The Coming Capitalism

The New Feudalism, Part II

The United States of Coke, or illiberal Hungary? It’s hard to get excited.

No reprieve, anywhere. Balon, Torino.

Between neoliberalism and populism, you’d be forgiven for getting frustrated. There isn’t a lot to choose from.

For neoliberals, democracy is a means to an end: stable and predictable governmentality in which liberty is equated with untrammelled property rights.

For populists, democracy is a means of confirming the power of one ethnic or religious community over all others.

While responsibility for populism can be blamed on neoliberalism, it’s still just a sideshow. Today’s market politics are nurturing something far more sinister.

That’s why it’s worth taking a second look at the laissez-faire ideology.

Neoliberalism arose when the organised power of the working class caused governments in Europe and North America to undertake a modicum of redistribution to discourage unrest.

Jürgen Habermas’ account of the public sphere as a space for the political discussion necessary for liberal democracy arrived, like the owl of Minerva, only at the end of the process.

It was the early 1960s, and West Germany’s postwar democratisation had given the philosopher reason to believe an alternative to Hitler’s authoritarianism was realisable.

Unfortunately, what may be true for Berlin isn’t always for the rest of the industrialised world.

By the time The Structural Transformation of the Public Sphere was published in 1962, neoliberalism had jumped from the universities where it had been born – Vienna, Freiburg and Geneva – to civil society.

Intellectuals, businessmen, and think tanks had been infected and would slowly but surely find a way to turn neoliberalism into an antidote to democracy and the welfare state.

From the perspective of neoliberal thought, the public sphere was useful as a part of the superstructure of capitalism. It was a means of explaining why things were and had to be the way they were, at least in terms of the distribution of property.

To the extent that democracy challenged the rights of property owners, it became a threat. That perception has led to the species of antidemocratic thought that has become widespread within the neoliberal right.

As Quinn Slobodian argued in Globalists: The End of Empire and the Birth of Neoliberalism, much of the positive project of neoliberalism has been to insulate market relationships from democratic interference.

It’s the libertarian dream come true. Neoliberalism’s premise is that markets are the maximally just mode of social organisation.

Organising society on this basis allows for the fiction that economic relationships under capitalism are consensual. Workers pick the optimal situation from the choices made available to them by employers.

To the extent that unemployment exists, it is also by choice due to people switching jobs or voluntarily absenting themselves from the labour market.

Underlying it all is the mute compulsion of economic conditions. The fact that things are the way they are is viewed in similar terms to the weather. Businesses make decisions based on impersonal factors.

This world is as it is, and given how little we can know about how the economy functions at any given time, the government that governs least governs best.

Left to its own devices, the system doesn’t function that way. “Competition is for losers,” as Peter Thiel once wrote.

What businesses want is to set themselves up in conditions of oligopoly or (better yet) monopoly in which prices can be set at will and barriers to entry limit interference from competitors.

Lately (at least one hopes), capitalism seems to have found the solution to Marx’s contention that the underlying tendency of profits was to decline.

According to the third volume of Capital, one reason they did so is competition.

Mr Moneybags might find his way into a previously unoccupied line or manage some significant innovation in one already established. But such advantages would be temporary.

The dominant versions of capitalism now come with adjectives: platform capitalism, chokepoint capitalism, and the like.

Given how little interest the firms that excel in these modes of capitalism have for competition, it is hardly surprising that feudalism has arisen to conceptualise these changes.

The argument for the relevance of feudalism as a concept arises from the supposed homology between the rent-seeking practices of platform capitalists and the behaviour of feudal landlords.

There is an ongoing debate about this, and it is not clear that platform capitalism and its adjacent variants aren’t still meaningfully capitalist.

But there is also the question of the political superstructure of capitalism. Here, the anarcho-capitalists have mooted the creation of a political order embodying some of the features of feudalism.

The idea that the world would be better if it were broken down into smaller polities, each of which organised according to whatever principle it was inclined, is the defining feature of anarcho-capitalism.

The connection to feudalism is the privatisation of politics.

Clearly, modern anarcho-capitalist fantasies do not precisely map onto the political and economic structures of 11th-century France.

The basis of sovereignty in the latter stemmed from the overarching institutions and culture of the Holy Roman Empire and the Catholic Church.

Colonialists and radical libertarians have nothing quite so substantial to fall back on, only a shared acceptance of brute compulsion.

Feudalism in this latter sense is shorthand for the disintegration of the public sphere and the conception of government as a neutral mediator looking after the interests of society as a whole.

The extent to which that ideal was ever approached, even during the heyday of liberal capitalism, is open to debate.

However, the spreading fetishisation of markets has given at least some observers pause about what might come when the last vestiges of that organising principle have gone.

Much as the rise of anarcho-capitalist ideas among the elites is alarming, the lack of realism in their ideas is equally so.

In the 17th Century, philosopher Thomas Hobbes saw that one consequence of devolution into small or individual units was the prospect of groups coming together to kill you and take your stuff.

One of the primary selling points of his 1651 book Leviathan is that it was meant to prevent this.

Modern weaponry, such as ballistic missiles, loitering munitions and drones, are difficult to defend against, making the prospect of non-state actors and small states less appealing.

At a more prosaic level, there is an odd fixation with production on the part of the mavens of anarcho-capitalism and a signal failure to understand consumption.

Sure, you can set up shop in a free enterprise zone and run your factory, with robots preferably. But this strategy only works if everyone else isn’t doing it as well.

The reserve army of labour is a good thing from a market perspective, but the spread of automation seems likely to change this from a downward-pressing factor on wages to a dangerous problem.

The boosters of the “many small states” solution to democratic interference seem to think there will always be some vast reservoir of consumers able and willing to buy the goods.

Moreover, in the course of the last century or so, larger states have done a better job than their predecessors of facilitating the relatively free movement of goods.

Small-state obsessives have failed to learn the lessons of 19th-century Europe.

Germany and Austria spent decades trying to work out a customs union for Germany’s myriad Länder because it was a pain to transport goods down the Rhein or the Danube and pay a toll every five miles.

Still, it is not surprising that small states retain a certain appeal to the forward-thinking businessman.

For the last two decades and more, conservatives in the United States have taken to heart Rudi Dutschke’s call for a long march through the institutions.

What they have discovered is that small spaces can be dominated more easily than large ones, especially when enormous amounts of money can be brought to bear.

The same way of thinking was behind Brexit.

Behind the lies about better funding for the National Health Service and complaints about bureaucrats in Brussels lay the desire of elites to escape from the democratic meddling the EU permitted.

And here we may find a lesson for those committed to opposing this refeudalisation, or whatever it is that is really going on.

Democracy works best on a large scale and the broadest stage.

If the prospect of refeudalisation retains the power to shock or to motivate, perhaps employing the term will help to shake the forces of democracy out of their current torpor.

Whatever else it might be, and whatever name one wants to use for it, it is clear that the ideology of capitalism as a system of competitive enterprise is passing away.  Perhaps it has done so already.

The massive concentration of wealth in Google, Amazon, Microsoft, and the like expresses a fundamental change in the economic formation of the world.

If these changes are going to be reversed, they will have to be made by political entities and movements big enough to compete.

In the coming struggle, what is clear is that small will not be beautiful.

Photograph courtesy of Joel Schalit. All rights reserved.