New APPS

By Gordon Hull

As I suggested last time, the current neoliberal expansion of IP hinges on the acceptance of monopolies, and the relation between deadweight loss (as advanced by Arrow) and incentives theory (as advanced by Demsetz) is accordingly essential to understanding it.  Here I want to expand on that point, and then say something about contemporary theory.

The debate is one that Demsetz’s side is winning.  When term limits came before the Supreme Court in Eldred v. Reno, a set of seventeen economists – including such neoclassical luminaries as Arrow, James Buchanan, Ronald Coase, and Milton Friedman – submitted an amicus curiae brief to the Supreme Court opposing the 1998 Copyright Term Extension Act (CTEA).  These economists made arguments precisely in terms of incentives and deadweight loss: a further increase in term length is highly unlikely to make a meaningful difference to incentives to create works, while likely to burden the public with reduced access, and other creators with greater licensing fees.  They conclude:

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By Gordon Hull

In rereading Philip Mirowski’s critique of Foucault on neoliberalism (as it’s presented in Never Let a Serious Crisis Go to Waste, his book on the 2008 financial crisis), I noticed a limit in Foucault’s analysis that I hadn’t really thought about before.  Although Foucault correctly sees that a key (if not they key) feature in the transition from classical liberalism to neoliberalism is the realization that markets are something that the state can create and curate, he does not see that neoliberalism also puts a lot of weight on the neoclassical tolerance for monopolies.  This is a significant reversal from classical liberalism.  I work on intellectual property, which is a legal regime that attempts to create markets in intellectual goods by way of granting monopolies to their creators, which means it’s hard to ignore the tolerance of monopoly.  But the point is worth expanding on more generally.

As Foucault points out (as will be apparent, all of my references will be to Birth of Biopolitics; I’m not aware the topic comes up elsewhere in his work), classical liberalism – the “liberal art of government” (BB 65) – requires anti-monopoly legislation for the “freedom of the internal market to exist” (BB 64).  Competition, if left unchecked, will tend to lead to monopolies.  By the New Deal, and the political opposition is engendered, liberalism faced a “crisis … due to the inflation of the compensatory mechanisms of freedom” (BB 69) such that anti-monopoly legislation could be perceived as part of a “’legislative strait-jacket” (BB 68).  The ordo-liberals thus pick up on the “problem of competition and monopoly” but “do not depart in any way from the historical development of liberal thought” (BB 119).  For early neoliberalism, the “problem will be to demonstrate that monopoly is not in fact part of the economic and historical logic of competition” (BB 134).  Instead, they look at what non-economic policies are supposed to have led to monopolies, and argue that competition and markets do not, without these external distortions, lead to monopolies.  They also reframe the problem with monopolies, which is that they will distort the operation of the price mechanism (BB 136, citing von Mises).  The essential claim is thus that a monopolist will have to charge market prices, or competition will unseat him.  So intervention is not necessary (BB 137).

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By Gordon Hull

It has seemed to me for a long time that one helpful theoretical lens through which to look at neoliberalism is to understand it as a phase (or perhaps a dispositive) of biopower. This is because neoliberalism does not generally rely on juridical rules (or tried to colonize the judiciary), it pushes for the marketization of everything, and involves an elaborate state apparatus to support that marketization. It also functions as an engine of subjectification, actively attempting to turn everyone into instantiations of homo economicus, whether directly by state action, or by way of empowering private actors. Even school students are quietly taught the ropes. The incessant demands for privatization have put enormous pressure on the public sector, both in the starvation of funding cuts and the efforts to privatize it. That, in turn, has led to such monstrosities as private prisons.

That said, today’s neoliberal biopolitics obviously needs to be distinguished from the biopolitics that came before, which was, as Foucault discussed, centered at the population level, concerned with birth rates, longevity, and so on (hence the distinction is readily apparent in health policy). One of the hallmarks of the emergence of biopolitics is the rise of the administrative state; as the state comes increasingly to try to optimize the population, an elaborate administrative apparatus – a large state bureaucracy – emerges to fill these functions. This does not mean that there are no more laws. Indeed, Foucault emphasizes that the biopolitical era involves multiple sites of power, both inside and outside the state:

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