The turn of the twenty first century witnessed important shifts in punishment practices. The most shocking is mass incarceration - the exponential rise in prisoners in state and federal penitentiaries and in county jails beginning in 1973. It is tempting to view these developments as evidence of something new that emerged in the 1970s - of a new culture of control, a new penology, or a new turn to biopower. But it would be a mistake to place too much emphasis on the 1970s since most of the recent trends have antecedents and parallels in the early twentieth century. It is important, instead, to explore the arc of penality over a longer course: to relate recent developments to their earlier kin at the turn of the twentieth century. What that larger perspective reveals is that the pattern of confinement and control in the past century has been facilitated by the emergence and gradual dominance of neoliberal penality. By neoliberal penality, I have in mind a form of rationality in which the penal sphere is pushed outside political economy and serves the function of a boundary: the penal sanction is marked off from the dominant logic of classical economics as the only space where order is legitimately enforced by the state. This essay traces a genealogy of neoliberal penality going back to the emergence and triumph of the idea of natural order in economic thought - back to the Physiocratic writings of Francois Quesnay and other economists during the 1760s. It is precisely their notion of natural order that metamorphosed, over time, into the modern idea of market efficiency that is at the heart of neoliberal penality.