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  1. The Weekend Interview
15 April 2023

Fantasies and fever dreams

How Quinn Slobodian, the author of Crack-Up Capitalism, came back down to earth.

By Gavin Jacobson

When the historian Quinn Slobodian was completing Globalists: The End of Empire and the Birth of Neoliberalism in 2015, the prevailing economic order – free markets, fiscal discipline, consumer sovereignty, and the growing power of tech barons and cyber-hustlers – seemed absolute. By the time of the book’s publication three years later, however, the ideological consensus had been disrupted and regnant orthodoxies thrown into doubt. Donald Trump’s election as US president, Britain’s decision to secede from the European Union, and the relative success of progressive insurgencies in national elections, were the master signals of an emergent crisis of neoliberalism and the end of the Washington Consensus. Obituaries pronounced the death of market democracy and its denizen homo economicus

Slobodian’s key insight in Globalists was that neoliberalism was a form of statecraft that did not aim to liberate markets but to encase them, “to inoculate capitalism against the threat of democracy”. Haunted by the collapse of the Austro-Hungarian Empire in 1918, and alarmed by postwar demands for national self-determination, neoliberals such as Wilhelm Röpke, Ludwig von Mises, and Friedrich Hayek endeavoured to design an “economic constitution for the world”. For the so-called “Geneva School”, democracy and capitalism were not synonymous; the latter needed protecting from the former. The establishment of supranational institutions would ensure that capital could flow in low earth orbit beyond the reach of nation-states. It was a global imaginary boosted by generations of faithful legates and realised in the command-and-control centres of modern political economy, such as the International Monetary Fund, World Bank, and the World Trade Organization (WTO).

“I wrote Globalists at a moment when I thought I was criticising a hegemonic status quo,” Slobodian explained when we met in an overly loud café in London’s Hatton Garden, the heart of Britain’s diamond trade. But following the political events of 2016, he said, the book became “talismanic” for two different sets of people. For neoliberals, it described a lost world and vindicated their belief that unconstrained democracy leads to political wrecking crews like Trump and the Brexiteers. For critics of neoliberalism on both the left and right, the book became a kind of vademecum for understanding the economic tradition they opposed. Hailed by intellectual luminaries such as Adam Tooze and Pankaj Mishra, translated into ten languages, and selling over 15,000 copies (a significant number for an academic work), Globalists confirmed Slobodian’s reputation as a rising star of the US east-coast academic left, one whose career seemed to rhyme with the conjunctural events of the contemporary era.

Born in 1978 in Edmonton, Alberta, “a bleak part of the Canadian prairies” as he described it, Slobodian had a peripatetic upbringing. This was in large part due to his father’s work as a doctor. In 1981, when Slobodian was three, the family moved to Vancouver Island before relocating to Lesotho in Southern Africa a few years later. Then in 1992 the family left for Vanuatu, a small chain of islands in the South Pacific Ocean, before returning to Canada a year later. Following his undergraduate degree in history at Lewis and Clark College, Oregon – not far from where protestors mounted their assault on the WTO Conference in Seattle in 1999 – Slobodian moved to New York in 2002 to pursue his postgraduate degree at NYU. A year later, the Bush administration began feverishly preparing to wage war on Iraq.

“The opposition to the war was invigorating,” Slobodian recalled, “and it gave a real sense of urgency to the work people were doing at the university. It was hugely formative for my own politics – it was the moment when the arbitrary decisions of government and the unpredictability of power were revealed in shocking ways. I didn’t have any faith in the benevolence of US institutions, but I didn’t think they’d be quite as bold and reckless as that.” In addition to the street protests against the invasion there was also a surge in union militancy on campus. Slobodian channelled these heightened atmospherics into his PhD on “radical empathy” – which became his first book, Foreign Front: Third World Politics in Sixties West Germany, a study on the solidarity between German students and their equivalents from the global south in the 1960s.

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[See also: Is neoliberalism really dead?]

“The engagement between activists and students in the 1960s, especially over the Vietnam War, was so much deeper and more existentially committed than what I witnessed in 2003,” he explained. “So, the question in the background of that book was about the missing solidarity between American anti-war activists and Iraqi intellectuals whose homes were under fire. What had changed in the years between the 1960s and the 2000s, a time when we became more interlinked yet more distant in our abilities to engage in cross-border politics?”

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In 2008, Slobodian secured a position at Wellesley, a liberal arts college in Massachusetts. The first course he proposed bore the title: “World Economic Orders, 1918-2008”. A few weeks later, Lehman Brothers collapsed triggering the global financial crisis. “I’ve never had to change the name of that course!” Slobodian jested. One consequence of the crash was the intellectual rehabilitation of Marx and a growing interest in the history and theory of capitalism. Socialism was slowly exfoliated of its association with inefficiency, dictatorship and state-sponsored terror, while high-ranking superintendents of the neoliberal order, including Alan Greenspan and Francis Fukuyama, offered (qualified) support for more state intervention.

For Slobodian, the Occupy movement was a significant, if now unappreciated, episode in this progressive redux. He visited some of the encampments in Harvard Yard while a visiting fellow at the university in 2011. “Our short-term memory of what Occupy meant has been reduced to a comical failure of attempts at self-organisation,” he said. “But it popularised the idea that people who didn’t have economics degrees could talk about the economy. After Occupy, the idea that debt, for example, was something that only bankers could talk about ended – debt is something that we all know intimately and it unites people across the divisions of education, upbringing, race, class, and so on… everyone is in the debt trap.” He added that, “for historians, it has been invigorating to know since Occupy that you don’t have to operate out of economics departments to write economic history”.

If Globalists examined how the early neoliberals envisaged capitalism as a stratospheric phenomenon, something shielded by law and elevated above national democratic will, Slobodian’s new book, Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy, brings it back down to earth and looks beneath the surface of the nation to “the zone”. From the 1990s, sub-national spaces – special economic regions, offshore havens, industrial parks, business districts, freeport facilities, warehouses and logistical hubs – have spread throughout the world. These proliferating zones of exception, with different laws and little to no democratic oversight, are where capitalism increasingly operates. They also serve to inspire reactionary libertarians and anarcho-capitalists who want to reorder global politics based on dreams of fragmentation, secession and exit. “The proponents of crack-up capitalism,” Slobodian writes, “envisioned a new utopia: an agile, restlessly mobile fortress for capital, protected from the grasping hands of the populace seeking a more equitable present and future”.

Like their neoliberal progenitors – Röpke, von Mises and co. – crack-up capitalists such as Peter Thiel believe that capitalism can exist without democracy. As Stephen Moore, one of Trump’s chief economic advisors and congregant at the Heritage Foundation, admitted in Michael Moore’s 2009 film Capitalism: A Love Story, “capitalism is a lot more important than democracy. I’m not even a big believer in democracy”. This is an increasingly common view on the contemporary right, which looks to authoritarian cities such as Dubai, Hong Kong and Singapore, as well as arcadian schemes such as seasteading, sovereign corporations, free cities, and the return to what one economist has called the “hierarchic-anarchic” order of the medieval era, as models for the future reordering of the world. “The people I write about,” Slobodian explained to me, “provide a symptomatic kind of fever dream of what a service dominated economy could look like. A lot of techno-libertarian escapist fantasies are nothing more than that. But fantasies are interesting, and we can learn something about what is repressed by following them to their conclusion”.

If zones are the new capitalist heartlands, they are also where innovations in right-wing thought are happening. It’s within these local spaces that notions of succession and exit can be imagined, planned and even lived. “Sometimes that means seceding – Brexit, for example – but also this notion of ‘soft-succession’, the opting out of society through gated communities, moving your children into the private schools, creating parallel and siloed media environments. I think that’s where the action is politically and where one should focus to propose counter-projects to crack-up capitalism.”

[See also: Europe’s false dawn]

Slobodian’s commanding view of 21st-century political economy upends common assumptions about the spread of neoliberal tenets and their reception. Except for Augusto Pinochet’s Chile between 1973 and 1990, a regime long seen as a cradle of free-market experimentation, historians and social scientists have tended to start in Europe or the United States and trace the diffusion of neoliberal ideas outwards, from the industrialised core to peripheral and semi-peripheral states. It is a story in which the global north generates and then imposes policies and articles of faith on the rest of the world. Slobodian inverts this view, showing how regimes in Asia, Africa, and the Middle East are the lodestars for capitalists in the chancelleries and seminar rooms of the West. As the scholar Jamie Peck has argued, “there is no ground-zero location – a Mont Pèlerin, in the White House, or in the Chilean Treasury – from which to evaluate all subsequent ‘versions’ of neoliberalism. There are only unruly historical geographies of an evolving interconnected project”. Slobodian’s book is a stunning confirmation of that thesis.

For UK readers, Crack-Up is also a cool and timely intervention. The book – the opening four chapters of which focus on Hong Kong, London, Singapore, and Dubai – can be read as a study of the British Empire and its afterlives; how imperialism redounded on its architects in the form of ideas about how to ensure economic openness with firm political control. The most well-known example was the fascination with Singapore during the Brexit campaign. The Asian city-state seemed to embody the dreams of two types of Brexiteer – the low regulated free port on the one hand, and the centrally-controlled law and order regime on the other. The more recent example came from March this year, when the Chancellor of the Exchequer Jeremy Hunt announced the government’s plans to create 12 new low-tax investment zones to “supercharge” economic growth.

Slobodian uses the metaphor of “perforation” to describe this riddling of the nation-state with economic spaces that exist under different laws outside society at large. But does this blatant act of crack-up capitalism, the punching of holes in the territorial fabric of the UK, undermine Westminster’s efforts to prevent the break-up of Britain? “The British Empire didn’t work by painting the map pink,” Slobodian said. “It worked through an extremely heterogeneous set of legal arrangements that differed from one place to the next – the concession, the protectorate, the crown colonies, and so on. Each of these had their own laws that allowed for different economic practices. Having lost your empire, what do you do? You resettle your own territory and what remains of your rump metropole, and you establish the colonial frontier at home. If you think about the history of the Empire as one of legal pluralism, then the attempt to reproduce legal pluralism at home is in the spirit of that story”.

Where Crack-Up stands tallest, though, is amongst that expanding literature on the crisis of democracy. Slobodian has injected fresh revelation and energy into what had become a moth-eaten genre. The first wave of ‘how democracy dies’ books, including Yascha Mounk’s The People vs Democracy, Jan-Werner Müller’s What is Populism?, Edward Luce’s Retreat of Western Liberalism, Timothy Snyder’s On Tyranny, and Bill Emmott’s The Fate of the West, located the pathology of democratic backsliding within the political process itself – in problems of disinformation, populist energy, and deadlocked parliaments and congresses. Capitalism never featured prominently in these accounts except as something that had produced just a little too much inequality. This is essentially Martin Wolf’s approach in The Crisis of Democratic Capitalism:democracy plays a stabilising function and provides a space for the airing of grievances just enough to legitimise a system that has its own inevitable inequalities.

“My approach is different,” Slobodian said, “which is to say that we don’t get a crisis of democracy because capitalism is not working – we get a crisis of democracy because capitalism is working very well on its own terms. If you look at the examples of undemocratic capitalism in Hong Kong, Singapore and Dubai, what you see is success stories that people from emerging markets to industrialised countries look to admiringly.” From this perspective, solving any crisis of democracy will be harder than most think. “To me,” he concluded, “it’s interesting that after Brexit, Dubai, and the logistics and free trade firm Dubai Ports World, are high in the docket of models to emulate for Conservative politicians. The idea that Dubai would be a lodestar boggles the mind.”

[See also: The rise of the right-wing globalists]

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