2020s >> 2025 >> no-1450-june-2025

In their 2019 book The People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism Leigh Phillips and Michal Rozworski argued that, contrary to appearances, modern capitalism is already succumbing to a process of central planning in such varied forms as large-scale businesses, the financial system and the welfare state. This could even imply that the growing dominance of large corporations in the economy, internally organised on the basis of a priori non-market allocation, might somehow herald the decline and, perhaps even, eventual eclipse of capitalism.

In an article in the Jacobin entitled ‘Yes, a Planned Economy Can Actually Work’ they wistfully maintained:

‘Mega-companies like Amazon and Walmart are already using large-scale central planning. We can wield that tool for good. Socialists need to renew our embrace of democratic planning and fight for a real alternative to capitalism’.

And that:

‘We need to use our vast productive resources to better ends – and through politics we can do just that. And as technology allows us to move to a discussion of what sort of planning, instead of whether planning, true democratic control of planning both at the enterprise and government level must be the non-negotiable foundation of our vision’ (tinyurl.com/345jbycw).

However, if a planned economy ‘can actually work’ on their terms, then it would be an economy that has nothing really to do with a post-capitalist society in any meaningful sense of the term.

Essentially, what they advocate is just a sort of democratised version of corporate capitalism. ‘Governments’ and ‘enterprises’ will continue to exist, and business will continue to operate as normal, churning out commodities for sale on a market.

The difference with today is that internally such business will become subject to ‘democratic control’. What enables this is the replacement in such businesses of internal markets by planning – something that Phillips and Rozworski said had already happened to a large extent:

‘Regardless, Walmart engages in large-scale planning without the direct intermediation of markets at scales to make Hayek bristle. Internally, like nearly all firms large and small, it is a dictatorial planned economy: managers tell workers what to do, departments realize goals from on high, and goods flow by fiat. Afloat in the market, Walmart is at once an “island of conscious power,” as Keynes’s collaborator D. H. Robertson put it, and an “island of tyranny,” as the social theorist Noam Chomsky rephrased it.’

According to them, the fact that a business like Walmart, the world´s largest company, operates without an internal market is precisely what makes it relatively more efficient than businesses with an internal market.

Walmart is, of course, a prime example of a large corporation. Its revenue in 2018 was $500 billion – exceeding that of the Soviet Union in 1970 (adjusted for inflation). As an organisation, it makes full use of sophisticated computer systems and comprehensive record keeping, to integrate and manage every aspect of production and distribution amongst its numerous outlets. Using big data analytics, it tracks and targets individual consumers – 145 million in the US alone – identifying patterns of consumer spending and anticipating future trends on the basis of past evidence.

These kinds of developments have been interpreted by commentators like Philips and Rozworski as clear proof that large-scale centralised planning is eminently practicable, contrary to the claims of Mises and Hayek. However, we should be wary of the all too facile way in which these commentators sometimes go about interpreting the evidence. Walmart’s is not an example of central planning in the sense of society-wide planning – obviously. Crucially, as just mentioned, it employs the principle of feedback and of course what Walmart is responding to is the market demand for its products. To its very core, Walmart is a market-based capitalist institution.

Whether a mega-corporation such as Walmart should be held up on purely technical grounds as some kind of template upon which a realisable alternative to capitalism can be built, albeit suitably reconfigured along democratic lines, is highly questionable for many other reasons too. After all, Walmart, like every other such corporation, is essentially a commercial or market-oriented entity and to draw attention to its enormous size and its ability to allocate inputs internally without reference to market principles is, in a sense, a red herring. What such thinking seems to imply is that a post-capitalist alternative will continue to feature something akin to ‘corporations’ – entities legally distinguishable from each other – and under whose aegis production will supposedly be ‘democratically organised’ unlike in capitalism.

This is missing the point completely. There won’t be, and cannot be, such a thing as a ‘corporation’ in a society based on the common ownership of the means of production. The very raison d’être of a corporation derives from its exclusive private or monopoly ownership of the productive assets in its legal possession and, as such, this is wholly incompatible with the very nature of such a society. Meaning it is nonsensical to talk of taking over an institution like a corporation and running it in a different, more democratic, way in a post-capitalist society, when such an institution would simply cease to exist.

Of course, what Philips and Rozworski describe is not society-wide central planning in the sense that Lenin might have had in mind when he talked of turning the ‘whole of society’ into ‘a single office and a single factory’. Nevertheless, just as Lenin´s approach via state capitalism comprehensively failed to deliver socialism in the traditional Marxian sense, there is no reason to think that their approach (via the democratic transformation of big corporations) would fare any better. Of course, one can redefine ‘socialism’ to mean something else, which is what Lenin did – but that doesn’t change anything.

Nevertheless, even granting their description of how Walmart works, we are none the wiser as to how the development of central planning within some corporate behemoth like Walmart is going to assist in laying the ‘foundations of socialism’ any more than the approach advanced by Lenin.

ROBIN COX

---

Next article: Reform – Breaking the mould or flash in the pan? ⮞