Friday, 12 April 2019

The People's Republic of Walmart: "The dichotomy between corporate capitalism and socialism-as-planning is false"

What exactly are the differences between corporate capitalism and state socialism?
Futures Forum: Welfare for the poor... welfare for the rich
Futures Forum: Libertarians of right and of left - and the actually existing system

An interesting book came out this week asking these same questions:
The People’s Republic of Walmart - How the World’s Biggest Corporations are Laying the Foundation for Socialism | Verso
Book launch: The People's Republic of Walmart Tickets, Mon, 8 Apr 2019 at 5:45 PM | Eventbrite 

Here's a critique from the Centre for a Stateless Society - a think tank with a 'market anarchist' take on the economy:

Review: The People’s Republic of Walmart

Frank Miroslav | @mutual_ayyde | March 30th, 2019

Phillips, Leigh, and Michal Rozworski. The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism. Verso, 2019.

Let me begin by saying that I’m glad this book exists. Phillips and Rozworski are upfront about their book not containing any radical new insights into questions of economic planning, but instead they compile arguments made by others in a highly readable format, something that those on the left who argue for economic planning have needed for some time... 

Market anarchist critiques of the currently existing economy are incredibly potent at also knocking down this form of socialism. The insistence that Amazon and Walmart are successful islands of planned order within the chaotic market completely ignores larger questions of how our current institutional arrangement allows them to exist. 

The dichotomy between corporate capitalism and socialism-as-planning is false. As Phillips and Rozworski correctly point out, much of actually-existing-capitalism is planned. And such a framing also excludes serious non-capitalist market alternatives. While I’m sure Phillips and Rozworski would roll their eyes at such a distinction, our arguments are not so easily dismissed.

Let us start with the most erroneous claim. The supposed economies of scale that they champion as proof of planning winning out in the capitalist marketplace are in fact the result of deliberate state investment. Kevin Carson’s award-winning article on the subject of transportation subsidies makes clear the ludicrous degree to which the transportation network that firms like Amazon and Walmart rely on require the socialization of costs to the rest of society. It’s worth reading in its entirety, but I’ll quote the most damning part here:

"Virtually 100 percent of roadbed damage to highways is caused by heavy trucks. After repeated liberalization of maximum weight restrictions, far beyond the heaviest conceivable weight the interstate roadbeds were originally designed to support, fuel taxes fail miserably at capturing from big-rig operators the cost of pavement damage caused by higher axle loads. And truckers have been successful at scrapping weight-distance user charges in all but a few western states, where the push for repeal continues. So only about half the revenue of the highway trust fund comes from fees or fuel taxes on the trucking industry, and the rest is externalized on private automobiles.1"

Center for a Stateless Society » Review: The People’s Republic of Walmart

Which this blog has featured before:
Futures Forum: We are all truck-drivers now ... The free movement of goods, increased carbon emissions and the destruction of manufacturing industry

This is known as 'lemon socialism':
Futures Forum: Subsidies and social engineering: or why we build roads.

And it's happening everywhere:
Futures Forum: Crony capitalism and lemon socialism in East Devon........ The costs of "substantial growth and expanding business"
Futures Forum: Lobbying: big business and big government in East Devon

Although there might be other approaches:
Futures Forum: Open Source Ecology >>> Homebrew Industrial Revolution >>> Do-it-yourself sustainable development

This piece from the Baffler is more positive about the planned economy - pointing out that planning is what corporations are all about anyway: 

Stick to the Plan

Reclaiming central planning from the clutches of corporations

Brendan James, April 3
The Baffler

"What do you think the Russians talk about in their councils of state—Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do."

–CCA Chairman Arthur Jensen, Network

WHAT DO JEFF BEZOS AND JOSEPH STALIN have in common? A certain supervillain chic. Cold-blooded austerity. Iron discipline. A penchant for back-breaking output targets. A healthy appetite for terror.

Yet perhaps their most surprising overlap is that the General Secretary and the chairman of Amazon, Inc. built two of history’s largest centrally planned economies. Then again, maybe it’s not so surprising: What embodies the trademark Bezos-ethos of “Get Big Fast” better than the Five-Year Plan? Thanks to its cutting-edge logistics and coordinated supply chains, Amazon last year clocked a GDP of $230 billion. You can picture Uncle Joe toasting Bezos’s success in the great Central Committee in the sky. To Jared Kushner’s recent demand that “the government should be run like a great American company,” let all communists raise a fist of solidarity!

In fact, write Leigh Phillips and Michal Rozworski in The People’s Republic of Walmart, Amazon is just one of thousands of firms, big and small, that centrally plan their inputs and outputs. Of the top hundred global economies, around sixty-nine of them are businesses, not countries; most, if not all, are internally planned. (Sears, which over the last decade broke its firm into an “internal market” of competing units thanks to CEO and Ayn Rand-devotee Eddie Lampert, is conspicuously absentfrom this list.) Despite the collapse of the USSR and the global gospel of markets that spread in its wake, it seems planning is still working all around us.

The problem is that planning is not working for most of us. Yes, automation and “Big Data” have conjured cheaper goods for consumers—unfortunately, most consumers are also laborers who remain ruthlessly exploited. As the promise of new technology expands each day, workers sleep while standing or collapse from heat exhaustion. Planning, once a revolutionary tool meant to reduce labor time and eliminate exploitation, has become just another vulgar mechanism for maximizing the profits of unelected, authoritarian, union-busting, planet-cooking, superrich vampires. The People’s Republic of Walmart makes the case that the left should reclaim the radical demand for a democratically planned economy and repurpose this corporate apparatus for the flourishing of all. Far from a dry pamphlet on logistics theory, the book raises crucial questions about justice, technology, and our capacity to build a new world in the face of economic and climate catastrophe.

The planned economy was supposed to have gone extinct three decades ago. The Soviet Union gasped its last breath, American capitalism sprayed a bottle of Cristal, European social democracy ordered another latte, and China pressed a big button labeled “Market Socialism.” But if you really put the time in, you could probably get a wonk from the Hoover Institution to grudgingly accept that government planning still beats the market in the realm of certain public services, such as health care or fire departments. The knives come out, though, when this approach is proposed for things like housing, pharmaceuticals, energy, or, heaven forbid, consumer goods in general.

What may surprise newcomers, however, is that many self-described Marxists are wary of planning, too. Despite being thanked in Phillips and Rozworski’s acknowledgements, Bhaskar Sunkara, editor of the left-wing magazine Jacobin, identifies as a market socialist. In a 2013 essay sketching an agenda for the left, Jacobin’s executive editor Seth Ackerman conceded that markets are necessary, so perhaps we’d best just find a way to socialize them. Vivek Chibber, professor of sociology and, along with Sunkara, one of several co-authors of The ABCs of Socialism, dismisses planning as a dead-end: “We can want planning to work, but we have no evidence that it can.” One of the left’s “worst legacies” has been to “identify socialism with central planning.” Market socialism, we’re told, is communism for grown-ups.

Everyone from the market socialist to the Austrian economist has taken one side of an incredibly sexy academic exchange known as the “socialist calculation debate.” The argument should be familiar: market transactions provide producers with essential information about what consumers and other producers need, and therefore how much to make. To try and calculate (that is, plan) this galaxy of interdependent inputs and outputs is impossible in a fluid economy. It’s a matter of information, you fool. And like it or not, market prices are the best way to collect the information we need to map out supply and demand.

A rich tradition of heterodox economics, mathematics, and computer science has materialized to answer this problem of calculation. But it is modern processing power, dwarfing the bandwidth available in the twentieth century, that truly rebukes the argument above. Consider computer scientist and economist Paul Cockshott who, in about two minutes, using only university equipment, claims to have run models that were able to optimize an economy “roughly the size of Sweden.” You get the feeling that the mammoth data centers at Amazon, Ford, or Foxconn might be capable of even more impressive calculations. And besides, to insist communist theory prove some perfect equation is either disingenuous or missing the point. The question is not whether planning is mathematically pristine, but whether it can allocate better than the market.

The answer, to return to the material world, is yes it can. It’s true that under capitalism firms plan internally but compete with each other, a dance that keeps companies innovating new ways to capture surplus and, sometimes, inadvertently benefit regular people. This dynamic would not occur naturally in a planned economy; one cannot just seize Amazon or Walmart, socialize it, and call it a day. Phillips and Rozworski apparently recognize this (there is an entire chapter in The People’s Republic of Walmart titled “Nationalization Is Not Enough”) and point to an interesting line of thought from economist J. W. Mason: Banks tend to operate as a privatized Gosplan, where the slush fund of finance capital flows to whichever firm a group of Brooks Brothers-clad planners decide deserves investment, regardless of profitability. Market competition, in other words, is hardly the divine engine of innovation if so many firms are, as Mason writes, “born new each day by the grace of those financing it.”

Even so, could planning replicate the market’s capacity to innovate? Ford’s former CEO Mark Fields certainly seemed to think so, declaring in 2016 that his company would soon “be able to use analytics to anticipate people’s needs, as opposed to people trying to tell us what they want.” And to the perennial taunt of the lizard-brained conservative—“I love seeing idiot millennials protest capitalism on their Apple-made IPHONES”—one may point out it was largely the market-immune Pentagon and Department of Energy, not Apple, that developed the batteries, algorithms, touch screens, and microprocessors our right-wing friend uses to tweet about the Muslim Caravan. Once again, none of this is to celebrate the actual decisions or practitioners of planning as it exists under capitalism, but to recognize its power and how else it might be put to use.

So much for feasibility. Still, the left has good reason to harbor deeper techno-skepticism. When most of us hear the phrase “data collection,” we think not so much of social justice but of Facebook selling our personal information, NSA surveillance, and racist models of “predictive” policing. In Automating Inequality, Virginia Eubanks catalogs state policies that placed welfare applications, housing allocation, and child welfare investigations under algorithmic control. The results have been catastrophic for the poor and working class, of every race and gender. Algorithms, after all, are written by humans, and prejudices operate just as easily in digital form as they do in twentieth century analog—perhaps even more so. Phillips and Rozworski acknowledge this reality and rightfully urge vigilance. If planning is to make use of such technology, we must make sure not to bake this poison into the cake.

But hope lies in the very recognition that technology is a political construct, rather than some transcendental, neutral force. If we can program the reinforcement of hierarchies, we can certainly work to program their destruction. (There’s already encouraging research as to how to account for problems such as “disparate impact.”) As Eubanks writes, “if there is to be an alternative, we must build it on purpose, brick by brick and byte by byte.”

Beyond algorithmic justice, the real specter haunting socialism is, naturally, the Union of Soviet Socialist Republics, whose record in planning was less than exemplary. While capital-C Communism brought about modern industry, literacy, and social security, Phillips and Rozworski don’t deny the ultimate failure of the Soviet experiment. The October Revolution was contorted and compromised by a world war, a civil war, imperialist invasion, economic backwardness, another world war, and a half-century of military competition with the United States. For the sake of the revolution, democracy was indefinitely postponed. Even if Soviet and East German firms were just as or more efficient than their Western counterparts, this arrangement still resulted in workers resisting work and managers lying about output, i.e., bad information. (In a particularly cruel irony, Gosplan bureaucrats even took to sabotaging new computerized approaches to planning, lest they personally lose their political clout. Their unlikely co-conspirators were “reform” minded crypto-capitalists who worried the algorithms would actually succeed, leaving planning in place forever!)

For Phillips and Rozworski, it wasn’t communist planning that led to authoritarianism and disaster, but authoritarianism and disaster that led to bad planning. “Democracy,” they write, “is not some abstract ideal tacked on to all this, but essential to the process.”

A few years ago. Francis Spufford’s novel Red Plenty cast the very idea of Soviet planning as its hero, wherein it falls from grace, as all tragic heroes do. There’s no need to understate that tragedy, but it is possible to overstate it. Let’s not forget what happened after the victorious arrival of the market in the former USSR: production of consumer goods, industrial output, and human life expectancy all cratered. A new class of homeless citizens emerged, frozen to death in streets, alleyways, and parks. We often discuss the millions of deaths in the Stalinist 1930s. We don’t discuss the millions of deaths in the post-Communist 1990s. Unsurprisingly, recent polling revealed that a majority of those surveyed in Russia still regret the collapse of the USSR and its planned economy. (In 1996 they nearly voted in Communist presidential candidate Gennady Zyuganov until—get this—right-wing hucksters colluded with a hostile foreign government to help install a widely unpopular and corrupt buffoon through a media campaign that peddled rank propaganda.) The Soviet experience was a lesson, all right, but not quite the one many smug market fetishists would have us believe.

And if all that can happen to a superpower, imagine what faced Chile, the would-be socialist alternative to Soviet technocracy: in 1970, buoyed by the support of the working class, Marxist president Salvador Allende was elected and set about building a nation-wide, participatory planning network. This novel approach was predictably stymied by a U.S. economic blockade and finally snuffed out by a CIA-backed military coup in 1973. Still, the pioneering spirit of this moment was poignantly captured by Eden Medina in her wonderful study Cybernetic Revolutionaries. What happened next is a depressing cliché: Chileans were placed under the rule of a distinctly not-left-wing dictatorship and enrolled as fresh test subjects in the mad laboratory of the market.

How will that same market treat the workers of tomorrow who fall victim to imminent waves of automation? Is the market really compatible long-term with progressive policy goals like universal basic income, or full employment? Will the market really permit the end of mass incarceration? Then there’s the C-word: last month we learned that potentially catastrophic climate change is now beyond prevention, and that even if we swore off carbon tomorrow, by 2099 the Arctic will still be 5°C hotter. The expression “glacial pace” doesn’t quite mean what it used to. In light of this, The Atlantic, official mouthpiece for the death god Nyarlathotep, predictably suggests that “any realistic plan to decarbonize the U.S. economy will almost surely require the sort of commercial technological breakthroughs that tend to come from private entrepreneurs.” Not to be outdone, the New York Times last month published an op-ed titled—no shit—“Can Exxon Mobil Protect Mozambique From Climate Change?

It doesn’t have to be this way. Converting industries to renewable energy, Phillips and Rozworski argue, is wholly within the power of America, India, and China. But, wouldn’t you know it, the principles of commerce just aren’t incentivizing them fast enough! Carbon-free agriculture is a trickier feat, but certainly less tricky as a state-sponsored venture freed from market meddling, à la Sputnik or the Manhattan Project. Climate reporter Kate Aronoff suggests: “If you create a successful drive to nationalize [the fossil fuel industry] or rapidly scale back their power that will create a real precedent for other industries . . . then you can nationalize Monsanto. Have that be the crux of a populist demand of a climate movement.” There are different schools on the left when it comes to ecology (Phillips, science writer by day, has been criticized for consumerist, growth-happy “ecomodernism”), but one hopes we can all agree that smashing the existing energy market is a necessary step.

More than any other crisis of capitalism, ecological calamity is the most self-evident reason to abandon the dumb, short-sighted, animal logic of the market for a rational and humane plan. It has been, to quote the superior critique of capital, Gremlins 2, “a complete failure of management.” And if the history of capitalist crises is any guide, the odds are that climate change will produce a bigger, bulkier, more controlling state no matter what. Before things really start to crack up, we may want to pick whether that state runs on egalitarian principles or the fascist death drive. Does anyone who doesn’t own a yacht called Fountainhead truly want to cede that decision to the invisible hand of the market?

To their credit, Phillips and Rozworksi return throughout the book to the necessity of mass mobilization. Planning is not One Weird Trick to Achieve Socialism. Unless we simply want state-capitalist profit optimization, the real thing will require continuous and brutal class struggle. It will require experimentation, failure and, as Marv Alpert once said, tenacious defense. Any hope of success lies in a rejuvenated, robust and, yes, global people’s movement to shatter the political, legal and physical barricades put up by governments and capital. But planning must be part of the agenda.

Here the cybernetic concept of feedback is useful: the very idea of a plan, of giving everyone control of their own lives, is just the kind of revolutionary notion that can energize, inspire, and keep such a movement alive. The final line of Spufford’s Red Plenty need not be read as the end of a dream, but the real beginning of history: “Can it be, can it be, can it ever be otherwise?”

Hope for the best, of course. And plan for the worst.

Brendan James is a writer, musician, and co-author of The Chapo Guide To Revolution.

Stick to the Plan | Brendan James

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