Ricardian view of the globaleconomyasapositive-sumgame.Whethernationsareactuallyindirecteconomiccompetition

witheachotherisnotconfirmed,butbenchmarkingusesthepowerofcomparisontoidentifyprioritiesforactionandcommunicatetheirurgency.

MichaelPorterandnationalcompetitivenessThefusionofmanagerialandpoliticallogiccannotonlytakeplacebysubjectingpublicpolicytoeconomicevaluation,althoughthatisakeypartofit.Theprovisionofstatisticalindicatorsandrankingsofanation’sperformancemayprovokeconcernorexcitementamongstpoliticalleaders,but theythenrequireexpertadviceonwhat theyshoulddo. It is the immanent,self-validating problem of the decision that needs to be economically theorized, if executivepoliticalauthority is tobereconfigured inmarket-orientedways.ThecrucialcontributionofMichaelPorterwastoprovideatemplatethroughwhichpolicymakersandpoliticianscoulddevelop quasi-business strategies for entire nations, as well as cities, regions andneighbourhoods. By also founding and delivering a number of consultancy services togovernments, Porter provided practical support for nations seeking to improve theircompetitiveness.Hisleapfromtheworldofbusinessstrategytothatofpolicyconsultancyandadvocacywaspossiblebecausehedistilled strategy to its simplest element: theproblemofstrategyistodifferentiateoneselfqualitativelyinsuchawaythatthethreatofcompetitionisreduced.2Porter joinedHBS in 1969 to do anMBAand thenmoved to the economics department,

where industrial organization economics was still dominated by the Structure ConductPerformance theory of Bain. Bain’s work, which remained influential in the US anti-trustagencies,showedhowfirmsuse theirpower toraisebarriers toentry,and thereforerequireregulatoryintervention.Porteradaptedthesameinsightstoshowhowindividualfirmscoulduse theirpower to raisebarriers toentry,and therefore returnhigherprofits to shareholdersand prosper in a more hostile environment (Stewart, 2010).3 He thereby married theformalisticapproachoforthodoxeconomicstothepragmaticrequirementsofbusinessstrategy,producing a generic theory of business competitive advantage that appeared in his seminal1979‘fiveforces’article(Porter,1979).4As thisarticlestates, ‘thesamegeneralprinciplesapplytoalltypesofbusiness’,aclaimthatdirectlycontradictedtheinductiveassumptionsofHBS strategy teachers of the 1950s and1960s (1979: 3).At the same time, he inverted theassumptionofBainian economics, that highprofits indicate illegitimate activity, and insteadtreated profitability as the raison d’être ofmanagement. In this respect Porter corroboratedwhattheChicagoSchoolwerearguingintheircritiqueofanti-trust,andanticipatedtheriseof‘shareholdervalue’thinkinginthe1980s,whichelevatedsharepricetothestatusofultimatecorporateperformanceindicator.Porter’s most important innovation was to challenge the sceptical and inductivist

epistemologythathadpreviouslydominatedtheacademicstudyofstrategy,asmanifestinthecase teaching method. Unlike neo-classical economics, with its shared presupposition ofindividual rational choice, strategy lacks any generally agreedmethodological principles orpresuppositionsaboutthenatureofcompetitiveadvantage(Froudetal.,2006:23).ButPorterrecognizedthatprinciplesandpresuppositionswereneverthelessneededbydecisionmakers,

andtherewasanopportunityforacademicswillingto invent themforpracticaluse.Methodandtheorycanbeconstructedanew,forthepragmaticpurposesofreducinguncertaintytosomeextent–at least, toagreaterextent thanqualitativecasestudiesoffer todo.Thequestion iswhomightpossesstheauthoritytoconstructsuchmethodsandtheories,towhichtheansweriswhichever scholar has the charisma and the political reach necessary tomake themwidelyplausible.Porterappliedthissameinventiveapproachtothestrategicanalysisofnations, indevelopingtheWEF’sfirstGlobalCompetitivenessreportin1979.Porter’s journey from business strategist to policy guru was initially conducted via elite

networks, consultancy, policy commissions and think tanks over the course of the 1980s.Anumberofhistoricalandpolitical factorsneed tobe taken intoaccount inunderstanding thistransition.Hisearlycareercoincidedpreciselywiththeeconomiccrisisofthe1970s,duringwhichtimelargeUScorporationsweremobilizingpoliticallyagainstregulationandbehindtheburgeoningconservativewingof theRepublicanParty (Phillips-Fein,2009).Thedeclineofcorporate profitability, stagflation and the rise of Japanese exports to the USA, all raisednationalistanxieties regardingAmerica’s status in theworldeconomy, thatcouldquickly tipintoprotectionistrhetoric.Oilpricerisesshowedthatcorporationscouldnotsimplyrelyoneconomiesofscaletokeepcostsdown,butneededtoanticipateunusualthreatsfrombeyondtheirimmediatemarkethorizon.Porter’sinversionofBainianeconomics,fromtreatingmarketpowerasabad thing (for thepublic), to treating itasagood thing (formanagement),hadawelcoming audience amongst corporate executives in the early 1980s, but a not unrelatedquestion was how policy makers could act to defend the power of US firms in the globaleconomy,otherthansimplyimposingtariffsonJapaneseimports.Ifstrategyisreducedtothebareessentials,offindingareasofproductionwhichotherscan’tmimick,Porterwasquicktorealize that this is something that can apply to entire nations, and not only individual firms.Bothsharetheproblemofhowtodefinethemselvesasdifferentinanincreasinglyglobalizedeconomy, so as to avoid competing directly through cost-cutting. This is a Schumpeterianaffirmationofqualitativedifference,appliedtoentirepoliticalterritoriesaswellasindividualfirms.Porter’s1990work,TheCompetitiveAdvantageofNations,completedhisexpansionofbusinessstrategytothequestionofnationaldecisionmaking(Porter,1990).There is a necessary sociological presupposition in this analysis, which competitiveness

consultants have expendedgreat energy in stressing.This is that the arenaof competition isconstantlyexpanding,thatlevelsofcompetitivenessareincreasingallthetime,thatthepaceofchangeisgettinghigherandhigher,andthat,whiletherisksoffailurearegrowing,therewardsto thewinner are greater and greater (e.g.Garelli, 2006). Innovation therefore becomes theonly path to competitive advantage, because any static corporate strategy will quickly bemimicked by a lower cost rival. During the 1990s, Porter shifted his attention to howcompetitivenesscanbeupgraded,thatis,constantlyrenewedastheonlyalternativetodecline(Porter, 1998).Crucially, for his entry into policy advice and consultancy, Porter’s implicitsociologyalsoassumedthatthesignificanceofnationsandlocalizedproductionsystemswasgrowingintheglobaleconomy,andnotdeclining(Porter,1990).Inasimilarlyformalstyletohow the five competitive forces influencing firm competitiveness were identified, Porteridentifiedfourfactorswhichinfluencedanation’s‘competitiveadvantage’.5Whilethepaceofchangeandscaleofglobalcompetitionwerealwaysrising,Porterarguedthat–contrarytoa

purelyliberalvisionoflaissez-faire–nationalleadersdidhavearoletoplayinaidingtheirdomestic industries, butnot aprotectionistone.Nations couldbegoverned inways thatnotonly attracted productive enterprises, but also helped them to build and defend their owndistinct competitive advantages. The idea that regional ‘clusters’ of businesseswere key tonational competitiveness became Porter’s most recognized policy prescription (Martin &Sunley,2003).Whatexactlyanyofthismeantintermsofpolicies,however,wasoftenvague,concealed behind rhetorical appeals to ‘leadership’, ‘vision’, enterpreneurial ‘values’,cultural re-definition and national boosterism.6 Even proponents of Porter’s ‘cluster’ theorywere doubtful that policy could necessarily influence how such clusters develop.7 Porter’smessage,thatbothcorporateexecutivesandstateexecutivescouldacttoinfluencethewayinwhich global competition proceeded, was more important to winning influence than theempirical validity of the theories that he proposed to back this up. The theories weredevelopedforalucrativeconsultancymarketofseniordecisionmakers,forwhomtheliberaleconomicmantraoflaissez-fairewasofnopracticaluse.

Thepolitical-economiccontestTheeffectofthesevariousmethodologicaldevelopmentswastorepresentfirmsandsovereignstates as ontologically equivalent and symbiotically related. As the crisis of the 1970sappeared todemonstrate,nationaleconomicprosperitywasdependenton thesuccessofkeyindustriesandfirms.Butthesuccessofkeyindustriesandfirmswaspartlydeterminedbytheconditionsandregulationscreatedbypublicpolicymakers.Anewtypeofpolitical-economiccontest is constructed and represented,which lies betweenmarket liberalism (positive summarket competition between firms) and political mercantilism (zero sum geopoliticalcompetition between states).8 In this contest, firms are quasi-political actors, seeking toposition themselves instrategicallyadvantageouspositions in theglobaleconomy:statesarequasi-corporate actors, seeking to do the same thing. Managers take decisions on howresources are allocated inside firms, while politicians take decisions on how they areallocatedoutsidefirms,andtheyeachbenefitfromdoingsowithasharedgoalinmind.Thisvisionisneitheraspeacefulastheliberalidealofunregulated‘freetrade’norashostileastheSchmittiandepictionofpoliticsasexistentialcombat.Instead,theeconomicandthepoliticalare fused together, intoaSchumpeteriangame inwhich the ‘winner’ is the firmorstate thatimposesitswillonhowandwherewealthisproduced.Chapter2arguedthatcompetitionsnecessarilyrequiresomesenseofaprioriequality,as

well as of empirical inequality, if they are to serve as coherent forms of socio-economicorganization.Theremustbeanormative,aswellasananti-normative,dimension.TheBrettonWoodsinstitutions,tradeagreementsandtheWorldTradeOrganizationserveglobalcapitalismwith many of its formal international norms. Statistics on national performance (such asproductivity and growth) make rival nations comparable before common standards ofmeasurement. However, national competitiveness evaluations and rankings are invented toprovideanentirelyseparateandneoliberalnationalmeasurementframework,thatengulfsthesocial, the political and the economic, within a single audit of strategic dynamism. Moral

valuesthemselvesareevaluated,forhowstronglytheypromotetheethosofcompetitiveness.Anation’slegalsystemisevaluated,forhowstronglyitdefendspropertyrightsandbusinessfreedom,includingmarketfreedoms(thequalityofanti-trustisgivenascore).Theliberalruleoflawisvalued,butontheextrinsicandcontingentgroundsthatitisbeneficialforenterprise.The methodologies to do this are constructed in an institutional space that sits outside ofconventional categories of state, business and academy, in cross-cutting think tanks andconsultancies.Thesemethodologies, and theglobalnetworks fromwhich theyemanate, thenserveastheaprioriforjudgementthatcanthenbecastuponanynation,cityorregion.The necessary accompaniment to this new type of global audit is a global network of

institutions, selling and pushing tailored knowledge and advice on how to act in response.Whereacompetitivenessevaluationmustbeimbuedwithsomespiritofobjectivity(albeit,anobjectivity that is recognisable to global elites), the subsequent consultancy and advice aredesignedinaheavilypartialfashion,thatissensitivetonationalpoliticalsentiments.How tomakeanationcompetitivelydifferentfromits‘rivals’,throughculturalpolicy,nationbranding,a culture of enterprise and ‘clusters’ of innovation, is a practical challenge thatcompetitivenessexpertsprovidehelpwith.Theartofthecompetitivenessexpert,whetherinconstructing measurement frameworks or in offering a definition of a nation’s (or firm’s)intangiblecultural identity, is toprovideamodicumof stabilityandexistential security toadecisionmaker,whilealsostressingtheirresistablehurricaneofchangethatcouldyetengulfthem.Uncertaintycanbe reduced throughactsof formalisticsimplification (suchasPorter’sresolutely simple theories of competitive advantage), but only for the pragmatic purpose ofpreparing leaders to re-enter thefrayandfacefurtheruncertainty. In thisway, theneoliberalproblemofhowtorepresentorstabilizeuncertainty,withoutseekingtodetermineorreduceit,isaddressed.

SpreadingCompetitiveness

Theempiricalrealityconstructedanddepictedbycompetitivenessexpertsisonethatcanonlybe inhabited by a global elite of decisionmakers, frombusinesses and governments. Thesedecision makers are deemed to share a common existential fate, which is to define thecommunitiestheyleadagainstapresupposedbackdropofeverincreasingglobalcompetition.Buthowdoesthismessageaccesstheelitesitisintendedfor?Howdoesthiscolonizationofthe political by business strategy actually proceed? The routes via which the discourse ofnationalcompetitivenesshastravelledarepartlyconstitutiveofthevisionofthepoliticalthatitpropagates.Theideaofstrategic leadership,asself-legislatingculturaldifferentiationinaglobal economy, demands and necessitates a break from other visions of politics, based innotions of representation, democracy or non-economic community. The ‘violent threat’ ofmanagementoffersavisionofauthorityasreducibletothesheercontingencyofthedecision,thatoneindividual takesonbehalfofmanyothers.It involvesnojustificationsorappeals tothecommongood,as itoriginates inanexistentialaffirmationof radicaldifferentiation, thatSchmittidentifiesastheprimaryfactofpolitics.The dissemination of competitiveness evaluations and rhetoric has occurred via channels

andlanguagespecificallyaimedatseniorleaders,whomayostensiblyberivals,butsharea

common fate by virtue of their executive power. The evaluations themselves will bedifferentiating(splittingnations,firmsandcitiesinto‘winners’and‘losers’,the‘competitive’and the ‘uncompetitive’), but there is a limited, quasi-private community of those whosedecision making needs to be reformatted against this backdrop. The function ofcompetitivenessconsultants is toconstantlyalternatebetweenrepresentationsofequivalenceand differentiation, on the one hand representing the shared global reality that all decisionmakers need to recognize, and on the other representing the qualitative and quantitativedifferenceswhichdefine rivalnational communities in theglobal ‘race’.This communityofleaders – often associated with the WEF Davos annual forum – needs to be strategicallyseparated off from the rest of the demos, whose political demands and representations arelikelytointerferewiththetaskofincreasingtheoverallefficiencyofanationstate.

ElitecongregationsThinktankswereacrucialresourceforthedevelopmentofneoliberalthinkingfromthe1930sonwards, especially in Britain and the United States (Phillips-Fein, 2009; Plehwe, 2009;Stedman-Jones,2012).Thepragmatismandheterodoxyofneoliberalideasmeantthatspaceswereneeded that satoutsideofexistingcentresof intellectualandpoliticalauthority,wheredebatecouldtakeplaceandideascouldbesharedamongstintellectualsandinterestedparties.Thinktanksarespacesfor‘outsiders’whorefusetosittidilyinacademia,business,mediaorgovernment,butseek to influenceallsimultaneously(Medvetz,2012).Hayek’sMontPelerinSociety, modelled on the socialist Fabian Society, aimed to provide a home for neoliberalintellectualsandcriticsfromaroundtheworld,toaidthemindevelopingapolicyprogrammewhiletheywaitedforanopportunityforinfluencetoarise(Bergin,2013).TheWEFmightbedescribedasa think tank, inasmuchas it employsacademics (suchas

Porter)toprovidepolicynarratives,reportsandadvicedirectlytogovernments,viathemedia.Butitremainsfirstlyaforum,inwhichaglobalelitecancongregatetoidentifyprioritiesforaction. It is convened by management scholars, who have their own business interest indeveloping their consultancybrands,but thosewhoattendaredecisionmakers in theglobalgameandnottheoreticalobserversofthegame.ThisisadifferenttypeofthinktankfromthefamousincubatorsofNewRightideas,inwhichbusiness(orconservativefoundations,suchasFordandRockefeller)provides funding topay scholars todevelop ideas.Themodelof the‘forum’ is one inwhich scholars oversee an event, provide some simple empirical data toframe the event, and political and business leaders attend in order to develop a sharednarrativeaboutthefuture.Thescholaristhereforeinthepositionoffacilitatororentrepreneur(muchas theyarewhenteachingcases inbusinessschools)rather thansupplierofobjectiveknowledgeorneutraltheory.Whilesuchaneventdoesnotsanctioneconomicplanninginanystrictsense,itfacilitatesadegreeofnarrativehomogeneityaboutthefutureacrosspublicandprivatesectors,temperinguncertaintywithoutseekingtodenyoreradicateit.Providingopportunitiesforleaderstoassemble,outsideoftheorthodoxroutesoflobbying

and diplomacy which otherwise mediate the interactions of global elites, is the primaryinstitutional means by which competitiveness evaluations have been disseminated. These

assemblies occurwith varying levels of formality and regularity, and their exclusiveness isconstitutive of their value and appeal. In the history of competitiveness thinking, the keymoments of policy influence have been one-off national commissions, which follow the‘forum’ model, with select political, business and academic elites, who conclude thecommissionwiththepublicationofadocumentevaluatingthenation’sstrategicstrengthsandweaknessesintheglobaleconomiccontest.Competitivenessforumsandcommissionsprovidean example of what Thrift calls the ‘cultural circuit of capital’: ‘a continual critique ofcapitalism,afeedbackloopwhichisintendedtokeepcapitalismsurfingalongtheedgeofitsown contradictions’ (Thrift, 2005: 6). Knowledge is produced and dispersed within thiscircuit,butitspracticalfunctionisalsotosupportdialogueandlinguistichomogeneityacrossmultipleeliteinstitutionsandcultures.Thecircuitisnecessarilyglobal,toprovideabasisonwhichtojudgeandactuponlessmobilesocialandeconomicresources.In the United States, where governments have historically not pursued active industrial

policies, the fear of declining relative productivity (relative to Japan especially) wasinstrumentalizedbybusinesselitesinordertoengagetheReaganWhiteHouseinconsideringwaysto improvenationalcompetitiveness.In1984this ledtheWhiteHousetoappointJohnYoung, theCEOofHewlett Packard, to chair a ‘commission on industrial competitiveness’made up of business leaders and management thinkers, including Porter. The commissionreported15months laterwithGlobalCompetition:TheNewReality, layingout a seriesofpolicy proposals to raise national competitiveness, focused on education, infrastructure andother public factors of productivity (President’sCommission on Industrial Competitiveness,1985).In1986,YoungestablishedtheCouncilonCompetitiveness,theleadingUSthinktankdedicatedtoevaluatingandpromotingAmericancompetitiveness,toprovideconstantdataandadvocacyoncompetitiveness inWashingtonDC.Fromtheearly1980sonwards,acircuitofcompetitivenessadviceandconsultancydeveloped,withinwhichPorterwasthemostfrequentbroker. His Monitor consulting group was established in 1983 (providing consultancy onbusinessstrategyandnationalcompetitiveness), fromwhichOTFconsultingwasspun-off in1991(providingconsultancytodevelopingnationsoncompetitiveness),andtheInitiativefortheCompetitiveInnerCitywasfoundedin1997,buildingdirectlyonanarticlepublishedbyPorteronthistopic(Porter,1995).ThePorter‘brand’spannedbusiness,academiaandpolicy,demonstrating the types of personal qualities that are needed to succeed in this new era ofcompetitiveness.Ifcompetitivenessmeantacting inpursuitofamoreactive industrialpolicy in theUnited

States, for European policy makers it meant re-conceiving industrial policy for a globaleconomy.Andifitwaspushedbybusinessleaders‘upwards’towardsthestateintheUnitedStates,inEuropeitwaspushedbytheEuropeanCommission‘downwards’towardsnationalmember states. A number of policy commissions were established by the EuropeanCommission during the 1990s, to assess what would be needed to develop Europe’s‘competitiveness’.In1990,theEuropeanCommissionsetoutthenewparametersofindustrialpolicy, on the basis that ‘competition is becoming ever more global and this trend isirreversible’ and ‘the role of corporate strategies is now determinant’ (EC, 1990). Futureindustrial policy would have to involve ‘maintaining a favourable business environment’,much as Farmer andRichman’swork had implicitly advocated in themid-1960s. European

nations were urged to shift from ‘vertical’ industrial policies (favouring certain firms orindustries) to ‘horizontal’ industrial policies (favouring competitivemarkets and supportiveinfrastructure) (Aiginger, 2005). Tackling unemployment and low macro-economic growth,primarily through loosening labour market regulation and increasing market integration,remained the preoccupation forEuropean competitiveness analysts during the 1990s. In thissense, the competitiveness agenda was initially more classically liberal in its Europeanmanifestation than in its Americanmanifestation, and its expert advisors were drawnmorefromorthodoxliberaleconomicsthanfrombusinessstrategy.Onlylater,withtheestablishmentof the distinctively Schumpeterian ‘Lisbon Agenda’ for competitiveness in 2000, did theEuropeanCommission begin to consider amore strategic role for policymakers seeking tospurinnovation,differentiationanddynamiccompetition.Fromthispointon,competitivenesswouldprovide a justification for new typesof state interventions, via universities, researchanddevelopment,andsupportfornewtypesofpublic-privatecollaboration.Competitiveness institutes are constructed around the concerns and worldviews of elite

decision makers from multiple sectors. Commissions such as the US Young Commissionoffered a voice to a select group, whose shared characteristic was seniority and celebrity.European competitiveness commissions represented subtly different institutions, with theinclusionoftradeunionsandmoreorthodoxpolicyspecialists.TheWEF’sDavosmeetingisnotorious for attracting pop stars and leading lights from all sectors, beyond the realms ofbusiness or public policy. The political implication in all cases is the same: professionalidentity or sector of responsibility is less significant than power and weight of decisionmaking.TheSchmittianburdentodecideonbehalfofothersiswhatbringspeopletogetherincompetitiveness networks, seminars and institutions. The liberal boundaries separating the‘economic’, ‘political’ and ‘social’ are dissolved by the distinctly neoliberal creation ofnetworksandtoolswhichextendamanagerial-politicalcalculusintoalldomains.The cultural and spatial reach of these institutionsmust be somehow commensuratewith

their horizon of political action.Competitiveness discourse is a pragmatic reflection on thepossibilities for economically efficient political action. Anything which lies beyond suchperceivedpossibilitiesisbeyondthescopeofdebate,butequallyanythingwhichlieswithinthose possibilities is potentially relevant. Given that corporations and elite individuals arepresumedtooperateinaglobalspace,somustpolicymakersbeorientedtowardsitintheirdecisionsandinterventions.Thinktankswithglobalreputationsandevaluativereach(suchastheWEF)servetomediateaglobaldebateaboutpolitical-economicpriorities,opportunitiesand threats, while also conducting the comparative audit of territories and states. Theirperspective is offered from ‘outside’ of the competitive contest, frequently using thesymbolicallyneutralterritoryofSwitzerlandasabasefromwhichtodoso.Individualgurusoffer a perspective on the global economy and its future, that transcends institutional ordisciplinarydivisions.In addition to globally-oriented think tanks and gurus, competitiveness institutions are

created which map onto pre-existing political communities. Achieving concerted action inpursuit of competitiveness requires building on forms of collectivity that already exist.Competitiveness commissions and think tanks have therefore focused on nations, drawingnational policymakers together, in addition to other tiers of governance such as cities and

regions.Therearecasesofentirelynewtiersofpoliticalactionbeingimagined,constructedand governed, such as Britain’s ill-fated ‘Northern Way’ or various attempts to nurture‘clusters’ofbusinessdevelopment,inlinewithPorter’sadvice.AsBrennerargues,‘Itisnolongercapitalthatistobemoldedintothe(territoriallyintegrated)geographyofStatespace,butstatespacethatistobemoldedintothe(territoriallydifferentiated)geographyofcapital’(Brenner,2004:16).Butpolitically,atleast,competitivenessstrategieshavetakenastrongerholdwheretheymapontospacesandculturesthathavemoreobviousheritage.

RegulatingleadershipanxietyThe discourse of national competitiveness only makes any sense, if the central problem ofpolitics is viewed as a Schmittian one of how to decide on behalf of others, and not (forinstance)aRousseauianoneofhowtorepresentthecollective.OnlyifpoliticsisconceivedinSchmittian terms can it be reconceived in terms of competitive strategy, or can the analogybetweenafirmandanationhold.Wecanseewithincompetitivenessdocumentsanationalistrhetoric,compellingleaderstodowhateverisnecessarytodefendtheirpoliticalcommunitiesagainst the ‘threat’of rivalnations.Andcommensurately, there is a suspicionofdemocraticand legal procedures that might threaten to undermine or divert this compulsion. A centralobjective for competitiveness rhetoric is therefore to produce an optimal sense of anxietyamongstpoliticalleaderswithregardtocompetitiveness,thatitismorethansimplyamatterofeconomicpolicy,but a fateful issue for theirpeopleand territory. It is through inculcatingasenseofexistentialanxiety(whichtheconsultantorguruthenpromisestotemper)thatbusinessstrategysucceedsincolonizingpolitics.Leadersarewarnedagainsteverfeelingcomfortablewiththecompetitivenessthattheyhaveattained,asitcanswiftlyvanishorbeovertakenbyarival.AsGarelliargues,‘althoughbeingheadoftheclassiscertainlypraise-worthy,nationsandfirmsshouldalsotackleamorefundamentalquestion:arewewinningtherightraceand,if so, by how much?’ (Garelli, 2006: 25). Presenting empirical data as ‘objective’ orscientificallyauthoritative is lessperformativelyeffective thanpresenting itasuncertainandthreatening,thatmakessomeformofradicaldecisionimpossibletoavoid.Hayek,Schumpeter and leadingmembers of theChicagoSchool all believed thatmodern

democracy had a tendency to deliver economically irrational policies, ultimately tendingtowards socialism. The great weakness of democracy, by this account, was that votersprioritize immediate satisfactionover long-termpoliticalvaluesandgoods.As it seemed tothe neoliberals and also to Schumpeter, socialism had the great electoral advantage ofpromisingtodeliveronthepublic’sdemandsimmediately,whereasthebenefitsofcapitalismwereonlyapparenttoobserverswhocouldtakealonger-termview.Stigler,forexample,wasresigned to the fact that a free market programme would never be popular: Hayek andFriedman both assumed that the success of neoliberalism would only be achieved via aprogramme of elite transformation, and not through any democratic movement. Friedman’sinfamous engagement with the proto-neoliberal Pinochet regime in Chile during the 1970sconfirmedthatpoliticalliberalismwasnotapreconditionofhisproposedpolicyprogramme(Mirowski, 2009). Competitiveness analysts have also viewed democracy as, at best, of

secondary importance and, at worst, obstructive for successful economic policy making.FarmerandRichman’s‘generaltheoryofmanagement’hadbenchmarkedallindustrialnations,capitalist and communist, in terms of how well they supported effective management.Democraticfreedomsareexternaltothecalculationofanation’scompetitiveness.Bothbusinessandpoliticalrealmsarerepresentedbycompetitivenessexpertsasafflicted

byproblemsof‘shorttermism’.Corporatemanagersruntheriskoffocusingonlyonexistingmarket demand and their next quarterly report, and taking their eye off their longer-termstrategy.Politicians faceananalogousproblemof focusing toomuchon theirpopularityandnext election (Ketels, 2006: 132). This also distracts from the longer-term challenge ofimprovingnationalcompetitiveness.Partofthejustificationforcompetitivenessinstitutesandthink tanks is that they promise to insulate the competitiveness agenda from ‘short-term’changes in thepoliticalweather (Ketels, 2006).Where the electoral cycle ismeasured in atemporalityoffourorfiveyears,competitivenessisrepresentedasaproblemthatneedsactingon over significantly longer time periods.9Good competitive strategies are oriented aroundlong-term horizons and necessarily uncertain outcomes. Democracy, including the electoralcycle,threatensthesestrategies.Meanwhile,thepoliticalchoiceswhichdogetmadeviademocraticprocessesareshownto

be inevitably dependent on competitiveness, regardless of the values that underlie them. Ifcompetitivenessisdefinedasanation’scapacitytoproducewealth,thenvirtuallyanypolicyprogramme,whetherof theLeftor theRight,willbeparasiticaloncompetitiveness insomeway.10IntheUSAthepolicymaybeataxcut,whileinEuropeitmaybeasocialpolicy,butbotharerepresentedasdependentonadegreeofcompetitivenessinthefirstplace.Nationalpoliticalcommunities thereforeoweaconstantdebt to theenterpriseswhich sitwithin theirborders, and there is no coherent political position which does not place a high value oncompetitiveness. As the very condition of all democratic possibility, it must therefore betreatedasbeyonddemocraticdebate.11But it is not simply that democratic choices are dependent on competitiveness. The

leadershipanxietythat thecompetitivenessdiscoursetargetsis thepossibilitythat thefateofthe political community itself may depend on the leader’s strategic decision making. In anumber of ways, the urgency of addressing national competitiveness blends with moreexistential forms of politics. Urgency and the authority of leadership decision then becomemutually reinforcing. The heightening of a sense of urgency (or even emergency) aroundnationaleconomicperformanceenablesaformofSchmittian-managerialactiontobeignited,wherethereisnopublicjustificationrequired,butsimplyasensethat‘we’areincombatwith‘them’.Thegreaterthisimmanentsenseofrivalrousness,themoreimmediateistheinjunctionfor elite action. And so at a rhetorical level, cherished forms of national identity arerepresented as under threat, as a result of diminishing competitiveness. Competitivenessreports which are addressed to American policy audiencesmake repeated analogies to theColdWar, and the ‘Sputnikmoment’ when the technological challenge of the Soviet Unionbecamemostvisible(e.g.President’sCommissiononIndustrialCompetitiveness,1985;Kao,2007).Meanwhile,Europeanleadersareurgedtopursuecompetitiveness,orelseconfronttheendoftheirsocialmodel.Thethreatoflostcompetitivenessexceedsanynarrowlyeconomicormeasurableconcerns.Whatbeginsasananalogybetweenstatesandcorporationstakeson

anexistentialhue,wherecompetitivestrategyis(re)imbuedwiththerationalityandrhetoricofmilitary strategy. The veiled threat is that the loser in the international ‘race’ forcompetitiveness might be weakened in the more existential sense, that they may becometechnologicallyincapableofdefendingthemselves.Is this allusion to warfare merely rhetorical and analogical, or is there a genuinely

biopoliticalormortaldimensiontothesenationalperformanceevaluations?Historyshowsthatthestatisticalprojectofmeasuringandcomparingnationaleconomicaggregateshasoftenbeenmotivated by strategic military requirements (Desrosières, 1998). The integration ofeconomics and statistics in the 1930s and 1940s was partly a requirement of wartimegovernment(Backhouse,2006).Statisticsputnationstothetest,asnon-violentauditsortrials,which indicate the likely outcomes ofmore fateful and lessmeasurable contests, hencewemightsaythata‘violentthreat’hasalwayshoveredbehindtheprojectofaggregatingnationalcapacities.Wehaveseenthatfallingcompetitivenessisrepresentedasmorethananarrowly‘economic’issue.Andarguably,ithasexistentialimplicationsandcauses,whichlaybaretheSchmittian underpinnings of competitive strategies. US competitiveness is tied up with thevitality of its military-industrial complex: rising competitiveness is achievable throughPentagon investment in research and technology, while declining competitiveness couldultimatelyaffectAmericanmilitarypre-eminence.12ToignoreUScompetitivenessisdeemedtoputnationalsecurityatrisk(Cole,2012).Meanwhile,Europeancompetitivenessistiedupwithitsresponsetoitsageingpopulation:alowbirthrateandatickingpensions‘timebomb’are the primary conditions forcing political leaders to act, to increase competitiveness.Thepolitical threat in each case is existential and Schmittian in character. Americancompetitivenessisdistantlyindicativeofitscapacitytoannihilateitsenemies,whileEuropeancompetitivenessishamperedbyitsinabilitytoreplaceitsfriends.

MeasurementandConversation

Empirical data perform differently, depending on their pragmatic situation or the mode ofunspoken authority that accompanies them.Neoliberalism seeks to substitute economic factsfor political rhetoric or judgement, but how these facts are generated, mobilized andrepresented depends onwhat their practical and political purpose is. The previous chapterarguedthatneo-classicaleconomicsprovidedaliberalprincipleofequivalence,whichcouldresolveconflictinaquasi-juridicalsense.Thefactsproducedbycompetitivenessconsultantsareentirelydifferentintheirpragmaticorientation.Nationalcompetitivenessevaluationsandcomparisons are produced in order to frighten, enthuse and differentiate their chosenaudience,whileatthesametimedefiningthebroadglobalarenawithinwhichdifferentiationmusttakeplace.Thequantitativeevaluationsarenotofferedwithaspiritofneutralobjectivity,butwithathreatofimminentdanger.Yettheymustatthesametimebeintuitivelyconvincing.Theepistemologyandmethodologiesofnationalcompetitivenessevaluationarerivenbya

fundamental tension between qualitative affirmations of national-cultural differentiation, andquantitativejudgements,rankingsandcomparisons.Fromaneoliberalperspective,qualitativedifferentiations are to be welcomed and celebrated, as long as they are manifest inentrepreneurial forms of distinction, which are oriented towards the global contest. The

purposeofquantitativeauditandrankingsisnottoarriveatsomestableobjectivefacts,whichcanbeamatterofbroadpublicconsensus:competitivenessconsultantsareoftensurprisinglydismissiveofthevalidityoftheirempiricalmethodologies.Thetaskistoprovideanempiricalrepresentationoftheglobaleconomy,thatisdesignedtocatalyseentrepreneurialcompetitiveenergies on the part of policy makers and political leaders. The pragmatic purpose ofcompetitiveness ‘scoreboards’ is not to achieve a form of peaceful consensus, via theprovisionofanagreed-uponprincipleofequivalence,buttonurtureexistentialanxietiesonthepartofleaders,whichmightdriveagreaterconcernandenthusiasmforcompetitiveness.

InstitutionalconditionsofdifferentiationIn the previous chapter,we saw how anti-trust economists are encouraged to participate inacademicpublicspheresandhowquasi-academicactivities(suchasseminarsandtheoreticalresearch)are reproducedwithingovernmentagencies.The legalauthorityof thegovernmentagencyisstrengthened,ifitseconomicexpertscangaincredibilityamongsttheirdisciplinarypeers, and then bring their skills to the service of agency lawyers.Competitiveness expertshavetheirowndistinctivewayofgathering,legitimatinganddistributingknowledge,whichisanimatedbyadesire toenergizedecisionmakers, rather thanprovideaneutralorobjectiveviewoftheworldthatwithstandsscientificscrutiny.Inthefirstinstance,theseexpertsmustconstructamethodthroughwhichdiversesourcesof

datacanbeweightedandcombined.Eachthinktankorgurudevelopstheirownmethodology,whichinstrumentalizesanon-empiricalbeliefaboutthesourcesofadvantageanddisadvantagein contemporary capitalism.These are then circulatedvia the circuit of think tank seminars,policy consultancymarkets and lobbying networks.Rival theories of competitive advantagenecessarilyendupincompetitionwitheachother.Hence,Porterbecameknownassomeonewhowould recommendbusiness clusters as the path to national productivity improvements,andRichardFloridabecameknownassomeonewhowouldexploreurbanstrategyintermsofattractinga‘creativeclass’ofresidents.Thesearenottestablehypotheses,butnarrativesthatpresumetoaccountforunstableandrapidfluctuationsinthegeographyofcapital.Accompanying each narrative must be a technical apparatus of measurement and

comparison,whichissufficientlyflexibletobeappliedacrosstimeandspace,butsufficientlystabletorepresentsocio-economicinequalities.Theuniquebrandoftheguruorthinktankismirroredinuniquemeansofcombiningandweightingstatistics,soastoprovideanevaluationrootedinaparticularsubstantiveviewaboutcapitalismanditsfuture.Ingeneralterms,gurusprovidethissubstantiveview,legitimatingitthroughtheirowncharismaticauthorityandsenseof clarity, while an associated team of technical experts provides supportive quantitativeanalysis. A division of labour develops, between the prominent individual providing aqualitativenarrative,whichmustbesufficientlycompellingas toconvince itsaudience,andthe technicalanalystprovidinganaccompanyingevidencebase.Thecombinationof the twomeans that data are provided not only as empirically credible, but also as substantivelymeaningful.Achieving this balance between empirical and ontological plausibility is the art of the

competitiveness expert. Empirical data are used to the extent that they support a policynarrative,oropenupvaluablequestionsaboutfuturedecisions,butareneveranalysedforthesakeofit.Datamustbeprocessedinwaysthatreducethecomplexityofuncertainsituations,rather than increase it.13 Narratives are developed to the extent that they provide a sharedreality,withinwhich data can be discussed, and shared problems identified and described.Orthodoxeconomicdata(forinstanceontradedeficits)mightbeaccompaniedwithanarrativeorquestionaboutwhattheyreallymeanorwhethertheyarereallyworthconsideringatall.14The‘scores’andnationalrankingsthatarethemostpubliclyvisibleoutputofcompetitivenessthink tanks are recognized by their proponents to be of limited value, beyond raising thepoliticalprofileof competitiveness as a concern.15Thehope is that theywill leaddecisionmakerstoengageinamoredetaileddiscussionabouthowtheycanrespondtothechallengeofcompetitiveness. Seeing as competitiveness experts are also commercial consultants, this ispartly a business strategy in its own right,which can lead a guru and his associates towinlucrative consultingwork.16Howmethods and narratives are constructed is also, therefore,partly a response to a competitive consultancy market: methods and narratives have to bedifferentiatedfromoneanother,ifeachconsultantistomaintainaclear‘brand’.Thefactthatrival competitiveness evaluations are based on different techniques of data analysis, withdifferent assumptions about sources of competitive advantage, is a function of the fact thatonto-empirical worldviews are competing against each other in a marketplace for policyadvice.Incertaininstances,expertsmightevenprotecttheirmethodswithintellectualpropertyrights.17Clientsandaudiencesforcompetitivenessresearchalsoserveasasourceofempiricaldata

and substantive meaning, for the experts that advise them. They provide case studies andexamples, which can be used by consultants when advising other clients or audiences.Crucially, they serve as the consultant’s sensors fornew challenges or threats thatmight beemerging. Their anxieties and perspectives on the future can inform how a competitivenessnarrative is developed and changes over time. The dialogical nature of seminars andconsultancy relationships means that competitiveness experts gather disparate subjectiveimpressionsof theworldas theytravel.18Bysynthesizingthese intoacoherent‘story’aboutcapitalism,theythenreflectbackarepresentationoftheworldthatisimmediatelyplausible,thoughsubtlyaltered.The‘delphisurvey’technique(whichconstructsquantitativeevaluationsthroughelitesurveys)codifiesamethodologicalapproach,whichusesaudienceperspectivesasabasisforrepresentation.The discourse of competitiveness is thus characterized by flux and fluidity.Methods are

necessarily plural rather than standardized. Narratives and empirical data blend together.Knowledge moves through commercial and non-commercial routes simultaneously.Academics,businessleadersandpoliticalleadersarebroughttogetherviaseminars,gurusandthink tanks, to address shared concerns andpriorities.Anopinionor subjectiveperspectivemightbesharedinoneeliteforum,andthenrepeatedasaformofevidenceinanotherforum.This ‘cultural circuit of capital’ is often referred to with the term ‘conversation’ by itsparticipants,suchthattheiraimisto‘startaconversationaboutcompetitiveness’inxterritory,or to ‘reflect on the on-going conversation’. In linewith the dynamic perspective on global

capitalism that underpins competitiveness theory, a constantly evolvingworld ismetwith aconstantlyevolving‘conversation’torepresentit.

EconomizingpoliticaldecisionAcriticaldistinctionbetween thecompetitivenessexpertand theacademiceconomist is thatthe former is sympathetic to the political vocation to act purposefully upon economy andsociety.19Knowledgeistailoredpragmaticallytoservedecisionmaking,ratherthanasanendinitself.Andyettheaspirationisthatdecisionswillbecomeeconomicallyrational,orientedaroundmaximizingtheproductivepotentialoflocalspacesinaglobaleconomy.Theauthorityofthecompetitivestatederivesfromitscapacitytodecideonastrategicpath,whichwillleadtorisingwealth,oratleastoffsetthe‘threat’offaster-movingorlowercostoverseasrivals.Butwhat, then, does the authority of the competitiveness advisor consist in?Onwhat basisdoes the competitiveness advisor claim to know or see what this strategic path might be?Giventheunknowableuncertaintiesofglobalcapitalism,whichthecompetitivenessexpertiskeen to stress, what counts as a valid representation or credible advice? Something mustremainstableamidst somuch flux, ifepistemological–andhencepolitical–authority is toremainfeasible.Thekeytraitofcompetitivenessexpertisethatisemployedtorespondtothisanxietyisits

own entrepreneurship. The uniqueness of the expert is constitutive of the authority of hisadvice. The advisor possesses authority by virtue of being unconstrained by all forms ofdisciplinary,institutional,sectoral,culturalandspatialboundaries.Byconstantlytranscendingeverydivisionorbinaryopposition,theexpertgainsaperspectivefromapositionexternaltothe cultural locale of the elites they are advising. Firstly, this means abstaining from anydisciplinarycommitmenttoscholarlymethod.20Instead,aswehavealreadyseen,adistinctivemethodisconstructedonthebackofasubstantiveontologicalnarrativeaboutthemechanicsofglobal capitalism. Secondly, it means being able to communicate across sectors, so as tofacilitatea ‘conversation’betweenbusiness,academiaandgovernment.Thecompetitivenessexpertrefusestobeplacedinanyofthesecategories.Andfinally, theentrepreneurialexpertmust be at least as geographically and culturallymobile as thosewho are drawing on theirexpertise.Competitivenessexpertsthuspresumetooperateinameta-institutional,meta-culturalspace,

fromwhere they can survey comparative inequalities. From this space, they get a view of‘winners’ and ‘losers’ and a sense of the challenges that are coming over the horizon.However,theymustbecapableofdescendingtoengagewithclientsanddecisionmakers,soas to help reorient their goals in ways that are compatible with global competition. Theirauthorityisultimatelyofacharismaticform,inasmuchasitistheirpersonality,self-beliefandpowers of convincing representation that offer a reason to believe and follow. Preciselybecause theydonot relyonanyapriori languageor rules,butdrawonlyon theexistentialresourcesofthemselvesandthefactofglobalcapitalism,theyprovideaformofexpertisethatoffersontologicalsecurityandmeaning,ratherthanmereempiricalcalculation.Methods,suchas thoseofneo-classicaleconomics,are internal to thefluxofcapitalistevolution.Theonly

stablemethodological premise in a capitalist world, as for Schumpeter, is the force of theentrepreneurialwill to reinvent and transcenddivisions. In scholarly terms, competitivenessgurus engage in what Weber bemoaned as ‘academic prophecy, [which] will create onlyfanaticalsectsbutneveragenuinecommunity’(Weber,1991a:151).However,itisbecauseoftheneedtoalignknowledgeproductionwiththeperspectiveandexistentialanxietiesofelitedecision makers, whose ultimate capacity is to order violence against enemies, that thisaffectiveandpropheticstanceisadopted.

Conclusion:TheViolenceofDecision

Conventiontheorystressesthatcoordinatedsocialandeconomicactivitydependsonreachingagreements,whichrequirestheofferofacceptablejustificationsandoftenevidenceforagivencourseofaction. Individualsneed to sharecertainprinciplesofequivalence,whichbecometangiblymanifestinmeasuresandtests,suchthattheycanagreethatcertainthings,peopleandactionscarryvalue.Adegreeofpublicnessisneeded,forjustificationstobeaired,listenedtoand– ifnecessary–challenged.Where justificationsarewithheld,and thepublic spacesofpossible dispute are closed down, then people enter what Boltanski terms a ‘regime ofviolence’(Boltanski,2011),inwhichtheycanbehaveastheyplease‘withoutbeingburdenedby the requirement to explain’ (Boltanski & Thévenot, 2006: 38). Within the regime ofviolence, there isanabsenceofanyexternal, transcendentphilosophicalprinciple regardingcommonhumanity,butanaffirmationof thesheercontingencyof thesituationathand,whichneeds acting upon as amatter of immediate necessity. The Schmittian political agent existswithin the regime of violence, evenwhen physical force is not being used, because purelydecision-basedpoliticsadmitsnonormativejustification.Itismandatedpurelywithrespecttothe‘friend-enemydistinction’,whicharisesasamatterofcontingentdifferentiation.What isculturally uncommon to the parties involved is what dictates action, rather than what ismorally common to all parties. Boltanski argues that, in the regime of violence, thephilosophical difference between people and things is abandoned, and individuals act upononeanotherinanon-discursive,purelymaterialfashion.Inthisprecisesense,theSchumpeterianentrepreneurandthebusinessstrategistalsooperate

inaregimeofviolence,inthesensethattheirauthoritytoactderivespurelyfromcontingentdifferencesbetweencompetitors,andtheirowncontingentqualitiesofcharismaticpersonality.People become mere factors of production or ‘human capital’. While the majority ofindividuals continue to act in accordance to norms (within a ‘regime of justice’), leaders,strategists and entrepreneurs draw on their exceptional personal qualities to act upon therules,fromoutsideoftherules.AsfortheSchmittiansovereign,theirdecisionisgenerativeofanewsetofnorms;thatdecisioncannotbemandatedbyanynorm.Bydistillingtheproblemofmanagement to that of decisionmaking under conditions of uncertainty, business strategyinvitesbusinessexecutivestoconceiveoftheirauthorityinaregimeofviolence.Therearenojustifications or proofs offered for the strategic decision that is made: there is no time orcapacitytocompilesufficientevidence,forwhythiscourseofactionissuperiortothatone.The action is self-legislating. The analogy between the existential condition of themilitaryleaderandthatofthecorporateleaderorentrepreneurwhichisrepeatedbySchumpeter,and

recurs in strategy thinking, means that an ontological gulf opens up, not only between theidentitiesofcompetingfirms,butalsobetweenthoseelitescompelledtodecide,andthevastmass of employeeswho obey rules as they are created. This is an anti-normative vision ofmanagerialauthority.Thisisalreadydeeplyproblematicinthecontextofbusiness.Itaffirmsaradicalexistential

separationbetweensenior‘leaders’andthosethatsimply‘follow’(whichisthenmirroredinhowincomeisdistributedwithinthefirm).Itaffirmsactionswhicharenotlimitedbyaregimeofjustification,inthesensethattheyarenotopentothemselvesbeingjudgedormeasured,atleastnotbythosewithinthefirm(judgementisostensiblyperformedbyshareholders).Modesofinstitutionthatdonotseeklegitimacyleavethemselvesopentocrisesoflegitimation,unlesssufficientpowerisavailabletopreventordelaycritique.Oneadvantagethatbusinessleadershaveinoperatingwithoutjustification,andpurelyonthebasisofdecision,isthecapacitytotransform the enterprise, alter itsmarketproductive functions,downsize its employees, suchthatitevadescritique.Managersretaintheoptiontosimplyeradicatecertainemployees,asanalternative tomorally engagingwith them.The resilience of highly innovative firms can beexplained partly in terms of their ability to evade the constraints of justification, through aconstantredefinitionoftheirmodesofvaluation(Boltanski&Chiapello,2007:534).Ifthisisproblematicasamodeofmanagerialauthority,itencountersitsownspecificand

graver contradictions when imported into the executive branch of government, as nationalcompetitiveness consultants sought to do. The analogy between the firm and the nation, theCEOandthepoliticalleader,hasbeenwidelycriticizedbyorthodoxeconomists,onthebasisthat it encourages formsof anti-tradeprotectionismand subsidy indefenceofglobalmarketshare (Krugman, 1994).But reconceiving of executive political authority in the language ofbusinessstrategyalsomeansabandoningnotionsofrepresentativedemocracyorothertheoriesoflegitimatepower.EventheWeberiannotionofmodernbureaucraticauthorityistoouniformandinflexibletoguaranteesurvivalinthecompetitivelandscapeassertedandrepresentedbycompetitivenessgurus.Thestruggleposedbythenarrativeofcompetitivenessisastruggleforeconomic survival, with the hint that this is ultimately a struggle for a nation’s existentialsurvival.Politicalelitesgainexceptionalquasi-wartimepowers,againstsuchabackdrop,andlose any constitutional relationship to the political community they lead. Their allies in the‘battle’ or ‘race’ for competitiveness are the business leaders, with whom they share acommon form of charismatic-managerial authority. Through economic critique, thecompetitiveness agenda seeks to channel executive political powers towards dynamicallyproductivepaths.Theanalogybetweena firmandanation (orotherpolitical territory)encounters themost

serious tensions with respect to those resources which hamper competitiveness. Businessstrategyencouragesmanagerstoevaluatehowwellsuitedtheirfirm’sexistingresourcesandactivitiesaretotheircompetitiveemergingcompetitiveenvironment.Certainresourcescanbeabandoned(out-sourcing,down-sizing),andothersacquired(M&As), inresponsetosuchanaudit. The same is not truewith respect to nations. The geography of the competitive stateconcentrates political capital behind the most competitive cities, clusters and regions, incontrast toaKeynesianspatialstrategywhichspreadswealthvia industrialpolicy(Brenner,2004).What then becomes of the uncompetitive spaces or populations? The Schumpeterian

logicofcompetitiongivesanunlimitedpoliticalmandateforthoseindividualsorcommunitieswiththepsychologicalstrengthtoenact‘newcombinations’,whooperateoutsideofexistingroutinesandregulations.Bysomerhetoricalsleightofhand,thismayinvolvetheexecutivesoflargefirms,andnotonlythosecreatingnewones.Theseroutine-lessindividualspossesstheultimateworth in theglobaleconomy,because theyarenotgovernedbyanystablestandard,butcapableofconstantreinvention.Others,intheSchumpeterianeconomy,mustsimplytrytokeep up, adopting the new conventions as and when they are invented. But what of theindividualswhoarewithoutvalue,inthiscontest,eitherbecausetheyareinflexibleorbecausetheir inventiveness ismorepoliticallydisruptive,andnotsimply inanentrepreneurial sense(Skeggs&Loveday, 2012)? In an economy oriented towards the exploitation of uncommonhuman traits (‘talent’, ‘leadership’, ‘innovation’),what value remains placed upon commonhumantraits?Thedangerfacedbyananti-normativecapitalismisthatit‘findsitselfstrippedofthejustificationsthatmakeitdesirableforalargenumberofactors’(Boltanski&Chiapello,2007:35).The strategic, competitivepolitical authoritydependsonaffirmationsofdifference, rather

than appeals to justice. The capacity of such authority to stave off or delay crises oflegitimation depends on its reserves of sovereign power, and its capacity tomobilize thesewithin the economicgame, in support of certain territorially specific strategicgoals.As thenextchapterwillexplore,theneoliberalresponsetothefinancialcrisiswhichbeganin2007has been to refuse critical judgement, in favour of evenmore decisive acts of competitivedifferentiation. This Schmittian politics, in which executive decision overrides publicjustificationandcritique,isnowmorenaked,asWesternpoliticalleaderssimplydeclarethatthemarket-basedorderwillsurviveasamatterofnecessity.However,thisinvitesandaffirmsequallynihilisticformsoffriend–enemycombatbypopulations,suchasthe2011rioters,whoare not included in the shrinking groupwhoseworth is being defended by executive dictat.Whenthestaterenouncesgeneralprinciplesofjustificationandcritiqueinfavourofimmanentexecutivefreedoms,thenitwillencounterequallynon-criticalformsofresponse,whichmaybepotent,destructiveanddifferentiatingwithoutcontributingtomeasured‘competitiveness’.

_____________________________1Itneedsstressingthatthelanguageandmeasurementof‘competitiveness’havebeenequally,ifnotmore,influentialatsub-national scales of governance, such as cities and regions. However, for sake of brevity, I henceforth refer to ‘nationalcompetitiveness’orthe‘state’,toexplorehowthisparticularscaleisreconfigured,saveforwheresomeotherscale(suchastheEuropeanUnion)isbeingdiscussed.2‘Competitivestrategyisaboutbeingdifferent. Itmeansdeliberatelychoosingadifferentsetofactivities todeliverauniquemixofvalue’(Porter,1998:45).

3‘Fromthestart,mygoalwastointegratewhatweknewabouttheeconomicsofmarketsandindustrialorganizationandwhatweknewaboutcompaniesandbusinessstrategy’(quotesinGavel,2000).4 The ‘five forces’which govern the level of competitiveness of a given industry are: ‘threat of new entrants’; ‘bargainingpower of customers’; ‘threat of substitute products’; ‘bargaining power of suppliers’; ‘jockeying for position among currentcompetitors’.Firmsneedtoactuponthesedifferentforces,torelievethepressuresthatcompetitionplacesonthem.

5 The four factors are: ‘factor conditions’ (e.g. skills, infrastructure); ‘demand conditions’ (the home market); ‘relatedindustries’(presenceofothersuccessful industriesnearby);‘firmstrategy,structureandrivalry’(governanceandcultureofanation’sfirms).6 ‘Government’s proper role is as catalyst and challenger; it is to encourage – or even push – companies to raise their

aspirationsandmovetohigherlevelsofcompetitiveperformance…Governmentplaysarolethatisinherentlypartial’(Porter,1998:185).

7‘Thereisincreasingevidenceandagreementamongresearchersthatclustersexistandthattheyfeatureanumberofpositiveeconomic effects. There is less systematic evidence and agreement that policy interventions are possible and that they cangeneratevaluebyspeedinguptheprocessofclusterdevelopmentorincreasingtheeffectivenessofexistingclusters’(Ketels,2003:14).8‘TobecompetitiveAmericawillhavetosailbetweentheScyllaofprotectionandtheCharybdisthat“leftalone,themarketwilltakecareofit”’(Thurow,1985:2).

9Porterarguesthat‘buildingstrongregionaleconomiestakesdecades’(Porter,2001:xiii).10 IMDcompetitiveness rankings include ameasureof howwell a nation’s political parties understand economic challenges(Garelli,2006:198).

11‘…competitivenessisnotanendinitself;itisameanstoanend…Beingcompetitiveiswhatpaysforwhateverpublicorprivategoalswechoosetopursue’(President’sCommissiononIndustrialCompetitiveness,1985:7).12‘Todonothingistolosenotonlyeconomicleadershipbutpoliticalandmilitaryleadershiptoo’(Thurow,1985:60).

13‘[It’sabout]tryingasmuchaswecantocomeupwithwaysofsaying“whataretheoneortworeallyinterestingthingsthatit’sworthgoingforwardwith?”.It’stryingtounderstandandlookathowwecanlearnsomethingnew.Butdoingitsothatwe don’t have a list of 75 indicators. That doesn’t help. It’s nice, it’s comprehensive, but it’s not really useful’ (UScompetitivenessconsultantA).14‘SoIthinktherearesomeissuesthatseemtoalwaysstickaroundandthere’salwaysachallengeandpeopleon[Capitol]Hillarewantingtoknowmoretotrytounderstandbetter…Andthenotherssortofwaneandcomeandgo.Imean,thewholeoffshoringthingtwooryearsagowasveryhot;lesssotoday.Tradedeficits,whatdoesthatmean?Someyearsit’slikeit’sa,you know, it’s a disaster, other years, oh, they’re sustainable and trade deficits don’t mean anything in the 21st centuryeconomy’(UScompetitivenessconsultantB).

15‘IfI’mknownatallinthemediait’sfromtheindicators,butIreallyusetheindicatorsasahook.Iunderstandthelimitationsofthem.They’rereallyahookforpeopletostarttakingthewholeagendaseriously’(UKcompetitivenessconsultantA).16 ‘[What’s]been incrediblyeffective iswhenwe’vebeenable to say“don’t justhire [gurux] for the speech,buthire theconsultingcompany”.Hiretheconsultingcompanytocomeinandhelpyouunderstandwhatyourregionis,helpyoudevelopaplan,have[gurux]comeinandbethe–Iliketocallittheignitingevent–itenergizesthehelloutofeverybodyandassoonashe’sdone,everybody’sreallyexcitedandsaying“wowwereallyneedtomakesomethinghappen”,andwecansay“inthelobbytherearelittleboothswithallthethingswe’veidentifiedthatweneedtodointhisregion,goandsignupfortheoneyouwant toworkon”.Sothatyou’renotdoingwhathappenssooftenwhichishegoesandgivesaspeech,andeverybodygetsexcited, then he leaves, then nothing happens. And so when people like to see things changing in their region and in theircommunity,thatyouneedtodosomeworkaheadoftimeandtofollowup’(UScompetitivenessconsultantA).

17 ‘As opposed to a lot of other consulting firms, [our institute] has really rigorous techniqueswhichwebranded.Wehavebusinessprocesspatents.Notonlydootherfirmshavenothinglikethem,mostconsultingfirmsdon’tevenhavepatents’(UScompetitivenessconsultantC).18 ‘We convened a group down in Silicon Valley a few days ago … of futurists, economic development analysts, largecompanies likeGoogle, small high-end entrepreneurs in the biotech and nanotech space, and peoplewho haveworkedwithotherglobalagencies,tosay“howisinnovationhappeningherein2007inSiliconValleyandtheBayArea,andhowdoesthatrelatetowhat’sgoingonglobally?”Sowe’regoingtopublishthatandthere’llbeongoingdiscussionsaroundthat,andoneofthethingsthattheparticipantstellusisthatactuallytheinteractionwitheachotheriswhattheyvalue.Theywouldn’thavetheabilitytogettogetheracrossallthosedifferentsectorsandhavethatconversation’(UScompetitivenessconsultantD).

19‘Toomanyeconomistssay,okay,youknow,ifwedon’texactlyknowwedon’tdoanything.AndI thinkifyouworkwithpoliticians long enough you can see that that’s really not an option. They will do something, and, you know, they’re underpressure,evengoodpeople,withbadpeopleit’sevenworse,butevengoodpeoplethathavetherightintentionandaresmart,theywillbeforcedtodosomething.Sothequestioniswhatcanwedoforthem–givethemintermsoftoolsandthinkingsothatatleastthereisalikelihoodthatwhentheydowillmoveintherightdirection’(ECcompetitivenessadvisorA).20‘Soasyoucanprobablytellfrommerightnow,Icantalkaboutanthropology,Icantalkabouteconomics,andIsureashellcantalkaboutbusinessstrategy.Asitturnsoutthereareactuallyeightdomainsthatwillopineaboutprosperity,noneofwhichwilllistentoanyoftheothers’(UScompetitivenessconsultantD).

5

ContingentNeoliberalism

Financialcrisisandbeyond

The classically modern schema of judgement – or crisis – operates according to a certainrhythm, that is found in both the normal governance and the reform of capitalism. Stableempiricalandnormativesituationsareperiodicallypunctuatedbyneweventsorphenomena,which introduce uncertainty. There is a moment of doubt regarding the empirical nature orvalueofthisinterruption,abriefperiodinwhichsharedrealityissuspended.Thismomentofuncertaintyisresolvedthroughtheuseofsomebroaderprincipleormeasure,throughwhichitsqualityorquantitycanbeascertained,therebystabilizingthesituationoncemore.Thesituationis judged, a statement is made, and a consensual reality can take hold again, until a newinterruption occurs. In order for judgement to succeed in achieving this, it is necessary thatthere issomeagreed-uponexternalor‘higher’basisonwhich the judgementcan takeplace,andthatthejudgeisconsideredtobesufficientlydistant(neutral,objective)fromtheissueathand as to be able to act in the common interest. This sequence reproduces the form ofCartesianskepticismandKantiancritique,inwhichdoubtisresolvedintocertaintythroughtheabstractpremiseoftheautonomousreasoningminditself.As convention theorists explore, this sequence is constantly at work in how institutions

perpetuate themselves. People and things are constantly subjected to critical evaluations, sothattheirqualityandquantitycanbeconfirmed.ThesearewhatBoltanskiterms‘realitytests’(Boltanski,2011:105).Neoliberalismisaprojectoftakingmeasuresandprinciplesfromthemarketplace, and using these to perform judgements across social and political spheres,including of the state itself.Uncertainty is only to be empirically resolved using economics(andassociatedmethodologies), so that competitivedynamics canbepreserved.Ostensibly,neoliberals claim to value uncertainty positively, inasmuch as it is injected by complex andconstantly changing consumer preferences and entrepreneurial strategies,whichmarkets andeconomics are uniquely able to represent without determining. Yet the same sequence ofjudgementisalsomanifestinmoreradical,historicmomentsofuncertainty,whichthrowdoubtupontheexistingtoolsandprinciplesofjudgement,andopenuppoliticalquestionsabouthowelse judgementmightbeperformed,bywhom,andwithwhat toolsandprinciples.This isaformof historical punctuation of normality, associatedwith the notion of a capitalist crisis,whichopensupspaceforradicalcritiqueor‘existentialtests’(Boltanski,2011).Crisesofthisformarereallymomentsofmeta-evaluation,inwhichthereisnoavailablejudge–otherthanhistory or political action – to resolve doubt and restore certainty. Multiple moral andtechnicalmodesofjudgementarise,sidebyside,andofferrhetoricalandaestheticreasonstobeadopted,untiladegreeofconsensusre-remerges.Capitalistcrisesareresolvedwhennew

economic theories, principles and tests havebeen agreedupon, as abasis onwhichnormalevaluation can then progress (Boyer, 1989; Aglietta, 2001; Boyer & Saillard, 2001).Alternatively,capitalismitselfissucceeded.Twoformsofuncertaintythereforeneedtobedistinguishedwithrespecttoneoliberalism.

Firstly, there is ‘competitive uncertainty’, or uncertainty that arises within the arrangedeconomic ‘game’ as a result of multiple actors, all pursuing conflicting and distributedagendas. This is the form of uncertainty that neoliberals have always celebrated, not leastbecause they claim to have the tools through which this uncertainty can be renderedperiodicallyempirical,intelligibleandmanageable.Competitiveuncertaintyisaconsequenceof perspectival pluralism, and requires certain artifices and interventions to guarantee it.Secondly,thereis‘politicaluncertainty’,oruncertaintythatchallengestheverytermsonwhichdoubtandjudgementaretobeperformed.Thisiswhatopensupspacefor‘meta-evaluation’,radical critique, in which standard methodologies, moral principles and anthropologicalpresuppositions can be thrown into doubt. Applied neoliberalism seized the politicaluncertainty occasioned by the crisis of Keynesianism during the 1970s to offer new ideas,principles and techniques throughwhich states couldproceedwith a commonagenda (Hall,1986,1989).Manyassumedthatneoliberalismhaditselfreachedasimilarpointofcrisiswiththe banking crisis of 2007–09. Had the banking crisis followed the classically modernsequencefollowedbythecrisisofKeynesianism,therewouldhavebeenarupture,succeededbyaperiodofpoliticaluncertaintyandtheoreticalpluralism,succeededbytheemergenceofanewregimeofevaluation,leadingtoanewstablereality.Yetasmanytheoristsandcommentatorshavesincerecognized,neoliberalismhasappeared

to avoid itsmoment of historical reckoning (Crouch, 2011; Engelen et al., 2011;Mirowski,2013).Rather thanaperiodof ‘politicaluncertainty’, inwhichprinciples and techniquesofevaluation are themselves subjected to critique and debate, new forms of state interventionhave developed in order to defend the status quo and prevent the moment of radicalizedjudgement. So how has this occurred? And what form of neoliberalism arises as aconsequence?The argument made in this chapter is that a new form of contingent neoliberalism has

emerged,whichrenouncestheclassicallymodernschemaofjudgement,offeringonlycultural-political affirmations of certain forms of conduct and certain representations of reality. Apoliticsofanti-crisisarises,throughwhichtheveryauthorityofdoubt(andhenceofcriticaljudgement)ischallenged,andthetimeandspaceofpoliticaluncertaintyarecloseddown.ThisrestsonwhatBoltanskiterms‘systemsofconfirmation’,whicharetautologousstatements–or‘truth tests’ – seeking to demonstrate that ‘this’ is all there ‘is’, to offset the disruptionrepresented by radical uncertainty (Boltanski, 2012: 72–73). Mirowski has explored thestrategiesthroughwhichthe‘neoliberalthoughtcollective’setaboutseizingcontrolofhowthecrisis was interpreted and acted upon, albeit after a short period of confusion (Mirowski,2013). In particular, he shows how a pincer movement between a classically neoliberalHayekianargument(whichwouldsuggestdoingnothingtorescuethefinancialsystem)andamonetaristandneo-classicalargument foremergencyrescuemeasures (asactuallyoccurred)endedupallowingthelattertoposeasthemorepublic-spiritedandreasonableposition.Butinany case, the sense of a political exception was crucial to the state’s ability to act, in

accordancewithkeyneoliberalprescriptions.Yetthisnecessarilyaltersthetypeofauthoritythatcanbeclaimedfortheformsofeconomic

evaluationpreviouslyendorsedbyneoliberalism.Theybecomecontingentlyproppedup,soasto avoid crisis, rather thanused as principles throughwhich crisismight be confronted andresolved. This anti-critical strand of neoliberalism inevitably infects how ‘competitiveuncertainty’ is represented and experienced as well. The competitive ‘game’ loses itsaspiration to be a general basis onwhich to distribute goods and recognition, and becomesperformed without any appeal to the broader public good. ‘Competitive uncertainty’ issuddenlytreatedwithgreatersuspicionforfearthatitmaycreatetheconditionsof‘politicaluncertainty’, hence the resolutely anti-Hayekian political decisions to save banks, industriesandcurrenciesfromtheuncertaintyofmarkets.Conversely,theempiricalrepresentationsofthe‘game’ (prices, economic evaluations, scores) are also treatedwithgreater suspicion, as aneffect of political strategies, rather than as objective or ‘neutral’ judgements. Economicmethodologieslosetheiraspirationtotranscendentalfinality,andserveasinstrumentsofmorenaked power struggles. For example, the empirical judgements produced by credit ratingagenciesarenolongercreditedwithanyaprioriauthorityor‘ultimate’validity,butbecomemeans of briefly stabilizing an untrustworthy reality. The judges in this instance have lost‘objectivity’,andaredraggedintothe‘game’bylettingtheirownstrategicagendasshapetheevaluationstheyproduce(Häring&Douglas,2012).Ratherthandoubtresolvedbyjudgement,thereissimplyafeelingofgeneralunease.To put this another way, the ‘liberal spirit’ of neoliberal authority which was already

rendered very frail by the Chicago School economic critique of law and regulation isabandonedaltogether.Thereisnolongeranapriori, transcendentalprinciple throughwhichthecritiqueofpoliticalmetaphysicsbyeconomicsisenacted.Rather,economicreasonitselfisthetargetofpoliticalrescueacts.Thedisenchantmentofpoliticsbyeconomicsistransformedintocontingentstrategiesforenchantingeconomicswithpoliticalsubstanceandreinforcingitwith power. In its anti-crisis formation, neoliberalism exists without any principle ofequivalence, with no appeal to common humanity, but purely via contingent acts ofpreservation of the status quo. In doing so, a philosophical anthropology of differencestructures the types of expert knowledge and policy intervention that sustain neoliberalism,withoutanyaccompanyingphilosophicalprincipleofsameness.Thiscanbewitnessedincontingentandexceptionalappealstotheveryformsof‘political

metaphysics’thatneoliberalismhadoncehopedtoeradicateorhide.Theprojectofreplacingpolitics with economics, judgement with measurement, can now only persist if some openacknowledgement of the latter’s political, performative and normative dimensions is made.Andyet rather than reopen spaces andmoments of political andnormative argument,whichmight risk the abandonment of much economic rationalization, contingent political andnormative capacities are now mobilized in order to defend and sustain the governingorthodoxy, on purely contingent grounds. Where Hayek had hoped to invent technicalapparatusesinordertodefendtheliberalphilosophical‘idea’ofunplannedcoordination,thecontemporaryneoliberalproblemishowtoharnesspoliticalandethicalresourcesinordertodefendextanttechnicalapparatuses.Twomanifestationsofthisareexploredinthischapter.Firstly,thetacitdependenceofeconomiccalculationoncommonnormativepresuppositions

hasnowbecomeentirelyexplicit.However,thisisnotbeingaddressedfromtheperspectiveofmoralorpragmatistphilosophy,butratherfromthatofempiricalpsychology.Withtheriseofbehavioural andhappiness economics,visionsof a rational economicactorhavemutatedfrom the status ofmethodological presuppositions (as theywere forCoase) to the status ofnormsforbehaviour.Homoeconomicusisnolongerassumed,buttaught,nudged,mimickedandnurturedintoexistence.Itbecomesapparentthatindividualsneedtobehelpedtoactintheirowninterests,indeedtheyneedhelpinidentifyingwhatthatinterestevenis,orelsetheycanlapseintoformsofself-destructivenihilisticbehaviour.Psychologicalexpertisecanhelpreconstruct the necessary ethos on which calculative market individualism depends, thoughthrough no less technocratic means. This represents what I term ‘neocommunitarianism’(Davies,2012).Secondly, the tacit dependence of neoliberalism on sovereign power has now become

entirelyexplicit.However,itisimportanttorecognizewhichvarietyofsovereignpower.Itisnot the sovereignty of law, which the ordo-liberals had hoped might formalize the marketsystemasanopencompetitivegame,butthesovereigntyofexecutivedecision.Followingthecollapse of Lehman Brothers in September 2008, rapid executive action was presented asnecessaryinorderfor themarketsystem–includingitsregulatoryprinciples– tosurviveatall. Inthissense,astateofmarketexceptionwasdeclared,andarguablyremainedinplace(Davies,2013).The‘violent threat’ofneoliberalauthority isnowreliedupontouphold themarket order. From a Schmittian perspective, this is always tacitly assumed, in that legalnormativityisexistentiallydependentonexecutiveandmilitarydefence,butnotviceversa.Ina sense, the logic of national competitiveness, explored in the previous chapter, potentiallythenoffersthebasisofapost-liberal,moremercantilistneoliberalism,inwhichrulesareonlyrecognized and enforced to the extent that they offer a local strategic advantage. The nextsection addresses the nature of the financial crisis in more detail, and then explores how‘neocommunitarianism’ and the ‘state of market exception’ are manifest in governmentalrationalitiesandactions.

CrisisandAnti-crisis

In themonths that followed the bankruptcy of LehmanBrothers on 15 September 2008, thenews headlineswere dominated by two contrasting ontologies of political agency.The firstwas a form of Nietzschean, hedonistic individualism, whereby individual bankers wererepresented as having allowed their exuberance to overwhelm them, making reasonablecalculationofriskimpossible.Manyofthesebankerswerenamedandnick-named:DickFuldofLehmans, ‘FabulousFab’Toure ofGoldmans, ‘Fred the Shred’Goodwin ofRBS.Emailrecords and taped telephone conversations revealed that the inner workings of the bankingworldwerenotorganizedaroundcold,rationalistcalculationsofutilityoptimization,butwereinstead often driven by surges of egoistic desire, demonstrations of power and hostilitytowards rivals. It wasn’t simply that the markets for financial products suffered from‘informationasymmetries’,whichleftcustomerslessabletocalculatethevalueofproducts:ittranspiredthatGoldmanSachsreferredtotheircustomersas‘muppets’,offeringopportunitiesforexploitation.Thedramatispersonaeof thiscrisiswere individuals,caughton tapesand

emails,conspiringtoenrichthemselvespersonally,throughmanipulatingrulesandmethods.Ata certain point, the competitive ethos reaches a limiting point, where it attacks its formalconditionsofpossibility.ThesecondwastheHobbesianLeviathanofthemodern,sovereignstate,whichcametothe

rescueofthefinancialsystem,ontheunderstandingthatthebankingcrisiswouldquicklybringdown the entiremonetary system if itwere not actedupon.For years, neoliberal states hadpridedthemselvesoncriticallyevaluatingandauditingtheefficiencyofpublicspending,andhad adopted self-imposed rules of fiscal constraint. Many of the hallmarks of neoliberal‘governance’, such as out-sourcing, privatization, public-private partnerships and privatefinance initiatives,were initially invented for thepurposesof trimmingaccounted-forpublicspending, sometimes by just a few hundred million dollars worth. During the 1990s, thiseconomizedandeconomizingstate ledmanypolitical theorists todivertattentionawayfromsovereigntyand towardsmeasured formsofgovernanceandgovernmentality (Rhodes,1996,1997;Rose,1999;Rose&Miller,2008).Initsefforttobehave‘asif’itwereamarketactor,thestatetreatedthepursuitofadministrativeefficiencyascriticaltoitsauthority.Theshock,therefore, of discovering that states could, in extremis, findhundreds of billions of dollarsworthofmoneythroughtheforceofexecutivedecisionwasastarkreminderof thefact thatstatespossessanontologicalsubstratethatisentirelyunlikethatofprivatemarketactors.InBritain,forexample,theNationalAuditOffice(NAO)calculatedthat,bytheendof2009

alone, the financialcrisishadalreadycost theUKTreasury£850bnor60%ofGDP(NAO,2010).TheNAOreportedthatthisexpensewasinfact‘justified’–butitsorderofmagnitudeplaced it beyond the limits of conventional public management evaluation. Britain’s publicdebt roughly doubled as a proportion ofGDP, as a result of the financial crisis, the sort offiscalshockthathaspreviouslyonlyoccurredasaresultofaworldwar(BBC,2012).Aswiththeexistentialnationalpoliticsofworldwars,thestatedealtwiththefinancialcrisisonlybyappealing to its immeasurable sovereign potentiality. But unlike in war, this sovereignmobilization remained immaterial ormetaphysical: the collective recognition that sovereignstatesdostillexistas immeasurablepotentialities, inspiteof theneoliberalemphasisonthevisibleandthemeasurable,enabledstatestomakecrediblepromisesonascalethatnootheractor could. With the effective promise to underwrite the entire financial system, statesexplicitlymadesovereigntyaconditionofeconomicpossibility.Sincethen,thistrickhasbeenpulledinotherwaystoo,aswiththepracticeof‘quantitativeeasing’,inwhichcentralbankstakeondebtinordertoinjectmoremoneyintotheeconomy.Sovereigntyisasharedillusionwithpossiblematerialeffects,whichcanplausiblyretreatintothebackgroundforlongperiodsoftime,butismagicallyandswiftlyrediscoveredwhenothersharedillusions–suchasmoney–starttodisintegrate.Withbanksestablishedas limited liabilitybusinesses, andbalance sheetsgreater than the

GDP of their host nations inmany cases, itwas clear that theirmanagers and shareholderswouldnevercarrythecostsofverylargerisk-taking,makinghigh-riskstrategiesquiterational(Haldane,2012a).Thisfacilitatedthevast‘privatizationofgainandsocializationofloss’,asitbecamecommonlyreferredto.Oneofthestrikingfeaturesofthiscrisiswastheappearanceofsublimenumericalratiosbetweenthenumbersofindividuals‘winning’(‘the1%’)andthenumbers‘losing’,ofhowparticularstrategiesofpersonalenrichmentbecameamatteroffiscal

concern.One calculation showed that if British bankers had paid themselves just 10% lessbetween2000–07,thebankswouldhavehad£50bnofadditionalcapitalavailabletothem–preciselythefiguretheUKTreasurysuppliedasequityfinancetoLloyds-TSBandRBSduringOctober2008.Thecrisiswascharacterizedbysuchexamplesofextremerationality, in theliteralsenseofthelogicofratio,withprivateindividualactorsgeneratingcoststhatonlythemostpowerfulpublicinstitutionscouldthencarry.Thisflippingbetweentheagencyofindividualsandtheagencyofsovereignstateswasnot

simplyaconsequenceofthescalarratiosinvolved.Thecostsofthebankingcrisishaveturnedouttobeextremelylarge,arguablyofascalethatonlysovereignbodiescouldcarry.Butinthemomentofcrisisitself,thiswasnotwhysovereignpowershadtobemobilized.Theproblematthetimewasthatthefullscaleofthosecostscouldnotbereasonablyknownorestimatedatall: theirmagnitudehadbecomesublime, in theKantian senseofaphenomenon fromwhichcognitionfleesinterror.Thecomplexityofthefinancial instrumentsthatbankshadinvented,madeupoflengthychainsofderivation,meantthatthevalueoftheirassetsandliabilitieswasnot calculable. Yet this wasn’t the ‘competitive uncertainty’, generated by the plurality ofperspectives and agendas present in and aroundmarkets, and onwhich the financial systemfeedsthroughesotericformsofquantificationandderivation.Itwas‘politicaluncertainty’,inthesensethatthe‘game’nolongerappearedviableatall,becauseithadundermineditsownconditions of possibility. The reason for this flipping from ‘competitive uncertainty’ into‘politicaluncertainty’was thatuncertaintywasnowbeinggeneratedby theverycalculativetools thathadbeenconstructed inorder tomanage it.As theorists of performativity haveexplored, in financial institutions economics had become a constitutive part of the reality itonce sought to describe or model, and was ultimately then unable to continue to act as an‘objective’ means of description (MacKenzie, 2006;MacKenzie et al., 2007). Quantitativeeconomicevaluationswerestillmanifold,everywhereacross thefinancialservices industry,in banks, credit-raters and regulators. But the value of those evaluations had becomeimpossibletospecify.AsMacKenziehasargued,economicswentfrombeing‘performative’to ‘counter-performative’ (MacKenzie, 2011). It was rendered a form of groundlessmathematicalbabble,accordingpricesandvaluestovariousentitiesandpossibilities,butnolongerabletodosowithanycredibilityorauthority.Thefinancialsectorstillhadtechniquesofvalidation,butitnolongerbelievedthatthesetechniqueswerethemselvesvalid.Insuchasituation,wherethe‘valueofvalues’istheobjectofcritique,aproblemofacuterelativism–orperspectivism–ensues.Asovereignresponsetothefinancialcrisiswasthereforenecessarynotsimplybecauseof

itsscale,butbecauseoftheacuteevaluativechaosthathadarisen.Ifbankshadmerelycometoconfrontan‘uncertain’future(inthesenseof‘competitiveuncertainty’),thentheycouldhavedonewhat they always did,whichwas to build statistical riskmodels in order to quantifypossibilities and then securitize them via markets. But where those very practices ofquantification and securitization had generated the uncertainty, then evidently that responsewould not be adequate.The shared objective reality produced by economic calculation hadbeen fractured, creating an intrinsically unquantifiable cost. The only certain means ofalleviatinganunquantifiablecostisviaapromisemadebyanunquantifiablepower,thatis,thesovereign state. The effective promisemade by sovereign powers during autumn 2008 and

subsequentlywasthatnomatterhowbigthescaleofthecrisismightturnouttobe,thescaleofthe state response would be even bigger. One form of irrational power – the exuberant,hedonistic Nietzschean individual – is met with another form, that promises to always bequantitativelygreater– thesovereign.Theveryaspectofsovereignty thathad longbotheredneoliberals,namelyitsincalculableand‘metaphysical’quality,iswhatrescuedneoliberalismfromcollapsein2008.AsChapter1argued,theprojectofneoliberalism,asadeliberatedisenchantmentofpolitics

byeconomics,wasalwaysdependentonconvenientformsofamnesiaaboutitsconditionsofpossibility. These conditions are at least twofold. Firstly, the expansion of economicrationalizationintosocio-politicalterritoriesrequiressomesharednormativesenseregardingtheauthorityofeconomicmethodologyandevaluation.Technicalrationalityandmethoddonotsimplyadvancebyforceofpower,oratleast,theycannotrelyondoingso.Beforeatechniquecanbeimplemented,theremustbeasharedsensethatitistherighttechniquetouse,thatitisbeingimplementedcorrectly,andthatitsresultswillbealegitimatebasisforconsensus.Thisis a central insight of convention theory. Economics can only produce a shared reality that‘holds together’coherently if individualsalreadypossessasharednormativecommitment tocertain ways of doing things. This shared normative commitment cannot be derived fromtechnicaldevicesormethodologiesthemselves,asitisfundamentallypragmatic.Norcanitbeentirelyarticulatedinlanguage.Butwithoutit,devicesofmeasurementandevaluationbecometoolsofviolence,tobeusedbyoneagentagainstanother,ratherthanasabasisforconsensus-formation.Initsintellectualfoundations,neoliberaltechnique(economics,price,governance)wasjustifiedwithreferencetoliberalethos(freedom,individualism,rights),butgradually,asthe latter was lost to Chicago School positivism, amnesia took hold and economics wasasserted as sufficient unto itself. The consequence is an economics without any pragmaticconnectiontoconsensus-formation.Groundlessbabbleistheinevitableendpointofthis.Secondly, the expansion of economic rationalization into the state itself is implicitly

dependent on the complicity of the authoritative sovereign powers that are set to beeconomized.AsChapter3 examined, law cannot be subjected to economic critiquewithoutjudgesbecomingsympathetic to the logicand justificationsof economics.AndasChapter 4examined,executivedecisioncannotbesubjected toastrategicmanagerialanalysis,withoutpoliticalleadersbecomingsympathetictothedynamismandcharismaofbusinessleadership.Sovereigntyhasalwayshoveredbehindandalongsidetheneoliberalproject,invisibly,despitewhatFoucaultdescribesas the instinctive ridicule thatneoliberalshave levelledat theveryidea (Foucault, 2008). While the expansion of economic rationalities has drawn on statepower, this needs to be forgotten if the vision of awholly economizedworld is to remainplausible,atleastforperiodsoftimeorinspecificlocations.Thedisturbingofneoliberalism,ifnotquiteitscrisis,consistsoftheseconvenientamnesias

becoming untenable, and preconditions coming to light. We are reminded of the normativepreconditions of effective economic calculation, by the spectacle of large numbers ofindividuals exercising their choices in wildly self-destructive and de-stabilizingways. Thefinancialcrisiswasoneverydestructiveexampleofthis,butsoarethevariousothercrisesofindividual choice that afflict Western societies, such as the rising obesity epidemic or thedepressive elementsof consumerism.Renderedmerely empirical, techniques for calculation

andevaluationbecomearbitrary: thevalueofevaluationsis thrownintoradicalNietzscheandoubt,anditbecomesimpossibletosaythathealthychoicesaremorevaluablethanunhealthyones, or a stable financial system ismore valuable than an unstable one. This explains therisingpolicyinterestintheconditionsofchoiceandcalculationinrecentyears,asmanifestinthe rise of ‘nudge’ theory (explored next). Meanwhile, we are reminded of the sovereignpreconditionsofextensiveeconomization,bythefactthatstatesarenowconstantlycalledupontomaintain the credibility of currencies,markets and individual banks. Financial credit andcredibilitysurvivebecausenationstateshavedeclaredthattheymust.Thosewiththeultimatepowerexpressasimpleandtautologousaffirmationofagiveneconomicreality, rather thanofferanobjectivejudgementofit,thatmightwithstandcritique.The neoliberalism that survives such a crisis is one that lacks any broader sources of

justification,whichnecessarilyinvolveclaimsaboutthecommongoodforall.Inthissense,itis post-liberal, in that it lacks an immanent liberal philosophy of the a priori equality ofcompetitors. In place of justification is a politics of contingency, which treats economicrationalization as a particular cultural-political procedure, that history just happens to havedelivered to us and requires safe-guarding. The presuppositions of this rationalization –individual and sovereign – become acted upon, so as to prop it up. Evaluative economiclanguage,likealllanguages,hasanarbitraryquality,whichmaynotrevealthe‘true’worthofthings,butisatleastsomethingwepotentiallyholdincommon.Market-basedtechniquesandprinciples of evaluation lack any outward justification, or sense of their superiority overrivals,butbecausetheyarealreadydominant,sotheymustbeproppedupfurther.Wherepre-2008 neoliberalism exercised amnesia about its normative or sovereign preconditions, nowthose preconditions are absolutely crucial to howneoliberalism survives. Indeed,wemightnowspeakof economiccalculationbeing fusedwith itsownpreconditions, as thenext twosections explore. Economic evaluation and calculation become a form of normativity, thatindividuals are taught to practice and repeat; economic risk management becomes theconstitutionofexecutivesovereignty.Let’saddresseachoftheseinturn.

Neocommunitarianism

Asanumberofinstitutionalistandregulationistscholarshaveexplored,theexpertframingandinterpretation of capitalist crises are constitutive factors in how they proceed and areeventuallyresolved.Suchhermeneuticsofcrisiscanproducethefoundationsofnewregimesof economic regulation, hence the emergence of national competitiveness theories, forexample, originated in a narrative regarding the failures of corporate and national strategyduringthe1970s.Ontheotherhand,regimesofgovernanceandevaluationcanbestrengthenedandsustained if theycandiscover theirownformsofself-criticism(Boltanski&Chiapello,2007). The survival of neoliberalism through various failures occurs thanks partly to thedevelopment of a specific interpretation of these failures, which recognizes the contingentlimitsofmarket-basedeconomicrationalities,butsoastobolsterandnotchallengethem.Thisinterpretation is offered by economic psychology, and in particular by behavioural andhappinesseconomics,withgrowingsupportfromneuro-economics.If a historic crisis throws the value of valuation mechanisms into doubt, then those

mechanismscanberescuedif theirowncritiqueor‘meta-evaluation’canbeanticipatedandpredetermined.Offeringapsychologicalexplanationofwhyconsumerismandfinancializationencountercriseshasprovedtobeacrucialstrategyinavoidingamoreradicalcritiqueofthestatus quo. Theories rooted in biology and biological metaphors concerning the brain,behavioural ‘epidemics’, financial ‘ecology’ and genetics have complemented thesepsychological narratives. At the same time, this allows for a critique of neo-classicaleconomics that effectively keeps the discipline intact (Mirowski, 2013). Common to thesevarious perspectives is an assumption that the methodological presuppositions ofneoliberalismoughttohavebeentrue,butareempiricallycompromisedbyvariousanomaliesthat show up in laboratory experiments, surveys, brain scans (Rose, 2001) or criticalsituations.Theseanomaliescanbecorrectedoraccommodated,ifexpertsandpolicymakerscan understand the various contingent preconditions of economically rational behaviour.Psychological presuppositions regarding competitive behaviour are lifted from the realm ofmethodology,wheretheyareimplicitlyassumedtoapplytoallpeopleinalltimesandplaces(asforCoase),andsubjectedtoempiricaltestsoftheirown,enablingtheirscopeofvaliditytobe specified. These tests involve new types of surveillance and audit, such asRandomizedControlled Trials and ‘in vivo’ economic experiments, in order that particular behaviouralresponses can be empirically guaged (Muniesa&Callon, 2007). It transpires that differentpeople pursue different strategies or rationalities, depending on different cultures,circumstances, brain types (or brain injuries) or social influences (e.g. Levinson & Peng,2006).Efficiency-maximizationandcompetitive strategycan remain the substantivegoalsofpublicpolicy,buttheconditionsthatsupportthemarerevealedasculturallyandbiologicallycontingent.WhatWeberwould identify as the ‘vocational’ precondition of economics – theimplicit ‘metaphysical’ orientation that accompanies tangible acts of rationalization – isaddressedinsteadasanempiricalpsychologicalorneurologicalproblem.Viewed from the perspective of economic psychology or neuro-economics, calculated,

competitiveandstrategicindividualbehaviourcannolongerbepresumedonprinciple.Itnolongerservesasaprincipleofequivalence,throughwhichjudgementandcomparisoncanbeperformed.Instead,itsconditionsneedinterrogating,inorderthattheymightbedefendedandextendedbyvariousmeans. In certain respects, this represents amajor departure fromcoretenetsofneoliberalthought.Hayek’scommitmenttoindividualchoiceandcompetitiveprocesswas sufficientlydeep that itofferednobasis fromwhich tocriticize theactualdecisionsoroutcomes that emergedasa result.He (incommonwithChicagoeconomists) recognizednoauthoritativebasis fromwhich todifferentiatea ‘good’ froma ‘bad’decisionorpreference.Outcomes of competitive, choice-based systems were de jure legitimate, as long as thosesystemswere genuinely competitive. By contrast, the tools of economic psychology offer abasis on which to evaluate the quality of choices, and understand how decisions areinfluenced. The ‘paternalist’ implications of economic psychology, as a basis on which to‘improve’ decision making, have been criticized by neo-classical economists on normativeliberal grounds (Saint-Paul, 2011). But in another sense, the privileging of the choosing,consuming,strategizingmindasthecentralorganizingprincipleoftheeconomyisentirelyinkeepingwiththeneoliberaltradition.Offeringsustenanceandsupporttothepsycheand/orthebrain is viewed as a means of preserving a system that depends on psyches and brains

functioningwithadegreeofpredictability.Atsomepoint,theneuraldriversofchoice-makingbehaviourmaybeidentifiedwithsufficientprecision,thatrationalchoicetheorycanbebuiltonbiologicalfoundations,withouttheneedforformalhypotheses(Shizgal,1997;Montague&Burns, 2002;Berridge, 2003); Coase himself expressed some hope that thismight happen.1Thisisacritiqueofneoliberalismthatpotentiallypreservesitinitspracticalform,thoughnotits normative form. Moreover, in its attempt to secure a competitive market ethos throughtechnicalgovernance,itmaintainstheempiricistepistemologyidentifiedwithneoliberalisminChapter1.The effect of this partial critique is that the market-based principles and techniques of

evaluation are represented as spatially and temporally specific in their validity, losing thetranscendental capacity (and methodological imperialism) that the neoliberals had initiallybestoweduponthem.Thiscanbeunderstoodasaformofneocommunitarianism,inasmuchasit highlights the unavoidably local, social and learnt nature of economic rationality. ThecommunitariancritiqueofliberalismisthatliberalphilosophersintheKantiantraditionhaveignored ormisunderstood the historical and cultural origins and preconditions of their ownconceptual apparatus. Hence, they have also under-estimated the extent to which norms ofjustice and rights are rooted in traditions and practices, whose authority is contingent notuniversal.Myargumentisthatthepsychologicalcritiqueofneoliberalismissimilarinspirit,challenging its presuppositions, so as to reaffirm its principles in contingent, rather thanuniversal,terms.Aswiththemarketexception,thisresultsinaradicallycontingentdefenceofmarket-basedformsofvaluation,asbeinglittlemorethananarbitrarybutneverthelessviabletradition to be upheld and repeated. The liberal spirit of neoliberalism, based on thepresumption of common calculative capacity, disappears, to be replaced by a culturalanthropologyofdifferenthabitsandrationalities.Toexplorethispropositionfurther,weneedto review key tenets of communitarianism, which provide an implicit moral coherence toneocommunitarianism.

Communitarianism‘Communitarianism’herereferstoagenreofresponsestoRawls’s1971statementofliberalpoliticalphilosophy,ATheoryofJustice.Philosophers,includingAlasdairMacIntyre,CharlesTaylor and Michael Sandel, drew on Aristotle, Hegel and Heidegger to denounce theahistorical abstractions that underpinned and organized Rawls’s work, arguing instead thatpoliticalphilosophyneededtoberootedinthespecificitiesoftimeandspace(Taylor,1992;Sandel,1998;MacIntyre,2013).Unlesspoliticalphilosophywereattunedtoitsownhistoricaltraditionand theethical resourcesofspecificpoliticalcommunitiesand traditions, it ran therisk of empty nihilism and/or violent imperialism. The communitarian critique was notnecessarily of liberal practices, institutions or policies themselves, but that liberals in the‘deontological’KantiantraditioninhabitedbyRawlsapproachedmoralandpoliticalquestionsinentirelythewrongway,fromentirelythewrongstartingpoint.The challenge that Kant set for liberalism, and which Rawls attempted to meet, was to

establishanentirelyaprioribasisformoralandpolitical rules,asopposedtoanempirical

one.If thefoundationsandprinciplesofjusticewerederivedfromcontingentcircumstances,thentheycouldmakenoclaimtoapplytoallpeople,inallsituations,andwerethereforenotcompatiblewiththeveryideaoflaworright.Rawlsfamouslyconstructedatheoryofjusticeon the basis of an imaginary ‘original position’, in which individuals agree to a legal andeconomicframeworkwithoutanyknowledgeoftheircontingentempiricalcircumstances.Sucha framework would be one that no reasonable person could refuse to be judged under.However, it is presupposedby those in theKantian tradition that political authority derivesfromapplyinggeneral rules to particular cases, that is, through a ‘descent’ froman abstractidea of the commongood to an evaluation of a single action or situation.AsBoltanski andThévenotargue,allargumentsaboutjusticesharethisgrammaticalquality,inwhichageneralpropositionaboutallhumanityisputforward,asabasisfromwhichtojudgespecificissues.Thegeneralruleisassumedtoprecedeanyindividualsituation,andthetaskofphilosophyistofocusonthedesignofapriorirules.Chapters2and3arguedthatneoliberalismtakesthisphilosophical tradition and reproduces it in a technical, economized form,where efficiencytests,imbuedwithaliberalspirit,becomethetranscendentalbasisoflegalauthority.If,ontheotherhand,rulesarerecognizedasemergingfromcontingent,empiricalsituations,

then the task of philosophy looks very different, and generalizable judgement is no longerprivilegedastheprimaryproblemofpoliticalphilosophyorpolitics.Thereisno‘external’or‘neutral’basisonwhich toconductacritique,and thepossibilityof ‘objective’or ‘critical’distance is lost. The authority of a procedure – be it legal or methodological – no longerconsists in its capacity to accommodateall events or phenomena, but in the fact that it is ameaningfulritualforthosewhopractiseit.Thevalueofaruleortechniquecomestoconsistofitsperformanceandrepetition,ratherthaninitscapacitytoclassifyallcontingentpossibilities.Repetition is crucial in keeping doubt (and hence, ultimately, nihilism) at bay, but vieweddifferentlythisalsomeanskeepingcritiqueatbay.AsBoltanskiargueswithregardto‘systemsofconfirmation’, repetition’sonlyrole is ‘tomakevisible the fact that there isanorm, bydeploying it in a sense for its own sake, without it being given any external function’(Boltanski,2011:104).Wherecontingentdifference issimplybeingaffirmed,rulesareonlyperformative.From this latter communitarian perspective, laws are emergent, evolving properties of

historicalsociology.Thereisnothing‘ultimate’oraprioriaboutthem,andtheirconstitutionalauthorityisnohigherthaninformalnormsormoresofsocialinteraction.Thusthegrammarofcritique–thatis,ofjudgement–isnolongerwhatorganizescommunitarianpoliticalrhetoric.Rather than appealing to ‘higher’ laws, so as to evaluate the action of the other, thecommunitariancitizenperformsaritualsoastowinculturalrecognitionfromtheother.Shouldtwodifferent setsof rules come into contactwithoneanother, recognition iswith-held, anddifferencemaybeacknowledged.Rather thanSchmitt’s ‘friend–enemy’distinction,which isconsummated in violence, this is an Aristotelian ‘friend–stranger’ distinction, which willhopefullybeconsummatedinformsofdiplomacy.Equally,acommunitarianrulecannotfailasdramatically as a liberal rule can fail. If the rule cannot be applied (due to some event oractionthatseemstodefyclassification)thissimplyrevealssomethingabouttheempiricalandperformative character of that particular rule. If a procedure or method encounters aphenomenon or behaviour that threatens its applicability, then this discovery reorients or

delimitshowtheprocedureormethodispractised.Individualsandcommunitiesareconstantlylearning.Thenotionofacrisisorhistoric judgement thereforedoesnot register in thesameway, as normative frameworks are constantly evolving in an organic way, as lived ritualsrather than abstract premises.The value of valuations is not thrown into the grave doubt ofcrisis,solongasthosevaluationsstillfacilitatesomemutualrecognitiononthepartofthosewhopractisethem.Strictlyspeaking,communitarianismdoesnotrepresentacritiqueofliberalism,butreallya

genealogyordeconstructionofit,inasmuchasitdoesnotoffersomealternativeprincipleforjudgement.Insteaditchallengestheverypossibilityoftherebeingstable,aprioriprinciplesforjudgement,andtheverypossibilityofan‘objective’perspectiveuponor‘critical’distancefromone’ssituation.Communitarianismisnotsomuchuncritical,inapurelyagnosticsense,asanti-critical in an affirmative sense. This challenge has two important recurrent features,whichwewill see reappearing in the ‘neocommunitarian’ response to neoliberalism,whichsimultaneouslylocalizeneoliberalevaluationtoolsandseektorescuethem.Firstly, communitarians claim that liberalism (in the Kantian and Rawlsian tradition) is

founded on an unrealistically empty theory of the self, as a disembodied, ahistorical choicemaker.WhereRawlsdefinedindividualsbytheirsharedcapacitytoreason,andnotthevaluesorgoals that theyhold,communitariansrespondedthatvaluesandgoalswereconstitutiveofindividual identity.Religious,moral or political beliefs are not selected as amatter of freewill,butareimportantconditionsofhumanfulfilmentandidentity.Anindividual,asimaginedbyliberals,wouldsufferfromexistentialcrisesofhavingnosourcesof intrinsicpurposeorvalue.InthehandsofsomecommunitarianphilosopherssuchasTaylorandMacIntyre,thisisacritique that is extended to secularmodernitymore broadly.TheCartesian attempt to foundobjectivecertaintyonthepremiseofsubjectivedoubtishistoricized,andtheprimacyofdoubtisitselfthrownintoquestion.Secondly, communitarians argue that human beings only ever exist in relationships with

others. They do not enter these relationships as if via choice or contract, as Rawls’sphilosophyproposed,but find themselves already in them. It is throughothers thatwe learnwho we are and what we value. Reason, including secular critical reason, is learnt andacquired throughmutual recognition, rather thanbestowedasaconditionofbeinghuman,asKantian liberalshaddeduced.By thesame token, therearenopoliticalormoralvalues thatprecede or transcend human community, community is instead a condition of political andmoralprinciples.Theerrorofliberalismisinseekingtheprinciplesofjusticefromoutsideofthepracticesofethicalandpoliticalaction.In the faceofcrisis, inwhich thevalueofvalues is thrown intodoubt,communitarianism

offers stability through denying the foundational authority of critique. With contingent andsharedethicalpracticesastheonlyaprioriavailabletohumanbeings,astheyhappentoexist,critical philosophy and judgement lose their privileged position in the constitution ofmoraland political life. The value of values is suddenly very obvious: they are generative ofparticularidentitiesandrelations,andcannotsimplybethrownoff.Theriskisthatvaluesandprocedures come to appear as arbitrarycultural inheritances,whoseauthority lies simply inbeing communally recognized.Belief can flipquickly into radicalizeddoubt – a choice thatMacIntyre represents as one between Aristotle and Nietzsche (MacIntyre, 2013). Liberal

institutionsequallyarevaluedandvaluableonlytotheextentthat theymakeuswhoweare.Andtotheextentthatthecrisesofneoliberalismthrowthevalueofitsvaluationsintodoubt,one means of rescuing neoliberalism is via a neo-communitarian strategy that asserts thesociallybindingnatureofcertainritualsofcalculation.Market-basedrationalitiesareaffirmedasacollective inheritance, rather thanofferedasa transcendentalbasisfromwhich tocarryoutgenerallyvalid,‘objective’judgements.

Non-criticalauditandhomopsycho-economicusIn his famous testimony to the US Congress in October 2008, Alan Greenspan, formerChairman of the Federal Reserve, offered his own immediate interpretation of the bankingcrisis.Heconfessedthathehadmadea‘mistake’ in trustingthat the‘self-interestof lendinginstitutions’was sufficient for them to preserve the overall viability of the financial system(Committee on Oversight and Government Reform, 2008). This remark raises interestingquestionsabouthowan institutionmightexercise ‘self-interest’.But italsodemonstrates thecapacityofpsychological rhetoric andcategories toprovide ahermeneuticsof the crisisonbehalf of policy-making elites. If the limits and failures of market-based techniques andrationalities can be attributed to minds, selves or brains, then neoliberalism itself can bemodified in view of contingent calculative anomalies, but also preserved as a particulartraditionofpractice.Elsewhere, various crises of neoliberalism are interpreted and acted on in psychological

terms. IfHayekandtheChicagoSchoolhadhoped tomake theprivatechoosingorknowingmind the central barometer of value across society (indicated in observed behaviour andprice), problems such as obesity, depression, hedonistic rioting and financial short termismsuggest that the psyche or brain is not sufficiently robust or calculative to perform thisconstitutional function. How individuals actually exercise choice, how much utility theyactuallyexperienceasaresult,howtheyactuallyadapttheirbehaviourtoexperienceandthelessons of others, become crucial empirical questions, if regulations and policies are tocontinue to be premised upon a particular,market-based vision of individual action. Theseempirical psycho-economic questions had been addressed on behalf of private companiessincethe1920s,intheguiseofhumanresourcemanagementandmarketresearch,butneverinanysystematicwaybythestate(Baritz,1960;Davies,2011a).Somecausalunderstandingoftheunconscious is needed, if policiesbasedupon rational choice assumptions arenot tobeoverwhelmedby irrationalpsychic forces.With thisknowledge,either those regulationsandpolicies can be adjusted accordingly, or new interventions can be designed to try andcounteract individualorcollective‘irrationalities’.Thusanewmodelofsubjectivityarises,that might be termed ‘homo psycho-economicus’, which is provided by a combination ofmethodological assumptions of economics, wedded to contingent empirical findings ofeconomicpsychologyand,wherepossible,neuroscience.Under the influenceof JeremyBenthamand theGermanpsycho-physicistGustavFechner,

theearlyBritishneo-classicaleconomistsofthe1870sand1880shopedtobuildatheoryofvalue and method of valuation directly on empirical psychology (Maas, 2005; Colander,

2007).Thecontinentalpioneersofneo-classicaleconomics,MengerandWalras,werefarlessconcernedwiththementalsubstratesofchoiceorvalue.Andwithpsychologyemergingasadistinctsocialscience in itsownright,and laboratoriesprovidinganewmodeofempiricalenquiry to replace introspection,economistsbegan toabandon theirconcernwith thepsychefromthe1890sonwards(Bruni&Sugden,2007).Inthe1930s,LionelRobbinsproposedthe‘revealedpreferencetheoryofchoice’:thatobservablebehaviourwassufficientdataonwhichtobaseeconomictheoriesofwhatindividualswantorvalue,representingthefinaldivorceofeconomics from psychology (Maas, 2009). But emerging in the 1970s, happiness andbehavioural economics represented the gradual rediscovery of psychology by economics. In1974, Richard Easterlin published an article demonstrating that economic growth did nottranslate into increased psychologicalwelfare (Easterlin, 1974). In 1979,DanielKahnemanand Amos Tversky published an article showing that individual decision making is moreinfluenced by relative losses and gains, than by absolute levels of reward, and is thereforecontext-dependent(Kahneman&Tversky,1979).Bothofthesepapersusedempiricaldatatochallenge the methodological premise of neo-classical economics, namely that the choicesmadebytheindividualmindareaperfectindicatorofvalue.The‘revealedpreferencetheoryof choice’ is discarded. Behavioural and happiness economics emerged as growing anddistinctivefieldsoverthecourseofthe1980sand1990s(Heukelom,2011).Thenotionthatamethodologicalpremiseisnotempiricallyvalidshouldnotbesurprising,

given that its function is tofacilitatecognitionandnotconstitute it.Thequestion ishowcansuchknowledgebeacquiredand,subsequently,howmightitbeacquiredandemployedbythestate.How, for example, does the authority of the state change, if it no longer assumes thatindividuals are equipped to make utility-optimizing choices? And what techniques ofknowledgeaccumulationandprocessingdoesitdependon?Forhappinesseconomics,thekeytechniquewasinitiallythesurvey.Marketresearchsurveysandopinionpollinghadalsoarisenas early as the 1920s, as notions such as ‘attitude’ were invented by social psychologists(Rose,1996a;Danziger,1997).Thefirstnationalsurveysonhappinesswerefirstintroducedin themid-1960s,byAlbertCantriland thepollingcompanyGallup,producing thedata thatEasterlinthenbasedhisanalysison.Statisticalagenciesandhouseholdpanelsurveysbegantocollectmoreregulardataonhappinessfromthemid-1980sonwards,enablingtherapidgrowthofhappinesseconomics,beginningwitha1994articleonhappinessandunemployment(Clark& Oswald, 1994). The other technique that economics imported from psychology was thelaboratoryexperiment.ThisbeganwiththestudyofgamesandmathematicalpsychologyattheUniversityofMichiganduringthe1950s, inwhichexperimentswerecreatedinorder to testhow far individuals diverged from instrumentally rational choice (Heukelom, 2010).Experimental economics focuses upon the divergence between how abstract mathematicaleconomics states individuals ought to act, and how they do in fact act, under variouscircumstances.Inthisway,rationalchoiceisconvertedintoanormativeideal,againstwhichpatterns of behaviour should be judged, rather than as an abstract premise through whicheconomic states of affairs should be judged.Alongwith themind, the context of individualactivity, orwhatwould later become known as ‘choice architectures’, is brought back intoeconomics,astheexplanationfordifferingformsofbehaviour(Thaler&Sunstein,2008).Themainobjectofempiricalenquirybecomesthebehaviouralanomaly.Whereindividuals

arefoundnottobehaveasneo-classicaleconomicsassumestheydo,thisrepresentsapotentialopportunity for a third party to work on assisting with the construction of their calculativecapacity. The Coasian view of a freely competitive society, as set out in ‘The Problem ofSocialCost’,dependsonthenotionthatallindividualsareequallyendowedwithacalculativecapacity.Hence, the dominator and the dominated can strike some sort of agreement,whichcompensates the latter, removing the formal requirement for regulatory intervention. Theimplausibilityofthispresuppositionistacitlyrecognizedinbehaviouraleconomics,giventhatthedominated receiveadditional support tobehave in a rational, utility-maximizing fashion.Theircalculative‘equipment’isreinforcedviasupportive‘choicearchitectures’andpoliciesforimproving‘financialliteracy’andvariousotherliteracies.Whatthisignores,ofcourse,isthatthedominatorisnotsimplybetteratcalculatinginapsychologicalsense,butthatthisisbecauseofextensivelegal,technologicalandpoliticalequipment,whichisn’tsimplycarriedaround in the mind as a heuristic, but actively shapes the material environment in whichcompetitiontakesplace(Caliskan&Callon,2009).The influenceofeconomicpsychologywithinmuchpublicpolicy rosesharplyduringand

afterthefinancialcrisisof2007–09.Variousareasofgovernanceandpolicy,whichhadlongoperated according to a logic of ‘incentives’ (inwhich individuals are assumed to respondrationally to changes in cost and benefit), were criticized and rethought, on the basis ofempirical evidence on behaviour, happiness and brains (e.g.Dolan et al., 2010). Economicpsychologywasproposedasabasisonwhichtoreformcorporategovernance(PwC,2012),consumer protection (Mulholland, 2007; OFT, 2010), welfare-to-work (Black, 2008),financialregulation(Shiller,2008)andsoon.Importingrecommendationsfromthepreviouslyleft-field ‘social indicators’ movement, official statistical agencies in Britain, France, theUnitedStates,CanadaandAustraliabegan tocollectdataonhappiness,andpublishofficialindicators of national wellbeing (e.g. Fitoussi et al., 2009). The potential to achieve costsavingsthroughimportinglessonsfrombehaviouraleconomicsbecameacausecelebreoftheObama administration in the USA and the Cameron government in the UK, both of whichemployedauthorsofthepopularNudgeasadvisors.Thesuccessesof‘nudges’weregenerallygaugedintermsofhowwell theyinfluenced‘morerational’behaviour,suchaspayingone’staxes on time or signing up to a defined contribution pension scheme (Langley & Leaver,2012).Asignificantconsequenceofthisrenewedempiricalinterestinthemindisa(re)discovery

of the ‘social’ – or at least relational – dimensions of human behaviour and subjectiveexperience(Mulgan,2012).This iswhere thepotentialbreakbetweenneocommunitarianismandneoliberalismbecomesmostapparent.Neoliberalism,aswehaveseen,soughttoexpandmarket-basedeconomicrationalitiesintoallcornersoflife,andwasparticularlyhostiletothenotion of distinctive ‘social’ rationalities, which provided the logic of socialism.Neoliberalismbeganfromacritiqueofthepossibilityofefficient‘socialistcalculation’,andwaspropagatedasastrategicstripping-outofdistinctively‘social’policiesor‘sociological’knowledge (Mises, 1990;Rose, 1996b; Fine, 2001).Hayek represented social science as acrypto-socialistprojectofconvertingthesubjectiveperspectiveofanintellectualminorityintobogus truth claims, with broad political reach (Hayek, 1942, 1949). But paying empiricalattentiontothemind,behaviourandthebrainquicklyrevealstheimportanceofrelationships,

learning, mimicry and group norms in determining habits and tastes. Social relations arerevealed as a crucial resource for individual wellbeing (Cacioppo & Patrick, 2009). Agrowing burden of mental ill health (especially anxiety and depression) afflicts manyneoliberalsocieties,whichcanbereducedtoasetofneuro-chemicalimbalancesasfavouredby many pharmaceutical companies (Healy, 1997), but is more promisingly looked at in‘social’ terms, as manifest in the growingmovement towards ‘social prescribing’ wherebysinging,gardeningordancingareprescribedbydoctorstoraiselevelsofphysicalandmentalwellbeing. ‘Behaviours’ and moods, whether ‘good’ or ‘bad’, are shown to travel throughsocial networks like contagions, with important lessons for health policy and financialregulation (e.g.Lo,2004;Christakis&Fowler, 2011).Biologicalmetaphorsof ‘contagion’,‘toxicity’,systemic‘resilience’cometoorganizehowthe‘social’isnewlyconceived.Thisisthe ‘social’, not as understood in a Durkheimian sense, but in the sense of social networkanalysis, asmathematically traceablewebsof linkage (Freeman, 2004).The role for publicpolicy, under neocommunitarianism, becomes one of seeking to catalyse or ‘nudge’ positivecontagionsofrational,utility-increasingbehaviour,inthehopethatthesetravelthroughsocialnetworksandgraduallyoustnegativeones.Butthequestionhereishowdoesthegovernmentexpertknowwhenitisthesuitabletimeor

placetointerveneintheseorganicprocesses?Underneoliberalism,socio-economicactivityissubject to a quasi-juridical ritual of audit (Power, 1997). This follows themodern criticalsequence described at the beginning of this chapter, of certainty, doubt, crisis/judgement,resolution, certainty. At regular intervals or at pre-designated moments, an evaluation iscarriedout,totesttheworthofcertainbehaviours,soastorendertheseobjectiveandpublic.Acomplexanduncertainsituationisrepresentedviaanumerical‘score’,brieflyremovingitsuncertainty. But the rise of homo psycho-economicus necessitates a very different style ofaudit, which is oriented around questions of systemic sustainability or resilience. What isbeinggaugedisthecompatibilityofmultiplerationalitiesatmultiplescales.Isthebehaviourof individual banks consistent with the resilience of the financial system as a whole? Areindividualnutritionaldecisionsconsistentwithbodilyhealth in the longterm?Atwhatpointdoes individual utility-maximization come into conflict with collective wellbeing? Theseinvolvewhat Iwould call a form of ‘non-critical audit’,which is a constantmonitoring ofactivity,butonethatisunpunctuatedbyanyrecognizedmomentsofjudgement/crisis.Thereisaperceived need to stay constantly abreast of how individual and collective behaviours areevolvingandaggregating,butwithoutanysenseofwhenoronwhatbasistoformajudgementonthisempiricaldata.Thetechnologiesofnon-criticalauditareemergingrapidly,thanksheavilytothedigitization

ofsocio-economicrelations.Themappingofsocialnetworkscannowbedoneatascaleandspeedthatthesocialscienceshadneverimagined,priortosocialmedia(Savage&Burrows,2007).Theauditingofpsychologicalmoodcanbeconductedonaconstantbasis,withouttheperiodization thatgoeswithsurveys,using technologiessuchas iPhoneAppsand‘sentimentanalysis’algorithmsdesignedtoassessthemoodofverylargenumbersofTwitterorFacebookusers.TheHayekianproblem,ofhow legitimately to representuncertain situations, receivesnewtechnicalsolutionsthatowenothingtomarketsoreconomics,butfromthemathematicalanalysisofBigDatathataccumulatesfromcompaniessuchasGoogle.TheBankofEngland

hasbeguntodrawonGooglesearchdatainconstructingtheireconomicforecasts,forinstancetrackingthenumberofsearchesfortermslike‘estateagent’(McLaren,2011).Meanwhile,aspublic policy makers becomemore interested in the vagaries of behaviour, so they importtechniques frommedical research, namely Randomized Controlled Trials (RCTs), wherebyrival policies are introduced simultaneously, such that knowledge about their empiricalefficacy can be accumulated. Where the behaviour in question is digitally-mediated (forinstance,throughane-governmentserviceoraninteractionwithanelectricityprovider),RCTsarepossiblewithoutanycost,seeingassurveillanceofthebehaviouroccursbydefault.Thepromise of the ‘smart city’, for example, is one in which so much activity is digitallymediated, resulting in so much data accumulating, that services, design and policy can beperfectlycalibratedaroundconstantlyemergingpatternsofbehaviour.But still the question of judgement or the critical test is not addressed directly. Under

neoliberalism,normativeandpoliticaljudgementisreplacedbysomeformofnumericaltest,eitherthatofthemarketitself(i.e.price)orthatofeconomicsandassociatedtechniques.Theeraof‘non-criticalaudit’,exemplifiedbyabeliefinBigData,doesnotusenumbersinsteadofjudgement,butreallyjustsoastodelayjudgement.Foranexampleofthis,considerthecaseof ‘macro-prudential regulation’, whichwas quickly identified as the regulatorymodel thatcouldpreventanotherfinancialcrisisafter2007–09(Saporta,2009;Clement,2010).Macro-prudential regulation would involve regulators and central banks intervening when thebehaviourofsome financial institutionsappears tobedestabilizing thefinancialsystemasawhole. It looks beyond orthodox, quasi-juridical forms of audit, in which every financialinstitutionhastopassthesameaudittoprovetheirworth,towardsaformofnon-criticalaudit,inwhichlargequantitiesofdataarecollectedandstudiedforsigns that thefinancialsystemmaybebecomingunstable.Itrecognizesthatthesimilarityofriskmodelsatworkwithinthefinancial system can lead individual institutions to pursue strategies that are individuallyrational, but collectively irrational.But this alsomeans recognizing that not every financialinstitutionisassystemicallyimportantasanother,andnoteverymomentinthefinancialcycleis as critical as any other. The hopemight be that data-mining of the financial system as awhole, combined with some form of representation of the system’s current ‘behaviour’ or‘mood’,mightmakeitpossibletodeterminewhentoactandonwhichinstitution.But,asonebehaviouralfinancetheoristargues,‘marketefficiencyisnotanall-or-noneconditionbutisaconstant characteristic that varies continuously over time’, which removes the neoliberaltechnicalrationalitythatjustifiesgovernmentintervention(Lo,2005).Thegreatertheamountof data accumulated, themore this exacerbates rather than alleviates the expert question ofwhattodo.Homopsycho-economicus,supportedbyaninfrastructureofnon-criticalaudit,generatesa

mode of government that is ‘neocommunitarian’ in its implicit ethos, because it stands inrelation toneoliberalism, just as communitarianism stands in relation toKantian liberalism.Neoliberalism (and its apparent failures) provides economic psychologists with theirempiricalorientation:whatarethesocio-culturalconditionsandlimitsofsustained,rational,welfare-enhancingdecisionmaking?Thisquestiononlyarisestotheextentthatneoliberalismtakessuchdecisionmakingasread,andsuffersvariousnegativeconsequencesasaresult.Inresponse,economicpsychologyfindstechnicalandempiricalfaultwithneoliberalismintwo

key areas, which echo the communitarian critique of liberalism. Firstly, the technicalmethodologiesofneoliberalismarecriticizedforrestingonanimplausiblyemptytheoryoftheself, as nothing but an atomized choosing calculator. Chapter 2 argued that the neoliberalvalorization of competition shifted from a commitment to markets as institution to acommitment to competitiveness as a psychological attribute. However, few of the theoristsinvolved had ever paid much attention to the empirical plausibility of the psychologicalpreceptsthattheyassumed.Secondly, and consequently, the rise of economic psychology as a policy discipline

undermines the transcendental a priori ideal of the neoliberal state. Elevating competition(however defined) as the central organizingprinciple of societywas expected to produce astate that was neutral or ‘ignorant’ regarding what ‘good’ outcomes would consist of. ForHayek,competition itselfwas themoralandempiricaldiscoveryprocess, and the statewasmerelyitsapriorifacilitator.Butevidencefromlaboratories,surveysandbigdataanalyticsoffersaverydifferentperspective,whichrevealsthecapacityofindividualstoroutinelyandcollectively act against their ownbest interests, assuming some standard forwhat their realinterests actually are. While not quite ethical, in a communitarian sense, or substantivelyrational,inWeber’ssense,thisreturnofteleologyintoeconomicpolicymakingisneverthelessa significant departure from neoliberal agnosticism regarding outcomes. To be sure, thisteleological rationality remains technocratic, with the socio-economic telos captured inmetricsof‘wellbeing’,‘resilience’and‘sustainability’,andthemeansofpursuingthesegoalsremain organized in terms of incentives, choices, strategies and individual agents. But inacknowledging that economic reason has a normative and teleological dimension, and notmerely an instrumental or formal one, the contemporary state has experienced a subtle butimportantneworientationawayfrompurelymarket-basedmodesofevaluation.Thisrepresentsanewandmorefearfulorientationtouncertainty.Whereneoliberalismhad

valorizeduncertainty,solongasitwasaneffectofcompetitionandorganizedwithintherubricofmarkets,rankingsandeconomictests,neocommunitarianismrestsonarecognitionthatthis‘competitiveuncertainty’can tip intoamoreradical, ‘politicaluncertainty’ that isgenuinelydisruptive,andnotsimplyinanentrepreneurialsense.Thecapacityofhumandecisionmakingtogeneratemoreprofoundlydisturbingorunsettlingoutcomes,whichmaybeself-destructive(aswithhedonisticconsumption)orsystemicallydestructive(aswithfinancialexuberance)orboth,meansthatpolicymakersbecomeconcernedwithhowthecompetitivegameisplayed,and not simply with helping to distinguish the ‘winners’ from the ‘losers’. In this sense,uncertainty itself becomes managed and ritualized, via new empirical representations of‘irrational’and‘social’formsofbehaviour.AkeyelementoftheHayekianneoliberalprojectisdiscarded.

StateofMarketException

Thebanking crisiswas swiftly framedbypolitical leaders in starkly existential terms,withBenBernanke,ChairmanoftheUSFederalReserve,declaringaftertheLehmans’collapsethatunlessactionweretakeninstantly,‘therewillbenoeconomyonMonday’(quotedinBryanetal.,2012).Theviabilityof theentirefinancialsystemwasindoubt,andemergencypolitical

actionwasrequiredtopreventacatastrophicfailure.Oneofthefirstnormativeandregulativeprinciplesthatwassuspendedasaresultofthisapparentemergencywasthatofcompetitionenforcement. InBritain, the fatal conditionofHBOSbank inSeptember2008meant that thegovernmentencouragedatakeoverbyLloyds-TSBwhichwouldotherwisehavebeenblockedby the competition authorities. The PrimeMinister personally brokered the deal, exploiting‘national interest’ clauses in competition law to do so.Aswe shall explore further on, theEuropean Commission meanwhile deemed it necessary to suspend the State Aid rules thatpreventmemberstatesfromgivingsubsidiesorfavourstospecificfirms,sothatstatescouldrescuetheirfinancialsectorsbywhatevermeanstheydeemednecessary.The vision of the state as a neutral enforcer of competition, without regard to the

consequences,winnersorlosers,wasattheheartofthefoundingneoliberalandordo-liberalvision.Itwasespeciallypowerful intheGermanandEuropeanUnioncontexts,at leastuntiltheinfiltrationofutilitarianChicagoSchoolideasandtechniquesduringthe1990s.AsChapter3 examined, this commitment to an a priori rule of market law was attacked and largelydismantled byChicago economists and their acolytes in the legal profession.And yet somenotion of a fair and competitive a priori is necessary if competition is to survive as anorganizingprincipleofbothsocio-economicorderandstateauthority.Onthefaceofit,thefactthatcompetitionenforcementwasamongst the firstpoliticalcasualtiesof the financialcrisis(at least for a period of time) may indicate that the neoliberal paradigm (or at least itsspecificallyliberalelement)hadbeendramaticallyterminated,oratleastsuspended.Thecrisiswasaccompaniedbyanumberofother instancesofhighlyunusual, emergency

interventions by executive state authorities. Besides the bail-outs of banks and insurancecompanies, inwhich a handful of political decisionmakers agreed to provide vast sums ofequityfinance,creditandguaranteestofailingfinancialinstitutions,specialexecutivepowershave been claimed and exercised in other instances too. In October 2008, the Britishgovernmentdrewonanti-terrorismlaws,inordertofreeze£4bnofassetsinafailedIcelandicbank. In 2011, the elected Prime Ministers of Italy and Greece were both replaced byrecognizedeconomists,aspartoftheefforttosustaintheEurointhefaceofsupposedSouthernEuropeanfiscalprofligacy.This threwa thoroughlymoreHobbesian lightupon thepotential‘performativity’ of economics. Executive decisionmakingwas no longer being economizedand authorized by the strategic framework of national competitiveness evaluation: it hadbecomestrippedbareasapurelycontingentforcefortherescueofeconomicnormativity.Butby directly replacing elected executives with economists, and using exceptional powers torescuerisk-managementinstitutions,sovereigndecisionwasfusedwitheconomicrationality.Thisphenomenon,ofextraordinaryemergencypowersbeingclaimedforthesakeofsaving

thejuridicalstatusquo,isthedefinitionofexception,astheorizedbySchmittandsubsequentlyGiorgioAgamben(Schmitt,1996;Agamben,2005).Thedifferenceunderneoliberalismisthatthejuridicalstatusquoispermeatedbyeconomicrationality.Hence,whenspeakingofa‘stateofmarketexception’,Irefertothefactthatthemarket-basednorms,proceduresandtechniquesof economic evaluation that characterize regular neoliberalism, are suspended for their ownsake, in favour of a logic of necessity. As was explored with reference to ‘nationalcompetitiveness’,neoliberalismalreadyacquiresaformofself-legislatingexecutiveauthority,borrowedfromtheSchumpeteriannotionof theentrepreneurandbusinessstrategy.Thecase

for‘competitiveness’ isdepictedassomethingofanationalemergency,evenduringtimesofrelativeeconomicpeace: inthatsense, the‘marketexception’simplyupstheante,raisesthestakes,andcompelsevenmoredecisiveactiononthepartofleaders.Tounderstandthisstatebetter,wemustfirstaddressthestateofexceptioninitsoriginaljuridicalsense,andthetypesofrhetoricalstrategiesthataccompanyit.

ThestateofexceptionThe application of rules involves a Kantian problematic of how to subsume particularinstances under universal principles. In Kant’s critical philosophy, this practical problemmirrorsanepistemologicalone,ofhowparticularphenomenacanbeclassifiedwithingeneralepistemiccategories.Yettheclaimputforwardbyconventiontheoryisthatthetwoproblemsare really identical, as they are both fundamentally practical in nature. Science (and socialscience)canonlytakeplacethroughthepracticalapplicationofmethodologies,leadingtothepublic demonstration of proofs that can withstand further critique. What Boltanski andThévenot refer to as ‘tests’ are thosematerial tools and practiceswhich subject individualsituationstomoral-empiricaljudgements.Thetermusefullybridgesboth‘juridical’situations(such as courtrooms) and ‘scientific’ situations (such as laboratories), and highlights thevariouscommonalitiesinhowsuchsituationsareframed,initiatedandconcluded.Judgementthereforerequiresa‘descent’fromageneralprincipletoaparticularoccurrence,

whichstripsthelatterofitsparticularitybyclassifyingit.Butifsomethingoccurswhichseemsto threaten theverypossibilityofapplying the law, theproblemof judgementbecomesverydifferent.Thesituationmustbejudgedpurelyintermsofitsparticularity,withoutrecoursetoany higher principle. In a laboratory situation, this might be the appearance of a newphenomenonwhichbreakssomebasiclawofscientifictheory,andtherebythreatenstobringdownanentireparadigmofresearch.Inajuridicalsituation,itmaybesometypeofactthatissothreateningtowardstheruleoflaw,suchasterrorism,thatitmustnotbedealtwithwithinstandard legal process. Such situations demand that the particular case be judged purely intermsofitsownparticularity,andnotwithrecoursetoanyavailablelaworprinciple.Anewlawmayneedtobeinventedspecificallytodealwiththisonecase.ThisisclosertoKant’smodelofaestheticjudgement,inwhichparticularityisnotsubsumedwithinageneralcategory,but judged as a singularity fromwhich a new general principle can be extrapolated (Kant,2007).Thejuridicalrecognitionofpureparticularityisthebasisofthestateofexception,asunderstoodbySchmittandAgamben.Politics, for Schmitt, is ontologically constituted by the ‘friend-enemy’ distinction,which

finds its full consummation in mortal combat. The critical political distinction is thereforebetweenthosewhomIamwillingtofightfor,andthosewhoIamwillingtofightagainst.Thisbeingthecase,contingentexistentialpoliticaldecisionsarealwayspriortotheimplementationoflaws.Theveryexistenceoflawisdependentuponthepossibilitythatviolencecanbeusedto defend the polity against an enemy. This is not to say that law itself is constituted byviolence or contingency.During periods of peace and stability, the rule of law is perfectlyplausiblefromaSchmittianperspective.Theseparationofpowersbetweentheexecutiveand

the judiciary can become a practical reality, such that the executive is constrained bynormativity.However,itremainsconstantlyimplicit(orsometimesexplicit)thattheexecutiveretains thecapacity tosuspend the law, inorder tosave it fromsometypeofunprecedenteddisruptionorthreat.Lawruleswithageneralform,butitonlyrulesparticularterritoriesandpopulations:universalityissecondaryto‘pluriversality’.Moreover,Schmittargues,lawonlyrulesforlimitedperiodsoftime.Itcanbeinterruptedatanytimebyasovereigndecisiontodeclare an exception, which is foundational: ‘Sovereign is he who decides on exception’,therebydecidingtosuspendtheconstitutionalseparationoflawandviolence(Schmitt,2005:5).The judgement that is made, in declaring a state of exception, is that it is necessary

(Agamben,2005:24–25).Thistypeofjudgementcannotbemadewithrecoursetosomeothernorm or law, because it concerns an event that disrupts the very possibility of legalnormativity.Thelogicofpoliticalnecessityconcernsuniqueoccurrences,whichdemandtobeactedoninwaysthatarespecific tothemselves.Theseeventsneithercomplywithlawsnorbreak them, but introduce a set of possibilities that are entirely at odds with the law asconstituted.AsAgambenargues:

Intruth,thestateofexceptionisneitherexternalnorinternaltothejuridicalorder,andtheproblemofdefiningitconcernspreciselya threshold,orazoneof indifference,where insideandoutsidedonotexcludeeachotherbut ratherblurwitheachother.(Agamben,2005:23)

Inthis‘zoneofindifference’,justificationsareneitherrequirednorpossible,becausethereisno general grammar or classificatory system throughwhich the exception can be proved orsubsumed. The declaration of exception rests on a purely political judgement of necessity,which lacks any preconditions beyond itself. Agamben notes that some legal constitutionsinclude a formal provision that the constitution may be suspended in exceptionalcircumstances,while others do not (Agamben, 2005: 13–21). But the fact that exception isrecognizedasaformalpossibilitydoesnotmeanthatitissomehow‘within’theruleoflaw,anymorethanalackofformalrecognitionrendersit‘external’totheruleoflaw.Exceptionisconsistent with the logic of law, without being strictly legal or illegal. It is impossible toconceiveofalawthatdidnotimplythepossibilityofexception,eventhoughlegalrationalityitselfcannotentirelyarticulatewhatthejuridicalstatusofexceptionactuallyis.Thestateofexceptionistypicallydefinedtemporally,althoughitmayhavespecificspatial

characteristicsaswell.AgambenofferstheexampleoftheRomaninstitutionof iustitium, inwhich the lawwould takea ‘holiday’,duringwhichactswereno longer judged in termsoflegality/illegality.Healsoobservesthatstatesofexceptionhaveoftenarisenasaconsequenceofmonetarycollapse,asoccurredattheendoftheWeimarRepublic.IntheUSA,meanwhile,the possibility of an exceptionwas first acknowledgedwith theCivilWar, and has alwaysbeenassociatedwiththepeculiarpoliticalcircumstanceofwartime.Framingobjectivesinthelanguageof‘war’hasbecometheprimaryrhetoricalstrategythroughwhichAmericanpoliticalleaders have sought to free themselves from the constraints of the constitution.Whether asholiday,monetary restorationorwar, it is expected that exceptionwill come toanend, andlegal judgementwillberestored.Butspecifyingwhen theperiodofexceptionends isneverstraightforward, and it is possible to live in a state of exception where law survives only

throughconstantnon-legalsovereigninterventionsanddecisions.Itiscrucialthatastateofexceptioncanonlyarisewithasovereigndecision,thatis,itmust

be backed up with sufficient violence (or its threat) to be realized. A revolutionary whobelieves in the ‘sovereignty’ of the people can declare a state of exception, but only if thepeoplehavesufficientmeansofviolencetorealizeit.Otherwisetheyaremerelyintherealmofcivildisobedienceor criminality.When the sovereigndeclares a stateof exception, theirdeclarationisvalidtotheextentthattheycanbackitupwithviolence.Bycontrast,ahistorical‘crisis’occurswhena systemof judgement ceases towork,openingupa spaceofpoliticaluncertaintyinwhichnewsystemsofjudgementmightarise.Suchsituationsarenotconstitutedbyviolence,although theyopenupspacewithinwhichviolence isonepossibility.Whenanorthodoxeconomistconfrontseventsthattheirtheorydeemsimpossible,thiscreatesaspaceinwhichalternativetheoriescanbepropagatedandthedominanttheoryattacked.Theorthodoxeconomist can trydifferentwaysofdefending their theory, suchas adapting it or seeking toconstrain the empiricaldata.Thenoveloccurrence canbequickly classified as aparticularvariantofamorefamiliaroccurrence.Thesestrategiesmaywellsucceedinrebuffingattackson their own, or else theymay eventually lead to aKuhnian ‘paradigm shift’.Butwhat theeconomistcannotordinarilydoistodeclarethatitisnecessarytosuspendnormsofscientificvalidation,ashelacksthepowertorealizethissuspension.Aneconomist(oranyothertypeofscientist,evaluator,criticorjudge)whosoughttodothiswouldbeviewedashavingaccepteddefeat.Adeclarationofexceptionisthereforeaformofviolentanti-crisis,inwhichjudgementis

debarred or delayed, for fear that itwould otherwise be destroyed.The speed of events orproximityofathreatisdeemedsosevere,thatachievingacriticalorobjectivedistancefromthem is deemed impossible (or too existentially dangerous). Kant argued that the sublimeoccasionsaformofpleasure,asaresultofcognitive judgementbeingfirstoverwhelmedbysomethingtoovastorpowerfultograsp,andthenretreatinginterror,beforetakingcomfortinrediscovering its own transcendent ideas of reason (Kant, 2007). The state of exceptionfollowsasimilarpath, inwhich law looks tobedestroyedbysomeunprecedentedeventoraggressor,butisthenrescuedbyasovereigndecisiontosuspendjuridicalrule.Forahistoriccrisis to occur, a regime of judgement must be allowed to fail, producing a situation ofpoliticaluncertainty inwhichanewmodeof judgementmightemerge.Eventsorrivalsmusthave time tooverwhelmthe legal,criticalorscientificapparatus (as thecasemaybe),suchthatitsfailuretoclassifypeopleorthingscanbecomefullyandpubliclymanifest.Thecrisisitselfwillbeexperiencedasamomentofradicalcontingencyandopenness,inwhichthereisnodominant‘higher’principleonwhichasharedevaluationcanbebased.It is thisfullandpublic failure of rule that the state of exception prevents. As with a crisis, exception alsointroducesaperiodofradicalcontingency,butwithouttheopennesstoalternativeprinciplesofjudgement.Thecontingencyisratherofsovereignexecutivewill,andnotofsomedemocraticpluralism.Thankstotheirentanglingwithsovereignpowers,itisintothisambivalentstateofexception that neoliberal principles and techniques of evaluation were thrown by the bankfailuresof2008.

RescuingmarketruleOneofthecentraltasksthatneoliberalcriticsofthestatesetthemselveswastofusetogetherlawandeconomics,asChapter3explored.Theordo-liberalssetaboutdoingthisbyusingruleoflawtoformalizemarketmechanisms,inflatingthepricemechanismwithaformofjuridicalauthority. By contrast, the Chicago School sought to demolish the very notion of law’ssubstantiverationality,byreducingit toaninstrumental logicofincentivesandneo-classicalcalculation.Thislattermovementcametopredominateincompetitionauthoritiesfromthelate1970sonwards,yetbydoingsoiteffectivelyelevatedneo-classicalmethodologytothestatusofaquasi-juridicalprocedure.Where lawhasbeensuccessfullyeconomized, thecalculatedmaximization of efficiency comes to replace the pursuit of ‘justice’ as the test of legitimateaction.Thenormativityof economicevaluation serves as aquasi-constitutional template forthestate.Incontrast tothestrictruleofmarketlawproposedbytheordo-liberalsandearlyHayek,

thistestrepresentsaveryweakformofnormativeconstraint.InthestateenvisagedbyChicagoeconomists,lawisonlyauthoritativetotheextentthatithasdemonstrablypositiveeconomiceffects.Allittakesiseconomicevidencetobeconstructeddemonstratingtheinefficiencyofalaworregulation(measuredinCoasiantermsofaggregateconsumerwelfare)anditsauthorityislost.Corporationsmarshallingwell-paidprivateconsultantscanoftensucceedindoingthis.The liberalspiritofneoliberalauthority is renderedvery frailby theChicagocritique.Theauthority of anti-trust law therefore comes to derive partly from the ‘violent threat’ ofexecutivepower,theclaimthatcompetitionisgoodforcompetitiveness.MichaelPorterandanumber of other competitiveness experts have argued that the normativity of regulation canhave a positive effect on the productive and entrepreneurial capacity of state territories(Porter, 2001b). Economically rational anti-trust enforcement is viewed by nationalcompetitivenessevaluationsasapositivestrategicattributeofastate.Marketlawreceivesapositiveevaluation,totheextentthatitraisestheoverallproductivecapacityofastate-space.Inthissense,theneoliberalstate’sliberalspiritistacitlysanctionedbyitspoliticalthreat.Toputthisanotherway,thefairnessofmarketcompetitionisvaluedtotheextentthatitsupportsgreaterlocalentrepreneurialdynamism,butnotviceversa.The logic of the political-strategic decision is therefore prior to that of legal-economic

rules, in a way that echoes Schmitt’s theory of sovereignty. The Schmittian sympathies ofneoliberalscholarssuchasHayekandFriedmanhavebeennoted,restinginadeeppessimismregarding the capacity of societies to remain ‘open’ and ‘competitive’ without constantenforcement and protection by executive powers (Mirowski, 2009; Spieker, 2012). Thepossibilityandeventualnecessityofexceptionarethereforealreadycontainedwithinthelogicofneoliberalism.Asanempiricalmanifestationofsuchanexceptioninpractice, thecaseofEuropeanCommissionStateAidrules,andtheireffectivesuspensionduringthebankingcrisis,providesanempiricalcasethroughwhichtoexaminethis(Davies,2013).Thereasonwhythisissoinstructiveisthat,inthiscase,wegetaclearviewoftheinterfaceofexecutivedecisionandmarket law.Andwhat becomes apparent is a shift from ordo-liberal, to Chicagoan, toexceptionalmodesofeconomicjurisdiction.State Aid rules seek to maintain a competitive order across the European Union, by

preventingmemberstatesfromoffering‘aid’toindividualfirmsorindustries,andoriginateinthe 1957 Treaty of Rome that first founded the commonmarket.2 The body responsible forenforcingtherulesistheanti-trustdirectorate,DGCompetition.Initially,‘aid’wasdefinedinnormativeterms,assomethingwhichdisruptedtheequallynormativeprincipleofcompetition,as the form of market organization. This definition was formal, rather than empirical, butwouldincludesubsidies,taxbreaks,tradeprotectionsoranytypeofstateactionthatappearedto disrupt the authority of the pricemechanism.As a classically ordo-liberal case of statesseekingtoconstructabinding‘economicconstitution’,thevisionbehindStateAidruleswasofacommonEuropeanspaceinwhichthemarketofferedtheprimaryinstitutionalmechanismforcoordination. Executive political action would be constrained by market law. But in itsoriginal statement, this constitutional framework contained various provisions for states toexempttheirpoliciesfromitsconstraints,thatis,toemployevaluativecriteriaotherthanthoseassociatedwithmarkets.Aid‘havingasocialcharacter’wouldalwaysbepermitted,offeringa justification for Europeanwelfare states, that is also in accordance with ordo-liberalism(Bonefeld,2013).Inaddition,afurtherfivecategoriesofexemptionareformallyrecognizedinthetreaty,oneofwhichisaid‘toremedyaseriousdisturbanceintheeconomyofaMemberState’(EC,1992:87(3)).ThisexemptionwasusedfromOctober2008onwards,inordertopermitexceptionalstateactsoffinancialrescuewhichotherwisewouldhavecountedasanti-competitive.Thisisaninstanceofaneconomicconstitutionwhichformallyacknowledgesthepossibility of its own suspension, but as Agamben argues, even without such anacknowledgement,sovereignswouldretainsuchanoptionregardless.Asapurelyformalcommitmenttotheprincipleofcompetition,theStateAidrulesdidnot

initially represent a very powerful restraint on the executive powers ofmember states. Theexemptionsavailable,thelackofaccompanyingimplementationguidelinesor‘softlaw’(untilthe 1990s) and the ambiguous sovereignty of the European Commission meant that DGCompetitionhadlittlecapacitytoenforcetherules.Therewasnoinstanceofunlawfulaideverbeingrepaidbyitsrecipientuntil1984(Luengo,2007).TherulesstatethatDGCompetitionmust always be notified in advance of aid being given, such that an evaluation of itscompatibility with the single market can be given (EC, 1992: 88 (3)). As a formality,notificationenablesaconsidered judgement tobepassed,even if it is typically torecognizethat the aid is legitimate.The strong emphasis on notification is therefore a requirement forpublic explanation, as a constitutive element of legitimate sovereign action within theEuropeancommunity.LackofnotificationrepresentsasmuchofachallengetotheCommissionastheaiditself,giventhatitrendersthepossibilityofjudgementimpossible(EC,1980).TheCommission’s a priori commitment to a competitive European order underpins a ritual ofnotificationandevaluation,but initiallyofferedno technicalorempirical testwithwhich toassesswhetheraparticularinstanceofstateaidisanti-competitiveornot.Nordiditofferanybasisonwhichtoofferapositiveevaluationofstateaid.With thegrowing influenceofneo-classical economic evaluationwithinDGCompetition,

the critique of aid became increasingly empirical (or ‘effects-based’) in nature, with theargumentthataidistypicallyinefficient.TheDGbegantoconductanannualauditofaidfrom1988,which initiallydiscovered that stateaidwasworth theequivalentof3%ofEuropeanGDP.Thecritiqueofaidshiftedfromanordo-liberalone,thatitdisruptsthemarketform,toa

utilitarian one, that there is too much of it and its costs are not being accounted for. Theinfluence of, firstly, competitiveness concerns across the European Commission and,subsequently,Chicago economicswithinDGCompetition resulted in amore economics-ledapproachtotheproblem.Aidandcompetitionwerenolongerjudgednormatively,butintermsof theirbenefitsorharmstoEuropeanconsumers,whichcouldbequantified throughregularaudit.Atthesametime,thiswidenedthescopeforlegitimatestateinterventions,wherestateswere raising competitiveness through public support for R&D and innovation (EC, 2005).Critically, this new economic approach led to the publication of a new ‘compatibility test’,whichwouldbeapplied toevaluate individual aidproposals, toassesswhetherornot theywere legal.3 The test was a form of economic cost-benefit analysis, which would seek toevaluatetheoverallefficiencyoftheparticularstateproposal.Legalprocedure,aslaiddowninthe1957Treaty,wastherebycomplementedwithaneconomicmethodology,providingDGCompetition with a normative-empirical procedure by which to conduct its evaluations.Europeanmemberstatesbecomeconstrainedbyempiricaleconomics,andnotjustbylaw.Guidelinesissuedin1999statedthatDGCompetitionmaytakeuptotwomonthstoevaluate

whetherornotaproposedaidwaslegal(EC,1999).Theeconomics-ledapproachmadetheprocess substantially more complicated, as DG economists were required to gather andanalysedata,whichwould thenbefed into the legalprocedure.Wherestateswereclaimingthat aid had a positive effect on local competitiveness, this added further complexity, aseconomists sought to quantify ‘dynamic’ effects, such as innovation. One indicator of theexceptionalnatureofautumn2008wasthatDGCompetitionpromisedtograntpermissionforaid in amatter of hours or over aweekend,making it clear that any normal procedure forevaluationhadbeensuspended.State rescue packages for financial institutions were already underway during late

September and early October 2008, before DG Competition had issued any guidance onwhether or not thesewere legal or not.Executive decisions bymember states hadde factoover-riddentheeconomicconstitutionoftheEuropeanUnion,demonstratingthattheexceptionis effected by those with the sovereign power to do so, not by those with the normativeauthority to.Hence, themost urgent task for theCommission at this timewasnot to delimitstateaidoreven toevaluate it,but to takeurgentaction toensure thatEuropeanLawcouldaccommodate whatever was deemed necessary. Following pressure frommember states, aCommunication issued by theCommission on 13October formally acknowledged the treatyclausereferringtoaidneeded‘toremedyaseriousdisturbanceintheeconomyofaMemberState’ (EC, 2008a). In this context, the activity of member states was no longer beingevaluated, either in a normative or an economic sense, but sanctioned by the unique andexceptionalnatureofthesituation.4Stateswerenolongerinvitedtojustifytheirinterventions,eitherinalegaloraneconomicsense,butmerelytoacthowevertheydeemednecessary.5Thedocumentmakes no reference to ‘efficiency’, ‘costs’, ‘benefits’, ‘competitiveness’ or to thecompatibilityofstateaidwithmarketcompetition.Hence,economicevaluationwassuspendedaswellaslaw.Theeffectiveorientationofthestateaidauthoritiesatthistimewasawayfromthedefence

ofcompetition (howeverdefined)and towards thedefenceof thestateaid rules themselves.WhenthenewCommunicationsreferredtothe‘compatibility’ofapieceofaid,theywerenot

referring to its compatibility with competition or the European single market, but itscompatibilitywith theTreatyofRome.Under the exceptional circumstancesof the financialcrisis,necessaryactionsare,asAgambenputs it,neither insidenoroutside the lawbut ina‘zone of indifference’.The question for those responsible for applying the lawwas how toensurethatitcouldreturnoncethisperiodhadended.Thestressuponnotificationremainedasgreat as ever, even though an evaluation would clearly be impossible given the timeconstraints.6Theprioritywassimplythatthelaw’sexistencewasrecognized,evenwhileitsproceduralimplementationwaseffectivelysuspended.Thejudgementofwhatwas‘necessary’nowlayinthehandsofmemberstates:DGCompetitionmerelyaskedtobekeptinformed,sothat the barest form of procedure could be sustained. For example, the British governmentnotified DG Competition that it intended to buy £35bn-worth of shares in two banks onSaturday11October,andtheDGgrantedpermissiononSunday12.Ashadowofconstitutionalnorms is maintained during this exceptional time, but no test is being applied. Actions aresimplydeclaredandaffirmed(albeitpublicly)butnotjustifiedinanycriticalsense.How long does this state of exception last and how far does it extend?One criterion by

which aid to banks would be considered compatible with state aid rules was that it bereviewed at least every six months (EC, 2008b). In December 2008, the Commissionannounced a newTemporary Framework authorizing necessary rescue packages in the ‘realeconomy’(i.e.non-financialfirms),suchasloansandguaranteesthatthefinancialsectorwasitself unable to offer (EC, 2008c). This framework expired on 31 December 2010, andsubsequent communications were issued to provide guidance on the phasing out of aid tofinancial institutions (EC, 2010). Statements made by the Commission therefore indicate adesire to terminate the formally recognized exception to market-based principles andtechniques of valuation.But this doesn’tmean that these principles and techniques are nowrestoredtothestatusofstate-endorsednorms.Onthecontrary,theexceptiondoesnotneedtobe legally validated or recognized to persist, that is its definition. From a Schmittianperspective, the legality of sovereign rule always tacitly allows for non-legal acts. Butmoments of rupture and publicly declared states of exception create the possibility ofpermanentlyexceptionalstates,inwhichexecutivepoliticalpoweracquiresthelegalrighttoact purelyout of necessity, andwithout justification.Whetheror not theCommissionwouldrecognizethisasanaccuratedepictionofEuropeanneoliberalismpost-2008,itmaybewhathasemerged.European State Aid rules are an unusual case, inasmuch as their sovereignty is at best

ambiguous. The implementation of these rules has always been somewhat dependent on adegree of compliance from those they seek to constrain, as the emphasis on advance‘notification’ indicates. In their ambiguity, they capture something about the contradictorynature of neoliberal authority, in which positive economic reason is offered in place ofsovereignty,butthenrequiressovereignbackinginorderforitsenforcement.Asanattempttoelevatemarketprinciplesabovenationstates,butwithno‘higher’powertoenforcethem,theEuropeanprojectisriddledwiththisproblem,andthefinancialcrisishasrendereditnaked.When the threat to market principles appears existential in nature, that is, when the entirepossibility of market-based evaluation is thrown into doubt, those principles need to besuspended,andexecutivepowersmobilizedinwhateverwayisdeemed‘necessary’.

Historic crises or paradigm shifts threaten to evaluate the evaluators, through periods ofpoliticaluncertaintyand radical critique.The financial crisis couldhave represented suchamomentofjudgement,whenadominanteconomicrationalitywasthrownopentocritique.Thatthis did not occur (at least to the extent that many first predicted) was thanks to thecontradictory entangling of economics and state sovereignty that constitutes neoliberalism.Both law and economicswere suspended, so as to prevent their failure becoming publiclymanifest, and the logic of executive necessity took over in their place. A market-basedeconomicrationalitywasnotsimplyoneevaluativelogicamongstmany,tobedispensedwithonceithadfailed:itwaselevatedtothestatusofquasi-constitutionalstatenorm.Assuch,inasituationofemergency,itbecamemoreimportanttosecurethatnormbyanymeansnecessarythantoapplyit.In the state of market exception, the ‘violent threat’ of the neoliberal state’s authority

becomesmorenakedlypolitical.Thelogicofbusinessstrategy,wherebythenationismanagedlike a corporation, morphs back into something approaching military strategy, in which allreserves of sovereign forcemust be drawn on to defend the existingmarket and economicinfrastructure. Economic logic becomes fused with executive decision, such that anythingpolitical leaders decide to do is de jure economically rational during such a state ofemergency.Fearofwhatpoliticaluncertaintymightproducegiventime–forinstance,anewpolitical-economicparadigm–meansthatitmustbeshutdownasswiftlyaspossible,evenifthatmeans (paradoxically enough) a return to quasi-socialist acts of public expenditure andeconomicplanninginkeyareasoftheeconomysuchasfinance.Politicaldecisionpreventsaperiodofpoliticalcritique,withtheresultbeingthatthereisnomeaningful‘crisis’tospeakof.Thisalsomeansthatthereisnohigherprincipleavailablethroughwhicheconomicrulecanbejustifiedanylonger.

Conclusion:Post-liberalNeoliberalism

Since2008,Marxistscholarshavedebatedwhetherneoliberalismisaliveordeadorinsometype of ‘zombie’ state, in which a deceased economic paradigm continues to regulate andgovern us (Peck et al., 2010; Harvey, 2011). Clearly the existential state of neoliberalism,howeverdefined, is somewhat ambivalent.This chapter confirms something like a ‘zombie’diagnosis, to theextent that theorganizingcategoriesandvaluationdevicesofneoliberalismarenolongertrustedtofunctionoftheirownaccord,withoutbeingproppedupwithvariousforms of contingent political intervention. In order to operate with normative authority, theneoliberalsystemreliedonthefactthattwoofitspreconditionswereconvenientlyforgottenabout and concealed. These were, firstly, the sovereign state, which hovers as animmeasurable force in the background of all governmental strategies of economization, andsecondly, thechoosingcompetitive individualmind,which is implicitly reliedon toact inavaguelypredictableandself-interestedfashion.Thepretensethatsocietyandpoliticscouldbereorganized along the principles of the market was viable, so long as these two forcesremainedbothvigilantandalsoseeminglyabsent.Therescueofneoliberalismhasinvolvedanew focus upon both, as explicit conditions of the status quo’s survival.‘Neocommunitarianism’and‘marketexceptionalism’aretheconceptsthatIhavedevelopedto

tryandcapturehowthiscontingentrescueacthasproceeded.Thiscontingentneoliberalismsurvivesthrougharadicalrejectionofthemodernsequenceof

crisis, as a periodic interruption and recreation of stable objectivity and normativity. Theassumptionthatneoliberalismwouldmeetitsfate,justastheKeynesian-Fordistparadigmhadduring the1970s,was implicitlyderivedfromthismodernistordialecticalnotionofhistoryand epistemology. But the sheer affirmation of a given reality, and an appeal to the baldnecessity to carry on as before – repeating certain forms of calculation, reciting certainnarratives–offerapoliticalalternativetocrisisandcritique,whichclosesdownthetimeandspace of uncertainty, through exceptional and culturalist acts of state intervention. Theinfrastructure of economic evaluation can survive only if it can avoid the ‘meta-evaluation’representedbyahistoricalcrisis.Thiscallsforphilosophiesandstrategieswhichabandontheprimacyofevaluationaltogether.AsMises remarked inhis1920pamphlet that launched the‘socialistcalculationdebate’,‘thestaticstatecandispensewitheconomiccalculation’;absentchangeorprogress,andcredibletechniquesofvaluationarenolongerrequired(Mises,1990:16).Totheextentthatneoliberalismhasnowbecomearitualtoberepeated,notajudgementtobebelieved,thefactthatitstoolsnolongerfunctionisbytheby.Onethingthatiscommonboth to Schmittian political theory and to behaviourism is an acute focus on themoment ofdecision (Schwarzkopf, 2011). At various political scales, from executive leader down toindividual consumer, it is in the contingency of decision that neoliberalism’s faith is nowplaced.Sowhatformofauthoritydoesthisleaveuswith?Isitevenaformof‘authority’atall,oris

itmerelyaconditionofpoliticalexpediencyoremergency?Thefirst thingtonoteisthatthe‘liberal spirit’ of neoliberalism, as described in Chapter 3, is now weaker than ever. TheexampleofEuropeanStateAidrulesdemonstrateshowtheliberalidealofasingle,statelesscompetitive order can be very rapidly abandoned, once that order becomes subject to asufficientlydangerousthreat.Inthestateofmarketexception,thereisarapidreappearanceofnationalsovereignboundariesandpoliticalidentities.Thepsychologicalcritiqueofeconomicrationalityalsocontributestothisnew‘culturalturn’withinneoliberalism,wherebycontingentdifferencesincalculativecapacitystarttoappear,andnothingcanbepresumedabouthumansqua humans any longer. The methodological basis to evaluate and judge all competitiveactivityequallyisbeingdissolved.Initsplacearedescriptionsand‘rulesofthumb’regardinghowcommunitiescanbestbesupported,indifferentsituations.The political philosophies of communitarianism and exception have various things in

common. They both take difference as their starting point for political theory and politicalaction,ratherthananassumptionofcommonhumanity.TheybothchallengetheCartesianandKantian project of modernity, which treats rational human subjectivity as a stableepistemological andmoral basis fromwhich to reorganize society. This fiction of a stable,exterior subject,whose judgement canbe reliedon as a constitutional principle for politicsand political philosophy, is replaced with various ontological portraits of individuals invarious typesofpoliticalcommunities,withvariousunevendistributionsofphysicalpower.These are forms of authority which do not operate using a grammar of justification orevaluation. Instead, theyareperformative, repetitiveandpotentiallyviolent.Toquestion thevalidityorauthoritysourceofthoseperformances,repetitionsandviolencewouldbepartlyto

missthepoint.Nevertheless,suchquestionsmustberaisedifcritiqueisnottobesilencedalltogether,infavouroftraditionandstability,asthenextchapterwillexplore.Thecontingentneoliberalismthatwecurrentlylivewithisinaliteralsenseunjustified.Itis

propagatedwithouttheformsofjustification(betheymoralorempirical)thateithertheearlyneoliberals or the technical practitioners of neoliberal policy had employed, in order toproducearealitythat‘holdstogether’,aspragmatistsociologistsliketosay.Theeconomizedsocial and political reality now only just about ‘holds together’, because it is constantlypropped up, bailed out, nudged, monitored, adjusted, data-mined, and altered by thoseresponsibleforrescuingit. Itdoesnotsurviveasaconsensualreality:economicjudgementsregarding‘whatisgoingon’arenolonger‘objective’or‘neutral’,totheextentthattheyoncewere.Thejusticeofinequalitycannolongerbeexplainedwithreferencetoacompetitionortocompetitiveness,letalonetoamarket.Thus,powermaybeexercisedalongtheverysametramlinesthatitwasduringthegoldenneoliberalyearsofthe1990sandearlymillennium,andthesameexperts,policiesandagenciesmaycontinuetospeakto thesamepublicaudiences.Butthesuddenreappearanceofthosetwounrulyuneconomicactors,theHobbesiansovereignstateandthepsychologicalunconscious,suggeststhatthattheprojectofdisenchantingpoliticsbyeconomicshasreacheditslimit.Andyetcrisisandcritiquehavebeenstrategicallydeferredoraccommodated.Whatresourcesarethereavailableforthistochange,andtowhatextentarethesedistinguishablefromneoliberalism’sowncriticalcapacities?

_____________________________1 ‘Itmaybe, therefore, that ultimately theworkof socio-biologists (and their critics)will enableus to construct a pictureofhumannatureinsuchdetailthatwecanderivethesetofpreferenceswithwhicheconomistsstart.Andifthisresultisachieved,itwill enable us to refine our analysis of consumer demand and of other kinds of behaviour in the economic sphere. In themeantime,however,whatevermakesmenchooseastheydo,wemustbecontentwiththeknowledgethatforgroupsofhumanbeings, in almost all circumstances, a higher (relative) price for anything will lead to a reduction in the amount demanded’(Coase,2005:201).2‘AnyaidgrantedbyaMemberStateorthroughStateresourcesinanyformwhatsoeverwhichdistortsorthreatenstodistortcompetition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade betweenMemberStates,beincompatiblewiththecommonmarket’(EC,1992:Article87).

3Thetestisasfollows:

1.Istheaidmeasureaimedatawell-definedobjectiveofcommoninterest?2.Istheaidwelldesignedtodelivertheobjectiveofcommoninterest,i.e.doestheproposedaidaddressthemarketfailure

orotherobjectives?(i)Istheaidanappropriate

policyinstrumenttoaddressthepolicyconcerned?(ii)Isthereanincentiveeffect,i.e.doestheaidchangethebehaviouroftheaidrecipient?(iii)Istheaidmeasureproportionatetotheproblemtackled,i.e.couldthesamechangeinbehaviournotbeobtainedwith

lessaid?

3.Arethedistortionsofcompetitionandeffectontradelimited,sothattheoverallbalanceispositive?(EC,2008a).

4 ‘As regards the financial sector, invoking this provision is possible only in genuinely exceptional circumstanceswhere theentirefunctioningoffinancialmarketsisjeopardised’(EC,2008a:3).

5 ‘Given the scale of the crisis … the Commission recognises that Member States may consider it necessary to adoptappropriatemeasurestosafeguardthestabilityofthefinancialsystem’(EC,2008a:2).

6‘ItisofparamountimportancethatMemberStatesinformtheCommissionoftheirintentions…TheCommissionhastakenappropriatestepstoensuretheswiftadoptionofdecisionsuponcompletenotification,ifnecessarywithin24hoursandovera

weekend’(EC,2008a:12).

Afterword:CritiqueinandofNeoliberalism

Neoliberalism,asthisbookhassoughttodemonstrate,isrepletewithitsowninternalmodesofcriticism,judgement,measurementandevaluation,whichenableactorstoreachagreementsaboutwhatisgoingon.Theseareespeciallyprovidedbycertaintraditionsofeconomicsandbusinessstrategy,whichprivilegecompetitiveprocesses,onthebasisthatthoseprocessesareuniquelyabletopreserveanelementofuncertaintyinsocialandeconomiclife.Theroleoftheexpert–be it in thestate, the thinktankoruniversity–within thisprogrammeis toproducequantitativefactsaboutthecurrentstateofcompetitivereality,suchthatactors,firmsorwholenations can be judged, compared and ranked.ForHayek andmanyof the early neoliberals,marketswoulddo this job insteadof expert authorities,withprices theonly facts thatwereentirely necessary. But increasingly, under the influence of the later Chicago School andbusinessstrategists,the‘winners’andthe‘losers’weretobejudgedthroughtheevaluationsofeconomics(andassociatedtechniquesandmeasures), rather thanofmarketsassuch.Certainformsofauthorityarethereforenecessaryforthis‘game’tobeplayable.Economizedlawisusedtotestthevalidityofcertainformsofcompetitiveconduct;auditsderivedfrombusinessstrategyareusedtotestandenthusetheentrepreneurialenergiesofrivalcommunities.Buttheneoliberalprogrammeinitiallyoperatedsuchthattheseformsofauthoritycouldbeexercisedinaprimarilytechnicalsense,withoutmetaphysicalappealstothecommongood,individualautonomyorthesovereigntyofthestatethatemployedthem.Asthepreviouschapterargued,variouscrises(primarily,butnotexclusively,the2007–09

financialcrisis)haveexposedneoliberalism’stacitdependenceonbothexecutivesovereigntyandoncertainmoral-psychologicalequipmenton thepartof individuals.Aclose readingofneoliberal texts and policies would have exposed this anyway. In which case, the recent‘discovery’thatneoliberalismdependsonandjustifiespowerinequalities,andnotmarketsassuch,maybesuperficialinnature.Witnessingtheexceptionalmeasuresthatstateshavetakentorescue thestatusquosimplyconfirms thestate-centricnatureofneoliberalism,asananti-politicalmodeofpolitics.AsZizekargued in relation to theWikileaks’ exposuresof2011,‘therealdisturbancewasatthelevelofappearances:wecannolongerpretendwedon’tknowwhat everyone knows we know’ (Zizek, 2011b). Most dramatically, neoliberalism nowappears naked and shorn of any pretence to liberalism, that is, it no longer operates withmanifestapriori principles of equivalence, againstwhich all contestants should be judged.Chapter 2 identified the ‘liberal spirit’ of neoliberalism with a Rawlsian assumption thatcontestants are fomally equal before they enter the economic ‘game’.Within theKantian or‘deontological’traditionofliberalism,thisisthecriticalissue,anditplayedapartininternaldebateswithintheearlyneoliberalmovement.Forthosesuchastheordo-liberals,whofearedthe rationalizing potential of capitalistmonopoly, the taskwas to build an economy aroundsuchanapriori liberal logic.Ensuringsomeequalityofaccess to theeconomic‘game’,viathe active regulation of large firms and ‘equality of opportunity’ for individuals, is howneoliberalism’s liberalism has most commonly been presented politically. As Chapter 3

discussed, the American tradition of neoliberalism – as manifest in Chicago Law andEconomics – abandoned this sort of normative liberalism, in favour of a Benthamiteutilitarianism, inwhich efficiency claims trumped formal arguments. The philosophical andnormativeelementsofneoliberalismhave,intruth,beenindeclinesincethe1950s.The ‘liberal spirit’ of neoliberalism was kept faintly alive by the authority that was

bestoweduponmethodologies,auditsandmeasuresofefficiencyanalysis.Theliberalapriorijustaboutsurvivedinthepurportedneutralityofeconomicmethod(ofvariousforms),tojudgeallcontestantsequally,evenwhiletheempiricalresultsofthesejudgementshaveincreasinglybenefittedalready-dominantcompetitors.Thisnotionreliedonafundamentalepistemologicalinconsistencyofneoliberalism,betweentheHayekianargumentthattherecanbenostableorobjective scientific perspective on economic activity, and themore positivist argument thateconomics offers a final and definitive judgement. American neoliberalism broadens the‘arena’ in which competition is understood to take place, beyond definable markets, andbeyond the sphere of the ‘economy’, enabling cultural, social and political resources to belegitimatelydraggedintotheeconomic‘game’,andaclusteringofvariousformsofadvantageinthesamehands.Monopoly,inWalzer’sterms,becomestranslatedintodominance.Thelossofneoliberalism’spretencetoliberalismtransformsthetypeofauthoritythatcan

beclaimedbyandonbehalfofpower,be itbusiness, financialorstatepower. Itmeans theabandonment of the globalizing, universalizing, transcendental branch of neoliberalism, inwhich certain economic techniques and measures (including, but not only, prices) wouldprovide a common framework through which all human difference could be mediated andrepresented. Instead, cultural andnational difference–potentially leading to conflict – nowanimatesneoliberalism,butwithoutacommonlyrecognizedprincipleagainstwhichtoconvertthis into competitive inequality. What I have characterized as the ‘violent threat’ ofneoliberalism has come to the fore, whereby authority in economic decision making isincreasingly predicated upon the claim that ‘we’ must beat ‘them’. This fracturing ofuniversalism, in favour of political and cultural particularism, may be a symptom of howcapitalistcrisesoftenplayout(Gamble,2009).Onereasonwhyneoliberalismhassurvivedaswell as it has since 2007 is that it has always managed to operate within two rhetoricalregisters simultaneously, satisfying both the demand for liberal universalism and that forpoliticalparticularism,sowhentheformerfallsapart,aneoliberaldiscourseofcompetitivenationalismandtheauthorityofexecutivedecisionisalreadypresentandavailable.One argument against the ‘sociology of critique’ is that it involves a capitulation to the

forcesofpowerthat‘criticalsociology’wastraditionallypitchedagainst.Butunlesswetakeseriously the capacity of regimes of economic power to assert themselves successfully incoherentnormative,politicalandphilosophicalterms,thenwewillbeunabletoexplainwhytheyarequiteasresilientastheyare.Thepoliticalsuccessofneoliberalismliespartlyinitscapacity to harness arguments aboutboth justiceand political transformation, and to locatethese within an economic contest, such that the demand for justice is reframed in terms of‘meritocracy’ and the urge for political action is channelled into ‘strategic leadership’.Recognizing the internalmodes and conventions of critique, that are immanent to neoliberalauthority,helpstocastsomelightonthegreatquestionofrecentyears–whyhasthepre-2007paradigmsurvivedtotheextentthatithas?Butitmayalsohelpustoimaginehowcritique–

beitliberalorotherwise–mightbebetterdisentangledfromtheinstitutionsandregimesthathave sought to possess it. While there is an obvious and necessary role for critique ofneoliberalism today, there is also some benefit in a hermeneutic excavation of the forms ofcritical authority that neoliberalism has claimed ownership of, but is now graduallyrelinquishing,orwhichithasstruggledtopossessinthefirstplace.Sowhatdotheselooklike,where might they be found, and how might they differ from their economized, neoliberalmanifestations?

TheFateofLiberalCritique

Neoliberalism’s relationship with liberalism was always somewhat ambivalent. The moralmetaphysics of the latter was treated with suspicion, by the pragmatists, behaviourists andpositivistsoftheneoliberalmovement.Outsideofordo-liberalism,rulesandlawswereonlyrarely recognized as legitimate in and of themselves (for instance, in the case of anti-cartelrules).Followingthebankingcrisis,itnowseemsthatneoliberalismhasbeende-coupledfromliberalismaltogether.Thishasopenedupspacefornascentpoliticalmovementstochallengecapitalism, fromwithin the ‘liberal spirit’ of critique.Arguing that the system, as currentlyorganized,isnot‘fair’,thattherules‘ought’toapplyequallytotherichastothepoor,thatthegamehasbeen‘rigged’byelites,representsamanifestationofliberaljudgementoperatinginamanner that is antagonistic to neoliberalism, and not constitutive of it. Critiques of taxavoidancebythewealthyaretypicallyliberal, inthesensethattheydemandarestorationoftherules,imposedwithaspiritofaprioriequality.Accordingtothiscritique,eliteshadbeengradually and tacitly exempting themselves from the liberal spirit ofneoliberalism formanyyears,priortothefinancialcrisisof2007–09.Thesesamecritiquesalsopointprecisely tohowneoliberalismcouldinprinciplerebuild

itselfinanauthoritativefashion.AsBoltanskiandChiapelloargue,‘thepricepaidbycritiqueforbeinglistenedto,atleastinpart,istoseesomeofthevaluesithadmobilizedtoopposetheformtakenbytheaccumulationprocessbeingplacedattheserviceofaccumulation’(Boltanski&Chiapello,2007:29).Thecritiqueof‘unfairness’inthecurrentpolitical-economicsystemachieves somuch public reach because neoliberalism has, at least for the time being, beendenudedof its liberalqualities.Preservingit in its‘contingent’formhasbecomethegoalofneoliberalgovernment,andnotrunningitinitsquasi-transcendental,universalizingform.Butif the rules were applied fairly again, if economic judgement (by regulators, credit-raters,auditorsetc.)cametoberestoredtothestatusofa‘neutral’and‘objective’perspective,andifeliteswere subjected to the same set of rules as everyone else,would that really bring thenormativecritiquetoaresolution?The danger with this liberal critique of neoliberalism is that it can overlook Michael

Walzer’sdistinction,notedinChapter2,between‘dominance’and‘monopoly’.Monopolyisaformofinequalitythatislimitedinitsinstitutionalreach,andthereforeconfrontsotherformsofinequality,thatareantagonistictoit.Hencemoneydoesnottranslatedirectlyintopoliticalpower,whichdoes not translate directly into cultural capital, though in no case is the gooddistributedequally.Dominance,ontheotherhand,involvesoneformofmonopolydictatingallothers.Intotalitarianregimes,politicalpowerstrivestodictateallotherdistributionsofworth

and recognition, and under existing neoliberalism, economic and monetary evaluation, andhence economic inequality, infiltrates previously separate spheres.Thiswas not necessarilyhowneoliberalismhadtoturnout.Thetraditionofneoliberalismmanifestinordo-liberalism,SimonsandtheearlyHayekproposedstrictlimitstomarketsandmarketpower,overseenbyjudicial rule. The price system could not practically be used to value everything. Butincreasingly it was economic evaluation, and not markets as such, that became the criticalneoliberaltestofworth,andwithsufficientmethodologicalinnovation,thereisnowherethateconomicscannotbeextended.Noteverythingcanbecomecommensurablewithinthemarketprice system (for instance, ‘public goods’ such as pollution and national security cannot beboughtandsold),buteverythingcanbecomecommensurablewithineconomicanalysis,evenculture,asthestudyofnationalcompetitivenessdemonstrated.Dominance, in this sense, invariably undermines the conditions of liberal legitimacy,

becauseiteventuallyseekstodominateevenitsownadjudicators,andthereforeitspotentialvalidators.Under neoliberalism, economic evaluation tools andmoney become the suprememechanisms of comparison and commensuration – so powerful, in fact, that they infect thebodiesresponsibleforrepresentingandjudgingthemarketeconomyitself,suchasaccountants,auditorsandcreditraters.Forexample,thequestforfeesonthepartofserviceprovidersandevaluatorsissuchthatthe‘objectivity’ofevaluationsandreportcannolonger‘holdtogether’asaviableconvention.In2013,theUK’sCompetitionCommissionexpressedconcernthatthemajoraccountingfirmsweretoosociallyconnectedtothemajorbankstobeabletoauditthemobjectively (CompetitionCommission,2013).Legitimatepower, in a liberal sense, requiressome‘other’throughwhichitslegitimacyisjudged,testedandmadepubliclyapparent.Somesortofconstitutionornormativeframeworkmustbeexternaltothepowerthatistobejudged.Butthismeansthattheremustthereforebemorethanoneformofpower,morethanonesourceofauthority,orelsethevalidityofpoliticalactioncannotbegauged.Ultimately,therecanbeno single ultimate source of authority, a paradox that is also responsible for the Schmittianexception, an ontologically ambivalent situation that is neither internal nor external to thejuridicalorder.Critiqueofneoliberalismcannot simply focuson itsgeneral ‘unfairness’, as if legitimacy

could be restored if everyone were ‘playing by the same rules’. The problem is that theproduction and enforcement of rules is now internal to the game. There is no longer ajuridicaloutside,thankstostrategicactsofrationalizationandpositivistcritiquesoftheveryideaofany‘higher’or‘juridical’sourceofauthority,externaltoeconomicprocesses.ChicagoLawandEconomics scholarsexplicitlyattackedsubstantive liberalnotionsof justice, rightsandprocedurallegitimacy.Whilenotaddressedinthisbook,theVirginiaPublicChoiceschoolsimilarlydismantlednotionsof the‘public interest’orethosofgovernmentofficials, throughexpanding neo-classical economics into political science (Amadae, 2003). Meanwhile, theauthorityoftheentrepreneurorbusinessleadertocreatetherulesthatothersthenhavetoplaybyisasimilarlyimmanentistandeconomisticaccountofnormativity.Thevisionofa‘meritocratic’societyunderminesitsownconditionsofpossibility,ifthere

is only a single sphere of competition to be dominated. Only if there are multiple andincommensurablespheresofinequality,withmultiplemeasures,judgesandnotionsofvalue,canliberalismbepracticallysavedinanymeaningfulway.Thismeansradicallyreducingthe

scopeofeconomicsagain,andrediscoveringrivalmeasuresandtheoriesofvalue.Aliberalseparationofpowersneedstobemirroredinaliberalseparationofvaluationtechniquesandprinciples,probablyalsoofmonies.Thesocialindicatorsmovement,whichoffersalternativeand sometimes incommensurable audits of national ‘performance’ and policy, provides anexample of how this can be done (DeNeufville, 1975; Innes, 1989). The growth of socialvaluationtechniques,suchassocialimpactassessmentandsocialreturnoninvestment,showsthat the value of the ‘non-economic’ can be recognized and measured independently. Butregardlessofthecriticalimperativesunderlyingthesetechniques,theytooareliabletobeco-opted, in support of some broader notion of economic efficiency. The ‘neocommunitarian’discoveryofthe‘social’,describedinChapter5, isamanifestationof this.Competitivenessevaluationsalsoincludeplentiful‘non-economic’resourcesanddata,intheirassessmentofanation’soverallcompetitiveness.When intrinsic values are reduced to metrics of value, the danger of this type of

commensurationwitheconomicsandprices isever-present.But ifvaluesarenot reduced tometrics of value then they forego certain rhetorical and performative opportunities, that anumbers-obsessedpublicspheremightotherwiseoffer.Astatementsuchas‘artforart’ssake’canbeportrayedaselitist,whilea legal-normativecommitment tohuman rightsor juridicalprocedurecanappeartobeaspecialminorityinterestorlobbygroupthatis‘outoftouch’withpublic sentiment. Intrinsic valuation has lost publicly plausiblemetaphysical substrates, butextrinsic,utilitarianvaluationispurebabble,unlessithassometacitlyassumedconnectiontoa realitywhich exceeds it. The performative and rhetorical capacities of numbers are nowbecoming explicit, in ways that make the possibility of ‘pre-interpretive’ empirical ‘facts’about society far less plausible. Civicmovements, from across the political spectrum, nowgeneratetheirownnumbersforrhetoricalpurposes–suchasthe‘99%’–andcirculatethemviasocialmedia,inwaysthatareaestheticallydesignedtogainattentionandpersuasion.Therhetoricalandpoliticalelementsofeconomictheoriesandmethodologieshavealsomovedtothe foreground, corroborating studies of economic performativity (Callon, 1998), such thattheories are nowpublicly discussed in terms ofwhether they can survive politically, ratherthanwhetherornottheyareobjectivelyvalid.ThediscoveryinApril2013thatakeypaper,endorsingausteritypoliciesandwhich the IMFandBritishTreasuryhadbothattachedgreatauthority to, was based on a calculative error attributable to an Excel spreadsheet, is onedramatic exampleofhow theperformativityof economics andcalculativedevices isnowamainstreampoliticalissue(Reinhart&Rogoff,2010).Mainstreampolicythinkingisbeginningtoaddresstheroleofmodelsandmeasuresinfinanciallife(e.g.Haldane,2012b).Neoliberalism is therefore becoming a victim of its own success, inmaking quantitative

economic evaluation the ‘ultimate’ test of validity across all realms of governance anddecisionmaking.Thepricepaid for this economic imperialism is that,once the languageof‘price’, ‘competitiveness’ and ‘efficiency’ is the lingua franca of public political discourse,then it itself becomes imbuedwith all of the ambiguity and rhetorical cleverness forwhichpoliticalspeechwasfearedbytheneoliberals.Itisnolongerclearonwhatbasisanacademiceconomist–oranyotheracademic–canclaimsufficientdistancefromeconomiceventsandpolicies,inordertospeakwith‘objective’authorityonastateofaffairs.Chapter3describedhow anti-trust agencies went to great lengths to allow in-house economists to operate in a

secluded,quasi-academiccultureofesoterictheoreticaldebate.Buttheauthorityofacademictheoriesisnolongertakenforgranted,andalternative,‘amateur’andcivicmethodologiesareemergingtochallengethoseofthe‘professional’socialsciences.Thiswasamatterofpublicdebate following Barack Obama’s 2012 Presidential election victory, which had beenpredictedwithunnervingprecisionbyNateSilver,abloggerwhoanalysedvariouslargedatasets.Asmethodologiesandmeasuresmultiply,sothepossibilityofbuildingaliberalismuponquantitativemeasurebecomesmoredistantandnotless,iftherecanbenoaprioriagreementthat themeasure is the right one, and is being applied in the rightway. The ‘audit society’promisedtoreplacejudgementwithnumbers:nowweencountersomuchenumeration,thatwefaceaseverequestionastohowtojudgewhichnumbersgenuinelymatter,andhowmuchtheymatter.Theriseof‘BigData’isexacerbatingthis.Apurelyimmanentistandpoliticalviewofnumbers emerges instead, meaning that it is no longer clear where any new liberal‘equivalence principle’ will emerge from. No doubt it may reappear in the language ofneuroscience, with accompanying measures of value. But for the time being, we mightironically paraphrase Milton Friedman’s 1953 methodological essay and say that ‘overnumbersandmeasures,mencanonlyfight’.

TheFateofPoliticalAction

IarguedinChapter5thataformof‘contingentneoliberalism’nowexisted,acombinationofa‘stateofmarketexception’and‘neocommunitarianism’.Bothofthese,indifferentways,seekto base economic rationality on some tacitly political notion of the decision. It is only thedecisionofexecutivesovereignpowerstorescueandpreservetheneoliberalstatusquoatallcoststhatkeepsitalive:thisisthestateofmarketexception.Meanwhileindividualshavetobetaughtandnudgedtodecide(or‘choose’) inacertainutility-maximizingway,asamatterofcultural preservation: this is neocommunitarianism. A longer-standing neoliberal tradition(examinedinChapter4)hadalsograntedacertainpoliticalauthoritytodecisionmaking,intheform of the strategic leader or entrepreneur, who could rearrange social and economicinstitutions according to their own will. The national competitiveness paradigm sought topersuade national leaders to view their own roles in similarly business-orientedSchumpeterianterms.Onequestion,asweconsiderthepossibilityofalternativestoandwithinneoliberalism,ishowmightthenotionofpoliticaldecisionmakingoractionbeharnessedinways that broaden the horizon of political possibility. This is partly about de-coupling thenotionofthe‘political’fromthatofentrepreneurship,andde-couplingthenotionofthe‘social’fromthatofcognitiveandbehaviouralpsychology,whereneocommunitarianismhasplacedit.Achieving this will require a critical reexamination and rethink of the Hayekian

understanding of uncertainty, in both its political and its economic forms. Hayek’s coreproposition,whichweaves through subsequent neoliberal thoughtwith variousmutations, isthateconomicuncertaintywillprotectagainsttheimpositionofpoliticalplans.Therefore,thepreconditions of economic uncertainty need to be constructed and secured by any meanspossible.ButasHayekhimselfwasaware,thisisitselfaprojectofpoliticalplanning,anditssuccessliesinthefactthatithascometoappearimmutableandpermanent.Arguably,itisnowsopolitically successful (at least judged in termsof its eliminationofpolitical alternatives)

thatitsuffersthesamefateofthesocialistplanningthattheneoliberalswereinitiallyinspiredtocombat,inthatitisunderminingthepossibilityofeconomicprogressandinnovation.IntheUnitedStatesandEurope,theneoliberalprojecthasbecomebothpoliticallyandeconomicallystagnant, suggesting that its political substrate (which insists that there is only one way togovern the economy) has now overwhelmed its economic veneer (which initially suggestedthat the futurewas radically uncertain).AsGraeber succinctly argues, ‘whenever there is achoicebetweenoneoptionthatmakescapitalismseemtheonlypossibleeconomicsystem,andanother thatwould actuallymake capitalism amore viable economic system, neoliberalismmeansalwayschoosingtheformer’(Graeber,2013).Neoliberalism rests on an idiosyncratic political anthropology, in which individuals and

groups confront the future by way of plans. The assumption is that human beings arepredisposedtoimposetheirwilluponothers,thatis,theyarenot‘naturally’liberal,somustbeplacedinframeworkswhichforcethemtobe.Challengingneoliberalpoliticsmustthereforealso involve offering an alternative political anthropology, in which political actors arecapable of injecting vitality and surprise into society, without necessarily dominating oneanother,eitherasmanagersorastyrants.Thisneedstobefedintothedesignandgovernanceof economic institutions. This more Arendtian vision of politics bestows a capacity fordecisive, inventive,autonomouspoliticalactionuponallhumans,andnotonlyon thosewhoare‘leaders’or‘sovereign’intheSchmittiansense.Thenotionofthe‘plan’astheenemyofeconomic liberty now appears somewhat outdated, following the demise of state socialism.Themoreurgentobjectofcritiqueisthepoliticalinsistencethatthesamedominanteconomicpowers must be protected and secured at all costs, for the forseeable future. This isneoliberalism’s own equivalent of the ‘plan’, which now resembles Brezhnev-era statesocialism,initsemptyinsistencethat thefuturemustbe thesameas thepresent.Businessesthemselves impose bland and deadening plans upon society, via credit relations, consumercontracts andwork contracts,which are all designed to restrict the individual’s freedomofchoiceandnotexpandit.Itisnotthedynamismofthepricesystemthatislikelytoupsetthisrepetitionofthepresent,butthedynamismofpoliticalactionandtheinventionofalternativeeconomicinstitutions,whichdonotconcentratethecapacityfor‘decisions’and‘action’onlyintheir‘leaders’ortheir‘entrepreneurs’.Entrepreneurship, as an ethos, contains a Schmittian ‘violent threat’, inasmuch as the

entrepreneur acts without justification, in ways that are animated entirely by a desire forvictory, rather than forpeaceor fairness.Theentrepreneur simplydesires that theeconomicstatusquogetre-made,includingitsrulesandconditions.Forthisreason,thereisundoubtedlypolitical potential in entrepreneurship to introduce something radically new, and not simply‘more innovation’ in the sense favoured by business and neoliberal policy makers.Entrepreneurshippotentiallymoves beyond a zone of ‘competitive uncertainty’ (of the formvalorizedbyHayek)andintooneof‘politicaluncertainty’,whichchallengestheverytermsonwhich choice, freedom and evaluation are organized. In this respect, entrepreneurship hasalways posed a tacit threat to neoliberalism, while also being celebrated. This threat ismanagedbyofferingcelebrity,extremewealthandpoliticalstatustosuccessfulentrepreneurs(for instance, inviting them to Davos), as ways of channelling the entrepreneurial andmilitaristic ethos into the existing ‘game’, as opposed to creating new political conditions

altogether. The phenomenon of ‘social entrepreneurship’ (in which non-monetary goals arepursued by new enterprises) represents a small shift away from this. However, were thedisruptive entrepreneurial ethos channelled into the creation of radically new institutionalforms,currencies,formsofpropertyandrulesofexchange,thenitpotentiallywouldabandonthe limits of ‘competitive uncertainty’ altogether. The creation of ‘real utopias’, such asdemocraticallygovernedfirmsandpublicbudgets,offersglimpsesofthis(Wright,2010).Thepoliticalshortcomingofentrepreneurshipisthatitremains,forthemostpart,hampered

by its assumption that the new can only be brought into existence by a small minority ofindividuals,whoseauthoritystemspurelyfromtheir‘talent’,‘decision’or‘strategy’.Todate,this has largely remained a feature of the social entrepreneurship and social innovationmovement.ASchumpeteriananthropology,whichaffirmsthefacticityofhumandifference–inwhichmostare inclined toobeyroutines,butasmall feware inclined to inventnewones–underpinsmost visions of entrepreneurship, splitting political-economic agents into a smallminority of narcissistic innovators, and a large majority of depressive followers. For thisreasontheterm‘entrepreneur’maybetoocompromisedtobepoliticallytransformative.Thesamemaybe trueof the‘innovation’and‘creativity’ thataresobelovedofcorporateelites.Butifanalternativepoliticalanthropologywereharnessedandchannelledintothedesignandconstruction of new economic institutions, one which started from the (liberal-spirited)assumption thatall individualshave ideas,decision-makingcapacityandvalue tocontribute(albeitofincommensurablevarieties),thismightdisruptinwaysthataregenuinelyuncertain,bothinaneconomicandapoliticalsense.Atpresent,theactionsanddecisionmakingofthe‘non-entrepreneurial’majorityareviewed

via the lens of economic psychology, whether that be Human Resource Management andmarketingonthepartofbusinessmanagers,or‘nudging’andcognitivebehaviouraltherapyonthepartofpublicpolicymakers.Thisisacritique‘within’neoliberalismwhichposesitsownparticular challenge for the critique ‘of’ neoliberalism. The assumption of the appliedeconomicpsychologistsisthatmostpeopledonotreallyknowwhattheywant,donotreallyknowwhat theyaredoing,andareunhappydue tocognitiveorneurochemicalmalfunctions.The recognition on the part of policy makers that consumers and citizens can bepsychologicallymanipulated, through the provision of cognitive cues or drugs, represents apeculiarneoliberalacquisitionofatheoryofcriticalrealism(orfalseconsciousness),whichisentirelyopposedtotheearlyneoliberalassumptionthattherewasnohigherbasisonwhichtobaseknowledge,beyondordinaryconsumerperspectives.Justaspoliticalactionneedstobede-coupledfromaspecificnotionofentrepreneurship,thatpresumessomeheroicvisionofanunaccountable leader, soalsodoes itneed tobede-coupled from thisnotionofachoicemaker,whosuffersfromcertainneurologicalorculturaldefectsofcognition.Thiswouldmeanhighlightingthewaysinwhichindividualsdoknowwhattheywant,anddoknowwhatthey’redoing, but are severely limited by circumstances, and not by their brains or their cognitiveequipment. It requires illuminating the latent relationship between unhappiness and critique,suchthataphenomenonsuchasdepressioncanbereactivatedasresistance,ratherthanasre-engagement.Anewvarietyofliberalagencythereforeneedstoberediscoveredorinvented,inwhich rational action is taken seriously as a sociological, political phenomenon, and is notreduced to thenormativeprescriptionof amathematical equation, tobeused to test choice-

makinginlaboratoriesagainst.Conventiontheoryisanimportantresourcehere,asittakesthestatementsandjudgementsofallactorsseriously,withouteverpresumingthattheyareinvalidbyvirtueoftheircontext.Theattempttounderstandwhatpeoplearedoing,ontheirownterms,takes on a newly political dimension, in societies which have made ‘behaviour change’ acrucialgoalofpublicpolicy.

AfterCompetitionandCompetitiveness

Chapter 2 argued that competition is privileged under neoliberalism, because of certainparadoxical qualities that distinguish it. Firstly, enforcing competition appeared to offer thestateauniqueeconomicrole,thatwasbothactiveandpassiveatthesametime.Secondly,itseemed to secure a paradoxical combination of equality and inequality amongst persons,wherebytheyareformallyequal,butcontingentlyunequal.Andthirdly,itappearedtoofferalogical route between an ‘over-socialized’ vision of capitalism (inwhich it is the outcomeonlyofrulesandhierarchies)andan‘under-socialized’vision(inwhichitisdeterminedonlyviaindividualrationality).ContrarytothedepictionofneoliberalismasaformofDarwinisticornaturalisticfaithincompetition,whicharisesassoonasthestate‘getsoutoftheway’,itisimportant to remember the constructivist elements of this approach to competition, and itsreliance on the state to secure and enhance competitive processes (Mirowski, 2009). As IarguedthroughChapters2,3and4,thepoliticsofcompetitionandcompetitivenessconsistsofcreatinganecessarytensionandbalancebetweenthe‘liberalspirit’(formalequality)andthe‘violentthreat’(contingentinequality)ofpoliticalauthority,whichservetoharness(andhencealsoconstrain)both.Onelessontobetakenfromneoliberalism,forpoliticalmovementswhichseektochallenge

it,isthatbothindividualagencyandcollectiveinstitutionsneedtobecriticizedandinventedsimultaneously. Political reform does not have to build on any ‘natural’ account of humanbeings,butcanalsoinventnewvisionsofindividualagency.Thedesignandtransformationofinstitutions, suchasmarkets, regulatorsandfirms,donotneed to takeplaceseparately fromthis project, but in tandem and in dialoguewith it.A productive focus of critical economicenquirywouldbethoseinstitutionswhichneoliberalthoughthastendedtobeentirelysilenton.These are the institutions and mechanisms of capitalism which coerce and coordinateindividuals,therebyremovingchoicesfromeconomicsituations.Theeraofappliedneoliberalpolicymakinghas recently started to appear as one of rampant ‘financialisation’ (Krippner,2012). So it is therefore peculiar how little attention is paidwithin neoliberal discourse toinstitutions of credit and equity, other than that they should be priced and distributed viamarkets. Likewise, the rising power of corporations has been sanctioned by theories thatactually say very little about firms, management, work or organization, but focus all theirattentionontheincentivesandchoicesconfrontingafew‘agents’and‘leaders’attheverytop.Despitehavingpermeatedourcultural liveswithvisionsofcompetition,andalsopermeatedpolitical institutions with certain economic rationalities, the dominant discourse ofneoliberalism actually contains very little which represents the day-to-day lives andexperiences of those who live with it. This represents a major empirical and analyticalshortcomingoftheeconomictheoriesthatareatworkingoverningus,andultimatelyaserious

vulnerability.A further lesson to be taken from neoliberalism, for the purposes of a critique of

neoliberalism, is that restrictive economicpracticesneed tobe strategically and inventivelytargeted and replaced. In the1930s and1940s, ‘restrictive economicpractices’wouldhaveimplied planning, labour organization and socialism. Today our economic freedoms arerestrictedinverydifferentways,whichstrikeattheindividualinanintimateway,ratherthanatindividualscollectively.Inthetwenty-firstcentury,theexperienceofbeinganemployeeoraconsumer or a debtor is often one of being ensnared, not one of exercising any choice orstrategy.Amidstalloftheuncertaintyofdynamiccapitalism,thissenseofbeingtrappedintocertain relations seems eminently certain. Releasing individuals from these constraints is aconstructiveproject,asmuchasacriticalone:thisiswhattheexampleoftheearlyneoliberalsdemonstrates.Lawyerswillingtorewritetherulesofexchange,employmentandfinance(as,forinstancetheordo-liberalsredraftedtherulesofthemarket)couldbeoneofthegreatforcesfor social progress, if theywere ever tomobilize in a concertedway.A formof collectiveentrepreneurship,which–likeindividualentrepreneurs–saweconomicnormativityasfluidand changeable, could produce new forms of political economy, with alternative valuationsystems.The reorganization of state, society, institutions and individuals in terms of competitive

dynamicsandrules,succeededtotheextentthatitdidbecauseitofferedbothavisionofthecollective and a vision of individual agency simultaneously. It can appear impermeable tocritiqueorpoliticaltransformation,ifonlychallengedononeoftheseterms.Forinstance,ifadifferentvisionofcollectiveorganizationisproposed,theneoliberalrejoinderisthatthismustinvolveabandoningindividual‘choice’orfreedom.Orifadifferentvisionoftheindividualisproposed, the neoliberal rejoinder is that this is unrealistic given the competitive globalcontext.Dispensingwithcompetition,asthetemplateforallpoliticsandpoliticalmetaphysics,is therefore only possible if theory proceeds anew, with a political-economic idea ofindividual agency and collective organization, at the same time.What thismight allow is adifferentbasisfromwhichtospeakofhumanbeingsasparadoxically thesameyetdifferent.Theproblemofpolitics is that individuals arebothprivate, isolated actors,with tastes andchoices, and part of a collectivity,with rules and authorities.An alternative answer to thisriddleneedstobeidentified,otherthansimplymorecompetitionandmorecompetitiveness,inwhichisolatedactorstakenoresponsibilityforthecollective,andthecollectiveisimmunetotheprotestationsofthoseisolatedactors.

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Index

Agamben,Giorgio,173–176,179–182anti-equivalenceprinciple,55anti-trustpolicy,40–44,59–60,71–75,78–84,87–104,116–119,128,178;Chicagocritique

of,88–95,104Arendt,Hannah,6,196Aristotle,161–164Austrianschoolofeconomics,29,43authority:ofeconomicsandeconomicexperts,55,67–67;institutionalclaimsto,22–23;legal,

162;managerial,145; neoliberal, 56–59,62,85,95–96, 151–152, 178, 183–184, 190;political,32,147,161;quasi-liberalandquasi-violentsourcesof,38;ultimatesourceof,193;seealsonormativeauthority

Bain,Joseph(andBainianeconomics),87–90,93,124–126BankofEngland,169bankingcrisis(2007–09),2,6,26,30,35,107,147,149,153–157,167,172–173,177–184,

188,191Baxter,William,93–94Becker,Gary,21,81,84–85behaviouraleconomics,165–167behaviourism,8,13,185–186benchmarking:offirms,119;ofnations,120–124Bentham,Jeremy,8,28–29,71–72,83,165,189Bernanke,Ben,172‘BigData’,169–170,195Blair,Tony,36–37Böhm,Franz,76Boltanski,Luc,11–17,31–32,59,144,147–50,161–162,174,191Bork,Robert,79–84,89–94BostonConsultingGroup,117Braudel,Fernand,46Brenner,N.,134Brown,Gordon,172bureaucracy,7,51,53,101,120,146businessschools,115–18;seealsoHarvardBusinessSchoolbusinessstrategy,112,119,124–126,146,173,188;foranation,124

Caliskan,K.,22Cameron,David,167Cantril,Albert,166capitalism,19,36–37,46–47,50–53,135,149,189,196,199;corporate,47cartels,42,75,98‘casemethod’ofteaching,117–118,125cheatingincompetitivesituations,64,66Chiapello,Eve,11,147,191Chicagoschoolofeconomics,13,22,28–29,38,42–45,51,68,70,74,85,105,125, 165,

172,178–180;critiqueofanti-trustpolicy,88–95,104;‘secondgeneration’,78–80,188;seealso‘LawandEconomics’movement

chiefexecutiveofficers(CEOs),110,112,145‘choicearchitectures’,166–167Christensen,Roland,118civilrightsandliberties,76Clausewitz,KarlMarievon,117Clinton,Bill,36–37‘clusters’ofbusinesses,127,139coaches,67Coase, Ronald (andCoasian economics), 38, 47–51, 54–55, 68–76, 79–84, 88–91, 96–97,

100,152,159–160,167,178Coasianparadox,107collectiveorganization,200–201commensuration,62,72–73,120,192–193‘commongood’concept,19,32,105,161communitarianism,32,160–164,171,186;seealsoneocommunitarianismcompetition:authorityprovidedby,38;andcorporatecapitalism,47;definitionsof,72,87,89,

92, 100–103, 113; effectsbased approach to, 95, 180; limits to, 46; paradoxes of,40–42;seealsomarketcompetition

CompetitionCommission,UK,192competitionlaw,40–42,88competitionstates,113competitive activity: legitimate and illegitimate, 56; need for judgement or critique of, 59;

pragmaticsof,57–59;rulesofandsenseoffairnessin,57–69competitiveadvantage,113,125–127;ofanation,127competitiveenvironments,116–119competitivepsychologies,54–56competitivestrategy,64–67,110–114,135–137,159competitiveuncertainty,149–150,155,171–172,197competitiveness, 37, 44, 173; definition of, 113; international comparisons of, 111–112,

121–123,128–130,137–140,193; liberal spirit of, 59–63; quantitative and qualitativeevaluationsof,138;spreadingof,129–130;asatraitofindividuals,47–48;intheUSandinEurope,131–133,137;useofterm,108–109

competitivenessagenda,132–133competitivenessinstitutions,133–135‘complete’competition(Eucken),75consultantsoneconomicpolicy,107,124–127,130–132,138–146consumerwelfare,55,90,94,178contestabilityofarguments,81conventiontheory,11–20,25,31–33,55,144,148,156,174,199‘conversations’,142–143cost-benefitanalysis,181CouncilonCompetitiveness,132‘creativedestruction’process,52creditratingagencies,151crime,viewsof,19crises,economic,18,149;seealsobankingcrisis‘criticalcapacity’,sociologyof,11;seealsoconventiontheorycriticaltheory,9–10

data-mining,170Davosmeetings,108,130,133,197‘delphisurvey’technique,123,141democraticprocesses,135–136,145;weaknessof,135DepartmentofJustice(DOJ),US,87,90–95,98–103Director,Aaron,70,78–83,88–90,94,103disenchantmentofpoliticsbyeconomics,4,8,10,13,26–28,32,111–112,151,156,187‘dominance’(Walzer),36,44,56,68,191–92

earlyneoliberals,38,50,54,68,71,78,80,87,89,188–9,198–200Easterlin,Richard,165–6economicimperialism,194economics:centralpurposesof,75,96,177;seealsoliberaleconomics;positivisteconomicseconomization,157;ofdecisions,111,73,102,178,188;of liberal authority,106; of rules,

111;ofthestate,153efficiency:definedasconsumerwelfare,94;economic,38,72,91,94,104,106;maximization

of,50,159,178;asproxyforjustice,83Eisenhower,DwightD.,121empiricism,13entrepreneursandentrepreneurship,12,47,61,69,113,119,143,173,178,188,195–200

entrybarriers,105,124–5epistemology,97equivalence,principleof,12;seealsoantiequivalenceprincipleethicalcommitments,7Eucken,Walter,42,75,77,105Eurocurrency,173EuropeanCommission,71,75,89,107,172;ChiefCompetitionEconomist,99,101;StateAid

rules,186EuropeanManagementForumseeWorldEconomicForum‘everydayneoliberalism’(Mirowski),10exception,statesof,183exploitation,opportunitiesfor,106,153externalities,80

fairnessand‘fairplay’,62,105–6falsifiabilityofarguments,81Farmer,Richard,115,132,135Fechner,Gustav,165FederalTradeCommission(FTC),42,87–95,98–103;BureauofEconomics,93–4financialcrisis(2007–09)seebankingcrisis‘fiveforces’model,125Florida,Richard,139‘forum’model,130–1Foucault,Michel,21,24,43,45,76,157Fourcade,Marion,22FreeMarketStudy,78Freiburgschoolofeconomics,38,42,75,78Friedman,Milton,8,62,86,135,178,195Friedman,Thomas,7–8‘friend-enemy’distinction,65,144,147,174–5Fuld,Dick,153

gametheory,43,117games,competitive,57–8‘gaming’,64,66Garelli,S.,134GEHoneywell,95GeneralDynamicsruling(1974),92Germany,44,172globalcompetitivenessreports,108,122,125

Goffman,E.,57GoldmanSachs,153Goodwin,Fred,153governance,neoliberal,153governmentality,24Graeber,D.,196Gray,John,118Greece,173Greenspan,Alan,164grossdomesticproduct(GDP),18–19GTESylvaniaruling(1978),92

happinesseconomics,165–7Hart,Liddell,117HarvardBusinessSchool(HBS),117,124–5Harvey,D.,114Hayek,Friedrichvon(andHayekiantheory),20,51,68,70,76,78,97,118,130,135,159,

165,178,192,196–7HBOSbank,172Hegel,G.W.F.,161Heidegger,Martin,161hermeneutics,roleof,31‘heterarchy’(Stark),17Hobbes,Thomas(andHobbesiantheory),23,41,173,187homoeconomicus,152homopsycho-economicus,165,169–70humancapital,21,144

industrialpolicy,109,132,146inequality,69;economic,36,44;publicacceptabilityof,69; resulting fromcompetition,42,

45,120;spheresof,44InitiativefortheCompetitiveInnerCity,132innovation,126,198instrumentalrationality,28,40intellectualpropertyrights,53,141InternationalCompetitionNetwork,95‘invisiblehand’metaphor,63Italy,173

Jessop,B.,113judicialeconomists,93–102

justificationformarketsandjustificationforbusiness,47

Kahneman,Daniel,166Kant,Immanuel(andKantianism),8,41,43,98,107,155,164,174,177,186,189Karpik,L.,111keyindustriesandfirms,128KeynesianismandKeynesianera,26,149Knight,F.,110Kuhn,T.,93,177

laissez-fairepolicies,5,21,80,127Latour,Bruno,10law:empiricalviewof,75,96,177;statusof,162;seealsomarketlaw;ruleoflaw‘LawandEconomics’movement,96,189,193leadersandfollowersinbusiness,145leadershipanxiety,134–8legalrealism,82legalsovereignty,23LehmanBrothers,collapseof(2008),152,172Levi,Edward,90,103Lexecon(company),92liberaleconomics,112,116–19liberalism:classical,1,6,21,41;communitarianviewof,5,11liberty,economicandpolitical,76LIBORrateconspiracy(2012),2LisbonAgenda(2000),133Lloyds-TSB,172

McDonald’s,7–8MacIntyre,Alasdair,161–4MacKenzie,D.,155McLoskey,Deirdre,82macro-prudentialregulation,170managementexpertise,41,115–16managementtheory,135Manne,Henry,92market-basedprinciples,6,25–6,158–61,164–5marketcompetition,178;appealof,29;andcompetitiveness,44;justiceof,39–43marketexceptionalism,195marketfailure,39,49

marketlaw,178–9market-likebehaviour,32,85–6marketpower,39,126marketresearch,116,165–6markets,1,4,39;asinformationprocessors,55Marxisttheory,184mercantilism,113–14mergers,79,93–5metaphysicalclaims,14–15metaphysics:asexistentialpossibility,66;political,71,103,111,151militarystrategy,117–18military-industrialcomplex,137Mirowski,Philip,10,97,150Mises,L.von,38,185Monitorconsultinggroup,132monopoly,39,42,44,69,85,88,90,113,92MontPelerinSociety,45,51,80,130moralquestions,9,15–16‘moralvictory’,62MPs’expenses,2

NationalAuditOffice(NAO),UK,153–4nationalismandnationalidentity,114,134,136NealReport(1968),78neo-classicaleconomics,7,13,26,42,125,143,158,160,178;ascendancyof,87–8neocommunitarianism,152,168,185,193,195neoliberalism:actually-existingasdistinctfromnormative,89;American,189;applied,48,

54,149,200;contingent,150;critiquesof,36,190;definitionof,186,3newpublicmanagement,116Nietzsche,Friedrich,7,164Nixon,Richard,78‘non-criticalaudit’,169–70normativeauthority,collapseof,30NorthernWay,134‘nudge’theory,157,167–8

Obama,Barack,167,195objectivity,13,194Occupymovement,35‘ordersofworth’,15–17

ordo-liberalism,38,42,44,68,105,119,152,172,189,192,200‘originalposition’(Rawls),161Orwell,George,25–6OTFconsulting,132

particularism,politicalandcultural,190Peck,Jamie,25performativemodesofcommunication,4phenomenologyofeconomicactivity,106phonehackingscandal(2011),2Pigou,A.C.,80Pinochet,Augusto,135planning,economic,29,40,47,131‘planningforthenew’,110politicallegitimacy,25–6politicalnecessity,175politicalreform,199politicaluncertainty,155,172pollution,49–50Poovey,M.,4Popper,Karl,81,97popularsovereignty,23Porter,Michael,108,139,178positivisteconomics,24–6Posner,Richard,103power,inequalitiesin,30‘pragmaticsociology’,11;seealsoconventiontheorypricemechanism,44,47,49,59,85,178,192;asdistinctfrompricetheory,106prices: as final arbiters of value, 85; institutionalized, 106; as a methodological tool, 86;

psychologyof,86Priest,G.,50,80privatization,116‘prostheticprices’(Caliskan),22psychology,economic,171‘publicchoice’schoolofpoliticalscience,84publicgoods,192publicownership,44public-privatepartnerships,116publicrealm,84publicspheres,100,107

quantitativeeasing,154

randomizedcontrolledtrials(RCTs),159,169–70rationalchoicetheory,48,160,165–6rationalityofindividualdecision-making,72Rawls,John,161,163,189Reagan,Ronald,93,131–2regulationandregulatoryagencies,72,75,80,89,96,105,170researchanddevelopment(R&D),publicspendingon,180restrictivepractices,53,200revealedpreferencetheory,97,165–6Richman,Barry,115,132,135riotinginEnglishcities(2011),2,10,147risk,18Robbins,Lionel,165Röpke,Wilhelm,41Rougier,Louis,59Rousseau,JeanJacques,36,134ruleoflaw,128–9,175–8

Sandel,Michael,161Schmitt,Carl(andSchmittiantheory),27,112,114,128,130,144,147,152,162,178,193,

196–7Schumpeter,Joseph,38,79,173Schwab,Klaus,108,121securitization,155separationofpowers,27,175sharedsenseofnormativity,13,69,156shareholdervalue,105,120,125‘shorttermism’,135Silver,Nate,195Simons,Henry,38,42,44,68,70,76,78,81,85,96,192Smith,Adam,39,41,63Smith,GeorgeAlbert,118socialdimensionsofhumanbehaviour,168socialentrepreneurship,197socialindicatorsmovement,193socialmarketeconomy,44socialrealm,20socialscience:empiricist,15;positivist,13;professionalizationof,11

socialism,45,135,168,196sociology,14;asdistinctfromeconomics,42,45sovereigneconomization,20sovereignty,58,147,175,33;ofexecutivedecision,152;ofthepeople,176;problemof,23–5sport,29,43,56,63,66–7Stark,David,17state,the,roleof,5–6statisticalindicatorsandstatisticalagencies,13,166Stigler,George,135strategiccompetition,64–7strategy,scienceof,117–18;seealsobusinessstrategy;competitivestrategystructure–conduct–performance(SCP)theory,88–93SunTzu,117SupremeCourt,US,92Switzerland,133SWOTanalysis,118

Taylor,Charles,161,163teleologicalrationality,171tennis,56Thévenot,L.,32,59,174thinktanks,130–5,139–40‘ThirdWay’policies,45Thrift,N.J.,131totalitarianism,40,192transactioncosttheory,48–51,79–80TreatyofRome(1957),75,179–82Tversky,Amos,166

uncertainty,188;competitiveandpolitical,155,197;reductionof,47,54,75,125;resolutionof,148–9

utilitarianism,72,92,112,189utilitymaximization,39,55,83,89,166,169,195

valuations,valueof,163–4value,metricsof,193–4valueneutrality,7,13,56,98‘veilofignorance’(Rawls),60Viner,Jacob,70violence:political,65–7;regimesof,144–5‘violentthreats’,114,120,130,149,152,178,184,190,197

VirginiaPublicChoiceschool,193

Walras,Léon,39,165Walzer,Michael,44,68,189–92warfare,117,137,176TheWashingtonPost,70Weber,Max,7,14,17,28,31,39,58,60,66,98,101,143,146,159welfareeconomics,39,49,88Wikileaks,189winning,commitmentto,65Wittgenstein,Ludwig,14,63WorldBank,122WorldEconomicForum(WEF),108,112,125,130–3WorldTradeOrganization,128

Young,John,132

Zizek,Slavoj,10,189‘zoneofindifference’,175,182