"Capitalism only Works in Theory": Leigh Phillips' & Michael Rozworski's People's Republic of Walmart​

by Bernhard Pirkl

“People’s Republic of Walmart” – the title of the book that economic and science journalists Leigh Phillips and Michael Rozworski published this year contains a double provocation: an American supermarket chain which is more or less a metronym for capitalist exploitation and alienation, lays the “foundations for socialism”? The answer that the authors give is even more shocking: Yes, because paradoxically this epitome of contemporary capitalism is a planned economy!

Today, some people associate the term “planned economy” with famine and the Gulag system. All the more surprising what socialism’s big enemies, Ludwig von Mises and Friedrich Hayek, have written in the context of the socialist calculation debate: In 1935 Hayek wrote in “Collectivist Economic Planning” that there was hardly anyone who would prefer the apparently arbitrary interplay of independent individuals which is typical of the market to the conscious regulation of social affairs.

Seventy-four years later, and thirty years after the fall of really existing socialism, Mark Fisher quotes Hayek as one of the founders of the discourse of “capitalist realism,” which makes any alternative to the methodical individualism of market ideology appear as Stirner’s “spook”. To conduct a defensive struggle against planned economy today would seem absurdly out-of-date, since the idea is considered so bankrupt – so much so that one can discredit anyone by suggesting that they want a planned economy. On the other side of this taboo is that the individual is expected to plan at all times: As Ulrich Beck wrote notes his classic on “Risk Society”, under deregulated post-Fordism, the individual paradoxically has to learn “to understand himself as a centre of action, as a planning office in relation to his own life course, his abilities, orientations, partnerships, etc. in order to avoid punishment.” This is true to the extent that the already limited possibility of individual plannability diminishes against the background of the normalization of precariousness.

For Hayek, the condition for the possibility of socialism lay first and foremost in the plannability of the economy; moral-philosophical, anthropological and psychological arguments, although not irrelevant, played a subordinate role for him. Phillips and Rozworski give the devil his due but turn the tables insofar as they show that those who believe in the superior allocative capacity of the market fall prey to an unbelieved faith. Mises and Hayek want to radicalize the common saying that socialism functions only in theory but not in practice – they believe that it fails even in theory. Phillips and Rozworski’s answer is that the arguments of Mises and Hayek may appear intelligible on paper, but are refuted by practice. Inspired by a footnote in Fredric Jameson’s “Archaeologies of the Future”, the US supermarket chain Walmart, which, according to the authors, represents a capitalist planned economy with an economic output roughly the size of Sweden, serves as the prime witness. Within Walmart, according to the findings, no market mechanisms are in place, the coordination of suppliers, branches and departments is based on cooperation and planning – a scandal in view of the ubiquitous market credo, as it seems that planning is not merely used as a supplement to market forces; on the contrary, it is the most important recipe for Walmart’s success.

A subchapter of the book is devoted to the ideology-induced self-destruction of Sears, Roebuck & Co., a department store chain driven to the brink of dysfunctionality by a market-extremist internal redesign inspired by Ayn Rand’s literature. The company suffered losses running into the billions; its branches ended up exuding the charm of late Soviet supermarkets, with empty shelves and a marred interior, as the authors note with malicious irony. Taking up an ideology-critical figure of thought from Slavoj Žižek, one could describe the difference between the Walmart system and the Sears system as the difference between cynical and fundamentalist fetishism: The “true believers” of market fundamentalism perish with flying flags, while the ironic cynics, who know exactly that their behaviour does not fit their convictions, are thriving.

In order to lend even more weight to their thesis of the return of repressed planning, Phillips and Rozworski (certainly not entirely without enjoying the provocation) have another devil of capitalism enter the stage, namely the head of Amazon, the “bald-headed Stalin without a moustache” Jeff Bezo: Big Data has a class character, so one could summarize the conclusion of the analysis of the “intensively managed chaos” of Amazon, and can in principle be put at the service of a reasonable, democratic production which serves human needs. The amount of information that Amazon has at its disposal thanks to advanced IT and the fact that it can easily anticipate demand shows that Hayek’s argument about the superiority of markets is obsolescing rapidly in the face of technological progress.

Phillips and Rozworski are by no means pleading for a return to a high-tech version of some Soviet “state-run barracks economy” (Robert Kurz). While Hayek and Mises assume that information deficits lead to authoritarianism, from which only the market can save us, the authors turn the argument around again: because authoritarian, top-down command structures lead to the deterioration of data, planning can only function democratically, according the analysis of really existing socialist economies that they put forth in two consisely written chapters. The last chapter „Planning the Good Anthropocene“, which was previously published by Jacobin, argues against the idea that the market can deal with the climate crisis – a view propagated above all by liberals and Greens of various kinds. Apart from the further escalation of social inequality through flat taxes, it is simply neither plausible nor expectable that efficient decarbonization can be achieved through the market. Instead of the capitalist realism of eco-asterity, the authors argue for a global, democratically controlled planned economy to save humanity. The planet, they quote Stephen Jay Gould, will survive on its own.


Leigh Phillips & Michael Rozworski, People’s Republic of Walmart. How the World’s Biggest Corporations are Laying the Foundation for Socialism, Verso 2019. 248 Pages.

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