How can Foucault make such a bold claim? Is philosophy not impractical, circular, and elitist?
The larger work I pulled this quote from demonstrates how knowledge did not evolve in a linear fashion from simple (or dark, archaic or primitive) to complex (or light, honed or advanced), but rather as a network and competition of political and economic struggles. The bodies who created the laws (ethics, or right and wrong), who had the money to purchase resources, and had the more aggressive military, had the power to determine was knowledge was, and eagerly did that. In essence, he showed that knowledge as we know it is not a Platonic Form floating in the heavens waiting for us to recall or intuit it, but is rather a technology that is fabricated through socio-political competition. It is easy and convenient to think that facts are "uncovered" and truths are "revealed," however facts and truths are always changing on a socio-economic level. Which makes it really suspect how each successive regime believes it is privy to the truth.
Okay, fair point, but still, what does Philosophy have to do with any of this?
Because understanding, revealing, investigating, reasoning, etc., were never a part of the social body-in-powers ideal of how knowledge was achieved or accumulated. This is why Socrates was put to death. He was critiquing the popular/approved perception of the origin of knowledge through posing provocative questions whose answer did not rely upon socially approved methods or systems. Granted there are thousands of years separating Socrates from the socio-political events that Foucault was referring to, but both these thinkers shined a light upon the weaponization of knowledge, or in other words, how knowledge was not about objectivity or understanding the world around us without our involvement, but was about how the social body in power used the self-serving determination of knowledge--and thus monopolization of knowledge--to increase its range and protect itself from harm. It was not about "knowing things."
Knowledge on a socio-political level is thus an artificial technological process of preserving hidden ulterior motives rather than revealing neutral facts and truths. No, Philosophy does not "help one uncover hidden clusters of facts and truths," because they do not exist. That is a Platonic ideal/assumption. Philosophy does not exist to deal with particular facts or truths; that is too finite and micro in scope. Instead, Philosophy exists in the macro-sense, in that it exists to provide clearer categories, or as Foucault said, "was, precisely, the organizational system, the system that allowed knowledges to communicate with one another--and...could play an effective, real, and operational role within the development of technical knowledges." You see, the discipline of Philosophy is designed to clarify the indistinct or unknown boundaries of other disciplines (aka: process of ordering chaos), which in itself creates new knowledges, or distinctions of known reality. Our predecessors were so wrapped up in power and war that the abstract process of delineating categories into distinct disciplines did not happen until then end of the eighteen century, according to Foucault.
But how can he make such a claim!? We have not lived in caves for thousands of years! Well, think about the hundreds of years spanning the Middle Ages to the Renaissance. Religion and Philosophy were mixed, and the same goes with science. Having an intellectual thought that was against the grain almost certainly got you killed, and if not, put you into lifelong house arrest. Why? Because categories and disciplines were not though of as separate or distinct; an intellectual apathy and paralysis maintained by those in central power. That body of central power, according to Foucault, therefore did not just act as the military or economic force, but as the knowledge-compass. (This is most likely where Orwell got the ideal of the Ministry of History and the Ministry of Truth for his novel 1984.)
Philosophy is thus an organizational tool that does not centralize anything or have any predetermined motive. It a perspective and an attitude rather than a discipline with canned premises.
Now, can a Philosophy have premises? Yes, of course, however those premises are designed to continually clarify reality in abstract terms, rather than concrete terms. It is not about behaviors or perceptions (that is psychology), but about further exploring what is real, and how we can interact and draw meaning from that reality. Thus, it is a general category clarifier, or as Foucault said, "an organizational system" that helps humans establish boundaries between their inner world and outer reality. Its primary business is exploring and exposing How this goes here instead of there. It qualifies.
For this reason Philosophy is extremely practical. The reason it is believed to be impractical is due to the fallacious conceptual attachment of money with self-sufficiency. This fallacy is a leftover of the power-based socio-political mutation of knowledge that Foucault exposed in his book; we just modernized it and marketed it with materialism and relativism.
When we as modern humans devalue and scorn Philosophy, not only do severely limit our ability to know our world and our history, but we essentially turn our back on the tool that helps (and helped) us clarify and create whatever tools of organization and categorization we know--and exploit--to this day. Other complaints directed toward it, that it is "elitist," or "circular," are merely smoke screens enabling people to avoid the very real individual effort and raw self-revelations that a neutral reality-clarifier like Philosophy is bound to do. In other words, it neither favors or entitles anyone. And that is a very significant qualifier between Philosophy and other disciplines: Since other disciplines are not tools to organize categories, but are systems and campaigns comprised of the most current/approved premises, they favor the individuals who are most up-to-date with those current/approved premises.
For this reason, real Philosophy--not academic Philosophy, which is the institutionalization of approved philosophical premises--is innately anti-elitist, and progressive. Scorning Philosophy is thus a form of parricide.