Foucault and the roots of risk management

October 1, 2007

 

A recent post in the Test Society blog (whose main writer is a personal friend) discusses the publication, by Palgrave of a set of lectures by French philosopher Michel Foucault. While reading this fascinating text, with its broad historical scope and its boundary-spanning insights, I gradually noticed a thread of analytical narrative that bears an interesting insight for modern risk management. This point, which appears repeatedly in the texts (and is, as far as I know and understand, one of the fundamental building blocks in Foucault’s thought) is the process by which the individual was re-configured vis-à-vis society, or societal structures. According to Foucault, that re-configuration began taking place, in Europe, at the end of the Middle Ages; it was established and institutionalised in the following centuries and reached its peak (at least in pure conceptual terms) in the eighteenth century, with the crystallised idea of Enlightenment. In that process of reconfiguration, the individual, in its interaction with societal institutions, is turned from being a ‘subject’ to (what can be called) a ‘calculable-relational object’. That is, the individual, after the transformation, can no longer be regarded simply as a detachable part of the society, a subject that can be easily singled out, isolated and manipulated. Instead, the individual came so to be seen as integral, irreducible part of a larger phenomenon, a broader category or a temporal intra-societal structure. Hence, the new conceptual and practical unit of reference swallowed the individual into a set of binding contacts and obligation outside of which she could not exist (e.g. physically, religiously) or at least could not be detected as a meaningful entity by the society. Furthermore, the existence of the larger societal phenomenon is dependent on the establishment of various calculative agencies and practices, such as the collection of statistics, the assessment of probabilities and the creation of numerical bases for policy.

Foucault uses a set of examples through which he explains the construction of the modern concept of the plague:

Take the exclusion of lepers in the Middle Ages, until the end of the Middle Ages. …[E]xclusion essentially took place through a juridical combination of laws and regulations, as well as a set of religious rituals, which anyway brought about a division, and a binary type of division, between those who were lepers and those who were not. A second example is that of the plague. The plague regulations […] involve literally imposing a partitioning grid on the regions and town struck by plague, with regulations indicating when people can go out, how, at what times, what they must do at home, what type of food they must have, prohibiting certain types of contact, requiring them to present themselves to inspectors, and to open their homes to inspectors. We can say that this is a disciplinary type of system. The third example, is smallpox or inoculation practices from the eighteenth century. The fundamental problem will not be the imposition of discipline so much as the problem of knowing how many people are infected with smallpox, at what age, with what effects, with what mortality rate, lesions or after-effects, the risks of inoculation, the probability of an individual dying or being infected by smallpox despite inoculation, and the statistical effects on the population in general. In short, it will no longer be the problem of exclusion, as with leprosy, or of quarantine, as with the plague, but of epidemics and the medical campaigns that try to halt epidemic or endemic phenomena.

This short example (and the text is rich in such micro-analyses) shows the construction of modern risk. To act institutionally about risk, it needs to be described and analysed in systematic tools. So, for example, individuals have to be removed from the concrete events of the plague or a financial crash only to be returned to them as figures in the numerical version of occurrences. Indeed, it is vital that the specific actors are anonymized and that the events are generalised and classified as a ‘case of…’ Without such institutionalised procedures, the conceptual tools that brought about modern risk management could not have developed. That is, the ability to perform historical VaR calculations, for example, is rooted in the historical transformation that Foucault analyses where idiosyncratic individuals disappeared and calculable plagues were constructed.

3 Responses to “Foucault and the roots of risk management”

  1. typewritten Says:

    Your reference to plagues made me also think of a very interesting book by Yvonne Baskin, _A Plague of Rats and Rubbervines_:

    http://www.islandpress.org/books/detail.html?SKU=1-55963-051-5

    “While our attention is quick to focus on purposeful attempts to disrupt our lives and economies by releasing harmful biological agents, we often ignore equally serious but much more insidious threats, those that we inadvertently cause by our own seemingly harmless actions.”

    I wonder what interesting research program would be suggested if you just replace “biological” by “financial”…

  2. typewritten Says:

    Lemke’s Economy & Society 2001 paper (strangely uploaded and available at the website of the World Bank) reviewed the 1978-1979 lectures (from the tapes) even before the French printed edition was available in 2004:

    http://www.ingentaconnect.com/content/routledg/reso/2001/00000030/00000002/art00002

    http://www.worldbank.org/research/inequality/pdf/lenke.pdf

    These are the ones that are forthcoming now possibly as _The Birth of Biopolitics_ (the 1978-1979 ones, not 1977-1978 which are available as _Security, Territory, Population_ and which Palgrave published in May 2007).

  3. Laure Says:

    Actually, one of Michel Foucault’s assistant at College de France, François Ewald has written a few books on insurance practices and risk management. In his book book on the development of the French “Etat Providence”,for instance, some chapters are dedicated to insurance and the management of risk. There is a nice chapter I think on the rise of probabilistic thinking in Europe and how this is related to the development of insurance practices. Ewald is now at the head of the Ecole Nationale des Assurances…


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