A Complicated System of Traps: On Quinn Slobodian’s “Crack-Up Capitalism”
Quinn Slobodian | Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy | Metropolitan Books | 2023 | 352 Pages
Through subdividing and cordoning-off, idealistic free-marketeers have devised an archipelago of capital in the shadow of the nation-state. There, they hope, democracy will remain a pipe dream. In a manifesto published by the libertarian Cato Institute in 2009, tech billionaire and far-right heavyweight Peter Thiel declared that he “no longer [believes] that freedom and democracy are compatible.” Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy, written by the historian Quinn Slobodian, tracks how this cohort has set out to shape the world according to their principles (or lack thereof), establishing spaces where money, goods, and power could be structured against the future’s perpetual uncertainty.
Contradiction is a constant in Crack-Up Capitalism, often rendering its subjects’ ideological projects incoherent and inviting strange bedfellows. Crack-up—the fracturing of conventionally understood national power and boundaries into zones—is more of an activist project than many of its advocates would like to admit. The disconnect between rhetoric and outcome suggests that it’s less about individualism than certain individuals.
It's appropriate that Slobodian opens his book with an epigraph from Ministry of the Future, a science fiction novel by Kim Stanley Robinson:
It became clear that the planet was incapable of sustaining everyone alive at Western levels, and at that point the richest pulled away into their fortress mansions, bought the governments or disabled them from action against them, and bolted their doors to wait it out until some poorly theorized better time… après moi le déluge.
“Après moi, le déluge,” the saying goes. “After me, the flood.” Attributed to King Louis XV of France in 1757, it’s thought to convey the French nobility’s nihilistic hedonism and indifference to the sad lot left in their wake. France suffered heavy losses that year in the Third Silesian War with Prussia—a conflict born of the feudal hangover afflicting the European continent and the lasting political instability it brought with it. Furthermore, French society was strained by deepening contradictions between the decadence of its aristocracy and the plight of its rapidly growing underclass.
But the phrase (cited in Karl Marx’s Das Kapital as “the watchword of every capitalist”) wasn’t just indicative of self-indulgent sadism. Louis XV was also an amateur astronomer and predicted that the passage of Halley’s Comet in 1757 may bring biblical end-times with it. The astral, speculative valence this lends his words is fitting. With a dizzying, connective approach, Slobodian reveals that dreams of elite dominion have drawn on fantastical, even magical, thinking. They’re predicated upon chaos and apocalyptic anxieties, both as preconditions for the reconfiguration of the world according to narrow, private interests and as drivers of paranoid self-seeking.
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The American economist Milton Friedman believed that Hong Kong was a veritable vision of the future. Despite comprising less than 500 square miles, by the 1970s it had become a dynamic international financial hub thanks to a series of economic reforms. A British Crown colony, it was run by an exclusive business elite who, in tandem with its government, capitalized on a “captive market through maximal economic openness and the rising value of scarce land.”
Friedman particularly approved of Hong Kong’s diminished popular sovereignty. The formal collapse of the British empire and consequent processes of decolonization had unleashed a tide of democratic potentiality across the globe in the mid-20th century. With organizations like the Mont Pèlerin Society—founded by the Austrian-British economist Fredrich Hayek in 1947 (and featured heavily in Globalists, Slobodian’s earlier telling of neoliberalism’s origins)—economists and policy makers began to devise ways to “defend against the threat of creeping socialism and the welfare state.”
Hong Kong was a cutting-edge template for an evolving entity, the “zone,” which is the primary object of Slobodian’s analysis. Zones—free trade zones, export-processing zones, industrial parks, economic and technology development zones, free ports, and more—have pockmarked and hollowed the neat geography of the world map from Hong Kong to Dubai, with outposts in London, New York, and the Metaverse. Many zones chase arbitrage, taking advantage of cheap labor, low taxes, and other loopholes. In doing so, Slobodian writes, they provide “sleek [alternatives] to the messiness of mass democracy and the sprawl and bloat of unwieldy nation-states.”
Herein lies the first of Slobodian’s main interventions in Crack-Up Capitalism: through the framework of the zone, capitalism’s history can largely be understood as an expeditionary search for sites of exception. Transforming swaths of land into laboratories where laws and regulations are subordinate to accumulation is generative, “reconfiguring relationships between governing and the governed, power and knowledge, and sovereignty and territoriality.”
Slobodian also reminds us that zones haven’t emerged from a vacuum. Their meteoric rise has been “less like an instantaneous bet on a stock,” he argues, “than a decades-long process of grinding material into a new shape.” Fragmentation has historical precedent and translates forwards in time; zone-mania is a feedback loop, emanating from and producing disorder, and opportunity along with it. “What looks at first like an aberration,” Slobodian writes, “is often actually a mutation adapted to the changed environment.” Modifying the Jurassic Park truism uttered by Dr. Ian Malcolm (played by Jeff Goldblum) one might conclude that “capital, uh, finds a way.”
Indeed, Hong Kong largely owed its liminality to Britain’s pursuit of global empire in the 19th century. In 1842, following the First Opium War, the Qing Dynasty ceded Hong Kong to the British. As European, American, and Japanese inroads into China continued, Hong Kong’s lease to Britain was extended for ninety-nine years in 1898, transforming it into a nebulous legal entity. The decision to maintain its status as a free market sluice at the Sino-British Joint Declaration in 1984—captured in its tagline of “one country, two systems”—would both preserve the island’s role in the international economy and its curious economic status, within and without.
Hong Kong’s model was instructive and would migrate outwards, met along the way by funhouse-mirror reflections of itself and fellow travelers. Singapore was also forged in the aftermath of European colonialism. Like Hong Kong, Slobodian shows how Singapore became a vessel for free-market accelerationism and an “enduring object of emulation.” And prior to the founding of the United Arab Emirates in 1971, six sheikhdoms—including Dubai and Abu Dhabi—were informal British protectorates and key imperial outposts extending back to 1820. By the early 2000s, Dubai’s high-rise utopia and pursuit of capitalism without democracy captured the imaginations of free market proselytizers the world over.
Investigating zones’ origins raises provocative causal hierarchies. Dubai’s successes were inseparable from U.S. military adventurism in the Middle East. American bases and materiel dotted the Persian Gulf and Jebel Ali, Dubai’s combination commercial port and economic free zone, was frequented by the U.S. Navy. Such an approach is fruitfully applied elsewhere too: would El Salvador be the recipient of cryptocurrency evangelism today if not for disastrous and deadly U.S. interventions in the 1980s? Or the political and social instability wrought by the “Chicago boys’” free market reforms in prior decades?
Where Globalists charts the fortification of capitalism within the citadel of the state by anxious bureaucrats, Crack-Up Capitalism traces its viral spread throughout the proverbial countryside. By recasting the traditional narratives of the 20th century—often thought to culminate with the triumph of globalization’s expansionist project and the primacy of groups like the World Economic Forum, International Monetary Fund, and United Nations—Slobodian provides an alternative kaleidoscopic lens for understanding the history of the present.
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For secessionists, the state is an ill-defined bogeyman standing in freedom’s path at every turn. Yet Friedman’s ritual worship of Hong Kong and Singapore’s laissez-faire monetarism belied the role of the state in their economic success: Hong Kong trended ever-towards Keynesian-welfarism, subsidizing public housing, social services, and infrastructure. Singapore relied on the “long arm of state intervention” to ensure its solvency. Theirs are myths which neoliberals, libertarians, and small-state devotees must believe in.
Slobodian indicates repeatedly that dissonance hardly tempered market boosters’ imaginations. The Friedman bloodline alone provides a wealth of material. Milton’s son, David, identified as an anarcho-capitalist (like the Austrian school economist Murray Rothbard and his protégé Hans Herman-Hoppe) and advocated for privatization of all state functions—constitutions by contract, laws à la carte. At his most fantastical, David invoked medieval Iceland and read capitalist orthodoxy into the distant past. Similarly, Slobodian points to the Dutch libertarian Michael van Notten, who sketched a return to nomadic clans, using the civil war-torn Somalia as his canvas, and an ex-State Department lawyer, who espoused the virtues of Ottoman millets, independent communities ruled by “personal law.”
In the 1990s, too, with the increasing centrality of computing in day-to-day life, escapist digerati theorized high-tech libertarianism. Exclusive virtual communities presaged decentralizing ventures from Bitcoin to the blockchain. But Slobodian is quick to point out that the “new frontier” of the web was hardly revelatory. Terrestrial political geographies made the jump to cyberspace. Dreamworlds were built on the back of federal innovation: the core technologies of the internet were developed by the U.S. Department of Defense’s Advanced Research Projects Agency during the Cold War and supported by public infrastructure. And its costs haven’t been stored in the cloud either — processors and server farms are built on real land and are severely environmentally taxing.
If taken at their word, it doesn’t seem that champions of market optimization and radical individualism transformed politics as promised. Crack-up has had the paradoxical effect of shoring up the status quo, both by limiting its accountability and our own ability to affect it. But, as Slobodian writes, “good capitalists know the real game is capturing the existing state, not going through the hassle of creating a new one.” To no fault of his own, Slobodian’s portrait of this union is often uneasy and begs further questions; it’s the lack of resolution, suggesting that his story is still unfolding, creeping in.
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Home, it seems, is also where the zone is. Slobodian notes that as of 2022, the U.S. topped Switzerland, Singapore, and the Cayman Islands as “the best place in the world to illegally hide or launder assets” according to research by the Tax Justice Network. Las Vegas, the old stomping ground of both the mob and Howard Hughes, announced that it would reengineer economically depressed areas as “Opportunity Zones” in 2018. The city invited start-ups and venture funds to take advantage of Nevada’s lack of state income or business income taxes. It’s worth noting here that approximately 80 percent of the land in Nevada is federally owned. Ultimately, displacement and the continued concentration of wealth upwards are at stake. But the strip’s neon glow shines bright through astronomers’ lenses.
Crack-Up Capitalism’s rich intellectual history cues us in to the existence of these lucrative niches and their methodical destruction of collectives. Residential segregation, zoned consumption, and an increasingly diffuse web of power are embedding progressively deeper into our world’s fabric. Avatars of nations remain with new matrixes of power overlaid and nestled within. Slobodian doesn’t prescribe policy, but it’s clear that renewed discussions of political economy are imperative if we hope to change course. For now, crack-up pushes on, come what may.