When Foucault and the Austrian Liberals Agreed on the Impossibility of Political Rationality

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Stephanie Kim/ProMarket

Philosopher Michel Foucault is often associated with the political left. Austrian liberals, including Ludwig von Mises and F.A. Hayek, are generally associated with libertarians or the political right. However, all shared a doubt regarding the government’s ability to use statistics and data to regulate populations and markets, writes Parv Tyagi.


The academic left has long revered philosopher Michel Foucault and his works on the repressive power of modern institutions. Yet at some point in the late 1970s, Foucault began castigating the socialist state’s “inherent violence beneath its social welfare paternalism.” His apparent disillusionment with the orthodox left coincided with his support for Eastern European dissidents. This marked anti-state shift in Foucault’s lectures displayed an affinity for some of the ideas of the Austrian liberal writers, like Ludwig von Mises and F.A. Hayek.

This article attempts to facilitate a dialogue between Foucault and the Austrian liberals. Foucault’s theoretical production of governmentality, I submit, has much in common with the Austrian critique of central planning. Planning is made possible by accumulating masses of statistics about people. Foucault and Austrian thinkers have both critically examined the centrality of statistics in the project of state control. Both accounts are critical of the political rationality embedded in statistics. 

Note that my aim here is not to locate Foucault in the Austrian liberal thought, or vice versa. Foucault’s “value-free” historiography makes such a revisionist undertaking very difficult, if not impossible. 

Governmentality

Foucault defined the term “government” as “the conduct of conduct,” meaning a form of activity seeking to affect the conduct of others. Government as an activity, then, involves some form of control. This definition, however, is wide enough to embrace in its fold all social and personal relationships. In his lectures on government rationality, though, Foucault is principally concerned with the government in the political domain. 

Foucault’s account of government rationality, or the reason of state, begins with Niccolò Machiavelli’s treatise, The Prince. According to the Machiavellian principle of “raison d’Etat,” the state constitutes an end in itself. This understanding of state and its power underwent a rethinking in the eighteenth and nineteenth centuries. The horizons of state power expanded. The art of government now included exercising wide ranging control techniques. This, in the Foucauldian scheme, marked the advent of governmentality.

Governmentality, put simply, is the art of government. In the context of the modern state, this art is principally concerned with the following question: how to introduce economy, i.e., the correct manner of managing individuals, goods and wealth, into the management of state . In other words, governmentality is the art employed to organize and control a population. This is made possible by the use of sophisticated tactics, called “apparatuses of security.” One such apparatus of security is statistics. Thus, the minor role of government during the nineteenth century could be explained, among other things, by the infancy of statistical methods at that time. With the advent of complex statistics in the early twentieth century, the contours of governmentality increased. 

The state collects, interprets, and analyzes numerical data about a population using statistics. Importantly, conclusions drawn from this data are mere representations, and not exacting realities. It is impossible to capture the complexities of the population’s dynamics. There are oddities and quirks of population that cannot be quantified. Therefore, the state relies on classifications and formulates only general truths. The pitfall is that national statistics can often inaccurately represent or, worse, misrepresent a population. It follows that the state has the power to misrepresent the population.  

Statistics serve one more important purpose. Statistics foster in the interventionist a sense of knowledge and expertise. It is only by statistics that the interventionist finds out who needs what and how much money should be channelled into what uses. It is precisely this sense of expertise and precision that the Austrian tradition has long challenged.

The Austrian School

Austrian economics is often described as the economics of time and ignorance. At the core of the Austrian approach is the problem of decentralized knowledge. All individuals, in this view, act in the face of dispersed knowledge. No single agent has access to all relevant information regarding other’s preferences or plans for the future. This knowledge may not only be costly to acquire but may simply not exist in the form required for decision making. 

If the problem of society is principally one of quick adaptation to changes in the particular circumstances of time and place, we must solve it by some form of decentralization. The problem cannot be solved by first collating this knowledge and communicating it to the central planner, who will then issue his orders. 

From this tradition, Hayek distils an explanation of a social order, not chaos, in which the blind actions of individuals converge spontaneously without the need for deliberate planning. In fact, the superiority of the market lies in its ability to distribute knowledge without central oversight. Hayek’s approach was markedly different from his positivist Keynesian and Welfarist contemporaries, who employed a welter of mathematical equations to arrive at economic “truths.” 

To take an example, mainstream economists use multivariable calculus to determine the point of consumer equilibrium. At this point, the marginal utility of good x divided by the price of good x is equal to the marginal utility of good y over the price of good y. To the Austrians, this solution is an exercise in fraud. There is, simply, no way to take a cardinal measure of one’s satisfaction. 

The symbols of math are not in themselves meaningful. Their meaning is operational, i.e., they are meaningful insofar as they explain given facts. In other words, mathematical symbols derive their meaning from operational testing. Therefore, the mathematical model, while perfectly suited for the natural sciences, strips economics, and by extension all social sciences, of their meaning.

No doubt one can make logical deductions from human action. And mathematics is indeed a branch of deductive logic. But it is impossible, the Austrians contend, to arrive at these deductions with the precision that mathematical reasoning requires. 

Statistics, intervention and the pretense of knowledge 

How does Foucault’s concept of governmentality tie up with the Austrian critique of statistical precision and central planning? In the Foucauldian scheme, government is a strategic and rationalized mode of power, whose actions are justified by a particular and distinct form of rationality. Governmentality works on the assumption that the government has, or can obtain, the relevant knowledge to execute stated goals. To the Austrians, this assumption is illusory. Any action taken on the basis of such pretense of knowledge is, thus, a malicious invasion of individual liberty. To that extent, the Austrian account is an anti-rationalist account attacking this very sovereign logic. It is a critique of political reason, warning the sovereign that he cannot intervene because he does not know. On this account, thus, the unity of knowledge and government which characterizes governmental raison d’Etat falls apart.

This bears striking resemblance to Foucault’s own antipathy towards political rationality. As Foucault himself declared, his study of governmentality was motivated by a concern for liberation from political rationality. Hayek’s “spontaneous order” represents, for Foucault, an oblique but radical criticism of the technique of the state. The knowledge intended to be compiled by the sovereign is, even in principle, impossible to obtain.

The centrality of statistics in the modern state machinery is a particular case in hand. According to Foucault, national statistics go hand-in-hand with governmentality. Foucault explains that the modern state is heavily focused on the aggregate. National statistics collect information at the individual level and lump it together into averages at the aggregate level. It is this fixation with finding the “truth” about the population that interests Foucault. Unlike the Austrians, he is not interested in the methodological efficacy of statistics. However, he shares with them the concern that this “truth” has the power to assign limits to individual freedoms. The Austrian imagination of spontaneous order provides some solution to this. It dispenses with this strict positivist “truth” and the arbitrary state power employed in finding it. 

The idea of developing statistics, not as mere records but as a basis for planning, is, thus, a leading cause of their proliferation. However, the relationship also works in reverse. The growth of statistics ends up multiplying the avenues of government intervention, i.e., their own autonomous development opens up new fields for the interventionist to exploit. Each new statistical technique soon acquires its own subdivision and application in government.

There are reasons as to why the statistically oriented tend to be interventionists. Statistics foster in the interventionist a sense of knowledge and expertise. The notion of “expertise” carries here an immediately “pragmatic” connotation. The expert detects, under the care of his eager research, the many “problem areas” in society—the list is, of course, endless. Hence, the expert tends to suggest pragmatic interventions to solve these problems. This case by case, ad hoc approach degenerates into muddled state interventionism.  

Conclusion

Government is Foucault’s preferred term for power, and governmentality is government’s very own distinct rationality. As the population became the object of government, it encouraged the development of specialized forms of knowledge. Statistical analysis and macroeconomics both emerged in the historical backdrop of the New Deal in the United States, as the state assumed enormous economic powers. So, the great spur toward constructing index numbers, for instance, was the desire to have the government stabilize the price level. The Austrian liberals critique these positivist methods. They argue that the knowledge required to affect such interventions is simply not available. But instead of acknowledging that it does not know, the state pretends it does. Foucauldian and Austrian accounts are both similar to the extent that they attack political rationality. They realize that interventions in markets or society are, more often than not, malicious clampdowns on individual liberty: they are tools with which the state asserts its power.

Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.

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