Michel Feher is a philosopher who has taught at Goldsmith, London, the École Nationale Supérieure, Paris, and at the University of California, Berkeley. He is the publisher of Zone Books, NY as well as the president and of Cette France-là, Paris, a monitoring group on French immigration policy. He is the author of Powerless by Design: The Age of the International Community (2000) and the co-editor of Nongovernmental Politics (2007). He co-authored Xénophobie d’en haut: le choix d’une droite éhontée and Sans-papiers et préfets: la culture du résultat en portraits (2012).

On first analysis, our brave new capitalist world can be traced to Milton Friedman’s pronouncement quoted below – on page 4 – and drawn from a New York Times Magazine article published in 1970. Entitled “The Social Responsibility of Business is to Increase its Profits”, the article famously claims that, in a free society, businesses should be run according to the desires of their owners, “which generally will be to make as much money as possible while conforming to the basic rules of the society.” Sanctimoniousness notwithstanding, Friedman goes on, “reducing poverty”, “preventing inflation” and “improving the environment” do not figure in the job description of corporate executives: when the latter take it upon themselves to pursue such goals, they simply abuse their position and betray the trust of their employers.

It is true, the economist later concedes, that sometimes stockholders and private business owners also buy into the dubious notion of social responsibility: surrendering to the anti-capitalist atmosphere of the 1960s, they profess to be accountable either to their employees or to society as a whole. Though he does not deny them the right to use, and even squander, their money as they please, Friedman argues that their conduct is self-defeating in that it condones “the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted,” he warns, “the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats.” The article ends with a citation from Milton Friedman’s own book, Capitalism and freedom: in a free society (…)”, the passage goes, “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

At the time, the scholars and politicians who held such views were still treated as extremists: in 1971, even Richard Nixon felt compelled to say that, with regard to economics, he was, like everybody else, a Keynesian. Ten years later, however, Friedman’s approach to social responsibility became the new orthodoxy: under the guidance of Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States – with the precious assistance of Paul Volcker at the helm of the Federal Reserve – the so-called “conservative revolution” of the early 1980s fulfilled most of Friedman’s wishes. Instead of relying on price and income control to curb inflation, public authorities adopted Friedman’s monetarist approach – which involved targeting the quantity of money in circulation. Instead of stimulating aggregate demand in order to fight stagnation, policy-makers resorted to the supply-side incentives favored by the members of the Chicago School of Economics – thereby making tax rebates, privatizations and deregulations the order of the day.

Now, given the enduring success of neoliberal policies with elected officials and international institutions, one would expect the unburdened profit-seeking businesses championed by Friedman to be the propellers of our societies. However, the opaque facades of banks, the convoluted definitions of exotic financial products and the ostensibly random series of numbers running through Twenty Red Lights indicate that something unexpected has happened – that the world created by the implementation of the neoliberal agenda is actually a far cry from the reign of straightforward and vibrant entrepreneurship promised by the author of Capitalism and Freedom.

To make sense of the gap that separates the “free society” advertised by Milton Friedman from the asset-driven universe depicted by Max De Esteban’s photos, it is helpful to start with what the former hailed as the proper rules of the game, to wit, “open and free competition without deception or fraud.” For while the arch-champion of neoliberal reforms eagerly identified as an advocate of laissez faire and vowed to restore the spirit of classical liberalism, the chasm between the blueprint of his project and what the triumph of his views actually delivered stems from the difference between what old-fashioned liberals and his self-appointed redeemer meant by “competition”.

According to classical as well as neoclassical economists, competition primarily refers to producers competing for consumers – businesses vying for clients. Hence, staving off the formation of oligopolistic markets, or worse, of monopolies, is one of the main tasks assigned to a liberal government. By contrast, Chicago school economists and their brainchild known as the “Law and Economics” program consider that monopolistic situations are benign – because necessarily temporary – as long as the State does not get involved either in creating or in sustaining them.[1]

What is problematic and needs mending, in the eyes of Friedman and his disciples, is the propensity of corporate mangers to put their own standing among the stakeholders of the firm above the interests of the shareholders. Therefore, what competitiveness really involves is a mechanism that will keep managers on their toes, that is to say, exclusively focused on creating value for the owners of the company that employs them.[2] Hence the institution of a “market for corporate control”, whereby current but also potential shareholders, namely investors at large, will be enabled to choose and replace CEOs and other top managers according to the latter’s ability to raise the shareholder value of their corporation.[3] In short, what “Law and Economics” scholars call competition no longer pertains to producers endeavoring to snatch consumers from their rivals, but instead, to managers competing for investors.

Once predicated on this new definition of competition, the implementation of the neoliberal agenda was bound to stray from the restoration of market discipline heralded by its champions. Firstly, as managers were made to internalize the new rules of “good governance” – both through the menace of hostile leverage buyouts and the lure of bonuses and stock options – they learned that their primary job was no longer about optimizing the commercial profit of their corporation over time – about tending to the difference between the accumulated income generated by the sales of commodities and the aggregate costs incurred to produce them – but about increasing the credit of the corporation’s stock in the eyes of impatient investors – about tending to the difference between the projected results of the company and the doubts that financial markets might harbor about its ability to deliver them.

Secondly, in order to create an environment that would keep managers on their toes – to wit, focused on the creation of shareholder value – public authorities were required to lift all forms of obstacles to the flow of financial capital. Indeed, if investors were to impress upon business executives that raising the market value of the corporation’s shares was the only way for them to keep their jobs, they needed to be free: free to move across national borders so as to reward good governance on a global scale, free to mount whatever take over scam imaginable so as to raid underperforming firms, free to ignore the boundaries separating the different types of financial institutions so as to leave no savings behind with regard to the fulfillment of their mission, free to invent novel financial instruments so as to protect the volume of available liquidities from the vagaries of the business cycle. While justified in the name of “competition” – of the will to render corporations more competitive – these manifold deregulations were clearly at odds with what classical liberalism envisioned as the prime responsibility of a liberal government, namely establishing a strong anti-trust legislation.

Thirdly, as national governments heeded the call of “Law and Economics” scholars, thereby assuming that their own calling was now to make the territory under their jurisdiction attractive to investors, they quickly learned that liquidity handlers had simple and stable tastes: what lured them almost unfailingly included low labor costs – or, to put it differently, a flexible labor market – a business-friendly tax code – especially with respect to capital gain – as well strong and pervasive intellectual property rights – to make sure that no potentially money-making idea would remain unpatented. While eager to placate investors, elected officials could not help but realize that meeting their demands translated into precarious labor conditions for most wage earners, drastic budgetary cuts affecting both social programs and public services, and the privatization of hitherto common resources.

In spite of the ideological climate that the proponents of the “conservative revolution” had managed to create, political leaders were still worried that their new priorities could cost them their reelection, or even cause social unrest. Thus, instead of simply sacrificing the welfare of their constituents to the wishes of the investing community, they sought to make up for the loss of tax revenues that were resulting from their fiscal and labor policies by borrowing the money they needed from the very investors they meant to attract.

Though happy to be of service, the purveyors of credit were careful to attach strict conditions to their loans – making them incumbent on commitments regarding welfare reform, leaner public institutions, improved flexibility in the labor market and fresh tax cuts. Since the depositaries of popular sovereignty no longer were in a position to refuse or even argue with their backers – having allowed financial capital to choose its havens freely – their approach to government underwent the same transformation as that which had affected corporate management. Indeed, just as managers had reneged on the Fordist ideal of sustainable profitability to embrace a mode of governance exclusively geared toward the pursuit of shareholder value, elected representatives not only renounced their Keynesian preoccupations with full employment and sustained growth, but also elected what the German sociologist Wolfgang Streeck aptly calls the “bondholder value” of their national debt as the main compass of their policies.[4]

Fourthly, as the twin pursuit of shareholder and bondholder values translated into new modes of corporate and public management, the incidence of what business manuals refer to as “best practices” began permeating people’s behavior as well. Having CEOs obsess about the shareholder value of their stock and political leaders focus on the bondholder value of their national debt respectively caused jobs to become either scarcer or more precarious and social benefits to shrink or, at least, get attached to a number of strings. Consequently, large sections of the population found it increasingly hazardous to stake their material welfare on the stability of their employment, the regular progression of their wages and the added protection of a publicly funded safety net.

Governments quickly realized that they could not make the territory under their jurisdiction attractive to investors and, at the same time, enable the majority of their constituents to reap sufficient income from the sale of their labor power. Moreover, the conditions under which bondholders agreed to purchase and hold their Treasury Bills made it quite clear that incurring more debt to compensate for the loss of tax revenues did not spare public institutions from subjecting their programs to drastic budgetary cuts. Torn, once again, between the demands of their financial backers and the looming discontent of their electorate, public officials decided to do for private citizens what they had done for themselves, namely substitute borrowed for earned money. In other words, what people could no longer purchase thanks to the income of their labor, they would still be able to buy, albeit on credit.[5]

Understandably, financial institutions were eager to oblige: for once properly securitized, proliferating loans would dramatically increase the volume of circulating liquidity, thereby widening and, at the same time, tightening the hold of investors on the rest of society. Yet, despite their confidence in the prowess of financial engineering, lenders still needed the recipients of their largesse to be able to offer valuable assets as collateral. Thus, for those who did not have much to show as guarantee, access to credit was dependent on the estimated worth of what they wished to acquire – be it the very house for which they requested a mortgage or the projected value of the university degree for which they sought a student loan – as well as on their past reputation as borrowers – an asset which, in many countries, is rated by the famed FICO credit score.[6] Altogether, what primarily enabled the classes formerly known as salaried to remain solvent consumers was not the income they made as employees but the various types of capital that qualified them as creditworthy.[7]

Of course, stagnant wages and precarious jobs did not simply change working people into idle borrowers. However, an increasingly large proportion of them ceased to receive a regular salary and became private contractors instead – as is already the case for a third of the working population in the US. Hailed by the surviving architects of the neoliberal program as a decisive step toward the generalization of the entrepreneurial ethos, the gradual substitution of this new status of “free agent” for the wage earner of yore turned out to fashion a very different type of character. Indeed, rather than as businesspeople selling the commodities they produce, private contractors are induced to see themselves as the managers of their assets – whether their occupation involves performing tasks predicated of their skills or renting out the capital goods they own. Some cash in on their talents – be it by designing computer programs for outsourcing companies or mounting Ikea furniture for clumsy households – others survive thanks to their availability and flexibility – as in the case of the German mini-jobs and the British zero-hour jobs – still others endeavor to lease the space, time and the durable goods at their disposal – a room in their flat, a drive in their car, an extra camera or vacuum cleaner sitting in their closet.[8]

Insofar as private contractors make a living by multiplying temporary commercial contracts – instead of being offered labor contracts accompanied by pension and health care plans – the success of their operations very much depends on their capacities to advertise what they have to offer and attest to their proficiency and trustworthiness. In short, the reputation they manage to build – regarding the efficiency of their performances, the quality of their amenities, or their willingness to be ruthlessly exploited – is their crucial asset. The credit they manage to muster thus proves equally essential to their abilities to work and to consume. For the private contractor, self-branding becomes the way to live, and in some case the only way to survive: a way that involves techniques analogous to the “best practices” of corporate managers seeking to raise the shareholder value of their firm and of public officials preoccupied with the bondholder value of their Treasury bills.

To the extent that my schematic description of it is correct, life under financialized capitalism is indeed a far cry from what neoliberal luminaries envisioned – or at least from the “free society” they championed and eventually managed to sell. Friedman had likened the implementation of his vision to the advent of a world where the mindset and behavior of corporations, governments and individuals would be modeled on the reasoning and pursuits of the profit-seeking entrepreneur. Yet, what we got instead – albeit through the enforcement of the neoliberal program – is a world where the mindset and behavior of corporations, governments and individuals – at least the growing number of “free agents” among them – are modeled on the reasoning and pursuits of a credit-seeking asset manager.

While people – credit-seeking or not – are hardly the most visible features of Twenty Red Lights, Max De Esteban’s book offers an incisive portrayal of the technology that constitutes us as appreciable projects. On the one hand, we are shown the buildings where asset handlers presumably dwell: ominous yet largely interchangeable, they are the black boxes of financialization. Behind their walls, current events and long term prospects are used as gambling material and, by that token, subjected to the primacy of the near future. On the other hand, we are invited to encounter the algorithms thanks to which everything from natural resources to fantastic dreams becomes an object of speculation. Short of appearing “in person”, they manifest themselves through the running numbers that turn expectations into ratings, through the arcane language of the contracts that turn the risks faced by some into the assets traded by others, and, courtesy of Max’s discrete assistance, through haunting watchwords – shareholders value, credit default swap, asset-backed security, collateralized loan obligation, etc. – gently tattooed on the skin of our brave new world.

[1] On the Chicago School’s approach to competition – developed in the 1950s by the Chicago Antitrust Project whose directors were Milton Friedman, Aaron Director and Edward Levi – see Rob van Horn, “Reinventing Monopoly and the Role of Corporations: The Roots of Chicago law and Economics”, in The Road from Mont Pelerin, op. cit., pp. 204-236.

[2] The principles and agenda of the Law and Economics movement can be traced to Michael C. Jensen and William H. Meckling, “Theory of the Firm: Managerial Behavior, Agency Cost and Ownership Structure, Journal of Financial Economics, 3, 1976, pp. 305-360.

[3] See Henry Manne, “Mergers and the market for Corporate Control, Journal of Political Economy, 73, 1965, pp. 110-120. The impact of the Law and Economics program on corporate governance – and on the dissolution of the corporation – is brilliantly described by Gerald Davis in Managed by the Markets: How Finance reshaped America, (Oxford and new York: Oxford University Press) 2011, pp. 59-101.

[4] Wolfgang Streeck, Buying Time: The Delayed Crisis of Democratic Capitalism (London, New York: Verso Books), 2014, p. 80.

[5] See Wolfgang Streeck, “The Crises of Democratic Capitalism”, New Left Review, 71, September-October 2011,, pp.7-9.

[6] See Martha Poon, “From New Deal Institutions to Capital Markets: Commercial consumer risk scores and the Making of Subprime Mortgage Finance”, Accounting, Organizations and Society, special issue, “Tracking the numbers: Across accounting and finance, organizations, markets and cultures, models and realities”, 2008.

[7] Marion Fourcade and Kieran Healy, « Classifications Situations: Life-chances in the Neoliberal Era”,

Accounting, Organizations and Society, 38, 2013, pp. 539-572; Gerald F. Davis, Managed by the Markets, op. cit., pp. 191-234.

[8] See David Weill, The Fissured Workplace: Why Work Became So Bad for So Many and What can Be Done to Improve It (Cambridge: Harvard University Press), 2014.