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"We’re Not Defending Walmart, We’re Just Intrigued"

In this edited excerpt from People's Republic of Walmart, Leigh Phillips and Michal Rozworski discuss their reluctant admiration for Walmart, and the un-sexy, liberatory potential of economic planning.

Leigh Phillips, Michal Rozworski20 March 2019

"We’re Not Defending Walmart, We’re Just Intrigued"

To celebrate the publication of two new books in the Jacobin series, People's Republic of Walmart and Capital City, we have 40% off ALL Jacobin books until Friday, March 22 at 11:59PM EST.

“So you’re writing a book celebrating Walmart, eh?”

“Er, no. Not exactly. Or, well, yes, in a way. You see, the logistical marvel that is Walmart, we do quite like. But it’s so much more complicated than that.”

“Bit of an odd topic for a pair of socialists. How on earth can you defend Walmart, with all their union busting, low wages and destruction of communities? Are they not one of the most evil companies in the world?”

“We’re not defending Walmart, and certainly not union busting. We’re just intrigued by how this epitome of capitalism is also, paradoxically, a vast planned economy. Very intrigued.”

Variations on this conversational theme have repeated themselves since we started writing this book. Invariably among progressive friends of ours, concerned or suspicious eyebrows have been raised.

So let us be clear from the outset: Walmart is an execrable, sinister, low-down dirty villain of a company.

Lamentably, the word “flagitious” – meaning “horribly criminal or wicked,” but also sharing a root with the word “flagellate” or whip, the Latin term flagitium, meaning “shameful thing” – is uncommon these days; yet at the same time that it is apropos for such a flagrantly socially delinquent business, it only begins to express the piercing, wolf-like hatred we two authors feel for Walmart.

Like any firm, Walmart is forced via competition in the market to reduce costs, notably labor costs – that most bendy and squishable portion of an enterprise’s expenditure. While none of this is very nice, it would hardly be fair to describe Walmart as uniquely evil. Sure, it pays poverty wages, depends upon Asian sweatshops and both child and prison labor, and disembowels high streets with all the relish and élan of the third-century torturers of Saint Elmo. But who doesn’t these days? Nevertheless, few other corporations seem to carry out their worker-immiserating, anti-union practices with quite such zeal, such crushing mastery; Walmart regards union busting not only as a necessary accompaniment to their enterprise, but places it at the very core of their business model. “I pay low wages,” said founder Sam Walton. “I can take advantage of that. We’re going to be successful, but the basis is a very low-wage, low-benefit model of employment.”

So no one should conclude, before reading a word of what we say (or indeed after reading every word but misapprehending what we say), that this book intends to be in any way a hip, contrarian apology for Walmart or Amazon or the Pentagon or for any of the other enterprises whose planning and logistics operations we investigate. That is not our purpose. Walmart should offer no inspiration for progressives.

With that throat-clearing out of the way, and now that everyone is content that we have no love for Walmart, we want to talk about how we nevertheless have admiration for Walmart, much as how an epidemiologist concedes an irrefutable genius to the wicked evolutionary dexterity of drug resistant tuberculosis; or in the way that Milton finds Satan, rather than Jesus, to be the more interesting character; or the manner in which Sherlock Holmes can simultaneously revile and admire the intricate, canny stratagems of the malign savant Professor Moriarty.

If only Walmart’s operational efficiency, its logistical genius, its architecture of agile economic planning could be captured and transformed by those who aim toward a more egalitarian, liberatory society!

But why should anyone care about so dry a subject as what is, in effect, a discussion about enterprise decision making, about the optimal allocation of goods and services? Why should we even favor democratic planning over the free market? Did the end of the Cold War and the collapse of the Soviet Union not put paid to the idea that socialism is viable? Isn’t curtailing the free market’s excesses the best that we can do?

Libraries’ worth of books have been written on the injustices and contradictions of capitalism, not least its ineluctable expansion of inequality (even as poverty can be reduced – as the most extremities of it certainly have been over the last 300 years or so, albeit not least as a result of the pressure of trade unions and the left broadly conceived, dating back to its origins in the French Revolution, to share the wealth), enclosure of democracy, perennial manufacture of economic crisis, and thereby unemployment and even war, but we have no desire to recount these arguments here. So let us restrict ourselves to alighting upon perhaps its central misadventure.

There is certainly overlap between the set of all goods and services that are useful to humanity, on the one hand, and the set of all goods and services that are profitable, on the other. You likely find underwear to be a useful product (though for commandos, this is no certainty); The Gap, meanwhile, finds it profitable to produce such a product – a happy coincidence, of which there are many. But the set of all useful things and the set of all profitable things are not in perfect correspondence. If something is profitable, even if it is not useful or is even harmful, someone will continue producing it so long as the market is left to its own devices.

Fossil fuels are a contemporary example of this irremediable, critical flaw. Wonderful though they have been due to their energy density and portability – freeing us energetically from the caprices of Mother Nature, who may or may not blow windmills or turn waterwheels when we want her to – we now know that the greenhouse gases emitted by fossil fuel combustion will rapidly shift the planet away from an average temperature that has remained optimal for human flourishing since the last ice age. Yet, so long as governments do not intervene to curtail the use of fossil fuels and build out (or at least incentivize the build-out of ) the clean electricity infrastructure needed to replace them, the market will continue to produce them. Likewise, it was not the market that ended production of the chlorofluorocarbons that were destroying the ozone layer; instead it was regulatory intervention – planning of a sort – that forced us to use other chemicals for our fridges and cans of hair spray, allowing that part of the stratosphere that is home to high concentrations of ultraviolet ray– deflecting tripartite oxygen molecules to largely mend itself. We could recount similar tales about how the problems of urban air pollution in most Western cities or of acid rain over the Great Lakes were solved, or how car-accident mortality rates or airline crashes have declined: through active state intervention in the market to curb or transform the production of harmful – but profitable – goods and services. The impressive health and safety standards of most modern mining operations in Western countries were achieved not as a result of any noblesse oblige on the part of the owners of the companies, but rather begrudgingly, as a concession following their
defeat by militant trade unions.

Conversely, if something is useful but unprofitable, it will not be produced. In the United States, for instance, where there is no universal public healthcare system, healthcare for all would be wonderfully useful. But because it is not profitable, it is not produced. High-speed internet in rural areas is not profitable, so private telecommunications companies are loathe to provide it there, preferring instead to cherry-pick profitable population-dense neighborhoods.

In general, criticisms of the current way of doing things propose that the market be replaced, or at least reined in. But if allocation does not proceed via the market, then it will occur via economic planning, also known as “direct allocation” – made not by the “invisible hand” but by very visible humans. Indeed, this form of planned allocation already takes place widely in our current system, on the part of elected and unelected individuals alike, by both states and private enterprises, and in centralized and decentralized forms. Even arch-capitalist America is home not only to Walmart and Amazon, but also to the Pentagon: in spite of being incredibly destructive, the US Department of Defense is the single-largest employer in the world, and a centrally planned public sector operation. In fact, almost all countries are mixed economies that include various combinations of
markets and planning.

There is not only a crying need for us to talk about what that alternative to the market would be, but also a great deal of confusion about what planning is and its history. To take one example: China appears to be the last man standing in the global economy; its growth rates, even if they have declined recently from eye popping to merely gobsmacking, have been achieved through an admixture of free market mechanisms and very heavy shepherding by authoritarian central planners. It seems even some members of the ascendant bourgeoisie in that country believe that Mao’s economic planning was less mistaken than premature. A 2018 Financial Times feature describes Jack Ma, founder of the Chinese e-commerce colossus Alibaba Group, as part of a growing movement in the People’s Republic who argue that “the fatal flaw of state planning was simply that planners did not have enough information to make good decisions.” He and his co-thinkers believe that “big data” can solve this problem. But is this what we mean when we talk about an alternative? Even though it has been more than a quarter century since the end of the Cold War, anyone who questions the outcomes of the free market is immediately pounced upon as an apologist for the Soviet Union and its satellites – failed authoritarian regimes that were indeed planned economies. Doesn’t their collapse, following decades of economic decline, show that planning does not work?

These questions are far from academic. In such volatile times, it cannot be ruled out that a socialist candidate or party might soon form a government in the capitalist heartlands. If they do not take pains to sketch out ahead of time what an alternative to the market might look like, those involved will inevitably fall back on versions of what they already know. The capitalist-realist earworm, like the Ceti eel in Star Trek II: The Wrath of Khan, remains wrapped around our cerebral cortex, foreclosing the possibility of transformation even at the moment of its realization.

The time, then, is as ripe as browning avocados on toast to uncover a very old conversation: a long-standing but largely forgotten argument over the question of planning.

Although it may not sound sexy, our contention is this: When we say we want an equal society, what we’re fighting for is democratic planning. There is no machine that can simply be taken over, run by new operators but otherwise left unchanged; but there is a foundation of planning that a more just society could surely take up and make its own.

This is not so much a book about a future society, but one about our own. We plan. And it works.

This is an edited excerpt from People's Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism. Out now!

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Since the demise of the USSR, the mantle of the largest planned economies in the world has been taken up by the likes of Walmart, Amazon and other multinational corporations

For the left and the right, major multinational companies are held up as the ultimate expressions of free-market capitalism. Their remarkable success appears to vindicate the old idea that modern society is too complex to be subjected to a plan. And yet, as Leigh Phillips and Michal Rozworski argue, much of the economy of the West is centrally planned at present. Not only is planning on vast scales possible, we already have it and it works. The real question is whether planning can be democratic. Can it be transformed to work for us?

An engaging, polemical romp through economic theory, computational complexity, and the history of planning, The People’s Republic of Walmart revives the conversation about how society can extend democratic decision-making to all economic matters. With the advances in information technology in recent decades and the emergence of globe-straddling collective enterprises, democratic planning in the interest of all humanity is more important and closer to attainment than ever before.

The People's Republic of Walmart
For the left and the right, major multinational companies are held up as the ultimate expressions of free-market capitalism. Their remarkable success appears to vindicate the old idea that modern s...