Musk's rise is symptomatic of our neo-feudal capitalist times opinions

Until recently, authoritarian capitalist regimes such as those in Russia and China were characterized as plutocratic: Putin's government, well known to be dominated by powerful oligarchs such as Yuri Kovalchuk, Gennady Timchenko and the Rotenberg brothers; and the Chinese Communist Party, which over the past few decades has enabled the country's now-famous 1,000 billionaires to flourish, including the likes of Zhong Shanshan and Ma Huateng.

But today it is the liberal democracies that are increasingly acquiring this plutocratic trait. Donald Trump's new administration in the United States is the latest example, with his “billionaires' club” lined up with Elon Musk, Howard Lutnick and Vivek Ramaswamy, among a few others. Ramaswamy and centi-billionaire ($100 billion or more) Musk are to be named heads of a new “Department of Government Efficiency” aimed at cutting some $2 trillion in “government waste” and reducing “redundant” government regulation.

Similar moves are underway under Narendra Modi's government in India, which is joined by a handful of tycoons such as Mukesh Ambani, Gautam Adani and Sajjan Jindal, to promote “business-friendly” policies and further neoliberalisation of the economy. And such a turn in favor of the “billionaire raj” (billionaire power) can be found it repeats itself in several other liberal democracies around the world, including Brazil, South Korea, Taiwan and Turkey.

So how do we make sense of this global shift to plutocracy, in which billionaire oligarchs not only control the economy but dominate politics in an unprecedented way?

An important explanation lies in what some analysts see as a structural shift in the global economy from neoliberalism, which prioritizes “free market” mechanisms as a way of dealing with both economic and social problems, to neofeudalism, which describes time of extreme inequality, where a growing underclass serves the needs of a handful of mega-rich – or as academic Jodi Dean puts it: “a little billionairesbillion precarious workers'.

This neo-feudal arrangement is evidenced by today's unprecedented rise in global inequality. Since the 1980s, income inequality, for example, has risen sharply around the world. This trend is seen in almost all leading industrialized nations and major emerging markets, which collectively account for roughly two-thirds of the world's population. The increase is particularly pronounced in the US, China, India, Brazil and Russia, precisely those in which, as mentioned above, plutocracy reigns. In India, the gap between rich and poor is wider now than it was under British colonial rule.

Perhaps most emblematic of such neo-feudalism is what is happening in the current “platform economy”, where a small number of technology companies, e.g. Apple, Google, Meta, Uber and Airbnb, have become increasingly super-rich and exploitative. The latter have enriched their owners/shareholders, turning them into (centi)billionaires, relying mainly on cheap sweatshops and/or precarious labor, as well as favorable government taxes and investment incentives.

And it is precisely the need to ensure favorable tax and investment policies—and the need to continue generating huge profits—that helps explain the increasing involvement of business tycoons in government today. People like Trump, Musk, Adani and Berlusconi may present themselves as people “of the people”, but their policies are mainly designed to increase corporate profits and market shares by cutting taxes, providing attractive business incentives, protecting national industries , threatened by foreign competition and a reduction in government environmental and investment regulations that they see as getting in their way.

Neo-feudal economics/politics deviate from neo-liberalism in the greater degree of coercion required to generate the historically unprecedented profits that have enabled the rise of the global billionaires. Such authoritarianism is necessary to ensure cheap and precarious labor and to keep state oversight and regulation of the economy to a minimum and in line with global financial and corporate power.

But if neo-feudalism really is the way of the world today, if the billionaire plutocracy is on the rise, it probably means that liberal democracies may be moving more and more towards authoritarian forms of government. Neo-feudal leadership is what our 'gig' and 'platform' economies seem to require.

Does this mean that the authoritarian capitalism of Russia and China may represent, not the exceptions, but the future of liberal democracy?

The views expressed in this article are those of the author and do not necessarily reflect the editorial position of Al Jazeera.