Neoliberalism's Demons
On the Political Theology of Late Capital
Adam Kotsko

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INTRODUCTION

Every academic critique of neoliberalism is an unacknowledged memoir. We academics occupy a crucial node in the neoliberal system. Our institutions are foundational to neoliberalism’s claim to be a meritocracy, insofar as we are tasked with discerning and certifying the merit that leads to the most powerful and desirable jobs. Yet at the same time, colleges and universities have suffered the fate of all public goods under the neoliberal order. We must therefore “do more with less,” cutting costs while meeting ever-greater demands. The academic workforce faces increasing precarity and shrinking wages even as it is called on to teach and assess more students than ever before in human history—and to demonstrate that we are doing so better than ever, via newly devised regimes of outcome-based assessment. In short, we academics live out the contradictions of neoliberalism every day.

The present investigation is also autobiographical in a more specific sense. It represents an attempt to think the three great catastrophes that have shaped my political awareness—the Iraq War, the Global Financial Crisis, and the installation of Trump as US president—together, as part of a single overarching phenomenon. As I discuss in my first chapter, this has rarely been done: the Bush debacle is most often viewed as an isolated and unrepresentative episode within the broader historical arc of neoliberalism, while Trump and analogous right-wing reactions in other countries are widely presented as a resurgence of social and political elements that have unaccountably persisted despite being foreign to neoliberal logic. For reasons that will become clear as my argument unfolds, I view such interpretations as inadequate and unsatisfying. Accordingly, I have sought to develop a more holistic account of the neoliberal era that renders apparent right-wing deviations legible as an integral feature rather than an inexplicable holdover from a previous era.

Yet this study is not itself a mere reaction to recent political events. It builds on concepts and themes from my previous book, The Prince of This World.1 There, I undertook a genealogy of the figure of the devil with an eye toward uncovering his legacy in the modern world. I argued that the devil has to be understood as at once a theological and a political figure, who plays an ever-changing but consistently decisive role in the strategies that key Christian theologians have deployed to legitimate the Christian social order in their respective eras. By the late medieval period, the devil had become a necessary scapegoat who allowed God to avoid direct responsibility for evil while also giving God the opportunity to enhance his glory by overcoming evil with good.

Crucial to this strategy was the notion that the devil freely chose to rebel against God. This claim served as the foundation of a moral paradigm in which freedom, far from being the basis of creaturely dignity or fellowship with God, is thought exclusively as a mechanism for generating blameworthiness. I designated this form of moral entrapment as “demonization,” in recognition of the fact that it is the means by which God generates demons within the theological system itself. And I argued that modernity inherited this demonizing notion of freedom as blameworthiness and laid it at the foundation of its own strategies of self-legitimation.

Given my focus on the origin and history of the figure of the devil in pre-modern thought, my claims about modernity operated at a very high level of generality. This book represents an effort to provide a more detailed warrant for my account of the devil’s legacy through a concentrated study of one particular paradigm of modern secular governance, namely neoliberalism, which I put forward as the paradigm in which the strategy of moral entrapment that I call demonization has been pushed to its uttermost limits. Neoliberalism makes demons of us all, confronting us with forced choices that serve to redirect the blame for social problems onto the ostensible poor decision making of individuals. This strategy attempts to delegitimate protest—and ultimately even political debate as such—in advance by claiming that the current state of things is what we have all collectively chosen.

At the time that I began developing the core argument of this book in the middle of 2016, the neoliberal consensus seemed nearly unassailable. In the United States the arch-neoliberal Hillary Clinton was in the process of consolidating her victory over the social democrat Bernie Sanders, and Donald Trump, though already coasting toward the Republican nomination, still seemed to be a bizarre sideshow rather than a serious political force. Like everyone else—apparently including even Trump himself—I was shocked at the election result. As I tried to come to terms with the increasingly surreal political events that began to unfold in the wake of that awful day, the concepts I had been developing for this project proved helpful. At the same time, the changed political circumstances shed fresh light on the neoliberal order. Given my poor track record as a prognosticator, I do not pretend to predict how the so-called Age of Trump will play out, or indeed whether Trump will even still be president by the time this book is published. Yet I maintain that the very fact such a thing was possible reveals something important about neoliberalism, something that will continue to be true even if things ultimately go “back to normal” (i.e., the neoliberal status quo ante is restored) in the coming years.

What Is Neoliberalism?

One of the consequences of the 2016 US election that most directly impacts my project is the emergence of the term neoliberalism as an object of mainstream political debate. Unfortunately, the discussion has resulted in more confusion around a term that was already much contested, as defenders of Clinton have tended to claim that neoliberalism is nothing more than a term of abuse and that what Sanders supporters tar as neoliberalism is simply identical to conventional liberalism. These new developments compound the difficulties stemming from the idiosyncratic US usage of liberal to mean “moderately left of center” and the similarities between neoliberalism and the “classical liberalism” advocated by libertarians.

Thus, while I flesh out my own demonic definition of neoliberalism in the chapters that follow, some initial clarification is in order. I will begin with the relationship between neoliberalism and “classical” or laissez-faire liberalism. The latter term refers to the economic order that prevailed during the “long nineteenth century,” during which all the major European powers were committed to the free operation of a global capitalist market. In this paradigm economics and politics are two separate realms that operate best when the state resists the urge to meddle in the economy. As Karl Polanyi shows in The Great Transformation,2 the establishment and maintenance of the classical liberal order required considerable state action, and the state was continually forced to ameliorate the destructive effects of unfettered market forces through a series of more or less ad hoc measures. Yet compared with the dominant model that emerged in the United States and Western Europe in the wake of the Second World War, the state’s role in relation to the economy was much more circumscribed in classical liberalism.

The First World War and subsequent cataclysms discredited the classical liberal model, whose promise of endless peace and prosperity (at least within the European sphere) failed spectacularly. As Polanyi shows, this collapse led to various experiments with more state-driven economic models, including Soviet Communism, Fascism and National Socialism, and Roosevelt’s New Deal. The model that ultimately took hold in the major Western countries after the Second World War has gone under a number of different names, including social democracy or the welfare state. Within the United States it was for a time known, confusingly enough, as neoliberalism, in recognition of the ways that the market forces familiar from classical liberalism were being intentionally harnessed and redirected toward socially beneficial ends. Ultimately, despite this clear opposition to classical liberalism, the term liberalism (sans neo-) came to prevail as a designation for the postwar American political settlement—a strange state of affairs that continues to generate considerable confusion. In recognition of this shift in linguistic usage, the faithful remnant in the United States who, inspired by the pulp novels of Ayn Rand, advocated a straightforward return to the prewar laissez-faire order came to call themselves libertarians.

For the purposes of the present study, I have chosen to designate the postwar order as “Fordism.” There are many reasons for this choice. From an academic standpoint it is a nod to the Marxist analysts who have shaped my understanding of the dynamics of capitalism in the twentieth century, and in contrast to a name like “postwar liberalism,” it has the benefit of defamiliarizing the postwar model and emphasizing our historical distance from it. On a more personal level it reflects my upbringing in the suburbs of Flint, Michigan, a city that has been utterly devastated by the transition to neoliberalism. As I lived through the slow-motion disaster of the gradual withdrawal of the auto industry, I often heard Henry Ford’s dictum that a company could make more money if the workers were paid enough to be customers as well, a principle that the major US automakers were inexplicably abandoning. Hence I find it to be an elegant way of capturing the postwar model’s promise of creating broadly shared prosperity by retooling capitalism to produce a consumer society characterized by a growing middle class—and of emphasizing the fact that that promise was ultimately broken.

By the mid-1970s, the postwar Fordist order had begun to break down to varying degrees in the major Western countries. While many powerful groups advocated a response to the crisis that would strengthen the welfare state, the agenda that wound up carrying the day was neoliberalism, which was most forcefully implemented in the United Kingdom by Margaret Thatcher and in the United States by Ronald Reagan. And although this transformation was begun by the conservative party, in both countries the left-of-center or (in American usage) “liberal” party wound up embracing neoliberal tenets under Tony Blair and Bill Clinton, ostensibly for the purpose of directing them toward progressive ends. With the context of current debates within the US Democratic Party, this means that Clinton acolytes are correct to claim that “neoliberalism” just is liberalism but only to the extent that, in the contemporary United States, the term liberalism is little more than a word for whatever the policy agenda of the Democratic Party happens to be at any given time.

Though politicians of all stripes at times used libertarian rhetoric to sell their policies, the most clear-eyed advocates of neoliberalism realized that there could be no simple question of a “return” to the laissez-faire model. Rather than simply getting the state “out of the way,” they both deployed and transformed state power, including the institutions of the welfare state, to reshape society in accordance with market models. In some cases this meant creating markets where none had previously existed, as in the privatization of education and other public services. In others it took the form of a more general spread of a competitive market ethos into ever more areas of life—so that we are encouraged to think of our reputation as a “brand,” for instance, or our social contacts as fodder for “networking.” Whereas classical liberalism insisted that capitalism had to be allowed free rein within its sphere, under neoliberalism capitalism no longer has a set sphere. We are always “on the clock,” always accruing (or squandering) various forms of financial and social capital.

Why Political Theology?

Thus neoliberalism is more than simply a formula for economic policy. It aspires to be a complete way of life and a holistic worldview, in a way that previous models of capitalism did not. It is this combination of policy agenda and moral ethos that leads me to designate neoliberalism as a form of political theology. As with the term neoliberalism, my fully articulated view of the latter term will unfold over the course of the entire argument of this book, and so I will again limit myself to addressing some initial sources of confusion.

Here the term theology is likely to present the primary difficulty, as it seems to presuppose some reference to God. Familiarity with political theology as it has conventionally been practiced would reinforce that association. Schmitt’s Political Theology and Kantorowicz’s The King’s Two Bodies both focused on the parallels between God and the earthly ruler,3 and much subsequent work in the field has concentrated on the theological roots of political concepts of state sovereignty. Hence the reader may justly ask whether I am claiming that neoliberalism presupposes a concept of God.

The short answer is no. I am not arguing, for example, that neoliberalism “worships” the invisible hand, the market, money, wealthy entrepreneurs, or any other supposed “false idol,” nor indeed that it is somehow secretly “religious” in the sense of being fanatical and unreasoning. Such claims presuppose a strong distinction between the religious and the secular, a distinction that proved foundational for the self-legitimation of the modern secular order but that has now devolved into a stale cliché. As I will discuss in the chapters that follow, one of the things that most appeals to me about political theology as a discipline is the way that it rejects the religious/secular binary.

That binary conditions the way people think about theology, leading them to view it as a discourse that, in contrast with rational modes of inquiry like philosophy and science, is concerned exclusively with God, is based on faith claims as opposed to verifiable facts, and is ultimately always dogmatic and close-minded. Yet attempts to establish a qualitative distinction between theology and philosophy or science on these grounds fail completely. If discourse about God is the defining feature, then Aristotle, Descartes, and Newton must be dismissed as mere theologians. If unverifiable premises mark the difference, then Euclidean geometry is the vilest form of fundamentalism.

Coming at the problem from the other direction, theology has always been about much more than God. Even the simplest theological systems have a lot to say about the world we live in, how it came to be the way it is, and how it should be. Those ideals are neither true nor false in an empirical sense, nor is it fair to say that believers accept them blindly. Every such theological ideal ultimately comes to depend on cultural inertia, but it could not take root and spread in the first place if it were not appealing and persuasive. It is this world-ordering ambition of theology, which relies on people’s convictions about how the world is and ought to be, that for me represents a more fruitful distinction between theological discourse and philosophical or scientific discourses, at least as the latter tend to be practiced in the contemporary world.

It is in this sense that I consider neoliberal ideology a form of theology—it is a discourse that aims to reshape the world. But here another question arises: why not simply call it an ideology? Why court misleading preconceptions about theology when an alternative exists? I answer that the term ideology carries its own preconceptions with it, which I am even more concerned to avoid. The term necessarily evokes the Marxist theory of ideology, which in its most simplistic forms maintains that ideology is merely a secondary effect of the development of the economic mode of production. This reductionism carries with it the implication that ideology, as an illusion propagated by the bourgeoisie, can be replaced by the true view of things, namely Marxist science. While the Marxist tradition has consistently tried to break free of this one-sided reductionism—an attempt that has often involved an engagement with theology, most famously in Althusser’s evocation of Pascal in “Ideology and Ideological State Apparatuses”4—it remains an inescapable center of gravity for the theory of ideology. Moreover, as I will show in subsequent chapters, this reductionism has made it very difficult for Marxist critics to grasp the distinctiveness of neoliberalism. Hence I chose a different path.

I will begin to lay out my own account of political theology in the first chapter, but I hope it is already clear that I conceive of the discipline as more than simply the study of parallels between political and theological concepts. On the most fundamental level, I regard political theology as the study of systems of legitimacy, of the ways that political, social, economic, and religious orders maintain their explanatory power and justify the loyalty of their adherents. I maintain that we have misunderstood neoliberalism if we do not recognize that it, too, is a system concerned with its own self-legitimation. In this respect the account of neoliberalism that comes closest to my approach is Will Davies’s The Limits of Neoliberalism, which he describes as “a piece of interpretive sociology.” This means that his study “starts from the recognition that neoliberalism rests on claims to legitimacy, which it is possible to imagine as valid, even for critics of this system. . . . The book assumes that political-economic systems typically need to offer certain limited forms of hope, excitement, and fairness in order to survive, and cannot operate via domination and exploitation alone.”5 Davies’s sociological approach takes him into territories I am not trained to explore, including the internal culture of regulatory agencies tasked with implementing neoliberal policies. In my view he provides an irrefutable demonstration of the fact that neoliberalism really is a consciously embraced ideology that has worked its way through concrete institutions of governance, while at the same time accounting for the developments and apparent contradictions in neoliberal thought and practice over the last several decades.

The obvious difference in scope and approach between our respective projects, despite our similar starting point, highlights another feature that is central to my vision of political theology: its genealogical character. Simply put, political theology always takes the long view—indeed, to such an extent that other academic disciplines could rightly portray it as speculative and even irresponsible. In the case of the current study, for instance, I must confess that I am unable to empirically document the connection that I am positing between late medieval theology and contemporary neoliberal practices. But neither could anyone else, and that is because the types of large-scale narratives that political theology constructs are neither true nor false on a strictly empirical basis. Political theology seeks not to document the past, but to make it available as a tool to think with. It does not aim merely to interpret the present moment, but to defamiliarize it by exposing its contingency. In other words, political-theological genealogies are creative attempts to reorder our relationship with the past and present in order to reveal fresh possibilities for the future.

The Plan of the Work

So far, I have offered only provisional sketches of neoliberalism and political theology and the relationship I see between them. They should not be regarded as firm definitions but as points of reference to help orient the investigation. In the chapters that follow, I will not merely be filling in more detail on neoliberalism and political theology; rather, I will gradually redefine each in terms of the challenge presented by the other.

For this pairing is anything but obvious. On the one hand, most accounts of neoliberalism leave little room for the conventional themes of political theology—above all of the notion of state sovereignty, which has supposedly been eclipsed in the neoliberal order.6 On the other hand, Schmitt’s initial formulation of political theology omits and even denigrates the economic concerns that are ostensibly the sole concern of neoliberalism. In order to bring together neoliberalism and political theology, my first step is to show that the conventional themes of political theology emerge persistently in the existing accounts of neoliberalism, but are always viewed as an extrinsic and even surprising element that theorists tend not to account for in any systematic way. Then, coming at the problem from the other direction, I attempt to show that Schmitt’s presentation of political theology is artificially narrow and to provide grounds in his text for a broader vision of the field that could include a phenomenon like neoliberalism. Without leaving aside political theology’s traditional focus on the homologies between theological and political systems, this more general political theology would ask more explicitly about the source of those homologies—namely, the ultimately unanswerable question that is expressed theologically as the problem of evil and politically as the problem of legitimacy.

Thus a political-theological approach to neoliberalism would not ask about the role of the state or sovereignty so much as the ways that the neoliberal order justifies and reproduces itself as a structure of meaning and legitimacy. I argue that the key concept in neoliberalism’s attempt at self-legitimation is freedom, which neoliberalism defines in deeply individualistic terms that render market competition the highest actualization of human liberty. Accordingly, my second chapter is devoted to making the case for overcoming political theology’s traditional hostility toward the economic realm. Drawing on the work of Wendy Brown, Giorgio Agamben, and Dotan Leshem, I trace this binary opposition back to the work of Hannah Arendt, who famously opposes the two realms and privileges the political over the economic. I then argue that “Arendt’s axiom” is false: there is no pregiven distinction between the political and the economic, and in fact each political theological paradigm—very much including neoliberalism—reconfigures that binary for its own ends.

In the third chapter I provide an account of neoliberalism as a political theological paradigm that governs every sphere of social life—not just the state and the economy, but religion, family structure, sexual practice, gender relations, and racialization—by means of a logic of demonization. This provides the foundation for my analysis, in the fourth chapter, of the reactionary populist wave represented by the Brexit vote and the Trump presidency. There I argue that, far from a radical break with neoliberalism, the populist wave is a kind of “heretical” variant on the neoliberal paradigm, which accepts its core principles and pushes them to almost parodic extremes. I then conclude with some reflections on the new concept of political theology that has emerged from this investigation and on the prospects for building a more humane and viable alternative to the neoliberal order.

Broadly speaking, the first half of the book has a much more methodological focus than the second half. I have therefore provided more detail in my summaries of the arguments of the first two chapters, in recognition of the fact that some readers who are more interested in neoliberalism than in political theology may wish to skip ahead to the third chapter. Those readers will presumably be able to make some kind of sense of my interpretation of neoliberalism and the populist reaction, but that interpretation never could have taken the form that it has without the theoretical labor undertaken in the first two chapters. Hence I hope that those who skip ahead will return to the more methodological reflections, if only to clarify the relationship of my view of neoliberalism with other major accounts.

Notes

1. Adam Kotsko, The Prince of This World (Stanford: Stanford University Press, 2016).

2. Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon, 2001).

3. Carl Schmitt, Political Theology: Four Chapters on the Concept of Sovereignty, trans. George Schwab (Chicago: University of Chicago Press, 2005); Ernst Kantorowicz, The King’s Two Bodies: A Study in Medieval Political Theology (Princeton, NJ: Princeton University Press, 2016).

4. Louis Althusser, “Ideology and Ideological State Apparatuses (Notes Towards an Investigation),” in Lenin and Philosophy and Other Essays, trans. Ben Brewster (New York: Monthly Review Press, 1971), 189–219.

5. Will Davies, The Limits of Neoliberalism: Authority, Sovereignty, and the Logic of Competition, rev. ed. (Los Angeles: Sage, 2017), xxii.

6. Davies is a notable exception to this rule, as he makes frequent reference to the necessity of state action to neoliberalism and, in fact, explicitly cites Schmitt’s theory of sovereign emergency powers throughout The Limits of Neoliberalism.