More reflective criticisms of communism, outside of the absurd mainstay of communism being the antithesis to “America” that most critics rely on, focus on the centralized government being in complete control of the economy. Economies work best when dictated by the invisible hand of supply and demand, and if a powerful bureaucracy were to attempt to fumble their way through managing the intricacies of varying economic factors, they would inevitably fail. An economy inherently cannot be managed by a centralized power. Just look at the Soviet Union, or Cuba, or Venezuela, or any of the other “failed” communist states who weren’t able to trade with other countries due to economic sanctions. It was The Communism that crippled their economy because their governments were too hands on; it wasn’t their isolation from markets. Also, don’t look at China because they seem to be managing their economy fine and are one of the most prosperous nations in the world.

I’m not here to be a defender of communism or to detail about how it isn’t even necessarily linked to a managed economy (I’ve already done that). Nor am I trying to defend China (the Muslim-minority Uyghurs don’t seem to benefit from a prosperous GDP) or get into a debate about the extent of capitalism that exists under a self-described “communist” government (that’s why Western governments are totally fine with Huawei’s networks in their countries and are fully supportive of the Belt and Road Initiative – there is no government management in their economy whatsoever). I want to talk about managed economies in general as someone who has never formally studied economics. Strap in!
Let’s take the conservative view that any kind of government oversight is going to hinder economic growth. We’ll imagine the libertarian paradise where government finally leaves companies and corporations alone to competitively spar with grit and vigour. Of course, in competitions there are winners and losers, and when a company loses, it either folds or is bought up by the winning company it was competing against. Once a company wins, it dominates its market and becomes more powerful making it harder for newer, innovative companies to compete. It would sort of be like if Mike Tyson ate the heart of everyone he beat in a boxing match and gained their strength on top of his own. Or I guess the literal plot of the movie Highlander. And much like the film, there can be only one, and that’s why capitalism tends toward monopoly. You can look at Alphabet Inc., the corporation that owns Google, for instance: they’ve cornered the market, and bought up 243 companies that came up with innovative ideas related to internet-y type stuff. If some young entrepreneur working in their parents’ garage came up with some new technology that improved the way searching works, you think they’d be able to compete with Google? Or not be bought out in an instant? Even a trillion dollar company like Microsoft can’t compete with Google in its market, and if you use Bing, you’ll know why.

With further expansion of corporate assets, one can imagine quite a spread. Amazon, an online retailer, has made inroads into grocery chains, robotics, video streaming, and news media. With this diverse portfolio already existing within a world with already too much nanny-ing in its state, it’s easy to see these big corporations building their own empires of employment were governments to dissolve. The abolition of government in favour of capitalism wouldn’t lead to any kind of libertarian paradise, but to more of a corporate feudalism where one’s national identity would be better defined by where they worked rather than where they lived.
Jeff Bezos would be king, the managerial class would be his aristocracy, and the workers would be his peasants. Bill Gates, Elon Musk, and the other b(tr)illionaire owners would be neighbouring monarchies. The metaphor works quite well. Current day governments are the centralized Catholic church; the church had control over the identity of their subjects for hundreds of years. Then the individual, national monarchies got stronger and stronger, and identity was shifting. In the end, Henry VIII wanted to divorce his wife, the Pope said no, and King Henry said fuck you and started his own damn church. We’re at the stage now where there is an uneasy alliance between the two superpowers of government and corporation, and there is a real possibility that some corporate lord is going to have his own Henry VIII moment where he doesn’t want to do what governments are regulating and decides to secede.

Maybe this isn’t so bad because capitalism relies on pecuniary wealth as its measure of power rather than land ownership, right? Well, that’s not technically correct because capitalist power resides in ownership just as much as feudal power; Jeff Bezos is powerful because he has a say in how Amazon, the Washington Post, and Blue Origin are run. And within capitalism, this power manifests itself much in the same way as between warring monarchies. When Iran’s Prime Minister Mossadegh wanted oversight on his country’s oil reserves, the Anglo-Iranian Oil Company (now BP) pushed American and British forces to assassinate him to accommodate their corporate interest. When the United Fruit Company (now Chiquitas Brands International) didn’t like how the democratically-elected government of Guatemala was challenging its monopoly of their arable land, they lobbied the American government to arrange a coup. Both instances led to the installation of brutal dictatorships – notably, brutal to their people, but quite friendly to corporate interests.
This capitalist utopia would ultimately be a regression of civilization, and more importantly, the economy would still be managed! Jeff Bezos is already talking about it! He wants to solve global warming by sending industries into space, which, however unreasonable it might be given the timeframe that climate change has allowed us, is a goal he intends to use his vast wealth and influence to realize. The examples I listed above were governments working in tandem with corporate management of the economy, and that could be the only reason we haven’t had our King Henry moment – governments are quite content to whore themselves out to corporate mercenary interests. They’ve got fewer scruples than the Borgias.

The thing is, Chiquitas is still around. BP is still around. Greenpeace recently tricked an Exxon lobbyist into admitting the ways that the oil industry manages the economy by curtailing green initiatives and reducing oil regulations in government. We’re already living in a plutocracy where the wealthy and ownership class manipulate government to exert their will. Cutting back government will only make their manipulations more open because they will be able to act on the economy much more directly.
Economies will always be managed; whether it’s by a communist government or a Keynesian one, whether by a feudal king or a corporate one. Once we accept that there is no such thing as a free market within capitalism due to accumulations of power, we can approach the problem of a managed economy with open eyes. I think everyone is in agreement that a concentration of control and power is bad and corrupt. Even Bezos’s “benevolence” toward climate change is myopic and likely influenced by an echo chamber of sycophants and power hungry trolls.

The right happens to think that this concentration of power exists in government and calls it communist, and the left sees it in corporations more subtly exerting their influence. When the government and corporations work hand in glove, the distinction really becomes inconsequential. Both right and left even seek the same goal: a diffusion of that control. It’s just that the right wants that diffusion to take place in an environment where power cannot be diffused due to the tendency of monopoly within capitalism. The left seeks democratic control to replace this concentration, democracy in both community and organizational levels.
A managed economy isn’t such a scary thing because they always have been and they always will be. The invisible hand doesn’t exist – Adam Smith was a naïve idealist. The question you have to ask yourself is, who should be in charge?
In the 1980s, Management Theory J was all the rage. Japan (that subsequently imploded in to a Lost Decade, becoming 3 decades lost), had MITI. The economiy was very managed.
As is often the case, it’s not an all-or-nothing proposition. The debate ends up being an argument in inches over what’s the right balance to dial in.
Frankly advertising manages the economy by manipulating the consumer into purchasing the advertised product. My argument could just as easily be replaced by Beyonce holding a Pepsi can – that would be less fun to write though!
My main gripe is the misunderstanding of the problems of communism, as well as the absolutist position of libertarian free market zealots.
Or Kylie Jenner and her Pepsi. haha
Right! I think I must have repressed my memory of that ad! Jeez…
It is both sad and funny because our consumerist culture is created by this emphasized link between celebrity and consumption. This wasn’t an accident organically arrived at by supply and demand! I wish I had thought of that before I wrote this damn thing because that could have been a whole section…
You do realize that free market policies in China led to more people being lifted out of poverty than at any other time in history. If managed economies would do so well why would Cuba, the USSR and Venezuela need sanctions lifted and be able to trade with say the US? They shouldn’t need to and in fact should welcome sanctions so they would not have to trade in the international market place. It is actually the law of supply and demand and not just a concept. Managed economies can only impact supply in any meaningful way but not demand. If what Government decides to supply is not in demand you will end up with a lot of left hand golf clubs.
China’s introduction of “free markets” into their economy did not eliminate their managing of the economy – see the Huawei and Belt and Road examples in the article. Or green technologies or the preparation for the Beijing Olympics or any number of examples that weren’t included. Saudi Arabia is another wealthy country with an overtly managed economy. If Saudi Arabia wasn’t allowed to export its oil due to sanctions, it would be a very poor country, regardless of how centralized its economy. If your economy is being actively sabotaged, that’s really just another kind of management.
Demand is also widely manipulated. This is why in my earlier comment to microglyphics I bemoaned not including advertising. Why do you think there is a new iPhone every year or two? Demand for phones isn’t changing, but the economy is manipulated to encourage consumers to buy the latest widget to keep Apple’s profits high. Heck, even more obviously, GOVERNMENT manipulated demand quite noticeably when it mandated masks. I’m sure mask manufacturers were thrilled by the news. And remarkably, the economy didn’t collapse! Well, maybe it did, but arguably it collapsed less because of government interference.
The whole point of this blog was to highlight how the economy is already being managed even in “free market” countries whether by governments or by corporations – and that it’s not an inherent evil. Microglyphics summed it up nicely by calling it an argument over inches – how much managing do we want? The problem is concentration of power and democratic accountability (we can vote out our politicians if we disagree with mask mandates, for example) – this leads to my concluding question: how do we want it managed and by whom? Do we want public accountability or do we prefer unelected tyrants pulling the string? Apple manages the economy toward its goal of higher corporate profits. The government, in my previous example at least, manages the economy toward its goal of public health. There are certainly governmental manipulations that aren’t as great, such as subsidies to the oil and gas industry, but the answer has to be more democratic control and not less. I don’t have any say in how Apple runs their company, and their near-monopoly means that I can’t do anything as a consumer either – hence my allusion to feudalism. I know I would prefer democratic accountability on economic management, and those are really the only two options.
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