When the Capitals of Capitalism Go Socialist

[Celerity]

https://prospect.org/blogs-and-newsletters/tap/2025-06-26-zorhan-mamdami-capitalism-socialism-wall-street-new-york/



Proximity breeds contempt. New York is not the only capital of financial capitalism to face the specter, much less the reality, of a socialist mayor. In the wake of Zoran Mamdani’s stunning victory in New York’s Democratic mayoral primary on Tuesday, we should recall that “Red Ken” Livingstone, who stood on the very left fringe of the U.K.’s Labor Party as Mamdani does on the Democrats’, was twice elected mayor of London, serving from 2000 to 2008.

Having Wall Street and the City (as London’s financial district is called), respectively, looming over the locals clearly doesn’t endear them to the citizenry. For one thing, financiers—unlike the moguls of manufacturing, transport, retailing, or digital technology—don’t make a product or deliver a service directly to ordinary Brits or Yanks. In the mid-20th century, when the rules set by the New Deal here and social democracy in Europe reduced finance to a modest-profit sector serving industry and developers, the intangible work of bankers wasn’t a source of public woe and rage. But ever since the Reagan and Thatcher Eighties, when deregulation swelled finance to the point that it called the tune for other sectors (demanding, for instance, that manufacturers offshore their work to low-wage nations), and shifted the balance of nations’ incomes (particularly in the U.S. and U.K.) from wages to investments, the level of public woe and rage has risen accordingly.

Economic inequality in the post-Reagan-and-Thatcher world is at its highest in major cities, nowhere more so than in London and New York, where financiers with stratospheric incomes create neighborhoods that attract the whole planet’s billionaires in sufficient numbers to warp housing costs. In New York today, the median monthly rent for a one-bedroom apartment is $4,500; for a two-bedroom; it’s $5,500. According to a study by the New School’s James Parrott, the wealthiest 1 percent of New Yorkers accounted for roughly 12 percent of New Yorkers’ income in 1980—on the eve of the Reagan ascent—but that share had risen to 36 percent by 2022. (Nationally, the rise was from 10 percent to 24 percent.)

So, the New York billionaires and centi-millionaires who are freaking out at the ascent of Mamdani should try to understand that they are the proximate cause of that ascent—that, and the fact that Mamdani is a brilliant campaigner. As their London counterparts demonstrated 25 years ago, a city divided against itself—horizontally, with the weight of the wealthy bearing down on everyone else—may still stand, but it will periodically buckle. While the Dan Loebs, Paul Singers and their hedgehog ilk rage at the threat of a more egalitarian metropolis, they should be thankful that democratic norms provide a peaceful path to de-oligarchization. After all, back in the 19th century, before ordinary New Yorkers had any real political power to affect the economy, they once chased robber baron Jay Gould down a Manhattan street. Mamdani’s agenda features no such near-lynchings, merely a series of reforms to make New York more affordable.

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