State and Market Failures

Starting from the polarization welfare state—competition state (neoliberalism) as established by Michel Foucault, this chapter will demonstrate that just as the first was implemented because of the failures of liberalism in the Great Depression, the second was implemented because of the failures of the welfare state in the 1970s. In part they were presumed failures that were not real, such as the accusation of educating individuals to live on assistance or of an excessive presence of the State that neoliberalism only claimed to want to reduce, not having any real intention of reducing the State but rather of controlling it. In part they were asserted failures that, like self-fulfilling prophecies, really caused them because they were asserted. This was the case of the public apparatus whose denigration led to mediocre politicians and officials who gave rise to mediocre performances, consequently justifying such denigration. In part, they were real failures such as excessive bipartisan spending on the public apparatus and promises that were not kept because they would have required structural reductions in the power of capitalists to the advantage of workers and of advanced countries to the advantage of developing countries producing raw materials. The neoliberal project implemented in the face of these failures intended to replace with the self-discipline of all “self-entrepreneurs” the procedures of command in exchange for security that had shown their limits leading to the failures of the welfare state. To this end, part of the neoliberal project was a vast therapeutic action implemented to convince everyone of the importance of self-esteem, the exaltation of the “winners” and disapproval of the “losers”. Then, faced with the collapse of the middle class, increase in inequality and reversal of social mobility, therapeutic services found themselves having to treat a real epidemic of narcissistic wounds. The practical demonstration that so many self-entrepreneurs had failed decreed the failure of the neoliberal project itself. But neoliberalism was not overcome for this. Violating the widely respected rule of oscillation between the two poles of modern governmentality, neoliberalism did not find its end in its failure and was able to unload it onto democratic institutions causing their current crisis. Neoliberalism was paradoxically strengthened: because the opposition forces proved to be too weak, because the idea was spread that there was no alternative, because it exploits collective resources that it also fights, because its failure fuelled defensive reactions from shame for personal failures such as identity obsession and narcissistic rage that strengthened its ideological grip, because it would result in another post-capitalist system. In this way, the epochal overcoming of the traditional polarization of modern governmentality between the welfare state and the competition state occurred. Hence, the arrival at an apparatus like Bentham’s “Panopticon”, a machine that controls occultly and is maximally efficient by eliminating the very consciousness of control. A machine that therefore only admits its (very problematic) reversal into the opposite Anti-panopticon.