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April 15, 2007
Mark Beeson and Ann Firth in Neoliberalism as a Political Rationality: Australian Public Policy Since the 1980s give a useful overview of the way that liberalism historically governed the national economy and its modification by neo-liberalism from a governmentality perspective. They say:
In early nineteenth century liberalism the economy as an object of government is conceived of as a self-regulating and relatively self-contained national system.... The notion of a self-regulating system separates economic activity from the sphere of governmental activity. The economy, thus conceived, is driven by the self-interest of individuals and exhibits a natural tendency to growth.
I've always understood this in terms of the economy as a clockwork mechanism. All traditional schools of economics are based on the concepts of classical physics of the universe as a perfectly predictable clockwork mechanism. We still hear orthodox economists describing the "economy as a machine", talking about "fine-tuning" the "economic engine, " or the "economy losing steam" or that the government needs to repair a failed "market mechanism."
Beeson and Firth's argument is that the emergence of a neoliberal political rationality involves a transformation in the image of the economy as an object of government from one seen as essentially national and self-contained to one that is seemingly transnationalised and locked in relentless international competition. Successful competition
is now perceived to depend upon the promotion of economic efficiency, not only in the production of goods and services, but in all areas of national life. They say that economic security:
requires the prioritising of competition and economic
efficiency in areas as diverse as welfare, health or education, because policymakers have come to feel that they may impact upon the overall economic performance of nation as a whole. Thus, the priority accorded to economic efficiency in order to create or maintain international competitiveness initiates a new relationship between economy, state and society in which their distinctive identities as separate spheres of national life are increasingly blurred.
S we have a shift in a liberal rationality of government, which conceive of the economy as a self-regulating system with a natural tendency to growth, economic activity provides the resources for education, health services and welfare, to a neoliberal political rationality in which society and the state must be transformed to make them contribute to the drive for economic efficiency. in drive for economic efficiency.
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