Material World: Has Walmart laid the foundations for socialism? (2025)

The Material World column from the June 2025 issue of the Socialist Standard

In their 2019 book The People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism Leigh Phillips and Michal Rozworski argued that, contrary to appearances, modern capitalism is already succumbing to a process of central planning in such varied forms as large-scale businesses, the financial system and the welfare state. This could even imply that the growing dominance of large corporations in the economy, internally organised on the basis of a priori non-market allocation, might somehow herald the decline and, perhaps even, eventual eclipse of capitalism.

In an article in the Jacobin entitled ‘Yes, a Planned Economy Can Actually Work’ they wistfully maintained:

‘Mega-companies like Amazon and Walmart are already using large-scale central planning. We can wield that tool for good. Socialists need to renew our embrace of democratic planning and fight for a real alternative to capitalism’.

And that:

‘We need to use our vast productive resources to better ends – and through politics we can do just that. And as technology allows us to move to a discussion of what sort of planning, instead of whether planning, true democratic control of planning both at the enterprise and government level must be the non-negotiable foundation of our vision’ (tinyurl.com/345jbycw).

However, if a planned economy ‘can actually work’ on their terms, then it would be an economy that has nothing really to do with a post-capitalist society in any meaningful sense of the term.

Essentially, what they advocate is just a sort of democratised version of corporate capitalism. ‘Governments’ and ‘enterprises’ will continue to exist, and business will continue to operate as normal, churning out commodities for sale on a market.

The difference with today is that internally such business will become subject to ‘democratic control’. What enables this is the replacement in such businesses of internal markets by planning – something that Phillips and Rozworski said had already happened to a large extent:

‘Regardless, Walmart engages in large-scale planning without the direct intermediation of markets at scales to make Hayek bristle. Internally, like nearly all firms large and small, it is a dictatorial planned economy: managers tell workers what to do, departments realize goals from on high, and goods flow by fiat. Afloat in the market, Walmart is at once an “island of conscious power,” as Keynes’s collaborator D. H. Robertson put it, and an “island of tyranny,” as the social theorist Noam Chomsky rephrased it.’

According to them, the fact that a business like Walmart, the world´s largest company, operates without an internal market is precisely what makes it relatively more efficient than businesses with an internal market.

Walmart is, of course, a prime example of a large corporation. Its revenue in 2018 was $500 billion – exceeding that of the Soviet Union in 1970 (adjusted for inflation). As an organisation, it makes full use of sophisticated computer systems and comprehensive record keeping, to integrate and manage every aspect of production and distribution amongst its numerous outlets. Using big data analytics, it tracks and targets individual consumers – 145 million in the US alone – identifying patterns of consumer spending and anticipating future trends on the basis of past evidence.

These kinds of developments have been interpreted by commentators like Philips and Rozworski as clear proof that large-scale centralised planning is eminently practicable, contrary to the claims of Mises and Hayek. However, we should be wary of the all too facile way in which these commentators sometimes go about interpreting the evidence. Walmart’s is not an example of central planning in the sense of society-wide planning – obviously. Crucially, as just mentioned, it employs the principle of feedback and of course what Walmart is responding to is the market demand for its products. To its very core, Walmart is a market-based capitalist institution.

Whether a mega-corporation such as Walmart should be held up on purely technical grounds as some kind of template upon which a realisable alternative to capitalism can be built, albeit suitably reconfigured along democratic lines, is highly questionable for many other reasons too. After all, Walmart, like every other such corporation, is essentially a commercial or market-oriented entity and to draw attention to its enormous size and its ability to allocate inputs internally without reference to market principles is, in a sense, a red herring. What such thinking seems to imply is that a post-capitalist alternative will continue to feature something akin to ‘corporations’ – entities legally distinguishable from each other – and under whose aegis production will supposedly be ‘democratically organised’ unlike in capitalism.

This is missing the point completely. There won’t be, and cannot be, such a thing as a ‘corporation’ in a society based on the common ownership of the means of production. The very raison d’être of a corporation derives from its exclusive private or monopoly ownership of the productive assets in its legal possession and, as such, this is wholly incompatible with the very nature of such a society. Meaning it is nonsensical to talk of taking over an institution like a corporation and running it in a different, more democratic, way in a post-capitalist society, when such an institution would simply cease to exist.

Of course, what Philips and Rozworski describe is not society-wide central planning in the sense that Lenin might have had in mind when he talked of turning the ‘whole of society’ into ‘a single office and a single factory’. Nevertheless, just as Lenin´s approach via state capitalism comprehensively failed to deliver socialism in the traditional Marxian sense, there is no reason to think that their approach (via the democratic transformation of big corporations) would fare any better. Of course, one can redefine ‘socialism’ to mean something else, which is what Lenin did – but that doesn’t change anything.

Nevertheless, even granting their description of how Walmart works, we are none the wiser as to how the development of central planning within some corporate behemoth like Walmart is going to assist in laying the ‘foundations of socialism’ any more than the approach advanced by Lenin.

Robin Cox

Blogger's Note:

The People’s Republic of Walmart was reviewed in the June 2019 issue of the Socialist Standard.

Tiny (URL) Tips (2009)

The Tiny Tips column from the November 2009 issue of the Socialist Standard

 Who would have thought a wee little packet of fake blood could threaten to unravel an entire culture. But so great is the threat of the “Artificial Virginity Hymen” — a kit that helps women fake their virginity — that prominent Egyptian conservatives are calling for an all-out ban. Not only that, they are also demanding the exile of anyone who traffics it.

[Link.]

  

“What creationists believe about human origins we get from the Bible,” said David Menton an acclaimed anatomist and also a creationist. “The creation of the world takes place on page one of the Bible. If you throw out the first page of the Bible you might as well throw out the whole thing. If you can’t live with the first page then pitch out the remaining thousand pages.”

[Link.]

  

The gap between wealthiest 10 percent and the rest of America is worse than at any time on record. Two thirds of all income gains from 2002-7 went to the top 1 percent. The Walton family alone is worth more than the bottom 100 million Americans combined. Wal-Mart is a major player in the “dead peasants insurance” game; it’s alleged that dead peasant insurance payouts are used for executive bonuses:

[Dead Link.]

  

Amnesty International has highlighted a case of a man facing execution in Texas. The human rights group has revealed a Texas man faces execution after jurors at his trial consulted the Bible when deliberating his fate:

[Dead Link.]

  Israel is making preparations to carry out military attacks in Iran after December, a French magazine reported overnight Wednesday:

[Dead Link.]

  

That Haiti needs the attention cannot be overstated. Unemployment hovers at around 70 percent, experts

say, and over half of the population lives in extreme poverty. Violence broke out in June as students demanded an increase in the minimum wage to $5 from $1.75 — which were daily rates, not hourly ones. Haiti’s extremely low labor costs, comparable to those in Bangladesh, make it so appealing:

[Link.]

  

When the Berlin Wall crumbled, East Germans imagined a life of freedom where consumer goods were abundant and hardships would fade. Ten years later, a remarkable 51% say they were happier with communism. About the same time a new Russian proverb was born: “Everything the Communists said about Communism was a lie, but everything they said about Capitalism turned out to be the truth.”

[Dead Link.]

  

We are fast approaching the time of the next great battle over evolution. The Neo-creationists will be corporations, and they will argue that they could not possibly be descended from human beings…The rape case of Jamie Leigh Jones was just a logical step forward in the long-standing Republican effort to lock Americans out of the nation’s courthouses, an effort undertaken on behalf of corporate supremacy. A woman is gang-raped by her fellow employees at government contractor KBR. The company says her contract prohibits her from seeking justice in court.

[Dead Link.]

Seeing Visions (2019)

From the June 2019 issue of the Socialist Standard

What comes to mind when you think of the word ‘revolution’? A spinning vinyl disc, a marketing cliché, heroic Bolsheviks clambering over iron railings, or queues of innocents being lined up for the firing squad?

The reason why more people don’t consider revolution as a serious political option is because their thoughts are instantly derailed by the mental pictures that this conjures up. Either revolution is meaningless because everything nowadays is a ‘revolution’ of some sort or other, or it is a blood-soaked Armageddon where nobody wants to go, no matter how desperate things get.

Arguably the lack of a mainstreamed, coherent vision of revolution, or of the society made possible by it, is what holds people back more than anything else. People already know that capitalism is a miserable system that’s rigged by and for the rich, and they don’t need to be told over and over again. But who’s offering a clear, understandable alternative, with a roadmap for how to get there?

The Socialist Party has, over the years, attempted to fill in this blank, however, we’ve always been reluctant to speculate too wildly, for several reasons. First, technology changes almost by the day, and what’s possible changes along with it. If we’d cared to describe our vision of a future socialist society, when we started out back in 1904, we would no doubt have been thrilling at talk of gas lamps in every street and a telephone in every town hall. Second, taste is a very time and culture-specific thing. What appeals to you might be off-putting to someone else, and there’s no point deterring people from building a free society simply because of idle speculation about what some of the furniture might look like. Third, and most importantly, it’s not up to us anyway, it’s up to the people who will establish socialism, which is you and people like you. If you want to live in bucolic forested idylls, as William Morris supposed back in the industrial 1890s, then doubtless you’ll make the arrangements. If you hanker for futuristic circular cities and gadgets galore, as Jacque Fresco and Zeitgeist imagined ten or so years back, then you’ll do what’s necessary to make it so. Or perhaps you’ll do both.

Not everyone shares our reservations about building castles in the air. In this issue, we consider two other images or ‘models’ of non-market socialism, which come at the subject from very different perspectives. First, there is the notion of fully automated luxury communism (FALC) devised by Aaron Bastani and James Butler of the alternative news outlet Novara Media. The idea of this is simple: machines are going to do all the work so we can just kick back and relax – once we’ve relieved the capitalist class of global control, that is.

Without rehearsing any of the criticisms that follow, or rehashing earlier ones (see Pathfinders, May 2015), it’s worth asking ‘is this the right strategic vision to put to workers’? FALC is a very clever approach in that it challenges head-on the idea of inevitable scarcity which is drilled into us today as part of capitalism’s manufactured artificial reality, and thus informs people’s too-ready assumptions about revolution as a time of misery, shortages, hard work and self-denial. Moreover, it imparts an appealing tongue-in-cheek humour to a subject more often plastered with a po-faced puritan frown. It feels young and fresh, and new, and now, in a way, no Marxist tract ever seems to. Trouble is, it might be going too far to the other extreme and risk looking like a Pollyanna paradise that’s got drunk on its own optimism. Workers might be seduced by a vision of luxury communism that makes it all sound easy and fun, but on the other hand, they may recall that if a thing sounds too good to be true, it probably is. Are they going to gamble everything on an idea of revolution that doesn’t seem to have considered all the externalities?

Externalities are also a problem in the second view, the model of ‘Walmart-socialism’. This is the idea that if a huge global company with hundreds of thousands of staff can operate perfectly well without its own internal market, then so could the entire planet, and that large global companies are in fact leading the way towards this new social reality. Leaving aside the whole question of central planning which we look at elsewhere, one or two obvious differences between a capitalist megacorp and socialist society present themselves. In the first place, capitalist companies are not democratic but autocratic, even if some limited decision-making is distributed through the system. ‘Citizens’ (ie workers) are not free not to do as they’re told, or free to do something else, or free to change their mind or walk off the job. No matter how managers like to pretend otherwise, a coercive element runs through capitalist companies like Brighton through a stick of rock. This is in stark contrast to socialist society which is predicated on the idea of nobody being anybody’s boss. Secondly, companies like Walmart are not obliged to factor in their wider impact on society, people, or the environment, when devising their future growth strategies. The only thing that really counts in a capitalist business is money, and how much they are going to make over their overheads. What this means is that people, society and the environment are inevitably pushed down the list of priorities, and they suffer accordingly. That’s why we have global warming, and the ‘bottom billion’, and famines and wars. In this sense using a capitalist enterprise as a model of a kind of proto-socialism seems more than bizarre, it’s a travesty.

All in all though, it’s good that people are discussing visions of the future, even if they can’t always agree on the details. Despite the risks inherent in such speculations, workers arguably have to see the goal before they can kick the ball in that direction. Hopefully, this discussion will help to focus minds, without moving the goalposts too often.

Paddy Shannon

More FALC: The Walmart hypothesis (2019)

Book Review from the June 2019 issue of the Socialist Standard

Can Walmart Tell Us Anything About Socialism?

Internationally, there is a resurgence in discussing socialism, not just in the American sense of faintly looking at a welfare state, but credibly and seriously taking on the idea of a co-operative democratic abolition of market allocation of goods and resources. Books like Four futures: life after capitalism by Peter Frase have already lead the way, including among the options a world of abundance without money (although reading the text, it seems the author’s preferred or most likely future was some sort of regulated market in a post-ecological-collapse world). That book sprang from Jacobin magazine, and it seems that other contributors to that magazine are beginning to produce other useful examinations of the way towards a market-free world.

The latest example is Philips and Rozworski’s The People’s Republic of Walmart: how late-stage capitalism gives way to early-stage fully automated luxury communism. This book puts forward the simple case that firms like Walmart are in effect massive planned economies, close to the size and scale of the Soviet Union in terms of the number of products and processes they have to employ to run their enterprise. They also note how 3rd party firms that trade with them are effectively locked into their productive ecosystem.

Much of this is achieved algorithmically, with resources being poured into tracking stock through the system, knowing where it is at all times, and using vast storage capacity. The algorithms calculate what resources are available nearest to the point at which they are required, and how to get them there quickly. The authors give the counter example of Sears, which imploded after implementing an internal market and competition within its firm (under libertarian ideological commitment from its directors).

Of course, Walmart and Amazon are planning to exploit, and get the most out of, their workers and advantages over commercial rivals. It is not so much an example to be emulated, but a living demonstration that wide-scale economic allocation via planned structures works. Further evidence is found in a nuanced description of the history of the NHS, noting how it has gone from an ad hoc replication of existing structures, without conscious planning to serve community needs, to being carved up by an internal market. The authors note that it has always existed as a hybrid between the firms of GPs and the hospitals and the pharmaceutical industry, and that attempts to implement society-wide input and control were stymied at Westminster.

Democracy is seen as an inherent good and a necessity for wide-scale planning in an economy, if it is to serve people’s needs. Phillips and Rozworski note that a significant part of the failure of the Soviet Union’s planned economy was because of dictatorial intervention preventing the free flow of information between productive units, and removing their capacity to respond. The other living example they cite is Project Cybersyne in Chile.

British cyberneticist Stafford Beer was called in to help the Allende government implement a planned economy. Given the state of the country at the time, he had to improvise a system of telex and phone lines. His systems were credited with enabling the government to defeat a crippling lorry drivers’ strike, by routing key resources around disruptions and allocating available lorries. The principles behind Beer’s cybernetics were thus not all about enslaving people to the machine, but allowing distributed horizontal decision-making between relatively autonomous units with oversight and regulation to achieve common ends.

If all of this sounds remarkably familiar, it is because this is what we have been saying in our slightly less fashionably way since we were formed. Indeed, our pamphlet Socialism as a Practical Alternative, largely written by the late Pieter Lawrence, based a description of socialism on using the regulated stock control models already developed by the likes of Walmart, coupled with formation clearing houses to allow communities and groups to work to enable production for needs.

It’s clear, though, that while technology has advanced, along with the experience of wide-scale economic organisation, this is not a prerequisite for socialism. Pencil and paper-based systems could have handled the work (and probably still could), but the fact that machines and computers allow us to do it faster, and are increasingly presenting the possibility of co-ordinated democratic production in people’s minds, is making the topic more popular.

Philips and Rozworski cite the work of Scottish academic Paul Cockshott with his demonstration that an economy-wide plan is computable (especially if we exclude millions of null combinations of goods, arguably Walmart does not compute all the possible combinations of goods, but works with what it has and approximates efficient allocation-adjusting over time). Cockshott is not alone in academia, and he and collaborators have made impressive inroads into the possibilities of computational planning through vertical integration of sub-systems. It would be well to think what would be the result of the combined efforts of the best and brightest computational minds being directed towards co-operative economics and the satisfaction of needs, rather than algorithmic stock trading.

We have discussed in these pages before the types of innovations in thought and process that will enable us to make socialism work on a worldwide scale: Leonid Kantarovich’s linear programming; Gale and Shaply’s stable matching algorithm; Brams and Taylor’s envy-free cake-cutting algorithm, etc. The intellectual progress for the machinery of co-ordinating activity is improving, even if the political co-ordination to pick it up and use it is not yet as developed. It is good that these obscure and complex lines of enquiry are beginning to get serious popular attention.

Some commentators have begun to compare capitalism (and/or corporations) to a vast out-of-control Artificial Intelligence, programmed to maximise profit. This is potentially a powerful way of depicting capitalism: but the risk is, in coming up with algorithms and procedures to create a planned economy, that we would end up replacing capitalism with simply a rival AI, rather than returning to a human-centred system.

Demonstrating that we can plan and rationalise resources in the way that capitalism can and does is not a clincher for socialism: it could be argued that in an ends-based economy, using labour inefficiently could well become a goal (as William Morris pictured in his utopian novel News from Nowhere). The most powerful message we can send is that there is not one way to run an economy, and the only real limit is the power of our imaginations.

The tag-line of ‘fully automated luxury communism’ that is gaining some popularity may help raise the profile of consciously planning the economy co-operatively.

Pik Smeet

Film Review: Walmart – The High Cost of Low Price (2011)

Film Review from the December 2011 issue of the Socialist Standard

Walmart – The High Cost of Low Price (Tartan DVD. A Robert Greenwald Film)

Almost everyone has heard of Walmart (Asda in the UK) but many are unaware of the effects of its practices on populations around the world. Owned by the Walton family, who collectively are worth around $100 billion, Walmart has the world’s largest work force of any private employer. This makes this in-depth scrutiny of the impact of globalisation for profit highly pertinent.

Impoverishment, destruction of communities and non-unionised and illegal work practices figure strongly as do the sometimes clear, sometimes opaque links to government policy-making in the USA.  Walmart moves into town promising employment, builds a megastore structure and hires staff, displays every commodity that can already be found in town (and more), undercuts local prices and very soon oversees the closure of long-established, formerly successful small family businesses – causing unemployment, ghost towns and impoverishment of communities. If a community is strong enough to fight and either prevent the actual build or force closure then Walmart simply ups sticks and moves a few miles outside the town or county border and the end results for the community are the same.

There is a strong anti-union imperative within the company and such a climate of fear of punishment among employees that it was very difficult to find current workers in the US ready to speak out on record. Ex-employees, however, were less reluctant. National employment laws are different around the world.  One example of workers defying the Walmart no union rule was in Quebec, Canada, where they were successful in forming a union (according to local law) with the result that Walmart won anyway – they just closed down.

How is it that Walmart can give such cheap prices and offer two for the price of one? Benevolence from a caring, hugely profitable megabusiness? No, they simply pass the cost on to the farmers or other suppliers. He who pays the piper…  The film doesn’t stop at covering the retail side of the business; also there are interviews and filmed information from China, Bangladesh, Honduras and Saipan (US territory) to reveal the impact of the Walmart style of sweatshop labour and conditions around the world.

This film could be an excellent stimulus when viewed together by a group prepared to discuss and further understand the ways in which capitalism systematically works against workers, against regulations, against communities and for the ongoing accumulation of the few.

Janet Surman