Review of Vulture Capitalism: Corporate Crimes, Backdoor Bailouts, and the Death of Freedom, Grace Blakeley (Bloomsbury, 2024), £18.00
By Tom Costello
Vulture Capitalism: Corporate Crimes, Backdoor Bailouts, and the Death of Freedom is the latest book by Grace Blakeley, a popular left-wing economics commentator and staff writer at Tribune magazine who has long been associated with Corbynism. First gaining prominence with the publication of her previous book Stolen, Blakeley has become something of a household name, with the Guardian recently describing her as “TikTok’s answer to Tony Benn”.
Her latest offering, Vulture Capitalism, dispels and dismantles some of the basic myths of neoliberal economics – in particular, the idea from ‘free market’ icon Friedrich Hayek, that capitalism is a means of guaranteeing freedom and democracy.
Blakeley shatters these myths and draws out the real nature of capitalism as a system of exploitation, oppression and endemic corruption. As she puts it: “There is a deep contradiction between the belief that we are free and the reality of living under capitalism – a system of pervasive unfreedom.”
Blakeley documents how “through their cooperation with states, businesses have gained power over our lives that would be the envy of some of the most authoritarian governments in history.”
She uncovers how, rather than being a system of ‘free markets’, a crucial component to the functioning of capitalism is the incestuous relationship between corporate and state power, through networks of patronage and state bailouts. One feature of this that she unfortunately doesn’t delve into is the heightened relationship between state intervention and corporate power under the New Cold War, where for instance to heighten the US-China inter-imperialist rivalry, a growing number of states are being compelled to carry out increased protectionist measures. As a result global trade and globalisation is going into reverse.
Likewise, rather than ‘sparking innovation’ as the argument goes, Blakeley explores how capitalist competition and monopoly power acts as an overwhelming barrier to innovation, or in a number of cases she cites, basic health and safety standards.
Blakeley particularly hones in on the case of Boeing, where a series of airplane disasters which cost a total of 346 lives were traceable directly to the company’s profit-maximising and cost cutting exercises. Specifically due to Boeing’s competition with its rival Airbus, the company’s owners knowingly cut corners and costs in order to rush the 737 Max model into production, installing lethally defective software. The company had received constant warnings from both researchers and inspectors, which were knowingly ignored by the company executives. The result was a system of malfunctioning sensors which sent Boeing’s flight into nosedive – the for-profit airlines had created the “world’s first self-hijacking plane”.
Blakeley also documents the cronyism and corruption on display during the Covid pandemic, where, rather than the state directly financing the production of personal protective equipment, the government instead set up a complex network of ‘contracts’ given out to private companies. Again, the rotten relationship between state power and corporate power was on show with repeated scandals, from David Cameron’s lobbying on behalf of Greensill for them to gain Covid contracts, to Tory Baroness Michelle Mone’s £29 million in profits, which she gained through personal connections.
The brutal and inhuman end result of this capitalist profiteering was well over 200,000 dead as PPE was severely delayed, all while £11.5 billion was paid out in profits for the shareholders.
What alternative?
Fortunately, Blakeley doesn’t just restrict herself to documenting the crimes of capitalism and the utterly inhumane and irrational way in which it functions. She also commits herself to discussing alternatives and the way they can be achieved.
This is particularly welcome given the significant growth in support for socialist ideas in recent years. In 2021, the Institute for Economic Affairs (a neoliberal think tank) reported that 67% of 16-34 year olds “would like to live in a socialist economic system”. While this is an enormously positive trend, there also remains a lot of confusion as to what a “socialist economic system” actually means – does it mean just more state spending and small amounts of nationalisation, for instance?
Blakeley attempts to provide an answer to these questions and draw some insightful conclusions, especially when she addresses some of these common confusions. In response to the misguided idea that socialism is the same as increased state spending (the pandemic would itself disprove that!), Blakeley cites Irish revolutionary James Connolly when he said:
“State ownership and control is not necessarily socialism – if it were, then the army, the navy, the police, the judges, the gaolers (jailers), the informers, and the hangmen, all would all be socialist functionaries, as they are state officials.”
The remainder of the quote omitted by Blakeley is just as relevant: “But the ownership by the state of all the land and materials for labour, combined with the co-operative control by the workers of such land and materials, would be socialism.”
Likewise, Blakeley points to some necessary criticisms of the economic theories of John Maynard Keynes, whose thinking still unfortunately still dominates much of the left today. Although defended by many genuine left-wingers (for instance those around figures like Corbyn and John McDonnell), Keynesian ideas are still founded on the idea of saving capitalism from itself through state intervention (stimulus, tax-and-spend etc), rather than a socialist programme which can genuinely address the economic roots of austerity and inequality.
Blakeley seeks to break out from the false dichotomy offered to the left today, between a ‘regulated’ and a deregulated capitalism – Keynes or Hayek, neither of whom offer any of the solutions to climate catastrophe, economic crisis and poverty. As Blakeley correctly sees it, “Both men shared a belief that most people could not be trusted to make any real decisions about the nature of society.”
In trying to chart a third option, Vulture Capitalism instead proposes “decommodify[ing] everything people need to survive by providing a program of universal basic services, whereby all essential services like health care, education (including higher education), social care, and even food, housing, and transport are provided for free or at subsidized prices.” This is certainly a vision which all socialists would eagerly sign up to, however as we will later come to, Blakeley’s vision for arriving there leaves quite a lot to be desired.
Planning
A positive feature of the book is the amount of emphasis which Blakeley puts on economic planning. She exposes the extent to which capitalism, erroneously described as a ‘free market’ system, actually relies on significant amounts of planning – from central banks, to the machinery of multinational corporations. In particular she draws on Leigh Phillips and Michal Rozworski’s book The People’s Republic of Walmart to explain how the corporate giants such as Amazon already basically operate as gigantic, cross-border planned economies who, in order to maximise profits, already use advanced computer software to distribute goods. This of course begs the question – if these corporations can operate gigantic planned economies with computers for the sake of profit, then why couldn’t a socialist government harness this technology for democratic planning to meet needs?
Similarly, Blakeley draws on the powerful example of the Lucas Plan, which was a pioneering document assembled by unionised workers at Lucas Aerospace in 1976. Lucas, then a leading producer of military equipment, faced the imminent threat of mass redundancies. The workers, through their union and shop stewards’ committee (elected from the shop floor), instead piled their skills, knowledge and intelligence together to propose the diversification of the factory’s production, to not only maintain skilled jobs, but to produce socially useful products (medical equipment, wind turbines etc) instead of instruments of war. It was immensely ahead of its time in providing a future model on which the climate and trade union movements could unite around a shared programme.
Although ultimately unsuccessful, Lucas provided a window into how the working class can collectively run its industries, while achieving innovation far beyond that under capitalism today once the profit motive is removed.
As Blakeley says of Lucas, “the evidence is clear: when you give people real power, they use it to build socialism.” This is of course true, however under no conditions could we ever expect the capitalist class to “give” people the power to build socialism. Likewise, as correct as it is to talk about the potential for the use of technology in a planned socialist economy, it is not enough to leave it there. Unless these giants are expropriated from the bosses and brought into full democratic public ownership under workers’ control and management along with the commanding heights of the economy, it would be impossible to even begin to harness that potential. Blakeley occasionally hints at this, but never actually comes out and says it.
This begins to touch on a weakness of Blakeley’s book. She routinely describes what could be possible, but never properly addresses the question of how to realise it. Where she begins to, she leaves open the possibility that a socialist future could be achieved without overthrowing the rule of the capitalist class – a socialist revolution. This is a mistake which has cost the working class massively through history.
Lessons of Chile
Vulture Capitalism draws on the experience of the Chilean Revolution of 1970-73, which for a short time thrust to power the government of Salvador Allende, a self-described ‘Marxist’ President. Reflecting the desire of the Chilean masses for socialism, Allende’s government undertook radical pro-working class reforms, taxing the rich and nationalising selected industries to fund social programmes.
US imperialism moved to cripple Chile’s economy in response. US President Richard Nixon ordered the CIA to, in his words, “make the economy scream”. What followed was a campaign of sabotage and terrorism which brought to power General Augusto Pinochet and his terrorist gangs. Pinochet and the so-called “Chicago Boys” – a group of neoliberal economists, oversaw a regime which crushed the labour movement, killed and tortured tens of thousands and wholesale privatised Chile’s economy. Blakeley draws the following conclusion:
“The Chilean experience shows that it is possible to begin building democratic institutions at scale. There are, however, several prerequisites. First, any attempt to democratise an economy will encounter massive resistance from capital – especially if undertaken in the Global South. The only route to a democratic economy will therefore run through struggle. The sine qua non of democratising society is building a movement capable of resisting the vested interests that would seek to prevent us from reaching this point.”
This is all quite true, but it is also insufficient. All of these ingredients she lists were present in Chile at the time. A “movement capable of resisting vested interests” and “struggle” were there in abundance – what was missing was a decisive lead from Allende’s ruling Popular Front to mobilise this movement to crush the bosses’ sabotage and carry forward the socialist revolution to its full conclusion, expropriating US imperialism and the native bourgeoisie, while sending an appeal to the workers and oppressed of all of Latin America to follow suit. Despite his personal heroism and honesty, Allende’s role at the decisive moment was to prevent the working class from arming itself and occupying the factories to fight off the counter-revolution, instead trying to cut deals with the enemy. The Stalinist Communist Party in all this was positioned even to the right of Allende, constantly exerting pressure on him to cut further deals with the capitalists, which eventually sealed the fate of the revolution.
Future revolutions of the type of Chile are undoubtedly on the cards. Even if it undoubtedly feels abstract in Britain 2024, socialists and workers’ movement activists must still study the lessons of these experiences. How in the future can the working class prevent this crushing defeat from happening again? The key lesson of Chile is not just the need to “resist vested interests” (although this is necessary), but to do so with a programme of socialist revolution, based on bringing the key sectors of the economy into the hands of the working class through a democratically accountable socialist government. In Britain, this would mean starting by taking the 150 monopolies which control the economy into public hands, twinned with a mass mobilisation of the working class through its unions, factory committees and workplace organisations to fend off the bosses’ sabotage.
Vulture Capitalism at points seems to draw the opposite conclusion. Although it would still enrage the billionaires (as Corbyn’s leadership of the Labour Party demonstrated), the programme she advocates would in sum be much milder than that of Allende’s, whose government for instance nationalised Chile’s gigantic copper industry.
Blakeley does not call for a crucial part of any viable socialist programme: nationalisation and democratic public ownership of the banks. Instead she simply calls for the setting up of a separate national insurance bank, along with a state-run “People’s Asset Manager”, which would presumably compete with the private sector. This would simply be ineffective if the majority of the financial system remains outside direct ownership and control of a workers’ government. The bosses could easily organise capital flight for instance (taking money elsewhere). The only way to avoid that is through a radical policy of nationalisation and seizing hold of the capitalist’s accounts, to be handed over to workers’ and consumers’ democratic management.
Blakeley does talk vaguely about the need for “expanding public ownership of firms”, but it is never clearly spelled out which ones. The implication is that a small selection of firms could compete as nationalised industries while the majority of the economy remains in private hands. Likewise, Vulture Capitalism advocates, instead of nationalisation of banks and the financial sector, simply setting up a state bank as a competitor to them. How Blakeley expects a socialist government to be able to control investment while the overwhelming majority of the financial sector remains in the hands of the capitalists, is never explained.
Rather than measures which try in vain to patch up capitalism, revolutionary socialists would instead call for public ownership of the banks as an absolute necessity. Without bringing finance into the direct control of a workers’ and socialist government, it would be rendered completely powerless.
The state
Vulture Capitalism also gives expression to some significant confusion on the question of the state and its role. Blakeley makes positive references to Marxist figures like Lenin and Antonio Gramsci, however the basic premise of her thinking on the state points somewhat away from a Marxist class analysis – Blakeley clearly has illusions in the idea that the state could potentially be class neutral. While acknowledging that the state today is generally used to further the interests of the capitalist class, she mistakenly puts forward the idea that the state itself can be used as it currently exists to further the interests of the working class on a long term basis.
It’s important to unpack what this means. Of course, socialists should make use of institutions like a parliament as a platform for socialist and revolutionary agitation. However, Blakeley takes this a step further, arguing essentially that the Marxist understanding of the state is no longer applicable. She for example asks rhetorically: “If the state is purely an instrument of capital, then how have working people ever won victories within the state? Why can workers vote? Why does the state exist at all?”
This is based on a misunderstanding; it’s not accurate to say that workers have ever won victories from “within the state”. Victories for the working class depend on mass struggle (or the threat of it), which can win concessions from capitalist governments and employers. It was the capitalists’ fear of revolution which delivered the NHS. The right to vote was wrested from the hands of a desperate bourgeois class through decades of revolutionary struggles – from Peterloo to Chartism. The strength and gains of the working class depend entirely on the organised strength and struggle of the working class outside the state.
It’s no accident that Marx said after the 1871 Paris Commune that “the working class cannot simply lay hold of the ready-made state machinery, and wield it for its own purposes”. Where this has been attempted as a strategy for socialists to win power, the end result has always been failure. History shows that in a revolutionary situation, what the working class needs is not to use the existing state machinery, but to break that up and replace it with its own apparatus based on the popular mobilisation and defence of the working class. In the Russian Revolution, these were the Soviets. For the German revolution, they were the workers’ councils. Likewise in Chile, the working class gave birth to the Cordones – democratic factory committees which operated as embryos of a new democratic workers’ state.
The Cordones oversaw factory occupations, organised committees to control prices while making decisions around distribution of goods and production targets. However Allende continually marginalised these bodies and instead relied on cutting deals with the threatened Chilean bourgeoisie. Until the coup, Allende considered Pinochet to be one of his most loyal generals, and falsely believed the military elites would respect the democratic wishes of the Chilean people. He placed at the head of nationalised industries not elected workers’ representatives, but former officials from the pro-CIA Christian Democrats who later played a key role in the sabotage.
Allende, for all of his personal sincerity and heroism, had a flawed reformist outlook which ultimately led straight to the defeat of the Chilean revolution. Unfortunately, Blakeley’s book emulates a number of these weaknesses.
Local solutions?
Much of Vulture Capitalism is devoted to looking into supposed localised solutions to the crisis of capitalism today. This is perhaps the weakest part of the book – in it she looks towards local initiatives such as co-operatives, mutual aid networks and small businesses as the way in which a socialist future can be achieved.
The movement which contains the most potential to resist the bosses – the trade unions and the weapon of strike action – occupies almost no significant role in this book. Blakeley is no doubt pro-union, but to her the organised working class rarely comes into the picture.
Instead, Blakeley points to what she calls “People-Powered Planning” as the route forward, which boils down to local council initiatives, ‘Community Wealth Building’ exercises and local co-operatives. Blakeley describes these as “local-level examples of democratic planning, [which] provide the foundations on which the shift to a democratic economy will be based.”
Among other things, she cites the example of ‘participatory budgeting’, which involves meetings at neighbourhood level, for residents to decide on priorities in funding services – which portion of the budget goes where. This is generally progressive sounding policy could bring certain benefits, for instance in identifying waste at a local level.
However it is also extremely limited in that it doesn’t point towards directly challenging the logic of austerity. Without a mass community-based struggle to force the resources and funding needed from big business and central governments, including through ending privatisation and outsourcing, ‘participatory budgeting’ would simply shuffle around meagre amounts of money without raising the key demands to end cuts which starve localities of funding. Austerity with a veneer of local decision making is still austerity. A programme of this sort, expanded across a country, would ultimately do very little to decisively shift the balance of power in favour of the majority.
Another example cited is that of the ‘Preston model’, which garnered attention in the last decade as a supposed alternative for councils to avoiding implementing cuts. The basic idea behind it – ‘Community Wealth Building’ – was that the decline of towns can be solved by local procurement of small businesses. Rather than councils outsourcing their services to giant corporations and monopolies, they will instead contract only businesses based in the council area, in order to use existing “local wealth”.
These kinds of schemes can bring some marginal benefits – for instance injecting a small amount of capital into a local economy and in Preston’s case, increasing the amount of enterprises which pay the UK Living Wage. But it is not true to say that selling services off to private companies, however ‘local’ they are, provides a viable way forward in getting rid of capitalism. This kind of thinking actually has more in common with the ‘trickle-down’ logic of capitalism than it does with anything related to the workers’ movement. It fails to challenge the myth that that if businesses do well, the working class will also prosper by extension. Anyone with a basic class view of society or a sense of recent decades will know this is not the case at all.
Vulture Capitalism deserves to be read widely, especially since it demolishes many of the foundational myths behind capitalism today. The fact that the book has done so well is also testimony to the growing thirst for a radical alternative to capitalism among a new generation. But where it falls short is in the solutions put forward, which often fail to provide a convincing and revolutionary answer to the problems facing society in this new age of disorder.
