141 Massimo De Carolis THE NEOLIBERAL (COUNTER)REVOLUTION: ITS PARABOLA AND DECLINE 1.1 The crisis that has plagued the global economy since 2008 has lately only negligibly loosened its grip and, after almost ten years, economic stagna- tion still persists. Moreover, its destabilising effects have now moved beyond the strictly economic sphere and deeply penetrated social and political life, generating a dramatic rise in inequalities and causing an intensification of con- flicts. At this point, it needs to be acknowledged that the crisis no longer affects only a specific orientation in economic policies, but rather the entire civil order paradigm that has prevailed globally over the past few decades and, for a long time, inspired government action by the main geo-political players. Put very concisely, the idea at the core of this paradigm is that different forms of social life can and must be re-designed according to the market com- petition system; and that, in line with this model, the more society is able to re-programme not just strictly productive activities but all forms of social life and communication society, the more it will be civil, rational and advanced. This means that living, in the broader sense, must mean being on the market: being part of a competitive network of exchanges and transactions, working to acquire the highest possible market value and thereby, at the same time, con- tributing, through one’s choices, in the constant updating of value listings that regulate the game and direct collective exchanges. PHAINOMENA XXVI/102-103 142 This “marketist” notion of social order is normally linked to the politi- cal shift developed, in the early 1980s, by conservative and, at the same time, highly innovative leaders like Ronald Reagan and Margaret Thatcher. This shift culminated in the implosion of the Soviet Union and the fast conversion of many formerly communist countries to the market economy. However, from a theoretical standpoint, the fact of the matter is that the main traits of this paradigm had already been outlined much earlier, during the feverish years between the 1929 Wall Street crisis and World War II. At the time, the feat had been accomplished by a fairly small, marginal and heterogeneous group of lib- eral economists and sociologists - most of whom had been forced to emigrate – who followed two very different main schools of thought: on the one hand, Ludwig von Mises and Friedrich von Hayek’s Austrian school, from which the “Chicago school” was to later evolve and, on the other, the German authors gathered around the journal Ordo. It was precisely one of the German “ordo- liberals”, Alexander Rüstow, who first designated the line of thought shared by the entire group by the word neoliberalism that, from the 1980s onwards, was to be commonly used as a label for the political programmes and administra- tive measures imposed by the new global governance. 1.2 The history of neoliberalism therefore presents a two-stage genesis and draws a parabola that, when closely observed, is somewhat unusual. Indeed, these theories were developed in Europe in the 1930s as a response to the advance of totalitarianisms from a position of cultural and political marginality that was to last for more than half a century. After this interval, however, mainly in the United States and Great Britain, the civil order model designed by neoliberals was translated into a technically detailed practical programme for governing the economy and society as a whole. At the end of the Cold War, the programme became established globally with surprising effectiveness and speed, in spite of the imbalances it entailed, the increasingly frequent crises and the spectacular fiascos neoliberal governance faced in its efforts to establish a “new global order”. Later on, in our times, the mechanism broke down and the entire construction started to crumble as inexorably as it had taken root a few decades earlier. Deep down, I do believe that there is still some element in the parabola of neoliberalism that has not yet been considered. We are still unable to indicate ONE HUNDRED PER CENT MASSIMO DE CAROLIS 143 the actual reasons why at the time its civil order model took hold so force- fully after lingering at the margins of official culture for such a long time. We are also finding it particularly difficult to understand why that model is now declining. And yet, on reflection, there is possibly no historical phenomenon that can be more useful in helping us focus on the deeper dimension and true meaning of the contemporary world’s crisis. In the initial stage, in fact, all the main authors – from both the Austrian school and German Ordoliberalism – were persuaded that their task involved much more than just addressing a contingent economic or political difficulty. They believed that it was more a matter of providing an answer to the overall crisis of modern civilisation that, after Nietzsche, had become the dominant theme of European culture. For this reason, they did not hesitate to carry their analysis further, to consider the basic philosophical questions concerning hu- man nature and the meaning of civilisation, as was also confirmed by the titles of the most influential works of this initial phase (such as Human Action by L. von Mises or Civitas humana by W. Röpke). 1 In the 1980s, when the neoliberal project began to assert itself at a planetary level, this anthropological dimension was set aside to make room for tech- nicalities and the emergencies associated with governing the economy. The programme’s radical nature, however, remained unchanged and was implicitly confirmed by a notion that was very widely shared at the time, i.e. that mo- dernity’s long-standing crisis was in fact about to end and pave the way for a civilisation model that was so new it had to be described as post-modern. Neoliberalism was hence a response to the general crisis of modern civilisa- tion. And, possibly, the only response to be translated into a coherent practical project and a real government programme. Its planetary hegemony over the past decades cannot, therefore, be explained only in terms of the support of the ruling classes or the effectiveness of propaganda. In my opinion, its roots go much deeper and depend on the fact that, right from the foundation phase, neoliberals had succeeded in intercepting a profound social process – in some 1 Ludwig von Mises, Human Action, Fox & Wilkes San Francisco 1963; Wilhelm Röpke, Civitas Humana. Grundfragen der Gesellschafts- und Wirtschaftsreform, Rentsch, Er- lenbach-Zürich 1946. PHAINOMENA XXVI/102-103 144 ways a crucial problem – that, until then, European philosophical culture had registered only in vague and purely negative terms, simply as a threat to the civil order. Neoliberal theories, on the contrary, endeavoured from the start to bring into focus the new historical and social scenario’s positive potential, so as to draw from it a new social order model and, even, a notion of civilisation that would be different from the one that had prevailed in the course of modernity. If this is the case, however, it is clear that the decline of the project – cur- rently being witnessed - is a far more significant and dramatic issue than is generally thought. It is the sign that the century-old crisis of modernity may befall us again, possibly even more directly than it did in the past. And if phi- losophy is to be “its own time comprehended in thoughts”, there is perhaps no philosophical task more urgent than to measure ourselves against this pa- rabola, seeking to grasp its meaning and deeper causes. 2.1 In my paper, I shall be tackling two issues. I will first try to bring into the focus the “problem” to which, in my view, neoliberalism sought to provide a solution. At the same time, I shall attempt to prove that this solution present- ed, from the start, a shortcoming, a sort of “blind spot” that neoliberal theories and practices refused to see and that is now emerging, causing the decline of neoliberalism. These are, of course, extremely broad and complex issues and I can but put forward very general hypotheses. And precisely for this reason it seems appropriate to illustrate my two hypotheses immediately, very concisely, so that the direction we shall be taking will be clear from the start. So, to begin with, I believe that neoliberalism’s basic problem refers to the factor whereby it is a significant response not just to social crises or political challenges, but also to the general discontent experienced by modern civilisation – and is to be found in an element that deeply interconnects the main social processes triggered by advanced modernity. All of these processes converge into what I shall call a trend towards the dynamization of the social order. This expression should be taken literally and refers to one of the more elu- sive and complex concepts expressed by ancient metaphysics, dynamis, the semantic value of which covers a wide spectrum of similar terms generally considered, however, to express separate concepts: potentiality (or virtuality), possibility and power. This formula, in fact, attempts to indicate the gradual ONE HUNDRED PER CENT MASSIMO DE CAROLIS 145 transformation, from the late 19th century onwards, of the mechanisms re- sponsible for the establishment of the social order and that have gradually been moving away from the domain of real and actual “facts” to that of pos- sibilities in that they are possibilities, before they are or are not fulfilled. To put it plainly, the hypothesis is that in late modernity collective life accentuated its character of possibility, virtuality or power to such an extent that it inevitably resulted in the calculation and strategic management of possibilities, opportuni- ties and risks becoming the heart of all emerging forms of life. In my opinion, the neoliberals were amongst the first to understand that the drift away from all that is real to all that is possible was, on the one hand, irreversible and, on the other, entirely incompatible with the traditional model of political sovereignty. So they came to be persuaded of the need to develop a radically new civil order model in which the dynamization of social life could release its full power, no longer threatening the stability of social structures. And – as we shall see –, in this transition, a decisive role was assigned to the dialectic between two distinct elements in the social order, indicated by F. von Hayek with the Greek words taxis and cosmos: the established order on which political authority rests and the spontaneous and unpredictable cosmic order generated by market relations2 (a dialectic that in recent years has also been used to refer to the distinction between Government and Governance and to the typically neoliberal idea of Governance without Government).3 The difficulty lies in the fact that dynamis, as mentioned, expresses a deeply ambiguous concept. At the very least, a distinction is required between its abso- lute meaning – indicating the power to act in the broader sense - and its relative meaning, i.e. the ability to exercise power over other people. I believe that this ambivalence is a “blind spot” in the mechanism developed by the neoliberals. In short, while believing that it promotes the empowerment of society in the abso- lute sense, this mechanism in fact ultimately protects its relative forms, i.e. the power relations crystallised within society and that the new government mecha- nism strengthens and upholds even to the detriment of general empowerment. 2 See Friedrich von Hayek, Law, Legislation and Liberty, Un. of Chicago Press, Chicago Ill. 1973–1979. 3 See James N. Rosenau and Ernst-Otto Czempiel, Governance without Government: Order and Change in World Politics, Cambridge Un. Press, Cambridge 1992. PHAINOMENA XXVI/102-103 146 Paradoxically, the outcome is the exact opposite of the “freedom of choice” that the neoliberals aimed to enhance. Power relations, in fact, are based on preventive control over other people’s choices. By strengthening such relations, the neoliberal governance mechanism hence also increases control over dis- seminated creativity and its submission to new power centres, exasperating forms of asymmetrical dependence and social vassalage. And it is thus that an alarming bipolarity between pluralism and re-feudalisation is taking shape, dominating the contemporary social scenario and marking, to my mind, the decline of neoliberalism. 2.2 I do realise that the two theories I have just illustrated are too generic and abstract to be presented articulately in a short paper. But I would like to at least somewhat clarify their substance, starting from the general idea of a dynamization of the social order. In considering neoliberalism, the specific “dynamization” of market mech- anisms undoubtedly holds a central position and it is no coincidence that, for instance in Human Action, von Mises feels the need to reiterate insistently that “numbers applied by acting man in economic calculation do not refer to quan- tities measured – hence real data; “facts”, that is, in the sense most widely used at present – but to exchange ratios as they are expected – on the basis of under- standing – to be realized on the markets of the future”.4 Clearly, it is its future yield that makes an investment more or less advanta- geous and that, therefore, determines in the present the value of an asset or a business. Now, the future is radically uncertain and only a hypothetical, par- tial and subjective representation is possible. The market mechanism, instead, causes the subjective expectations of different operators to interact and mutu- ally influence each other, thus generating a shared convention that provides single transactions with an objective reference base. Although expectations are more than likely to be corrected or even totally contradicted in the future by real facts, as long as such a correction has not taken place and collective trust remains untouched, market generated values in any case guarantee the liquid- ity of the asset and, with it, the effectiveness of the investment. In conclusion, 4 Ludwig von Mises, Human Action, cited above, p. 211. ONE HUNDRED PER CENT MASSIMO DE CAROLIS 147 the value of a security reflects mere possibilities; it is mediated and, so to say, “reified” by a shared convention that the market itself has generated. Since then – and still today – the process designated, perhaps incorrectly, by the word “financialisation” has unceasingly been moving the core of market exchanges progressively from one dimension to the other, from reality to possi- bility, thus assigning an increasingly central role in the formation of economic value to the market’s conventional mechanisms and their most typical product, the liquidity of securities and financial products, in the broader sense of the word. Of course this process was not invented by neoliberalism. But I do be- lieve that the neoliberals were the first (and possible the only ones) to grasp its potential value with a view to the establishment of a real and proper civilizing mechanism that would be totally different from anything that had preceded it. 2.3 It is important to understand that, in a hyper-modern society, dynami- zation is not limited to the economic sphere in the strictest sense, but rather invests the whole of social life. Technical evolution, for instance, clearly multi- plies the possibilities available to people. And furthermore, as Aristotle had al- ready observed, techne is in itself, and always has been, knowledge focused on possibility (and not, like science, on necessity). Hence the more work and life become technicalised, the more they result in the designing and manipulation of simple possibilities, conceivably leaving their actual realisation to machines. Meanwhile, according to the teachings of sociology, personal identities be- come “liquid”. Socially significant skills proliferate and even very basic indi- vidual characteristics accentuate their contingency: they become potentialities that individuals can choose to activate or stifle, depending on circumstances. Therefore, if they wish to fulfil their aspirations, everyone is required to perform a strategic calculation of possibilities. And because everyone chooses, evaluates and calculates – and everyone knows it – in order to be effective each individual’s subjective calculation shall ceaselessly have to take into account the calculations made by others. Every single person shall have to strive to include the calculations and choices of others in their perspective, in order to anticipate outcomes and, if possible, control them. Such a specular and con- tinuous dynamic ends by generating a combinatorial explosion that no one, not even a godlike mind, could ever master. And nowadays every single person’s PHAINOMENA XXVI/102-103 148 self-fulfilment, value and dignity depend on these unlimited contingencies. It would take a lengthy analysis to prove the extent to which this rule of the possible has affected typically modern “civilisation and its discontents”, in its different forms. From the Nihilist intuition that if everything is possible then nothing is truly real, to the feeling of impotence of post-modernity, summarised by Niklas Luhmann in a single sentence: “everything could be different – and it is nearly nothing that I can change”.5 Returning to neoliberalism, the crucial point is that dynamization makes the governing of society based on the traditional notion of “political sovereignty” inconceivable; based, that is, on the idea that it is possible for a sovereign entity capable of knowing the collective interest to exist and, hence, feel authorised to steer society’s “ship” towards the common good. Because of the combinatorial explosion imposed by the overlapping of different subjective strategies, accord- ing to the neoliberals at least, the idea of such a sovereign and universal stand- point becomes a contradiction, a naivety or pure and simple fiction. However, the fact that a top down order cannot be imposed on social dy- namics does not in any way mean that disorder and entropy are inevitable. Suf- fice it to consider, for instance, the more basic social phenomena of the syntax of a language and its evolution or the set of social conventions and customs. In these cases, order develops bottom up, has no author and responds to no “plan”. It is not an “established” order, a taxis, but rather a spontaneous, cosmic order, order from noise in cyber jargon. The neoliberal idea, in short, is that this kind of “cosmic” order can be pro- moted in all the different spheres of collective action. And that the market is its basic prototype, given that market equilibrium is not generated by any “plan”, but rather by the action of an impersonal mechanism that – precisely because it is blind – is able to coordinate all subjective points of view, without favouring any one of them. Unlike classic liberals, however, neoliberals do not believe that such coordi- nation mechanisms can be produced and strengthened by an “invisible hand” or by chance. Creating the conditions for them to develop requires what Rüs- 5 Niklas Luhmann, Komplexität und Demokratie, in: Politische Planung, Westdeutscher Verlag, Opladen 1971, p. 44. ONE HUNDRED PER CENT MASSIMO DE CAROLIS 149 tow calls “Life-Politics”: the capillary participation of an administrative appa- ratus, an efficient legal system and constant technical innovation.6 Spontaneous order is hence an artefact: the product of a social machine, a real and proper “civilising device”. From the 1980s onwards, efforts were made precisely to im- pose this device on a planetary scale, so that it could become the infrastructure of a dynamic, cosmopolitan and pluralistic “great society”. It is now a matter of trying to understand the deeper reasons why this de- vice has in the end generated not greater freedom of choice, widespread crea- tivity or initiative but, on the contrary, the proliferation of control systems, the explosion of inequalities and the consolidation of power relations. So, in a sense, the downside of freedom. 3.1 The core of neoliberal anthropology is illustrated by L. von Mises in Human Action and is based on the assumption that the main species-specific trait that sets the human race apart from other living species is its ability to in- tentionally cooperate (purposeful cooperation). There are, however, it appears “two different kinds of social cooperation: cooperation by virtue of contract and coordination, and cooperation by virtue of command and subordina- tion or hegemony”.7 As is evident, these two different kinds of cooperation are opposed and irreconcilable, in an oppositional scheme that is present in all variants of neoliberalism: Freiheit versus Herrschaft among the Ordoliberals; freedom versus coercion among the Austrian-Americans. The idea is that the degree of civilisation of a social system is linked to its ability to entrust, to the extent that this is possible, cooperation to free and voluntary coordination, re- ducing to a minimum recourse to hegemony and command. On this assump- tion, market exchanges are considered to be the prototypes of free coordina- tion and, hence, of civilisation. Naturally, neoliberals too are well aware that the market is often the setting for power relations and, therefore, forms of hegemony and command. They believe, however, that such instances can be explained as being a form of aber- 6 See Alexander Rüstow, Das Versagen des Wirtschaft sliberalismus als religionsge- schchtliches Problem, Metropolis Verlag, Marburg 2001. 7 Ludwig von Mises, Human Action, cited above, p. 195. ers des irtschaftsli reli PHAINOMENA XXVI/102-103 150 ration in which cooperation based on command illegitimately infiltrates “free” market dynamics and is superimposed upon them. Literally, this entails a kind of re-feudalization in social relations (according to a definition coined by the Ordoliberals) that can only be countered by separating economic coordination from political power and accentuating the blind, impersonal and, hence, “free” nature of market mechanisms, thereby reiterating the oppositional scheme be- tween “freedom” and “coercion”. But, in logical terms, there is a problem in that power relations can in no way be confined to one or the other poles in opposition, but by their very na- ture regularly tend to intertwine, join and merge coercion with agreement and command with voluntary submission. Basically, in fact, power is the equivalent of a relative certainty that other people’s behaviour can be pre-determined to one’s own advantage. It is associated, that is, with a guarantee of obedience8 or, in other words, preventive control over other people’s choices. For power to grow, therefore, the freedom of choice of those who are subjected to it must also grow, as long as there is a guarantee that the choices shall, in any case, benefit the power structure and its leaders. Power, in fact, is never (or almost never) pure and simple coercion. This because, by removing freedom of choice, simple coercion also reduces real power to a minimum, especially in a “dynamised” society, submerged by a su- perabundance of possibilities. In this kind of social environment, power ap- paratuses have no use for recalcitrant slaves, while they do need willing and faithful vassals who are encouraged to act strategically and creatively, as long as this always benefits the power centre leading them. Hence power is not the opposite of freedom of choice but its correlative or, rather, its downside – and, in my opinion, this downside is the “blind spot” that neoliberalism cannot or will not see. And it is this denial that is now decreeing its demise. 3.2 The declared aim of the “biopolitics” promoted by neoliberalism was to maximise disseminated potentialities and collective initiatives, on the assump- tion that risks of abuses of power can only be countered at their roots if the meas- 8 See Jonathan Nitzan and Shimshon Bichler, Capital as Power, Routledge, London- New York 2009, p. 17. ONE HUNDRED PER CENT MASSIMO DE CAROLIS 151 urement of value is entrusted to impersonal and blind algorithms. The paradox we are faced with is that the experience of recent years has instead proved the exact opposite. The more calculation devices penetrate social life, the more this “life” is consigned to the service of power relations, creativity is subjected to con- trol and intelligence reduced to a mere administrative technique. I believe that the point is that the image (diagram, chart) of spontaneous order – which both the market and administrations comply with – is obvi- ously not the order in itself, but only its representation, achieved through con- ventional procedures that are influenced, at a capillary level, by three decisive factors: the economic strength of the different players, their political authority and the technical competence available to them. These are factors that logically tend to merge and interconnect precisely in the element that has always been at the heart of power relations: preventive control over other people’s choices. While claiming to circumvent or neutralise more traditional power figures, the administrative practices suggested by neoliberalism only strengthen the process by which these three factors become interconnected and mutually support each oth- er. And thus they facilitate the genesis of great power agglomerations, in the form of networks, in which economic strength, political authority and technical compe- tence become the facets of one same crystal. And it is precisely these agglomerates that are now pushing global society towards a short circuit between pluralism and re-feudalisation, which the neoliberals once referred to as the worst of all evils. Contrary to all intentions, the device introduced by neoliberalism not only fails to counter such a trend, but it in fact actively incentivises it. And the key to the paradox lies precisely in the basic claim that value, and with it the po- tential and initiative intrinsic to collective life, can be calculated. This because potentiality in itself cannot in fact be calculated, only power can. In the face of this difficulty, I do not believe that wishing for a return to tra- ditional forms of political sovereignty that, in the meantime, dynamization has rendered increasingly fragile, can provide a solution. The idea of countering the established order with a spontaneous, dynamic order without any subject still seems to me to be a promising and, I might even say, an unavoidable spec- ulative move. The point is that cosmic order cannot, obviously, coincide with the market and needs to rely on a different and more radical counter-power if it is to oppose the new neo-feudal apparatuses with any success. PHAINOMENA XXVI/102-103 152 The decline of neoliberalism, therefore, does not mean that the crisis of modernity is over but, rather, that it is only just beginning to reveal its deepest dimension. ONE HUNDRED PER CENT