Contemporary Political Theory , (27 May 2014)
"Behavioral economics as neoliberalism: Producing and governing homo economicus
John McMahon"
Abstract
The research program of behavioral economics is gaining increasing influence in academic economics and in interest from policymakers. This article analyzes behavioral economics from the dual perspective of Foucault’s genealogical investigation of neoliberal governmentality and contemporary critical theorizations of neoliberalism. I argue that behavioral economics should be understood as a political economic apparatus of neoliberal governmentality with the objective of using the state to manage and subjectivize individuals – by attempting to correct their deviations from rational, self-interested, utility-maximizing cognition and behavior – such that they more effectively and efficiently conform to market logics and processes. In this analysis, I contend that behavioral economics enacts three components of neoliberal governmentality: positioning the market as a site of truth and veridiction for the individual and the state; regulating what constitutes the objects of political economy and governmental intervention; and producing homo economicus (economic human) and diffusing this mode of economic subjectivity across the social terrain. In doing so, behavioral economics and its rationalities transform and introduce new technologies of power into neoliberal governmentality. I illustrate this argument with an analysis of recent changes to retirement savings policy in the United States, heavily influenced by behavioral economics thinking, that entrench neoliberal formations.
http://www.palgrave-journals.com/cpt/journal/vaop/ncurrent/pdf/cpt201414a.pdf
Original Title
Behavioral economics as neoliberalism: Producing and governing homo economicus - John McMahon
Contemporary Political Theory , (27 May 2014)
"Behavioral economics as neoliberalism: Producing and governing homo economicus
John McMahon"
Abstract
The research program of behavioral economics is gaining increasing influence in academic economics and in interest from policymakers. This article analyzes behavioral economics from the dual perspective of Foucault’s genealogical investigation of neoliberal governmentality and contemporary critical theorizations of neoliberalism. I argue that behavioral economics should be understood as a political economic apparatus of neoliberal governmentality with the objective of using the state to manage and subjectivize individuals – by attempting to correct their deviations from rational, self-interested, utility-maximizing cognition and behavior – such that they more effectively and efficiently conform to market logics and processes. In this analysis, I contend that behavioral economics enacts three components of neoliberal governmentality: positioning the market as a site of truth and veridiction for the individual and the state; regulating what constitutes the objects of political economy and governmental intervention; and producing homo economicus (economic human) and diffusing this mode of economic subjectivity across the social terrain. In doing so, behavioral economics and its rationalities transform and introduce new technologies of power into neoliberal governmentality. I illustrate this argument with an analysis of recent changes to retirement savings policy in the United States, heavily influenced by behavioral economics thinking, that entrench neoliberal formations.
http://www.palgrave-journals.com/cpt/journal/vaop/ncurrent/pdf/cpt201414a.pdf
Contemporary Political Theory , (27 May 2014)
"Behavioral economics as neoliberalism: Producing and governing homo economicus
John McMahon"
Abstract
The research program of behavioral economics is gaining increasing influence in academic economics and in interest from policymakers. This article analyzes behavioral economics from the dual perspective of Foucault’s genealogical investigation of neoliberal governmentality and contemporary critical theorizations of neoliberalism. I argue that behavioral economics should be understood as a political economic apparatus of neoliberal governmentality with the objective of using the state to manage and subjectivize individuals – by attempting to correct their deviations from rational, self-interested, utility-maximizing cognition and behavior – such that they more effectively and efficiently conform to market logics and processes. In this analysis, I contend that behavioral economics enacts three components of neoliberal governmentality: positioning the market as a site of truth and veridiction for the individual and the state; regulating what constitutes the objects of political economy and governmental intervention; and producing homo economicus (economic human) and diffusing this mode of economic subjectivity across the social terrain. In doing so, behavioral economics and its rationalities transform and introduce new technologies of power into neoliberal governmentality. I illustrate this argument with an analysis of recent changes to retirement savings policy in the United States, heavily influenced by behavioral economics thinking, that entrench neoliberal formations.
http://www.palgrave-journals.com/cpt/journal/vaop/ncurrent/pdf/cpt201414a.pdf
John McMahon Political Science and Womens Studies, The Graduate Center, City University of New York, New York, NY, 10016, USA. [email protected] Abstract The research program of behavioral economics is gaining increasing inu- ence in academic economics and in interest from policymakers. This article analyzes behavioral economics from the dual perspective of Foucaults genealogical investigation of neoliberal governmentality and contemporary critical theorizations of neoliberalism. I argue that behavioral economics should be understood as a political economic apparatus of neoliberal governmentality with the objective of using the state to manage and subjectivize individuals by attempting to correct their deviations from rational, self-interested, utility- maximizing cognition and behavior such that they more effectively and efciently con- form to market logics and processes. In this analysis, I contend that behavioral economics enacts three components of neoliberal governmentality: positioning the market as a site of truth and veridiction for the individual and the state; regulating what constitutes the objects of political economy and governmental intervention; and producing homo economicus (economic human) and diffusing this mode of economic subjectivity across the social ter- rain. In doing so, behavioral economics and its rationalities transform and introduce new technologies of power into neoliberal governmentality. I illustrate this argument with an analysis of recent changes to retirement savings policy in the United States, heavily inu- enced by behavioral economics thinking, that entrench neoliberal formations. Contemporary Political Theory advance online publication, 27 May 2014; doi:10.1057/cpt.2014.14 Keywords: behavioral economics; neoliberalism; governmentality; Foucault; homo economicus; subjectivization neo-liberal governmental intervention is no less dense, frequent, active, and continuous than in any other system [] [government] has to intervene on society as such, in its fabric and depth. Basically, it has to intervene on society as such so that competitive mechanisms can play a regulatory role at every moment and every point in society and by intervening in this way its objective will become possible, that is to say, a general regulation of society by the market. (Foucault, 2008, p. 145) 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 www.palgrave-journals.com/cpt/ libertarian paternalism is not an oxymoron. Choice architects can preserve freedom of choice while also nudging people in directions that will improve their lives. (Thaler and Sunstein, 2008, p. 252) Richard H. Thaler and Cass R. Sunsteins book Nudge which seeks to popularize the research program of behavioral economics and apply it to questions of governance puts forth an account of what they call libertarian paternalism. Their libertarian paternalism, informed by the eld of behavioral economics, forcefully illustrates the practices of neoliberal governmentality that became a central focus of Foucault in the years 19771979. This article analyzes behavioral economics as both a theoretical discourse and implemented governmental practice although, of course, these two projects are not truly so separate from the dual perspective of Foucaults genealogical investigation of neoliberalism and governmentality as well as contemporary critical theorizations of neoliberalism. I argue that behavioral economics should be understood as a political economic apparatus of neoliberal governmentality that has the objective of using the state to manage and regulate individuals, interests and populations by attempting to correct their deviations from rational, self-interested, utility-maximizing cognition and behavior such that they more effectively and efciently conform to market logics and processes. In doing so, it intensies processes of neoliberalization. This apparatus organizes a variety of components, techniques, relations of power and discourses. What Foucault (2008) calls an apparatus of power-knowledge has three constitutive elements: the coupling of a set of practices and a regime of truth; the way it effectively marks out in reality that which does not exist and how it legitimately submits [that which does not exist] to the division between true and false (p. 19). Behavioral economics, especially once articulated in specic policy and governmental domains, does precisely this. It couples particular policy techni- ques with a regime of positivist, socialscientic truths about the market to mark out in reality what does not in fact exist governable yet free economic subjects, interests and populations and subjects them to the division of truth or falsity on the basis of their behavior in the market. As such, behavioral economics as practice and as theory is another apparatus in the genealogy of regimes of veridiction bringing together truth, law and policy (Foucault, 2008, p. 35). Behavioral economics consequently illustrates, I demonstrate in this article, the way that forms of neoliberal governmentality are intimately engaged in the functioning of the market and the production of the kinds of economic subjectivities populating that market. For Foucault, governmentality denotes a reective art of governing distinct from traditional practices of sovereignty. Whereas regimes of sovereignty sought as the end of public good the obeying of God and/or men and had as its objects state and territory, governmentality has plural ends intrinsic to its multiple objects of governance, such as the maximization of the life of the populations being governed. This entails managing the life of people in their relation with things, not commanding McMahon 2 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 people as subjects of sovereign power. Governmentality develops as a mode of governance that has populations (not subjects as such) as its main target and apparatuses as its essential mechanism (Foucault, 2007, pp. 107108). It is the broad term denoting a historical shift in Europe toward a reasoned, reective, rationalized and self-conscious art of governing. Emerging from earlier incarnations as Christian pastoral power and then raison dtat, 1 a decisive shift unfolds in the eighteenth century when political economy makes possible the self-limitation of governmental reason (Foucault, 2008, p. 13). In this liberal governmentality, the market functions as the site of veridiction for the state, where the market formulates its own truth and functions as norm, standard and criterion for governmental practice. With the Great Depression, the rise of Nazism and the Soviet Union, and World War II, and more specically with the rise of Keynesian economic interventions a crisis of liberalism and liberal governmentality emerges, manifested in re-evalua- tions, re-appraisals, and new projects in the art of government (Foucault, 2008, p. 69). Neoliberalism emerges as a response to what is understood as a crisis of Keynesian economics, and does so in what Foucault describes as German and American variants. 2 What is important and decisive for both modes is whether a market economy can in fact serve as the principle, form, and model for a state which, because of its defects, is mistrusted by everyone on both the right and the left, for one reason or another will liberalism in fact be able to bring about its real objective, that is to say, a general formalization of the powers of the state and the organization of the society on the basis of the market economy? Can the market really have the power of formalization for both the state and society? This is the important, crucial problem of present-day liberalism (Foucault, 2008, p. 117). That is, the crucial problem neoliberalism poses is whether the market can be the ground and the vehicle of legitimacy for the state, and whether it can be the organizing and regulating principle for society. As such, it is a distinct programming of governmentality. This poses a question with much greater stakes than that of eighteenth- or nineteenth-century liberalism, which sought only to free the market from the state. Neoliberalism broadly, and American neoliberalism specically, seeks to expand this project in terms of both surface and depth: its project is to absolutely generalize the market form to the entirety of the social eld (Foucault, 2008, pp. 219, 243). In this article, I rst sketch out the basic motivations, approaches and ndings of behavioral economics as a mode of knowledge production as well as some specic policy and governance implications of this socialscientic discourse. I then turn to analyze behavioral economics in terms of how it and its rationalities transform and introduce new technologies of power into neoliberal governmentality. In doing so, I argue that behavioral economics enacts three components of neoliberal govern- mentality: positioning the market as a depoliticized site of truth and veridiction for Behavioral economics as neoliberalism 3 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 the individual and the state; regulating what constitutes the objects of political economy and governmental intervention; and producing homo economicus (eco- nomic man) and diffusing this mode of economic subjectivity across the social terrain. These modalities of behavioral economics, I will contend, intensify processes of neoliberalization. I end by illustrating my argument through an analysis of a specic policy changes to retirement savings policy in the United States in which the rationalities of behavioral economics have been taken up by governmental practice in a way that further entrenches neoliberal formations. The objectives of this project are twofold. First, I seek to intervene in emerging critical engagement with behavioral economics, much of it coming from political geographers. Work in this area has focused on situating the libertarian paternalism of behavioral economics in a genealogy of the liberal production of economic subjects (Huxley, 2011), exploring the potential points of contact between behavioral economics and critical geographical research (Whitehead et al., 2012), examining behavioral economics in relation to neuroeconomics and picoeconomics (Pykett, 2013), and generating more philosophical critiques of it from the standpoint of deliberative democracy (John et al., 2009) and liberal concerns with autonomy (Hausman and Welch, 2010). I take up a somewhat different project: directly engaging behavioral economic theory as such, from a Foucaultian orientation, to explore what behavioral economics says about itself, about the state, about the market and about the economic subject. I seek to more thoroughly and comprehensively read behavioral economics into a critical theoretical and epistemological account of neoliberalism and governmentality. In doing this, I focus on a different and more wide-ranging set of power effects produced by behavioral economics than the work mentioned above, effects that attach together a regime of socialscientic discourse, concrete govern- mental interventions and policies, and the neoliberal productions of governable yet free economic subjects submitted to the truth of the market. Second, I argue that analysis of behavioral economics is necessary for any critical interpretation of neoliberalism. Behavioral economics in my account functions as a new technique of neoliberal governmentality, one that works to deepen neoliberal practices and rationalities. When we shift to thinking of neoliberalism not as something homogeneous that can be understood as coming from the top down but instead as a constructed project with interacting processes and practices that seek to continually remake rule of, by and for the market (Peck, 2010, p. xi), we can see the necessity of paying attention to behavioral economics as a constitutive technique of neoliberal governmentality. As Read (2009) insists, any criticism of neoliberalism as governmentality must not focus on its errors, on its myopic conception of social existence, but on its particular production of truth (p. 34). Behavioral economics functions as a particular mode by which neoliberalism works to produce certain forms of truths as well as certain kinds of economic actors and subjectivities to conform to those truths. As such, behavioral economics introduces new technologies of power into neoliberal governmentality in a way that buttresses neoliberal hegemony. McMahon 4 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 Behavioral Economics: A Challenge to Homo Economicus The standard neoclassical economic model makes a set of assumptions about economic actors. The basic economic unit of these models, homo economicus, is an atomistic individual who has stable, coherent and well-dened preferences rooted in self-interest and utility maximization that are revealed through their choices. Furthermore, this actor is assumed to rationally maximize these preferences; that is, given a set of available options, he 3 accurately reects on the costs and benets of various strategies and choices, pursuing the correct path to maximize his preferences and the expected value of utility. Finally, the model assumes that in situations of uncertainty, this individual has well-formed beliefs about how the situation will resolve and updates their beliefs as new information becomes available. Overall, then, individuals are presupposed as rational actors in the sense of forming correct beliefs about their environment, their own behavior and others actions, and in the sense of choosing actions to best satisfy their preferences that have self- interested preferences (Rabin, 1998; Camerer et al., 2003; Camerer and Fehr, 2006; DellaVigna, 2009). This model of homo economicus has thus served as the foundation for the dominant mode of contemporary economic theory. Behavioral economics has challenged these fundamental assumptions of neoclas- sical economics. Camerer et al. (2003) identify two waves of behavioral economics research. The rst sought to empirically investigate, describe and explain the variety of ways in which people deviate from the assumptions of a rational choice model of economic behavior. This predominantly took the form of experimental studies demonstrating one or two kinds of divergences from one aspect of homo economicus. The second wave comprises efforts to socialscientically consolidate these various empirical ndings into testable models and predictions (ibid., pp. 12141216). 4 As such, behavioral economics can be seen to have a few objectives: identifying departures from the standard model that recur in predictable ways through the incorporation of psychological research and theory; demonstrating how these deviations matter in a wide variety of economic contexts; developing alter- native formal models of economic behavior; and incorporating these deviations and the models that attempt to systematize them into economic policy, law, regulation and so on. In attempting to briey summarize the major ndings of behavioral economics, I follow DellaVignas (2009) classication scheme. He identies three ways in which behavior deviates from the assumptions of rational, self-interested utility maximiza- tion: non-standard preferences, non-standard beliefs and non-standard decision making. In terms of preferences, the standard model assumes that the individual has the same preferences about future plans at different points in time, but research indicates that people consistently demonstrate a preference for immediate gratica- tion they are impatient over the short term and patient over the long term. For example, behavioral economists argue that people regularly undersave at any Behavioral economics as neoliberalism 5 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 given moment in time while stating a commitment to long-term savings plans. Furthermore, preferences are reference- and context-dependent; that is, instead of calculating preferences on the basis of all available information and possibilities, individuals preferences are more situational. Thus, to cite one argument of behavioral economists, people overvalue (from the perspective of the market and perfect rationality) what they already have and are irrationally averse to losses when the opportunity for gains are present. Furthermore, individual preferences are often socially inuenced and thus not purely self-interested. Behavioral economists contend that people engage in positive reciprocity giving up individual gain in the interests of some notion of fairness to a worthy other and negative reciprocity incurring personal costs to economically punish others all based on ascribed motivations, not economic actions (Rabin, 1998; DellaVigna, 2009). In terms of non-standard beliefs, behavioral economic research indicates that people are systematically overcondent: they overestimate their own ability and commitment while underrating the probability of negative events and the time necessary to complete projects. Hence, for example, individuals are considered to be nave about their own future self-control with regard to gym attendance, CEOs overrate their ability to manage a company, rank-and-le employees overestimate the future performance of their employer and people overrate the precision of their own information. Moreover, behavioral economists claim individuals overweigh informa- tion that is available and representative, such as overinferring or overextrapolating patterns from small numbers (that is, if a coin comes up tails four times in a row, it has to come up heads next, even though each individual coin ip is independent, with an even chance of heads and tails; a similar extrapolated principle applies to predictions of individual investors in the stock market). Finally, actors exhibit a projection bias, where they expect their future preferences to be close to their present ones without adapting to future circumstances (DellaVigna, 2009). Finally, behavioral economists seek to describe non-standard decision making. They claim that people respond heavily to the way a decision is framed a decision with the same underlying economic trade-offs and logic can be made differently depending on the way it is framed in experiments. Individuals further exhibit limited attention by not using all the available information to make economic decisions, for instance, not factoring in shipping costs in online shopping choices. When faced with a wide set of choices, people use limiting and simplifying heuristics to make decisions, such as choosing to overdiversify their choices, only choose familiar options, choose based solely on salience or avoid choosing all of these are irrational and work against utility maximization. Moreover, decisions are subject to persuasion and social pressures such as an overreliance on stock market analysts (DellaVigna, 2009). 5 This brief recounting of behavioral economics has focused on the rst of Camerer et al.s (2003) two waves of behavioral economics research: the way that individual behavior deviates from the standard neoclassical model and the implications of these McMahon 6 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 departures for economic relations. More recent developments in the eld have attempted to translate this set of research into more specic analyses of economic phenomena and contexts, and into concrete policy program. In this vein, I also want to highlight some of the main areas into which behavioral economics has been extended. Behavioral economics has gained some of the greatest attention in the eld of nance, where the efcient market hypothesis has been challenged by behavioral economists who argue that stock prices do not reect the true value of a security on the stock market, that consumers overweigh new data and thus stock prices are to some extent predictable and so on (Mullainathan and Thaler, 2000; Shleifer, 2000). Behavioral economics has posed a broad set of constructive challenges to game theory (Sent, 2004, pp. 750752; Camerer, 2005, pp. 21, 30; Camerer and Fehr, 2006). Behavioral economic analyses of poverty respond to standard economic theorizations of poverty as adaptive to circumstances or stemming from a psycho- cultural decits by positing that poverty tends to exacerbate the effects of the same non-standard biases all have (Bertrand et al., 2004). Similar work has been done in applying behavioral economics to development economics (Mullainaithan, 2007). Behavioral public economics seeks to develop new basic commitments and assump- tions of normative policy and welfare economics, and apply this to questions such as saving, addiction and public goods (Bernheim and Rangel, 2007). Parts of the eld of economics and the law have incorporated behavioral research to examine issues such as distributive legal rules, the rules of evidence discovery in litigation, business judgments, consumer protection law and so on, as well as investigating the potential of the law to de-bias individuals (Jolls, 2007). Overall, behavioral economics, while not fully accepted by a majority of economists, is increasingly entering the mainstream (Sent, 2004, pp. 749750; Fudenberg, 2006). 6 It exhibits a unique impact in public policy and governance today, as behavioral economists have put forth models for governing and regulating based on behavioral economics, and have played an inuential role in the Obama administration (Camerer et al., 2003; Thaler and Sunstein, 2008; Grunwald, 2009; Dorning, 2010; Subramanian, 2013). 7 This raises the crucial questions, then, of what it means when behavioral economics is incorporated into the state apparatus. Behavioral Economics as Neoliberalism I now turn to analyze three techniques of behavioral economics, focusing in this section on how behavioral economics transforms and introduces new technologies of power into neoliberal governmentality. Here I am interested in articulating ways in which behavioral economics connects to and in many ways extends neoliberal formations. I more specically discuss three techniques of the behavioral economic apparatus: positioning the market as a depoliticized site of truth and veridiction for the individual and the state; regulating what constitutes the objects of political Behavioral economics as neoliberalism 7 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 economy and governmental intervention choices, preferences and interests; and producing and subjectivizing homo economicus. By engaging both Foucaults account of neoliberalism and governmentality as well as contemporary debates about the formations, rationalities and techniques of neoliberalization, this section seeks to investigate how behavioral economics entrenches modes of neoliberal governance. Depoliticizing the market as truth The rationality of homo economicus in market logics and actions remains the benchmark dening the economic terrain for behavioral economics. I argue that in the way it continues to privilege the market and seeks to organize government and policy to participate under a market logic, behavioral economics enacts two of the dening characteristics of neoliberal governmentality: the depoliticization of govern- mental organization of the economy, as well as situating the market as the site of sociopolitical truths. Here, the market becomes the site of fact and justice, and thus the mode of examining governmental practice whereby being a good government entails acting according to the truth as found in and determined by the market (Foucault, 2008, pp. 3132). As such, this marks a shift from the delineated relationship of economy and state of classical liberalism. There the two constituted different spheres, but under neoliberalism the two form an inextricable assemblage: There will thus be a sort of complete superimposition of market mechanisms, indexed to competition, and governmental policy. Government must accom- pany the market economy from start to nish. The market economy does not take something from government. Rather, it indicates it, it constitutes the general index in which one must place the rule for dening all governmental action. One must govern for the market (Foucault, 2008, p. 121). Hence, under neoliberalism, we witness the subsumption of government by the market. The market its functioning, growth, and production of truth becomes the objective of governmentality and the very truth matrix of the governmental state itself. Two of the clearest calls by behavioral economists to enact public policy motivated by behavioral economic research offer similar political justications. Thaler and Sunstein proffer their libertarian paternalism as a Third Way or middle ground in American politics organized around governing for the betterment of the market; Camerer et al. argue that their asymmetrical paternalism shifts focus away from polarized politics in order to focus on empirical terms of actors, behaviors and interests (Camerer et al., 2003, p. 1254; Thaler and Sunstein, 2008, pp. 252253). 8 Both sets of analysts thus seek to depoliticize the political question of how to organize governmental economic intervention, and thus enact the very subsumption of government-by-market that Foucault describes. The process of governmentalizing McMahon 8 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 behavioral economics involves techniques of power that posit the market as truth, end and organizing principle. Instead of neoliberal governmentality being subject to political debate, it is posited as an object of consensus to be sought after, as political questions become empirical problems of the market and economic actors. The governmentalization of behavioral economics is not, however, limited to hypothetical programs in academic literature. The Obama administration, for example, has pursued a range of policies inuenced by behavioral economists. Behavioral economists in the administration have been inuential in the design of the Making Work Pay tax cut in the 2009 economic stimulus bill, the individual mandate of 2010s health-care reform bill, various aspects of the DoddFrank nancial reform bill, retirement savings programs (about which more is detailed in the next section), and other policies and regulations (Dorning, 2010; Priluck, 2013). Moreover, there has been an explicit attempt to keep behavioral reforms quiet: the behavioral adherents lowered their prole, with White House advisers [making] sure of it by rarely allowing them to speak on the record (Dorning, 2010). This downplaying of the behavioral economics approach of the administration, I argue, illustrates the depoliticization of economic decision making and governmental intervention in the working of markets that behavioral economics and neoliberalism more broadly entails. The Obama administration renewed its commitment to behavioral economics in the summer of 2013, organizing a new working group modeled on the United Kingdoms Behavioural Insights Team (Subramanian, 2013). David Camerons Conservative government in the United Kingdom is itself strongly inuenced by behavioral economics (Wells, 2010; Whitehead et al., 2011; Pykett, 2013; Whitehead et al., 2012), and the governmentalization of behavioral techniques have been noted in Australia, New Zealand, France and Brazil (Pykett et al., 2011, p. 302). The object of these behavioral economic interventions, of course, is the smoother functioning of the market, and in its self-presentation as technical and non- ideological, seeks to depoliticize its deployment. Behavioral economics thus can be understood as a technology of power to further entrench a depoliticization of economic, social and political intervention, often understood to be characteristic of neoliberalism (for example, Duggan, 2003, Chapter 1; Brown, 2005; Madra and Adaman, 2013). Madra and Adaman (2013) describe as central component of neoliberalism in its various forms a project of the economisation of the social that is materialised either through the naturalisation of economic processes or technocratisation of their governance or both and thus functionally depoliticizes the social eld (p. 2). That is, neoliberalism seeks to ensconce itself as apolitical and pragmatic, limiting terms of political debate to the neoliberal terrain. Behavioral economics self-con- sciously adopts this non-ideological posture, as the above quotes from Camerer et al. and Thaler and Sunstein demonstrate. It understands itself as simply solving technical, empirical questions in a non-controversial and ultimately non-political way. This ignores, however, that the very setting up of the market as the truth of Behavioral economics as neoliberalism 9 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 individual actions and governmental interventions to enforce that truth is a decidedly political decision. Indeed, behavioral economics-inected regulations beg the question of exactly who is constructing these supposed rational and non- ideological standards and policies; by trusting democratically unaccountable bureaucratic actors to design the rational environments of behavioral economics, there is little opportunity to question the political and economic values that may lie behind these interventions (Whitehead et al., 2011, pp. 2834). Behavioral economics should thus be understood as a technology of neoliberal governance that deepens a broader neoliberal project of depoliticizing economic decision making. On a more theoretical level, even as behavioral economics challenges many of the central components and assumptions of neoclassical economics, it still does so for the sake and the truth of the market. If there is a rationality to the irrationality of economic actors, then the market can respond to, change and/or create incentives to shift behavior. Indeed, as Camerer and Fehr (2006) argue, individuals who violate the assumptions of economics may create powerful economic incentives for Economic Man to change his behavior, but depending on the economic structure, the existence of Economic Man may also create strong incentives for those with bounded rationality or other-regarding preferences to behave like Economic Man (p. 48). If there are enough agents who do indeed act like homo economicus, then the existence of these subjects may cause aggregate outcomes to be close to the predictions of a model that assumes that everyone is rational and self-regarding (Camerer and Fehr, 2006, p. 47). The market remains the assumed standard by which the behavior of heterogeneous agents is evaluated and modeled. Behavioral economics problematizes not the market itself, only the assumptions made about the actors on the market, whose behavior is then measured against the truth of the market. It seeks not to challenge or defy the market but to provide tweaks so as to better assimilate all to the market; it captures the irrationality of economic actors and disciplines that irrationality to the functioning of the market. As such, behavioral economics functions as an apparatus in practice and in theory bringing together truth, law and policy; it is part of a genealogy of regimes of veridiction (Foucault, 2008, p. 35). In doing this, behavioral economics functions as a new technology of power that further instantiates neoliberal governance. Brown (2005) argues that we should understand neoliberalism as a normative claim about the pervasiveness of economic rationality that then takes as it task the development, dissemination, and institutio- nalization of such a rationality (p. 40), while Harvey (2005) contends that a central feature of neoliberalism is its attempts to maximize the reach of market transactions, including the building and enforcement of market conditions and logics by the state where necessary (pp. 23). Conceptualizing behavioral economics as an effort to compel actors to act more closely aligned with a rationality judged by the market-as-truth enables us to see the role it plays in further entrenching neoliberalism. McMahon 10 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 It seeks precisely to develop, disseminate, and institutionalize economic rationality and to enforce market logics by disciplining subjects to behave more rationally on the market. Neoliberalization, as continuous efforts to x markets, to build quasi- markets, and to repair market failures (Peck, 2010, p. xiii) needs some technology of power to carry out these efforts, and the rationality and practice of behavioral economics fullls this need. It proceeds from the premise that the market is indeed the truth of rational behavior and then seeks to compel conformity to market behavior, but does so while presenting itself as non-political and non-ideological. As such, behavioral economics functions as a new mode of neoliberal governmen- tality by depoliticizing the market-as-truth. The objects of neoliberal governmentality Foucault argues that the shift to liberal governmentality, and especially to neoliber- alism, marks a change in the objects of governmentality. No longer does govern- mentality manage subjects, individuals, land and things (as it did under raison dtat), but instead works on interests, populations, enterprises, circulations produc- tion, practices and utilities. It concerns itself with growth and the maximization of life, and thus is caught up with the rise of biopolitical management. This marks a substantial shift. As the market takes the place of the juridical as functional limit on the state, interest comes to signify the primary object of governmentality. In the regime of liberal governmentality, government is basically no longer to be exercised over subjects and other things subjected by these subjects, but is to be exercised over what we would call the phenomenal republic of interests (Foucault, 2008, p. 46). Contemporary neoliberal formations, I argue, only accelerate this change in the objects of governmentality. More specically, behavioral economics does not govern individuals, or rather, does so only indirectly. It addresses interests, utilities, cognition, decisions, choices, actions, consumption, preferences, behaviors and so on. The literature is quite explicit about this. In their justication of their asymmetrical paternalism, Camerer et al. (2003) make a point of emphasizing that their approach focuses on situations rather than persons (p. 1213). Instead of applying paternalistic policies or what I would call techniques of governmentality to individuals or subjects as such, they do so to choices, preferences and situations. Similarly, while discussing the possible applications of behavioral economics in the eld of public and welfare economics, Bernheim and Rangel (2007) make the argument for understanding preferences as real objects, and claim that the discovery of true preferences is a central objective of welfare economics (p. 11). In both of these examples, preferences form the basis of governmental intervention. A corresponding focus exists in recent theoretical developments in behavioral economics as well. Many have observed an impetus for behavioral economics Behavioral economics as neoliberalism 11 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 to create general, unied and formal mathematical models of their ndings (Camerer, 2005; Fudenberg, 2006; Pesendorfer, 2006; DellaVigna, 2009). These mathematical formulae seek to model preferences, utility and choices, not subjects. According to DellaVigna (2009), the standard economic model accounts for maximiz[ing] expected utility subject to a probably distribution p(s) of the states of the world, at time t =0 (p. 316). Behavioral deviations from this standard model modify these terms and/or add new ones; for example, accounting for non-standard preferences involves adding factors for preference discounting, time discounting and future payoffs (DellaVigna, 2009, pp. 318319). Overall, much as we saw above in the way behavioral economics reenacts the market as the site of truth, so does it reiterate a government of the phenomenal republic of interests. I argue that behavioral economics acts as an educative force on behalf of neoliberalism, shaping interests, preferences and choices to more deeply assimilate them to neoliberalism. In accounting for the way that neoliberalism becomes a dominant mode of thought, Harvey (2005) argues that it appeals to our intuitions and instincts, to our values and desires (p. 5). What is missing from this analysis is an explicit articulation of those intuitions, instincts, values and desires as in part produced through techniques and rationalities of power. One of the power effects of behavioral economics is the shaping of individual instincts, values, desires and so forth to more closely conform to the market logics of neoliberalism. Neoliberalism operates with the presupposition that the real is programmable by authorities: the objects of government are rendered thinkable in such a way that their difculties appear amenable to diagnosis, prescription, and cure (Rose, 1996, p. 53). We should understand behavioral economics as part of both the process of rendering objects of government thinkable in its focus on preferences and choices as well as the diagnosis, prescription and cure in its analysis and manipulation of those preferences and choices. By acting on those objects, it can assimilate them and the individual persons that incorporate them into market-focused neoliberal rationalities. Neoliberalism is a mode of public pedagogy that targets desires, values, and identities in prescribing a market-oriented subject (Giroux, 2008, p. 591). In its understanding of and action upon its objects of governmentality, behavioral economics functions as a particular technique of neoliberal pedagogy. Producing and governing homo economicus Foucault identies a theory of human capital that relies on a specic notion of homo economicus as one of the unique elements of American neoliberalism. Whereas the classical liberal homo economicus was a partner of exchange, the American neoliberal version is an entrepreneur of himself, being for himself his own capital (Foucault, 2008, p. 226). With this model, neoliberalism seeks to extend the economic realm and economic thought into a previously unexplored domain, and McMahon 12 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 on this basis inaugurates the possibility of giving a strictly economic interpretation of a whole domain previously thought to be non-economic (Foucault, 2008, p. 219). The ultimate end of this process is the attempted absolute generalization of the economic form of the market throughout the social body and the whole of the social system (Foucault, 2008, p. 243). With neoliberalism, economics becomes an apparatus of how individuals, as homo economicus, pursue their self-enterprise in the face of scarcity. Because of the novel emphasis on analyzing the rationality of homo economicus, and because American neoliberalism seeks to render the entire social eld intelligible through economic analysis, the question of how far homo economicus can be generalized becomes vital (Foucault, 2008, pp. 268269). At stake for American neoliberalism is the ability to diffuse the rationality of homo economicus throughout society. The problem that behavioral economics poses in this context is this: Is the model of homo economicus accurate? And if not, can homo economicus be produced? As to the rst question, the research program of behavioral economics challenges the empirical validity of the strategic rationality, strictly understood, of the American neoliberalism that Foucault critiques. However, homo economicus as economic subject, and the spread of this model throughout the social realm, is not wholly contingent on its veriability as a completely accurate description. Instead, homo economicus is more of a grid of intelligibility, an epistemological matrix of economic and social relations. Furthermore, while behavioral economics does indeed challenge the veracity of the perfectly rational, self-interested, utility-maximizing model of homo economicus, it does nothing to upset the broader model of an individual allocating scarce means to varied ends. Indeed, much of behavioral economics is the attempt to systematically theorize and model that strategic rationality, even if it is different than that of the classical formulation. That is, while problematizing the content of homo economicus strategic rationality, the form remains unchanged. Camerer and Fehr (2006) push this even farther (unwittingly closer to Foucault, one could argue), contending that more robust formal models of behavioral economics would further embed the economic across the social eld, with a unied, and powerful, approach able to inform not just economics, but social sciences more broadly, the biological sciences, and governments, philosophers, and lawyers (p. 52). This indicates the closeness of contemporary behavioral economics to the tendency of neoliberalism to generalize the economic interpretation to the entire social terrain. Moreover, behavioral economics is in many ways an attempt to produce a more rational homo economicus, one more well suited to be an entrepreneur of the self on the market. Jolls (2007), for instance, argues for using the legal system to de-bias individuals, claiming that legal policy may respond best to non-rational errors by operating directly on the errors and attempting to help people either to reduce or to eliminate them (p. 137). If the market cannot x the individual, perhaps govern- mentality can x individuals for the market. A prevailing thought among some behavioral economists is that the biases, errors and miscalculations individuals make Behavioral economics as neoliberalism 13 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 prevent them from realizing their own self-interest. If this is the case, then those deviating from the neoclassical model are in effect imposing externalities on themselves (Camerer et al., 2003, p. 1221). An asymmetrical paternalism that seeks to correct these errors is hence understood as helping people to behave in their own best interests (Camerer et al., 2003, p. 1212). Thaler and Sunstein (2008) offer a similar defense of their own libertarian paternalism, arguing that this mode of governmentality enables individuals to be better off as judged by themselves (p. 5). However, who is this self-blocked from achieving their real ends, and from where do these real ends come? They derive from the truth of the market. The authors claim that the economic agent is the one who deems certain ends best, but it is a certain market that generates particular agents with a set of specic ends that trains, manages and subjectivizes these actors in the rst place. They are still the selves and ends of homo economicus, only this time homo economicus, as an economic subjectivity, has to be produced, through apparatuses such as behavioral economics. Ultimately, we should not be surprised that homo economicus must be produced, for the truth of the market, and the marketization of the governmental state had to be produced historically as well, as did liberal notions of freedom. 9 Similarly, I argue, homo economicus and his freedom must be produced, and behavioral economics is intimately entangled in its production. An apparent paradox arises: How can homo economicus be absolutely free but also a central element of governmentality? I argue that this seeming contradiction is resolved once we understand rst that freedom and homo economicus both have to be produced, and second that this production occurs with direct reference to the market and to the neoliberal economic logic of the market. Within this framework, then, behavioral economics functions as a contemporary apparatus engaged in the production of homo economicus and his freedom, an apparatus that submits what it has produced to a judgment of truth located in the market. This is an eminently neoliberal practice. Kiersey (2009) maintains that in analyzing neoliberalism, we must understand homo economicus as subject to government, as an ideal type which must be produced in actuality, meaning that one of the crucial questions to ask about neoliberalism is that of how does actually existing capitalism produce [this] subject (pp. 381382). Along similar lines, Brown (2005) argues that neoliberal govern- mentality gures humans as homo economicus through the production of economic- ally rational actors and the imposition of market rationalities that cultivate and enact neoliberal life (pp. 4041). What is necessary, though, is to identify and analyze what, precisely, these practices producing homo economicus are. We should conceptualize behavioral economics as an indispensable technique of this generation of economic subjectivity, for it explicitly recognizes that homo economicus indeed does not exist, and then goes on to posit and advocate for means by which he could in fact be produced. The unequivocal objective of behavioral economics is to cultivate subjects that more closely conform to market logics. Neoliberalism is a new regime of truth, and a new way in which people are made subjects, and homo economicus is McMahon 14 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 a creature whose tendenc[ies] must be fostered (Read, 2009, pp. 2829). More attention must be given to the specic modes by which economic theory and governance specically engage in these processes of neoliberal subjectication, such as behavioral economics. An analysis of the rationalities of behavioral economics is, I contend, vital for any attempt to account for, theorize, or criticize neoliberalism, for behavioral economics introduces new technologies of power into neoliberal governmentality in a way that buttresses neoliberal hegemony. Behavioral Economics, Neoliberalism and Foucault My account of behavioral economics as a technique of neoliberal governmentality suggests some modications to Foucaults genealogy of neoliberalism. If my argument is correct, such that the contemporary governmentalization of behavioral economics functions to produce a certain economic subjectivity contingent on the existence of the market as a site of truth, then the current neoliberal governmentality in the United States is engaged in a deeper form of social regulation than Foucault understood under his rubric of American neoliberalism. That is, the production of homo economicus with reference to the market exemplies, I believe, the kind of German social policy that Foucault (2008) argues American neoliberalism rejected (pp.144145). My account thus demonstrates the way that changes and new discourses in economics that post-date Foucaults inquiries, in this case the development of behavioral economics, ought to be used to modify and sharpen Foucaults critical analysis of neoliberalism. Biebricher (2013) has recently argued that, at least in Europe, we are witnessing the unlikely renaissance of ordoliberal- ism; for him, current European neoliberal market reforms involve an ordoliberal understanding of the market not as naturally emerging and self-sustaining, but as something that needs to be established and cultivated (pp. 339340). 10 I would concur with his assessment, and furthermore extend the argument to suggest that behavioral economics marks a more general assemblage of ordoliberal and American neoliberal tendencies in neoliberalism as such. Neoliberalism has always been a heterogeneous eld (Madra and Adaman, 2013, p. 21), 11 and behavioral economics testies both to the limits of Foucaults genealogy as well as to contemporary admixtures of different threads of neoliberal thought and practice. The second modication the behavioral economic apparatus suggests is that of re- evaluating Foucaults account of the relationship between homo economicus and the state. This is a question of economic sovereignty. According to Foucault (2008), homo economicus is he who says to the sovereign you must not, because you cannot, because you are powerless, because you do not know, because you cannot know (p. 283). This absence or impossibility of an economic sovereign is a crucial question for the history of governmental reason, and neo-liberal thought [is] still a way of posing this problem of the impossibility (Foucault, 2008, p. 283). Behavioral economics as neoliberalism 15 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 What behavioral economics demonstrates, I believe, is that far from being powerless or impossible in the face of homo economicus, the state and the economic sovereign, in the form of neoliberal governmentality, are involved in conjunction with the market as the site of truth in the very constitution of homo economicus. 12 The Behavioral Economic Rationality of Retirement Savings I would now like to examine a specic policy example heavily inuenced by behavioral economics changes to retirement savings policies in the United States in order to examine in some more detail precisely how the behavioral economics apparatus seeks to correct behavioral deviations from homo economicus in a way that entrenches neoliberal rationalities. The primary recommendation of behavioral economists in modifying retirement systems is to change dened-contribution employee-savings plans which often take the form of Individual Retirement Account and 401(k) tax-subsidized investment accounts from an opt-in choice by the employee to an opt-out system where employees would have to actively decide to exit the retirement savings vehicle in which they are automatically enrolled. Behavioral economics argues that individuals operate, to a substantial extent, through inertia in their economic decision making, and that they typically undersave for retirement. Thus, automatic enrollment with an opt-out option seeks to use individual passivity to increase savings (Bubb and Pildes, 2014, pp. 1314). There has been a substantial increase in recent years in the number of workplace plans using automatic enrollment, federal law has been changed to encourage opt-out plans, and the Obama administration currently has regulatory plans to expand automatic enrollment programs (Bubb and Pildes, 2014, pp.14 no. 28; 2021). Indeed, behavioral law and economics has laid claim to retirement savings as perhaps its greatest policy-reform success (Bubb and Pildes, 2014, p. 13). How, then, does this mode of behavioral economic governance work as a technique of neoliberal power and rationality? Neoliberalism and behavioral economics rely on the market as the site of truth, as I demonstrated above. Automatic enrollment policies further entrench the market in the form of nancial investment and speculation as a truth of individual retirement savings and of the governance of individual retirement savings. Harvey (2005) argues that neoliberalization has meant, in short, the nancialization of everything: the economy, the state apparatus and individual life (p. 33). With automatic enrollment policies, behavioral economics as governmentality insists that individual investment in the stock market is the truth of rational individual savings behavior and of government intervention in retirement savings. In this entrenchment of the market, the objects of governmentality of this behavioral economic rationality are less so individuals as such, and more so choices (opt-in versus opt-out), decisions (about savings strategies) and investments. McMahon 16 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 In terms of neoliberalism-as-depoliticization, this increased emphasis on enrolling individuals in personal retirement savings accounts through automatic enrollment is presented as non-partisan and non-ideological; for example, the 2006 Pension Protection Act received substantial support from both Democrats and Republicans and was perceived as non-controversial. What behavioral economics focus on employee retirement plans ignores, though, is what is considered to be the more politicized, more ideological issue of increased Social Security benets or other policy proposals to more universally provide benets. 13 More broadly, we can understand the increased reliance on employee-contribution retirement savings as a political economic effect of decades of neoliberalism (Clark, 2012). The behavioral economic emphasis on automatic enrollment also intensies the production of homo economicus as the rational neoliberal economic subject. If the specic objective of behavioral economic governance is to have more individuals investing more money, then this intervention generates more force subjectivizing the individual as someone who must rationally manage an investment portfolio. Automatic enrollment produces homo economicus and seeks to compel that subject to self-manage in the realm of the neoliberal nance economy. Moreover, automatic enrollment further shifts all the risk to the individual by making individual investments primary instead of government-provided or dened benet pensions. The approach of behavioral economics to retirement savings thus endeavors to convert passive non-participation in the nance economy into elicited active management of their own retirement investments in this economy through automatic enrollment. In general, neoliberalism compels the individual to become an entre- preneur of their own life and existence, forcing them to new heights of self- responsibility, rational economic calculation and individual risk management (Duggan, 2003, Chapter 1; Brown, 2005, pp. 4043; Harvey, 2005, pp. 6466; Foucault, 2008, Chapter 9). Behavioral economics, as an apparatus of governmen- tality, intensies this neoliberal project by attempting to compel more people to become these risk-managing entrepreneurs of their own savings and future. Conclusion: Neoliberal Nudging In their critique of behavioral law and economics in relation to retirement savings and other policy areas, Bubb and Pildes (2014) note a tension in the implementation of behavioral economic-guided policy: while the social science of behavioral econom- ics document[s] the failure of individual choice, all the political regulatory interventions are all about preserving, improving and insisting upon individual choice, and this emphasis on choice tends to win out even if the literature cautions against it (pp. 23). Although their account (which never mentions neoliberalism) argues that this is a contradiction, I would argue that it is an unsurprising feature of behavioral economics that is explained by its ability to instantiate rationalities that Behavioral economics as neoliberalism 17 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 function as new techniques of power produced by neoliberal governmentality. If neoliberalism is going to be understood as processes of instantiating market-oriented governance and market rule over social actors (Peck, 2010, pp. xixiii), and if as I have argued behavioral economics functions as an entrenchment of neoliberal governmentality, then it is to be expected that behavioral economics would seek to emphasize individual choices and decisions on the market over other concerns. Indeed, in Nudge, Thaler and Sunstein (2008) regularly return the idea of maximizing choices that are presented in the correct way. The (over-)emphasis on choice in behavioral economics theory and practice further reveals the intimate connections between behavioral economics and neoliberalism I have been describing throughout this article. As the above discussion of retirement savings indicates, behavioral economics grants priority to choice, but only if that choice is presented in the correct (read: neoliberal) way, and thus falls within a narrow range of techniques and forms of power that entrench neoliberalism and its rationality. In retirement savings, one can choose how to manage their investment portfolio, but those choices are available only within the constrained, power-lled zone of rational participation in the neoliberal nance economy. Whether in the specic form of automatic enrollment into retirement savings vehicles or in its broader theoretical and policy program, behavioral economics transforms and introduces new technologies of power into neoliberalizing processes. Behavioral economics, I have argued, enacts three components of neoliberal governmentality: positioning the market as a site of truth and veridiction for the individual and the state; regulating what constitutes the objects of political economy and governmental intervention; and producing homo econom- icus while diffusing this mode of economic subjectivity across the social terrain. Each of these modalities of the behavioral economics apparatus has intensied and further entrenched ongoing processes of neoliberalization, and any critical analysis of neoliberalism must account for the increasing deployment of the rationalities and techniques of behavioral economics. Acknowledgements I would like to thank Rosalind Petchesky, Leonard Feldman, Joanna Tice and Rachel Brown for insightful commentary on earlier drafts; thanks to George DeMartino and William Seitz for their assistance in orienting me within behavioral economists. This article beneted immensely from the thoughtful criticism of two anonymous reviewers. An earlier iteration of this article was presented at the Northeastern Political Science Association Annual Meeting, where I received helpful feedback from the Critiquing the State, Critiquing Modern Institutions panel and audience. McMahon 18 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 Notes 1 For Foucaults account of these movements from non-territorial, non-sovereign Christian pastoral power to a reexive raison dtat focused on the maintenance and preservation of the state through the management of everyday life and of populations, see Foucault, 2007, Chapters 5, 9; Foucault, 2008, pp. 110). Foucaults account of the historical development of governmentality is limited to Europe. Others have attempted to utilize the analysis of governmentality in non-Western histories; Chatterjee, 2004, 2011, for example, theorizes the junctures and disjunctures of colonialism, governmentality and politics in India both historically and in the present. 2 Foucaults genealogy of German neoliberalism (or ordoliberalism) occupies a series of ve lectures (Chapters 4 through 8 in Foucault, 2008), and his account of American neoliberalism three chapters (Chapters 9 through 11). Although differences do exist, Foucault discusses their shared projects, techniques and discourses as well as the mechanisms and course of the diffusion of German neoliberalism to the United States at multiple points (Foucault, 2008, pp. 6870; 7579; 117119; 160161; 177179; 192193). For the purposes of this article, I draw on Foucaults analysis of both forms of neoliberalism, suggesting later that behavioral economics suggests a need to understand them as more closely linked in light of contemporary neoliberal formations. 3 It is important to note that homo economicus, while presented as a neutral subject, is in fact thoroughly gendered. While functioning as the universal subject of the neoclassical economic model, he is, upon analysis, a white, heterosexual, elite, and male subject; thus, it becomes apparent once homo economicus emerges in all of his positionality that economic rationales are often merely a way to preserve the patriarchal status quo (Fineman and Dougherty, 2005, p. 58). Furthermore, the liberal philosophical and theoretical heritages of the neoclassical economic subject are themselves gendered, for example, in John Lockes account of private property ownership (Mayes, 2005). On the gender dynamics of economic theory, see also Pujol, 1992, Nelson, 1993 and Nelson, 1995. Future research into behavioral economics should examine its own gendered processes, assumptions and proposals, especially in relationship to neoliberalism and the gendered forces of neoliberalism. 4 Sent (2004) provides a different periodization, arguing that old behavioral economics represented a strong challenge to develop alternative models, while new behavioral economics has sought to begin from the benchmark of rationality, formalizing alternate theories to explain anomalies (pp. 740748). 5 There are other ways to classify the ndings of the eld of behavioral economics that provide a slight variation on DellaVignas account. For example, Mullainathan and Thaler (2000) view the eld as having studied three bounds bounded rationality (encompassing overcondence, optimism, anchoring, extrapolation and availability), bounded will-power and bounded self-interest. 6 Camerer (2005) contends behavioral economics is not a distinct subeld of economics. It is a style of modeling, or a school of thought which is meant to apply to a wide range of economic questions (p. 3). 7 For example, Cass Sunstein was Administrator of the Ofce of Information and Regulatory Affairs from 2009 to 2012. In November 2013, Daniel Kahneman, one of the founding scholars of the eld of behavioral economics, received the Presidential Medal of Freedom (Obama, 2013). 8 This Behavioral Economics as Neoliberalism section engages most directly with Camerer (and often his co-authors), and with Thaler and Sunstein (2008), as they are some of the more prominent behavioral economics, and because Thaler and Sunsteins work is one the most explicit and most publicly circulating attempts to connect behavioral economics and public policy. Per the previous section, their work should be considered to be characteristic of the dominant themes, methodologies and kinds of knowledges produced by behavioral economics. Similar analyses could be carried out in relation to any of the behavioral economists discussed in the preceding section, and this section does indeed discuss some of this work as well. 9 Liberal governmentality operates as a consumer of freedom that can only function if the freedom it consumes actually exist: if the government must consume freedom, it must produce freedom; if it must Behavioral economics as neoliberalism 19 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 produce freedom, it must organize and manage freedom. Freedom is not a given but must be constantly manufactured (Foucault, 2008, pp. 6265). 10 He also argues that ordoliberalisms elite, undemocratic and technocratic political philosophy is returning; given my earlier claim that behavioral economics further entrenches neoliberalisms depoliticizing tendencies, I would concur. 11 Madra and Adaman (2013) provide a detailed problematization of Foucaults classicatory schema and attempt to rethink a genealogy of neoliberalism as interaction and contestation between Austrian, Chicago and post-Walrasian approaches. 12 Further critical Foucaultian inquiry into behavioral economics could also productively use Foucaults (2006) writing on psychiatric power and Foucaultian accounts of the infusion of psychological trends into liberal and neoliberal rationalities (for example, Rose, 1999) in order to analyze behavioral economics, which is itself a particular nexus of psychological research and microeconomics. Although the current article focuses on neoliberal power effects of behavioral economics as such, genealogical inquiry into power knowledge processes involved in the emergence of behavioral economics would be a fruitful project. Related to this kind of inquiry are contemporary critiques of psychological aspects of policy applications of behavioral economics in the United Kingdom, such as Cromby and Willis (2013) and Whitehead et al. (2011). 13 Lind (2014) of the New America Foundation describes the ever-increasing emphasis on individual retirement accounts to be perceived as the reasonable, responsible policy position in opposition to abolishing Social Security and to increasing Social Security benets. References Bernheim, B.D. and Rangel, A. (2007) Behavioral public economics: Welfare and policy analysis with non-standard decision-makers. In: P. Diamond and H. Vartiainen (eds.) Behavioral Economics and its Applications. Princeton, NJ; Oxford: Princeton University Press, pp. 784. Bertrand, M., Mullainathan, S. and Shar, E. (2004) A behavioral-economics view of poverty. The American Economic Review 94(2): 419423. Biebricher, T. (2013) Europe and the political philosophy of neoliberalism. Contemporary Political Theory 12(4): 338349. Brown, W. (2005) Neoliberalism and the end of liberal democracy. In: Edgework: Critical Essays on Knowledge and Politics. Princeton, NJ; Oxford: Princeton University Press, pp. 3759. Bubb, R. and Pildes, R.H. (2014) How behavioral economics trims its sails and why. Harvard Law Review, 127, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2331000, accessed 7 February 2014. Camerer, C.F. (2005) Behavioral Economics. In: World Congress of the Econometric Society. World Congress of the Econometric Society. London, pp. 152, http://www.hss.caltech.edu/~camerer/ worldcongress05v18.doc, accessed 22 April 2012. Camerer, C.F. and Fehr, E. (2006) When does economic man dominate social behavior? Science 311(5757): 4752. Camerer, C.F., Issacharoff, S., Loewenstein, G., O'Donoghue, T. and Rabin, M. (2003) Regulation for conservatives: Behavioral economics and the case for asymmetric paternalism. University of Pennsylvania Law Review 151(3): 12111254. Chatterjee, P. (2004) The Politics of the Governed: Reections on Popular Politics in Most of the World. New York: Columbia University Press. Chatterjee, P. (2011) Lineages of Political Society: Studies in Postcolonial Democracy. New York: Columbia University Press. Clark, G.L. (2012) From corporatism to public utilities: Workplace pensions in the 21st century. Geographical Research 50(1): 3146. McMahon 20 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 Cromby, J. and Willis, M.E.H. (2013) Nudging into subjectication: Governmentality and psychometrics. Critical Social Policy, advance online publication 15 October 2013, doi:10.1177/0261018313500868. DellaVigna, S. (2009) Psychology and economics: Evidence from the eld. Journal of Economic Literature 47(2): 315372. Dorning, M. (2010) Behavioral Economists Establish a Beachhead Within Obama Administration. Bloomberg, http://www.bloomberg.com/news/2010-06-24/behavioral-economists-sway-obama-policy- on-health-care-nancial-overhaul.html, accessed 15 March 2012. Duggan, L. (2003) The Twilight of Equality? Neoliberalism, Cultural Politics, and the Attack on Democracy. Boston, MA: Beacon Press. Fineman, M.A. and Dougherty, T. (eds.) (2005) Feminism confronts neoclassical economic theory and law and economics. In: Feminism Confronts Homo Economicus: Gender, Law, & Society. Ithaca, NY; London: Cornell University Press, pp. 5759. Foucault, M. (2006) Psychiatric Power: Lectures at the Colle ge de France, 19731974. New York: Picador. Foucault, M. (2007) Security, Territory, Population: Lectures at the Colle ge de France, 19771978. New York: Picador. Foucault, M. (2008) The Birth of Biopolitics: Lectures at the Collge de France, 19781979. New York: Picador. Fudenberg, D. (2006) Advancing beyond advances in behavioral economics. Journal of Economic Literature 44(3): 694711. Giroux, H.A. (2008) Beyond the biopolitics of disposability: Rethinking neoliberalism in the new gilded age. Social Identities 14(5): 587620. Grunwald, M. (2009) How Obama is Using the Science of Change. Time, http://www.time.com/time/ magazine/article/0,9171,1889153,00.html, accessed 15 March 2012. Harvey, D. (2005) A Brief History of Neoliberalism. Oxford; New York: Oxford University Press. Hausman, D.M. and Welch, B. (2010) Debate: To nudge or not to nudge. Journal of Political Philosophy 18(1): 123136. Huxley, M. (2011) A history of the nudge. Political Geography 30(6): 302304. John, P., Smith, G. and Stoker, G. (2009) Nudge nudge, think think: Two strategies for changing civic behaviour. Political Quarterly 80(3): 361370. Jolls, C. (2007) Behavioral law and economics. In: P. Diamond and H. Vartiainen (eds.) Behavioral Economics and Its Applications. Princeton, NJ; Oxford: Princeton University Press, pp. 115145. Kiersey, N.J. (2009) Neoliberal political economy and the subjectivity of crisis: Why governmentality is not hollow. Global Society 23(4): 363386. Lind, M. (2014) Elizabeth Warren vs. the neoliberals: The battle over Americans retirement security. Salon, http://www.salon.com/2014/02/12/elizabeth_warren_vs_the_neoliberals_the_battle_ over_americans%e2%80%99_retirement_security/, accessed 23 February 2014. Madra, Y.M. and Adaman, F. (2013) Neoliberal reason and its forms: De-politicisation through economisation. Antipode: A Radical Journal of Geography, advance online publication 28 November 2013, doi:10.1111/anti.12065. Mayes, E. (2005) Private property, the private subject, and women: Can women truly be owners of capital? In: M.A. Fineman and T. Dougherty (eds.) Feminism Confronts Homo Economicus: Gender, Law, & Society. Ithaca, NY; London: Cornell University Press, pp. 117130. Mullainaithan, S. (2007) Psychology and development economics. In: P. Diamond and H. Vartiainen (eds.) Behavioral Economics and its Applications. Princeton, NJ; Oxford: Princeton University Press, pp. 85114. Mullainathan, S. and Thaler, R.H. (2000) Behavioral Economics, http://www.nber.org/papers/w7948, accessed 19 May 2012. Nelson, J.A. (1993) Gender and economic ideologies. Review of Social Economy 51(3): 287301. Nelson, J.A. (1995) Feminism and economics. Journal of Economic Perspectives 9(2): 131148. Behavioral economics as neoliberalism 21 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122 Obama, B. (2013) Remarks by the President at Presidential Medal of Freedom Ceremony : The White House, http://www.whitehouse.gov/the-press-ofce/2013/11/20/remarks-president-presidential-medal- freedom-ceremony, accessed 22 February 2014. Peck, J. (2010) Constructions of Neoliberal Reason. Oxford; New York: Oxford University Press. Pesendorfer, W. (2006) Behavioral economics comes of age: A review essay on advances in behavioral economics. Journal of Economic Literature 44(3): 712721. Priluck, J. (2013) The overselling of behavioral economics. Reuters Blogs The Great Debate, http://blogs.reuters.com/great-debate/2013/11/20/the-overselling-of-behavioral-economics/, accessed 7 February 2014. Pujol, M.A. (1992) Feminism and Anti-feminism in Early Economic Thought. Aldershot, UK; Brookeld, VT: Edward Elgar Publishing. Pykett, J. (2013) Neurocapitalism and the new neuros: Using neuroeconomics, behavioural economics and picoeconomics for public policy. Journal of Economic Geography 13(5): 845869. Pykett, J., Jones, R. and Whitehead, M. (2011) Introduction: The georgraphies of supple states. Political Geography 30(6): 301302. Rabin, M. (1998) Psychology and economics. Journal of Economic Literature 36(1): 1146. Read, J. (2009) A genealogy of homo-economicus: Neoliberalism and the production of subjectivity. Foucault Studies 6: 2536. Rose, N. (1996) Governing advanced liberal democracies. In: A. Barry, T. Osborne and N. Rose (eds.) Foucault and Political Reason: Liberalism, Neo-Liberalism, and Rationalities of Government. Chicago, IL: University of Chicago Press, pp. 3764. Rose, N. (1999) Governing the Soul: The Shaping of the Private Self Second. London; New York: Free Association Books. Sent, E.M. (2004) Behavioral economics: How psychology made its (Limited) way back into economics. History of Political Economy 36(4): 735760. Shleifer, A. (2000) Inefcient Markets: An Introduction to Behavioral Finance. Oxford; New York: Oxford University Press. Subramanian, C. (2013) Nudge Back in Fashion at White House. TIME, http://swampland.time.com/ 2013/08/09/nudge-back-in-fashion-at-white-house/, accessed 22 February 2014. Thaler, R.H. and Sunstein, C.R. (2008) Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven, CT; London: Yale University Press. Wells, P. (2010) A nudge one way, a nudge the other: Libertarian paternalism as political strategy. People, Place and Policy Online 4(3): 111118. Whitehead, M., Jones, R. and Pykett, J. (2011) Governing irrationality, or a more than rational government? Reections on the rescientisation of decision making in British public policy. Environ- ment and Planning A 43(12): 28192837. Whitehead, M., Jones, R., Pykett, J. and Welsh, M. (2012) Geography, libertarian paternalism and neuro- politics in the UK. The Geographical Journal 178(4): 302307. McMahon 22 2014 Macmillan Publishers Ltd. 1470-8914 Contemporary Political Theory 122