Book Review: Vulture Capitalism - Grace Blakeley’s new book on what has gone wrong since the 1980s
By The Conversation
By Conor O’Kane, Senior Lecturer in Economics, Bournemouth University
Vulture Capitalism: Corporate Crimes, Backdoor Bailouts and the Death of Freedom is the latest book from the English economic and political journalist – and rising progressive star – Grace Blakeley. The 30-year-old describes her book as a critique of modern capitalism from a Marxist perspective, which isn’t a phrase that major writers on the left tend to attach to themselves these days.
This hasn’t stopped her making the Sunday Times bestseller list, which reflects both the fact that this is a readable and well researched piece of work, and probably also that many people are desperate for alternatives to the status quo.
The strength of Vulture Capitalism is in its powerful summary of developments over the past few decades. Rather than offering a “big new idea” comparable to fellow travellers like Naomi Klein (No Logo, 1999), David Graeber (Bullshit Jobs, 2018) and Thomas Piketty (Capital, 2013), Blakeley does a good job of pulling together many of their themes.
All these writers would presumably agree that the “neoliberal” policy approach adopted in the 1980s was a key inflection point towards today’s economic malaise. Blakeley points out how different the realities are from the neoliberals’ promises of greater individual freedom through lower taxation, smaller government and the privatisation of inefficient state monopolies.
Instead of reduced taxation, the Office for National Statistics is forecasting that by 2027-28 the UK will have the highest level of taxation since the second world war. Rather than a smaller government, UK government spending as a percentage of GDP is higher now than it was at the start of the 1980s.
Instead of deregulation unleashing dynamic “free markets”, many industries are dominated by monopolies or oligopolies. Widening income inequality, declining social mobility and reduced life expectancies are further examples of this policy failure.
Blakeley argues that neoliberalism’s underlying mission was to restore the authority of capital over labour, “a redistribution of power and wealth away from workers and towards owners and senior managers”. As examples she cites Amazon’s success at avoiding corporation tax, and Boeing’s change in management approach that prioritised profit maximisation over design safety.
The democratic deficit
Further to the idea of disempowered workers, Blakeley argues that the lack of democratic accountability in key domestic and international economic institutions helps to drive vulture capitalism. Banks, for instance, have immense power to shape the economy through creating money out of nothing by lending to customers. They determine which businesses or individuals succeed, but ordinary people neither get told about these choices nor get any say in them.
Similarly, bank regulators and central banks are not elected, but frequently make decisions for the good of capital. For instance, she argues that central banks’ policy of quantitative easing – essentially another means of creating money – was done after the 2008 financial crisis to boost asset prices, making the rich richer.
Blakeley also points out that the International Monetary Fund and World Bank were set up and financed by Wall Street and therefore represent the interests of investors, not workers. And she criticises international trade agreements for being negotiated in secret, and for including anti-democratic provisions like investor state dispute settlement (ISDS).
These enable investors to take legal action against governments using their democratic prerogatives to tax, regulate and prosecute corporations. Chevron, for instance, used an ISDS in 2018 to overturn a US$9.5 billion (£7.6 billion) fine imposed by Ecuador over oil pollution in the Amazon rainforest.
Blakeley convincingly argues that this all adds up to a major democratic deficit in which “elite” classes operate without any accountability. “Politicians, technocrats and financiers work together to decide everything from the interest rates we pay on our loans, to who gets what when a state files for bankruptcy,” she writes.
The way forward
Blakeley disagrees with those who think these problems can be solved by tinkering at the edges:
Businesses choosing profits over safety and governments bailing out bosses while letting people starve do not represent a perversion of capitalism. These things are capitalism.
Yet that’s not to say that she’s calling for a revolution. Her answer is for workers to come together, join unions and push collectively for change.
So far so good, but her exemplars amount to a fairly limited blueprint for success. Several reach all the way back to the 1970s: trade unionists’ alternative plan to save ailing British firm Lucas Aerospace certainly demonstrated workers thinking strategically, but it was swatted aside by management. Similarly, the more widespread attempts at democratic planning in Chile under Salvador Allende were crushed by Richard Nixon.
A more recent example is Iceland, where voters rejected a proposed UK-Netherlands bailout after the 2008 financial crisis. This led to the establishment of a democratic platform called Better Reykjavik, where citizens can make suggestions about how their budget is spent. This has been fairly successful, though we’re talking about a city of 123,000 people – that’s not much more than half the size of Bournemouth.
One potentially useful example that Blakeley doesn’t consider is the success of citizens’ assemblies in Ireland. These have helped to break the deadlock on divisive issues such as abortion by bringing together randomly selected members of the public and a government-appointed chair. They invite submissions from expert advisory groups and other interested people, before making policy recommendations to the government.
As well as effectively recommending the legalisation of abortion, which was later ratified in a referendum, citizens’ assemblies have addressed gender equality, loss of biodiversity and how to deal with an ageing population.
This model could be an important stepping stone towards overcoming the democratic deficit that Blakeley identifies. They could be run at a local authority level to help decide priorities on how council budgets are spent, for instance. And if that worked effectively, there’s no reason why assemblies couldn’t be incorporated into, say, the negotiations around trade treaties.
In summary, Vulture Capitalism feels like a timely account of the failure of neoliberalism to deliver on its promises. But not unlike Karl Marx’s own writings, Blakeley’s solutions feel underwhelming by comparison. In fairness, these are incredibly difficult challenges. Addressing the democratic deficit won’t solve everything, but it would be an important step in the right direction.
