The Economic Royalists

And their discontents

The libertarian right has three rhetorical moves it uses to keep the American trust-doctrine off the table, and each of the three has been working for forty years.

The first move is the Marxism charge. Anyone who proposes that a corporation is a creature of public law, established by a public charter, accountable to public conditions, and revocable for public cause, is told that they are smuggling Marxism into the American political conversation. The charge is a fraud, but the charge has worked. The charge has worked because the population the charge is aimed at has not been told the actual American history of the corporation, and because the apparatus that benefits from the population’s ignorance has spent forty years and many billions of dollars ensuring that the population stays ignorant.

The second move is the slippery-slope warning. Any restoration of the older doctrine is presented as the first step toward Soviet Russia, the gulag, Venezuela, the bread lines. The argument requires the listener to believe that the only stable points on the political-economic axis are the Delaware general-incorporation regime of 1899 and the collectivization of agriculture under Stalin, with no intermediate possibilities. The argument is absurd on its face but it has been deployed so many times by so many surrogates in so many venues that it has acquired the texture of common sense. The intermediate possibilities — the entire history of the American republic from 1787 to 1875, the entire history of the Progressive Era, the entire history of the New Deal — have been deleted from the public memory the slippery-slope warning is operating on.

The third move is the most important, the least examined, and the one that does the actual work of recruiting the people who staff the project. The third move is Atlas Shrugged.

⁂

The libertarian right will put a copy of Ayn Rand’s Atlas Shrugged in your hand at the moment of your professional formation. They will give it to you as a graduation present, as a hedge-fund onboarding gift, as a startup-orientation reading assignment, as the most influential book of my life on the listicle the firm publishes for its new analysts. The book has been distributed by the apparatus for sixty-five years, in editions running into the tens of millions, and the people who staff the contemporary American oligarchy have, in case after case after case, named it as the formative text of their political imagination. Peter Thiel cites it. Travis Kalanick cited it. Mark Cuban cites it. The Koch family funded the Atlas Society for decades. Paul Ryan made his entire congressional staff read it. The Ayn Rand Institute has been an operating intellectual node of the libertarian apparatus since 1985. The novel is the catechism. The novel is what the people building the kingdoms read in order to understand what they are building and why they are right to build it.

What the novel actually says, stripped of its eleven hundred pages of melodramatic scaffolding, is this. The world is divided into two kinds of human beings. The first kind is the producer — the engineer, the industrialist, the inventor, the financier, the railroad magnate, the steel manufacturer, the philosopher who provides the producers with their moral framework. The producer is the engine of civilization. The producer creates wealth that did not exist before. The producer is rare, valuable, and irreplaceable. The producer is, in the moral framework the novel is constructing, the only kind of human being whose existence is morally legitimate.

The second kind is the moocher and the looter. The moocher is the dependent — the worker who could not have invented the railroad, the customer who could not have built the steel mill, the citizen who could not have philosophized the moral framework. The looter is the politician who taxes the producer, the regulator who constrains the producer, the welfare recipient who lives off the producer’s surplus, the union organizer who demands a share of what the producer made. The moocher and the looter are presented as parasites. They contribute nothing. They consume what the producers have made. They are sustained by the producers’ indulgence and they repay the indulgence with envy and resentment and ever-escalating demands.

The story of the novel is the story of the producers, finally, refusing to play the game any longer. They withdraw their productive capacity from the society that has failed to honor them. They go on strike. They retreat to a hidden valley in the Colorado mountains called Galt’s Gulch — a jurisdiction outside the political community, governed by a contract among the producers, where wealth is honored and looters are excluded. The society they have withdrawn from collapses without them, as it must, because without the producers there is no production. The book ends with the producers triumphant in their valley, the lesser world in ruins, and the philosophical framework that justifies their withdrawal proven correct by the catastrophe that followed when they were not given what they were owed.

This is the operational manual for what Musk and Thiel and the Bitcoin maximalists are actually doing.

Galt’s Gulch is Starbase, the Texas city Elon Musk has bought and is incorporating as a municipality under his control. Galt’s Gulch is the Network State, the project Balaji Srinivasan has been building under Peter Thiel’s funding, in which the wealthy construct their own jurisdictions on top of or alongside the existing ones. Galt’s Gulch is Próspera, the special economic zone in Honduras where the law has been written by the corporation that operates the zone. Galt’s Gulch is the seasteading projects, the charter cities, the libertarian micro-nations that have been proposed and prototyped and funded across the past two decades. Galt’s Gulch, finally, is Mars — the planet Musk has been telling us for fifteen years he intends to colonize, governed not by the United States or by any other terrestrial sovereign but by SpaceX, with the residents subject to the corporate constitution rather than to the laws of any nation on Earth. The novel published in 1957 is the script. The strike is happening. The producers are withdrawing. They are constructing their own jurisdictions. The construction is not metaphorical. The construction is the project I named as the operational execution of the Sovereign Individual doctrine, and the doctrine is what the people building these jurisdictions believe.

The function of the Rand catechism, in the lives of the people who hold it, is to convert what would otherwise be the moral problem of being an extractive elite into the moral satisfaction of being an unjustly subjugated natural ruler. The hedge-fund manager who has structured his fund to pay no tax under the carried-interest treatment is not, in his own self-understanding, a person who has captured a private benefit at public expense. He is John Galt, denied his rightful reward by a society too benighted to recognize what he has built. The platform owner who has used his platform to suppress speech that threatens his political project is not a censor. He is Hank Rearden, defending the metal he invented against the bureaucrats who would seize it. The space entrepreneur who is building a private city outside the jurisdiction of the United States is not a secessionist. He is Ragnar Danneskjöld, the pirate captain in the novel who reclaims by force the wealth that the looters had taken from the producers. The crypto lord who is moving his fortune into Bitcoin to escape the tax authority is not a tax evader. He is Francisco d’Anconia, blowing up his own copper mines rather than letting the looters nationalize them.

This self-image is unanswerable from inside the framework. If the producers are natural rulers, then any constraint on them is illegitimate. If the rest of us are moochers and looters, then our complaints are envy and our demands are theft. If the strike is morally justified, then the catastrophe that follows the strike is our fault for having driven the producers to it. The novel constructs a closed circle of self-justification, and the people who have spent their formative years inside the circle cannot, by any argument internal to the circle, be reached. They have to be reached from outside. They have to be reached from a vocabulary the circle was constructed to exclude.

That vocabulary is the American constitutional tradition. The reaching has been done before. The man who did it most clearly was Franklin Delano Roosevelt, in the summer of 1936, at the Democratic Convention in Philadelphia, when he gave the speech that named the project for what it is.

⁂

FDR did not call them socialists. FDR did not call them communists. FDR called them economic royalists, and the choice of word was deliberate and devastating. The Revolution had been fought against royalism. The colonists’ grievance was not against capitalism, which did not yet exist as a coherent system, but against a hereditary and chartered class that had captured political authority and was using it to extract from the productive population. The 1776 fight was a fight against royalism. The 1936 fight, FDR said, was the same fight in modern dress. He read the passage that should still be read in every high-school civics class and is read in essentially none of them.

Out of this modern civilization, economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things. Through new uses of corporations, banks and securities, new machinery of industry and agriculture, of labor and capital — all undreamed of by the fathers — the whole structure of modern life was impressed into this royal service.

It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over Government itself. They created a new despotism and wrapped it in the robes of legal sanction. In its service new mercenaries sought to regiment the people, their labor, and their property. And as a result the average man once more confronts the problem that faced the Minute Man.

The hours men and women worked, the wages they received, the conditions of their labor — these had passed beyond the control of the people, and were imposed by this new industrial dictatorship. The savings of the average family, the capital of the small businessman, the investments set aside for old age — other people’s money — these were tools which the new economic royalty used to dig itself in.

Throughout the nation, opportunity was limited by monopoly. Individual initiative was crushed in the cogs of a great machine. The field open for free business was more and more restricted. Private enterprise, indeed, became too private. It became privileged enterprise, not free enterprise.

Read those paragraphs slowly. Every sentence is operative right now. Privileged enterprise, not free enterprise. This is the diagnosis. The forty-year libertarian project has succeeded in convincing the American public that the choice is between free enterprise and socialism, when the actual choice — the choice the founders understood, the choice FDR understood, the choice that confronts us — is between free enterprise and privileged enterprise. Privileged enterprise is what corporations become when they are released from the trust-doctrine. Privileged enterprise is what produces the economic royalists. Free enterprise is what the trust-doctrine protects, by ensuring that no enterprise is allowed to grow large enough to capture the political authority that disciplines all enterprises.

The new despotism wrapped in the robes of legal sanction. This is the Citizens United line of cases. This is the corporate-personhood doctrine. This is the regulatory capture, the judicial pipeline, the legal sanction that has been wrapped around what is in substance a despotism by men who have purchased their position. The robes are the doctrine. The despotism is what is inside the robes.

The Minute Man problem. The frame is the Revolutionary frame. The fight is the same fight. The royalists then had crowns and titles and chartered companies of the Crown. The royalists now have private municipalities and Network States and SpaceX charters and Bitcoin sovereign-wealth instruments. The robes have changed. The position is the same. The fight is the same.

⁂

The doctrine FDR was reaching back to had been universal at the founding and was, by 1936, almost forgotten. It was the doctrine of the corporation as a trust.

A corporation, as the founders understood it and as American law understood it for the first century of the republic, was not a private entity that the state was somehow obliged to leave alone. A corporation was a privilege granted by a state legislature, for a specific public purpose, for a limited duration, under specific conditions, revocable if the conditions were violated. The legal name for this was the charter, and the charter was understood as a trust. The corporation existed because the public had granted it permission to exist. The permission carried obligations. The obligations were enforceable. The charter could be revoked.

This was not Marxism. The doctrine predated Marx by generations. Hamilton, who is the canonical American defender of corporate enterprise, defended the Bank of the United States precisely on the grounds that its charter would be granted by Congress for the public benefit. Jefferson, who opposed Hamilton on almost every operational question, agreed entirely on this point. Madison’s Federalist 44 treats corporate charters as squarely within legislative authority. John Marshall, in Dartmouth College v. Woodward in 1819, affirmed that a charter was a contract — but in doing so he confirmed that it was a legislatively granted contract, not an inherent right of the corporators.

The state-level evidence is sharper. Through the entire first half of the nineteenth century, corporate charters in the American states were granted for limited durations — twenty years, thirty years, fifty years, with renewal requiring affirmative legislative action. They were granted for specific purposes — a railroad charter authorized you to build a railroad on a specific route, and the doctrine of ultra vires held that acting outside the chartered purpose was beyond the corporation’s legal capacity. They were granted with conditions — to charge reasonable rates, to provide service to all comers, to maintain works in good repair, to submit to inspection. They were revocable. State legislatures regularly revoked charters when corporations violated their conditions. The historical record contains hundreds of examples of charter revocations through the 1860s.

This was American law. This was the founders’ understanding. This was what the Revolution had been fought to make possible — a republic in which economic enterprise existed under public authority rather than displacing it.

The dismantling came at the end of the nineteenth century and was a coordinated political project. Beginning with New Jersey in 1875 and Delaware in 1899, the states began offering general incorporation — anyone could form a corporation by filing paperwork, for any purpose, for indefinite duration, on the most permissive terms. Delaware in particular engineered a deliberate race to the bottom, writing its corporate code to maximize freedom from public oversight, and most major American corporations are still chartered in Delaware today for precisely this reason. Then Santa Clara County v. Southern Pacific Railroad in 1886, in which a court reporter who had previously been a railroad executive inserted into the headnote a declaration that corporations were persons under the Fourteenth Amendment. The Court itself never ruled on the question. The headnote entered the citation stream as if it had been the holding, and within a generation it had been cited in hundreds of cases as authority for corporate constitutional personhood. The proposition is, on the historical record, a fraud, and it became the foundation of the legal regime we are living under. Then the Lochner era, from 1897 to 1937, in which the Supreme Court invented substantive due process and used it to strike down progressive economic legislation across the country, on the ground that the legislation interfered with the liberty of contract of corporations the Court had just declared to be persons.

By 1900, the older American doctrine had been buried under a new jurisprudence of corporate personhood, corporate constitutional rights, and corporate freedom from public oversight. The burial was the project. The project was funded by the corporations that benefited. The intellectual cover was provided by a legal academy that had been reshaped by corporate money. The historical doctrine was treated, by the new orthodoxy, as if it had never existed. The Gilded Age proceeded to produce the first generation of American economic royalists — the Rockefellers, the Carnegies, the Vanderbilts, the Goulds, the Morgans — operating in a legal environment that the founders would not have recognized as American.

⁂

FDR’s recovery, beginning in 1933, was a partial restoration of the older doctrine. Glass-Steagall, the Securities Acts of 1933 and 1934, the National Labor Relations Act, the Public Utility Holding Company Act, the antitrust enforcement, the regulatory state, the progressive income tax, the estate tax — these were doctrinal restorations as well as practical reforms. The corporation was again understood, in the legal regime that emerged from the New Deal, as a creature of public law, accountable to public purposes, subject to public conditions. The recovery was incomplete. The Delaware regime persisted. The corporate-personhood doctrine was not overturned. But the practical effect of the New Deal regulatory architecture was to discipline concentrated capital in ways the Lochner-era courts had previously prevented, and the discipline held, more or less, for forty years.

The second dismantling began with the Powell Memo in 1971 and proceeded through the apparatus I described in Business Ought Never Be Politics — the donor network, the think tanks, the law-school capture, the Federalist Society pipeline, the Buckley through Citizens United line of cases, the Reagan administrative state, the Clinton-era deregulation, the Roberts Court’s expansion of corporate constitutional rights to include religious exercise and political speech and protection from disclosure. By 2025, the New Deal regulatory architecture had been hollowed out from within, the corporate-personhood doctrine had been expanded into corners the Lochner-era courts would have hesitated to enter, and the wall between concentrated capital and political authority that the Progressives had partially restored was again essentially gone.

The current generation of American economic royalists is what walked through the space where the wall used to be.

⁂

Name them. The naming is the move and the naming has been deferred for too long.

Elon Musk is the cleanest contemporary instance. He has bought a city in Texas and is incorporating it as a municipality under his personal control, with his employees as its residents and his corporate authority as its governance. He runs Starlink as a sovereign communications network and has personally turned it on and off in active war zones based on his private foreign-policy preferences. He has installed himself inside the federal government via the Department of Government Efficiency while simultaneously running the largest private space program in human history under contracts with the same federal government, an arrangement of self-dealing that would have been illegal under the regulatory regimes the Progressive Era and the New Deal constructed and that proceeds in 2026 because those regimes have been dismantled. He has declared, in his more candid moments, that humanity must become multiplanetary, and the operational implication of the multiplanetary frame is that the planetary jurisdiction does not bind him. The Mars project is not metaphorical. The Mars project is Galt’s Gulch in literal three-dimensional space, escape velocity included.

Peter Thiel is the philosophical version of the same project. He has been explicit, in print since his 2009 Cato Unbound essay, that he no longer believes freedom and democracy are compatible, and the seventeen years since then have been a sustained operational program premised on that belief. He has funded Curtis Yarvin, who has been the most candid postliberal in American intellectual life — the proposal is the patchwork, the world divided into competing corporate sovereignties, each ruled by a CEO-monarch, citizens reduced to customers who can exit but cannot vote. He has funded Balaji Srinivasan’s Network State, the operational version of the Yarvin patchwork. He has funded the seasteading projects and the charter-city movement and the special economic zones in Honduras and elsewhere. He delivered, in March of this year, the Antichrist lectures at the Palazzo Orsini Taverna in Rome — which I addressed at length in Towards a More Perfect Union — and which constituted the most explicit statement of the postliberal program any American figure has yet given in public. The genealogy of the position runs from Carlyle through Maistre through Schmitt through Yarvin through Thiel, and the line of descent is documented and unbroken, as I traced in A Fascism Older Than Fascism. The frame is feudalism. The territories are the holdings. The CEO-monarchs are the lords. The residents are the tenants. The state is the enemy.

The Bitcoin maximalist project is the financial infrastructure for the same vision. Bitcoin in its maximalist form is not a currency. Bitcoin in its maximalist form is a sovereign-wealth instrument for a class of people who intend to hold wealth outside the jurisdiction of any state. The pitch for Bitcoin, when its serious advocates write what they actually believe, is not that it is a better payment system — it is a worse payment system than the existing alternatives. The pitch is that it is a vehicle for exit. Exit from the dollar system. Exit from the regulatory state. Exit from the tax authority. Exit from the political community that the wealth was generated within. The historical condition Bitcoin is being designed to replicate is the condition of the late-medieval European nobility — a class of mobile-wealth-holders who owed allegiance to no king and operated as a parallel sovereignty over the populations they extracted from. Adam Back, identified by John Carreyrou in the New York Times in April as the author of the original Bitcoin protocol, holds a fortune in unmoved coins now worth somewhere between a hundred and a hundred and fifty billion dollars, and the holding is the operational realization of the Sovereign Individual doctrine that David Davidson and William Rees-Mogg laid out in 1997 and that Peter Thiel wrote the foreword to in 2020.

These are competing royalist projects. They do not agree with each other. Musk and Thiel have been on opposite sides of various disputes. The Bitcoin maximalists despise the Ethereum people. The seasteading people think the Mars people are crazy. The Network State people think the seasteading people are unserious. What unites them is not the architecture of the kingdom each is trying to build. What unites them is the rejection of the modern democratic state as the legitimate container of political authority, and the substitution, in its place, of some form of personal or corporate sovereignty modeled on pre-modern arrangements. They are, in FDR’s exact words, carving new dynasties and building new kingdoms upon concentration of control over material things. The vocabulary is FDR’s because the project is the same project FDR was naming. The name has not changed because the thing has not changed.

⁂

State the doctrine plain.

A corporation is a trust. The charter is a public grant. The grant carries obligations. The obligations are enforceable. The grant can be revoked. This is American law. This is the founders’ understanding. This is the doctrine the Revolution made possible and the doctrine the Gilded Age tried to bury and the doctrine the Progressive Era partially recovered and the doctrine the New Deal mostly restored and the doctrine the Powell project has spent forty years trying to bury again.

The doctrine is not Marxism. The libertarian apparatus calls it Marxism because the apparatus needs to make the doctrine unavailable for political use, and Marxism is the closest available curse word in the American political vocabulary. But the doctrine predates Marx by a century and was held by every serious American legal authority of the founding generation. To call Hamilton a Marxist is absurd. To call Madison a Marxist is absurd. To call Marshall, who wrote Dartmouth College, a Marxist, is absurd. To call Theodore Roosevelt, who broke up the trusts, a Marxist, is absurd. To call Brandeis, who wrote Other People’s Money, a Marxist, is absurd. To call Franklin Roosevelt, who saved American capitalism from the very economic royalists who hated him for it, a Marxist, is absurd. The doctrine is American. The doctrine is constitutional. The doctrine is the thing the libertarian apparatus has spent forty years trying to make us forget, and the forgetting is the project, and the remembering is the work.

The doctrine is also not the slippery slope the apparatus claims it is. The American republic operated under the trust-doctrine for the first century of its existence and produced the most dynamic economy in human history. It did not collapse into Soviet collectivism. It did not produce bread lines. It produced railroads, canals, factories, universities, hospitals, the public works that built the country. The trust-doctrine was the operating framework under which all of this was constructed. The slippery-slope warning is a propaganda artifact aimed at a population that has been deliberately kept ignorant of its own legal history. There is no slippery slope. There is only the recovery of the framework the country operated under for a century before the Gilded Age legal coup, and the framework’s recovery is consistent with every variety of economic dynamism the founders intended and the Progressives restored.

The doctrine is, finally, not the framework Galt’s Gulch is set against. Atlas Shrugged presents the choice as between the producer free to keep what he has made and the looter who would take it from him. The choice is false. The actual choice — the choice American constitutional law has been organized around since 1787 — is between the producer who operates inside the political community on terms the political community has set, and the producer who has decided that the political community is beneath him and is constructing his own jurisdiction outside it. The first is a citizen. The second is a royalist. The first deserves the standing the culture extends. The second is the threat the culture exists to defend itself against.

⁂

The recovery is happening, in places, mostly unnoticed.

Lina Khan at the Federal Trade Commission under Biden was doing this work. Her 2017 Yale Law Journal paper Amazon’s Antitrust Paradox was the manifesto of what is now called the New Brandeis movement, which is exactly the trust-doctrine recovery in twenty-first-century form. Tim Wu at the National Economic Council was doing it. Zephyr Teachout’s Break ‘Em Up and Corruption in America are in this lineage. Sabeel Rahman’s work on the public-utility tradition is in this lineage. Ganesh Sitaraman at Vanderbilt has been writing the legal scholarship that translates the older doctrine into the platform-economy context. State attorneys general have been doing some of this work at the charter-revocation level — the New York attorney general’s attempt to dissolve the National Rifle Association under New York charter law, the California investigations into corporate misconduct under California charter authority, the multistate actions against the opioid manufacturers that have begun to reach the question of whether some of those corporations should continue to exist at all.

These are not Marxist projects. These are recoveries of the original American doctrine. The people doing this work are constitutionalists. They are American legal scholars working within the American legal tradition to recover what the American legal tradition originally held. The work is happening at the law schools, at the state attorneys general, at the regulatory agencies when they are staffed by people who understand the materials, at a small number of think tanks and journals and policy shops, and increasingly in the pieces of legislation that have begun to be drafted by congressional staff who have read the older case law. The work is the operational complement to the wall. The wall is the political project of preventing concentrated capital from converting itself into political power. The trust-doctrine is the legal project of disciplining the corporations through which the conversion is attempted. They are the same project from two angles, and they need each other to succeed.

The middle road I have been describing across this week’s writing runs through this recovery. The road is the road of the substrate, the road of the citizens against the royalists on one flank and the campists I named in The Anti-Imperialism of Fools on the other. The road is constitutional and bipartisan and supra-partisan and it is the road that holds against both forms of the assault on the democratic state — the assault from the right, which proposes to replace the state with corporate sovereignties, and the assault from the left, which proposes to dissolve the state into international solidarities that recognize no political community as legitimate. The middle road insists on the political community. The middle road insists on the trust-doctrine. The middle road insists that economic power is subject to political authority and political authority belongs to citizens.

⁂

FDR’s frame is our frame because the fight is the same fight.

It was royalism then and it is royalism now. The crowns were different. The titles were different. The technologies were different. The 1936 royalist owned a railroad or a bank or a steel mill. The 2026 royalist owns a platform or a launch company or a wallet of unmoved Bitcoin. But the project is the project FDR named — new kingdoms built upon concentration of control over material things, with their privileged princes reaching out for control over Government itself, creating a new despotism and wrapping it in the robes of legal sanction.

The robes this time are the Citizens United doctrine and the corporate-personhood line and the Federalist Society judiciary and the regulatory captures and the platform exemptions and the petro-AI rentier coalition that has purchased the executive branch. The despotism is what is inside the robes. The work is to recognize the robes for what they are and to refuse the legal sanction they are claiming, and to recover the older sanction that runs from the founding through Brandeis through FDR and that is still, in the actual American constitutional tradition, the operative authority on what a corporation is and what its obligations are.

The Revolution did not end. The Revolution was always going to require defending in every generation, against the same enemy, in the same vocabulary. The generation that has to defend it now is ours. The defense is the wall, and the doctrine, and the names FDR gave us when he named the thing for what it is.

---

Go Deeper into the Circus

---