Extractive Capitalism: How Commodities and Cronyism Drive the Global Economy
Leila Khalili, Profile books, £11.99

WHAT is the connection between the extraction of oil and gas, global commodity traders, oligarchs’ luxury yachts, and the Houthi Red Sea attacks on western shipping? They are all nodes in 21st century extractive capital, linking the US military empire, Western control of key commodities, and the historic conflict between colonial powers and the global South over the latter’s natural resources.

In her wide-ranging explainer, Exeter University’s Leila Khalili takes a number of connected themes to explore how capital today is an outgrowth of the colonial economy that many believed expired with the end of formal colonialism in the post-war era.

Behind the glass towers of capital in London, New York and Rotterdam are the corporations, still doing what they did 400 years ago at the birth of capitalism when the first Western trading companies were founded for profit in slaves, tobacco and spices.

Extraction of resources from the global South remains the underlying mechanism of exploitation that provides profits across the global North, she writes. Core commodities such as oil, gas, nickel and coltan are the lifeblood of the global economy, and most of them are found in Africa, Latin America and west and south Asia.

An early chapter looks at the murky world of global shipping, with its flags of convenience, tax-avoiding ownership and the super exploitation of crews. The grounding of the MV Ever Given in the Suez Canal in 2021 exposed the vulnerabilities of global shipping to disruption and bottlenecks.

Suddenly, the apparent seamless workings of international trade were seen to be at the mercy of human error and the veils hiding the hidden workings of private capital. Ever Given had a Taiwanese operator, a Panama flag, Japanese owners, multiple insurers and an Indian crew. No wonder it took months to release the giant ship.

Khalili’s own journey from a student in pre-revolutionary Iran, to management consultant trainee in Texas in the 1990s is explored in the most personal and revealing chapter on the consultancy business. She doesn’t actually call it a scam, but the overall sense is of a system of extracting value, carried out by people with little expertise or understanding of the industries they are reconstituting.

It is also a devastating exposé of the way that governments like Britain have used consultants like McKinsey to dismember great public companies through dodgy software systems, job cuts and rationalisation as a way to extract value and dissolve labour resistance.

Regardless of the negative consequences and questionable results, the consultants move on to the next victim. The underlying philosophy is neoliberal: destroy workforce autonomy and union power, extract sources of value and turn the company into a soulless, money-driven bureaucracy.

She cites an early British government contract in 1967 with McKinsey to containerise the London docks and remove the problem of militant unions. Through automation, the power of workers to disrupt the flow of goods through the ports could be curtailed, essentially by slashing the workforce.

The ultimate example of consultancy and auditing malfeasance was Arthur Anderson’s “criminally negligent audit” of the corrupt US firm Enron, which led to both companies’ collapse.

In the realm of intelligence and empire-building, these firms are also active. Consultants from Booze Allen Hamilton helped map US interests at the start of the cold war in the Middle East — in Egypt (where it helped set up the Mukhabarat intelligence service), Syria, and counterinsurgency plans against Philippine communist rebels.

That work has continued: Booz Allen helped the United Arab Emirates set up its intelligence agency and infamous surveillance system, the author writes.

And Boston Consulting Group (BCG) staffers recently worked with the blood-soaked US-Israeli aid company, the Gaza Humanitarian Foundation, and also helped model cost estimates for forcibly “relocating” Palestinians out of Gaza, projects the firm has since disavowed. This is the dirty work of imperial statecraft alongside the usual software contracts for which these firms are famed.

Extractive Capitalism is wide-ranging and ambitious, and does a great service in exposing the underbelly of commodity capitalism today. Khalili is standing on the shoulders of great theoretical and investigative works that she clearly admires, including Walter Rodney’s How the West Underdeveloped Africa and the Saudi novelist Abdul Rahman Munif’s City of Salt.

The book finally explores the Yemeni Ansar Allah movement’s attacks on Western shipping in the Red Sea in solidarity with Palestinians facing Israeli genocide in Gaza. It ends suddenly, leaving the reader unmoored amid the horrors of the current exploitative world order. A theoretical overview across the horizon would have been helpful.