Could Walmart Be a Model for a Socialist Future?

Leigh Phillips and Michal Rozworski argue in a new book that megacorporations—although odious—demonstrate the massive central planning we need.

Peter Frase March 11, 2019

(Photo illustration by Rachel K. Dooley)

Leigh Phillips and Michal Roz­wors­ki want you to know that their new book, The People’s Repub­lic of Wal­mart, is not a social­ist defense of Wal­mart, a com­pa­ny they call exe­crable.” Rather, they use the mega­cor­po­ra­tion as a mod­el to imag­ine what a cen­tral­ized, planned econ­o­my might look like.

If Walmart is already more or less a planned economy...why not just nationalize it so everyone can save money and live better?

The authors offer Wal­mart as an empir­i­cal refu­ta­tion of mid-20th-cen­tu­ry con­ser­v­a­tives, such as Lud­wig von Mis­es, who insist­ed that effi­cient eco­nom­ic plan­ning on a mass scale was sim­ply infea­si­ble because of the enor­mous num­ber of vari­ables, such as thou­sands of end prod­ucts and mate­ri­als from sup­pli­ers around the globe. To objec­tions that the world is sim­ply too com­plex” for such cen­tral­ized plan­ning, Phillips and Roz­wors­ki observe that today’s glob­al econ­o­my is fueled, not by com­pe­ti­tion and free mar­ket exchange, but by mega­cor­po­ra­tions whose glob­al­ly inte­grat­ed sup­ply chains are mas­ter­works of eco­nom­ic planning.

There is no bet­ter exam­ple of this plan­ning, in the 21st cen­tu­ry, than Wal­mart. Of course the com­pa­ny com­petes with oth­er firms, but inter­nal­ly, it is a cen­tral­ly planned econ­o­my, one so large—$500 bil­lion in rev­enue in 2018 — that, when adjust­ed for infla­tion, it sur­pass­es the econ­o­my of the USSR at its height in 1970. Wal­mart is not a net­work of retail stores, as it appears to its cus­tomers. Instead, pro­duc­tion and dis­tri­b­u­tion are part of an inte­grat­ed whole. The com­pa­ny uses com­plex record-keep­ing and com­put­er algo­rithms to man­age it all, from the time raw mate­ri­als are sourced to the pro­duc­tion, ship­ping and stock­ing of a fin­ished prod­uct on store shelves. Even the company’s sup­pli­ers are less inde­pen­dent enti­ties than appendages of the cor­po­rate cen­ter, often doing busi­ness exclu­sive­ly with Wal­mart. The result is a net­work of 11,000 retail stores in 27 coun­tries sell­ing prod­ucts from 70 countries.

Phillips and Roz­wors­ki offer the exam­ple of Wal­mart, as well as cor­re­spond­ing advances in the eco­nom­ic the­o­ry of plan­ning and in com­put­ing pow­er, as proof that the ele­ments of a suc­cess­ful social­ist planned econ­o­my are indeed pos­si­ble. If only,” they imag­ine, “[Walmart’s] archi­tec­ture of agile eco­nom­ic plan­ning could be cap­tured and trans­formed by those who aim toward a more egal­i­tar­i­an, lib­er­a­to­ry society!”

In this dream, they echo long­stand­ing cur­rents on the social­ist Left. Indeed, it is char­ac­ter­is­tic of almost all Marx­ists to insist that social­ism must be built, to some extent, from the ele­ments of the cap­i­tal­ist econ­o­my, rather than con­struct­ed from the ground up from a utopi­an blue­print. In his 1859 pref­ace to A Con­tri­bu­tion to the Cri­tique of Polit­i­cal Econ­o­my, Karl Marx implies that at ear­li­er points in its devel­op­ment, cap­i­tal­ism is still pro­gres­sive” because it pro­duces rapid increas­es in pro­duc­tiv­i­ty. There aren’t enough mate­r­i­al goods to sup­port every­one at this stage, so social­ism would only amount to the redis­tri­b­u­tion of scarci­ty. But at some point, Marx argues, pro­duc­tion increas­es to such a scale that it becomes pos­si­ble and nec­es­sary to social­ize the exist­ing mech­a­nisms of pro­duc­tion and redis­trib­ute the social prod­uct fair­ly. This would, for some, be enough to con­sti­tute social­ism: a demo­c­ra­t­i­cal­ly run, cen­tral­ly planned econ­o­my that ensures every person’s mate­r­i­al needs are met. A Wal­mart for the peo­ple, with the same low prices and effi­cient logis­tics but with­out the pover­ty wages — and no bil­lion­aires at the top rak­ing in the profits.

Phillips and Rozworski’s book is, at its root, a lat­ter-day ver­sion of Marx’s argu­ment. They sug­gest that cap­i­tal­ism has great­ly refined the means of pro­duc­tion, as exem­pli­fied by Walmart’s logis­tics chain of ware­hous­es. After all, if Wal­mart isal­ready more or less a planned econ­o­my, then pri­vate cap­i­tal­ists and mar­ket com­pe­ti­tion have become large­ly irrel­e­vant to actu­al­ly run­ning the econ­o­my and pro­duc­ing enough stuff for every­one. Why not just nation­al­ize it so every­one can save mon­ey and live better?

Each of the book’s chap­ters either finds planned economies oper­at­ing in the heart of neolib­er­al cap­i­tal­ism — in mega­cor­po­ra­tions like Wal­mart and Ama­zon — or con­tests the claim that social­ist plan­ning is impos­si­ble, by re-exam­in­ing cas­es like the Sovi­et Union, the U.K.’s Nation­al Health Ser­vice (NHS), and the Allende régime’s exper­i­ments with com­put­er­ized plan­ning in social­ist Chile. Through­out the book, we are reas­sured that the authors do not mean to sug­gest plan­ning is sim­ply a mat­ter of tak­ing over the machine’; still less the gov­ern­ment tak­ing it over and oth­er­wise leav­ing the machine as it is,’” as they say in their con­clu­sion, although they cer­tain­ly seem to think that would be a good start. And they admit that the short­com­ings of planned economies — like the USSR and the NHS — often stem from a lack of demo­c­ra­t­ic par­tic­i­pa­tion, lead­ing to a bureau­crat­ic sys­tem that is unre­spon­sive to the needs of its users and, as was the case in the USSR, con­trolled by a new rul­ing class of apparatchiks.

What would an alter­na­tive sys­tem look like? That is left unde­fined. Phillips and Roz­wors­ki are hum­ble enough not to pro­vide an answer, only offer­ing that what demo­c­ra­t­ic plan­ning will look like is a ques­tion a new gen­er­a­tion of pro­gres­sive econ­o­mists needs to begin today to dis­cuss.” Many pos­si­ble con­tra­dic­tions, how­ev­er, lurk beneath this ques­tion. When the workforce’s demo­c­ra­t­ic demand for pow­er with­in the work­place con­flicts with the needs of effi­cient social­ist pro­duc­tion, what wins out? At its worst, a social­ized econ­o­my could look like one in which the exploita­tion of labor con­tin­ues unchanged. The boss might now be us,” in some col­lec­tive form, but what com­fort is that if life on the job is as gru­el­ing as ever?

Such issues of work­place democ­ra­cy are large­ly pushed aside. Phillips and Roz­wors­ki offer a tech­no­crat­ic vision, one that owes some­thing to Marx but per­haps just as much to the top-down social­ism of the British Fabi­an Soci­ety of play­wright George Bernard Shaw. Shaw and his fel­low intel­lec­tu­als viewed social­ism as some­thing to be brought to the mass­es by edu­cat­ed elites — them­selves, for instance — through a process of grad­ual reform. Phillips and Roz­wors­ki do rec­og­nize the poten­tial for democ­ra­tized eco­nom­ic plan­ning to devolve into a dystopia of end­less meet­ings, yet their only solu­tion is to insist that we’ll have to give up some deci­sion-mak­ing pow­er — whether to experts, (elect­ed) man­agers or rep­re­sen­ta­tives.” We are left to hope, fin­gers crossed, that a bal­ance can some­how be struck between the imper­a­tives of democ­ra­cy, effi­cien­cy and bureaucracy.

At best, this vision amounts to a halfway house on the way to lib­er­a­tion. Marx, in his 1875 Cri­tique of the Gotha Pro­gram, spoke of social­ism as a tran­si­tion­al affair, a sit­u­a­tion in which pro­duc­tion has been social­ized but alien­at­ed labor and exploita­tion remain; only the dis­tri­b­u­tion of goods and income are altered in an egal­i­tar­i­an direc­tion. For the rad­i­cal Marx of the 1871 pam­phlet The Civ­il War in France,” this type of social­ism was only the pre­lude to a sit­u­a­tion in which work­ers rad­i­cal­ly democ­ra­tized both gov­ern­ment and work­place, so that even­tu­al­ly a true com­mu­nism could emerge in which the bound­aries between state, work­place and civ­il soci­ety were blurred and then effaced entirely.

The Marx­ist tra­di­tion con­tains oth­er approach­es to the ques­tion of social­ist eco­nom­ics and the need to fun­da­men­tal­ly change not just who runs the econ­o­my but how it func­tions. Would it be enough to put such a sys­tem in pub­lic hands, and return its prof­its to the peo­ple? What of the con­di­tions of its work­ers, and its effect on the envi­ron­ment? To account for both the human­i­ty of the work­er and the need to pro­tect our ecosys­tems, two oth­er schools of thought are rel­e­vant to the exam­ple of Walmart.

The first school con­cen­trates on the labor process itself, and on the ways in which work­ers are dehu­man­ized by cap­i­tal­ist pro­duc­tion meth­ods, which reduce them to cogs in a machine; the most famous work in this tra­di­tion is Har­ry Braverman’s Labor and Monop­oly Cap­i­tal. Tempt­ing though it is to see Wal­mart as incip­i­ent social­ism requir­ing only a change in lead­er­ship, this moves too quick­ly past what actu­al­ly makes Wal­mart work, beyond its com­plex com­put­er-planned logis­tics. Phillips and Roz­wors­ki quote Sam Wal­ton him­self on the secret to his suc­cess: I pay low wages.” And more than low wages, the well-oiled logis­tics oper­a­tion requires that work­ers, whether in the store aisles or the cen­tral ware­house, be treat­ed as just one more cal­cu­la­ble — and dis­pos­able — cog in the machine. Any tru­ly demo­c­ra­t­ic social­ism would have to decide whether it’s accept­able for us all to sac­ri­fice those vaunt­ed low, low prices to improve the qual­i­ty of a Wal­mart worker’s life in and out of the workplace.

In the sec­ond school of thought, eco-social­ists point out that, if we are to man­age the cli­mate cri­sis, con­tin­u­ing with eco­nom­ics as usu­al is an eco­log­i­cal impos­si­bil­i­ty. The Wal­mart sys­tem entails mas­sive expen­di­tures of ener­gy and ship­ping prod­ucts from one end of the Earth to the oth­er. In oth­er words, an enor­mous waste. Phillips and Roz­wors­ki acknowl­edge this in their final chap­ter, Plan­ning the Good Anthro­pocene,” but they assume it will be pos­si­ble to move to a post-car­bon ener­gy sys­tem with­out alter­ing the fun­da­men­tal premis­es of our cur­rent glob­al economy.

Nei­ther of these per­spec­tives is nec­es­sar­i­ly incon­sis­tent with the one Phillips and Roz­wors­ki pro­pose. Per­haps har­ness­ing Walmart’s effi­cien­cy while mak­ing it a more pleas­ant work­place with a lighter envi­ron­men­tal foot­print does not require any trade-offs. Yet as their repeat­ed asides sug­gest, Phillips and Roz­wors­ki inveigh us to study how we might recon­struct a social­ist Wal­mart,” one that can simul­ta­ne­ous­ly pro­vide a high mate­r­i­al stan­dard of liv­ing to every human being with­out ruth­less­ly grind­ing down its work­ers and burn­ing up the planet.

Peter Frase is the vice chair of the Hud­son Val­ley chap­ter of the Demo­c­ra­t­ic Social­ists of Amer­i­ca, and a mem­ber of the edi­to­r­i­al board at Jacobin mag­a­zine. He is the author of Four Futures: Life After Cap­i­tal­ism (Ver­so, 2016).
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