Something, we are told, has changed in capitalism. Finance has replaced production as the main source of wealth; credit matters more than profit; even the old antagonism between owner and worker is no longer as important as the new conflict between investor and investee. But perhaps what is more important about recent capitalism is not what has changed but, instead, what has stayed the same.
Financial capitalism and its partner in crime, neoliberal political regimes, were created, in part, to protect white supremacy around the world; to repeat the discipline of the old empires with a new, but similar, world order. What is eminently clear—and missing from even the best scholars’ analysis of financial capitalism—is the realization that neoliberalism is, at its center, a racial project. In fact, financial capitalism aims at maintaining global white supremacy, in order to keep capitalism safe from the “savages”: the insurgent nonwhite populations found in rebellious colonies and former colonies, as well as within the United States.
But even when they misunderstand the causes of the crisis, the scholars revealing how financial capitalism and neoliberal politics are remaking the world are, nevertheless, important to study—for their substantial contributions as well as for the weaknesses in their arguments. Michel Feher’s Rated Agency is a strong addition to a growing literature that theorizes and traces how the neoliberal project laid the foundations for the financialization of national and global economies.
This literature includes contributions from, among others, Greta Krippner, Quinn Slobodian, and Wolfgang Streeck, all of whom have convincingly argued that the changes to the global economy mark a new era of capitalism, and/or that this new era of financial capitalism was profoundly enabled by the political project of neoliberalism. One of Feher’s singular contributions to this literature is his careful elucidation of how the new logics of financial capitalism affect politics in general and, particularly, the politics of the left.
“The restoration of the liberal order was less about getting the state out of people’s lives,” Feher writes, “than about getting public officials to govern in the interest of the market.” That is to say: the changes in capitalism have little to do with the freedom spoken of by the original architects of European capitalism and more to do with the triumph of today’s financial firms.
Indeed, Feher strongly argues that, due to such financialization, the nature of capitalism itself has changed. The central features of commodity exchange and profit seeking, he explains, while still important to firms and enterprises, are no longer the dominant factors governing the behavior of capitalists. Feher summarizes:
Throughout capitalism’s golden age, corporations identified success with sustained profitability, national governments obsessed about economic growth, and private citizens were expected to pursue their own interests, whether they perceived such a pursuit as an individual matter or the cement of class solidarity. With the ascendancy of financial institutions, however, a new order of priorities has emerged. Firms primarily care about the rating of their stock, public officials do whatever it takes to maintain the trust of bondholders, and households mainly attend to the value of their assets.
The ability to appear creditworthy—and to receive credit—is now a more desirable pursuit for businesses than the old goals of trading, making, and profiting. “The hegemony of finance,” Feher claims, necessarily modifies “the conduct and expectations of those who experience it. For if economic agents are now primarily intent on making themselves attractive to investors, what they pursue is arguably less the profit yielded by their professional activity than the credit necessary to exercise it.”
But Feher’s focus on the rise of credit obscures the larger story. In fact, neoliberalism and finance, domestically and globally, were believed to be necessary to maintain white supremacy. Therefore, the maintaining of white supremacy—in the face of global anti-colonial and domestic black insurgency—was essential for transitioning to a transformed capitalist social order centered on finance. This new economic order of financial capitalism would be shielded domestically and globally from the militant demands of the racialized other by the neoliberal political order. Slobodian provides a useful correction to Feher, arguing:
Wilhelm Röpke is conspicuous for his belief that defending the world economy meant defending Western Christian—and Caucasian—principles against what fellow neoliberal William H. Hutt called “black imperialism.” Röpke’s postwar belief in “a world of races” … was in many ways a marked detour from the mainstream of Geneva School neoliberals. Figures such as Hayek, Friedman, and Hutt also criticized the diplomatic isolation of white minority governments in Southern Africa, but for reasons closer to the concerns of this book—namely, the perils of unconstrained democracy and the need to insulate world economic order from the political demands of social justice.1
It is true that Röpke’s logic, as Slobodian makes clear, was different from that of his former colleagues such as Hayek and Friedman. Yet both sets of neoliberals supported the suppression of democratic black movements globally and domestically. They saw these movements as not only a threat to the neoliberal agenda, but to the capitalist social order itself. This, Feher completely misses.
What He Gets Right
What changed? Now, Feher writes, creditors—that is, financial firms and investment groups—have the upper hand. And the critical power that creditors possess is valorization. Financial institutions have the power to evaluate the assets of economic actors (including enterprises, governments, households, and individuals), and, based on those evaluations, allocate resources. Therefore, economic institutions, governments, households, and individuals must all relentlessly pursue creditworthiness, if they are to have the resources necessary to survive, let alone succeed.
This has resulted, the argument goes, in an unexpected shift: once, the primary power relationship of capitalism was the exploitation by the owner of the worker—today, this has been largely supplanted by conflicts between investors and those they invest in. As Feher and other scholars have noted, this has led to a corresponding political crisis. As a consequence of being beholden to bondholders, governments at all levels have had to slash social programs and then engage in various strategies in order, as Streeck describes, to try and “delay crisis.”2But that bill has come due.
Meanwhile, the working class, in addition to being bought out or actively attacked, has—in Röpke’s words (quoted by Feher)—been politically “de-proletar-ianized.” Their concerns have been fragmented and buried, their safety nets and economic futures left in a precarious state.
Neoliberalism (as Feher, Slobodian, and others make abundantly clear) was a conscious political project designed to enable the financialization of the economy. Feher shows that this transformation is not just about the degree to which revenue streams have increasingly come from financial services and instruments, as opposed to the value of property and the selling of commodities.
Instead, Feher argues, the nature of the incentive structure of the capitalist social order has fundamentally shifted. Now all aspects of society—including financial institutions, the state, and households—must prioritize portfolio building. They must work, that is, at becoming and remaining creditworthy: reducing their risk profile, in order be valorized by those who allocate the flow of wealth. And this, according to Feher, is exactly what the architects of the new economic order wanted.
One of Feher’s two most original contributions in Rated Agency is his analysis of this age’s invention of new forms of discipline: new methods to ensure the continued growth of financial capitalism and neoliberalism. Feher describes, for example, how neoliberal theorists lobbied strongly for changing the mode of corporate governance, so that management would be beholden only to stockholders. These theorists considered corporate managers too enamored with concerns such as corporate social responsibility, which neoliberals saw as opposing what should be the “true” purpose of management: the maximizing of shareholder value.
Feher also explains how governments became increasingly subject to the severe discipline of their bondholders, who insisted on austerity programs that included—explicitly—the dismantling of the social safety net. As Streeck demonstrates, one reason that workers did not resist more when bondholders demanded state austerity programs was because of a tactical decision by the neoliberal state to enable the extending of various forms of consumer and householder credit. This credit, in the short run, was meant to substitute for the now defunct social services that had previously been provided by the state.
And even this extension of credit by the state was one of the mechanisms through which households and individuals were disciplined. Now, households had to work extra—to build their own portfolios and prove their own creditworthiness—so as to have access to credit and even, increasingly, employment. Further, austerity programs precipitated—as the neoliberals had demanded—the breaking of the power of the working class.
financial capitalism aims at maintaining global white supremacy, in order to keep capitalism safe from the “savages.”
Feher’s other critical intervention is his analysis of how progressives could regain their agency. Correctly, Feher severely criticizes leftist and progressive activists who have not adapted to this new version of the capitalist social order and remain tied to the narratives, strategies, and tactics of the Fordist era’s left. I agree with Feher when he argues that “what finance’s stranglehold on the concerns and options of all economic agents primarily attests to are the political defeats suffered by labor unions and the Left over more than three decades. Even so, there are good reasons to question the relevance of a strategy that predicates the renewal of social movements on the hope of rewinding history.”
Feher then considers strategies that address the precariousness of those increasingly burdened by debt—as well as those embedded in the so-called gig economy—in a world in which everything and everyone is rated (deemed worthy or unworthy) by the holders of capital. For example, he discusses the rise of “platform cooperatives” comprised of gig workers, everyone from deliverers to designers. Such cooperatives interact and valorize (“rate”) each other, rather than letting themselves be rated by the massive and exploitative platform corporations that dominate the current gig sector of the economy.
Feher also argues—if only briefly, in a coda—that movements like the Movement for Black Lives have a role to play in this “valorizing” struggle. He argues: “Far from sacrificing substance to symbolism or concentrating on symptoms to the detriment of structural inequalities, these movements reckon with the fact that the allocation of moral, social and financial credit has become the decisive stake of social struggles.”
Phrases like “Black Lives Matter,” according to Feher, are another—radical—way of valorizing and making creditworthy those oppressed by the articulation of white supremacy and the capitalist social order. One need not agree with Feher’s conclusions to appreciate his attempt to theorize the goals and strategies that social movements must adopt in the changed capitalist order of the 21st century.
What Is Missing
Like many who work in this genre, Feher misconstrues the nature of the current political crisis. He misses that it was not just fears about worker rights that motivated the architects of neoliberalism, but fears of nonwhite-governed states destroying the global capitalist order, through various domestic and international regimes of redistribution.
But it is not just that Feher misses the importance of maintaining white supremacy to combat the global dismantling of colonialism. He also fails to realize that these same concerns applied domestically to the US. Here, neoliberal thinkers and politicians worked eagerly to maintain the economic and political status quo, in the face of the ferociously democratic and predominantly social democratic, revolutionary nationalist, and socialist forces within the black insurgency of the 1960s and 1970s.3
There are important consequences to this misreading of history. It means that Feher’s analysis misses some origins of the current crisis. (Illustrative in this respect is how he merely gestures to the importance of movements such as Black Lives Matter, without giving them the same depth of analysis that he provides for social movements organized in response to the massive accumulation of debt or ensnared within the gig economy.)
He also misses many of the key progressive forces that are most likely to challenge finance capital. These include, for example, those for whom rising interest rates do not pose a major barrier to political involvement, as well as those who were not part of the grand bargain of 20th-century social democracies—such as racially subordinate populations, many women, and those still under the yoke of (neo)colonialism.4
I agree with Slobodian that we need to “knit together … strands of scholarship that have remained strangely disconnected.” We desperately need historical and theoretical work that combines the careful work on the history of neoliberalism and the evolution of financial capitalism with the literature of racial capitalism.
This article was commissioned by Destin Jenkins.
- Quinn Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism (Harvard University Press, 2018), p. 22. ↩
- Wolfgang Streeck, Buying Time: The Delayed Crisis of Democratic Capitalism, 2nd ed., translated from the German by Patrick Camiller and David Fernback (Verso, 2017). ↩
- See Michael C. Dawson, Blacks in and out of the Left (Harvard University Press, 2013); Michael C. Dawson and Emily A. Katzenstein, “Articulated Darkness: White Supremacy, Patriarchy, and Capitalism in Shelby’s Dark Ghettos,” Journal of Political Philosophy, vol. 27, no. 2 (2019). ↩
- For more information on these progressive forces, see: Michael C. Dawson, “Hidden in Plain Sight: A Note on Legitimation Crisis and the Racial Order,” Critical Historical Studies, vol. 3, no. 1 (2016). ↩