Vulture Capitalism – review

The global financial crisis of 2007/08 exposed the dominant economics of the time that had reigned unchallenged both in university departments and the policies of western governments. The result was a new generation of academics and activists who relearned economics from scratch by engaging with rich intellectual traditions that had nevertheless been marginalised in universities. These traditions included Marxism and post-Keynesianism as well as a willingness to expose economics to the insights of other disciplines, such as history, geography, law and sociology.

In the UK, Grace Blakeley is perhaps the most prominent of our ‘post-crisis’ thinkers, writers and activists, willing to argue back against government economic policies on their own terms and to bring critical and heterodox views on the economy to a wider audience.

In her new book, Vulture Capitalism, Blakeley builds on her previous publications examining the trajectory of finance-led growth that led to the 2007/08 crisis, and the subsequent effects of the world’s next major recession following the Covid-19 pandemic and resulting lockdowns. In Vulture Capitalism, Blakeley sets out the ways in which capitalism works against our collective interests and freedom, and she intersperses this with spirited and closely-referenced accounts of manifold business and corporate scandals from recent history.

‘Free Money’

The main argument of the book is that capitalism does not play by its own rules, and that while it preaches free and fair markets to the rest of us, large corporations conspire together and with governments to ensure that profits keep flowing in their direction – including by unapologetically hoovering up public funds at every opportunity.

Recent events endorse Blakely’s thesis. It was exposed recently that the private train operator, Avanti, had celebrated the opportunity for ‘free money’ since they could harvest profits from tickets sold to the public while the costs of investing in rail infrastructure were covered by the government.

The second part of the book focuses specifically on planning, taking the reader through ‘how big business plans’, ‘how big banks plan’, ‘how states plan’ and ‘how empires plan’. Accordingly, there are references to intellectual giants of the 1960s, including John Kenneth Galbraith – a Keynesian who claimed that industrial planning was leading to a convergence between capitalist and socialist models of economic management – and Paul Sweezy and Paul Baran – two Marxists who examined how monopolies had transformed capitalism. The third and final section discusses the need for democratic planning.

Paradoxically, although each crisis deepens poverty and inequality, economic debate seems to be falling further and further from public discourse

This is an intriguing ‘back to the future’ move by Blakeley, who despite embodying a new generation of radical thinkers and writers for the 21st century is returning to the economic ideas of the generation before last. This is not to say that Galbraith, Sweezy, Baran and their ideas have nothing to say about our current world; indeed, Vulture Capitalism demonstrates the contrary. However, it is worth interrogating whether ‘planning’ remains the best window through which to understand the influence of vast corporations over our economy and society, or whether other more pertinent factors are now also at play.

The ability to wield brute financial power, rather than planning as such, is surely what characterises today’s masters of capital. The post-war period saw the rise of planning by governments and large industrial enterprises to guarantee long-term investment at the expense of more competitive economies. Since the neoliberal turn, large (and, usually, financial) corporations are now empowered by states to unleash competition, chaos, and state-backed power to weaken rivals, undermine civil resistance and to draw a profit.

Instead of engaging in long-term planning, big business continuously sets new rules of the game that are written up in a permanent state of crisis. Indeed, the long-term investments that would surely characterise a planned economy have long-since fallen by the wayside, with large – but not necessarily monopoly – corporations operating in a series of relentless short-terms. This is demonstrated in the many anecdotes of recent business history and scandals in Vulture Capitalism.

21st-century challenges

Short-term thinking poses challenges in attempting to imagine a left-wing economic project in the 21st century. In the post-war period, industrial planning and monopoly enterprises created by capitalist consolidation appeared as a tool that could be readily appropriated by progressive politics. Planning was opened up to the state and trade unions as well as to industrial enterprises in order to set wages and employment alongside prices. This ensured a ready demand for the expanding production of consumer goods.

Key monopolies could even be nationalised to support the state[1]led coordination of a capitalist economy (or, more cynically, to frame a public bailout as socialist radicalism). Public spending further sustained consumer demand along with its redistributive effects, in the belief that there was a structural trade-off between inflation and unemployment. Through this, planning, regulation and public spending allowed for rising living standards and falling inequality within a capitalist economy.

In the 21st century, however, each of these policy levers has been perverted to increasingly regressive ends. As Blakeley’s book demonstrates, planning and collusion continue between big business and the state. Trade unions, in contrast, have been weakened by transnational supply chains and are excluded from the revolving doors, consultation and lobbying that constitute capitalist planning.

Meanwhile, regulation by national governments and in transnational trading arenas has ceased to defend the interests of workers and consumers, as left-wing critics of the European Union have long highlighted. Instead, regulation is a tool for commercial warfare between economics blocs, an instrument for defending investors and employers against insurance claims and a means for large corporations to erect barriers to entry against potential smaller competitors. For example, new regulation on fire-proof cladding in housing blocks following the 2017 Grenfell disaster has primarily penalised small apartment owners unable to sell their properties.

Finally, public spending is no longer the route to a progressive redistribution of wealth but a primary means of vast private accumulation. In the west, permanent government deficits have become a means of transferring funds directly from the public purse to crooked capitalists, whether in the form of private health care providers of services paid for by the NHS, failed suppliers of PPE, pharmaceutical companies holding private patents for vaccines bankrolled by public funds, or private rail companies that celebrate how their capital costs are paid-for or underwritten by the government. With the typical tools for progressive economic management so co-opted and perverted, the question to ask is: what solutions should the left today be advocating?

Planning for power

In the 1960s, the Keynesians and Marxists in the west that Blakeley cites were addressing publics who believed they were locked in a cold war struggle between free and controlled societies. Revealing to them that many aspects of the ‘free’ market were in fact carefully planned was intellectually and politically radical. After 2007/08, when governments faced rising public debts, left-wing activists and economists hit back against the household analogy that governments have to just ‘pay back their debts’ by cutting spending and (more rarely) increasing revenue. Is either notion prominent in public discourse today?

Blakeley explains her project by writing that, ‘Most of the ideas in this book are not new,’ but, ‘while academics have already spent a great deal of time debating these ideas, their debates have not filtered out into mass politics.’ Communicating specialist ideas to a wider audience is a legitimate and laudable project, although by no means the limits of Blakeley’s capabilities. She is one of the most prominent and clear-sighted thinkers of the British left, but a question unasked is why accounts like hers have failed to break into the popular and political mainstream.

Citizens in the west have come to accept a state of permanent crisis, springing from financial crashes, global pandemics and foreign wars. Paradoxically, although each crisis deepens poverty and inequality, economic debate seems to be falling further and further from public discourse – even more so for debates that present left-wing views of economics and public policy. Instead, political debate is dominated by other issues, while working-class politics is increasingly being co-opted by the radical right and framed as a form of identity politics.

Heterodox economics has won the intellectual battle for ideas following the global financial crisis, exposing the reigning orthodox ideas as the ‘naked emperor’ of the social sciences. The left in Britain is fortunate to have a generation of young and bright thinkers such as Blakeley and others – many of whom might have formed an army of special and technical advisors across government departments in the wake of an election victory by Jeremy Corbyn in 2019.

As we know, Jeremy Corbyn did not win, but that alone does not explain why progressive economics – despite its strong academic foundations and its proposed answer to our successive cost-of-living crises – has failed to break into mass politics. That question remains a worthy topic, potentially for Blakeley’s next book.

This article first appeared in Issue #244 30 Years of Red Pepper. Subscribe today to support independent socialist media and get your copy hot off the press!