In his 2016 book ‘An American Utopia,’ the renowned Marxist theorist and critic Frederic Jameson suggested that Walmart may, counterintuitively, offer a guide for a post-capitalist future. Now, Leigh Phillips and Michal Rozworski have expanded on this provocation in their new book ‘People’s Republic of Walmart’, which attempts to reexamine the achievements of modern multinational capitalism through a socialist lens.
Walmart, with its vast array of outlets, distribution centres and suppliers, is controlled from the company’s headquarters in Bentonville, Arkansas. Staff there dictate what is made available to customers, when and in what quantities. Does this sound familiar? Well, according to our authors it bears a striking similarity to the supposedly sclerotic and inefficient Soviet planned economy that was, we have been told, so conclusively discredited by the events of 1989. Is it the case, they ask, that globalised capitalism, with its tendency towards monopolies, has created the conditions for a few companies to dominate vast percentages of the economy, accidentally facilitating the very kind of economic planning that the free market is supposed to abhor?
Phillips’ and Rozworski’s contention is not only that the answer to this question is ‘yes’, but also that this proves the inherent superiority of planned economic programmes over theoretical free market models. Their book offers a lively and combative reading of the economic literature, delving deeply into works such as Oskar Lange’s writings on ‘market socialism’ and Ronald Coase’s studies on the nature of private limited companies, significant contributions from authors whom the wider public might otherwise be unfamiliar. They also draw attention to the many little ways in which the ‘free’ market is planned. Drawing up a business plan for a board meeting? Planning. Increasing orders of avocados when you spot more and more millennials moving into the new housing development next door? Planning. Stopping stocking orange jeans when you notice that they’re not selling? Planning. (My editor noted that better planning would have been not stocking orange jeans in the first place and I can only agree.)
The book is an invigorating read, delivered in a conversational and clear tone that I found enjoyable (though others might find it grating). It certainly stands as a useful corrective to many casual assumptions about just how free contemporary capitalism actually is. The authors also offer combative defences of nationalised industries and a critique of the NHS internal market reforms that act as a useful reminder for British audiences, though I suspect it is targeted primarily at an American audience.
What, however, is this defence of planning meant to accomplish? Indeed, what exactly is being defended when the authors speak so highly of planning? This is much trickier territory (although it would be unfair to expect a book like this to provide final answers) and the authors’ arguments ultimately become confused. It is certainly true that Walmart operates with a physical and economic footprint that dwarfs that of many countries but – contrary to the authors’ implication – that does not mean that there is an equivalence. Just as George Osborne’s ‘overspending the national credit card’ narrative was a poor argument for countries adopting austerity measures in a downturn, a company’s ability to plan its marketing and distribution strategy is nothing like a country planning its internal economy and external balance of trade, to say nothing of its foreign and domestic policy.
The board of Walmart – or, if you’d prefer, its central planning committee – has one job: to maximise shareholder value (whether company boards should have broader goals than this is a different debate). What is the equivalent for the government of the UK? To maximise the happiness and/or prosperity of its citizens, would I suppose be the correct answer. But that’s a less simple directive. Over the course of Margaret Thatcher’s premiership, the UK experienced a great deal of economic growth but it was unevenly distributed and benefitted certain sections of society over others. Does that count? Perhaps. I certainly have my opinion on this question but answering it should, I venture, be open to reasonable political contestation. Reaching a consensus on this is not as straightforward as expecting board members to work to double the value of your shareholding.
Secondly, the kinds of surveillance and data retention that facilitate the vast planned economies of Walmart and Amazon pose a challenge to the authors’ arguments but one they don’t always confront head-on. In the first place, an acknowledgement of the importance of these practices is central to their rebuttal of one liberal critique of planned economies – that government bureaucracies cannot have sufficient information to properly and efficiently plan an entire economy. Amazon does, our authors argue – why shouldn’t the Treasury as well? But, on the other hand, is this a good thing? Personally, I’m not comfortable with the amount of my personal information that tech companies have quietly harvested. And I’m not at all sure that this discomfort would fade if government agencies were collecting the data instead. Indeed, the authors seem to agree and they devote much page space to criticising these practices. But if the means by which multinationals administer a planned economy are morally questionable, what does that say for the wider argument in favour of the system?
This question of democratic oversight over the economy is one with which ‘People’s Republic of Walmart’ grapples several times, without any real result. The authors certainly pay lip service to the idea of democratising the economy, in a way that makes it hard to disagree with in principle. Suggested innovations such as compulsory worker representation on boards, would go some way to achieving this. But this falls a long way short of the economic planning that Phillips and Rozworski seek to advocate (beyond the limited sense in which boards of directors are also planners). Their approach to deomcratic oversight is thus somewhat inconsistent. At one point, in arguing for the creation of people’s economic councils, they suggest that “votes could be weighted” in situations “where technical knowledge is more important,” which isn’t necessarily a bad idea but also doesn’t strike me as particularly democratic.
Late in the book, the authors quote with admiration the computer scientist Paul Cockshott, who claims to have developed a programme which was able to solve all optimising equations for an economy roughly the size of Sweden in about two minutes using a computer costing only £5,000. Without wishing to get into the direct merits of Cockshott’s work (and I should say that I am not qualified to analyse and come to a judgement on the contents of his equations), I would note that, were such an economic programme be instituted by the government of Sweden, it would hardly be democratic. The programme does not offer the public oversight over its solutions to the various optimising equations, it just goes ahead and performs them. Indeed, seeing a country’s economy simply as a series of optimising equations is completely the opposite of democratic. What equations was Cockshott attempting to maximise? And how did he come to decide what the machine’s objectives should be? What does ‘democratic oversight’ even look like in this context? The Industrial Revolution ‘maximised’ (or at least wildly accelerated) the United Kingdom’s GDP growth during the nineteenth century, but with results that the twenty-first century Left would probably find hard to support.
Finally, it must be said that the authors’ engagement with Soviet economic history is seriously lacking. While an analogy with the Soviet Union should not be the be-all and end-all of arguments about far left ideas (I find the ‘so you like nationalised railways, you must love famine and gulags too’ school of thought as tiresome as anyone else), people discussing the implementation of a planned economy do have a responsibility to engage more seriously with the history of the first country to make that attempt. Instead, after being told that all forms of projects and strategies in a private company are tantamount to central planning by stealth, our authors later tell us that the Soviet economy was in fact “a chaotic stagger from bottleneck to bottleneck” rather than a planned system, an assertion which stretches credulity.
When the authors do address the role of planning in the Soviet Union, they do so in a muddled manner which actually underplays its successes. They assert that planning was undermined by Stalinist autocracy and regular changes of priorities in the 1930s through to the 50s, a contention which sits uneasily with the fact that this period of turbulence and tyranny was also one of impressive economic growth. And if planning was not the cause of the Soviet Union’s economic transformation, what does that say to recommend it?
Indeed, though there are many reasons to suspect that Russia was ripe for economic expansion from the mid-1920s onwards, the Soviet planned economy did play a vital role. One thing that well-run planned economies have been able to do with great success is copying, faster, what other economies have already done. This allowed Soviet planners to steer their economy within 20 years along a course that it took the United Kingdom nearly over a century to manage. After catching up with the British and, more pertinently in the context of the mid-twentieth century, the Americans, however, the Soviet economy stagnated because there was no longer a blueprint to follow and the planned economy proved itself unable to innovate. This should cause us to ask a simple question: what economy or country should a twenty-first century planned economy be looking to emulate? This is a question to which, to my mind, there are no easy answers – and it is one that the authors fail to address.
Phillips and Rozworski have written an interesting book, and not one without merit, despite the criticisms above. But the book’s fundamental argument – planning will work now because we have the means to collate sufficient data and the system will now be subject to democratic oversight – requires further development. The central metaphor of pointing out the alleged similarities between planned economies and contemporary multinationals probably belongs more in a ‘made you think’ tweet than a full-length book. There are serious things to be said about the role of planning in the economy but these must go beyond “well this time we’ll do things right because we have superior surveillance methods.” Serious consideration of the relative merits of planned economies and what can be borrowed for our contemporary moment are left out and must await more detailed treatment elsewhere.