Research Handbooks on Globalisation and the Law series
Edited by Ugo Mattei and John D. Haskell
Chapter 5: Neoliberalism, debt and discipline
In the neoliberal reorganization of capitalism since the late 1970s, hegemony of finance capital displaced Keynesian welfare. This transformation entailed a roll-back of the welfare state, breaking the power of organized labor, precarization of labor markets, financialization of the economy, and exponential expansion of debt. In this ensemble, debt sustained aggregate demand, fueled liquidity to lubricate financialization, and facilitated assemblages of entrepreneurial subjects responsible for their own economic security. Public welfare was replaced by self-care, and working classes were obliged to fund their private welfare through private debt, while calibrating their conduct with demands of a precarious labor market. Under neoliberal financialization, debt was deployed as the primary instrument for the assemblage of self-caring subjects through ‘modes of subjectification … in which people are invited to recognize their moral obligations.’ The citizen was reconstituted as homo economicus, ‘an entrepreneur, an entrepreneur of himself,’ and one that is ‘eminently governable’ through the technologies of the self, motivated by the incentive structure of the market. The hidden hand of the market and the iron fist of the law worked in concert to forge governmentalities that sutured debt with discipline. This ensemble underscored that capitalism is not a de-politicized and de-subjectified market economy governed by ‘economic laws,’ but a set of politically contested social relations under the hegemony of capital. Capitalism is a relation of power where the state and the market remain intertwined.
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