Booknotes: The People"s Republic of Walmart by Leigh Phillips and Michal Rozworski
The People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism
by
Leigh Phillips and Michal Rozworski
Finished 3/20/2022
A contrarian and radical book that argues against the facile critiques of socialist economic planning as unworkable, and presents, as an alternative, counter-examples drawn from the revolutions in commodity logistics, internet and technological algorithms, and a close reading of the history of large-scale economic planning.
Leigh Phillips is a socialist and science journalist, who has written books advocating for technological solutions to ecological catastrophes, as well as a left defense of air conditioning (!) He’s an excellent writer, even when covering complex subjects like the economic calculation debate. I had heard of this book when it came out, and finally got a chance to crack it this year.
One of the long-standing critiques of socialist, or even social-democratic government planning and regulation is that markets are more efficient, in their coding of all kinds of information about supply, demand, politics and culture into the simple metric of price. The authors start with this criticism, and trace its origins through the 20th century debates between socialist (and even capitalist) economists and the neoliberal Austrian and Chicago economists whose ideas and policies would come to dominate the neoliberal era. This debate is complicated (though the authors do a good job of exploring that complexity), but the upshot is that, for the past 40 years, market boosters have won that debate, and have enacted policies in governments across the globe that foregrounded market forces over state planning in the name of efficiency. The question of whether efficiency was ever the goal (as opposed to, say, labor subjugation or white supremacy) is an open one, but Phillips and Rozworski take market boosters at their word that there is no state or policies that can delegate resources as efficiently as markets.
The rest of the book presents a series of counterfactuals to this argument, both drawn from technological and logistics revolutions of the last fifty years, and from a close reading of the economics of state socialism in the Soviet Union on elsewhere. What they find is that the case for immutable market efficiency and state inefficiency is decidedly more mixed, contested, and uneven. Indeed, one might say that the book is an attempt to show the ways in which capitalists have often ruthlessly planned, and socialists often navigate economies based on contingency, chaotic democracy, and immediate necessity. To take an example from their title, Walmart (the world’s third largest employer, with an internal economy the size of Sweden) is an astonishingly controlled, planned economy internally, relying as it does on just-in-time production and delivery, meticulous stock management and forecasting, and very close and rigorous planning based on complex computer algorithms that regulate the supply and movement of goods across its supply chain. Simply put, Walmart is a planned, managed economy, with the only caveat being that its economic output is profit for shareholders rather than provisioning of citizens. The authors contrast this rigorously planned system with that of Sears, which was purchased by libertarian CEO Edward Lampert in 2004, which was re-organized with different sectors of the company competing with each other (an efficient, competitive economy?), with disastrous results.
Phillips and Rozworski perform a similar analysis of Amazon, whose forecasting and consumer behavior models calculate what consumers want or need before they may even be conscious of it themselves, and then present it to them as a recommended purchase. Along with an analysis of hedge funds (a kind of future planning, based on calculation of market forces), the authors suggest that the possibilities of fairly and equitably provisioning people in the present and for the future exist within current business, financial, and technological forces. The only difference is that they are currently harnessed for private profit, rather than public betterment.
The second half of the book explores historical moments of state-based economic planning, and finds evidence for the ways in which the neoliberal idea that “all planning will eventually fail” is belied by more nuanced and historically contingent forces acting upon both states and markets. Phillips and Rozworski examine the early economic planning efforts of the Soviet Union, which created, from the ground up, a system of state planning where none had previously existed. They argue, following earlier scholarship, that there were a number of planning models present in the early decades of the USSR, and that the decision to focus the economy on heavy industry rather than on lighter consumer industry or improving agricultural production, was a political choice with disastrous consequences for workers control (rather than bureaucratic control), as well as for peasants (including Ukrainian farmers who were starved of their own surplus in an effort to make the five year plan look on track). The key point of their long exploration of the first two decades of Soviet economic management was that what can seem in retrospect like a “plan” was in fact “a chaotic stagger from bottleneck to bottleneck” (Ch. 7) rooted as much in the exigencies of the revolution, the subsequent Civil War, and the breakdown of infrastructure which was, itself already sorely underdeveloped. Stalin’s power grab and subsequent purges wiped out many of the people with the kind of expertise that could have more democratically guided an experiment in economic planning, and replaced them with bureaucrats skilled as yes-men, and capable of papering over failures. It was authoritarianism that spurred the whims and failures of economic planning, rather than the other way around.
Other interesting examples of the complexity and possibility of planning include rich discussions of the history of the UK National Health Service, one of the largest planned resource provisioning programs ever attempted, and Salvador Allende’s development of Cybersyn, an early version of the internet in socialist Chile which attempted to both provision goods to Chilean citizens and also respond to their needs through a series of feedback processes that decentralized and democratised economic provisioning without a price mechanism.
Ultimately, Phillips and Rozworski want to see a planned, equitable economy replace the current rapacious capitalist one both to reduce inequality, and prevent ecological catastrophe (as they frequently remark throughout the text, the price of fossil fuels does not contain information about the disastrous footprint of their long-term ecological consequences). Their central thesis is that economic planning is possible, and that an economy that fairly and equitably distributes resources can draw upon the lessons of capitalist and socialist innovation, contradiction, and failure. What separates good planning from poor planning is, they argue, the extent to which it takes into account the distributed and decentralized nature of needs, knowledge, and resources, and build feedback and democracy into provisioning structures.
There is a kind of chicken-and-egg element to this book: i.e. “planning is good, but only if it’s good planning”. Additionally, there is a long-standing anarchist critique of both capitalists and states as two sides of the same heavy-hand of control. The authors are hopeful of the power ingenuity and goodwill to create a fair system of social provision that neither enhances private wealth nor beggars the bulk of humanity, and it’s reasonable to perhaps think this naive. Nevertheless, I learned a lot about the ways in which seemingly anarchic capitalism relies on rigorous planning, and methods derived from socialists, as well as the ways in which socialists have experimented with (and sometimes succeeded in the short term) equitably distributed economies.
