A rigorous liberal legal framework promoting economic competition is the ONLY way neoliberalism can exist – the state serves to construct the necessary economic conditions for the market to exist and to shape our subjectivities and social relations towards those markets

One of the myths surrounding neoliberalism is that it envisages a minimal role for the state. This myth, peddled by advocates and critics of neoliberalism alike, confuses the arguments about laissez-faire and the minimal state advanced by adherents of classical liberalism in the nineteenth century with the more nuanced views on the state propounded by theorists of neoliberalism. Of course, the goal of proponents of neoliberalism is to create a society founded upon the market – a market order – but this is not incompatible with a strong state; indeed, it demands a strong, active state to construct the necessary conditions for the establishment and maintenance of that market order. Thus, inter alia, the state must create markets where they do not already exist and ensure their continued operation; guarantee property rights; and ensure the absence of monopolies. But it needs to do more than this to ensure that societies function on the basis of markets. The state must also shape social relations accordingly and construct a specific worldview that enables the market to define the manner in which societies operate in practice. As Loïc Wacquant has noted: ‘[W]hat is “neo” about neoliberalism [is] the reengineering and redeployment of the state as the core agency that sets the rules and fabricates the subjectivities, social relations and collective representations suited to realising markets’.2 Wacquant’s analysis of neoliberalism is helpful for two reasons. First, in emphasising the importance of the state, he identifies neoliberalism as a political, as opposed to an economic, project. In other words, while the establishment of a market order is the goal of neoliberalism, this is accomplished through politics, rather than the product of neoclassical economics. Second, he points to the need to develop ‘a “thick” sociological conception’ of neoliberalism that identifies both the institutional means deployed by the state to establish, maintain, and impose the market order on society, and the types of consequences this has for citizenship. For Wacquant, those institutional means are not confined to the rules of the marketplace, but also include the criminal justice system – especially the prison, the ‘disciplinary’ social policy of workfare, and the ‘trope of individual responsibility’. Whether or not one agrees with the relevance of the particular institutional means or ‘logics’ he identifies, this manner of conceptualising neoliberalism and what he calls the crafting of the neoliberal state succeeds in highlighting the importance of concrete state institutional mechanisms in shaping the material components of those phenomena (e.g. the construction of new markets) and their symbolic components (‘the capacity that the state has to trace salient social demarcations and produce social reality through its work of inculcation of efficient categories and classifications’3 ). If we wish to understand market societies, we need to attend to the different ways and means through which the state constructs these. How does law fit within this analysis of neoliberalism and the crafting of the neoliberal state? While Wacquant himself includes (presumably the criminal) courts as part of the penal wing of the neoliberal state that he explores in his recent work, there is little discussion of the role that these, or law and legal categories more generally, play in neoliberalism and the construction of the neoliberal state. And yet for the pioneers of neoliberalism law was to play a foundational role in the development and implementation of the neoliberal vision. Two dimensions of this can be identified. First, for neoliberals, markets are creatures of law. Their existence demands, and depends on, the presence of a legal framework suited to this end. In Marxist terms, though contrary to traditional Marxist teachings, law, in this vision, is not a part of the superstructure determined by the economic base; rather, law is an inherent aspect of the base – law founds the market order, rather than being determined by it. This has consequences for common assumptions surrounding the nature of economic entities and their regulation. Thus, the property bought and sold on the market, the contracts through which the sale and purchase are made, and the companies involved in selling and buying the property are all, in the first instance, legal entities, rather than, as is commonly assumed, objects that exist outside of the law and are only subsequently regulated, or not, by the law. As Walter Lippmann, whose eponymous Colloquium is often cited as constituting the beginnings of neoliberalism, wrote: Only by recognizing that legal rights are declared and enforced by the state is it possible to make a rational examination of the value of any particular legal right. The latter-day liberals did not see this. They fell into a deep and confusing error when they failed to see that property, contracts, corporations, as well as governments, electorates, and courts, are creatures of law, and have no existence except as bundles of enforceable rights and duties.4 Second, for neoliberals law must take the form of a set of formal abstract general rules that apply equally to everyone’s conduct. This is necessary because the market order is based on the idea that individuals are free to pursue their different objectives via the market. The alternative – social law – defeats this purpose as it involves the creation of rules designed to further a particular, predetermined end such as the redistribution of wealth between classes. Here, law would prescribe individual conduct rather than respect liberty of action. The market order, then, is what Hayek refers to as a nomocracy (governed by law), as opposed to a teleocracy (governed by an end or ends). It is what he called a ‘private law society’ where the formal abstract general rules – the ‘rules of just conduct’ – that constitute the market order are synonymous with ‘the essential content of all contemporary systems of private law, [“]freedom of contract, the inviolability of property, and the duty to compensate for damage due to his fault[”]’.5 In his influential book The Road to Serfdom, Hayek was already setting out this vision of law in the course of his argument that competition – the defining norm of neoliberalism and what Hayek called ‘the principle of social organisation’ – required a rigorous legal framework for its successful and beneficial operation. It was a crucial part of what he endorsed as the state’s ‘planning for competition’, as opposed to ‘planning against competition’, which involved the ‘central direction of all economic activity according to a single plan, laying down how the resources of society should be “consciously directed” to serve particular ends in a definite way’.6