The Neoliberal Transformation of the State
Antoine Vauchez and Pierre France take the reader backstage in The Neoliberal Republic, providing empirically rich insights into how neoliberalism has permeated French state institutions. More specifically, their account focuses on the role of private actors, like lawyers and consulting firms, in this transformation, as well as on the extent and significance of the revolving door phenomenon. Resisting simplifying portrayals of neoliberalism as deregulation, Vauchez and France clarify from the outset that the neoliberal turn did not mean a retreat of the state but rather a mutation of its role: from interventionism in the name of the public interest to the oversight and protection of the undistorted operation of competitive markets.
This new regulatory state, facilitated by the turn of EU competition policy “away from its traditional concern with private conduct and toward the problem of government interference with the competitive process” has blurred the boundaries between public and private actors. Public action assumed new forms, following an ordoliberal logic that justifies intervention in the economy only to ensure the smooth operation of markets. One example was the emergence of regulatory agencies beyond the reach of the administrative hierarchy and parliamentary control, such as the Autorité de la Concurrence, which is the independent body protecting competition. Law firms, meanwhile, adapted and flourished in the reformed public-private legal regime, establishing privileged relationships with regulatory agencies and other public entities through their consulting in a wide array of matters, including public procurement and competition policy, and through their role as intermediaries facilitating private sector compliance.
For Vauchez and France, the rise to prominence of such dialogical forms of governance fundamentally contradicts the distinction between public and private—a distinction that remains a condition of possibility for the formation and articulation of the public interest. Despite France’s tradition of strong state institutions and a public law oriented towards the supposed universalism of the public interest and the service public, the determination of the public interest has ceased to be a state monopoly. This is a development that can partly be attributed to the Conseil d’État itself—France’s highest court of administrative justice—which has held that the public interest may be obtained through the satisfaction of private interests (Ville de Soschaux, 1971) or that free competition is in itself an essential component of the public interest (Million et Marais, 1997). Yet, for the authors of The Neoliberal Republic, it is precisely the separation of these spheres of authority that must underpin democratic regimes. The public sphere needs to be sealed off from the logic of the market to ensure that collective decisions about the content of the common good are at least possible.
Separating Politics from the Economy
An overarching conclusion that can be drawn from The Neoliberal Republic is that the boundary between the sphere of politics and the sphere of the economy has become more porous than it used to be. This invites the normative argument—advanced by Vauchez and France—that the separation of the two must be defended in order to secure the transformative possibilities of politics. The separation thesis is at once intuitive in its appeal to public power to constrain and mitigate private economic power, and yet, at the same, it is also perplexing, as it is the public—the sphere of politics—that is, to a significant extent, the source of private power in the first place. Not only do legal entitlements determine the different coercive power of private actors, but the separation of the public and private spheres can also be understood as a structural element of capitalist economies. In such economies, on this view, the producers of goods are divorced from the means of production, and labour is not compelled through direct force but rather through coercion as a result of unmet needs. This being so, the mode of production itself requires the mutual subordination of both the producers and the owners of means of production to an impersonal authority that can guarantee the sanctity of the property rights and the contractual freedom that this mode of production presupposes. In addition, the separation of the public from the private ensures that individual property rights are insulated from political intervention to a significant extent, and that relations of force are removed from the immediate sphere of production.
The empirical insights of The Neoliberal Republic challenge the extent to which the public/private (or politics/economy) distinction is constitutive of capitalist economies, by suggesting that the “neoliberal turn” has tended to collapse it. Does this mean that the distinction is not constitutive after all, and that a “privatized state” is conceivable? From a certain Marxist perspective (associated with “economism” and “instrumentalism”), the state embodies the interests of the ruling classes—interests which, in the current historical context, appear to coincide with the protection of competitive markets, the abstention from direct intervention, and the dialogical, non-coercive relation between regulators and private actors. Far from being a novelty, the subsumption of the political by the economic would be, from this perspective, the essence of the state. Vauchez and France’s account would then only highlight how this currently manifests, suggesting that the subsumption of the political has currently assumed a cruder, more visible form.
Alternatively, if one resists simplistic instrumentalist positions and defends the structural autonomy of the political, then what accounts for the developments sketched by Vauchez and France? One possibility would be to read their argument through the lenses of methodological individualism, attributing a broader socio-political shift to the actions of individuals (lawyers, regulators, etc.), who are seen as the origin of social change. However, this would not adequately capture the structural nature of the change outlined by the authors.
A more promising avenue would be to search for the structural explanations behind the neoliberal shift in the junction between legal transformations and processes of capital accumulation. In other words, the political has the capacity to resolve certain of the contradictions inherent in the processes of capitalist accumulation. For example, in neoclassical economic theories, Keynesianism, and Marxism, the abundance of capital and the increase of the capital/output ratio leads to a fall of profit. However, this expected tendency may be reversed through institutional arrangements. Indeed, one way of reading Piketty’s empirical finding that the rate of profit has not fallen over the centuries despite capital’s increasing abundance is to suggest that the rate of profit has been protected and guaranteed through institutional arrangements—that is, through politics. This highlights that law plays a constitutive role for economic life and is not only defined by, but may itself define, the processes of capital accumulation. Interpreting the findings of Vauchez and France from this perspective, the political remains as autonomous as ever—its apparent “privatization” is attributable to the political itself. Neither is politics being colonized by external economic interests, nor should the changes described by Vauchez and France be attributed to individual human agency. Instead, their origin should be sought in the ways in which the political transformed itself to secure processes of capitalist accumulation. There is also a diverse set of factors that further enabled this reformation of the political, including the declining power of labour to antagonize capital, ideology and mass media, and the legitimating power of the continuing appearance of a “strong state” and an uncompromising “public interest”—as Vauchez and France underline, the vocabulary, even if increasingly hollow, persists.
The Public Interest: A Contextual Defense
It follows that the existence of a distinct political sphere is not in itself sufficient to anchor the demands of egalitarian politics. In fact, as The Neoliberal Republic itself shows, it can also be the springboard for the resolution of the contradictions of capitalist accumulation and further entrench socioeconomic inequalities. Assuming that some form of politics/economy separation constitutes capitalist systems by definition, it is not the existence, but rather the content, of the political that is at stake. From this perspective, I suggest that Vauchez’s and France’s defense of the “public interest” needs to be qualified. The authors make the case that the egalitarian aspirations that define democratic citizenship “are countered by the anti-egalitarian pressures that are inherent to the functioning of the market economy.” However, democratic citizenship is not inherently oriented to egalitarian outcomes—democratic citizenship is what we make of it. Incidentally, the same can possibly be said about markets. Stepping away from essentializing such conceptual categories highlights that their content is ultimately determined by social and political contestation.
Vauchez and France suggest that the possibility of at least formulating a public interest is preferable to a regime in which unaccountable private interests colonize the state. However, once again, key is not only the form of the political but rather its content. While the formation of the public interest is indeed permeated by class antagonism and may be used as a vessel for different politics, its enunciation may also serve to efface such antagonism and construct a misleading image of supposedly shared, objective citizen interests. For example, during the Greek sovereign debt crisis, austerity politics that deepened socio-economic inequalities were legitimated and justified as advancing “the public interest.” In that case, the idea of the public interest enabled framing fiscal discipline and the prioritization of creditors’ interests as objective interests. It is then important to highlight that projects of upward wealth redistribution and the insulation of the economy from political contestation remain fundamentally pragmatic, exploiting existing political and institutional conditions. As such, projects of critique need to be similarly pragmatic and sensitive to the historical context in which they unfold. The public interest as a concept is defensible partly because it highlights the potential of the political for institutional rearrangements. At the same time, nothing necessarily suggests that such institutional rearrangements will drive egalitarian politics forwards; in fact, as in the case of European austerity, they may do the complete opposite.