Plutocratic Insurgency

I recently engaged in a private exchange with leading 4GW thinker Robert Bunker on the question of how to periodize what he calls "plutocratic insurgency." Here are a few notes I took in the course of that exchange. The point of departure for this sort of an inquiry is to ask what the JohnGaltification of society would actually look like in practice—what would it seriously mean for the wealthy to opt out of participation in the collective institutions that make up society?

This is not an abstract exercise. One of the most important global trends of the last few decades has been the tendency of wealthy elites to hole themselves up in walled off enclaves. These islands of elitism are designed to be largely self-sufficient in their ability to deliver health care, food, security, education, entertainment, etc. to their residents, even as they sit amid seas of social misery. (Mike Davis has spent a good portion of his career chronicling this sort of thing, starting in Los Angeles with City of Quartz, and examining it as a global phenomenon in collections like Dead Cities and Evil Paradises.)  From the point of view of the denizens of such communities, the primary function of the wider society is to serve as a source of cheap, servile labor, and as a well of resources to be looted. Gated communities, in turn, are merely an example of a broader pattern, in which economic, social, or political enclaves are carved out of a national state and enabled to play by a fundamentally different set of rules from the surrounding territory.

In themselves the creation of such enclaves do not amount to a plutocratic insurgency. Rather, plutocratic insurgency arises wherever you see financial and economic elites using such enclaves as staging areas for making war on public goods. This is what I take to be the defining political-economic feature of plutocratic insurgency: the attempt on the part of the rich to defund the provisioning of public goods, in order to defang a state which they see as a threat to their prerogatives. (Conceptually, plutocratic insurgencies thus need to be separated from kleptocracies—the latter involve the using the institutions of state to loot the population, whereas the former wish to neutralize those institutions in order to facilitate private sector looting. In practice these may overlap or co-mingle.)

Before discussing the periodization of this phenomenon, it's worth noting that the idea of plutocratic insurgency on its face is paradoxical, perhaps even oxymoronic: shouldn't plutocrats be the folks most invested in the perpetuation of a system which has them at the top? Why would the system's biggest beneficiaries want to make war on the system? The answer lies in part in the rise of an ideology—or perhaps more accurately, a narrative—that has allowed society's winners to imagine their success not as being the result of either the luck or the skill to work the system for their maximum personal benefit, but on the contrary as having been arrived at by pure dint of their own rebellion against the system. So when did this weird phenomenon begin to take hold?

While the ideological origins of the plutocratic insurgency can be traced to the foundation of the Mont Pelerin Society, it really starts to gain cultural visibility with the corporate raiders of the 1980s, guys who thought of themselves not as the leading lights of the empire, but rather as "barbarians at the gates" (a term Henry Kravis had no problem embracing at the time). These guys didn't see themselves as the system's ultimate winners, but rather as iconoclasts who were being rightfully rewarded for destroying entrenched, unproductive rent-seekers. What began to surface in the 1980s has only gained momentum with the growing financialization of the US economy.

On the one hand, then, an ideology of rebellion and success through the undermining of "the takers." The flip side is a material point: the very wealthy today are so rich that they can effectively afford to buy for themselves the sorts of goods which previously required a state to provide. The result is a phenomenon whereby many plutocrats today see no reason to contribute anything to their host societies, and indeed actively make war on the idea that citizenship imbues them with any economic or social responsibilities. (People as different as Stephen Schwartzman and Sheldon Adelson fit this bill, as do the Koch brothers.) In sum, plutocratic insurgency is another way of characterizing the most ideologically ambitious bleeding edge of what sometimes gets terms "Neoliberalism" or "Thatcherism," or "Reaganism." "There's no such thing as society," Thatcher famously declared, thus issuing the cri de coeur of insurgent plutocrats everywhere.  

Beyond the United States, the critical event for the rise of the global plutocratic insurgency was the ideological collapse of state socialism, which everywhere on earth shifted the Overton Window dramatically to the right. Not only was the threat of left-wing grabs largely neutralized by socialism's implosion, but counterrevolutionaries on the right were emboldened by this collapse to attempt to roll back even the moderate, liberal forms of the welfare state. Arguably the most successful plutocratic insurgency in history was staged by the so-called oligarchs who arose from the ruins of the Soviet collapse. These were (mainly Jewish*) men who had started their business careers in the dark-gray corners of the Soviet "second economy," learning how to profit by sharp and ruthless dealing that took state strictures as opportunities rather than limits. Aided by useful idiots like Jeffrey Sachs, they grabbed the vast majority of the state-owned assets that Yeltin was selling off in a drunken fire sale designed to ensure that Communism could never again return to Russia. Eventually, in the Aughts, the former KGBers led by Vladimir Putin would stage a counter-insurgency and defenestrate most of the first generation oligarchs. What the rise of Putin signalled was the end of the Russia's plutocratic insurgency, and the reassertion of the state's interests as prior to those of the wealthy.

It might seem like the story laid out here is a liberal, perhaps even a Marxist one. While it's true that liberals have long fretted about the "secession" of the rich, increasingly conservatives are also getting alarmed. Ultimately, however, I don't think this is really a liberal or conservative matter. It's a question of national and social coherence as such: do people living together in a contiguous territory feel themselves somehow to be "in the same boat," willing to share responsibilities and risks collectively? Those engaged in the plutocratic insurgency answer that question with a defiant "No!" The plutocratic insurgency from above thus mirrors the deviant globalization insurgency from below, and taken together they embody the contemporary crisis of the nation-state.

* UPDATE:  I should clarify the significance of the dramatic overrepresentation of Jews among the first-generation Russian oligarchs, including Boris Berezovsky, Vladimir Gusinsky, Alexander Smolensky, Mikhail Khodorkovsky, Mikhail Friedman, Vitaly Malkin, and others. First, Jewishness was not incidental to these men becoming oligarchs in the first place. While many late Soviet Communist Party members were enriching themselves with bribes, official anti-semitism made it almost impossible for Jews to get ahead within the formal Communist hierarchy. The most effective (and perhaps only) way for Soviet Jews to get ahead commercially, therefore, was by participating in the organization of the "second" (black market) economy. Unsurprisingly, therefore, ambitious Jews were overrepresented among those involved in the second economy, particularly in and around Moscow. This made them well-positioned to take advantage as the state economy collapsed. The biographies of most of the aforementioned oligarchs conform broadly to this pattern. Second, the Jewishness of the oligarchs also helps explain the course of their eventual removal from the apex of the post-Soviet economy. The fact that these oligarchs were Jewish helps account not only for why their appropriation of former state assets was widely perceived by the (anti-semitic) Russian public and elite establishment as illegitimate, but also for why there was little domestic Russian outcry when Putin threw them out of the country or into jail.