Until recently, authoritarian capitalist regimes such as those in Russia and China were considered plutocratic: Putin’s government, well known for being dominated by powerful oligarchs such as Yuri Kovalchuk, Gennady Timchenko and the Rotenberg brothers; and the Chinese Communist Party, which over the past few decades has enabled the country’s now famous 1,000 billionaires, including Zhong Shanshan and Ma Huateng, to flourish.
But today it is the liberal-democratic states that increasingly take on this plutocratic feature. The new administration of Donald Trump in the United States is the latest example. His “billionaire club” consists of Elon Musk, Howard Lutnick, Vivek Ramaswamy and a few others. Musk is to be named head of a new “government efficiency department” that aims to cut “government waste” by some $2 trillion and reduce “excessive” government regulation.
Similar moves have been taking place in India under Narendra Modi’s government, which has brought together a handful of tycoons such as Mukesh Ambani, Gautam Adani and Sajjan Jindal, with the aim of promoting “business-friendly” policies and further neoliberalisation of the economy. Such a turn in favor of billionaire rule is repeated in several other liberal democracies around the world, including Brazil, South Korea, Taiwan and Turkey.
Global transition to plutocracy
How then to understand this global transition to plutocracy, in which billionaire oligarchs not only have control over the economy, but, which was not the case before, dominate politics as well?
An important explanation lies in what some analysts see as a structural shift in the global economy from neoliberalism, which favors “free market” mechanisms as a way to solve economic as well as social problems, to neofeudalism, which describes a time of extreme inequality in which a growing underclass serves the needs of a few mega rich or as the academic, Jodi Dean puts it: “A few billionaires, a billion disadvantaged workers”.
This neo-feudal system is manifested in today’s unprecedented increase in global inequality. Since the 1980s, income inequality, for example, has increased sharply around the world. This trend is observed in almost all leading industrialized countries and major emerging markets, which together represent approximately two-thirds of the world’s population. The increase is particularly pronounced in the USA, China, India, Brazil and Russia, precisely in those countries where, as mentioned earlier, plutocracy rules. In India, the gap between the rich and the poor is now greater than it was under British colonial rule.
Perhaps the best example of such neo-feudalism is what is happening in the current “platform economy”, in which a small number of technology companies, e.g. Apple, Google, Meta, Uber and Airbnb, became super rich and exploitative. These companies enriched their owners/shareholders, turning them into so-called (centi) billionaires, mostly relying on cheap labor and/or precarious labor, as well as favorable state tax and investment incentives.
Authoritarian capitalism of Russia and China is the future?
And it is precisely the need to ensure favorable tax and investment policies and the need to continue generating huge profits that help explain the increasing involvement of business tycoons in today’s government. The likes of Trump, Musk, Adani and Berlusconi may present themselves as people “of the people”, but their policies are aimed mainly at increasing corporate profits and market shares by cutting taxes, providing attractive business incentives, protecting domestic industries threatened by foreign competition and abolishing government environmental regulations. and investment regulations that they feel stand in their way.
Neo-feudal economics/politics departs from neo-liberalism in the greater degree of coercion required to generate the previously unseen profits that enabled the rise of the global billionaires. Such authoritarianism is needed to ensure a cheap labor force whose labor is unprotected and to minimize state oversight and regulation of the economy and bring it into line with global financial and corporate power.
But if neo-feudalism is really the way the world works today, if billionaire plutocracy is on the rise, it probably means that liberal democracies may be moving more and more towards authoritarian forms of government. Neo-feudal leadership seems to be what our gig and platform economies need.
Does this mean that the authoritarian capitalism of Russia and China may represent not the exceptions, but the future of liberal democracy?
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(Opinions and views published in the “Columns” column are not necessarily the views of the “Vijesti” editorial office.)
Source: www.vijesti.me
