I picked up Phillips and Rozworski’s The People’s Republic of Walmart on a whim, then read it in three sittings. Its subtitle says, “How the world’s biggest corporations are laying the foundation for socialism”, and once you scrape away a few clumsy jokes and some repetitive rhetoric, the authors’ thesis is fascinating:
- Companies like Walmart and Amazon are planned economies of a kind the old Soviets could only dream of.
- They are extremely efficient, but not democratically accountable.
- We can build a better world by adopting the first and fixing the second.
To build their case, the authors highlight a few things that neoliberals prefer to overlook. The first is that most economic activity occurs within firms, not between them, and that companies such as Sears that institute internal free markets because “everyone knows markets are more efficient” do less well than ones which use non-market means to allocate resources. Second, when capitalist systems are under the stress of war and need efficiency more than private profit, they always adopt some sort of planning.
But what about freedom? Hayek, von Mises, and others convinced a generation of neoliberals that planning inevitably produces authoritarianism, and disasters like the Soviet Terror Famine and Mao’s Great Leap Forward seemed to prove them right. Phillips and Rozworski argue that this is backward: authoritarianism comes first, and then adopts planning as yet another means to perpetuate its rule. Authoritarianism actually makes planning less effective, since the fear on which it is based undermines the quality of the information in the system. Institutions like the UK’s National Health Service are proof that planning can be both efficient and accountable, and as the slow-motion health care disaster in the US shows, a lack of planning can destroy just as many lives as an inefficient or oppressive bureaucracy.
Right now, the globe-spanning supply chains made possible by modern information technology are used to create what’s profitable for the few rather than what’s useful for the many: to spew fossil carbon into the atmosphere rather than develop new antibiotics or affordable housing. The private profits extracted by the unaccountable owners of those supply chains are then used to shape public discussion and election outcomes in order to perpetuate inequality: Jeff Bezos could buy a house for every homeless person in the United States and still have billions left over, but Amazon doesn’t pay taxes. The essence of socialism is the generalization of the democratic ideal to places of power currently in the hands of the unelected and unaccountable. While this book has a lot of rough edges and preaches to the converted more often than it should, it makes a convincing case that what capitalists are afraid of isn’t really planning: it’s democracy, and that’s what we need to build a better world.