Special Section: Eurocrisis, Neoliberalism and the Common

Theory, Culture & Society

2015, Vol. 32(78) 6783
Neoliberalism, the ! The Author(s) 2015
Reprints and permissions:

Financial Crisis and the sagepub.co.uk/journalsPermissions.nav

DOI: 10.1177/0263276415600037

End of the Liberal State tcs.sagepub.com

Mauricio Lazzarato
Matisse/CNRS (University of Paris 1)

Abstract
The article turns to Deleuze and Guattaris concept of state capitalism and their
theorization of money and debt in their critique of capitalism to develop an analysis
of the governmental management of the current crisis determined by ordo- and
neoliberalism. The paper argues that analyses which fail to properly recognize the
power of capital to determine both state apparatuses and economic policy thereby
fail to grasp the real functioning of money, debt and the Euro in the crisis and end up
unwittingly supporting liberalism. This is true of positions such as heterodox theory
that, though critical of conventional and neoliberal political economy, nevertheless
continue to uphold the state as an independent or mediating mechanism in relation
to the power of capital. The neglect of the role which money plays in the strategies of
capital to control both the creation of value and the functioning of the state is to be
found even in Foucaults genealogy of neoliberalism, a neglect which undermines his
analysis of power. The paper highlights the implications of the standpoint of state
capitalism for a more incisive analysis of the current crisis that reveals what is at stake
for political struggles.

Keywords
debt, Deleuze and Guattari, Euro, Foucault, heterodox theory, money, neoliberalism,
ordoliberalism, state capitalism

The State, the Market, and Capital: Problematizing Liberal

Governmentality
The nancial crisis, transformed into a sovereign debt crisis, has imposed
new modalities of governmentality as well as new subjective gures, since
it has determined, on the one side, the governors deployment of a tech-
nical government and, on the other side, the transformation of the gov-
erned into the indebted man who atones for his error through taxation.
These subjective novelties reveal more clearly, and at a more

Corresponding author: Mauricio Lazzarato.

Extra material: http://theoryculturesociety.org/
68 Theory, Culture & Society 32(78)

fundamental level, the true nature of techniques of governmentality and

of the relation between liberalism and capital than in the period when
neoliberalism was emergent.
One cannot develop a critique of the liberal government of the crisis
without addressing the Foucauldian analysis of neoliberalism, since his
two lecture series, Security, Territory, Population (STP, 2007 [2004a]) and
particularly The Birth of Biopolitics (BB, 2008 [2004b]), constitute a
major advance regarding the analysis of the modalities of the control
and government of populations. His research into liberal governmental-
ity is part and parcel of the evolution of his theorization of power, par-
ticularly of power as war and as governmental strategy. Nevertheless,
these two lecture series seem to introduce weaknesses into our under-
standing of the relation between the state and capital and its logic, and
the relationship of the state with liberalism. One could even propose that
the most important limit of the two sets of lectures, especially in BB,
is the assumption that liberalism and liberal techniques of government
exist or have ever existed in opposition to or as an alternative to strate-
gies of the state.
The idea of liberalism as a practice and theory that mediates the rela-
tion between capital and the state in order to defend and promote the
freedom of the market and of society cannot be left unchallenged in the
light of the neoliberal management of the relation between the state and
capital in the current crisis. It seems to me more reasonable to try out a
working hypothesis of Deleuze and Guattari who, in LAnti-Oedipe
(1972), establish the reasons which lend to capitalism merely the appear-
ance or the illusion of liberalism. They draw a radical but decisive con-
clusion from this premise that informs our interpretation of the crisis,
namely, that capitalism was never a liberal capitalism but was always a
state capitalism. Their argument is that there never was any kind of
struggle against the very principle of state control (1972: 301) since
any action against monopoly could only relate to a past when mercan-
tile and nance capital could still be allied to the old system of produc-
tion, and when the emergent industrial capitalism could not guarantee
production and the market except by abolishing these privileges
(1972: 301).
The analysis of governmentality should therefore focus not on the
suspicion that one might govern too much, and not on liberty
(Foucault, 2008: 2832), that is, not on the principles that liberals had
advanced and defended against the state, but on the alliance between the
state and capital, or between the state and the market, as economists
would say, and thus of state capitalism. Liberals, instead of oering an
alternative to government by the state, present but one of the possible
modalities of subjectivization by state capitalism, as the crisis is now
unambiguously demonstrating. Instead of representing the freedom of
the society and of the market against the state, liberalism has clearly
Lazzarato 69

made a fundamental contribution to the construction of a state that suits

capital perfectly.
But what kind of state or capitalism are we speaking about? Is the
state capitalism now operating in the crisis the same as the state capital-
ism of the 19th century and early 20th century? Can we still speak of state
capitalism as understood by Deleuze and Guattari? In spite of all its
limitations, the work of Foucault can be useful here, provided one inter-
prets rst ordoliberalism, then neoliberalism, as a politics working to
recongure state capitalism and a new relation between the state and
the market, the subjective conditions for which liberals had made pos-
sible. Neoliberalism constitutes a new and fundamental stage in the inte-
gration of capital and the state, brought to fruition in the current
governmentality of the crisis.
There is no support today or even retrospectively for the claim that
liberalism consists in limiting as much as possible the forms and elds of
action of government. How is it possible that liberals would have sud-
denly gone from governing the least possible to wanting to govern every-
thing? How does one explain that they could consider irrational every
form of government, yet since 2007 one nds that technical governments
EU, the IMF, the European Central Bank and all liberal-inspired
institutions have put in place programmes requiring long-term planning
for the recovery of state nances, including the establishment of a multi-
tude of ne-tuned mechanisms of control for the detailed administration
of cuts, state expenditures, and the long-term process of recovery? How
does one account for the fact that the same liberals have substituted the
maximal state after the crisis in the place of the minimal state before it,
instituting a big government that besides is happy to by-pass
democracy?
Clearly, there is something quite wrong in this opposition between the
before and after, just as much as it is reductive to think that it is the crisis
that imposes such a profound change in liberalism, or that this kind of
intervention is conjunctural, and that once the crisis is over, this centra-
lizing and authoritarian government will revert to its previous liberal
form. The crisis has revealed a truth that has prevailed for a long time,
namely, that capitalism has never been liberal; it has always been state
capitalism. In its new version, the state today intervenes twice: once to
save banks, nance and the liberals themselves, and again to impose on
the populations the cost arising from the rst intervention; so, interven-
ing once for the market, and then against society.
However, this is but a stage in a process that began with the birth of
capitalism: Never has a state lost so much power in order to put itself so
violently at the power of the economic sign. And the capitalist state has
taken on that role from the beginning, from the time of the management
of capitalism according to forms that were half feudal or monarchical
(Deleuze and Guattari, 1972: 300). The relation between the state and
70 Theory, Culture & Society 32(78)

capital has indeed been heterogeneous. Capital does not have its own
territory; rather, it is a process of permanent deterritorialization that
knows no territorial boundaries. Whereas the state constitutes a commu-
nity, a people, a nation, capital cannot produce one because competition,
class division, and private appropriation dislocate community, a people,
a nation. The state is founded on law and citizenship, capital is founded
on the interests of entrepreneurs and the exploitation of wage earners, the
people, etc. The state exercises a political sovereignty tied to a territory
and a people whilst capital establishes over a population an economic
power which has the world as its eective scale.
Governmentality (and liberals only constitute one of its subjective
modalities) consists rst of all in composing these heterogeneities, and
afterwards in subordinating and reconguring state principles to the
processes of value-creation of capital. One of the most striking stages
of this process of subordination is the formation of the social state, a
process most clearly and radically theorized by ordoliberals and Carl
Schmitt. The introduction of the social state in the German constitution
has an historical as well as a current value, since the process of construc-
tion of European and EC institutions seems to relate to these ordoliberal
techniques for constituting the new type of state.
Carl Schmitt, the author called upon to promote the autonomy of the
political, is in fact the gure who demonstrates that the social state signals
an irreversible stage in the decline of the sovereignty of the state as it
existed in Europe. The social state, he argues, no longer has any political
autonomy because it is in the grip of the social and economic forces of
capitalism. The state henceforth can no longer represent the general inter-
est because it is traversed by class struggle and the conicts inscribed in the
interests that are the stakes in the politico-economic conicts.
The neoliberals do not limit themselves to opposing the state in order
to defend societys freedom, but they are instead committed to its total
transformation so that it may work perfectly for capital and its accumu-
lation. This new phase in the transformation of capitalism is well
described by Foucault in The Birth of Biopolitics where he examines
the relation which ordoliberals had with the German state in the postwar
period of its reconstruction. We shall limit our interpretation of the
stages in the light of the analyses of Deleuze and Guattari and Carl
Schmitt and what the crisis has revealed. The problem, as Foucault
recognized, is about how to establish and legitimize a new form of
state in the non-state space constituted by economic freedom
(Foucault, 2004b: 836). His answer is to point to its constant generation
on the basis of the institution of the economy such that the economy,
economic development, economic growth, produces sovereignty, it pro-
duces political sovereignty through the institutional play that enables
such an economy to be instituted and function. The economy produces
legitimacy for the state which in turn guarantees the economy (Foucault,
Lazzarato 71

2008: 84 [2004b: 85]); thus, the economy creates public law (Foucault,
2008: 84 [2004b: 85]). Such a state does not emerge by itself, its genesis
depends on grounding it in the market, and this, according to the ordo-
liberals, is the main task of governmentality. Thus, the economy, far
from being the other of the political, is the major force which engenders
it. One should understand the economy not economically, as a mech-
anism of production or of exchange, but as a hub or centre of power or,
more accurately, as a relation of power amongst forces.
Foucaults account conrms the analysis which Carl Schmitt elabo-
rated at the very moment of the constitution of the social state: the sov-
ereign state, the nation-state, the transcendent state is dead, replaced by
the economic state. The sovereignty of the new state does not proceed
from the people, from democracy, from the nation, but from Capital and
its development; the implications involve a radical reconceptualization of
the concept of state capitalism. One consequence is that governmentality
is no longer guided by the principle that the state should govern the least
possible, but is directed by the objective of constructing a social state
targeting the socialization of value to serve the market. One could even
argue that the postwar economic miracle in Germany and Japan is not
due to the limits imposed on military spending but because they had put
into place a state that was in tune with the exigencies of the market.
And it is the German model which is dominant in contemporary
Europe and which frames the Euro. According to this model, the state,
the economy, and society are transversally invested by capital, whilst
governmentality works to construct their coherence and eective com-
position. With the emergence of neoliberalism, this process of the recon-
stitution of the state has spread to the rest of the world, with all that this
implies. The neoliberal interpretation seems to me to be more pertinent
than the Keynesian or social-democratic analysis of Fordism. Although
it is only in postwar Germany that the economic state, marked and
dened by class conict, appears to have been theorized and practised,
it is in fact the reality in all countries. This is because one should not see
in Fordism evidence of an impartial state representing the general interest
through mediation, regulation or compensation for capitalist divisions;
rather, the evidence points to the economic state responding to class
conict by making concessions in recognition of the relation of force.
Changes that occurred in the 1970s provided liberals with the possibility
of using state functions (e.g. lender of last resort, scal policy, redistribu-
tive policy, etc.) to their own advantage. The social state and its functions
can thus be seen as the loot, to use Carl Schmitts blunt language.

The Neoliberal Turn

The shift from ordoliberalism to American neoliberalism will deepen and
shape the specicity of the new organization of capitalism. The two main
72 Theory, Culture & Society 32(78)

principles underlying the eld of action and legitimation of the state

framed around the administration of the population and the representa-
tive system of popular sovereignty are being rearticulated such that they
function as the economically managed dispositifs of neoliberal govern-
ance. The aim of transforming the system of political representation
requires more than the virtual elimination of the dierence between the
left and right of centre parties that has been going on since the 1980s: it
requires that the state be directed by agents of capital. The system of
representation is suspended in favour of technical or elected govern-
ments, both completely aligned to the capitalist logic, whilst parties are
shorn of any power, and parliament is reduced to the status of a site for
recording the orders dictated by global capitalist institutions. Thus, the
economic state, through governmentality, ensures that it maintains com-
plete power over the population through control over the conduct of the
governed. The shift from the ordoliberal market (of goods) to the neo-
liberal market of entitlements demonstrates the hegemony that hence-
forth nance exercises on other forms of capital. The American version
of this process is even more clearly oligarchical and plutocratic.
What emerges in this subordination of administration and welfare to
capitalist valorization is not the minimum state but the state rid of the
inuence of wage-earners, the unemployed, women, the poor. This max-
imum state, as the crisis is showing, is quite compatible with neoliberal-
ism, on condition that the appropriation that it operates through
taxation and expenditures favours enterprises and the rich, and on con-
dition that the sovereign functions of the issue of money and the man-
agement of taxes be entirely diverted from Keynesian ends of full
employment and the relative distribution of wealth and property. The
economy subjected to a process of privatization functions as collector of
taxes for the benet of creditors and their transnational institutions.
These functions no longer express the power of the state as guarantor
of the general interest.

The Social State as a Government of Society

This new form of state capitalism and the new ends of capital are insti-
tuted via the social state, that is, through the subordination of all aspects
of society to the value-system of capital by means of the generalization of
the logic of the enterprise. As Foucault (2004b) points out, ordoliberal
governmentality, by producing the economic state and the economiza-
tion of society, enables the market to function as a machinic system that
nds its own equilibrium. For Foucault (2008), this market as self-
regulating mechanism works through competition as the mechanism
which endows the economy with a rationality and an internal logic, a
principle of formalization, and an essence. But competition, as he has
highlighted, does not proceed from a simple play of appetites, instincts,
Lazzarato 73

and conducts, for it must be produced, incited, and protected. This is

why the governmentality consistent with state capitalism must intervene
as massively as the Keynesian state to put into place the social conditions
to sustain it: The main and constant concern of governmental interven-
tion . . . must be the conditions of existence of the market, that is to say,
what the ordoliberals call the framework (Foucault, 2008: 140 [2004b:
145]). This means it must operate on the population, technology, train-
ing and education, the juridical system, the availability of land, the cli-
mate (Foucault, 2008: 141 [2004b: 146]), elements which are not directly
economic, but that must be made to function for and as a market.
Governmentality organizes a social policy that aims to take charge of
social processes and take them into account to make room for a market
mechanism within them (Foucault, 2008: 240 [2004b: 246]).
These conditions are so many that one must wonder if there is any-
thing like an essence rather than a political principle, a calculus, a model
that shapes people, the society and the state according to the reality of
the new form of a market centred on competition. But what kind of
society is this about? It is not so much a mercantile society in which
the population is normalized and disciplined according to exchange
value, but a society grounded in the enterprise. As Foucault argues,
the generalization of competition means eectively to generalize the
enterprise form inside the social body, inside the social fabric; it
means to take up this fabric and ensure that it can be divided and
reduced according to not so much the weft of the individual but that
of the enterprise (Foucault, 2008: 241 [2004b: 247]). Neoliberal govern-
mentality, in enacting this generalization of the enterprise form, must
escalate the economic model, the model of supply and demand, the
investment-cost-prot model, to transform it into a model for social
relations, a model for existence itself, a form of the relation the individual
entertains towards himself, towards time, his environment, to the future,
the group, the family (Foucault, 2008: 241 [2004b: 247]).
The socialization of capital thus does not return us to industrializa-
tion, since it is a matter of managing the individual household or neigh-
bourhood communities as an enterprise. From this point of view, one
could claim that the ordoliberals have gone beyond the Marxism still
bounded by the factory and its separation from society. It is only with
the Italian Operaismo in the 1960s that the relation between capital and
society was problematized. Neoliberalism developed further the logic of
the enterprise, bringing all social relations within its scope, and intensify-
ing the vitalpolitik already established by the ordoliberals by anchoring
it in nancial rather than industrial enterprise. This shift, along with the
politics of debt, are dispositifs of power and capture that are immediately
social, acting directly upon social agents.
It is from the point of view of this shift from the hegemony of indus-
trial capital to that of nancial capital and in the enlargement of state
74 Theory, Culture & Society 32(78)

intervention that one understands the passage from ordoliberalism to

neoliberalism. What changes is the nature of the intervention. As
Foucault argued, liberalism broke with the principle of raison detat
in the name of society: It is by reference to the latter that one looked
for the reasons why it is necessary to have a government . . . and when it
is pointless or harmful to intervene (Foucault, 2008: 319 [2004b: 324]).
The question of why then must one govern inhabits the problem of the
danger of governing too much. Another logic is now at play in neo-
liberalism, namely, that of blaming society for the disequilibria in the
market. However illogical, economically nonsensical or against the evi-
dence it may be, neoliberals claim it is society that must change in order
to conform to markets, even if that means the disintegration or implosion
of society, as is happening in Southern Europe. The policies of reform,
the cuts in social services, reductions in wages, tax increases imposed on
the poorest, are measures arising from this logic. In order to align society
and democracy with capitalist creation of value, liberalism is ready to set
aside all liberty and to establish a post-democratic and authoritarian
governmentality. All these measures undermine the view that the state
can still operate as a mediating mechanism between capital and the
administration of populations. The analysis of the role of the Euro,
money and debt in the crisis in Europe will illustrate the fruitfulness of
the standpoint of state capitalism for theorizing the transformations that
are taking place globally.

The Euro, a German Currency

Today, at the root of European institutions, one nds ordoliberalism.
The logic of the European governmentality appears to be entirely shaped
by the ordoliberal model whereby the state is determined by the econ-
omy. This is why one can claim that the Euro is a German currency, for
it expresses German economic power, though it is important to stress
that economic power is inseparable from the reconguration of the state
as economic state and social state. The Euro expresses a new state
capitalism in which the economy and politics are inseparable. Yet, we
are constantly bombarded by the news media and experts promoting the
single currency
The constant bombardment by the news media and experts shows up
the absurdity of promoting the centrality of the single currency in spite of
the fact that one would require a political community, a political author-
ity and a state, or a centre of power, in order to legitimize and found a
currency. But the Euro has proceeded in the opposite direction, by start-
ing with the economy, hence its weakness and bankruptcy. The point of
view evident in arguments supporting the Euro reproduces 19th-century
state capitalism and cannot grasp the new presuppositions and the
dynamics of contemporary state capitalism invented and practised by
Lazzarato 75

ordoliberals. The constitution is written by the economy, as Carl Schmitt

would say; the state is managed by the economy, as ordoliberals
would say.
Yet pro-Europeans like Cohn-Bendit would like us to believe that the
single currency represents a completely new attempt to transcend the
nation-state. In reality, along with the supporters of state sovereignty,
they fail to recognize what is at stake with the Euro, namely, the con-
struction of a new space of domination and exploitation by capital.
European governmentality tries to construct a space and a population
adequate for the global market, whilst the nation-state no longer repre-
sents a territory or a population capable of accomplishing this capitalist
project.
Against the supporters of sovereignty, one can argue that the promo-
tion of the Euro is not absurd, and against the pro-Europeans one can
point out that it is a strategy of neoliberal power and exploitation that
suits the new conditions relating to state capitalism, a capitalism that
seeks a new space to constitute itself, dierent from that of the nation or
a community or the national society. European institutions follow the
teaching of the ordoliberals, namely, that the state is not the presuppos-
ition for the economy but its result. Or more precisely, the state is one of
the articulations of this new dispositif of capitalist power that it force-
fully helped to create and maintain. Such a project does not target the
unity and cohesion of Europe, the solidarity of its populations, but a new
dispositif of command and thus of class divisions. Of course, the process
of construction of Europe presents greater problems than for the consti-
tution of the post-war German social state, which, in spite of being new,
was contained within the territorial limits of a nation, a language, etc.
The process of constitution of Europe reveals inter-capitalist conicts
that crystallized around dierent conceptualizations of sovereignty, and
thus of the function of the state. Amongst the European nations, France
is the paradigmatic case of the sovereignty of the nation-state. Such a
position has for some time been undermined by the German model of the
new state capitalism, notably since the emergence of neoliberalism. Yet it
is worth interrogating it from the point of view of the French heterodox
economic school, since they approach the problem of sovereignty
through money and debt, two institutions that takes us to the heart
of the current crisis.
Money constitutes a black hole for economic science, but also for
ordoliberalism and for Foucault in The Birth of Biopolitics. The transi-
tion from exchange to the enterprise, from homo oeconomicus as the man
of exchange to homo oeconomicus as entrepreneur, as established by
ordoliberalism, implies that one should take into account not only
money as general equivalence but also, and above all, money as capital.
For the enterprise, money is by denition money-capital. This transition
is fully developed within neoliberalism, for which it is quite precisely
76 Theory, Culture & Society 32(78)

money-capital, that is, credit-money, debt-money, that commands and

organizes the whole process of value creation. Money presents enormous
problems for economists, since its origin and its functioning cannot be
explained by the market or production, but by the centres of power that
became organized neither through exchange or competition nor
production.
We rediscover the absence of the problematization of this most
important institution of capitalism in Foucault, in spite of the fact
that it is money that expresses relations of power in at once the most
abstract and the most concrete form. The limits of his analysis show the
limits of his reading of Marx; it stops with Marxs description of the
organization of work in the factory, which, as he said, he drew from
for his theory of disciplining. But he fails to grasp the functioning of
capital as the process whose production of value takes eect through its
three forms, namely, mercantile, industrial and nancial.
Deleuze and Guattari (1972) argued that it is impossible to speak of
capitalism without constructing a theory of money that would be as
elaborate as that developed by Marx; this remains a valid argument.
Without the distinction which Marx sought to establish between
money as means of payment and money as capital, and the subordination
of the former to the latter, it is impossible to understand the functioning
of the economy. But for most economists, money is exogenous to the
economy and has functions (means of payment, measure, general equiva-
lence, etc.) which only serve to facilitate exchange. The picture which
Milton Friedman gives of this externality is emblematic: money is scat-
tered by a helicopter on a society which meanwhile produces without its
support. It only intervenes afterwards to enable the process of evaluation
and exchange of what has been produced. Its origin remains mysterious.
The problem as posed by heterodox theory is dierent since at its
centre there is indeed a focus of power, namely, the state and its monet-
ary sovereignty. The heterodox school, whilst including a critique of the
standard conceptualization of money, resolutely denies not only the
existence of state capitalism but, on the contrary, asserts that nance
(or private money) and central money (state or public money) are now-
adays in direct conict because both lay equal claim to sovereignty
(Orlean, 1999: 249).
In opposition to this view, we claim that there is no conict in the new
state capitalism between nance as expression of the power of capital, i.e.
nance as not simply one of the three forms capital takes in its creation of
value, but also as collective capital, and money as expression of the
power of the state. This convergence happens under the hegemony of
nancial capital (standing for the collective capitalist) which establishes
the modalities of this convergence. There is a striking dierence between
such a theory and standard economic theory. Money does not derive
from market exchange, but is produced by debt. But this major advance
Lazzarato 77

is undermined by the view of the functioning of debt seen through the

prism of the separation (or dierentiation) between the economy and
politics, between society and the economy, and that posits the state as
externality that, over and above the activities of private actors, guaran-
tees the social bond.
For heterodox theory, capitalism would be characterized by the split-
ting of the forms of debt between economic debts and political debts. The
former are private contracts between individuals; the latter belong to the
political logic of citizenship and solidarity and depend on the state (see
Aglietta and Orlean, 1998; see also Lazzarato, 2011, where the forms of
debt as either nite or innite are discussed by reference to Deleuze and
Guattari, 1972). For Orlean (1999: 245), the social state and social debt
are deduced from the autonomy of the political, whose action is
expressed through its mediation of class conicts. For him, capital and
its divisions constitute a permanent danger for national communities in
relation to which it has responded through state action (1999: 245). The
state, because of its externality and its capacity to represent the whole of
society, would have as a function the aim of producing pacication
through targeting the living together; it is this cost which would be
politically expressed in the form of social debts.
Neoliberalism and the transformations it imposes on the welfare state
explicitly counters the view that social rights proceed from political rights,
for although we still have citizenship, every day we lose another slice of
social services. Instead of this association, we propose Carl Schmitts view
that social debts are the product of class struggle over the control of the
social state and its functions of appropriation and distribution.
We nd even more troubling the heterodox claim that, regarding the
administration of public wealth, the state is the representative of the
whole of society and is the guarantor of the social bond. According to
this view, the states monetary system, operating at the junction between
the two nancial circuits of private debts and social debts, contributes to
the constitution of social unity (Aglietta and Orlean, 2002: 116). For
Aglietta and Orlean, debts are expressed in the same unit of accountancy
as sovereign money and at the heart of the same monetary space, but
they do not have the same values or power, since the political and its
wealth as public good has priority over the economy and its private
good. This dualism thus remains under the control of a recognised
sovereignty that subjects monetary power to its authority, if one under-
stands authority to mean an ensemble of collective values in whose name
social cohesion is asserted (Aglietta and Orlean, 1998: 11).

The State as Lender of Last Resort and the Social Bond

This theoretical description of sovereign money by heterodox theory
does not appear to correspond at all to the way it actually functioned
78 Theory, Culture & Society 32(78)

in the crisis. Central money has not operated as normative principle

positioned above private and social debts. Instead, the state has recog-
nized and validated private debt by settling it whilst refusing to recog-
nize, validate, or defray public debt, yet cutting back public
expenditure. The lender of last resort has thus worked only for private
debt at the expense of social debt. The state has not defended society
but forced it to underwrite the rationality of the market through scal
and austerity measures. It is the reversal of the states role of safeguard-
ing the social bond, as we have seen in the case of Greece and other
members of the EU. The political domain (or democracy) has sus-
pended rather than asserted itself as guarantor for the continuity of the
social bond, even going so far as to impose conformity to markets a la
Merkel. The heterodox theoretical approach, by claiming that the sep-
aration between the economy and the political, the economy and soci-
ety, is constitutive of modernity does not grasp the integration which
capital sustains with both state and society. It thus neglects the pro-
gressive subordination of the state as well as society to the market,
seeing this subordination as but one tendency. This is surprising,
since Orlean (1999: 246) recognizes that the sovereign is capital as
evaluated by the market, and even declares that this displacement of
power towards the market reaches its nal stage when the power to
determine value is transformed into eective control (1999: 246).
The confrontation between heterodox economic theory and Deleuze
and Guattaris theory of money can be useful on several counts. For both
theories, capitalism is characterized by a double and problematic mon-
etary circuit, or by a double regime of debt or double nancial regime.
Yet they present radically dierent accounts of this problem, tied to a
view of the relation between capital and state from which heterogeneous
concepts of capitalism can be deduced.
The key dierences are that heterodox theory understands the problem
in terms of the problematic duality between economic money and sover-
eign money. The former is thought of as private money which is purely
instrumental, presenting itself as absolutely neutral or impartial; it is but
a dependable tool making possible transactions of the market without
upsetting them (Orlean, 1999). Sovereign or state wealth by contrast is a
public good representing society as a totality; it is this form of money
that, by establishing the coherence of the whole system, would ensure the
convertibility and legitimacy of private money. For heterodox theory, the
problematic duality of the monetary circuits is related to another oppos-
ition, one derived from the Durkheimian republican sociology accord-
ing to which sovereign money is seen as an expression of the collective
whilst economic money is seen as an expression of the individual, open-
ing the way for a mediation. However, the Durkheimian distinction is
countered in Carl Schmitts view that both the social and the state are
shot through by class struggle.
Lazzarato 79

With Deleuze and Guattari, we exit the republic to enter inside state
capitalism. Here, the heterogeneity of forms of money refers not to the
public and the private, the collective and the individual, but to dierent
functions of capital. They do not have the same power, since the power
dierentials between economic money and state money concern, on one
side, exchange money and, on the other, properly capitalist money
which is money-capital. State revenue, by operating to ensure the con-
version between the two forms of money, dissimulates the class relations
expressed in terms of money.

On an Anarchist Theory, or How to Address Money whilst

Forgetting Capital
Let us stress the dierent nature of the two forms of money by way of a
brief detour. It is David Graeber (2011) in his book on debt who clearly
establishes the distinction between credit money and exchange money.
According to him, since 1971 we have entered into a cycle of credit
money about which we cannot draw any conclusion, because 40 years
is nothing compared to the 500 years between such cycles. Such a phil-
osophy of history surprisingly avoids the confrontation with capitalism
and its dynamics.
Credit money and exchange money do have a very long history, exist-
ing prior to capitalism, but the latter integrates them within its dynamics
in a specic way. They no longer primarily serve the centres of power, the
king, the state, or a bureaucracy, but capital and its model of accumu-
lation. Credit money is transformed into nancial capital, and exchange
money into mercantile capital. Together with industrial capitalism, they
constitute the three forms of the metamorphoses of capital. The two
forms of money deal with specic and strategic functions in the domin-
ation by capital. Credit money is the most deterritorialized form of cap-
ital, manifesting itself as the nancial ux that constitutes the real/true
power of capital and its policing power. It is around credit money as
capital that collective capitalism is constructed, whilst exchange money
serves to pay wages and distribute the revenue to the dominated.
Credit money in the form of money-capital embodies the logic of
production for the sake of production, that is, the introduction of an
innite scale in the capitalist creation of value. The cycle of contempor-
ary capital (M M; Marx, Capital, Vol. 1) begins and ends with money,
which means it never ends and must always begin again. One has known
for a long time this relationship between money and the innite, as
much as one knows its power of deterritorialization and abstraction,
and its destruction of all social relations. Up until capitalism, societies
had delimited its power by trying to code the uncodable through the
construction of religious, political and innite social systems, precisely
80 Theory, Culture & Society 32(78)

in order to conjure its self-referential and innite dynamics (money pro-

ducing money).
Capitalism introduces a remarkable innovation since it constitutes the
only society that grounds its principle of organization, its meaning and
its goal, on the uncodable and its power of abstraction, deterritorializa-
tion and destruction. Not only are religious, political, symbolic and
social codes thus undone one by one but, since the innite cannot be
coded, all social and political relations must bend themselves to its logic,
that of production for the sake of production, and the innite creation of
value.
Capitalism establishes a radical break in the history of credit-money
and exchange money, a break that cannot be thought in the categories
deployed by David Graeber. Contrary to his claim, we have not entered
into a cycle whereby credit money dominates exchange money for the
next 500 years, since with neoliberalism credit money, as capital, takes
power over industrial and commercial capital. It is a matter of the dom-
ination by capital rather than the domination of one form of money over
another.
But money does not simply express two of the three forms that capital
embodies in its metamorphoses, such as nance or mercantile capital. In
the form of commodity money, it represents dierences of class and the
relations of power between capitalists and the dominated. Credit money
expresses the power of capital whilst exchange money expresses the
powerlessness of the wage-earner. Though Graeber makes a distinction
between the two forms of money, he overlooks their nature inside cap-
italism, particularly regarding the functioning of credit-money. It is limit-
ing to dene it only in terms of its virtuality or its conventional
character. It is better to look to the Marx of Grundisse (1973) for a
view of money in its form as capital and not simply as a general equiva-
lence that can be exchanged for the commodity. Money capital is a claim
on the product of labour in the future. Marx argued that in the same way
as with public credit, every capitalist possesses in the value already accu-
mulated a claim over future labour; by appropriating labour in the pre-
sent, the capitalist appropriates the labour to come. One need only add
that contemporary capitalism, by way of the claims it makes, is able to
appropriate not only labour but social production.
Wage earners and the population do not have access to money as an
entitlement for present and future appropriation but to the powerless
monetary signs of general equivalence, to money as means of payment,
that is, to exchange money; capitalists, however, have access to the signs
signifying the power of money-capital, to the ux of nancialization that
anticipates and decides upon future production. Wage earners and the
population can only exchange their money against already available
commodities, whilst capitalists and money in the form of capital pre-
scribe what will be produced, how, under what conditions, and according
Lazzarato 81

to what distribution of roles and functions. Private money and public (or
state) money intervene together and in the same direction. Their actions
during the crisis have been absolutely complementary and targeted the
protection of markets, for which they are ready to sacrice society, the
social bond and democracy.
Even Orlean recognizes the subordination of public funds to the logic of
capitalist valorization when he argues that monetary sovereignty is cir-
cumscribed within narrow limits, for it is dicult for it not to validate the
creation of private monetary wealth (Aglietta & Orlean, 1998: 372 ). It
could not be otherwise, since it is the private banks that hold the monet-
ary initiative, that is, it is their money that functions as capital. Orlean
interestingly insists that the only time when sovereign wealth functions as
capital is when it nances the treasury, that is, when it decides upon
social expenditure and state investments and thus functions as the
power to prescribe and command the production of the social. And it is
precisely what Europe, more liberal than the Americans, has prohibited.
The sovereignty of the central bank only plays a subordinate role: con-
fronted by the legitimate credit requirements of private agents, its mission
is to manage its global coherence (Aglietta & Orlean, 1998: 373 ).
One could assert the subordination of political sovereignty and mon-
etary sovereignty to a new centre or dispositif of power. But, to be more
accurate, one should speak of the constitution of a new articulation of
the dispositif of capitalist power, a dispositif which includes the state. To
understand the new articulation of these powers and their governmental
techniques, one should not follow heterodox theory in interpreting the
crisis as a conict between politics and the economy, between the public
and the private. The aim is not that pursued by the fundamentalists of
the market like Hayek, who wish for the disappearance of sovereign
wealth and its substitution by a multiplicity of competing private
funds. The crisis shows clearly that the capitalist dispositif has no interest
in taking the place of the state. Instead, the problem is how to integrate
the sovereign, administrative and exclusive function of the state in the
new governmentality for which it does not fully take responsibility.
Capital still needs the sovereignty of state wealth to organize the
mechanism for recognizing and validating, or not, the debts which we
are experiencing. The end point of this new multi-headed assemblage of
power is not the radical emancipation of the economy in relation to the
political (Orlean, 1998: 382) in order to isolate the economic sphere
from all external and principally political disruption (1998: 380).
Heterodox theory appears to analyse whats going on the wrong way
round when it claims, as Karl Polanyi (2001) does, that the economic
order, previously imbricated in the social web, is acquiring its independ-
ence and becoming separated from society.
The crisis shows, on the contrary, that the reorganization of the dis-
positifs of power goes beyond and integrates the dualisms of economy
82 Theory, Culture & Society 32(78)

and politics, of the public and the private, of state and market, etc., by
deploying a governmentality with multiple points of entry. The power of
capital is transversal in relation to the economy, the political and society.
Governmentality is dened precisely as a dispositional technique and has
as its main task the articulation of the relation between the economy, the
political and the social in terms of the market.
Neoliberal governmentality is no longer a technology of the state,
even if the state occupies a key role in it. Foucault had responded to the
many criticisms which declared that his theory of power did not include a
theory of the state by contending that the relation of governmentality to
the state was what the techniques of segregation were for psych-
iatry . . . the techniques of disciplining were for the penal system, what
biopolitics was for medical institutions (Foucault, 2004a: 124). From the
1970s we see a privatization of governmentality. It is no longer conducted
exclusively by the state, but by an ensemble of non-state institutions
(such as independent central banks, markets, pension funds, etc.)
which the state administers only in terms of an admittedly important
articulation. This functioning is exemplied in the crisis by the Troika
of the IMF, the EU and the European Central Bank.
The crisis allows us to see in real terms the constitution and deepening
of a process which Deleuze and Guattari call state capitalism. The
imbrications of the state and the market, of the political and the econ-
omy, of society and capital, have been extended by exploiting the nan-
cial collapse. The liberal management of the crisis is ready to integrate a
maximum state as one of the dispositifs of its governmentality. In order
to free the markets, it binds society in chains, by massive, invasive and
authoritarian interventions in the life of the population, claiming to
govern every conduct. Like all forms of liberalism, it produces freedoms
for owners of wealth whilst allowing non-owners the semblance of an
already weak political and social democracy.
Translated and edited by Couze Venn
References
Aglietta M and Orlean A (1998) La monnaie souveraine. Paris: Odile Jacob.
Aglietta M and Orlean A (2002) La monnaie entre violence et confiance. Paris:
Odile Jacob.
Deleuze G and Guattati F (1972) LAnti-Oedipe: Capitalisme et schizophrenie.
Paris: Editions de Minuit.
Foucault M (2004a) Securite, territoire, population. Paris: Gallimard/Seuil.
Foucault M (2004b) Naissance de la biopolitique. Paris: Gallimard/Seuil.
Foucault M (2007) Security, Territory, Population, trans. Burchell G.
Houndmills: Palgrave Macmillan.
Foucault M (2008) The Birth of Biopolitics, trans. Burchell G. Houndmills:
Palgrave Macmillan.
Graeber D (2011) Debt. New York: Melville House.
Lazzarato M (2011) La fabrique de lhomme endette. Paris: Editions Amsterdam.
Lazzarato 83

Marx K (1973) Grundrisse, trans. Nicolaus M. Harmondsworth: Penguin.

Marx K (1974) Capital, Vol. 1. London: Lawrence and Wishart.
Orlean A (1999) Le pouvoir de la finance. Paris: Odile Jacob.
Polanyi K (2001) The Great Transformation. Boston, MA: Beacon Press.

Maurizio Lazzarato is an Italian independent sociologist, philosopher

and writer based in Paris. He is the author of an inuential essay on
Immaterial Labor and numerous books in French such as Puissances de
linvention. La psychologie economique de Gabriel Tarde contre leconomie
politique (2002), Les Revolutions du capitalisme (2004), Le Gouvernement
des inegalites, Critique de linsecurite neoliberale (2008), La fabrique de
lhomme endette : Essai sur la condition neoliberale (2011) (translated as
The Making of the Indebted Man, MIT Press, 2012), Gouverner par la
dette (2014), and Marcel Duchamp et le refus du travail (2014). He is a
Researcher at Matisse/CNRS (University of Paris 1), a member of the
Paris International College of Philosophy (CIP) and a founding member
of the journal Multitudes.

This article is part of the Theory, Culture & Society special section,
Eurocrisis, Neoliberalism and the Common, edited by Tiziana Terranova,
Adalgiso Amendola and Sandro Mezzadra.