Mike Davis on a searing indictment
Vulture Capitalism by Grace Blakeley published Bloomsbury
Subtitled, “Corporate crimes, backdoor bailouts and the death of freedom” this book is a searing indictment of modern oligarchic capitalism. Blakeley exposes the myths of the “free market” system and how record corporate profits don’t trickle down but on the contrary further line the pockets of profiteers like Jeff Bezos, Elon Musk and their ilk.
The book is divided into three parts. The first examines the scandals, short cuts, inequalities and anti-trade union practices that have marked the rise of major corporations from Ford at the beginning of the 20thC through Boeing, to tech giants Google, Amazon, Microsoft and others today. The latter three collectively bought over 436 companies and start-ups in the last ten years with no challenges. So, when our economies are dominated by large monopolistic corporations where market discipline has little sway, efficiency often goes out the window. Without real competition we get higher prices, lower wages, worse working conditions, greater inequality and few start-ups.
There is no such thing as “corporate manslaughter” in US law, so Boeing’s safety corner-cutting led to two major crashes and hundreds of deaths, but no convictions at the top. Henry Ford, vehemently anti-union, put profit before principles and life. Ford made planes for the US airforce at the same time as selling military equipment to Hitler.
The post-war social democratic settlement gave workers a seat at the table, an ability to challenge the authority of capital over labour. This strength grew in the two decades following the war. It was neoliberalism’s mission to break that strength.
The neo-liberals, influenced by free-marketers like Hayek, sought to reverse these trends excluding workers from both corporate and state planning, further concentrating power in the hands of capital. By the 1980s restrictions on the lending and movement of money were removed, deregulation became the name of the game with tax rates cut and industries privatised. Blakeley sees the aim of neoliberalism to replace democratic governance with technocratic governance.
However, the neoliberal revolution did not end capitalist central planning, it simply changed who was in control of the planning process.
Drawing on Marx’s Capital and later US Marxists, Paul Baran and Paul Sweezy, Blakeley shows how the tendencies towards monopoly squeeze out competition and lead to price gouging, wage depression and inevitable crisis. Competition remains but between a smaller number of economic behemoths.
Blakeley exposes many scandals during the Covid-19 pandemic. For example, McKinsey’s realised estimated profits during the pandemic of $100m plus access to personal data, much on no-bid contracts. Meanwhile, TUC research showed 50% of low paid workers suffered a loss of income during the pandemic. Wealth inequality shot up while 24 more billionaires were made in the UK in 2021.
Blakeley then tracks back to the Suez crisis showing how the big oil giants ExonMobil, Chevron, Shell & BP have been reaping in record profits since.
She identifies climate breakdown as the latest, but greatest, of the collective action problems faced by global capitalism. She is at pains to stress that more state planning does not equal socialism.
Part two looks at central planning practiced by powerful firms, financial institutions, states and international organisations. Chapter headings indicate the direction of travel: American made sweatshops; How the big banks plan; Buying time; Capital’s cronies-how states plan; Money at six percent-how empires plan. What emerges is a comprehensive analysis of how modern capitalism operates to the detriment of all but a few people. The edifice is built on debt and the mutual interplay between global corporations, states and banks.
Blakeley argues that corporate and state power is not as separate as we are taught to believe. Corporations are political as well as economic entities. They rely on the support of other powerful actors like capitalist states and financial institutions. She likens the big banks—Morgan Stanley, Credit Suisse, HSBC, Goldman Sachs to Doctor Who’s time lords helping consolidate power into the hands of fewer corporations and finance organisations with their control over time and money.
Having uncovered the intestines of late capitalism, the third part of the book looks at how we can democratise political and economic life for the benefit of all.
Here we find a programme for change. Starting with micro democratic initiatives she cites the example of the Alternative Plan for Lucas Aerospace developed in 1976 in the face of closure and redundancies. Workers at the plant designed over 150 ideas, divided into five categories including medical equipment, energy conservation, a road rail bus and hybrid power for cars. These ideas drew on the expertise and creativity of workers. The later Vickers Worker’s plan was also inspired by Lucas workers. Mike Cooley, a victimised Lucas shop floor leader wrote of these ideas in his classic study Architect or Bee – the human price of technology.
Blakeley outlines a selection of further people-powered planning initiatives. These include Australia’s green bans, Porto Alegre participatory budgeting emulated by 250 other Brazilian cities and 1500 worldwide, Spain’s Marinaleda Cooperative network, Preston Council’s Community Wealth building plans to social enterprises like those developed in Blaenau Ffestiniog.
She acknowledges these small-scale initiatives are more about inspiration for a transition to a democratic economy. Fundamentally it’s about socialising and democratising ownership of society’s resources. The big example she revisits is Allende’s democratic socialist transformation of Chile which ended in a brutal US backed coup.
The study is painstakingly well referenced with contemporary and historical studies. It’s an education just to trawl through the footnotes of one chapter. Buy or borrow this book.