The Capital Order

The book begins by explaining, with enviable clarity, how “the capital order” is built on two “basic pillars,” labor markets and private ownership of the means of production, which support the “roof” of profit. Mattei is careful to note that markets preexisted the rise of capitalism proper. What marks the decisive qualitative break with prior economic systems is not merely a quantitative increase in trade but generalized market dependence, whereby “our society now relies on the market for our survival and reproduction.”

Echoing Karl Marx’s analysis of “so-called primitive accumulation,” Mattei emphasizes that the historical emergence of capitalism bore no resemblance whatsoever to the comforting neoclassical myth of the peaceful expansion of markets alongside rising productivity. The consolidation of absolute property rights took place through widespread, violent expropriation at the hands of the state — events “written in the annals of mankind in letters of blood and fire,” in Marx’s powerful formulation. Far from markets displacing states, Mattei insists that the coercive laws of competition and state power have worked hand in hand to uphold the capital order.

Mattei insists that capitalism has, from the very beginning, been marked by the accumulation of wealth at one pole and the accumulation of misery at the other — what Marx called “the absolute general law of capitalist accumulation.” This provides the basis for Mattei’s argument that the logic of profit is fundamentally at odds with the logic of need.

The purpose of capitalist production is not the creation of use-values to support human flourishing but the endless accumulation of exchange-value by one class through its control over the labor of another. To treat the neoliberal degradation of the working class as a symptom of capitalism’s failure, rather than as an extension of its inner logic, is to depoliticize the antagonism between need and profit, capital and labor. It implies that a strong, competitive capitalism necessarily benefits workers, and thus that the interests of workers and capitalists are not inherently opposed. In fact, the strength of capital has always been predicated on the subordination of human needs to the imperative to profit.

As Mattei argues, economic growth represents “the logical progression of the capitalist class.” Technological development is driven by the imperative to maximize exploitation, enabling each worker to produce more in a given period of time. Absent labor organization, the system will tend to automate away the highest-paid jobs, throwing workers out of work, swelling the ranks of the jobless, and increasing competitive pressure on all wages. Meanwhile, if wages rise faster than productivity — leading to declining rates of exploitation and diminished returns for capitalists — the lack of profit will lead to reduced investment and layoffs, again expanding the reserve army of the unemployed.

Thus, workers ultimately can’t win in capitalism: higher wages only mean that the “golden chain of their own making” that binds their fortunes to the power of capital has been, for a time, “loosened somewhat.” Growth, in other words, is not a win-win for capital and workers, as is so often claimed. Class discipline is baked into its very logic. Working-class politics, therefore, cannot be limited to fighting for higher wages but must aim at escaping from capitalism altogether.

This foundation in Marxian economic theory allows Mattei’s analysis to move beyond populist exhortations about “the greed” of “the billionaire class,” which typically focus on income distribution rather than the underlying processes through which wealth is produced. Income stratification, she shows, is distinct from class. The latter is not about how much money one makes but where it comes from — that is, one’s position within the social relations of production.

So, too, does this framework help to ground racial and gender inequalities in the class relations that structure hierarchies both between and within such groups. The ostensible strength of populist framings is the claim that more substantial economic theory, which would illuminate the structural roots of inequalities of wealth and power, is “too hard,” “too complicated,” or “too scary” for mass consumption. Yet Mattei’s text neither relies on the jargon that might deter the uninitiated nor sacrifices political urgency. Bringing the systemic sources of power relations in our society into focus, instead, points the way toward the systemic changes necessary to bring about genuine democracy.

Especially important is Mattei’s understanding of competition as the central force driving accumulation, rejecting the “monopoly capital” arguments that have long dominated heterodox economics. Far from being confined to an early stage of capitalism, competition remains the source of the system’s extraordinary dynamism and resilience. Market dominance, she claims, is inherently temporary and always under pressure from rivals. The race for innovation and the tendency to lower prices “cannot be stopped” — and indeed is reproduced on a larger and more destructive scale as units of capital grow through concentration and centralization.

Crucially, competition is by no means a benefit to workers, as neoclassical economics suggests, supposedly allowing them to choose a different employer if their labor is not fairly compensated. On the contrary, it anchors Marx’s “general law,” compelling firms to maximize exploitation and guaranteeing the production of a surplus population. For Mattei, competition is pivotal for the “logic of profit,” disciplining workers and reinforcing their dependence on the market.

Mattei’s arguments coincide with our own work on financialization as well as on the Amazon corporation. As we showed in The Fall and Rise of American Finance, insofar as financialization has increased the mobility of capital, facilitating its circulation geographically as well as across sectors, it has intensified the competitive dynamism of the system at a global scale. The more easily capital can be withdrawn from assets with relatively low returns and allocated to those with relatively high returns, the more intense the competitive disciplines on all investments to maximize returns becomes.

Similarly, our research on Amazon — a key example cited by Mattei — has shown how, far from being a monopoly, as is often claimed, that firm is in fact ferociously competitive. Rather than the high prices, technological stagnation, inefficiency, and inflated profits that monopoly theory would expect, Amazon has been compelled to continuously fight to sustain and renew its position through unceasing innovation and restructuring — especially by minimizing circulation time and costs, thus helping to maximize the production of profit in the minimum time, and slashing prices.

This challenges the “technofeudal” hypothesis, which implies that many contemporary economic and social ills can be attributed to the malfunctioning of capitalism as a result of the monopoly power of a group of tech firms that drain value from “productive” capitalists. Such accounts largely draw on the work of Lina Khan, anti-trust guru and former Federal Trade Commissioner under Joe Biden, albeit dressed up in more radical-sounding language.

The implication is that “restoring competition” would benefit workers and industrial capitalists alike. Yet paradoxically, Amazon — perhaps more than any other firm — illustrates precisely how damaging competition is for workers. Cutthroat price competition has led to the most ruthless exploitation through relentless downward pressure on wages and continuous innovations in the automation, surveillance, and discipline of labor processes in warehouses employing thousands of workers — scenes which resemble passages straight out of Capital: Volume 1. Nor is taking on “speculative” finance likely to produce the “good” industry-led capitalism for which liberals pine. Mattei’s analysis helps us see that the massive harms visited upon workers in the neoliberal period is the result of competition, not its absence.

Austerity and the Capitalist State

If many on the Left see capitalism today as ailing, European social democracy (or even its far more limited cousin, the New Deal) is frequently offered as the cure — extending the argument that workers and capitalists have a shared interest in “restoring” a strong and competitive capitalism. Indeed, social democratic regimes are often taken to have resolved the contradiction between capitalism and social justice, and between the priorities of private profit and those of democracy and equality. Even as these regimes impose increasingly harsh austerity, they are invoked as proof that we can have unlimited economic growth and accommodate democratic demands for income redistribution and the welfare state.

For Mattei, however, the intensification of austerity that has marked the crisis of these regimes is not merely a policy choice or political failure, but a structural necessity imposed by the “logic of profit” itself as it visibly asserts its antagonism to the “logic of need.” Fighting austerity, therefore, cannot mean installing a more progressive capitalism but requires transcending it altogether. Rather than defending capitalism, it is up to socialists to expose the limits of reform within it — and to make the case for a different economic and social order.

As Mattei argues, capitalist economies require authoritarian political management in order to sustain relations of class power and exploitation. Macroeconomic policy, she shows, is nothing more than a system of social control: tweaking the knobs, pulling the levers, and indeed turning the screws of policy to secure ruling-class power while accommodating workers’ demands within the bounds of profitable accumulation. Especially crucial is the state’s role in enforcing austerity, which sustains workers’ dependence on markets — and therefore on capitalist employers — by depriving them of the means to survive outside of wage labor.

Neoclassical economics has been important for legitimating this order, rendering exploitation invisible and concealing the class character of state policy behind a veil of objective scientific expertise. So-called “pure economics” reinforces the narrowing of democracy to the “political sphere,” from which “the economy” is excluded. In doing so, it depoliticizes even the political sphere itself, facilitating the concentration of power in the hands of technocrats understood to be impartially solving purely technical problems.

Capitalist states enact three forms of austerity: fiscal, through restraint on social spending; monetary, through interest-rate policy; and industrial, through limitations on labor rights. As has been widely noted, the “assault on trade union freedoms” has been central for ratcheting up exploitation over the neoliberal period alongside cuts to welfare programs. Less obvious is the role of monetary austerity, which has become increasingly important with the empowerment of central banks in recent decades. As Mattei explains, monetary policy is guided by the so-called Phillips curve, which posits an inverse relationship between inflation and unemployment: as one rises, the other falls.

Raising interest rates increases unemployment, pressing down on wages as competition among workers for jobs intensifies. The explicit objective is to maintain what economists call the NAIRU — the “just-right” level of unemployment necessary to secure working-class docility. What is coded as “controlling inflation,” Mattei argues, in fact means “protecting profits” and attaining a target rate of exploitation. Unemployment, she emphasizes, is not a natural state of human affairs but a necessary feature of the capitalist system and a political choice.

That austerity, in case after case, has not spurred significant economic growth has led Keynesian critics on the Left to deride such policies as “failures.” Instead, they point to the need to stimulate aggregate demand and boost employment through redistribution and fiscal expansion. Mattei’s critical point, however, is that austerity is not a mistaken attempt to generate growth, nor has it in fact failed. Its implementation is not the product of technical misunderstanding or erroneous theory; it is a profoundly political mechanism for maintaining the capital order. And far from being contingent, austerity is a necessary structural imperative for sustaining the class discipline that underpins profitability.

Austerity is thus “not a neoliberal aberration” but an enduring feature of macroeconomic governance, forming the framework within which all public spending must operate. State economic policy, in this sense, is not simply an effect of shifting economic ideas but capitalist strategy forged in the crucible of class struggle. While the state may respond to workers’ demands by organizing reforms, austerity enforces hard limits on how far these can go, lest they undermine the commodification of labor on which capitalism depends.

While Mattei unfortunately does not explore this history, her framework helps to clarify the structural limits of social democratic politics. Social democracy aims to secure reforms that benefit workers without challenging private ownership of the means of production or the boundaries of capitalist democracy. Although nominally committed to socialism, the history of social democratic parties since World War II is not one of gradual advance toward socialism, but of accepting “managed capitalism” as the ultimate political horizon.

The imperative to limit worker demands to what capital could support, and their absorption within the machinery of the capitalist state, reinforced these parties’ top-down, bureaucratic structures. They stifled activism and confined political engagement to electoral channels rather than cultivating the democratic capacities necessary for socialist transition. This orientation was underpinned by the rise of Keynesian economics, which allowed these parties to claim that reforms would benefit, not threaten, profits. They positioned themselves as better managers of capitalism than their conservative rivals, presenting their programs as a “win-win” for capital and labor.

Social democracy has always relied on the forms of austerity Mattei identifies to enforce market discipline. Social programs had to be calibrated, through fiscal restraint or the countervailing force of monetary policy, to ensure they did not undermine the compulsion to perform wage labor. Workers’ demands were also contained through industrial austerity, especially corporatist arrangements that integrated trade unions and business associations into the state.

These institutions managed class conflict by administering “incomes policies” that prevented wage growth from squeezing profits. But it was the end of the postwar boom and the 1970s crisis that really brought down the hammer of austerity. Falling profits demanded increasing exploitation through cuts to real wages and social expenditures. Suddenly, the corporatist mechanisms that had anchored distributional bargains as well as class discipline became instruments for securing wage restraint as social democratic regimes embraced the “new reality” of global competitiveness. Having long accepted the constraints of capitalism as fundamental political limits, these parties had neither the imagination nor the capacity to forge an alternative to neoliberal austerity and market reform.

Mattei’s analysis thus helps explain why social democratic regimes could never “decommodify” labor, as theorized by Danish sociologist Gøsta Esping-Andersen. To be sure, these states decommodified certain social services — health care, transportation, education — by providing them free at the point of use rather than through purchase on the market. These reforms are major victories for workers and can help illuminate what a social system emancipated from market dependence and oriented toward meeting social needs could look like. Yet even the most expansive welfare states have not — and could not — decommodify labor itself.

Providing workers with the means to survive without undertaking wage labor would be tantamount to granting them an unlimited strike fund. And in practice, labor force participation in these regimes has not been lower than in “liberal” models, as one would expect if the compulsion to undertake wage labor had truly been relaxed, but higher. If anything, social democratic regimes embedded workers more deeply in market relations. Even in the strongest welfare state regimes, the entire society, and all state expenditures, remained dependent on competitiveness and profitability.

Globalization and Empire

In the book’s penultimate chapter, Mattei turns to analyzing capitalism as a global system, simultaneously attempting to account for persistent hierarchies on the world market while emphasizing that the most decisive conflicts in global capitalism are not between states, but within them. The exploitation of workers in both core and peripheral economies, she insists, is the lifeblood of global capitalism.

This means that it is mistaken to suggest that working classes in the global core somehow “exploit” workers and peasants in peripheral states, as is sometimes suggested by contemporary accounts of the “imperial mode of living.” Such arguments often rely on versions of the “labor aristocracy” thesis, according to which monopoly firms in the Global North have effectively bought off workers there through higher wages and consumption standards financed through the super-exploitation of workers in the Global South. This framework winds up perversely suggesting that workers in core states have actually benefited from globalization rather than being among its principal victims. In fact, far from blocking the forces of real competition, globalization has been about intensifying them, increasing market dependence and entrenching austerity everywhere.

At the same time, Mattei frames her chapter around the “dependency” of the global periphery, and the “development of underdevelopment” through the structure of the international system. These theories, which emerged initially in the 1960s, contend that core economies systematically drain value from the periphery through “unequal exchange” as the latter export cheap primary commodities and import expensive value-added goods.

Exploitation is thus primarily understood to operate through international trade rather than class relations within each society. It follows that working classes in the core are not likely to be forces for transformative change; on the contrary, they are more likely to support the imperial domination of the periphery on which their privileged position depends. Thus, in their seminal work Monopoly Capital, Paul Baran and Paul Sweezy argued that revolutionary agency would, if anywhere, arise from national liberation movements in the so-called Third World — which might in turn inspire marginalized populations within the United States to undertake analogous national struggles. This called for national class alliances between workers, peasants, and national bourgeoisies to transform the international economic system.

The apparent tension between these two perspectives leaves Mattei’s analysis somewhat unclear at times. While dependency theory accurately described the terms of world trade in the 1950s and 1960s, subsequent history — which is not discussed by Mattei — points strongly to the primacy of class struggle within states rather than conflict between them.

In the 1950s, it was the American state that underwrote so-called import substitution industrialization (ISI), through which protected national industries displaced imports from the core, as part of a wider project of integrating peripheral economies into the US-led global order. And it was peripheral bourgeoisies that, having been strengthened through the ensuing process of economic development, came to favor discarding those protections as they sought fuller integration into the American empire.

Indeed, as Leo Panitch and Sam Gindin argued, the American Empire has operated to a significant extent as an “empire by invitation.” As it oversaw the emergence of an integrated global capitalism stitched together by cross-border flows of trade and investment, the American state came to articulate the general interests of global capital, eroding any distinctly “national” bourgeoisies.

In this way, the restructuring of the American Empire eroded the foundations for class compromises in the core and periphery. While the postwar Bretton Woods system placed certain constraints on the movement of capital, providing a stable framework for global integration and the consolidation of the American Empire. Its supersession by a regime of free capital mobility following the 1970s crisis enabled capitalists to circulate investment globally virtually cost-free. With capital’s ability to relocate production wherever labor and regulatory costs were cheapest, it became increasingly difficult for workers to compel it to enter into domestic distributional bargains.

Unwilling to challenge the internationalization of capital, social democracy instead embraced it through “progressive competitiveness” strategies that aimed to entice capital to invest at home through subsidies and upskilling national workforces. But the expansion of skilled labor on the periphery and the adaptation of advanced technologies to low-wage zones led to the displacement of industrial employment from the core to the periphery, rising precarity and inequality, and mounting pressure on welfare state programs.

The deepening of global integration within the American Empire intensified competitive discipline and reinforced monetary, fiscal, and industrial austerity. The effects were precisely the opposite of what dependency theory had anticipated: deindustrialization and downward pressure on wages, job security, and living standards among the most privileged workers in the core states, alongside industrialization in the periphery.

The global integration of finance that tied the system together locked states into fiscal austerity and increased pressure to roll back taxes and cut social spending. Such cuts to programs for working people coincided with massive tax breaks for the wealthy, reinforcing the upward distribution of income. Globalization also fortified industrial austerity, severely straining labor rights and collective-bargaining regimes while imposing tight limits on worker mobilization, wage growth, and all forms of industrial democracy. Meanwhile, a highly volatile floating exchange rate system imposed strict demands on more powerful central banks, and the technocrats who managed them, for continuous intervention to fight inflation and support currency stability — and thus to secure class discipline through monetary austerity.

Mattei’s historical analysis, however, is largely confined to the 1920s. As such, the book does not explore the interconnected histories of social democracy, developmentalism, and the American Empire. Assessing social democratic regimes is crucial for substantiating her argument about the structural nature of austerity, precisely because these regimes are typically understood to be its very opposite. Their crisis and retrenchment from the 1970s onward had everything to do with their long-standing embrace of the American Empire and their fundamental unwillingness to challenge capitalism.

Together, these commitments made the rollback of the gains of the postwar “Glorious Thirty Years” all but inevitable as investment was liberalized. Indeed, globalization imposed what Gindin described as a “polarization of options” on working classes: break with globalization and begin moving toward greater democratic control over investment or accept neoliberal restructuring. This aligns closely with Mattei’s argument, but the urgency of her perspective, and its relevance to present debates, is weakened by her limited engagement with the conjuncture.

Socialism and Class Formation

Mattei’s overriding — and crucially important — point is that workers have no interest in strengthening capital. Focusing on the supposed “failures” of austerity, monopoly, financial speculation, and the like obscures the social harm produced by capitalism’s normal operation. Such perspectives frame politics as a struggle within capitalism rather than against it, and cast the working class as a potential ally of a supposedly “progressive” fraction of capital that, it is hoped, might embrace pro-worker policies that would enhance profitability and competitiveness.

In reality, rising levels of working-class precarity are not signs of the breakdown of capitalism, but conditions of its strength. While economic growth may allow workers to win higher wages and improved living standards, the satisfaction of needs is subordinated to profitability. Social democracy legitimates capitalism by illustrating how humane it can supposedly be. But the hard limits on these regimes, and the structural necessity of austerity, deprivation, and exploitation, pull the mask off a system guided not by the production of useful goods but by the inhuman, “phantom-like” law of value.

It is these contradictions of accumulation, rather than the collapse of capitalism, that Mattei argues have now fueled the rise of an authoritarian hard right in the United States as well as Europe and beyond. The anger generated by decades of downward pressure on living standards and the retrenchment of welfare states through increasingly harsh austerity — both of which have been very functional for capital — has created fertile ground for far-right politics.

Yet once in power, such forces have only deepened austerity, often unleashing truly brutal attacks on workers and the poor. Moreover, because the class power and exploitation at the heart of the capital order are largely invisible, and because the intensification of market dependence through austerity heightens competition among workers, movements such as MAGA have been able to channel these frustrations into resentment at migrants and other racialized and gendered Others, rather than toward capital itself.

Mattei powerfully argues that overcoming this world of universal alienation requires a struggle for democracy: the assertion of conscious, collective control over economic and social life. This, she suggests, entails an interlinked project of democratizing economic theory, economic policy, and the economy itself. The fight against austerity, in Mattei’s view, is not merely about implementing a different economic policy, but moving toward an entirely different economic order. Necessary to support this is an economic theory that centers what neoclassical economics conceals: exploitation, unemployment, and austerity are not laws of nature but of capitalism.

Insofar as programs for social provision inevitably run up against the logic of profit, sustaining them inherently demands a rupture with capitalism itself. Any left government will ultimately face a stark choice between retreating to austerity or pressing forward. When that moment arrives, workers must be organized and prepared for the necessary break with capitalism. Prioritizing the logic of need thus entails a continuously expanding struggle for democracy and an increasingly radical challenge to capital.

It is thus critical that struggles for reform be framed in socialist terms — not as projects to strengthen capital or boost competitiveness but as efforts to build the capacities to break with the capital order. Central to this task, however, is class formation, which is absent from Mattei’s analysis. As Marx and Friedrich Engels emphasized in The Communist Manifesto, this entails “the formation of the proletariat into a class, and hence a political party.” To be sure, the working class always already exists in some abstract “objective” sense. But in practical terms, it is fragmented across an enormous range of income levels, occupations, educational backgrounds, gendered and racialized conditions, and so on.

Class formation is the political process through which these individuals come to recognize themselves as part of a class with common interests opposed to the logic of profit. This is the distinctive role of a socialist party: to develop the democratic capacities of workers through political education, debate, and collective action. In this way, the party does not merely represent the working class but actively constitutes it as a political force capable of transforming society.

This gap in Mattei’s analysis leads her to miss a crucial dimension of the critique of social democracy: social democratic parties articulate the working class and its interests in a way that departs substantially from a socialist conception. Most importantly, this involves obscuring the antagonism between the logic of profit and the logic of need by implying that fighting for social needs does not necessarily involve opposing capitalism itself.

In the absence of an analysis of class formation, Mattei tends to conflate workers’ immediate economic demands — such as higher wages or even quitting their jobs — with explicitly socialist politics. Thus, she frames the 1979 Volcker Shock, when the Federal Reserve raised interest rates to nearly 20 percent, triggering mass unemployment to break inflation, as suppressing not only workers’ wage demands but also nascent “anti-capitalist alternatives.” Yet what this event and its aftermath truly revealed were the limits of a trade-union model that confined its demands to wage militancy rather than building shop-floor power, let alone advancing a broader political transformation. Because capital retained full control over investment, once profits clashed with rising real wages, exploitation had to be increased.

The more interesting question, then, is why anti-capitalist alternatives were not seriously on the agenda at all. What was missing from the labor movement and working-class politics that might have opened space for a path other than neoliberal austerity? This was certainly not a matter of needing more of what already existed in that moment: more votes for Democrats, more marginal sectarian parties, or even more union density would not have halted the neoliberal assault. What was required, instead, was a mass, organized, socialist movement rooted in the working class, possessing real power and capable of offering a credible alternative.

Absent this, as workers’ defensive battles of the 1970s were defeated, most saw little choice but to adapt to the constraints of competitiveness and profitability. The profound defeat of the working class that has defined the neoliberal era is therefore not only the result of repression by capital and the state but also persistent limits within the labor movement itself. It is not enough, then, to simply continuously replay past struggles. Getting somewhere better requires that unions be transformed into organs of class struggle — which in turn demands the coordination of a party.

This opens another crucial issue Mattei raises but does not elaborate on. If capitalism is defined by market dependence, escaping it must entail replacing that with economic planning. The problem with workers’ cooperatives and community-run financial institutions is that they remain subject to market discipline. As a result, they reproduce the logic of profit: downward pressure on wages, externalization of environmental costs, and a competitive interest in austerity. Overcoming this requires replacing competition among private firms with macro-level coordination.

As Mattei notes, planning of this kind would differ drastically from that carried out within corporations, which allocate investment based on rates of return and price signals. Planning to serve social needs at the macro scale is infinitely more complex. Rather than “breaking up the banks,” this means envisioning, and fighting for, a project of developing the state capacities to run finance as a public utility. Given the failure of private capital to mobilize investment for the urgently needed green transition, this is no longer only a matter of dreaming of a more just and equitable future — it is essential to avert catastrophe.