Corporate Crimes & backdoor bailouts

Session 7 - Grace Blakeley 2024

by Sam Leith @ OffGrid Sessions 2024

The premise that Grace Blakeley’s new book Vulture Capitalism starts from, she told the first session of Offgrid day two, “is that so many people feel so powerless in our economy today.”

And it’s that sense of powerlessness, she said, that is behind a whole number of the large political movements of our recent history – the rise of the far right, the vote to leave the EU, the rise of Donald Trump; and equally, the rise of radical left-wing movements proposing an alternative..

Climate change is an example of one of the things that leave people feeling powerless. What can you do? Buy a tote-bag? Reduce your carbon footprint (“and, by the way, the very idea of a carbon footprint is an invention of the fossil fuel industry”)? 

The sense of powerlessness, typically, issues in one of two emotions. There’s apathy – which benefits the corporations who profit from the status quo. And then there’s rage — which helps to fuel the rise of the far right. 

So that sense of powerlessness – which either lends support to authoritarians or engenders passivity in the face of a system in which you despair of change — is eroding our democracy. “I argue,” Grace said, “That this sense of powerlessness emerges because the way we think about politics and economics is broken.”

At the root of that brokenness is the idea of a divide between the market and the state. We are taught to imagine that they are quite different domains, and political ideology since the 1980s has encouraged us to imagine them as separate spheres: that companies flourish in a “free market” where the state does not interfere. “But they are not as separate as we like to think.”

The seed for Vulture Capitalism was sown during Covid, when Grace did a lot of media. Interviewing people for radio and television, she said. “I kept hearing; ‘We’ve got socialism now’” when people talked about the furlough scheme and the bail-outs during the pandemic. I realised: “They think socialism is when the government does stuff, and they think capitalism is when companies do stuff.”

What they hadn’t realised was that most government support during the pandemic didn’t go to ordinary people: it went to landlords and banks; and that wealthy corporations had access to help that ordinary people did not. The Greensill scandal – where the financier Lex Greensill was able to get former Prime Minister David Cameron to lobby on his behalf for government money to prop up his ailing finance company. “Millions of pounds of taxpayers’ money went into this guy’s pocket.”

The problem, as Grace sees it, is “a toxic fusion of public and private power at the top of our economy. These people are in the same room, making decisions in pursuit of the same goals.”

How did they get there? Grace took us back to the 1980s, and the roots of Mrs Thatcher’s neoliberal revolution. “She thought that the state was too big, that it was the enemy of competition – and that if you shrunk the state you’d create more freedom.” But that was a lie. In fact, under Thatcher the state didn’t shrink: it just started giving money to a different group of people – the big corporations rather than ordinary workers. “The idea of creating freedom by shrinking the state was an attractive narrative: but it was just that – a narrative.”

Grace offers as a prime example of the public/private fusion of interests the story of Boeing – with its recent engineering problems (doors blowing off planes in flight) and the scandal of the 737 Max planes crashing in 2018/2019. The 737 Max crashes were blamed by Boeing on “pilot error” but were discovered to have been caused by a software fault that the company knew about but chose to ignore; and had been able to get away with thanks to “self-regulation”. 

Boeing was found guilty of fraud on the American government. Did that harm them? No. Nobody went to jail. The senior executives responsible walked away with fat pay packages. And if the idea behind self-regulation was that “the market” would punish bad business practices, it didn’t work. “Boeing was the biggest recipient of corporate welfare in the US,” says Grace. “Even after it had been found guilty of a criminal fraud against the United States, Boeing got a huge government bailout in the pandemic.”

As Grace puts it flatly: “Capitalism is not a free-market system.”

Neoliberalism did more than simply reorganise the state. It also worked to reorganise the way people understood themselves in the service of capital. You were no longer a “worker”, connected to your place in the system of production: you were a “consumer”. You were no longer a “citizen”: you were a “consumer of public services”. Everything from architectural and planning reforms to prime Ministerial pronouncements (notoriously, Mrs Thatcher said “there’s no such thing as society: just men and women and their families”) worked to erode the idea that there was a community of collective interests: rather, we were encouraged ot think of ourselves as “atomised, isolated individuals with no sense of power”. You were to be “an entrepreneur of the self.”

So the key to pushing back against the cartel of big business working with government, says Grace, is “a third force that can resist the fusion of private with public power”. That force, as Grace sees it, is an invigoration of democracy. You respond to a sense of powerlessness by making sure people have power. 

And her book is “not all doom and gloom”. She dedicates the final third of it to examples of where workers or ordinary citizens have been able to band together and pursue power from the bottom up. One such instance was Lucas Aerospace in the late 1970s. The company was failing, but a group of workers at the encouragement of Tony Benn submitted a plan to save it. 

They drew on their collective knowledge and understanding of the company to devise a plan to switch from making armaments to making wind turbines and dialysis machines – and they wanted to change the company to a worker-run co-operative “to empower us as producers”.

“Then came the 1980s”: Mrs Thatcher’s crushing of the unions did for Lucas Aerospace. The guy who had led the workers’ effort was fired. “It was not about shrinking the state: it was about attacking organised worker power.” But Lucas Aerospace still offers a model for what we can do now. 

“This book is about how we can again build this sense of collective power. It’s not just politics: it’s a way of changing how we think about ourselves and the world”.

Key takeaways

  1. The idea that the state and the private enterprise occupy separate domains is a fiction that serves the status quo

  1. The feeling of helplessness can cause anger or apathy: both damage democracy

  1. Don’t get mad: organise