S: While we are on this subject, what are the broader implications of this libertarian secession project for national liberation and anti-colonial struggles? It seems like, taken together, Globalists and Crack-up Capitalism paint a pretty grim picture — these forming nation-states are always between the Scylla of neoliberal international institutions forcing austerity on them and Charybdis of carving their country up into a myriad of special economic zones to attract investment — with no clear way out.
QS: One is almost tempted to say Cuba figured it out. In some ways, you can declare it a success story despite them having a very low standard of living with a lot of basic amenities hard to come by. But they have managed to produce a level of self-sufficiency inside of an interdependent world economy that avoids giving away too much of their sovereignty in the ways that other countries have. Another example is Jamaica which specifically chose not to be a tax haven. They could have and they decided not to despite all kinds of pressure they continue to live under due to capitalist investment, specifically in manufacturing and small-level agricultural production. Another example is Barbados which not only has recently left the Commonwealth but their leader Mia Mottley has become a spokesperson for the leading role of small island nations in climate change as moral leaders, but also the ones producing small-scale welfare states and doing redistribution.
An optimist could say that in the idea of common ownership and different forms of accountability, there is a space to appeal right now to economic global elites' sense of justice. And sometimes — if they can see profitability in it — they will opt for socially just forms of investment over just the bottom line. But it's still the old problem of how you use moral persuasion on people who are generally not open to being morally persuaded. So I'm not that optimistic especially because the drying up of global investment and global credit is hitting these nations the hardest. I think there's no option except to hope that regional and domestic left-wing waves like the recent quasi-pink tide in Latin America can produce new settlements where, for example, indigenous peoples’ land rights get written into national projects.
S: What do you think about the Ukraine case? There is a great amount of help they receive and some of it even comes as grants but most of it brings more debt and unfavorable conditions imposed by supranational institutions. Of course, it helps, for now, to fight against the Russian invasion, but the question is what comes next. It seems like the political climate that exists now leaves very little space for the imagination of alternative options for building back from all the catastrophes that were imposed on Ukraine by Russia.
QS: If you look at historical examples, I've just read a very interesting dissertation, where the Jubilee movement around the early 2000s is analyzed. The idea of the movement was to forgive the debt of the poorest nations. The author has a very interesting observation about it being a huge victory, on the one hand, because that had never happened before. Creditors had never just forgiven the debt, they'd always got it through the IMF or whatever. On the other hand, the price of the jubilee was that the countries then had to be exposed to much more structural adjustment and oversight. Indeed, it came with even more intervention: countries had to balance their budgets, had to cut social programs, and so on. This two-sidedness is unfortunately the best-case scenario. Because the worst-case scenario of the post-war recovery would be Ukraine returning to the economic model they had before the war. The one that was largely based on kleptocracy and bending over backward to foreign investment. I can see how the cutthroat investors would want all these privileges that special economic zones provide.
What would be good is to follow the lead of wartime Europe in the 1940s, which means that the time to plan for the post-war is now, not just in the sense of military strategy, but also the vision of the good life that should follow the conflict. It’s really interesting that things like the Beveridge plan and the British welfare state or the Bretton Woods system were conceived of during the war, not after it. So if the post-neoliberal turn is for real then it will be interesting to see post-neoliberal visions for post-war Ukraine. But it's not much of a conversation, at least in the Western media. I can't really remember reading much about the blueprint for a more socially just and democratically accountable Ukraine.
S: Right, it seems like the turn away from neoliberalism that we are speaking about is now mostly happening in the developed economies. Maybe the likes of Mexico or Brazil are also starting to do this, but for the countries that are — just like Ukraine — really dependent on other nations’ involvement in their economy this new approach is not really in the cards yet. Maybe it will come to them later but for now, it seems, they are still forced to stay in the old paradigm and play by the old rules.
QS: Potentially it’s even worse than that. There are left-governed countries, but the frame now for Ukraine, for example when it comes to EU membership, it's being discussed in the West Balkans-style. That's one of the ways in which the EU is an iron cage for political and economic imagination. Because if you set up a vision of the future that way — ‘Will you be allowed in the European club?’ — you trigger the stereotypical imaginations of everyone who lives in Northern Europe; the likes of Holland and Germany immediately begin to worry about the costs and transfers and the problems of securing the outer border. It stalls out the utopian thinking that is actually necessary, turning the best possible future into a budget line for the European Central Bank or for Brussels. Maybe the real constraint right now in conversations and in the press in Germany or the US is that every time the vision of Ukraine after the war comes up, all people see are financial burdens rather than something that could be dynamic and even inspiring.
S: The overwhelming majority of contemporary left-wing economists and historians who are trying to engage with global history or global economics (with some notable exceptions like Simon Clarke) often treat post-Soviet countries and maybe even the whole former Eastern Bloc region like a black hole which everyone tries to step and speak around. Why is that so, in your opinion? Even if we take Crack-up Capitalism, these countries are mentioned alongside the main examples but never are at the center of attention.
QS: It's a good question. Partly, when people are writing the history of neoliberalism sometimes they're trying to create a timeline that is not the same as the geopolitical timeline of the Cold War. So there's an attempt to create a different series of important events: Pinochet becomes important, Thatcher becomes important rather than just Great Power conflict and standoff. So maybe there's an overcompensation for that sometimes, and then the countries that had been central in the Cold War become irrelevant somehow. In my book, for example, there was indeed an attempt to put developments in East Asia more centrally. But this comes out of a reaction to the very West-centric narrative in public schools, universities, and popular memory in the United States, where if you write about the 20th century, you talk about the Second World War, the Cold War, globalization, and then 2016. The fact that there were Japan, South Korea, Taiwan, and then China steadily rising is almost never mentioned. China’s rise to dominance has caught Americans by such surprise partially because they weren't told about this in their textbooks.
At the same time, I think the lack of attention to the Soviet bloc and Eastern Europe is a shame because even if you're just interested in the history of neoliberalism, post-Soviet space is a great place to look: there's a really good book, for example, by Hilary Appel and Mitchell Orenstein From Triumph to Crisis: Neoliberal Economic Reform in Postcommunist Countries. It’s about what they call avant-garde neoliberalism. Especially in the Baltic states; the things those countries were doing were beyond what the EU or the IMF recommended — flat tax, all kinds of extreme pro-market libertarian measures that were considered a bad idea even by hardcore neoliberals. There's no good reason why that shouldn't be part of a general narration. Probably the more cynical answer would be that we write histories to explain the present and to explain the success stories of the present. And this is why Eastern Europe and Central Europe became irrelevant to the American imagination and arguably even to the European imagination at some point. Especially for Germans, it was almost a return to the 19th-century relationship where this part of the world was just an economic hinterland. As long as everyone stays relatively peaceable, keeps sending their workforce, and allows us to build the back end of our supply chain out there, then why would you think about it unless there are too many people coming as unwanted migrants? So it continues to exist in a blind spot. One thing that Putin has done, sadly, is forcing the US and Western Europe to think about that part of the world again--although many Americans are already forgetting about the war.
S: Speaking of which, it seems that Putin — or at least people who are in charge of the economic policies in Russia — wouldn't be out of place in your book. Because, among other things — and I think it's not completely coincidental — he is the creator of the largest special economic zone to date, which occupies the entirety of the Russian Arctic. His power is incredibly centralized but also increasingly fragmented through different private enterprises — like state-run companies and private military contractors. Do you think he can be a ‘model’ leader for the fragmented yet interconnected post-neoliberal world that is taking shape now?
QS: There are members of the right-wing libertarian world who do see Russia as one of the most economically free places in the world because of its low tax rates. In a way, this is the most important story for neoliberals and libertarians, everything is secondary to that. But as far as the direct involvement of the state in the economy goes, I think most of the doctrinaire neoliberal types would see a problem. They usually don't think what is called ‘state capitalism’ is a particularly good thing. That's why they like Hong Kong. Because there was not such a high level of state ownership but also a decreased amount of political freedom that made things run more efficiently. But practically speaking, it’s important to observe that the world is turning more in the direction of places like Russia, Saudi Arabia, or China than towards Hong Kong, Liechtenstein, or the Metaverse.
In that sense, what you're describing is a more accurate view of the world and it explains why there's almost a tragic end to Crack-Up Capitalism. In the 1990s and early 2000s, these free-market radicals thought things were going their way. They thought that we were heading towards a Neal Stephenson-like virtuous competition between endless fragmentary micro-polities. But that's not what's happening. There is zonification and there is the multiplication of the zones but there is also a twist ending. The zones they cherished were not sites of economic freedom, experimentation, and self-government. They were contained within the large authoritarian framework of China for the most part, Russia, and a number of other less democratic states. So the zone which was supposed to be the vessel for escaping from the nation-state has just become another tool in the repertoire of nation-states. The state capitalism you describe in your question is more like the horizon of the future, while the hypermobile escapism of the market radicals is going to be subjugated to that state power.
S: Since you’ve mentioned Neal Stephenson. The libertarians we meet on the pages of Crack-up Capitalism have a shared affection for his fiction — The Diamond Age and Bantustans, the whole Metaverse idea... What attracts them to it?
QS: Certain people are just lightning rods for the zeitgeist who are able to capture the mood perfectly. And this is what Stephenson did. I think Snow Crash and Diamond Age are incredible books. Very poorly written, but at a world-building level, they're great. The interesting thing about these libertarians is that they're big science fiction readers, so there's a feedback loop. Someone like Stephenson writes a beautiful description of the state of global capitalism and then people like Peter Thiel or Jeff Bezos pick up on it. Bezos has been the employer of Neal Stephenson for years now. Stephenson works for Blue Origin, his space company, doing who knows what. But there's a way in which those speculative worlds become blueprints for the things that these billionaires see themselves striving towards. It’s obvious that the Metaverse itself is from Snow Crash. It’s almost heavy-handed at this point, the way they try to recycle or launder their profit-making enterprises through these fantasy concepts from sci-fi.
In the same way that the Globalists book captured the era of high neoliberalism right before the global financial crisis, Crack-Up Capitalism is trying to write the intellectual history of a slightly overlapping timeline starting from the early 1990s, which took off with the tech boom and Web 2.0 and hit a wall with the inflation and the loss of endless pool of liquidity that was keeping all kinds of crazy ideas flowing. For years, you could get money for just reading a chapter from Snow Crash, and some venture capitalist would be like ‘Here's your first line of credit, let's go’. But that true bullshit era of Metaverse visions has come to an end. I think there will be a soft version of the state subjugating the market, ideally towards positive ends. But no more dreams of escape, no more dreams of fragmentation for the time being.
S: In some of your interviews, you mention that anger and futility around the efforts at international solidarity during the US-led invasion of Iraq in the early 2000s served as an inspiration for your dissertation on West German students' encounter with Third World politics. What do you make of the world’s reaction to the Russian invasion of Ukraine?
QS: In some ways, it's the exact opposite. The solidarity with the Ukrainian people was very strong and very immediate at least in superficial ways — the hanging of the flags and the attempt to help people who were fleeing from the war. There was a capacity for personalizing and humanizing the victims of the conflict which simply didn't exist at all in the case of Iraq — partially because it was further away, but partially because of cultural, racial, and religious differences. There is a sense of a gap between the aggressor nation and the victim nation, especially if you're in Europe — after all, Ukraine is just a train drive away.
But you're still left with the problem of solidarity. This is where it actually does go back to things I wrote about in my first book. In particular, I wrote about this interesting distinction the New Left made in Germany between the solidarity of sentiment and the solidarity of interests. There was this argument, in which Herbert Marcuse intervened in part. It goes like this: ‘As a young West German, what connection do you have to a Vietnamese peasant? Yes, you're both human. But what is it that you consume that is reliant on the labor of that person on the other side of the world? How can you construct a chain of causation that leads from your lifestyle to theirs?’
This was a big project for the New Left: to show the reliance between these distant populations and to try to construct the solidarity of interests. So when you fight for the Vietnamese peasant you're not just fighting on their behalf or in a humanitarian gesture, but you're also fighting for your own struggle domestically. That conversation hasn't happened very much. Instead, we've had more of the solidarity of sentiment, which Marcuse actually advocated for. He said, ‘You don't need to create this elaborate Rube Goldberg machine of connections between the Vietnamese peasant and yourself, you can just say that you're moved by their struggle, you care for that and you'll bleed for them because they're humans too’. And you can make this leap of identification and in that leap, you will find new revolutionary politics. At the time, the horizon of politics was the revolution, overthrowing the government, and you could arguably have this shared vision. But what we have now is a solidarity of sentiment without the dream of revolution. So if you just have the humanitarian belief of caring for the suffering of others, but no political project attached to that then it has nowhere to go. The energy exhausts itself in the gesture and exhausts itself in the flag. Eventually, the pleasure you get from it fades and the attention fades as well.
I'm sure it's stuff that you spend half your life discussing: how to politicize these cross-border solidarity movements. I encourage my own demographic of leftist academics and intellectuals in the US and Canada to think more about it than they have so far. There has been a strong initial reaction and very weak follow-up, very little political strategy is attached to the war in my circles. Most of the energy in the US is going into Bidenomics and climate transition but the geopolitical situation is removed to the background.
S: This distinction between the solidarity of sentiments and solidarity of interests got me thinking about this part of Black Jacobins where C.L.R. James writes how during the French Revolution, both revolutionaries and ordinary people not only detested ‘the aristocracy of the skin’ vividly but also were so moved by the sufferings of the slaves that they had stopped drinking coffee altogether because for them it was ‘drenched with the blood and sweat of men turned into brutes’. I think it’s a good example of how concrete this connection between the struggles in different parts of the world can be when there is actually a horizon of radical change to look forward to.
QS: Yes, there are all kinds of ways I think the global interconnection that exists now doesn't just have to work in favor of the wealthy. It can also be flipped and turned into a tissue of connection. People I really like are working on what they call supply chain justice. So, instead of just saying ‘We're moving to electric vehicles in the United States, let’s get everyone a Tesla’ you question where the lithium is coming from, and what's happening to the communities in the highlands of Chile where the lithium pools are located. Politics isn't just ensuring mass consumption domestically, it's about making sure that all that is happening in a way doesn’t produce new forms of domination and suffering.
S: My last question to sum up our conversation would be about the neoliberal project and libertarian secession as an attempt to defend the profits and property from popular demands and democracy as a way of bringing these demands to life. What is so dangerous in democracy for the ruling classes and capitalism in general? Is there a way to turn the tables for the democratic forces?
QS: That is something I wanted to go more into in Crack-Up Capitalism, but certain things didn't make it into the book. There is an interesting reversal in neoliberal intellectual history. At the beginning of the 20th century, the assumption was that democracies would always tend towards socialism: if you give people the vote, they will use it to ask for something. And eventually, there'll be nothing left to give them.
What some interesting thinkers like Murray Rothbard started to figure out by the 1980s is that in places like the United States, the average person is not a socialist waiting to happen but extremely selfish, property-obsessed, and very unwilling to give anything of their own to anyone else. And if you can make them realize that you want to keep the government as far away from their property as possible then you can use them as shock troops for encasing the economy from democratic institutions. So, if you can recognize the basic anti-democratic impulses of the people themselves they could be a useful resource. The campaigns for Pat Buchanan in the 1990s and then for Trump in the 2010s used that insight. You can mobilize people democratically towards a goal of reducing the level of redistribution and reducing the level of state ownership, you can use people to mobilize in the name of a government that would self-destruct its own power.
That was a very powerful insight of the neoliberals, which isn’t only about tying the hands of democratic leaders and the demos itself but using the population to reduce the capacity of the government to act. In Germany, you have the debt brake, in other countries, you have flat taxes in the constitution. When you do enough of those things you don't have to worry about democracy anymore because democracy works within such a narrow space that it can't actually change very much economically or in terms of people's lives. This is how neoliberals stopped worrying and learned to love democracy. If you build this structure in such a way that it's impervious to most of the changes, you will always be able to achieve your own goals in the end.