Vulture capitalism

Sigmar Polke, Untitled (Triptych), 2002


Comment on the recently released book, “Vulture capitalism”, by Grace Blakeley


Grace Blakeley is a media star from the radical left wing of the British labor movement. She is a columnist for the left-wing newspaper Tribune and a regular speaker on political debates on broadcasting – she often presents herself as the only spokesperson for the left advocating socialist alternatives.

His profile and popularity led to his book, Stolen, directly into the top 50 of all books on Amazon. His new book, titled Vulture capitalism: corporate crimes, backdoor bailouts and the death of freedom achieved even more popularity. It is “listed” as the women's nonfiction book of the year; even the magazine Glamour considered it an essential book for young people Fashionistas read.

Grace Blakeley's main theme in Vulture Capitalism is to demystify the long-standing concept in conventional neoclassical economics that capitalism is a system of “free markets” and competition. If capitalism ever had “free markets” and competition between companies in the struggle for profits created by labor (and Grace Blakeley doubts it ever did), then it certainly does not now.

Capitalism now, she argues, is really a planned economy, controlled by large monopolies and supported by the state. Monopolies plan strategy and investment together with governments. And small businesses and workers must comply: “In fact, existing capitalist economies are hybrid systems, based on a careful balance between markets and planning. This is not a failure resulting from the incomplete implementation of capitalism, or its corruption by an evil and all-powerful elite. It’s simply the way capitalism works.” Thus, she considers that the big monopolies, finance and the State now plan the world and avoid the impact of the ups and downs of markets (free or not), which are now basically irrelevant.

As Grace Blakeley explains, market forces do not operate within companies. Ronald Coase was the economist mainstream who first described how companies operate according to internal planning. There are no markets or contracts between sections or workers and administration within companies. Management plans and workers apply them. But Grace Blakeley argues that this planning mechanism now applies to relationships between firms, or at least large “monopolistic” firms. “Large companies are able, to a large extent, to ignore market pressure and instead act to shape market conditions themselves.”

If something goes wrong and there is a crisis, the big monopolies and the State work together to resolve it, with little impact on themselves.

“Within actually existing capitalism – she says – there is a hybrid of markets and central planning – the largest and most powerful public and private sector institutions can work together to save their own skin. Instead of bearing the consequences of the crises they created, these actors shift the costs of their greed to those with less power – workers, particularly those in the poorest parts of the world….”

This is how monopolies combine with the State to solve these crises: “All recent crises – from the financial crisis to the pandemic to the cost of living crisis – have involved a fundamental role for the State in solving the collective action problems of the capital. And even though capitalists have often regretted the pain inflicted on them at the time, they have always come out ahead.”

Grace Blakeley argues that crises in capitalism are no longer resolved by what Joseph Schumpeter (and, for that matter, also Karl Marx) called “creative destruction”. Crises in capitalism, that is, the declines that lead to the liquidation of companies; Mass unemployment and financial crashes have increasingly been overcome through “planning” by large monopolies and the State.

“The evidence suggests that Schumpeter's temporary monopolies are becoming increasingly permanent. Thus, not only are relationships within the firm based on authority rather than market exchange, but the boss's authority is also relatively unconstrained by market discipline. Chiefs are increasingly able to act as powerful planners within their domain. And in doing so, they are able to exercise significant power over society as a whole.”


For me, two doubts arise here about this thesis. First, although there may be no markets or competition within firms, we are really saying that there is no competition among firms over the share of profits exploited from the labor of workers, that markets (free or otherwise) have no influence about capitalist accumulation?

To begin with, international competition between multinational companies is intense: cartels do not operate with any conviction in international trade and investment. The trade and investment war between the US and China is not a good example of global planning. Furthermore, the search for profits in capitalist production leads to an incessant search by companies for technological advantages over their rivals. Companies that appear to have a “monopoly” in a particular sector or market are always under threat of losing that hegemony – and this also applies to the largest companies. In fact, technological competition has never been greater.

This applies to competition within the nation-state as well as internationally. In 2020, the average life expectancy of a company in the S&P 500 Index was just over 21 years, compared to 32 years in 1965. There is a clear long-term trend of declining corporate longevity relative to companies in the S&P Index 500, with this expected to fall further throughout the 2020s. Grace Blakeley supports her argument with evidence of growing market power and concentration of monopolies provided by recent studies. However, these studies do not seem convincing to me.

Secondly, if monopolies and the state can now plan for and avoid market vicissitudes, why are there still major crises in capitalist production at regular and recurring intervals? In the 2008st century we had two of the biggest crises in the history of capitalism, in 2020 and XNUMX. Did capitalism avoid this through “planning”?

Grace Blakeley dispenses with the “outdated” Marxist explanation of crises defended by Marx: that theory according to which the fall in the profitability of capital and the productivity of labor leads to regular and recurring crises in investment and production. For Grace Blakeley, capitalism can actually avoid or at least resolve such crises through “planning” and through receiving “handouts” from the State. Monopolies can avoid “creative destruction” and can continue to grow at the expense of small businesses and the rest of us.

For Grace Blakeley, crises occur, but they no longer come as “natural results of unrestrained free markets or greedy unionized workers”; it rejects that there is any economic contradiction inherent in capitalist accumulation. Now, crises result “from political choices made by states and corporations in response to the shifts in power and wealth then underway in the world economy. Naturally, these choices tended to consolidate the status quo and benefit the powerful.”

But if crises are now the result of bad policy choices by those in power, then better decisions could work to keep capitalism not just market-free but also crisis-free. “Planned” capitalism can work if there are no longer inherent flaws in capitalist production. Grace Blakeley has essentially resurrected the theory of “state monopoly capitalism,” an old Soviet/Stalinist/Maoist theme that argues that crises in “competitive” capitalism were ended at the expense of stagnation. Democracy has been replaced by monopoly power (assuming there ever was a true economic democracy).

Grace Blakeley instructs us to realize that under capitalism, workers are to be considered just like bees; they fulfill the requests of the queen and her drones. However, I think, what “differentiates us from other animals is our ability to reimagine and recreate the world around us. As Marx wrote, human beings are architects, not bees.”

Apparently, there was a time when workers had some influence on planning. I quote Grace Blakeley from a recent interview about her book: “So planning continued as before, throughout the history of capitalism, only instead of workers, bosses and politicians, the workers were kicked out and it was just bosses and politicians who ended up planning.”

Really? Workers used to influence the planning of economies in the so-called “pre-monopoly” era, but not like bees? If Grace Blakeley means that the union used to be stronger before the neoliberal period and therefore could exert some influence on monopoly planning or that German works councils could do the same, those of us who lived through the 1960s and 1970s they know that is not the case.

For Grace Blakeley, the answer to this “death of freedom” that is now affecting workers is not to replace markets with planning, as the old socialists thought. The answer must come from the workers’ own local companies. And Grace Blakeley presents us with a good set of examples that show how workers developed their own cooperatives and self-managed activities, which demonstrates that it is possible to organize society without markets, without the State (and without planning?).


Grace Blakeley's best example is the Lucas Plan that thrived in the 1970s: through it, workers put forward proposals to transform a multinational arms manufacturer into a worker-owned social enterprise. Here's how she displays it:

“The Lucas Plan was an extraordinarily ambitious document that challenged the foundations of capitalism. In place of an institution designed to generate profits through the domination of labor by capital, the workers at Lucas Aerospace developed an entirely new model of enterprise – one based on the democratic production of socially useful commodities. It was almost as if the workers had never needed management, as if they were creative architects rather than obedient bees.”

To this example, she adds the “participatory budget movement” that took place in Brazil, “in which citizens took control of government spending with surprising results”. Other examples are taken from Argentina and Chile. Grace Blakeley concludes that “the evidence is clear: when you give people real power, they use it to build socialism.”

But the evidence is also clear that all of these imaginative projects by workers at the local level either ended up collapsing, or were consumed by capital (Lucas), or continue without having any broader effect on capitalist control of the economy – the “participatory budget” ” in Brazil led to a socialist Brazil? Did the projects in Argentina stop the terrible series of economic crises in that country?

Grace Blakeley is, of course, well aware of this: “without reforms to the structure of capitalist societies, such innovations must remain small. Unless we socialize and democratize ownership of society’s most important resources – unless we dissolve the class division between capital and labor – there can be no true democracy.”

Grace Blakeley rightly calls for an end to union restrictions, a four-day working week and universal basic services. “A much better proposal would be to decommodify everything people need to survive, providing a universal basic services program, in which all essential services such as health, education (including higher education), social assistance and even food, housing and transport are provided free of charge or at subsidized prices. And ensuring these services are democratically governed would also help build social solidarity at a local level – something a UBI is unlikely to achieve.”

Really! However, how can these necessary measures in the interests of workers be achieved without public ownership of the means of production? How can we decommodify essential services without public ownership of energy companies, public health and education services, public transport and communications, or the production and distribution of basic foods?

It can be seen here that Grace Blakeley's proposals appear to be very vague. Look at this: in a program for the United Kingdom, she wants “retail banks” to be nationalized; Furthermore, she wants to democratize the Central Bank. In other words, she wants to work in the field of finance.

Right, but I don't see demands for nationalization of the big monopolies that, according to Grace Blakeley, now control our society with impunity. What about the big fossil fuel companies, as well as the big pharmaceutical companies (which profited from COVID), or even the big food companies (which profited from the inflationary spiral)? What about social media and technology mega-companies that suck up trillions in profits? Shouldn't they be public property?

When it comes to the world economy and the Global South, Grace Blakeley refers to what she calls the “developmental approach” adopted by some countries, where it is assumed “that the State can act as an autonomous force within society”. For her, China is an example in which “the result was the construction of a surprisingly successful development model”.

But this success, says Grace Blakeley, was only achieved through the exploitation of Chinese workers, as is the case in the rich world: “it was precisely the ability of Chinese planners to promote economic growth while repressing workers’ demands that sustained the Chinese “miracle”. ”. Thus, for Grace Blakeley, the case of China is no different from the cases of the “developmental” economies of Japan or Korea.

Is it really that? In the West, “state monopoly planning” did not prevent successive economic crises; it has only achieved slower and slower economic growth and investment, as in Japan and the rest of the G7. But “state monopoly planning” in China has led to unprecedented growth without slumps like those experienced in the West or other “emerging economies” such as India or Brazil.

Contrary to Grace Blakeley's claim, China has achieved the fastest real wage growth of any major economy. We can only explain this different result because there is a difference: China's economy is based on state-led investment planning that dominates not capitalist companies and the market, unlike the West.

Now look at the issue of climate change and global warming. Of course, it is very clear that markets and price fluctuations cannot deal with the climate crisis. What is needed is global planning based on public ownership of the fossil fuel industry and large-scale public investment by cooperating States. It cannot be solved by local labor companies.

Grace Blakeley says that “expanding” public ownership of companies – whether at a local or national level – is “another key element in the democratization of the economy, because it challenges the power of capital over investment”. But ending capitalist power (monopolistic or not) through public ownership is not just “another key element”, but the key element above all. Without it, democratic planning and workers' control of their economy and society are impossible.

Grace Blakeley puts “democracy” before public ownership and planning – in other words, putting the cart before the horse. To move towards socialism, we need the horse and cart together.

Capitalism did not overcome international crises through state monopoly planning. Crises continue to occur at regular intervals, caused by the contradiction between the search for more profit and the increasing difficulty of realizing that profit. Crises are still inherent to the process of capitalist accumulation and not the result of “bad choices” made by politicians bidding for monopolies. Only the end of private capital and the law of value through public ownership and planning can stop such crises.

Grace Blakeley’s analysis of modern capitalism as “planned capitalism” is – in my opinion – quite confusing. Have the spots of the capitalist leopard that emerged as the globally dominant mode of production in the 19th century really moved? Blakeley's previous book, Stolen, had the subtitle “how to save the world from financialization” – note that, for her, the key issue did not concern capitalism as such, but only financial capital.

And the title of this new book is also confusing. Our enemy this time is not “financialization”, but “vulture capitalism”. But what is this vulture capitalism? I looked in the book to find out. There is no explanation for this term in the book other than it briefly refers to vulture hedge funds pressuring governments of poor countries into debt payments. The term vulture capitalism seems to have no relevance to the contents of Grace Blakeley's new book. I assume this is just a title marketing cleverly “judged” by publishers. It must have worked for a good sale of the book. However, it does not work to explain anything about capitalism in the 21st century.

*Michael Roberts is an economist. Author, among other books, of The great recession: a marxist view (Lulu Press) []

Translation: Eleutério FS Prado.

Originally published in The next recession blog.


Grace Blakeley. Vulture capitalism: corporate crimes, backdoor bailouts and the death of freedom. London, Bloomsbury, 2024, 384 pages. []

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