Governing the system: Risk,finance,and neoliberal reason

Abstract

The 2007/2008 financial crisis was widely expected to usher in a shift toward a post-neoliberal regime that would be more actively concerned with system-level risk and impose restrictive regulations on financial institutions and markets. Such a shift, it is now widely recognized, has failed to materialize. Commentators have tended to point to the “capture” of policymaking processes by financial elites to account for the failure of reform. This argument represents the continuation of a problematic trend in critical perspectives on neoliberalism — namely, to rely on an instrumentalist understanding of institutional power and to view the survival of neoliberalism as dependent on external interventions. That line of critique, it is argued, is rather one-sided in downplaying the internal sources of cohesion that neoliberalism commands. Taking its cue from Foucault’s comments on neoliberalism in his late lectures at the Collège de France and the methodological innovations that he introduced in that context, the article explores the logic of governance through risk and the specific way in which neoliberalism intervenes in this relationship. In this way, it moves beyond an understanding of neoliberalism that views it in terms of the neglect of system-level governance and offers an account of the distinctive modalities of neoliberal financial governance. The article suggests that we should not view developments since the crisis in purely negative terms (the failure of progressive reform), but consider the ways in which they represent a continuation of the distinctive rationality of neoliberal financial governance.