It Could Happen Here - Corporate Sabotage

Episode Date: November 26, 2021

Why do corporations destroy their own goods? Why do factories sit empty when people need their products? The answer is corporate sabotage. Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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Welcome to It Could Happen Here, a podcast about things falling apart and what you can do about it. My name is Christopher Wong, and today I'm going to be talking about sabotage. But this is not the episode on sabotage that you expect. I will not be discussing, for example, the destruction of machinery, throwing monkey wrenches, slowdown strikes, or the myriad of other tactics that workers have used since time immemorial to strike back at their bosses. No, instead, I'm going to be talking about a far more common and infinitely more dangerous form of sabotage, corporate sabotage. Now, the most convicuous form of corporate sabotage is the mass destruction of

a corporation's own products. The fashion company Burberry, for example, destroyed $370 million of its own product in one year alone. Louis Vuitton and Chanel also systematically destroy their own sold stock every year, joining H&M in literally lighting their unsold products on fire in order to prevent anyone from using them. Quote Business Insider, Richemont, the owner of Cadelier Montblanc, destroyed more than 400 million pounds of watches over a two-year period after an excess in goods in the Asian markets. Nike has also admitted that a New York store slashed unsold trainers before throwing them away, and last year an Urban Outfitters employee said he was instructed to pour green paint on the unsold stock.

These, of course, are only the stories that have made it into the press. And this behavior is by no means limited to high fashion. Grocery stores routinely throw away enormous quantities of unsold goods, to high fashion. Grocery stores routinely throw away enormous quantities of unsold goods, and when communities realized they could feed people in need by taking the still-good products from grocery store dumpsters, the stores began to destroy the food intentionally. But these acts of destruction, as callous and horrifically greedy as they are, are by no means the extent of corporate sabotage. To explain, I turn to the work of the economist Thorsten Veblen. Veblen is perhaps best known today for the theory of conspicuous consumption,

but he wrote extensively on corporate sabotage. In the first part of The Engineers and the Price System, a work that has been broadly ignored even by his followers, Feblen wrote a section called On the Nature and Uses of Sabotage. From that work, writers and speakers who dilate on the militarist exploits of the nation's businessmen will not commonly allude to this voluminous running administration of sabotage, this conscientious withdrawal of efficiency that goes into their ordinary day's work.

We are not used to thinking of the ordinary work of a corporation being sabotage. But for Veblen, there was no other explanation for what he was seeing. In the wake of World War I, there was an enormous explosion in unemployment, an enormous need on behalf of the population. But even as the unemployed begged to be let in to create the products that could fill the needs of their fellow humans, business owners steadfastly refused to open their factories. As Veblen explained, But for reasons of business expediency, it is impossible to let these idle plants and idle workmen go to work.

That is to say, for reasons of insufficient profit to the businessmen interested, or, in other words, for reasons of insufficient income to the vested interests which control the staple industries and so regulate the output of product. Veblen was not alone in observing these or similar conditions. John Maynard Keynes, writing During the Depression, observed nearly precisely the same thing. For Keynes, the solution simply was to have the government step in to increase demand. But for Veblen, this missed the core of the problem. The real problem was that a core of absentee owners had the ability to shut down the factories in the first place by simple virtue of their ownership. This, Veblen argued, was simply sabotage, no different from the hated strikes of the IWW that so wracked and perturbed the capitalist ruling class of his time. At least

the workers could argue that they were simply fighting for a better share of what they'd created. The absentee owners, on the other hand, who had no actual involvement in the production process whatsoever, simply carried out sabotage on an enormous scale in order to secure their own returns. And this was true even in times that weren't marked by massive depressions. In order to make payments to capitalists, Veblen argued, who expect a certain rate of return on their investment, corporations must maintain prices at such a level that they can meet their returns, and the only way they can do this is sabotage. For the good of business, it is necessary to curtail production of the means of life, on pain of unprofitable prices, at the same time that

the increasing need of all sorts of necessities of life must be met in some passable fashion, on pain of popular disturbances, as will always come of popular distress when they pass the limit of tolerance. This sabotage, Veblen argued, was simply a product of the price system. Any production that was too efficient would simply and inevitably be sabotaged for private gain, because in order to maintain prices that would maintain the returns of investors, it was necessary to ensure that production never became too efficient and produced too many goods. Veblen used as his example the 20th century post office, but we could just as easily point to Trump sabotaging the post office in 2020 in a dual bid to privatize the service by causing it to collapse and prevent mail-in votes from being counted as part of his

attempt to win the 2020 election. In their book Capital as Power, Connors, Shimshon Bickler, and Jonathan Neitzan take Veblen's argument and expand on it, noting that capitalism, far from encouraging productivity writ large, makes things inefficient on purpose. They used the example of public transportation, which is, by essentially any measure, a significantly more efficient way of moving people around the U.S. As an example, in the U.S. in the 1940s, 100 electric rail lines were bought up and destroyed by car companies. Those same companies, likewise twice, destroyed incredibly efficient and popular electric cars once in the 1930s and again in the

1980s because the profit rate was lower than that of gas cars. They then set out to cause everyone to forget that they'd actually done this until Elon Musk figured out a way to sell electric cars that was profitable, namely by selling himself as a brand and not the cars themselves. Now, if capitalism was simply destroying its own products in order to create Elon Musk's, you could argue that the system at least produced advancements before it stopped them. But the most violent forms of sabotage are reserved for productive systems that are simultaneously efficient and outside of capitalist control altogether. that are simultaneously efficient and outside of capitalist control altogether. Perhaps the best-known example of this is the British East India Company's deindustrialization of the Indian textile industry. Not to be outmatched by their British forebearers,

American settlers and their allies in the American military exterminated the buffalo herds of the Great Plains in an attempt to starve out the indigenous tribes that lived there. In doing so, they destroyed an enormously productive and sustainable agricultural system. They did so precisely because the system was efficient. So efficient, in fact, that it allowed indigenous tribes to repeatedly defeat the American army in defense of their lands. We are used to thinking of capitalism as a system of production, but here, amidst the fields of buffalo corpses, is something else entirely. Capitalism appearing in its true form, a system of organized sabotage.

Welcome, I'm Danny Thrill. Won't you join me at the fire and dare enter Nocturnal Tales from the Shadows presented by iHeart and Sonora. An anthology of modern day horror stories inspired by the legends of Latin America. From ghastly encounters with shapeshifters to bone-chilling brushes with supernatural creatures.

I know you. Take a trip and experience the horrors that have haunted Latin America since the beginning of time. that have haunted Latin America since the beginning of time. Listen to Nocturnal Tales from the Shadows as part of my Cultura podcast network, available on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Hi, I'm Ed Zitron, host of the Better Offline podcast, and we're kicking off our second season your podcast. from an industry veteran with nothing to lose. This season, I'm going to be joined by everyone from Nobel-winning economists

to leading journalists in the field, and I'll be digging into why the products you love keep getting worse and naming and shaming those responsible. Don't get me wrong, though. I love technology. I just hate the people in charge and want them to get back to building things that actually do things to help real people. I swear to God things can change if we're loud enough.

So join me every week to understand what's happening in the tech industry and what could be done to make things better. Listen to Better Offline on the iHeartRadio app, Apple Podcasts, or wherever else you get your podcasts. Check out betteroffline.com. On Thanksgiving Day, 1999, a five-year-old boy floated alone in the ocean. He had lost his mother trying to reach Florida from Cuba. He looked like a little angel. I mean, he looked so fresh.

And his name, Elian Gonzalez, will make headlines everywhere. Elian Gonzalez. Elian. Elian. Elian. Elian. Elian. Elian Gonzalez.

At the heart of the story is a young boy and the question of who he belongs with. His father in Cuba. Mr. Gonzalez wanted to go home and he wanted to take his son with him. Or his relatives in Miami. Imagine that your mother died trying to get you to freedom. At the heart of it all is still this painful family separation. Something that as a Cuban, I know all too well. Listen to Chess Peace, the Elian Gonzalez story,

as part of the My Cultura podcast network, available on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Hey, fam, I'm Simone Boyce. I'm Danielle Robay. And we're the hosts of The Bright Side, the daily podcast from Hello Sunshine that is guaranteed to light up your day.

Every weekday, we bring you conversations with the culture makers who inspire us. Like our episode with actor, former Beverly Hills 90210 star and host of the podcast, I Choose Me, Jenny Garth. There have been so many times when I've been really lost. I say that because I'm on the other side of it. And the only way to get to the other side of something is to go through it, not around it. Allow your body to feel the pain. And then you have to dig in sometimes and look within to learn from it because that's what all these obstacles are for, I guess.

Ultimately, what other choice do you have? Listen to The Bright Side from Hello Sunshine on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. To fully untangle what this means, let us return to Veblen. Veblen divided capitalism into two separate processes. The first he called industry. Industry, Veblen argued, has existed long before capitalism and will continue to exist long after it. As Bickler and Nietzsche put it, When considered in isolation from contemporary business institutions, the principal goal of industry, its raison d'etre according to Veblen, is the efficient production of quality goods and services for the betterment of human life. Industry is an inherently collective undertaking.

Its basis is cooperation and integration, the creation of communal knowledge that allows production and scientific advance to occur, and coordination and cooperation between people to create things for each other. Left to its own devices, industry would simply produce goods for people. It has no concern for profitability, rates of returns, or capitalization. Unfortunately, capitalism is defined by private ownership. This is what Veblen calls business. Business is a system of power that extracts wealth from industry by means of sabotage. Production to serve human need, the basis of industry, is useless to business unless it can be turned into a revenue stream.

It does this by taking control of industry and its products and then restricting access to it. Pickler and Nietzsche put it, The most important feature of private ownership is not that it enables those who own, but that it disables those who do not. Technically, anyone can get in someone else's car and drive away, or give an order to sell all of Warren Buffett's shares in Berkshire Hathaway. The purpose of private ownership is wholly and only an institution of exclusion, and institutional exclusion is a matter of organized power. As we can see from the genocide on the plains, this power is no abstract force.

Veblen tends to focus on the power of absentee owners to stop production, and for good reason. But business stands in the way of industry, in more immediate ways too. After all, the purpose of cooperative industry is to make goods, to improve our lives. And yet in between us and the proceeds that industry creates to serve our needs, there is a cash register and a cop. Even the creators of a Louis Vuitton bag, or, for that matter, a tomato, have no claim on it once business takes over, and business would rather destroy it than see it fall into their hands.

The famous Russian anarchist theorist Peter Kropotkin was writing along similar lines to Veblen just a few years before. Veblen, it seems, had been exposed to anarchist ideas through its association with the industrial workers of the world. In the early 1900s, it was not altogether unusual for economists to move in radical circles. The great Italian economist Piero Serafa smuggled pens and papers to Antonio Gramsci,

while Gramsci, the head of the Italian Communist Party, was a prisoner of the Italian fascist regime. Graffa would later extract the writings that Gramsci had written in prison, unleashing Gramsci's prison notebooks onto the world. But Veblen was unique even among these economists for the extent that he incorporated radical theories directly into his work, as you've seen with his adoption of sabotage as a way of thinking about capitalism. This led Veblen to call the end of the system of what he described as vested interests and absentee owners. Veblen's solution, however, which he described as a quote,

soviative technicians that would manage production for all society, leaves a lot to be desired for. So let us return to the source. Here's Kropotkin in The Conquest of Bread. The mines, though they represent the labor of several generations and derive their sole value from the requirements of the industry of a nation and the density of the population, the mines also belong to the few, and these few restrict the output of coal

or prevent it entirely, if they find more profitable investments for their capital. Machinery, too, has become the exclusive property of the few, and even when a machine incontestably represents an improvement added to the original rough invention by three or four generations of workers, it nonetheless belongs to a few owners. And if the descendants of the very inventor who constructed the first machine for lace building a century ago were to present themselves today at a lace factory in Bale or Nottingham and demand their rights, they would be told, hands off, this machine is not yours, and they would be shot down if they attempted to take possession of it. Here we see the competition between two different kinds of rights.

On the one hand, the right of industry, the right of creativity. The right of those who produce and care for each other to be able to determine where the proceeds of their labor go. From industry's point of view, this is to each other, to those in need, and to society as a whole. On the other hand, there is the right of property, the right of men with guns to throw oysters into the ocean because it's not profitable for anyone to eat them.

Capitalism has developed a myriad of iterations of precisely the same principle, and the world is now infested by them. Patent trolls haunt the already fraught waters of intellectual property, buying up patents for cheap, or on rare occasions creating something themselves for the sole purpose of preventing anyone else from using it, making money by suing anyone who dares try. Large corporations, of course, do precisely the same thing. See, for example, Disney's war on the concept of anything, anything at all, falling into the public domain. This sabotage, and on this, all four of our interlocutors, Veblen, Kropotkin, Kliernitz, and Agri, as long as private ownership exists, because sabotage is all private ownership really is.

But it is not simply enough to answer corporate sabotage with our own sabotage. As Veblen pointed out, this is simply the ordinary state of affairs under capitalism. For Kropotkin, the answer was simple. This rich endowment, painfully won, builded, fashioned, or invented by our ancestors, must become common property so that the collective interest of men may gain from it the greatest good for all. There must be expropriation, the well-being of all, the end, expropriation, the means. How precisely to go about doing such a thing has been the subject of endless debate for nearly 200 years, and I am not arrogant enough to propose

to solve the problem here. But a system where a company can prevent even the US government from attempting to produce ventilators by simply buying up the company that won the contract and refusing to fill the order to maintain the value of the ventilators it was already producing is a system based on nothing less than ensuring that people will die for a 5% rate of return. If we are to have any hope of stopping the ravages that climate change promises for our future, we cannot afford to be sabotaged at every step. you should probably keep your lights on for nocturnal tales from the shadow join me danny trail and step into the flames of right. An anthology podcast of modern day horror stories inspired by the most terrifying legends and lore of Latin America. Listen to Nocturnal on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

Hey, I'm Jacqueline Thomas, the host of a brand new Black Effect original series, Black Lit, the podcast for diving deep into the rich world of Black literature. Black Lit is for the page turners, for those who listen to audiobooks while running errands or at the end of a busy day. From thought-provoking novels to powerful poetry, we'll explore the stories that shape our culture. Listen to Black Lit on the Black Effect Podcast Network, iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. AT&T, connecting changes everything. cruising and expanding your horizons? Hit play on the sex-positive and deeply entertaining podcast, Sniffy's Cruising Confessions. Join hosts Gabe Gonzalez and Chris Patterson Rosso as they explore queer sex, cruising, relationships, and culture in the new iHeart podcast,

Sniffy's Cruising Confessions. Sniffy's Cruising Confessions will broaden minds and help you pursue your true goals. You can listen to Sniffy's Cruising Confessions, sponsored by Gilead, now on the iHeartRadio app or wherever you get your podcasts. New episodes every Thursday. Hi, I'm Ed Zitron, host of the Better Offline podcast.

And we're kicking off our second season digging into tech's elite and how they've turned Silicon Valley into a playground for billionaires. From the chaotic world of generative AI to the destruction of Google search, Thank you.