Mapping the Flows of Extractive Capital

Unlike a slate of recent texts claiming to find some novel iteration of capitalism, Khalili’s claims are never overblown. Instead, she uses the titular term extractive capitalism to refer to the circuits of primary commodities fueling and lubricating the global economy.

Her aim is to create a balance sheet assessing the winners of extractive capitalism—insurance brokers, commodity traders, management consultants, state managers and technocrats, private equity and asset managers, Russian oil barons, and Gulf capital—against those on the losing end: sections of the maritime proletariat such as seafarers on cargo ships and crew members on major cruise lines, Indigenous populations dispossessed through mega-infrastructural projects, and the vast majority of the Global South that disproportionately suffers from externalities and ecological crises wrought by accumulation and planetary flows of value.

Khalili charts the novel ways that capital and state managers are ravaging the planet through illegal sand dredging of Cambodian beaches, hydraulic fracturing in the US Sunbelt, and the dumping of lethal waste in residential neighborhoods of the Ivory Coast (as prominent commodity trading firm Trafigura did in 2006), showing how these very same forces have assumed a vanguard role in promoting eco-friendly and green energy initiatives. Drawing on anticolonial revolutionaries like Kwame Nkrumah and Walter Rodney, Khalili illustrates how the circuits of extractive capital map onto prior colonial relations.

She reminisces over the tale of OPEC cofounder Abdullah Turayqi, also known as the Red Sheikh. Turayqi was a technocrat typical of the era. He received his education in the imperial core—a master’s in petroleum engineering at the University of Texas at Austin—and sought to bring his technical acumen to the postcolonial world in service of resource sovereignty.

Like Nkrumah and other anticolonial figures, he was quickly disillusioned after witnessing the limitations of nationalization measures and the consolidation of neocolonial relations. This is the configuration of global capitalism that confronts us today and that Khalili helps us navigate, and from a very particular vantage point. She was hired by one of the Big 4 management consulting firms—then called Andersen, now Accenture—and worked as a consultant before the massive growth in the industry.

The first two chapters consider the two most important primary commodities: oil and sand. The former examines how a series of conjunctural shocks to global supply chains have furnished the prevailing contours of extractive capitalism and global maritime oil flows. Taking the case of sand, the most widely consumed natural resource after water, Khalili traces the demand-driven uptick in illegal sand mining, erasing entire beaches in Senegal and Morocco, stripping the sandy riverbeds and sandbanks of Cambodia and Myanmar, and devastating coastal ecosystems and the livelihoods of nearby villages and fisherman.

Unlike the clumpy, uneven sand used for construction, uniform, homogenous sand is used in fracking. Besides the hugely deleterious consequences on the environment, the booming shale industry requires construction of mega infrastructural projects that often intersect the territories of Indigenous populations. This is certainly the case with the Keystone XL pipeline, which, if completed, would cut through Sioux tribal reservations.²Khalili, Extractive Capitalism, 39.

The third chapter briefly examines the dynamics and origins of financialization of oil. The introduction of oil futures contracts in 1983—the financial instrument responsible for the fortunes made by the Essex Boys—was a strategic response by the dominant oil firms in the North Atlantic to the sweeping nationalization efforts as well as to price fluctuations generated by the Iranian revolution. The Seven Sisters saw their share of global oil trade plummet from 80 percent at its height to 42 percent by the end of the 1970s.³Khalili, Extractive Capitalism, 58.

The chapters that follow examine the players in this neocolonial configuration of commodity traders, insurance dealers, and management consultants. Khalili highlights the plight of seafarers and crew members cramped in the lower levels of cruise lines during the pandemic and the inscrutable and arcane aspects of the insurance industry.

She takes us on a tour of superyachts owned by Gulf capitalists and reveals attempts by Russian capitalists to circumvent US sanctions designed to seize their superyachts. She traces the history of US and British colonization of the Chagos Archipelago, a guano paradise turned geostrategic outpost and extraterritorial prison site, which (following the 1971 dispossession of the native inhabitants from the islands of Diego Garcia and Pero Banhos) now houses Washington’s CENTCOM (Central Command).

Khalili introduces management consulting through the tale of retired decorated military general Stanley McChrystal, advancing a shocking exposé of prominent consulting firms like McKinsey, Booz Allen Hamilton, and Arthur D. Little. The book’s final four chapters explore the techno-utopic and ecomodernist fantasies of ruling elements, disgraced private equity investor Arif Naqvi’s foray into “woke capital,” a brief political economy of China’s Belt and Road Initiative (BRI), and a conclusion that highlights the very serious material consequences produced by the Houthi blockade in the Red Sea.

Invisibility, Covid–19, and Maritime Jurisprudence

A key conceptual thread running throughout the book is visibility—or lack thereof. The beneficiaries of extractive capital are recognized through prestigious awards and niche university appointments, and of course, their excessively conspicuous lifestyles. Gulf capitalists and Russian oil barons are notably egregious examples.

Take former UAE president Sheikh Khalifa bin Zayed’s superyacht Azzam, which is longer than a Royal Navy Destroyer and comes furnished with a “de rigueur cinema” as well as a “swimming pool…gym” and, of course, a “golf training room.” Not to be outdone, the Omani Sultanate’s Al Said boasts “a concert hall for a fifty-piece orchestra.”⁴Khalili, Extractive Capitalism, 87.

This was more than just conspicuous consumption as usual. As Bukharin observed in 1919, fears of imminent social catastrophes and civilizational collapse send the rich and powerful running to their hyper-securitized, luxurious enclaves.

The pandemic only exacerbated these anxieties. This is the backdrop to the late neoliberal space race between Richard Branson’s Virgin Galactic and Jeff Bezo’s Blue Origin in 2021, Elon Musk’s fantasies of planetary colonization, or even Stockton Rush’s submarine Titan, which sought to descend two nautical miles to observe the ruins of the Titanic.

In the same week, almost five hundred Pakistani, Syrian, and Turkish refugees drowned crossing the Mediterranean. News of the Titan’s implosion eclipsed this human catastrophe. From the vantage point of the Masters of the Universe, they were considered disposable—and were reduced to insignificant memories.

While these capitalists escaped pending civilizational collapse in their shiny new superyachts, crew workers aboard major cruise lines like Carnival and Royal Caribbean were stuck in place. Customers were quickly let off the ship with no screening procedures or safety protocols. The cruise ship Ruby Princess “disembarked in Sydney and spread out across Australia before it was discovered that more than a quarter of them were infected with the virus.”

The crew of eleven hundred, on the other hand, was “quarantined on board for several weeks”⁵Khalili, Extractive Capitalism, 78. with scarce medical resources. They were of course still expected to work and maintain the ship, despite exhibiting flu-like symptoms. Prolonged isolation generated a widespread sense of anomie, which led some to overdose or jump overboard.

According to the International Maritime Organization, around four hundred thousand seafarers were stranded at some point in 2020.⁶Khalili, Extractive Capitalism, 77.This was truly exceptional. Stranded seafarers are typically on cargo ships or vessels with a shipping flag of convenience that allow owners to circumvent labor laws and hire cheap labor.

This was certainly the case with Muhammad Aisha. When he tried to dock MV Aman in the Gulf of Suez, operating under a Bahraini flag of convenience, the Egyptian Port Authority issued an arrest warrant due to the ship’s poor upkeep, failure to pay wages, and substandard living conditions. Maritime jurisprudence, in fact, grants port authorities the ability to issue arrest warrants on ships.

This leaves the workers in a bind. If they leave, they do not have a legal claim to their wages or they may even be arrested for neglect. The Egyptian Port Authority thus required the vessel to have a legal owner. Ownership was transferred to Aisha, and he was again barred from docking. He lived alone on the ship without food, water, electricity, or fuel for four years, forced to swim “ashore every few days to secure basic supplies and charge his phone.”⁷Khalili, Extractive Capitalism, 73. Eventually, as a result of a publicity campaign and considerable wear and tear, the Port Authority gave him the greenlight to come ashore in 2021.

Commodity Traders, Insurance Dealers, and Management Consultants

Commodity traders, insurance dealers, and management consultants operate behind the scenes. These parasitic elements proliferated alongside the financialization of the oil trade and flourished amid political strife and geopolitical tension. One travel writer recounting their conversations with Antonin Besse, a French trader based in Aden, was “distressed…because he could not help making money during the war; it piled itself up malgré moi.”

Vitol, the world’s largest oil trading company, sent shipments of oil and diesel to the rebel forces fighting Gaddafi.⁸Khalili, Extractive Capitalism, 61. Given the shady and unscrupulous nature of their work, commodity traders operate on the low. In the early 1950s, Israel and Iran coordinated a 50–50 joint venture, the Eilat–Ashkelon pipeline, financed by Deutsche Bank, whose head at the time expropriated Jewish property under the Third Reich, and relied on US-based commodity trader Marc Rich and his associates to quietly move oil from Iran to Israel, even after 1979.⁹Khalili, Extractive Capitalism, 63.

The very existence of the Eilat–Ashkelon pipeline remains aggressively guarded by Israeli state managers. As Khalili writes, “The pipeline itself is a state secret, and anyone leaking information about it may be subject to a prison term for fifteen years.”¹⁰Khalili, Extractive Capitalism, 69.

Management consultants are the “willing foot soldiers of global capitalism.”¹¹Khalili, Extractive Capitalism, 132. They are the holy ministers of capital in the business of selling the theology of capital: that workers are expendable, bloated management desirable, and labor discipline virtuous. The goal is to maximize efficiency in the name of profit. Consulting, in other words, is the “bastard child” of Taylorism.¹²Khalili, Extractive Capitalism, 131.

Their core functions entail providing technical and strategic advice, installing software, and more broadly, management. This overly vague job description, however, conceals the truly formidable scope of operations. Consultants have been mobilized to finetune mechanisms of labor discipline, design technocratic and instrumental functions essential to the accumulation process, beef up repressive capacities of autocratic states, or even facilitate (and obscure) corruption and the robbery of public coffers.

Take Cold War juggernauts Arthur D. Little and Booz Allen Hamilton. Little helped design the blueprint for Export Processing Zones at the heart of the reindustrialization and population management scheme of Operation Bootstrap. Hamilton “set up a land register” to assist a covert CIA operation crushing the Huk peasant insurgency in the Philippines, and he tapped into the acumen of freshly hired CIA agent Miles Copeland to trace the activities of Egypt’s National Bank. In 2012, Washington sent Hamilton to train Saudi Arabia’s Navy and the cyber workforce of Saudi Arabia.¹³Khalili, Extractive Capitalism, 133.

McKinsey, started in 1926, has an impressive resume. It helped nationalize the UK’s National Health Service, just as it would later help privatize it. It worked with Dutch Shell in 1957 to decentralize its firm, an organizational template subsequently superimposed on universities.¹⁴Khalili, Extractive Capitalism, 134. In 1967, McKinsey produced a report for the British Transport Docks Board suggesting that containerization would solve their profitability and logistical woes.¹⁵Khalili, Extractive Capitalism, 127.

More recently, they designed a survey for the reception of Muhammad bin Salman’s governance and produced detailed reports of critics.¹⁶Khalili, Extractive Capitalism, 139-40. Their role is so prominent in Riyadh that the Ministry of Planning is nicknamed the Ministry of McKinsey, essentially a de facto arm of the Saudi state. Under the first Trump administration, McKinsey was tasked with producing a report for ICE.¹⁷Khalili, Extractive Capitalism, 139.

The resultant document suggested minimizing costs through cutting back on food and medical supplies in detention centers and speeding up the process of deportation.¹⁸Khalili, Extractive Capitalism, 138-9. While the opioid crisis was ongoing, they collaborated with Purdue Pharma to identify neighborhoods in which OxyContin might be prescribed with less hassle.¹⁹Khalili, Extractive Capitalism, 135.

The chapter “Stupid Questions: Generals and Corporate Leadership” follows Stanley McChrystal, a boisterous West Point cadet who would eventually head the Joint Staff Operating Council, where he played an important role in centralizing US military forces. After being asked to resign by Obama in 2010, McChrystal stumbled into a wildly successful second career.

Through his firm, McChrystal Management Consultancy, he sold a niche commodity popularized by upper brass military operatives coming out of the War on Terror: the macho business self-help manual. These include seminars which require customers to perform high-intensity calisthenics while the decorated, ex-military general proceeds to yell at them and pitch advice at a high level of abstraction. The release of McChrystal’s third book, Risk (2021), marked his entry into the world of public health, joining several other consulting firms in the process.

By May 2021, the UK had paid consultants a whopping $600 million to help to manage the pandemic. One of the Big 4 consultants, Deloitte, was paid $279 million to help implement a track-and-trace system. The bill also included much more minor expenses, such as the $560,000 project greenlit by Dido Harding, a former McKinsey consultant (also married to a McKinsey consultant at the time), to provide “mission and vision” for a trace-and-track program. In 2018–19, 15 percent of the NHS’s digital budget went to Accenture to update its software. Only months into the pandemic, McKinsey was making $100 million through contracts awarded by the state.²⁰Khalili, Extractive Capitalism, 137.

Woke Capital and Techno-utopic Fantasies in the Gulf

Woke capital: a cosmopolitan, motley crew of “globalist financiers, gay and friendly lifestyle entertainment businesses, and ESG (Environmental, Social, and Governance) investors,”²¹Khalili, Extractive Capitalism, 148-9. appearing especially in the form of finance, private equity, and asset managers. These characters relish in integrating ecological and humanitarian sensibilities into their investment rationales, sit on the board of directors of the World Health Organization, and participate in UN initiatives like Global Compact—all three in the case of Arif Naqvi, a successful private equity investor and woke capitalist extraordinaire ultimately charged with rampant fraud.

The apparent contradiction between Naqvi’s “wokeness” and his naked cronyism lies in the underlying class content of woke capital: private equity and asset managers. In the final analysis, they seek to “turn land and ocean into asset classes, and make more money from renewables, impossible carbon capture ventures and spurious carbon credit schemes.”²²Khalili, Extractive Capitalism, 149.

Woke capital, along with the material support and symbolic sponsorship of development finance agencies, champions a conception of development ultimately reducible to asset-stripping public infrastructures and raiding public coffers. Woke capital even found its way into Palestine. Naqvi set up a branch of a $500 million private equity fund—Palestine Growth Capital—which was a joint venture between Palestine and Israel.

A largely bogus and ineffectual scheme, it nonetheless was adorned with the perfect ideological veneer. As Khalili writes, “The Palestine Growth fund was the kind of thing development wonks love: an innocuous agricultural programme that was held as a ‘bridge building exercise’ by Israel, and which supposedly empowered women.”²³Khalili, Extractive Capitalism, 162. Woke capital also featured prominently at COP27, the annual climate change conference hosted by the United Nations, this one held in Sharm El-Sheikh, Egypt, in 2022. The meeting brought together investors, NGOs, consultants, technocrats, fossil fuel lobbyists, and state managers—a total of thirty-five thousand delegates—from across the world, providing a prime opportunity to showcase the latest lines of flimsy ecomodernist technologies.

Just as importantly, COP27 functioned as a marketplace that enabled the purchase and sale of primary commodities, fossil fuels, or carbon credits in the case of large emitters looking to reduce their carbon footprint.²⁴Khalili, Extractive Capitalism, 178-9. Consultants were joined by ESG representatives and big oil firms celebrating the merits of carbon trading and green tech. Neom, the high-tech utopia or “Hellscape” envisioned by Muhammad bin Salman, boasts “a vision of an eco-future replete with robot technologies seeding forests in the desert, mechanisms to warn of oil spills and sandstorms, and alternative fuels.”²⁵Khalili, Extractive Capitalism, 142, 180.

This high-tech Silicon Valley, tinged with the cyberpunk aesthetics apparently adored by bin Salman, is expected to house a population of two million across two parallel lines stretching 170 kilometers, all overseen by an omnipotent repressive machinery. The current population sits around ten thousand, and only 2.4 kilometers of the lines have been built thus far. For the moment, it remains—like the largely bogus initiatives of carbon capture technologies and the bulk of ecomodernist innovations—mere fantasy and speculation.

World History, Totalization, and Inter-imperial Rivalry

According to Khalili, mainstream approaches to the study of oil are limited by a focus on “policy, global powers, and the slow movements of macro-history.”²⁶Khalili, Extractive Capitalism, 52. They narrowly focus on the high geopolitical drama of powerful nation-states like Washington or Moscow. China, alternately, is only seen as an “economic engine” and an insignificant actor operating in world political space.

They pay scant attention to sub-Saharan Africa, secondary or periphery petrostates, nefarious economic actors, and a wide range of struggles and resistance from below. Attention to the full range of processes, actors, and interventions is crucial since “these forces have changed the course of history in a million different ways.”²⁷Khalili, Extractive Capitalism, 55.

What kind of theory of capitalism might we extract from Khalili’s book, which so deftly weaves together the narratives that comprise it? The chapters on management consultancy illustrate how such firms constitute an intervening link into the process of accumulation through developing the instrumental and technocratic machinery in service of capital.

This can be seen in their involvement in designing the paradigmatic spatial form and technology of neoliberalism, Export Processing Zones, or the role of McKinsey as a de facto arm of Saudi Arabia’s state apparatus. Khalili’s strong analyses of consultants demonstrate the power of granular analyses connecting structural transformations to local historical processes.

But is there a final methodological movement which might reconstitute these narratives into a complex totality? How might we trace and illuminate the full series of relations and processes, all while speaking to relative capacities and interests of different actors, the shifting terrain of class struggle, and the horizon of emancipatory possibilities?

In the concluding sections of the text, after a sharp analysis of China’s Belt and Road Initiative, Khalili notes, “Most accounts of BRI focus on its geopolitics and geoeconomics. But large infrastructure projects have wider ramifications: lives are affected, connections forged, and knowledge circulated.”²⁸Khalili, Extractive Capitalism, 176.

Take the case of the China–Pakistan Economic Corridor (CPEC), an ongoing multilateral development project. China’s entry into the Port of Gwardar must be situated in relation to the BRI initiative, itself a response to the 2008 crisis, which entailed funneling overcapacity into several infrastructure projects across the Global South.

China’s entry into Gwardar can be—and should be—located in relation to the movement of macro-historical processes, all without giving short shrift to lived experience. The extension of CPEC, for instance, has resulted in significant disruptions in the day-to-day activities of fishermen. The encroachment of the Chinese Overseas Port Holding Company has depleted marine life, squeezed incomes, imposed curfews, and restricted fishing in specific areas.

The life activity of fishermen here is not distinct from the decisions and political calculi made by state managers or the interventions of powerful economic actors. On the contrary, it expresses the entire social totality. Their stories are filled with irreducible complexities, but they are constrained and pressured in broad and significant ways, situated as they are in a capitalist context.

Of course, Khalili recognizes this fact explicitly. As she puts it while reflecting on her upbringing in Iran, “The oil world I inhabited brought together geopolitics and the everyday. It was material, dirty, bloody, and wracked by wars, coup d’états and revolutions.”²⁹Khalili, Extractive Capitalism, 51. There are an infinite number of histories to be uncovered, but the broad structural configurations and asymmetries of power on a world scale delimit possible historical trajectories in profound ways.

Whether the capitalist mode of production prevails and continues to wreak unprecedented ecological destruction and widespread immiseration, or Indigenous populations, workers, and petty commodity producers in the Global South—the exploited and oppressed masses across the world—wrest control of the planet’s natural resources from the grips of capital and fulfill the dreams of resource sovereignty held by the Red Sheikh, is not just a question of many different histories.

The possible historical roads to be taken here are few. And to take that of system transformation, we must not only demystify flows and relations of extractive capitalism but rather understand them. This can only be done by locating them within the social totality, mapping these historical conjunctures of world capitalism. ×