People’s Republic of Walmart

People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism (2019) is a recent release from Verso’s Jacobin series and the first collaboration between authors Leigh Phillips  ̶  journalist, science writer and author of Austerity Ecology & The Collapse-Porn Addicts (2015)  ̶ and Michal Rozworski, blogger, economist, organizer and writer. Following the lead of American Neo-Marxist Frederic Jameson, the authors premise their claims on the notion that corporate behemoth, Walmart, may be confronting the socialist movement with an unlikely opportunity. (Frederic Jameson. Archaeologies of the Future. London: Verso, 2005) Though the embodiment of some of capital’s worst exploits, Walmart may also be something of an apparition from the future; it has ascended to dominance on the free market through the payment of poverty wages to its employees, ruthless union busting, etc., but its successes have also been predicated on a unique corporate structure through which it has virtually eliminated its own internal market. In other words, as Phillips & Rozworski claim, Walmart, ‘this epitome of capitalism, is also, paradoxically, a vast planned economy.’ Quoting Jameson, Phillips & Rozworski insist that Marx was right in showing that Walmart is ‘the purest expression of that dynamic of capitalism which devours itself, which abolishes the market by means of the market itself.’ (Frederic Jameson. Valences of the Dialectic. London: Verso, 2009) Facilitated by its use of ‘big data’ and innovative information technology, the company has managed to plan on a scale that previous socialist experiments had only dreamed of. As the third largest employer on the planet  ̶  outsized only by the U.S. Department of Defense and the People’s Liberation Army of China  ̶  and the largest private employer, Walmart also happens to be the world’s 38th largest economy, putting its revenues on par with the GDPs of mid-sized nations like Sweden or Switzerland and that of the Soviet Union in 1970, when it was the world’s second largest economy (adjusted for inflation). Where socialists of the past had to conceive of ways to turn institutions like central banks, the post office, into mechanisms of economic planning, Walmart is a planned economy on a nationwide scale, which, though not simply a ready-made apparatus, provides a key element in the foundation for a more just society. Thus, Phillips & Rozworski claim, while a socialist strategy should (obviously) continue to denounce Walmart’s labour practices, part of that strategy should also incorporate demanding to nationalize and democratize Walmart (and other like corporations) to reap the benefits of its logistical marvel and more generally apply them, while also overcoming its authoritarian labour practices.

Phillips & Rozworski shine in their renewal of the so-called ‘economic calculation’ debate from the early-20th Century, the explicit discussion of which carries much of the book’s first half. The debate refers to a theoretical battle nearly a century ago among economists over whether or not it was possible to plan an entire economy. Pro-capitalist theorists, of course, challenged the very idea of socialism on the grounds that the amount of information needed to plan a national economy would be so vast that it would impede the planning itself, and that anything short of the utmost meticulousness was bound to inefficiencies in the forms of mass shortage or mass waste. Capitalism, they argued, presented the best of all possible worlds, because the central mechanism of the marketplace, i.e. the price, comprehended the necessary information for determining supply and demand; the market itself, so they believed, held all the right answers and bore an innate tendency to equilibrium. As Phillips & Rozworski point out, however, beyond the price mechanism’s failure to communicate the necessary information about the distribution of resources in society, it elicits ambiguities of its own as the greater the number of exchanges in any given supply chain result in the so-called ‘bullwhip effect.’ Walmart, via its acquisitions of suppliers and distributors, sought to minimize this effect by virtually eliminating its internal market, bypassing the inefficiencies incurred by the price mechanism from within. Reliant on its use of big data, Walmart has shown planning at the corporate level to eclipse anything achievable by internal market. Because of the amount and speed of the data that information technology allows and of the transparency with which supply and demand can be communicated via planning, Walmart has managed to, paradoxically, show that nation-scale planning is not only possible, but desirable. By centering the discussion on economic calculation, Phillips & Rozworski have made an important contribution to the literature by firstly, showing a way to speak the language of the capitalist better than he/she can and secondly, showing a way to turn a capitalist symbol inside out. This two-fold dimension to their approach places a powerful logical argument and rhetorical device at the left’s disposal. Regardless of what one thinks of Phillips & Rozworski’s conclusions, framing the problem in this way is considerably persuasive.

However, the major drawback to the book is that the authors sidestep one of the most difficult, but also one of the most essential questions in socialist strategy – which is the question of ‘power’. Phillips & Rozworski’s central aim is to show that Walmart has refined a mechanism for economic planning that is ripe for management in a ‘democratic’ form; as they state: ‘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 reviewer is in full agreement with this position that democratic planning is of paramount importance for realizing a more just society and that such a regime of planning should rely on pre-existing institutions. Upon closer scrutiny, however, the term ‘democracy’ appears somewhat paradoxical in the text; on one hand, it is the animating term of the book, but on the other, it is the term which the authors appear most reluctant to define. The reason for this is that Phillips & Rozworski devote most of their attention to the means of production, at the expense of conflicts in the social relations of production and the ideological superstructure. (Marx, Karl. A Contribution to the Critique of Political Economy. London: Lawrence & Wishart, 2010) In other words, they do not focus on the conflict over the mechanisms of power. By doing so, they sidestep a central problem – which is that the conflict over the means of production is not only one of logistical efficiency, but of conflicting interests and that these interests shape the extent to which the means of production can be managed democratically. Phillips & Rozworski suggest that this problem can be circumvented by the planning mechanism; a point which they articulate outright in their discussion of the history of the Soviet Union. The authoritarian nature of Soviet economic planning, they maintain, was the product of the Bolsheviks’ lack of a clear economic plan from the beginning, which gave rise to an authoritarian state apparatus and the persistence of that apparatus once economic planning was underway, which was its eventual undoing. Based on this argument, they assert that ‘while the replacement of the market with planning is a necessary condition for an egalitarian society, it is not a sufficient condition. . . . [I]t is not that degradation of economic information as a result of planning leads to authoritarianism, but that authoritarianism drives degradation of information, which undermines planning.’ I am inclined to agree with the authors here that the lack of planning was instrumental in the catastrophes that would ensue in revolutionary Russia. However, there is ample reason to believe that the authoritarian measures taken up by the Soviet state were also attributable to the conflicts of interest in the social relations of production – between the proletariat and the peasantry, the poor peasants and the wealthy peasants, against the retaliating Tsarist forces, international intervention. To be fair to Phillips & Rozworski, history has yet to provide a satisfactory resolution to this problem, but the nature of class politics and the state has changed considerably over the course of a century. However, this only makes an analysis of the social relations of production and the state even more essential for their main argument, not to mention their corollary claims that democratization would help provide a better answer to the problem of surveillance, the reduction of consumption, etc., particularly when we are speaking of democratizing and nationalizing companies that are central to consumerist ideology. They do not altogether dodge the issue social relations of production, as they do argue that:

Any future Left that takes the question of planning seriously will also have to depend heavily upon talents from computer science, operations research, combinatorics and graph theory, complexity theory, information theory and allied fields. And the transformation needed if it is to be democratic, rather than technocratic, will have to be led by, not on behalf of, workers at Walmart, Amazon, Facebook and other transnationals.

But they ultimately maintain that giving this issue its due diligence ‘would be another book in itself.’ Nor do they avoid the issue of the state, but their remarks in this capacity are also rather preliminary: ‘[w]hether state-administered or otherwise, we must ensure that any nonmarket mode of global governance adheres to genuinely democratic principles.’ In sum, Phillips & Rozworski have covered significant ground and provided considerable material worthy of debate here. In doing so, however, they have also shown how much there is much discussion to be had and work to be done.

People’s Republic of Walmart
Leigh Phillips & Michal Rozworski
Verso, 2019
9781786635167