Between the State and the market: what if we took a closer look?

If we had to read only a few pages of Bernard Harcourt’s book, they would undoubtedly be those he devotes to listing the rules involved in futures transactions on agricultural products on the Chicago Mercantile Exchange. We discover there that one of the most emblematic places of speculation, and of “ market self-regulation “, is based on finicky limits and that even the federal state plays, ultimatelya role in their respect.

When categories prevent you from thinking

Nothing new under the sun ? It is sometimes good to return to Durkheim: “ (O)besides the fact that it is false that all regulation is the product of constraint, it turns out that freedom itself is the product of regulation » ; “ Any contract therefore assumes that, behind the parties who commit, there is society ready to intervene to ensure that the commitments that have been made are respected (…) “. And yet, those who have emphasized, in sociology as in history, that even the most “ perfect » could not do without institutions was hardly heard by the general public, or even by their colleagues: the law or the State are still very often presented as pure constraints for economic actors.

The Illusion of Free Markets thus highlights that certain dichotomies are inscribed so deeply in our ways of thinking that, far from simply hiding a few nuances of detail, they literally prevent us from seeing entire sections of reality – with considerable political consequences. Working on commercial courts, I can only agree: these strange hybrids between market and discipline – hybridization which was recognized and praised in XIX^e century – are also forgotten by the social sciences. From courts to judges elected by their peers to enforce contracts, but who resort to bailiffs, or even debtors’ prison: this seems so strange that we could pretend it didn’t exist. And yet, for two centuries, they have judged 200,000 cases per year…

The need, to do history well, as well as to think carefully about economic policy, to abandon the oppositions between freedom and discipline, but also between private and public, or even between informal and formal, is hardly in doubt: not because they are simplifying, which is their aim, but because they are so unsuitable that they prevent us from seeing, or cause us to see in a negative way. However, as a historian rather specialized in XIX^e century, I wonder about some missing links in Bernard Harcourt’s book, taking into account which could perhaps help us know what to do, once we have abandoned our dichotomous blinders.

Do ideas make history? ?

My doubts refer to two founding gestures of the author: on the one hand, starting from a parallel between the XVIII^e century and today, blithely stepping over the XIX^e century and the first half of XX^e century ; on the other hand, follow a primarily intellectual genealogy to, ultimatelylink it to two observations of another order: the number of prisoners in the United States and the fact that, in polls, nearly three-quarters of Americans say they are in favor of the free market. Don’t forget the XIX^e and first XX^e centuries, and in particular the social question and technocracy, could make it possible to better take into account the connections between market and discipline in the history of ideas themselves – in short, at this level too, to move away from dichotomies. Thus, free market economists have not always taken “ state intervention “. Their opposition in this matter was completely reconfigured after the emergence, from the 1830s to the 1890s, of a “ social question » defined as such – something that is not just economic, or “ moral “, or policy, but which can constitute a new area of ​​study and intervention for “ social sciences » and “ social laws “. All of this contributes to the creation of a sphere which seems to me external to those of the market and the penal system, equipped with its own modes of regulation. But is it not above all this sphere that the neoliberals wanted to circumscribe ?

As for technocracy, I am thinking of “ neoliberals » from the interwar period, direct ancestors of those to whom B. Harcourt is attached: but, for them, “ neoliberalism is a state thought, and not against the state or for its withdrawal “. This is in particular the thinking of experts, who think they know what is good for the free market to happen, and tell the State how to act in this direction. From this point of view, they resemble the physiocrats mentioned by Harcourt, but we should amend the description of what brings them together: they are also intellectuals who think they know better than economic actors what is good for them. We thus find in multiple sources from the years 1750-1820 variations of the formula according to which what is good for traders (who demand protection) is not necessarily good for commerce. If they can also speak, moreover, of the natural order, they are not fooled by their own ideas, and it is not only through penalty that they propose to act.

The formula also underlines that the ideas of economists are not always those of economic actors. Of course, it is not uncommon for economic theories to be popularized and even end up becoming performative – but not always, and it is important to know through exactly which channels. Without even going as far as voters, or going so far as to reintroduce social groups and power relations into this story, how do political leaders receive the ideas of economists, translate them, tinker with them? ? Wouldn’t it be simpler to postulate that Ronald Reagan’s phrases which speak of the economy and those which speak of crime do not come from the same advisers and that he does not consider – or that his voters do not consider – that ‘it is necessary that they arise from the same philosophy ?

What to do after the reveal ?

Jean-Pierre Hirsch thus highlighted the permanence of “ two dreams of commerce “, freedom and protection, and therefore the need to admit that the preferences of economic actors are not necessarily coherent, nor directly deducible from “ their interests “. There is a new black box to open: behind the illusion of the free market, that of obvious interests and preferences that would naturally flow from it. It is the study of the formation of these preferences – including when economists influence it – which should above all concern us, as legal sociologists Lauren Edelman and Robyn Stryker have already stated.

Above all, it remains to reinvent a way of talking about economic institutions. I do not believe that the nominalism claimed by Bernard Harcourt allows this: he asserts that once the categories of free market and discipline are abandoned, all that remains is to observe the individuality of each situation – a somewhat untenable position. Certainly, it is important not to reduce the articulations between forms of regulation to a single axis which would go from the free market to State discipline: we must take into account dimensions perpendicular to this axis, such as corporatist regulation, and above all refine the definitions of public and private, formal and informal. If everything, in practice, is hybrid, it is difficult to be satisfied with the observation of this hybridization: it would be more interesting to constitute a new glossary to describe articulations which differ, for example, between France and the United States or between the XVIII^e and the XXI^e centuries, even if not in the way postulated by neoliberals.