Twenty-first-century capitalism is fundamentally different from the neoliberalism of the late twentieth century. The prominence of finance, intellectual property (IP) protection, and digital platform businesses raises new regulatory challenges. Monopoly dominance has replaced market fundamentalism. This commentary proposes a research agenda for twenty-first-century capitalism in the interests of identifying, examining, and considering a range of potential regulatory and governance solutions to promote social resilience in an anxious world.

The globalization of finance, IP protection, and digital platform businesses all promised endless innovation and unprecedented prosperity. Once heralded as keys to unlocking the best possibilities for the future, today their pathologies of monopoly dominance are becoming all too apparent. Heightened inequality and the unprecedented concentration of wealth into fewer hands are producing social anxiety across work, health, and even democracy. After multiple financial crises, global banks are still “too big to fail and too big to jail” (Naylor 2016). During the global COVID-19 pandemic, a taxpayer-funded vaccine producer (Moderna, Inc.) charged poor countries more than rich countries, restricted supply, and enjoyed enormous profits (Robbins 2021). Initially praised as a vehicle for social connection, Facebook is now vilified as the new Big Tobacco (Zakrzewski 2021). We see failures across public health systems, working conditions, and supply chains, and the concentration of political and economic power among the fortunate few. Inequality has fostered political polarization and the rise of populisms on the Left and the Right. Many observers fear that democracy itself is in danger (Snyder 2019).

In order to explain these pathologies, this commentary aims to propose a research agenda for understanding distinctive features of twenty-first-century capitalism in an effort to go beyond the “descriptive shell” of neoliberalism as a “broad indicator of the historical turn in macro-political economy” (Venugopal 2015, 182). Political economy scholars have made important sense of some of these trends but have yet to identify the connections between finance, intellectual property (IP), and digital platforms. Too often scholars look at these in isolation, or debate analyses of the late twentieth-century neoliberal agenda of tax cuts, privatization, and liberalization. Twenty-first-century capitalism is fundamentally different. Monopoly dominance, fueled by finance, IP, and the platform revolution, has replaced market fundamentalism (Bell and Hindmoor 2015; Cohen 2019; Mattli 2019; Sell 2003, 2021; Srnicek 2016).

Contemporary law, politics, and regulation reward monopoly business strategies. Winner-take-all markets predominate (Autor et al. 2020). Powerful global corporations have shaped this macrolevel institutional change. Ramifications include social harms and instability, but the root causes of monopoly dominance across all three areas and their distinct pathways to particular social harms are not well understood. Policymakers around the globe struggle to rein in concentrated private power. Uncertainty, extensive litigation, and regulatory experiments abound as inequality has increased sharply across the global political economy.

A research agenda for twenty-first-century capitalism should begin to trace the mechanisms linking the macrolevel features of the global political economy to multilateral, regional, and national institutions, and to explore resultant social effects in domains such as health, education, and social protection. The lack of transparency in finance, intellectual property, and platforms makes these areas difficult to regulate. The winner-take-all dynamics and highly concentrated economic and political power of the “superstar” firms have made it hard for policymakers to rein in the activities of these firms, as they can easily evade local taxation, willfully limit supplies of essential goods (e.g., vaccines, drugs, and personal protective equipment) to ensure robust economic returns, and even destabilize democratic processes with algorithms amplifying hate speech and disinformation. The dominant conception of the global economy as “neoliberal” is too broad and obscures the driving features of the twenty-first century. These features call for more targeted analysis, as proposed here, to devise policy approaches to address their pathologies.

Private economic and political power has become increasingly concentrated. The dramatic change from the late twentieth-century “neoliberal” model based on market logic to twenty-first-century capitalism has raised a new set of regulatory and policy challenges. Challenges include steepening income inequality, financial crises, precarious work (e.g., “essential” workers), unnecessary death due to restricted access to vaccines, digital disruption, global corporations’ tax arbitrage, and political polarization. Table 1 presents major differences in global capitalism across three eras.

Table 1. An Evolving Global Political Economy
CoreFeatures Embedded Liberalism: 1940s–1970s Neoliberalism: 1980s–2000 Twenty-First-Century Capitalism: 2000–Present 
Trade Protection/openness Openness Deeper integration with rising tensions, big firms dominate 
Finance Capital controls, strict banking regulation, stability Globalization of finance, deregulation, volatility Domination, concentration, volatility, cryptocurrencies 
Organizationof Production Vertically integrated firms Nexus-of-contracts, global supply chains Nexus-of-contracts and platforms 
MarketRegulation Competition, robust antitrust policies Competitiveness, weak antitrust, expanded IP protection Monopoly dominance, winner takes all 
Ideology Keynesian compromise “TINA,”i market fundamentalism Silicon Valley libertarianism 
SocialProtection Generous safety nets Reduced tax base, austerity Financial inclusion, personal responsibility 
CorporateGovernance Stakeholder value Shareholder value Shareholder value, betting on dominance 
Labor Full employment, strong unions Flexible employment, weakened unions Independent contractors, precarity 
GlobalGovernance Multilateralism, Cold War economic blocs Multilateralism, regionalism, bi- and unilateralism Regionalism, strategic use of institutions, decline of multilateralism 
CoreFeatures Embedded Liberalism: 1940s–1970s Neoliberalism: 1980s–2000 Twenty-First-Century Capitalism: 2000–Present 
Trade Protection/openness Openness Deeper integration with rising tensions, big firms dominate 
Finance Capital controls, strict banking regulation, stability Globalization of finance, deregulation, volatility Domination, concentration, volatility, cryptocurrencies 
Organizationof Production Vertically integrated firms Nexus-of-contracts, global supply chains Nexus-of-contracts and platforms 
MarketRegulation Competition, robust antitrust policies Competitiveness, weak antitrust, expanded IP protection Monopoly dominance, winner takes all 
Ideology Keynesian compromise “TINA,”i market fundamentalism Silicon Valley libertarianism 
SocialProtection Generous safety nets Reduced tax base, austerity Financial inclusion, personal responsibility 
CorporateGovernance Stakeholder value Shareholder value Shareholder value, betting on dominance 
Labor Full employment, strong unions Flexible employment, weakened unions Independent contractors, precarity 
GlobalGovernance Multilateralism, Cold War economic blocs Multilateralism, regionalism, bi- and unilateralism Regionalism, strategic use of institutions, decline of multilateralism 

i Margaret Thatcher’s slogan in defense of her promarket reforms was “There is no alternative” (TINA).

The globalization of finance, the prominence of IP, and digital platforms have profoundly reshaped everything from banking to production, trade, and labor. These three features have sharpened income inequality and concentrated economic and political power into fewer and fewer hands. Highlighting four of the core features from Table 1—finance, market regulation, the organization of production, and labor—illustrates these changes.

Finance. In the heyday of “embedded liberalism” (Ruggie 1982), governments committed to multilateralism and domestic social safety nets. In this era of “boring banking,” banks were strictly regulated and had public missions, providing long-term credit and housing finance (Epstein 2018). By 1980 many states had liberalized the sector, dismantled capital controls, and adopted floating exchange rates. This facilitated the globalization of finance and “roaring banking,” bringing extreme volatility into the system and resulting in multiple financial crises. As the global financial crisis showed, financial volatility damages the real economy, and regulators cannot assess the true market value of opaque toxic assets when crises hit. Cryptocurrencies and blockchain technology pose new regulatory challenges and questions about valuation. Footloose capital is difficult to tax, and public budgets suffer. Concentration in this sector created banks that were “too big to fail”; taxpayers had to bail them out.

Market regulation. Market regulation evolved from promoting competition through robust antitrust enforcement into a system rewarding competitiveness in global markets. Regulators became unconcerned about monopoly power at home if their nation’s firms were competitive abroad. Leading economies relaxed antitrust laws and expanded global protection of IP. Integrating this into the trade system increased its value for firms; economic returns to IP-based assets skyrocketed. This created a winner-take-all system based on monopoly dominance. The “superstar” platform firms—Facebook, Apple, Amazon, Netflix, and Google—have built bigger moats to keep competitors at bay, protecting long-term profits and market share. They secure their monopoly status by buying up competitors, and “as they accumulate providers and users, they become more dominant and entrenched, harder to dislodge by rival upstart competitors” (Rahman 2016, 658). The superstar firms’ venture capital investors expect monopolistic dominance (Atal 2021).

The organization of production. The globalization of finance sparked the rise of the global factory, disaggregating production processes while concentrating economic power and control. Facilitated by the information and communications technology revolution and transport efficiencies, global firms reshaped the global division of labor. Global supply chains proliferated in the 1990s, unbundling production and offshoring manufacturing through a nexus-of-contracts business model (Rahman and Thelen 2019). These supply chains were built on power asymmetries between global firms and low-cost labor in the Global South. The “smiling curve” (Figure 1) depicts the change in value distribution along the global value chain. Over time the smile has become steeper, with the return on intangibles such as IP much higher and the return on production much lower as emerging economies scramble to join global supply chains. This system increases inequality, producing fewer winners and many more losers. For example, Apple conducts R&D and owns the IP. A Taiwanese electronics contractor assembles Apple’s products in China, receiving only pennies on the dollar for each product. Apple also profits post-production; its stores provide a platform for developers to sell their Apple-compatible wares. When a customer buys a product developed by someone else, Apple’s App Store takes a substantial cut (Wiedeman 2021). Apple reaps the lion’s share of the value added and earns huge profits. In an even more extreme example, the athletic shoe company Nike owns no factories and makes no shoes. It earns profits managing its IP, the Nike trademark.

Figure 1. Graphic adapted from “Interconnected Economies: Benefiting from Global Value Chains” (OECD 2013).
Figure 1. Graphic adapted from “Interconnected Economies: Benefiting from Global Value Chains” (OECD 2013).
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Labor. The nexus-of-contracts supply chain model exists alongside a new business model facilitated by the rise of digital platforms (Rahman and Thelen 2019). The “gig economy” (e.g., Uber and TaskRabbit) is built on mobile phone apps that connect service providers directly to customers. To the extent that they are contract workers, not “employees,” gig workers plunge deeper down toward the valley of the steepening smile curve with no minimum wage guarantees and no benefits. Power has shifted away from workers, regulators, and the public at large (Rahman 2016). Infused with Silicon Valley libertarian and techno-optimist ideals, platform businesses lobby against state-run social programs, unionization, and government regulation of the platforms (Popiel 2018).

A research agenda for twenty-first-century capitalism should integrate macro and micro scales and analyze the combined effects of finance, IP, and digital platforms on social outcomes to highlight distinctive features of twenty-first-century capitalism. It invites interdisciplinary inquiry into the structural, institutional, and discursive factors driving profound change. Tracing pathways from macrostructural features, such as the concentrated economic and political power of finance, IP, and digital platforms, to social outcomes, such as availability of vaccines and reliable work, this agenda holds promise. The framework allows us to identify, examine, and consider a range of potential regulatory and governance solutions to undesirable social outcomes, including unnecessary obstacles to essential goods and services that promote well-being. Opacity of digital platforms, labor precarity, inequality, pandemics, and climate change are just some of the sources of social anxiety today. The research agenda for twenty-first-century capitalism, as suggested here, is to help identify policy approaches to better promote social resilience in an anxious world.

I would like to thank Abe Newman, Henry Farrell, Kathleen McNamara, JP Singh, and Stephen Kaplan for helpful comments on earlier drafts.

No competing interests exist.

Australian Research Council DP18 0102426.

Susan K. Sell is Professor at School of Regulation and Global Governance, Australian National University; Emeritus Professor of Political Science and International Affairs, George Washington University. She has published widely on the politics of intellectual property, including private power, public law, global governance, and public health.

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