25min chapter

This Is Hell! cover image

Chuck has Covid pt. 2: Technoauthoritarian Frontiers / Quinn Slobodian & Greg Grandin

This Is Hell!

CHAPTER

The Tension Between Democracy and Capitalism

This chapter examines the fraught relationship between democracy and capitalism, highlighting historical shifts in power dynamics and the implications of legal decisions like Citizens United. It critiques concepts such as charter cities and their impacts on national sovereignty while exploring labor dynamics in extreme capitalist environments. The discussion also addresses the paradox of globalization, rising inequalities, and ambitious projects like Saudi Arabia's NEOM, questioning the future of governance and citizen representation in an increasingly capitalist world.

00:00
Speaker 3
So do you think democracy is more defined by the ledgers of capitalism than it is defined by votes at the ballot box?
Speaker 1
Well, I mean, you know, I think these things exist in uneasy tension and always have. I think that the best way that historians kind of think about it is that there are like, there's moments in time where there's kind of new settlements between sovereignty and the kind of needs of capitalism. And the settlement that existed in the lifetimes of our parents and our grandparents was one that allocated a lot more of the profit share to workers. And in turn, workers gave kind of labor peace and gave kind of consensus to the parties in power. As that settlement transforms, I think that the balance is shifted towards the powers of capital and away from that of everyday people through like a series of often quite blatant legal decisions, including, of course, Citizens United and all the way down. I think that the latest series of revelations about what could probably just best be called the corruption of Supreme Court justices like Clarence Thomas and Neil Gorsuch, and the kind of shamelessness with which that that's been so far defended or treated, suggests to me that, you know, we're entered a kind of moment of settlement in the United States where capitalism doesn't feel the need to apologize that much for itself in the face of democracy. And that's the thing that concerns me is that kind of the, that sort of shamelessness or the lack of accountability, which, you know, always threatens to become the kind of dominant mood. When
Speaker 3
Vice President Dick Cheney was trying to convince the United States into going to war and the war on Iraq in 2003, kept repeating that without free markets, you do not have freedom. So clearly, capitalism is political. But how do we understand capitalism differently when we see its dependence on being outside of democracy and engaging in undemocratic activities? How do we view capitalism differently when we see it not as something that brings about democracy, but that's something that can be antagonistic toward democracy?
Speaker 1
Well, I mean, interestingly enough, even though since the end of the Cold War, we've sort of operated with this, I think, misguided assumption that capitalism and democracy are sort of mutually complementary. For much of history, when political philosophers have thought about this, they've thought something very different. I mean, someone like Joseph Schumpeter, for example, didn't think that capitalism and democracy could coexist. He assumed that the actual practice of universal suffrage and representative government would lead to the corrosion of competitive capitalism because people would become discontent with the capture of profit by a small number of people. So you'd get a move towards socialism. So the idea that real democracy would lead to the end of capitalism and socialism is kind of the mainline opinion for the 20th century and much of the 19th too. So our idea that there could be like a settlement between the two or that assumption is probably just a bit of a blip. I mean, I think that the point of my book as a historian was really to kind of try to revisit this period that by now has gone on for you know 35 years which is the period from the fall of the Berlin Wall to the present which if you do kind of world history courses or global history courses in high school let alone college chances are you kind of consider history to have ended still around the time that the Cold War ended. We don't really have a narrative yet for what world history has been like since then, except for this idea that we had an era of globalization and capitalist democracy became the only game in town. The point of my book is to kind of question that in two different ways and to suggest at least two different storylines that we should have in mind about the world since the end of the Cold War. One is about the 90s being not just a period of like seamless integration and kind of kumbaya, Coca-Cola, you know, globalization where everyone held hands and joined forces under the sign of the market. In fact, the 90s were a huge time of political fragmentation. There were all kinds of secessions and crack ups and civil wars, dissolutions of large states into smaller states. And we should think about the 90s that way as much as we think about it as a time of integration. And then I'm glad that you mentioned Cheney, because I think we're only starting now to historicize what the sort of political effects were of the American decision to invade and occupy Iraq in 2003. Because I think that really furthered the sense that sovereignty was up for grabs. It was something that could be revised. It was potentially quite literally up for sale. I mean, the contracts that were handed directly out to Cheney's associates and, you know, former employees, places like Halliburton and Bechdel, were just an especially crass example of the way that the sort of imperatives of capitalism were subordinate to those of any Wilsonian even ideas of self-determination. The book that has a kind of through line in it, which is that these libertarian fantasies of state making and exit are sort of can't be taken out of this context. So I really think that when Peter Thiel is sitting there in San Francisco in 2009, saying that he wants to exit the nation state and create a new nation state, that statement would not be made without the fact that America was doing something very similar at that very moment in Iraq, right? They were doing failed and catastrophic versions of nation building, led people with money and means and influence to wonder, well, why can't we do the same thing ourselves? Why can't Silicon Valley do a better version of Iraq? And in some cases, the people that I write about in the book were making the comparison directly. Paul Romer, the now Nobel Prize winning Stanford economist then at Stanford, was quite open that when he proposed these things called charter cities, which meant that countries would give up part of their territory and let a foreign country oversee it, which I call Silicon Valley colonialism, in the title of that chapter, he said, you know, we're not talking about what the US is doing in Iraq, that's conquest, that's military, we would do this all by contract and consensus. So that idea that you could use commercial relationships in a way that would run roughshod over basic principles of like Westphalian sovereignty, like people on one patch of the earth being able to make their own decisions about their lives. You know, we've been in now over two decades of waves of the kind of the besmirching of that principle of self-determination. And I think it's starting to come home to us in many ways with the or capitalist of Donald Trump in office, best understood, I think, not as a kind of ethno-nationalist populist, even if he was that too, but as someone just bringing the practices of capitalism from the smash and grab vulture models of the 80s and 90s and 2000s and then saying, hey, why can't we do this at the level of the great powers now?
Speaker 3
We are speaking with historian Quinn Slobodian, author of Crack Up Capitalism, Market Radicals, and the Dream of a World Without Democracy. Find out more about Quinn at quinslobodian.com. You write that new barricades replaced old ones as the Cold War and that goods and money were free to flow, but not people. Walls were built the world over. By one estimate, more than 10,000 miles of borders worldwide have been hardened with barriers. In 1990, the United States planted its first stretch of border fence south of San Diego. President Bill Clinton liberalized trade in North America while he authorized Operation Gatekeeper further fortifying the southern border. So the wall came down and the walls went back up. What does it say about globalization when instead of taking down barriers, it builds more walls than ever? Soviet communism built walls. Why does today's globalization? Are there perhaps shared reasons?
Speaker 1
Yeah, that passage that you cite there is also drawing directly on a book I really recommend by a political philosopher named Wendy Brown called Walled States Waning Sovereignty. she's you know well before i was was sort of asking the same question which is why is it that in this era that we're talking about flows and movement and mobility there's also all of these these extreme ways of blocking specific kinds of mobility and specifically the the movement of of humans human bodies. And that constitutes what I talk about in this book, but I also talked about in the globalist book you mentioned, which is kind of the people problem for, in this strong sense, kind of neoliberal or libertarian intellectuals. Even someone like Thiel and the people that he works with, say they're imagining building a new polity on like an offshore, you know, abandoned oil platform that will now be like whatever, a call center and an experimental laboratory or whatever. these wonderful things called Hayek Islands, which would be like a steel pod sitting in the middle of the Caribbean that you could just relax and like stream your favorite shows, like far from the problems of everyday life in San Francisco or whatever. Every time they come up with these fantasies, the most obvious question is always like, who will clean your toilets? Like who will cook your food, who will take care of your children if you have them, who will cut your hair, whatever. The repression of the need for people, even as an underclass, even as a kind of domestic class, is very, very strong in these kind of visions. And it's kind of the most obviously symptomatic aspect to the way that they see the world, which is to just render invisible all of the structures that they depend on for the reproduction of their own lives. At a larger level, it gets interesting around migration policy because Singapore and Hong Kong, example, who, when the Financial Times just reviewed my book this week, for example, they, the author notes that Singapore and Hong Kong are sort of like wonderful success stories. And maybe we shouldn't throw out, you know, the baby of crack up capitalism with the bathwater of the true libertarian nutcases. But the people problem completely plagues those places. Singapore has, you know, well over 75% of its population is non-citizen, meaning they are on temporary contracts. They don't have the same rights as citizens. They can be deported at will and often are. They are, if you're talking about domestic workers or construction workers, they're kept, you know, in conditions that are well below those of Singaporeans. Dubai exists on the same model. a good version, quote unquote, of crack up capitalism, are all predicated on like really extreme stratified versions of like two class citizens. One set of citizens has access to all of the things that are good about being part of the state. The other non-citizens are treated as completely disposable. So that is also, I think, coming into focus as one of the kind of normative ideals for, you know, keeping growth alive and keeping, you know, a certain quality of life up, even under stresses of climate breakdown and political turmoil and so on, is to just, you know, fortify these small nodes, secure a kind of class, a domestic underclass, and then just, you know, treat them as factors of production that can be allowed in and dispelled at will. But that's a very hard thing to do, actually, right? I mean, it's very hard to treat a population that way over the long term and ensure that they won't revolt or quit or in some other way, make life miserable for their employers. It's hard to figure out how to placate a population if you're still trying to do it politically, if they are unhappy about having large numbers of foreigners. The British Conservative Party right now is a great example of being kind of torn between these two poles where half of the more business-minded ones want to do like proper, you know, hyper-capitalism and suck in workers when they need them and spit them out when they don't. And then the other half is playing to basically the racism of their voter base and doing performatively cruel things like trying to figure out how to send asylum seekers to Rwanda to be processed and so on. So I think that this is one of the fault lines of the current transformations of globalization. It's like, where will the people come from? How will they be treated when they arrive? And if you don't want migrant workers or migrant populations, then how are you going to get your own population to do the unpleasant jobs if you're not able to develop robots in time to have them do it for them. It
Speaker 3
seems like this is the only way that globalization can or in any way does succeed, and that is through this imposition of greater and greater inequality. And as you were saying, eventually, there would probably, you would assume, be some sort of uprising against this imposed inequality. If we do see these voids, we actually notice these zones where the state has given power to profits over people. Once seen, what do you think is the likelihood that the public would do anything about it or could do anything about it? Would so much power be concentrated within these zones and the people that control them that nothing can be and nothing will ever be able to be done to stop them? Well,
Speaker 1
I'll give you two responses to that one, very gloomy, and the other a little less so. The very gloomy one I mentioned in the conclusion of my book, and it comes from the incredibly prescient and beautifully written novel, The Parable of the Sower by Octavia Butler. And she wrote it in the wake of the LA riots in the 1990s. But it's set, you know, in a world not so far from our current one. And there's an incredible passage where her family is trying to figure out if they should leave their insufficiently secure gated compound to take refuge in this other more secure compound on the coast, on the Pacific coast. a desalination plant owned by a conglomerate of foreign interests in Japanese, Canadian, and German, where workers can work and have housing. But when you enter, you lose your status as a citizen because it's like a proper extraterritorial enclave. And she's talking about this, the main character is talking about it with her family, and she reflects that this sounds a lot like the stories that she'd read about in science fiction novels that she remembered had always had this sort of setup of a company town with the protagonist who's trapped in there and then, you know, through heroism and bravery manages to overthrow the leaders of the sovereign corporation. But she says, you know, in real life, that's not how it works. You know, people aren't working like hell to overthrow the corporation and escape the company town. They're working like hell to get into the company town. And that's much more the predicament that she, the author and the character sort of predicts for the near future. And I think that's extremely, you know, insightful and important to revision of her idea of how the near future might look. So I think there's that one side of it, which is like, even if you see those zones, then all that might mean is that you're like, well, I guess that's where I'm sending my job application, right? Kind of in the sort of sorry to bother you model of just entering the call center permanently. The second slightly less gloomy thing that I think one can gain by putting on the zone glasses is to look at something like the current industrial policy push by the Biden administration. So there's been a lot of talk from people on the left, sort of political economists watching something like the IRA, the Inflation Reduction Act, or the CHIPS Act, and asking whether or not these are things that one should get behind and cheerlead, or if they're just sort of handovers to asset managers and financial intermediaries, is this just going to profit BlackRock more than it's going to profit anyone else? And what you will find is that eventually that big bill that's passed with all of its money, it touches down to earth. And the question of where it touches down is often pretty closely connected to this whole zone question, which is like, well, it will go to a place that will have a steady supply of workers that will be able to ensure some kind of benefits for corporations who come and set up there. So there will be, even in an attempt to kind of change the settlement between capitalism and democracy, it's still likely that we will be doing so within a kind of, again, patchwork geography of differentiated zones. And that doesn't necessarily have to be a deal breaker, so to speak. I think we can see the recuperation of the idea of a fractured legal landscape is just a working necessity, as long as it's filled with a different set of imperatives and a different set of incentives than what had existed before. So I think both our bad future and our good future will incorporate this world of zones. It's just a question of, will the zones work for us or will we work for them? And
Speaker 3
you mentioned one of these zones. In 2017, Saudi Arabia announced a spectacular extraterritorial zone near the Jordanian-Egyptian border, a $500 billion megaproject called NEOM with the backing from some of the world's biggest investors. Planned from scratch, NEOM is intended to cover over 10,000 square miles of desert and Red Sea coastline. And you mentioned how many Bedouin were moved out of the area to put in this NEOM. The plans include a linear city with a pair of twin skyscrapers to stretch horizontally for dozens of miles. Build as the largest buildings ever constructed. The scheme is not only a feat of architecture and engineering and arguably magical thinking when it comes to water procurement, but also a laboratory of private government. It is to be run by shareholders rather than the Saudi state, an autonomous government whose laws will be chartered by investors. Shares are to be sold on the Saudi stock exchange. The only obligation of the NEOM board of directors would be protecting the shareholders' investment. The Saudi crown prince Mohammed bin Salman has called it the first zone floated in the public markets and the first capitalist city in the world. Shareholders in a virtual state, not citizens in a real state. How much say would shareholder investors have in their state? How much freedom would they be able to protect in their state?
Speaker 1
Yeah. Well, that's a good question. I mean, so this thing, which they pronounce it NEOM, is I think a perfect example of the dynamic that also we're trying to get at here and that maybe in a way Octavia Butler saw more clearly than others. It's huge. It's ongoing. It's only ballooning in size since I put those words to paper and it got printed a few months ago. It's a big push by Saudi Arabia, ironically, to like pivot away from purely an oil extraction economy, right? And so they're selling all of this as like super sustainable and green and ecological and so on. And it's an attempt to kind of do a Dubai, right? Set up an economy more on offering services offshore and sites for real estate speculation than just things you're taking out of the ground. The reason why I think it captures the dynamic well is it's kind of a global joke, right? I mean, this Neom, it mostly just gets mentioned in kind of like, are you kidding me? Kind of editorials or like, you know, MBS builds dystopian wonderland in the desert kind of a thing. And yet there's so much money going through this that huge numbers of people are getting contracts somehow for it. Right. I mean, I literally spoke to someone the other day who said, you know, they're working on something for Oxfam, the grandiosity and hubris of MBS and still depend on his paycheck to pay your next rent bill. So I think that the fact that money is so extraordinarily concentrated in the hands of people with such impoverished visions of what human life could look like is itself part of the kind of, it's part of the hellish nature of our present, right? And the fact that they're, you know, filtering their visions of the future through these subnational privatized zone like spaces only sort of tells us that we can we can like disenchant them and laugh at them and even, you know, like walk around with our they live sunglasses on all day. but in the end, if they're the ones, you know, with the resources, then we may nonetheless find ourselves like, you know, sucked into that kind of undertow of the worlds that they're creating. So whether or not NEOM ever comes to exist as it's, you know, outlined and drafted on these blueprints, I think it is like a symptom of the world that already exists.

Get the Snipd
podcast app

Unlock the knowledge in podcasts with the podcast player of the future.
App store bannerPlay store banner

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode

Save any
moment

Hear something you like? Tap your headphones to save it with AI-generated key takeaways

Share
& Export

Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode