The following Michel Foucault’s sharp insights on neoliberalism were presented during his lecture series “The Birth of Biopolitics” at the Collège de France in 1979 — a few months before Thatcher and Reagan took power, but several decades after Walter Lippmann, Wilhelm Röpke, Alexander Rüstow, Friedrich Hayek, Ludwig von Mise, and Milton Friedman articulated, formulated, and then vigorously disseminated their ideas.“Neo-liberalism is not Adam Smith; neo-liberalism is not market society; neo-liberalism is not the Gulag on the insidious scale of capitalism.
So, what is this neo-liberalism?… The problem of neo-liberalism was not how to cut out or contrive a free space of the market within an already given political society, as in the liberalism of Adam Smith and the eighteenth century. The problem of neo-liberalism is rather how the overall exercise of political power can be modeled on the principles of a market economy. So it is not a question of freeing an empty space, but of taking the formal principles of a market economy and referring and relating them to, of projecting them on to a general art of government. This, I think, is what is at stake, and I tried to show you that in order to carry out this operation, that is to say, to discover how far and to what extent the formal principles of a market economy can index a general art of government, the neo-liberals had to subject classical liberalism to a number of transformations.
So, what is this neo-liberalism?… The problem of neo-liberalism was not how to cut out or contrive a free space of the market within an already given political society, as in the liberalism of Adam Smith and the eighteenth century. The problem of neo-liberalism is rather how the overall exercise of political power can be modeled on the principles of a market economy. So it is not a question of freeing an empty space, but of taking the formal principles of a market economy and referring and relating them to, of projecting them on to a general art of government. This, I think, is what is at stake, and I tried to show you that in order to carry out this operation, that is to say, to discover how far and to what extent the formal principles of a market economy can index a general art of government, the neo-liberals had to subject classical liberalism to a number of transformations.
The first of these… was basically that of dissociating the market economy from the political principle of laissez-faire. I think this uncoupling of the market economy and laissez-faire policies was achieved, or was defined,at any rate, its principle was laid down, when the neo-liberals put forward a theory of pure competition in which competition was not presented as in any way a primitive and natural given, the very source and foundation of society that only had to be allowed to rise to the surface and be rediscovered as it were. Far from it being this, competition was a structure with formal properties, [and] it was these formal properties of the competitive structure that assured, and could assure, economic regulation through the price mechanism… Neoliberalism should not therefore be identified with laissez-faire, but rather with permanent vigilance, activity, and intervention.” (Foucault 2008: 131-2)
Foucault, Michel. 2008. The Birth of Biopolitics: Lectures at the Collège de France, 1978–1979. Palgrave Macmillan.
Economic Sociology & Political Economy 
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