Grace Blakeley, a leftist political commentator, has a new book out titled Vulture Capitalism. Blakeley’s goal with this book is to provide a portrait of how capitalism, particularly its most recent neoliberal variant, operates in the real world. Her main thesis is that capitalism, contrary to the claims of defenders like Milton Friedman, is not characterized by the free actions of relatively equal individual decision-makers. Rather, capitalism in the real world creates a society that is dominated by the interests of the small number of people who control the capital. Blakeley makes a compelling case for this leftist thesis.
Blakeley begins by asking why, since those of us in democratic, capitalist societies are supposed to be free, we so often feel unfree. As she says, “this sense of unfreedom is grounded in the deep disparities of power that exist within capitalist societies, many of which are completely invisible…life under capitalism means life under a system in which decisions about how we work, how we live, and what we buy have already been made by someone else. Life under capitalism means living in a planned economy, while being told you are free.” (p. IX.). Her task in the book is to illustrate the many ways in which our lives are unfree in a capitalist world.
Because of this, “the question we should ask ourselves, then, is not whether planning is possible in a capitalist economy. Instead, we should ask where planning is taking place, how it is being executed, and whose interests it is serving.” (p. X).
Blakeley effectively demonstrates how large corporations plan and exert enormous economic power through investment decisions, employment practices, market dominance, and more. This world we now live in can be summed up as follows: “A world of pervasive corporate power is one characterized by low investment, low productivity, low wages, and high inequality.” (p. XIII).
She also stresses the point, as political philosopher Elizabeth Anderson has recently made so well, that whereas we have democratic freedom in the political realm, at work we are in an unaccountable dictatorship. (In addition to Anderson, this argument has been made by many. See, for instance, work by Robert Dahl, Carole Pateman, and Richard Wolff). I also plan to expand on this point in a future double book review of Elizabeth Anderson’s Hijacked and David Frayne’s The Refusal of Work.
In chapter one Blakeley sets out the key part of her argument, namely that capitalism, in the real world, is defined not by free markets but primarily by corporate power and its intertwining with state power. As she notes, “a corporation with significant market power can make decisions that have far-reaching implications for the lives of its workers, the choices of consumers, and even factors like the direction and rate of innovation, or the health of the planet. And all these decisions are made with little or no democratic accountability.” (p. 13).
As Blakeley recognizes, this goes against the grain of much mainstream economic thinking. “After all, free-market economies aren’t supposed to be defined by big inequalities of power. Corporations are supposed to be restrained by the market mechanism” (p. 15). But in the real world things work differently. Blakeley uses the example of Boeing, a massive corporation whose cost-cutting led to hundreds of deaths, to illustrate how many a large corporation actually operates. She rightly notes that “Boeing’s executives can afford to ignore the short-term pushes and pulls of the market precisely because their firm is so large and well connected—the ability to ignore market signals is precisely what market power is.” (p. 16).
But what about the neoliberal turn? Didn’t the election of Thatcher in the UK, Reagan in the US, and similar leaders elsewhere lead to the shrinking of the public sector? Isn’t this what leading neoliberal thinkers like Friedman and Hayek wanted? In the introduction Blakeley summarizes the Keynes-Hayek debate and how by the 1970s the neoliberals had won. Yet, “we live in societies that are just as tightly regulated, surveilled, and controlled as those of several decades ago.” (p. XI). Why?
Because, in practice, while the neoliberal turn transformed the state (and broader conceptions of politics), it didn’t necessarily shrink the state. This is an important point. In Blakeley’s words, “cutting public services doesn’t create more space for free markets, it simply encourages states to rely more on unaccountable organizations like McKinsey to do their dirty work for them.” (p. 58). She elaborates later on the same page: “The close links between the public and private sectors seen during the pandemic demonstrate the futility of attempting to draw a stark line between state and corporate power in capitalist societies, especially during crises. Throughout the pandemic, states and firms worked together to augment their power and wealth—and as they did so it became harder to see where the private sector ended and the state began.” (p. 58).
This happened in part because neoliberalism, at its heart, was and is antidemocratic: “The idea was to replace democratic government with technocratic governance—to replace government by the people with rule by technocratic elites.” (p. 35). (There is a huge literature on neoliberalism: a few good starting points can be found in work by Wendy Brown, Quinn Slobodian, David Harvey, and Jamie Peck).
Blakeley uses the example of the US Federal Reserve to show how in contemporary capitalism an undemocratic but supposedly neutral, expert body actually takes actions that serve corporate interests, from quantitative easing to raising interest rates, done largely at the behest of big finance and the broader corporate world. For example, the US Federal Reserve kept interest rates too high for nearly three decades (until the 2008 recession) leading to lower wages for workers and unnecessarily high unemployment rates. In addition, “because the law is so central to the operation of the financial system, financial institutions spend a great deal of time and money lobbying legislators and regulators to influence that system.” (p. 130).
Blakeley uses many examples, from Google to Amazon to Ford, to provide evidence for her compelling summation—“in the real world, corporate owners and managers have power—power that derives from their control over their workers, their ownership of the physical resources used in the production process, and their close relationships with states. Corporations are a form of despotic private government.” (p. 82).
The example of Greensill Capital in the UK offers another case study of the ways in which large investors exert power over state actors. “The events surrounding the rise and fall of Greensill Capital demonstrate quite clearly that the idea of a fixed boundary between public and private—state and market—has always been a fantasy…the link between the public and private sectors have become so close that it is hard to know where one ends and the other begins.” (p. 157). Again, this echoes arguments from political theorists Sheldon Wolin and Wendy Brown (whose excellent work Blakeley draws on).
One obvious rejoinder to Blakeley would be to ask what alternatives to neoliberal capitalism would look like. After all, the model of centrally planned economies from the twentieth century isn’t exactly enticing. And on this question it will be difficult to fully persuade the skeptics. As Thatcher famously said about capitalism in the 1980s, “there is no alternative.” Thatcher didn’t literally mean there were no alternatives—just that the main alternative to neoliberalism, Communist Bloc central planning, was worse. But Blakeley, and many others on the left, show that there are alternatives.
Chapter 8 draws on a wide range of local experiments in democratic economic control, from worker-run firms to city government projects like participatory budgeting, to flesh out in some detail what these alternatives might look like. As Blakeley and others on the democratic left like myself argue, these cases of democratic economics stand as real-world counter-examples to the grim choice between Soviet-style central planning and neoliberal capitalism. Contrary to Thatcher and Hayek, we do not have to settle for only those two choices. Thankfully, “the local-level examples of democratic planning outlined [in Chapter 8] provide the foundations on which the shift to a democratic economy will be based. Not only do they show what is possible, they also help to engage and politicize people in a project of collective social transformation.” (p. 240).
To summarize Blakeley, capitalism is not characterized by free markets but by the dominance of capital. The occurs in several ways. First, within the workplace itself, where workers must submit to their superiors as long as they are on the clock. Second, in investment and production decisions made by big corporations and rich private investors. Third, through the complex and widespread interconnections between capital and the state.
Obviously, I think Blakeley’s framing is largely correct, and one finds good elaboration of these points in the work of sociologists Vivek Chibber and Erik Olin Wright, and political theorists Sheldon Wolin, Wendy Brown, and Tom Malleson. But one should also read and engage with the alternative perspectives: read some of the great free market writers, like Friedman, Hayek, Von Mises, Sowell. And judge for yourself. It is a credit to Blakeley’s Vulture Capitalism that it does just this, engaging with prominent exponents of neoliberal capitalism and showing where they go wrong.