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People’s History of the Marvel Universe, Primary Special: Krakoan Economics

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Miracle Drugs and Xavier’s Corporate Structures

Hickman’s attention to the importance of economics is evident from the very beginning of House of X #1 – what separates Krakoa from Genosha, Utopia, New T’ian, and other failed mutant homelands is that (this time) they have an exportable commodity to trade with the rest of the world:

As we see over the course of House of X’s run, Krakoa is able to parlay this commodity into both U.N recognition and treaties that combine diplomatic recognition and trade agreements with most of the world’s governments. Hickman’s argument seems to be then, that for minority nationalities seeking self-determination, appeals based on economic self-interest rather than appeals based on human rights have a greater likelihood of success. And given the history of nations (especially newly-independent nations) trying and either succeeding or failing to gain recognition since WWII, it’s hard to argue with this strategy.

At the same time, it’s important to analyze the content of the Krakoan economic “proffer.” Unlike so many newly-independent nation-states who have found themselves in the unenviable position of reliance on natural resource extraction or monocrop agriculture (with all of the economic volatility, inequality, and poverty that often attends) Charles Xavier has seen to it that Krakoa’s economy is based on pharmaceuticals, a high-value-added product that commands quite a price on the world market.[1]

As we learn from X-Force #4, these medicines have made Charles Xavier quite rich – and how rich matters, because for all intents and purposes, Xavier’s personal wealth is indistinguishable from the GDP of Krakoa.[2] (More on this later.) However, this leaves us with the question of what this money is for. X-Force puts some meat on the bone of the discussion of shell corporations and offshore interests that Charles and Emma had in Powers of X #5:

The purpose of some of these corporations are relatively self-evident (Xavier Pharmaxeucticals, and possibly Gifted Mind Technologies and Uncanny Valley Farms as well, are likely the company – companies actually – that I’ve created to process and manufacture the drugs”) but others remain something of a mystery. Given how many different sectors are involved – pharma, tech, media and culture, energy and mining, real estate, legal service, aviation, waste management, and philanthropy – it could be that these businesses are meant to be the skeleton that a Krakoan economy could be built on. (We also don’t know who works for these corporations – presumably those located on the island are all mutants, but X-Force #4 shows that locations out in the human world have a mixed workforce of humans and mutants.)

On the other hand, given what we know about the limitations of Krakoan land use and the impact of Krakoan and mutant technology, it’s not clear whether some of these economic activities would be needed or even allowed on the home islands. As I’ll talk about in more detail later, Krakoa’s Second Law would seem to forbid Evolution Energy and X-Marks-Spot Mining from natural resources extraction, and at the very least severely restrict the activities of Salem Center Auctions and Real Estate. Moreover, this infographic describes many of these companies as being meant to influence news, entertainment and education, or allow for political, legal, monetary, fiduciary gains and control in the human world. Certainly, this would seem to be more in keeping with Magneto’s vision of political economy as laid out in X-Men #5 (more on that later as well).

A third possibility – and these are by no means mutually exclusive – is that these corporations, especially the more extractive ones, are a way for Krakoa to get resources it needs from outside without having to go through human-controlled firms or markets or polluting its own environment. (This latter is sadly plausible when you look at the trade practices of Northern European countries who have significant investments in sustainability and low domestic CO2 emissions.)

Krakoa as Semi-Automated Economy Space Gay Communism

This raises a really important question: what does Krakoa’s domestic economy look like? We know from House of X #6 that it’s not exactly a conventional capitalist system:

Karl Polayni, author of The Great Transformation, argued that in order to have capitalism, you first have to have free markets in land, labor, and money – all of which have to be created by government. As we see here, Krakoa’s government explicitly rules out a free market in land, because the land is a sovereign, conscious individual – an individual, moreover, who we see getting actively involved in land use policy and the construction of all housing on the island, which it provides free at the point of use:

Thus, housing (and to a lesser extent, food) has been entirely de-commodified, to borrow Gøsta Esping-Andersen’s terminology from Three Worlds of Welfare Capitalism. Similarly, it’s unclear whether there are free markets or indeed any markets in money. Presumably, the digital currency known as xcoindescribed in the infographic above is Krakoa’s sovereign currency. But since the Quiet Council tabled monetary legislation, we don’t know how the Krakoan government produces and distributes xcoins, how individual Krakoans can earn xcoins (or borrow and lend them, which you’d need to have for a Krakoan banking system to exist), where they can spend xcoins, and as our Modern Monetary Theory colleagues would remind us, what taxes they’d have to pay in xcoins.

Finally, while there are no restrictions of caste that would prevent a free market in labor from emerging, the fact that the island itself provides free housing and food might greatly reduce the extent to which Krakoan citizens feel the need to engage in waged labor…except that Krakoa isn’t a replicator from Star Trek. As we learn, the island has difficulty providing certain items:

Meat, processed foods, alcohol, personal hygiene products – these are the kinds of consumer goods that a lot of mutants want and that the island can’t provide (and thus de-commodify). As we learn from Marauders #1, the price of these goods has skyrocketed far above their norm, which is a pretty classic economic phenomenon that is common on (especially smaller and more remote) islands where a lot of goods have to be imported, leading to the creation of a substantial black market (at least for bacon and potato chips). This might be somewhat surprising, given that we see in X-Men/Fantastic Four #1 that individual mutants can and do use the portals to go shopping anywhere in the world and buy goods at their normal retail price:

However, there are some important limiting factors that explain why the portals haven’t solved this issue completely. First, we’ve only seen people go through the gates on foot, which severely limits the quantity of goods that can be imported in this fashion. Second, as the success of delivery services like Seamless, Postmates, Doordash, Taskrabbit, UberEats, FreshDirect, Instacart, Amazon Prime, and the like demonstrate, there are quite a lot of people willing to pay a premium for someone else to go the store for them rather than do it themselves. Third and perhaps most critically, people who move to Krakoa rather than commute are eventually going to run out of human currency that they can buy outside goods with, and I doubt that even Quentin and Daken are capable of shoplifting enough to supply an entire nation.

However, there is another economic strategy that developing nations, especially those trying to maintain a positive balance of payments, used quite frequently in the mid-20th century to deal with this kind of problem: “import substitution.” Over the past in-universe month, we’ve seen the island learn how to produce coffee, turtle eggs (in place of chicken eggs), spinach, edible flatware, and a weird goo-gun that could be classified as kitchen detergent, a washing machine, and/or a garbage disposal system. As these substitutes become wildly available, their price should drop down to zero, eliminating them from the black market and adding them to the stock of goods that are de-commodified.

So how then, should we think of Krakoa’s economy? Well, I would argue that we should think of it as one in which there is a rather large public sector that provides a substantial “social minimum,” albeit in-kind rather than in cash, but which will still require a significant market economy and international trade to satisfy the wants of all of its citizens (at least until mutant bio-technology emerges from its infancy). Or, as Marauders #7 put it, a capitalistic country with some very strong socialist programs.

This still leaves an important question: how do we get these human goods to Krakoa?

Hellfire Club as National Champion

When it comes to economic interactions between the new mutant nation and the whole world, the discussion wouldn’t be complete without the newly-christened Hellfire Trading Company. Beginning with Powers of X #5, where Xavier and Magneto make an agreement with Emma Frost that she would have afifty year exclusive contract to handle the distribution (licit and otherwise) of Krakoa’s pharmaceuticals, the Company has taken center stage in Krakoa’s economy:

The HTC acts a kind of central bank for Krakoan pharmaceuticals, intervening in markets to set (and maintain) their prices. It does so by both providing legal supplies of said drugs to countries which have signed trade deals for their importation and by providing illicit drugs to countries that have refused. This black marketeering is partly done as a means of political subversion of nations that are hostile to the mutant nation-state; what better way to demonstrate Krakoan benevolence and the perfidy of anti-mutant governments than by healing the sick? The Company also engages in black marketeering out of a desire to maintain price stability – without access to ample supplies, black markets might seek to re-import Krakoan drugs from countries where they are legal (and thus cheaper) in order to make money from the arbitrage, which would destabilize prices in treaty and non-treaty nations alike.

It is this latter activity that potentially undermines the liberatory elements of Emma Frost’s vision for HTC, because it often requires the Company to use its naval forces to engage in privateering missions against black market re-importers. For the moment, the Red Queen and her allies have been able to stay just on this side of imperialism – most of their efforts have been directed against the Black King (more on this in a second) and his mercenaries, and the human terrorist organization Homines Verendi, but the Battle of Madripoor Bay comes very close to the line given the ability of various criminal and foreign government institutions to buy membership in Madripoor’s government (and thus potentially transform a private conflict into an act of war between nation-states). Whether they can stay on the right side of this line over time is another question; good intentions are no guard against the creation of empires.

Speaking of the Black King, however, we have to talk about the division in strategy between Emma Frost and Sebastian Shaw. Broadly speaking, the White Queen wants HTC to act as a stabilizing force, both in terms of Krakoan drug prices and maintaining political goodwill in as many nations as possible. By contrast, Shaw is all about short-term gain, redirecting black market Krakoan drugs from the global south to the global north in order to maximize profits even if they come at the expense of Krakoa’s long-term political interests.

In his own way, Shaw is even more dangerous than Homines Verendi’s drug-tampering scheme, because in addition to the short-term damage he could do to Krakoa’s reputation as a reliable trading partner in the developed and developing world alike, there is the long-term damage he could do by using his influence within Krakoa’s government to transform the nation-state from a potentially revolutionary force into just another global predator. This is the grand conflict of Marauder’s first arc.

Leaving aside questions of which model of export policy Krakoa should follow, there’s another potential role that the Hellfire Trading Company could play in Krakoa’s economy: the import side of import-export. While this part has remained largely implicit (with Emma’s comments about how Kate could make a fortune as Red Queen), the holds of the Company’s ships are unlikely to just be bringing mutant refugees on the return voyage. Given their pre-existing strengths in logistics and distribution, their growing fleet to allow for economies of scale, and the fact that they have large amounts of cash on hand from the delivery of Krakoan drugs to buy wholesale rather than retail, the Hellfire Trading Company is perfectly positioned to be Krakoa’s joint-purchaser-of-last-resort for all of those human consumer goods (and to deal with global balance of payment issues; it’s not a good thing for the world economy if huge sums of money flow into Krakoa and then never leave). 

Over time, then, the HTC should shrink the Krakoan domestic black market as it expands its maritime commerce capacity. As with the xcoin, however, important questions remain about how individual mutants would go about paying for HTC’s imported goods. No matter how many submarines and armed merchantmen you have, there is no escape from macro-level political economy.

Political Economy of the Quiet Council

Speaking of which, X-Men #4 gives us an explanation of the purpose of Krakoan economic policy – now that diplomatic recognition has been achieved – in so far as Xavier and Magneto are the driving force in and above the Quiet Council. It turns out that pharmaceuticals are ultimately useful for the diarchy because they have to be taken regularly, requiring ongoing economic relationships:

Here is where Hickman’s X-Men comes closest to the critique of late capitalism seen in his Black Monday Murders – although here the source of economic advantage is ultimately in intellectual property rather than raw finance, in both cases Hickman is fascinated by the way in which debt acts as a mechanism of social control, extending the leverage of creditor over debtor into realms beyond the economic. Acting as Hickman’s mouthpiece, Magneto turns his critique of the existing economic order into a game plan for Krakoa. This would seem to lean in Shaw’s direction for how Krakoan pharmaceuticals could be used to transfer wealth from an aging global north to a rising competitor, but for two important details:

The first is that, as he alludes to on the previous page, Magneto has not changed that much from the man who once threatened the world’s leaders with a volcano machine to force global disarmament and a peace dividend that could eliminate poverty. Thus, where Sebastian Shaw can think no further than a crude smash-and-grab policy that would allow him to sit at the head of the world’s boardroom table, Erik Lensherr sees Krakoa’s destiny as a benevolent technocratic overlord, offering better versions of a better life to humanity. In this view, Shaw’s short-termism is counter-productive, potentially leading to resentment and reaction where Magneto intends to keep the global north contended in their debt.  

Similarly, Magneto remains a mutant nationalist, but one who intends to use the tools of global financial capital in place of doomsday machines and Bond villain ultimatums. The means have changed, but both the ends and his jaundiced view of human-mutant relations have not: Erik’s view is not that Krakoan drugs or Krakoan technocratic management will lead humans to be less racist against mutants, but that by using the proceeds from Xavier’s pharmaceuticals to finance a campaign of influence-buying, they can starve anti-mutant forces of oxygen. Here is where I think we see some development in Hickman’s thinking since Black Monday Murders, extending his analysis from the economic to the political: while this brand of subtle coercion is certainly in keeping with Lensherr’s autocratic instincts in Uncanny X-Men #150, it’s not like we haven’t seen examples of this in contemporary world politics, from China’s “Belt and Road Initiative” to the EU’s association agreements in Eastern Europe.

It’s a peculiarly post-modern kind of development economics, suited for an age in which dark money sloshes through elections despite all attempts to regulate it and in which billionaires view themselves as both kings and kingmakers. And ultimately, it is a political economy far more suited to Emma Frost’s vision for the Hellfire Trading Company…

Conclusion:

As I hope I’ve shown by now, there is actually quite a rich vein of content as well as symbolism to be mined from the economic, and it’s one of the main reasons why I hope that we don’t get a reversion to the X-Mansion-in-Westchester norm any time soon. HoX/PoX and Dawn of X have shown us that the mutant metaphor can evolve to include and examine new concepts that it never could before.

But stasis is not compatible with evolution.


[1] As someone who followed the X-twitter discourse on HoXPoX quite closely on a week to week basis, I found myself surprised by some of the skepticism of the desirability of some of these drugs. While a drug that extends human lifespans by five years isn’t the same thing as literal immortality, the current global market for anti-aging products is somewhere around $200 billion, and most of those products are of dubious benefit. Likewise, in an age when antibiotic resistance is rising, an “adaptive universal antibiotic” would be poised to gobble up much of the current $62 billion global market in antibiotics. Finally, while “diseases of the mind” is a rather vague term (and in Marauders and New Mutants has been shown to include Alzheimer’s and other forms of dementia as well as mental illness), the global market in mental health drugs alone is about $88 billion. These are not small sums we’re talking about.

[2] In our world, global pharmaceutical sales in 2019 were $1.56 trillion, which suggests that Krakoa’s economy would be no more than the 13th biggest in the world, somewhat above Spain and Australia and slightly below Russia. On the other hand, Pfizer is the single largest pharmaceutical firm in the world, and took in about $50.8 billion in 2019, which would place Krakoa’s GDP around that of Libya and the Ivory Coast – although given Krakoa’s small population, their GDP per capita would be closer to that of Japan and Germany. X-Force #4’s estimate about Charles’ net worth suggests that the figure we’re looking for is somewhere in the vicinity of $125 billion, which would place Krakoa’s overall GDP around that of Morocco and a GDP per capita up there with Luxembourg.



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