Peter
McMillan teaches English part-time and writes part-time.
Several books (fiction and non-fiction) published under
his name and a pen name (Adam Mac) are licensed under the
Creative Commons and available for free download as PDF
books.
MARKET
RADICALS AND THE DREAM OF A WORLD WITHOUT DEMOCRACY
international
history who is at present the Marion Butler McLean Associate
Professor of the History of Ideas at Wellesley College. He
co-edits Contemporary
European History and co-directs the
History and Political Economy Project. In his latest book,
Crack-Up
Capitalism, Slobodian continues the broad
theme of Globalists: The End of Empire and the Birth of
Neoliberalism (2018), which is to expose the ongoing
existential threat of the pervasive ethos of the market to
democratic political systems. In Globalists, Slobodian reports
a detailed biographical history of selected prominent neoliberal
thinkers dating back to the end of continental European empires
post-World War I in order to weave a narrative of the evolution
of neoliberal economic thought. Crack-Up Capitalism
focuses on libertarianism, an extreme form of neoliberalism,
and gives significant space to anarcho-capitalism, a radical
vision of libertarianism, where laissez-faire is irrelevant
because there is no longer to be a state.
In
Globalists, Slobodian speaks of social justice being
intentionally left out of the political economy of neoliberals
dating back to the Austrian School and its apologists, notably
Ludwig von Mises and Friedrich August von Hayek. It is a given
that there is no room for social justice to creep back into
the ideas and practices of those Slobodian labels as market
radicals "who dream of a world without democracy"
— an ideal even for mainstream neoliberals, e.g., Milton
Friedman and others from or sympathetic to the Chicago School,
the archrival of everything Keynesian in North America. The
principal tenet of neoliberalism is that the highest goal
of social organization is economic freedom. Political freedom
is a legitimate social goal as long as it facilitates commerce
and does not conflict with or impede economic freedom. Life,
liberty and property as Locke wrote in tumultuous 17th century
England.
Market
radicals are indeed 'radical' arriving at the extreme conclusion
that the state is no longer necessary in theory — a
bizarre point of agreement with Marx albeit for different
reasons — because the state politicizes decision-making
(i.e., makes it accessible from the masses below) and interferes
with the efficient ordering produced by market forces. For
this radical camp, even creating and maintaining the preconditions
for markets — grudgingly accepted by neoliberals —
are no longer acknowledged to be essential state functions.
For the anarcho-capitalist, the laws of capitalism are so
fundamental to human nature that they can develop organically.
What is required is that they be given the space (strategic
geographical location), time (open-ended), and freedom (non-intervention
by the state) to germinate. In other words, the state would
spin off, say, a special economic zone with a host of exemptions
for tariffs, labour laws, environmental laws etc. Theoretically,
a zone could mature into a sovereign corporate entity unencumbered
by the inefficiencies of democratic conflict and freed to
be governed by the priorities of profitability and wealth
accumulation.
What
is different in Slobodian's account is his presentation of
the challenge to democratic capitalism coming not only from
illiberal capitalist nation-states (China in particular as
it offers an increasingly viable alternative to the Western
model of democratic capitalism) but also from special economic
zones:
[T]he modern world is pockmarked, perforated, tattered and
jagged, ripped up and pinpricked. Inside the containers
of nations are unusual legal spaces, anomalous territories,
and peculiar jurisdictions. There are city-states, havens,
enclaves, free ports, high-tech parks, duty-free districts,
and innovation hubs. The world of nations is riddled with
zones.
It
is within these zones that the neoliberal experiment can more
easily controlled. State regulation of markets and intervention
to mitigate the effects of market failure can be limited to
a greater degree in special economic zones than in the state
economy as a whole. Breaking with purist laissez-faire political
economy, opportunities for state aid, in the form of subsidies,
tax incentives and preferential market access can continue
to be solicited to underwrite the competitive positions of
a state's zones.
Crack-Up
Capitalism is an enlightening read for those who may
think that globalization and international relations are just
about the interaction of nation-states. The world is vastly
more complicated than that, and Slobodian, to demonstrate
the point, illustrates with in-depth coverage of the 'microworlds'
of Hong Kong, Singapore, London (Canary Wharf), South Africa
(the Bantustan of Ciskei), Liechtenstein, Somalia, Dubai,
and Honduras.
Slobodian
believes that democratic capitalism is being hollowed out
from the inside as much as nation-states are reverting to
illiberal political systems. This is part of his central thesis
— the crack-up or fragmentation of the capitalist state
into myriad special economic zones where economic freedom
flies its flag of allegiance.
However,
after describing special economic zones and the danger they
represent for democracy, Slobodian returns to the state reminding
the reader that it is states that create and can dismantle
zones. "No matter the rhetoric, zones are tools of the
state, not liberation from it." Then, more generally,
Slobodian acknowledges that:
Good
capitalists know the real game is capturing the existing
state, not going through the hassle of creating a new one.
Thiel [Peter Thiel, venture capitalist] seemed to agree
that a world of one thousand new state contracts was preferable
to one of a thousand nations.
Slobodian's
closing does not appear to be particularly optimistic as he
reviews the rise China's autocratic state capitalism and its
growing imperialist ambitions (an inversion of its 'century
of humiliation') rivaling those of the US:
By
the 2010s, it was also creating zones far from its own territory.
Under the Belt and Road Initiative, launched in 2013, China
funded infrastructure stretching from its own borders through
chains of zones, reaching out to Turkey, Kenya, and beyond
. . . China follows well-worn tracks, retracing the network
of coaling stations and free ports that upheld the British
Empire in the nineteenth century.
Nor
is Slobodian sanguine about the future of the US, observing
that the US is becoming a nation-state version of a special
economic zone, arguably the ultimate prize for neoliberals:
[T]he
United States itself looks more like a zone all the time.
In 2022, it edged out Switzerland, Singapore and the Cayman
Islands to take the top spot in an index of financial secrecy,
crowned as the best place in the world to illegally hide
or launder assets. Its own status as a democracy has been
called into question. It was briefly downgraded by a well-respected
index to a so-called anocracy, a system mixing features
of democratic and autocratic rule. Soon, Americans may no
longer need to go elsewhere to realize the perfect zone.
Like
Wolfgang Streeck (How Will Capitalism End? Essays on a
Failing System, 2016), Wolfgang Merkel (Is Capitalism
Compatible with Democracy?, 2014), Martin Wolf (The
Crisis of Democratic Capitalism, 2023), and Katharina
Pistor (The
Code of Capital: How the Law Creates Wealth
and Inequality, 2019), Slobodian exposes the adversarial
challenge of contemporary anti-democratic thought not to suggest
shrinking back or giving in to resignation but to support
pro-democracy forces in an complex ideological struggle that
is not dialectical (the synthesis and progression of ideas
are not guaranteed), does not fit the simplistic formula of
former US Supreme Court Justice Oliver Wendell Holmes' metaphor
of the marketplace of ideas, and, as history seems to have
confirmed, does not render a permanent verdict in the history
of human thought.
By
now the 'end of history' has become fiction. For Pistor, nation-states
are continually faced with:
A
choice not only between democracy and autocracy, parliamentarian
and presidential systems, constitutional powers or the voting
system; it is also a choice about creating and allocating
wealth, and this includes the legal tools for coding [i.e.,
creating the legal framework for] capital.
For
those opposed to the political economy of neoliberalism and
its offshoots, what is fundamental to that choice is how economic
and political freedoms are to be re-balanced so that democracy
does not disappear from 'democratic capitalism.'
