Sun May 4, 2014

Gary Becker, an appreciation by Michel Foucault

Gary Becker, University Professor of Economics and Sociology at the University of Chicago, has died at the age of eighty three. I am certainly not going to attempt an obituary or assessment. But something Tim Carmody said on Twitter caught my eye: “People sometimes talk about ‘neoliberalism’ as a kind of intellectual bogeyman. Gary Becker was the actual guy.” In a somewhat similar way, people sometimes talked about ‘poststructuralism’ as a kind of intellectual bogeyman, and Michel Foucault was the actual guy. It is worth looking at what one avatar had to say about the other.

Foucault lectured on Becker and related matters in the late 1970s. One of the things he saw right away was the scope and ambition of Becker’s project, and the conceptual turn—accompanying wider social changes—which would enable economics to become not just a topic of study, like geology or English literature, but rather an “approach to human behavior”. Here is Foucault in March of 1979, for instance:

In practice, economic analysis, from Adam Smith to the beginning of the twentieth century, broadly speaking takes as its object the study of the mechanisms of production, the mechanisms of exchange, and the data of consumption within a given social structure, along with the interconnections between these three mechanisms. Now, for the neo-liberals, economic analysis should not consist in the study of these mechanisms, but in the nature and consequences of what they call substitutible choices … In this they return to, or rather put to work, a defintion [from Lionel Robbins] … ‘Economics is the science of human behavior as a relationship between ends and scarce means which have alternative uses’. … Economics is not therefore the analysis of the historical logic of processes [like capital, investment, and production]; it is the analysis of the internal rationality, the strategic programming of individuals’ activity.

Then comes the identification not just of the shift in emphasis but also point of view:

This means undertaking the economic analysis of labor. What does bringing labor back into economic analysis mean? It does not mean knowing where labor is situated between, let’s say, capital and production. The problem of bringing labor back into the field of economic analysis … is how the person who works uses the means available to him. … What system of choice and rationality does the activity of work conform to? … So we adopt the point of view of the worker and, for the first time, ensure that the worker is not present in the economic analysis as an object—the object of supply and demand in the form of labor power—but as an active economic subject.

At first glance it seems strange to see Foucault emphasize the “active economic subject” here. A standard—indeed, clichéd—critique of Becker’s approach is that economic agents are calculating robots that bear little resemblance to real human beings and that, furthermore, their disembedded and completely systematic choice-making takes us far away from any sort of first-person point of view of labor in the economy. If we want a proper account of economic action on the ground surely we will have to look elsewhere.

Wasn’t Marx supposed to have been doing something like this, for example? Maybe in his early work, where he is concerned with the existential aspects of labor. But the Marx of Capital inherited the classical economics of Smith and Ricardo, where economic actors divide quite naturally into great classes—workers, capitalists, and landowners—and the problems for analysis are the determination of prices and the dynamics of its decomposition into wages, profits, and rents. Individuals bob around on the waves created by these much larger forces. They are reduced in the analysis to the price of their labor power and the surplus value that can be extracted from it. Insofar as they choose and act, they choose and act collectively. Foucault emphasizes how Becker and those like him succeeded in providing an economic approach to labor that allowed for the use of existing tools more usually applied to firms, while preserving the emphasis on a unitary actor:

This breakdown of labor into capital and income obviously has some fairly important consequences. First, if capital is thus defined as that which makes a future income possible, this income being a wage, then you can see that it is a capital which in practical terms is inseparable from the person who possesses it … This is not a conception of labor power; it is a conception of capital-ability which, according to diverse variables, receives a certain income that is a wage, an income-wage, so that the worker himself appears as a sort of enterprise for himself. … [The idea is] that the basic element to be deciphered by economic analysis is not so much the individual, or processes and mechanisms, but enterprises. An economy made up of enterprise-units, a society made up of enterprise-units, is at once the principle of decipherment linked to liberalism and its programming for the rationalization of a society and an economy.

… The stake in all neo-liberal analyses is the replacement every time of homo economicus as partner of exchange with a homo economicus as entrepreneur of himself, being for himself his own capital, being for himself his own producer, being for himself the source of his earnings. … So, we arrive at this idea that the wage is nothing other than the remuneration, the income allocated to a certain capital, a capital that we will call human capital inasmuch as the ability-machine of which it is the income cannot be separated from the human individual who is its bearer. … In other words, the neo-liberals say that labor was in principle part of economic analysis, but the way in which classical economic analysis was conducted was incapable of dealing with this element. Good, we do deal with it. And when we make this analysis, and do so in the terms I have just described, they are led to study how human capital is formed and accumulated, and this enables them to apply economic analyses to completely new fields and domains.

The shifts in focus Foucault picks out here, and the concepts and methods that accompanied them, are why Becker’s influence has been so enormous, why his work has been the straw man in so many social science articles, why his methods allow for such broad application, why the imagery of choice and responsibility that so often accompanies them has proved so politically attractive, why the world is now full of economists who feel empowered to dispense advice on everything from childrearing to global climate change, and why the audience for this advice is so large.

One of the pleasing things about reading Foucault on Becker is the way he refuses to let his Parisian audience settle in to a dismissive reaction. He scolds them about finding an economic analysis of the family amusing by reminding them of Pierre Rivière’s description of his peasant parents’ marriage. (“I will work on your field, the man says to the woman, but on condition that I can make love with you. And the woman says: You will not make love with me so long as you have not fed my chickens.“) And a little later in connection with Becker’s analysis of crime we find this:

In his article “Crime and Punishment” Becker gives this definition of crime: I call crime any action that makes the individual run the risk of being condemned to a penalty. [Some laughter.] I am surprised you laugh, because it is after all very roughly the definition of crime given by the French penal code, and so of the codes inspired by it, since you are well aware how the code defines a criminal offence: a criminal offence is that which is punished by correctional penalties. … The crime is that which is punished by the law, and that’s all there is to it. So, you can see the neo-liberals’ definition is very close.

Here we see Michel Foucault using the work of Gary Becker to remind an audience at the Collège de France about a central insight of Èmile Durkheim. It’s a funny image. But again, he emphasizes the vital shift:

It is very close with, however, as you can see, a difference, which is a difference in point of view, since while avoiding giving a substantive definition of the crime, the code adopts the point of view of the act and asks what this act is, in short, how to characterize an act which we can call criminal, that is to say, which is punished precisely as a crime. It is the point of view of the act, a kind of operational characterization, as it were, which can be employed by the judge … You can see it is the same definition when the neo-liberals say that a crime is any action which makes an individual run the risk of being sentenced to a penalty, but the point of view has changed. We now adopt the point of view of the person who commits the crime … We ask: What is the crime for him, for the subject of an action, for the subject of a form of conduct or behavior? Well, it is whatever puts him at risk of punishment.

You can see this is basically the same kind of shift of point of view as that carried out with regard to human capital and work. Last week I tried to show you how the neo-liberals tried to address the problem of work from the point of view of the person who decides to work rather than from the point of view of capital or of economic mechanisms. Here again we move over to the side of the individual subject, but doing this does not involve throwing psychological knowledge or an anthropological content into the analysis … We only move over to the side of the subject himself inasmuch as … we can approach it through the angle, through the aspect, the kind of network of intelligibility, of his behavior as economic behavior.

More than any other single person, Gary Becker was associated with and responsible for propelling that shift in perspective, and all that has flowed from it for the social sciences and their engagement with the world.