Operación con la base de datos

In his lectures on the history of governmentality, Foucault found that the various “apparatuses of security” through which rulers attempted to regulate contagious dis- ease, urban planning, and food scarcity in the 17th and 18th centuries shared a com- mon characteristic that distinguished them from the traditional, sovereign mode of power. Rather than working through the sequence of order and obedience, they har- nessed “natural processes” to achieve their goals (Foucault 2007: 65-66). The new mode of power that found its expression in these apparatuses of security was closely associated with the emergence in the 18th century of “the population” as “an absolute- ly new political personage” (Foucault 2007: 94). The hallmark of this new person- age – setting it sharply apart from the purely legal, and thus man-made structure of the old sovereign’s society of legal subjects – was its naturalism:

The population appears therefore as a kind of thick natural phenomenon in relation to the sovereign’s legalistic voluntarism. To say that population is a natural phe- nomenon that cannot be changed by decree does not mean, however, that it is an inaccessible and impenetrable nature, quite the contrary. And this is where the ana- lysis of the physiocrats and economists becomes interesting, in that the naturalness identified in the fact of population is constantly accessible to agents and techniques of transformation, on condition that these agents and techniques are at once en- lightened, reflected, analytical, calculated, and calculating. ... I think a very import- ant mutation in the organization and rationalization of methods of power takes place with reference to this penetrable naturalness of population.

(Foucault 2007: 71-72) Thus, while in the face of the ‘naturalness’ of the population the instruments of the sovereign mode of power – “regulations, laws, edicts, and so on” (Foucault 2007: 69) – appeared ineffective, this did not mean that the population was entirely impervi- ous to targeted interventions – its naturalness was “penetrable”. This called for a more subtle approach based on “calculation, analysis, and reflection”, and thus on the inti- mate knowledge of the natural mechanisms that governed the population. Precisely

because the population – and, by implication, the economy – “possesses its own regu- larities” (Foucault 2007: 104), government can only be effective if it recognises these regularities and indeed harnesses the freedoms that produce them to service its own goals.

2.2.1 Monetary governance: From game against nature to game with rational agents

Foucault’s take on the problem of governability brings into sharp relief an under-ap- preciated irony of New Classiscal macroeconomics. Robert Lucas and his followers abandoned the conceptualisation of the economy as a ‘natural’ system of aggregates following a set of mechanical laws – a view they attributed to their Keynesian oppo- nents (Lucas/Sargent 1979). As Kydland and Prescott (1977: 473) put it in an influen- tial paper on policy ineffectiveness, “economic planning is not a game against nature but, rather, a game against rational economic agents”. Of course, in terms of theory, the New Classical model of the economy – a general equilibrium structure populated by households and firms that rationally maximise underlying objective functions and adapt instantly to policy changes – was still essentially naturalistic. But in terms of macroeconomic governance the new ‘game against rational economic agents’ was even more difficult than the old ‘game against nature’ – the mechanical inertia of na- ture had been replaced by the strategic calculation ofhomo oeconomicus, which tend- ed to neutralise or counteract any attempt at intervention by the government. Ironical- ly, however, the ‘gameagainstrational agents’ offers a possibility that is precluded in a ‘game against nature’ – in practice, governmental technologies would be devised to turn it into a ‘game with rational agents’.

Historically, the shift in monetary governance towards a governmental technology that harnessed the ‘rationality’ of the governed occurred gradually and was driven by policy-makers rather than by theorists. At first, the rational expectations revolution notwithstanding, monetary policy remained intransparent – at times even obscure – throughout the 1980s (Goodfriend 1986). It was only when they abandoned monetary targeting in favour of inflation targeting that central bankers began to embrace the view that their control over the economy depended on their ability to harness private actors’ rationalities (Krippner 2007). The conception of the economy as a hydraulic system that could be manipulated by skilled engineers was replaced by a model of the economy built on the microfoundation ofhomo oeconomicus, whose present profit- or utility-maximising behaviour was based on expectations about the future.42_Crucially, this theoretical shift had an immediate performative dimension as central banks adopt- ed a policy regime that explicitly governed (through) expectations. For under such a regime it is true that the economy is governable only to the extent to which these ex- pectations are formed in a systematic, predictable, and in that sense ‘rational’ way. This shift from an ‘engineering’ to a ‘strategic’ approach to monetary policy has been eloquently described by two leading financial economists as follows:

The traditional perspective viewed monetary policy as an engineering problem. Central bankers had a set of instruments under their control, faced uncertainty out- side their control and sought to manipulate their instruments to achieve targets. The modern perspective views monetary policy as a strategic problem. Most of the action comes neither from instruments under the direct control of central bankers, nor from exogenous uncertainty outside their control, but rather from the actions of market participants who are mostly concerned about variables outside the direct control of the central bank – for example, long-term interest rates – but are acutely aware that everyone else is looking at the central bank for clues about where those variables are headed. (Morris/Shin 2008: 88)

42. _{For critical discussions of the New Classical claim to have put macroeconomics on firm micro-} foundations, see Jansen (1993) and Hartley (1997).

In other words, central bank agency is strategic in the sense that it enlists private agents’ cooperative – i.e., predicable – behaviour. Yet such prediction-based gov- ernance “can proceed only on the faith in the rationality of the market players whose opinions create the predictive device” (Zaloom 2009: 248). It has been the crucial in- sight of the performativity approach that such rationality isneitheran inherent trait in economic actors, nor a pure figment of the New Classical imagination.

2.2.2 Central bank agency, governmentality, and performativity

The best starting point to show up the deep links between the thinking of Michel Fou- cault and that of Michel Callon is both authors’ emphasis on the fundamental impor- tance of processes of “translation”, “during which the identity of actors, the possibili- ty of interaction and the margins of manoeuvre are negotiated and delimited” (Callon 1986: 203). Such processes are also at the heart of the later Foucault’s conception of power, the essence of which can be expressed in terms of “authoritative norms, calcu- lative technologies and forms of evaluation [being] translated into the values, deci- sions and judgements of citizens in their professional and personal capacities” (Miller/ Rose 1990: 18). The hallmark of the form of power that Foucault called “neoliberal governmentality” was that the ‘calculative technologies’ were the technologies of eco- nomics – meaning that “the interface of government and the individual” was the fig- ure of homo oeconomicus:

The subject is considered only ashomo oeconomicus… [This] also means that the

individual becomes governmentalizable, that power gets a hold of him to the ex-

tent, and only to the extent, that he is ahomo oeconomicus. That is to say, the sur-

face of contact between the individual and the power exercised on him, and so the principle of the regulation of power over the individual, will be only this kind of

grid ofhomo oeconomicus.Homo oeconomicusis the interface of government and

(Foucault 2008: 252-253) Governmentality can thus be defined as a technology of power that interpellates the subject ashomo oeconomicus. It does so for pragmatic rather than for ideological rea- sons – it is simply that “[h]omo oeconomicus is someone who is eminently govern- able” (Foucault 2008: 270). The systematic rationality of homo oeconomicus makes the population and the economy predictable, penetrable, and thus ultimately governable.

As the following section will show, Michel Callon’s (1998b: 50) insistence that “homo oeconomicus really does exist”, and that economic sociology needs to try and comprehend precisely “his simplicity and poverty” was at the heart of his performa- tivity programme for economic sociology. Although Callon had by that time moved on from a language of ‘translation’ to that of ‘performation’, the similarities with Fou- cault’s perspective are striking. Broadly speaking, both are concerned with the consti- tution of subjects (Foucault’s preferred term), or agencies (Callon’s preferred term). To the extent that the two approaches differ, this difference is clearly of a complemen- tary kind: Governmentality scholars study subjectification in contexts ofpolitical au- thority, with a specific interest in the constitution ofgovernable subjects and (market) structures (Miller/Rose 1990; Foucault 2007, 2008). Performativity theorists, on the other hand, focus onmarket interactions, with a specific interest in the constitution of calculative agencies, including the market structures that form part of the ‘agence- ments’ that make calculation possible (Callon 1998b, 2007).

Figure 2: Convergence of bureaucratic authority and market transactions in central bank practice

At this point, the link between the complementarity of Foucault and Callon’s work and the hybridity of central bank agency stand clearly before us (see Figure 2). For as explained in the introduction, the central bank is both ‘central’ – a branch of the state equipped with governmental powers – and a ‘bank’, which engages in open market transactions with private banks on a daily basis. While the following section focuses on the notion of performativity, the Foucauldian notion of the ‘apparatus’ will feature prominently in my conceptualisation of central bank agency in sections 2.4 and 2.5.