Neo-Liberalism, Neoclassical Economics, and Foucault: Dominant Schools of Economic Thought in American Anarcho-Liberalism and German Ordoliberalism
28 Pages Posted: 20 Oct 2020 Last revised: 8 Apr 2021
Date Written: April 3, 2021
This paper examines the influence of American and German neo-liberalism on the dominant school of economics in their respective countries based on an extended version of Foucault’s The Birth of Biopolitics. The analyses of the American neo-liberal economists, or anarcho-liberalists, legitimised the extension of the basic neoclassical model to non-economic, social phenomena and invalidated governmental intervention in both economic and social phenomena. In contrast, the assumption of the German neo-liberals, or Ordoliberals, of markets as artificial, imperfect constructs validated setting the right conditions for the market by the government. This analysis demonstrates and draws lessons from the historical conditions under which a school with divergent assumptions from the neoclassical assumptions of perfect rationality and perfect competition became dominant in a neo-liberal political-economic environment.
Keywords: neoliberalism; neoclassical; Foucault; The Birth of Biopolitics; economics
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