Capitalist Markets Aren’t “Free.” They’re Planned for Profit.

Grace Blakeley

Neoliberalism was never about shrinking the state to unfetter markets and enhance human freedom. In her new book, Vulture Capitalism, Grace Blakeley argues that neoliberalism has always sought to wield state power to maximize profits for the rich.

City workers walk in the financial district in London, England, on January 20, 2017. (Leon Neal / Getty Images)

Interview by
Chandler Dandridge

The twenty-first century has proved highly unstable. The ongoing climate collapse, 9/11, the 2008 financial crisis, the coronavirus pandemic, and worsening income inequality have all contributed to younger people’s sense that something is fundamentally wrong with society and, consequently, a dwindling view of its political-economic structure: capitalism.

Despite generational discontent, capitalism is an adaptive and regenerative economic force, and private interests will not willingly hand over the means of production to the public. Mass organization is necessary. To that end, building collective power against capitalism requires appealing to people whose distress does not immediately call forth an anti-capitalist articulation. It’s therefore important for critics of capitalism to be armed with a comprehensive and factual perspective. We can’t just appeal to morality; we must truly understand our current system in order to chip away at the myths it relies upon to conserve itself, and to show each other that another world is possible.

Vulture Capitalism: Corporate Crimes, Backdoor Bailouts, and the Death of Freedom, a new book by British author and frequent Jacobin contributor Grace Blakeley, is a sophisticated and accessible polemic against capitalism. Blakeley communicates in clear terms the ways in which our economic order depends upon a veneer of democracy and competition in order to mask its real aim: the consolidation of power and resources for corporations, politicians, and ruling-class power brokers. In great detail, the book explicates how capitalism creates its own crises and prevents both individual and collective flourishing, and how a more egalitarian economic system might be achieved.

Blakeley joined Jacobin contributor Chandler Dandridge to talk about Vulture Capitalism. Their conversation touched upon the myths of neoliberalism, the value of socialist representation in a capitalist state, the role of planning in supposedly free-market capitalism, and how socialists might view the concept of freedom.

Chandler Dandridge

You write that one of the biggest neoliberal myths is their claim that they want to “shrink the state,” when their aim is actually to “seize and then task it.” How has this myth served the neoliberal project?

Grace Blakeley

It’s not just the neoliberal project. It also served the Keynesian project. Politics in most of the rich world has settled into this divide between a left Keynesianism and right neoliberalism, with these right-wing populist outcrops coming up in the back as well. But this divide on the economic front between “Should we have freer markets or a larger state?” has been the terms of debate in politics for at least a century now.

During this shift toward Keynesianism, among socialists there were all these discussions about revolution or reformism: Should the Left attempt to work alongside liberals in order to push through reforms in Parliament and other places within the state? Or should they maintain a revolutionary radical orientation toward the state?

In the UK, you had the independent Labour Party that aligned with the liberals who were supported by trade unions, and they decided to work within the state to try and push reforms that would benefit working people. In a lot of ways that made sense at the time, given where the trade union movement was and given the kinds of reforms that we were talking about, some of which were just liberal reforms around voting and human rights.

But because there was this compromise between liberals and socialists, the main current of policy and thinking from the 1940s onward became a social democratic model of basically “How can we expand things that the state is doing for people?” Now there was obviously a radical fringe on the Left that was maintained and became a lot stronger in the 1970s arguing for a deeper democratization of politics and economics. But really the locus was: How do we get the state to do more stuff?

A lot of people who may have ordinarily been sympathetic to the Left, from a libertarian perspective, ended up going toward the neoliberals because there was a sense that state power was growing and growing and becoming more and more repressive. This was in a context, and still is, where most people’s interactions with the state are not pleasant. The neoliberal angle was to say, “We’re all about freedom, we want to stop the state from forcing you to do things, we want to expand the realm of the market, of trading, of entrepreneurship, of creativity.”

That message is presented as a really radical and revolutionary one in the 1980s, and it works. It gets at a core demographic of lower-middle-class voters who are aspirational and don’t have good connotations when it came to the exercise of state power.

What I look at in the book is how this was always a lie. The aim was never to shrink the state and expand human freedom. It was to expand freedom for a very particular class of people. This book looks at how neoliberalism was about expanding corporate power and in a lot of ways expanding state power as well. The famous line from Andrew Gamble was how [Margaret] Thatcher wants to create a free economy and a strong state. Actually, she wanted to create an oligarchic economy and a strong state to enforce that. But this line that it was all about freedom was really powerful and remains really powerful.

Chandler Dandridge

As socialists how do we break out of this state versus market divide?

Grace Blakeley

It’s difficult to imagine being able to create large, powerful institutions within a capitalist economy that don’t then conform to the logic of capitalism. We have to look at this system as a totality. We need to understand that the operation of any institution within a capitalist society is going to be influenced and shaped by the balance of class power, which in a capitalist society is always going to be weighted in favor of capital and the people who own and govern the means of production.

The argument in the book is that we need to stop acceding to this state versus market divide, and actually start thinking about all socialist politics in terms of shifting power. Not in some anarchist way of “don’t look at the state or don’t look at the corporation,” but actually don’t think you can just get control of an institution and use it to change things.

Think about how you shift the balance of power within society in order to change the operation of political and social institutions, in order to shift policy or shift working conditions. In some ways it involves using similar strategies. We still want progressive policy. We still want to be organizing in corporations. We still want to be organizing across supply chains. But the orientation is toward changing the balance of power.

For that reason, I include all these examples of community organizing and grassroots experiments in democratic planning. Both because those can achieve real gains within the system as it stands, but also because the central ideological foundation of neoliberalism is this idea of the Homo economicus — the rational, utility-maximizing, individual subject who doesn’t organize with other people to demand wage increases, who doesn’t really engage in politics as a distributive struggle, but just consumes politics as a consumer rather than a citizen.

Building collective power from the ground up is a way of beginning to undercut those kinds of subjectivities and facilitating the emergence of new subjectivities that make it easier to build power while also allowing for people to see through the system.

Chandler Dandridge

One major myth is that there is no planning that takes place in a capitalist economy, that the market dictates all action. Could you walk us through the planning that takes place in, for instance, big banks and the finance sector?

Grace Blakeley

I use some insights from modern monetary theory and heterodox economics that shows that banks are private institutions that are able to create money ex nihilo, as the economists say, meaning out of thin air. It is extraordinary that a private institution within a capitalist economy has that much power to determine the allocation of credit.

Mainstream economists would say, “Well, banks lend to those ventures that will provide them with the highest returns.” So if a bank was lending to an institution that had returns lower than the market average, then that bank would go out of business and a new bank would emerge that lends to the firms that were making the most profits. The issue with this, as [Friedrich] Hayek himself realized, is that economies are not simple systems that can be modeled using basic mathematics. They are complex systems in which many variables are interlinked.

Finance is one of those variables: the access to credit is part of what determines whether or not a company will be profitable. If an investor says, “I think this company is going to be profitable,” the investor’s expectation that the company is going to be profitable then determines whether or not it is profitable. So you get these positive feedback loops that reward certain kinds of relationships.

A lot of this comes down to relationships. As an investor you are part of a particular class and you expect that you’re going to be lending to people like you. In a world of concentrated corporate power, investors have close relationships with executives of the largest companies in the economy that they will probably be lending to. Maybe the investment arm of your bank is literally invested in those companies.

These relationships end up meaning that this planning power that banks have is used to reinforce the power of the largest corporations. It really undermines this idea that we have this market for money in which the most successful and ingenious and profitable businesses will be the ones that will access credit because otherwise the market will sort them out. There is no market in the finance sector. It is a sector that has been created by states and is defined by extraordinary levels of oligopolistic power and deep relationships between actors within that sector.

Chandler Dandridge

In the chapter on how big business plans, you cite [Jeff] Bezos and Amazon as a successor to [Henry] Ford. Yet you write about the “irrationality of Amazon’s business model.” What makes Amazon both a traditional monopoly and how are they deviating from models of the past?

Grace Blakeley

The reason I put forward this idea that Bezos is a successor to Ford is that there’s an idea within leftist circles that Fordism, though capitalistic, is this very social democratic distinct mode of production that existed based on cooperation and collaboration between workers and businesses in the state. The argument is there was the same kind of planning power that existed within the private sector in that era, and it was used in pretty horrific ways, but there was also this counterpower that came from the working class and organized labor that shifted the way the system worked and gave us what some people have termed Fordism. So it is about the balance of power, rather than the benevolence of corporate leaders during that time or even of state officials.

I look at Amazon as a successor to Fordism because there have always been these powerful people, generally men, in the American economy that have had this astonishing power to plan what goes on in the rest of the economy. Ford is this great example because he literally was like, “Okay, you can have a $5 day, but you’re not allowed to drink and your wife has to stay at home. Also, I’m going to build this rubber factory in the middle of the Amazon rainforest.” That planning is very obvious and material.

On the surface, Amazon doesn’t seem to have the same traction in our lives or in our societies. Yet you look at Bezos buying the Washington Post and using it as a megaphone for his own ideas, you look at the deep connections between Amazon and federal and municipal and state governments, the tax breaks, the immense amounts it spends lobbying, the private infrastructure that Amazon has built and created, which has become this foundational part of all of our existences, and you look at its market power, its relationships with its suppliers, all of these different things that show that the decisions that are being made by this corporation have massive implications. And not only for the lives of its workers, who are treated appallingly, but also for society as a whole.

Amazon is so big that the decisions that are made around sustainability, around tax practices, around the media, and lobbying shape the way that our society works. And these decisions are being made by a group of men, no longer Bezos, but a group of senior executives with no democratic accountability. The idea that that is somehow in alignment with this argument of capitalism as a free-market system is absurd.

It is also important to note that the ways in which Amazon plans and the ways in which planning takes place today is different than how it’s taken place in the past. The importance of Amazon Web Services and the digital element of the business, for example, is something that is really profitable. The prominence of rent-seeking within the digital space has not only facilitated massive profits on the part of tech giants but it has also shaped the development of technology itself within our society. Then the huge imbalances that exist in a relatively less unionized economy mean that this power is exercised without so much of that counterpower.

These are big differences between the two eras. But my argument is that what remains the same is that there are people who sit at the upper echelons of the corporate world who get to decide what happens for everyone else. And in many ways it sounds obvious to say that. We’ve gotten used to that idea. But if you were to ask any defender of liberalism and capitalism whether they accept that it’s true, they would say, “Of course not, because that contravenes the principles of the free market.”

I think it is important to note that this defense of capitalism that it is a free-market system in which competition rules, efficiency is the outcome that happens most of the time, and we all have the capacity to go out and be entrepreneurs and make the best of ourselves just doesn’t hold up under scrutiny.

Chandler Dandridge

I was fascinated to read about the Lucas Plan. Could you tell us a bit about this hinge point in history?

Grace Blakeley

The Lucas Plan was this amazing plan put together by workers at an aerospace factory in the UK in the 1970s. Lucas Industries was a big arms manufacturer but was becoming less competitive because of cheaper labor abroad and more efficient techniques of production. Some of the workers realized that the firm was in trouble and management was threatening layoffs so they were like, “Right, we need to do something about this.” They write to all the workers in the organization and say, “What could we do with this firm? How could we reorganize it?” And they got the most astonishing ream of responses.

All of these workers with immense amounts of expertise saying, “We could stop producing this and start producing kidney dialysis machines; we could stop producing these weapons and start building wind turbines.” They provided detailed specifications as to how production could be shifted. Then there were insights from workers about how the management of this new firm could be changed and shifted to a democratic, worker-owned organization, as well as shifting the kinds of things that were being produced. Now, of course, this was crushed. This was a much more radical threat to capitalism than nationalization, even. As one MP said, “This threatened the fundamental principle of capitalism which is that the managers manage, the boss’s own, and the workers do as they’re told.”

But this attempt captured the spirit of the times. Interestingly I start the book with the example of Boeing, which has obviously been in the news a lot recently, but I look at how the corporate governance within the firm contributed to a massive cover up where people high up in the organization knew that these planes were faulty and let them be produced anyway.

When the Lucas Plan was defeated, Lucas Aerospace was carved up in the shareholder value revolution of the 1980s and bits of what were once Lucas ended up being bought by companies that went on to manufacture the inputs that went into the Boeing 737 MAX planes that crashed out of the sky. It highlights this turning point when we had this movement for democratic planning, which was like, “Workers can own this firm and they can use it to build wind turbines or it can be bought out by Raytheon or United Technologies in pursuit of maximizing profits at the expense of everything else.”

I think that really exemplifies the divide that we should be talking about in politics, which is not state versus market. It’s democracy versus oligarchy. And that extends not just to politics but into the economy as well.

Chandler Dandridge

What is the value of having socialist representation in the capitalist state? How do figures like Bernie Sanders and the Squad in the United States factor into our project?

Grace Blakeley

Sanders, AOC [Alexandria Ocasio-Cortez], and the Squad are not operating in a vacuum. Their existence and their ability to continue to operate within the system is premised upon a particular set of institutional constraints that in turn reflect the balance of class power in US society.

Over the last ten years as the far right responds to the disillusionment and alienation experienced among people who are seeing rising poverty and inequality, they’ve been honing their cultural messages to cut through the potential emergence of class solidarity across racial, gender, and other lines. That was briefly undermined by the efforts of socialist organizers who started to really push the economic angle and try and build class consciousness. We had that in the UK with the Labour Party and Jeremy Corbyn.

Obviously those projects were roundly defeated. So we’re left with many socialists that entered into these institutions during moments of relative left strength, but now are outliers during a time of retrenchment. There’s not going to be a way to respond to that that results in them staying in a position of power, having lots of influence, and doing socialist things because the foundations for them to be able to do that don’t exist. Either they speak out and get pushed out or marginalized within the institution, or they cooperate and compromise and are further assimilated into the institution.

People will have different views as to what they should and shouldn’t do. The path of assimilation has its dangers because it’s often very difficult to come back. It’s quite easy to go down that path and start really believing that you’re not just doing what you need to do to survive but that these are the things that you should be doing. The path of marginalization also has dangers because if there is a time when the Left was able to strengthen itself once again and we start seeing genuine class conflict, it will be important to have socialists in those electoral positions.

While it is difficult and challenging for those individuals, I caution against thinking about anything in terms of individuals and individualism. We are encouraged to focus on the celebritization of politics, and that very much fits into the ideas that we’re told about how change happens: which is you stop traveling and you stop buying things and you do things as an individual.

Then you project those needs and wants that you have as an individual for social change onto a celebrity politician. It’s not a way to actually shift things. Those people need to be held to account by movements. That is the only way that we really begin to shift power within those institutions. So it’s all about building power from the ground up, which is easier said than done.

Chandler Dandridge

You end the book advocating for “a world in which every human being has the chance to flourish into their fullest selves.” On its face the concept of the “self” and individualism can appear at odds with a collective project. It is something our opponents are quick to bring up, especially as it concerns the freedom of the individual. How do you think about this contradiction?

Grace Blakeley

As socialists we have to view freedom as a social concept. Freedom not being submission to authority, as you might see in the collectivist dreams of the state planners, but neither freedom as this super libertarian version of pushing everyone else out of the way and competing with everyone to get to the top. Freedom lies in this dialectic, this balance between the respect for the individual, the need for individual flourishing, the expression of human creativity, and the social, the relationships and networks that that individual is a part of.

There is no freedom when the individual says, “I am the creative one and I will tell all of you what to do.” Nor is there freedom in an institution or an individual alienating people from their creative power in saying you will simply obey. The freedom lies between those two things where we do not mindlessly obey each other, we do not mindlessly compete against each other, we work with one another.

We are social beings. Our collective brain is so much more powerful than our individual brain. There’s this creative tension between the individual who has a desire to self-actualize and the individual who has a desire to connect. How do we respect both of those drives? Not by allowing one person’s individuality to overwhelm everyone else’s and not by allowing conformity to overwhelm our creative potential. It is basically: How do we learn to live with one another?