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COMMENT: The Covid-19 pan­dem­ic is dri­ving what might be termed a right-wing ide­o­log­i­cal wet dream in a num­ber of dif­fer­ent respects. In this post, we note that the dam­age done by the virus is seen as fur­ther­ing a cor­po­ratist agen­da, mas­querad­ing under the com­mon rhetor­i­cal cam­ou­flage of “lib­er­tar­i­an” phi­los­o­phy.

An impor­tant piece in The Guardian details how plu­to­crats terming them­selves “anar­cho-cap­i­tal­ists” see the pan­dem­ic as forc­ing regions–from nations to municipalities–to con­form to the demands of dom­i­nant, mobile blocks of cap­i­tal by elim­i­nat­ing the essen­tials of the pro­gres­sive social agen­da.

1. ” . . . . They spy oppor­tu­ni­ty in the cri­sis, and wager that we might be able to ride the wave of the pan­dem­ic into a new tomor­row, where the virus shat­ters the glob­al map – and under­mines the pow­er of demo­c­ra­t­ic nation states. The US is ground zero for this type of think­ing. . . .”
2. ” . . . . In an analy­sis released at the end of April, Arthur Laf­fer and Stephen Moore, two of Trump’s clos­est eco­nom­ic con­fi­dants and authors of the book on ‘Trumpo­nom­ics’, pre­dict­ed that ‘blue’ Demo­c­ra­t­ic states would be slow­er than ‘red’ states to recov­er, because of what they saw as their pre-exist­ing excess of reg­u­la­tions and tax­es. . . .”
3. ” . . . .Their analy­sis divid­ed the US map into ‘lag­gard anti-growth’ states and ‘momen­tum pro-growth’ states. The for­mer have min­i­mum wages, pro-union laws and state income tax; the lat­ter are free of such reg­u­la­tions. In the estab­lished mode of dis­as­ter cap­i­tal­ism, Laf­fer and Moore’s analy­sis appears to see the pan­dem­ic as a way to com­pel ‘anti-growth’ states to adopt ever low­er tax rates in order to attract mobile cap­i­tal and labour. It sug­gests those who resist will not be bailed out by redis­tri­b­u­tion from the cen­tral gov­ern­ment, but left to lan­guish in a deserved eco­nom­ic depres­sion. The effect is rem­i­nis­cent of social Dar­win­ism, applied as a phi­los­o­phy of gov­ern­ment. . . .”
4. ” . . . . As nations are divid­ed into dif­fer­ent zones accord­ing to their respec­tive stages of viral and eco­nom­ic recov­ery, the well-off could fol­low Elon Musk’s recent threat to relo­cate from Cal­i­for­nia to Texas, vot­ing with their feet for loca­tions that elude redis­trib­u­tive tax­a­tion. In our post-pan­dem­ic future, the flight to safe­ty, away from con­ta­gious ‘red zones’, could be a flight from the nation state as we know it. . . .”

“How the lib­er­tar­i­an right plans to prof­it from the pan­dem­ic” by Quinn Slo­bo­di­an; The Guardian [U.K.]; 6/1/2020.

Dis­as­ter cap­i­tal­ists dream of dis­as­sem­bling nation states for post-viral exploita­tion

When coro­n­avirus crept across the world in ear­ly Feb­ru­ary, talk of how dif­fer­ent nations were deal­ing with the virus came to resem­ble the Olympics for state capac­i­ty. Which coun­try had the author­i­ty, the sup­plies and the exper­tise to “crush the curve”? A bal­ance sheet of nation­al progress marked out a bleak race to the hori­zon, enu­mer­at­ed in case num­bers and death fig­ures.

Although the focus over recent months has remained on lead­ers in cri­sis mode and the cen­tral agen­cies deliv­er­ing fore­casts and quar­an­tine mea­sures, local author­i­ties have also played a promi­nent role dur­ing the pan­dem­ic. Chi­nese may­ors, US gov­er­nors and Indi­an chief min­is­ters have coor­di­nat­ed local respons­es, tak­ing respon­si­bil­i­ty for pop­u­la­tions and even lock­ing horns with nation­al politi­cians.

Most peo­ple would read the pan­dem­ic as a sign that pop­u­la­tions and nation states should band togeth­er, and for the peo­ple “at the head of the rope” to pull even hard­er, to use the metaphor favoured by the French pres­i­dent, Emmanuel Macron. But there are oth­ers who see mat­ters quite dif­fer­ent­ly. They spy oppor­tu­ni­ty in the cri­sis, and wager that we might be able to ride the wave of the pan­dem­ic into a new tomor­row, where the virus shat­ters the glob­al map – and under­mines the pow­er of demo­c­ra­t­ic nation states.

The US is ground zero for this type of think­ing. Across the coun­try, regions have bro­ken up into “com­pacts”, with states com­pet­ing against each oth­er for life-sav­ing ven­ti­la­tors and PPE. The atmos­phere is one of com­pet­i­tive fed­er­al­ism, where states are recon­fig­ured as eco­nom­ic units bid­ding in a mar­ket­place. Washington’s state gov­er­nor, Jay Inslee, accused Trump of “foment­ing domes­tic rebel­lion” for his calls to “lib­er­ate” indi­vid­ual states; gov­er­nor Gavin New­som termed Cal­i­for­nia a “nation-state.” One Mary­land gov­er­nor con­fessed to keep­ing Covid-19 tests in an undis­closed loca­tion under armed guard, in part to pre­vent their seizure by cen­tral state author­i­ties.

Although North America’s econ­o­my is grad­u­al­ly reopen­ing, the virus is still ram­pag­ing through its pop­u­la­tion. What will eco­nom­ic recov­ery look like in the midst of a pan­dem­ic? The president’s eco­nom­ic advis­ers have some ideas. In an analy­sis released at the end of April, Arthur Laf­fer and Stephen Moore, two of Trump’s clos­est eco­nom­ic con­fi­dants and authors of the book on “Trumpo­nom­ics”, pre­dict­ed that “blue” Demo­c­ra­t­ic states would be slow­er than “red” states to recov­er, because of what they saw as their pre-exist­ing excess of reg­u­la­tions and tax­es.

Their analy­sis divid­ed the US map into “lag­gard anti-growth” states and “momen­tum pro-growth” states. The for­mer have min­i­mum wages, pro-union laws and state income tax; the lat­ter are free of such reg­u­la­tions. In the estab­lished mode of dis­as­ter cap­i­tal­ism, Laf­fer and Moore’s analy­sis appears to see the pan­dem­ic as a way to com­pel “anti-growth” states to adopt ever low­er tax rates in order to attract mobile cap­i­tal and labour. It sug­gests those who resist will not be bailed out by redis­tri­b­u­tion from the cen­tral gov­ern­ment, but left to lan­guish in a deserved eco­nom­ic depres­sion. The effect is rem­i­nis­cent of social Dar­win­ism, applied as a phi­los­o­phy of gov­ern­ment.

The most artic­u­late cheer­leader for this kind of post-pan­dem­ic lib­er­tar­i­an­ism is Bal­a­ji Srini­vasan, the elec­tri­cal engi­neer and for­mer gen­er­al part­ner at Sil­i­con Val­ley ven­ture cap­i­tal fund Andreesen Horowitz. Since the pan­dem­ic began, Srini­vasan has fore­told a redi­vi­sion of the world map into “green zones” that have con­trolled and con­tained the virus and “red zones”, which have not.

“We are enter­ing this frac­tal envi­ron­ment,” Srini­vasan recent­ly told a vir­tu­al sum­mit organ­ised by the Start­up Soci­eties Foun­da­tion, “in which the virus breaks cen­tralised states”. The virus does not stop at the bor­der, so nor will this process of frag­men­ta­tion. As regions seal them­selves off to pre­vent con­ta­gion, “you can drill down to the state, or even the town or coun­ty lev­el”, Srini­vasan observed, not­ing that any state with­out the virus under con­trol will “face defec­tion” in an inten­si­fied con­test for tal­ent and cap­i­tal. After the pan­dem­ic has passed, “nations are going to turn into effec­tive­ly ven­dors and entre­pre­neurs and rel­a­tive­ly mobile peo­ple will be appli­cants”, he pre­dict­ed.

It’s easy to imag­ine how a par­tic­u­lar breed of investor could see this pan­dem­ic as an oppor­tu­ni­ty that will accel­er­ate exist­ing trends. The loose attach­ments that investors feel towards this or that nation will grow even loos­er as cap­i­tal becomes more mobile, and a sort­ing process will sep­a­rate the pro­duc­tive few nations from the malin­ger­ing many. States that don’t fall in line with the demands of this investor class will be starved by the vol­un­tary expa­tri­a­tion of the wealthy, with their assets and abil­i­ties in tow.

If you assume this is mere­ly a pes­simistic vision, you’d be wrong. In fact it accords with a long-cul­ti­vat­ed ide­ol­o­gy that Srini­vasan shares with a group of like-mind­ed ven­ture cap­i­tal­ists and entre­pre­neurs, who sub­scribe to vari­a­tions of the rad­i­cal lib­er­tar­i­an phi­los­o­phy known as “anar­cho-cap­i­tal­ism”. The idea at its root is that a wealthy class of investors and entre­pre­neurs should be free to exit nation states and form new com­mu­ni­ties whose mem­bers can choose which rules (and tax laws) they’re gov­erned by – as if those rules were prod­ucts on a store shelf.

For like-mind­ed lib­er­tar­i­ans, the colour-cod­ed zones used in pub­lic health to con­trol the virus are the blue­print for a new polit­i­cal econ­o­my. Since Srini­vasan began dis­cussing the frame­work, colour-cod­ed zones have been rolled out to con­trol the virus in Malaysia, Indone­sia, North­ern Italy and France; the strat­e­gy was also con­sid­ered as a mod­el for bio­con­tain­ment in the White House in ear­ly April. As of ear­ly May, India has divid­ed its 1.3 bil­lion peo­ple into a patch­work of green, yel­low and red zones, with dif­fer­ent free­doms and restric­tions based on each.

The red-green zone schema has already informed the strate­gies of glob­al investors. In April, Hen­ley & Part­ners, the glob­al cit­i­zen­ship bro­ker, released its annu­al rank­ing of nation­al pass­ports for mobile investors, and pre­dict­ed that coro­n­avirus would spark a dra­mat­ic shift in glob­al mobil­i­ty. Its chief source fore­cast that “as the cur­tain lifts, peo­ple will seek to move from poor­ly gov­erned and ill-pre­pared ‘red zones’ to ‘green zones’, or places with bet­ter med­ical care.” In ear­ly May, it report­ed a 42% increase in appli­ca­tions for new nation­al­i­ties, com­pared with the pre­vi­ous year.

Nobody can tell what the world will look like after the pan­dem­ic. But what we can be sure of is that some investors appear to be already plac­ing their bets on a vision of the future where the wealthy are freed from tax con­straints. As nations are divid­ed into dif­fer­ent zones accord­ing to their respec­tive stages of viral and eco­nom­ic recov­ery, the well-off could fol­low Elon Musk’s recent threat to relo­cate from Cal­i­for­nia to Texas, vot­ing with their feet for loca­tions that elude redis­trib­u­tive tax­a­tion. In our post-pan­dem­ic future, the flight to safe­ty, away from con­ta­gious “red zones”, could be a flight from the nation state as we know it.