Power reset

The excerpts below are from the book, printed with permission from the publisher, Penguin Random House, and priced at ₹999.

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By the standards that had emerged after the Second World War, this process 'globalisation' was criminal. The entire motive, after all. was to evade the laws and social contracts which lay at the heart of national societies. The result was the corruption, around the world, of the values that had underpinned national capitalism. In response to Western demand, a vast ‘grey’ or 'informal' sector emerged in Asia, whose purpose was to supply every possible degree of regulatory evasion, even as it enabled foreign corporations to maintain several degrees of separation from the resulting infringements of minimum wages, labour rights and environmental standards (more on this in Chapter 12). Poor countries everywhere learned their lesson: to be competitive in the global era required them to serve up unprotected populations - producing a regulatory 'race to the bottom'. In the core states, meanwhile, the mutual dependency of top and bottom was undone, and property owners were free to disdain the responsibilities and accords of the post-war era. One immediate manifestation was the extraordinary rise in executive pay: with workers dispersed across the world, and unions ousted from corporate decision-making, there was apparently no limit to the share of profits that could be personalised as salaries and bonuses.

In a couple of decades, the proportion of the UK and US workforces employed in manufacturing fell from over 30 per cent to under 10 per cent; remaining factory workers were largely stripped of the securities and benefits that had been common during the previous era. In America particularly, which was at the forefront of these changes, what filled the gap was non-strategic labour, which could rarely provide a ‘career’: low-level retail, packaging and delivery, food and drink preparation. We described the epochal moment in the nineteenth century when Western workers moved from the global periphery to the centre, joining the class of consumers; now the opposite was happening. Many found themselves gradually expelled from the privileges that had once accrued to their nationality. Since there was no longer any Western social participation without consumption, and since even cheap Asian production was not enough to subsidise the emerging underclass, many sank into misery and debt. By the teens of the twenty-first century, more than a third of adult Americans were dulling the pain with prescription opioids; 70,000 were dying every year from overdoses.

Nor was there any political remedy especially not from liberals, who asked the expelled masses simply to continue placing their faith in democracy and capitalism. This was self-evidently disingenuous: business-as-usual would not bring back what had been destroyed, and states were no longer able to make it up with large-scale redistribution. Liberals were widely rejected as a result. The political right spoke more usefully, therefore, to the trauma. It too pretended it would solve problems with state capacities that no longer existed; but the right focused more on those that did: immigration controls, policing, laws on sex and reproduction, foreign policy.

The emphasis was on symbolic, rather than material, restitution. We saw how, in the British empire, guaran-tees of racial supremacy were used to win white masses to the causes of capitalism and the state; similar calculations returned in the twen-ty-first century, when racial polarisation, reassertion of masculine pride, distrust of foreigners - all were used to deflect attention from the lack of fit between the West's political system and its economic reality.

The assault on the principle of labour was intensified, from the 2000s on, by the commodification of services. The work of hundreds of thousands of small bookshop owners and their staff, for instance, was replaced by Amazon's automated platform. Unlike factory jobs, these were not transferred elsewhere, but replaced by algorithmic processes - which effectively meant that human work was converted into private property. Amazon's two-trillion-dollar market capitalisation derived from its power to usurp a vast bustle of shops, markets, libraries and the like. Thousands of small taxi operators were similarly usurped by Uber, whose valuation approached $200 billion in 2025 - and so on. But this process had much farther to go. Artificial intelligence (AI) systems were taking and more complex forms of human work and it became clear that middle-class professions law, medicine, accountancy, architecture, publishing-could in large part be handled by machines. In the process, many sectors would be entirely transformed. The companies with the largest processing power were creating systems capable, for instance, of discovering drugs that could never have been identified by human intelligence. All this undermined the jobs which had previously enjoyed the greatest economic and social value. It endangered the position of Western educated professionals, whose disproportionate good fortune had been acquired through their passionate embrace of the 'principle of labour', and who had always been the most ardent proponents, therefore, not only of the liberal social contract, but of the nation-state system itself.

The unravelling of the principle of labour was accompanied by a dramatic reassertion of the principle of property. In 2025, seven Silicon Valley firms Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla had a combined market capitalisation of about $17 trillion, equivalent to almost 60 per cent of American GDP. The last time joint-stock companies had so nearly approached the economic scale of the leading capitalist state was during the era of the East India Company. At its height in 1911, Standard Oil, the much-resented titan of the Gilded Age, was valued at $1.1 billion, or about 2.8 per cent of US GDP.

In 1965, when US industry was overwhelmingly dominant, America's seven largest companies had a combined market capitalisation of under 7 per cent of US GDP. This was not because their revenues were low: allowing for inflation, General Motors revenues in the 1960s and 1970s exceeded those of Meta today; and yet the car company’s market capitalisation, when converted to 2025 dollars, remained under one-tenth of Meta's $1.8 trillion. This super-valuation of twenty-first-century tech firms reflected profound changes in the nature of the corporation itself. Where General Motors had been a node in a system of open money flows, Silicon Valley companies were constituted as sealed vaults of property. To the greatest extent possible, their revenues were converted into profit and shareholder value, not dissipated as wages or tax. They kept their workforces slim: in 2023, Meta employed just 66,000 people, which meant its market capitalisation per employee was fifty times greater (in 2025 dollars) than that of General Motors in 1970. To mini-mise tax exposure, these firms dispersed their functions among national jurisdictions - just another way that the nation-state system had been co-opted for the purposes of commercial arbitrage; Facebook paid only about 10 per cent tax on the profits it made during the 2010s (US corpo-ration tax was 35 per cent for most of that decade, and 21 per cent for the last three years).

(The next book that the Blueprint will feature: Target Tehran by Yonah Jeremy Bob and Ilan Evyatar)