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Crack-Up Capitalism: A Review

Image Credit: The Guardian. An aerial view of downtown Hong Kong. Photograph: Ratnakorn Piyasirisorost/Getty Images

In this engrossing historical account, Quinn Slobodian lays out how a few very rich men—yes pretty much men—and the neoliberal intellectuals upon whose ideas they fed, imagined and sometimes built their versions of utopia: “zones” free from the grasping hands of the many who want to tax their riches or impose rules in the name of the common good, free, that is, from democracy.

Crack-Up Capitalism is the perfect follow up to Slobodian’s brilliant Globalists, in which he traces the birth of neoliberal globalism.

Here, he takes us on a global voyage of enterprise zones, free ports, gated communities, tax havens, private islands, and communities in the cloud—all testament to the commitment of these market radicals to find new and better ways to escape the confines of the nation state even after decades of effectively undermining the capacity of the state to interfere with their pursuit of wealth and power.

It’s a riveting read with a cast of characters who in another time might have been dismissed as crackpots or cruel narcissists but who are instead celebrated and admired.

From Milton Friedman’s championing of Hong Kong as the example to the world of the beauty of unfettered capitalism to his son David, who offers the Middle Ages as some ideal and participates with like-minded marketeers in cosplay as they hanker for the return of feudalism.

Peter Thiel, libertarian tech billionaire, who gave us “competition is for losers” and “I no longer believe that freedom and democracy are compatible” appears on page one and crops up repeatedly. In part, no doubt, that’s because Thiel says the quiet part out loud but, more than that, he represents the troubling reverence that some, including many politicians, give to the new “tech wizards” who have never seen a problem that couldn’t be solved with an app—to say nothing of their unmitigated self-regard.

Slobodian’s ensemble is the living expression of how extreme inequality corrupts, how the wealthy come to believe they deserve their wealth just as the poor deserve their poverty.

Crack-Up Capitalism exposes the myths that underlie these market utopias—fantastical views of the past and distorted views of the present. How else could one imagine the Middle Ages as some kind of paradise? Milton Friedman’s passion for Hong Kong is also based on a distorted understanding of how that former colony works and indifference to how it came to be.

Slobodian also lays bare their hypocrisy. They talk endlessly of freedom but admit their gated communities might have to be protected with a gun. They are content to build their utopias on the backs of others whose freedom apparently matters not a whit.

Theirs is a private freedom that justifies private discrimination, segregation based on race or religion—“voluntary apartheid”. The rise of white and Christian nationalism is not a break from neoliberalism but a predictable expression of its contempt for democracy and withered view of freedom.

The rise of authoritarianism, too, is at one with these market radicals’ views. Slobodian mentions, among his examples, Elon Musk’s dream of communities in space. But as Ronan Farrow’s recent New Yorker profile details, Musk also likes to throw his weight around in this world, to use his obscene wealth to shape public discourse and influence world events. In the end is just one more character in Slobodian’s cast of characters with too much money and too much power, a living demonstration of the incompatibility of democracy with extreme inequality.

No doubt it’s the possibility of escape to private islands or settlements in space that allows Slobodian’s characters to pretend away climate change or the wrath of the many. But they well understand that their best hope lies not so much in a world freed from the state but, rather, in a world in which the state is subverted to their interests.

Crack-Up Capitalism sheds light on how “neoliberal policies” have perforated the world of nation states and shrunk our democracies—cryptocurrencies, free trade deals, balanced budget laws, privatization and public-private partnerships, deregulation and the hollowing out of government.

The dream of fantasy islands of perfect economic freedom is simply the clearest expression of what underlies neoliberalism in its various forms: a commitment to consolidate wealth and power and insulate it from the threat that democracy poses.

Crack-Up Capitalism, though written with great charm, offers a dismal view of where we are and the obstacles to turning things around. To be fair, “dismal” seems to capture our times. The most insidious effect of decades of neoliberalism has been to undermine “the collective”. Government: overhead, a problem, something foreign. Taxes: a burden, theft. Regulations: wealth-destroying red tape. Unions: a drag on the economy.

The young have only known opportunities in decline and governments in retreat, seemingly serving interests other than theirs. Rich countries like ours have seen a steady decline in the trust we have for one another. Our divisions grow deeper.

In this age of misinformation, we have trouble agreeing on where we are, let alone where we might choose to go. Little wonder that we are seeing widespread withdrawal from the public sphere and increasing openness to illiberal alternatives.

There are positive signs too. Nobody much believes trickle-down rhetoric anymore. People are pushing back against offshoring jobs to wherever the wages are low and regulations weak.. COVID-19 and the invasion of Ukraine have heightened concern about relying on fragile global supply chains. It’s no longer good politics to ignore climate change and the environment. We see signs of a more active role for government.

Our love affair with billionaires may be on the rocks. And we are going through a cultural reckoning with respect to colonialism and unearned privilege essential for building a truly inclusive democracy.

Slobodian does give a nod to the courageous pro-democracy movement in Hong Kong as a glimmer of hope. One might point to other examples, from the thousands in the streets of Israel to the 2017 Women’s March in the U.S., to Black Lives Matter, to Pride, to the movements behind versions of a green new deal to resurgent union power.

We are, it seems, in one of those in between times when things could flip this way or that. Each step forward brings with it a push backwards.

Our needed cultural reckoning has yielded a fierce backlash. Yes, there’s growing anger out there, but also fear. Decades of neoliberalism have yielded a profound loneliness, a sense that we are on our own in precarious times.

And so we become more vulnerable to demagogues who redirect our anger at “the other”, promise to stand up for us and people “like us”, and bring government and our imagined enemies to heel.

Slobodian’s unflinching account makes clear just how strained the relationship is between capitalism and democracy. Democracy is fragile, anything but assured.

In the battle to determine who gets to shape the future—the powerful few or the many—the many are losing ground. In its way, Crack-Up Capitalism is, then, a call to action: a forceful reminder that democracy is no side issue and a warning that if we are to secure and strengthen our democracy, we cannot afford to lose hope and sit on the sidelines.

A slightly shorter version of this review was published in The Monitor, November-December 2023.

Editors Note: For further reading in a similar vein, you might also consider:

Cannibal Capitalism by Nancy Fraser https://saw.americananthro.org/pub/541lv317/release/1

Alex Himelfarb
Alex Himelfarb
Alex Himelfarb is a former Clerk of the Privy Council and currently chairs or serves on numerous voluntary sector boards. He was also the Director of the Glendon School of Public and International Affairs, leading the Centre for Global Challenges.  He is an Atkinson Foundation Board member as well as a Fellow of the Broadbent and Parkland Institutes, respectively.
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