Still utopian

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The month has been a bit of a blur but on one trip I read People’s Republic of Walmart by Leigh Phillips and Michal Rozworski. It has one of those long, chatty subtitles that try to save you the trouble of reading the book: How the world’s biggest corporations are laying the foundation for socialism. They wish – the authors are out of the Jacobin stable, and so explicitly (sort of) Marxist.

The premise is revisiting the socialist calculation debate, mashed up with Coase and Simon, in the light of big data and AI. So it’s similar territory to Bastani’s (2020) Fully Automated Luxury Communism. People’s Republic begins with recent examples of large coprorations planning their internal economy using digital technologies, data, and investment in logistcs – Walmart and Amazon. It expands from there to index funds and common ownership, the NHS, the space race and the examples of the Soviet Union and Allende’s Chile. The point hammered home in each chapter is that there are so many examples of managed rather than non-market exchange that technological advances mean planning (or bureaucracy) can replace markets in many more areas of the economy.

There’s certainly an interesting debate to be had about the extent to which AI can potentially substitute for prior modes of organisation, whether market arrangements or bureaucracies, by the new affordances for summarising and organising a lot of information. Henry Farrell and co-authors propose AI is indeed a new social technology.

But People’s Republic fails to distinguish between planned economies – Walmart may be described in this way, in line with Herbert Simon’s well-known observation – and actual (as opposed to ‘free’) markets. The fully free market is as mythical as the unicorn. All actual markets are structured by regulation, other government intervention, standards, customs and other institutional arrangements; but this is not ‘planning’. The book underestimates the huge amount of physical and software investment needed to make Walmart’s logistics possible; organising information is neither entirely intangible nor easy even in the big data era.

It’s also slightly weird, to me at least, to position Walmart and Amazon (even with a benign approach to human labour assumed) as demonstrations of the possibility of socialist utopia in the 21st century. Even before its ‘enshittification’ Amazon couldn’t distinguish between me buying economics books for me and young reader books for my 7 yr old grand-daughter.

I think it likely that AI will reshape economic structures, just as earlier digital technologies did, making Walmart and Amazon possible, along with many other platforms – how dramatically depends on what you think the limits of computability are. It would be nice to think governments will respond strategically in their interventions in the economy and how they structure the operation of markets, though this isn’t something I’d confidently expect. I hope the conditions of labour improve through policy and organisation, doing away with terrible, precarious jobs. But the 1920s/30s lens of (idealised) planning versus (idealised) markets won’t be the best way to analyse what happens. Having said that, this was a very jolly read, and anything debunking the myth that markets are ‘free’ is welcome.

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Positive pragmatism

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The great Dani Rodrik is giving the S T Lee public lecture in Cambridge on 15th January 2026 (free but please book a ticket if you want to attend). The subject will be his new book, Shared Prosperity in a Fractured World.

The book is an excellent synthesis of Dani’s work in recent years, structured around making the case that trade-offs between the policy objectives of eradicating poverty, tackling climate change, and preserving democracy can be alleviated or even removed. Typically, for example, measures to boost growth in low income countries might be seen as in conflict with preserving jobs for middle class voters in rich countries. The book argues that shifting the poverty-reduction focus to creating service sector jobs (not manufacturing as in the old version of globalisation) mitigates that conflict of objectives.

The book also urges pragmatism: Act at the level of the nation state as global agreements move further out of reach; Accept second-best remedies; Be willing to experiment. After diagnosing where globalization went wrong, the book has individual chapters on pragmatic policies for green transition, good middle class jobs in high income countries, and growth through the service sector in lower income countries.

These together constitute what he calls the ‘productivist paradigm’ – ‘productivism’ is a term I don’t like as it conjures up old-style industrial policies, although I don’t have a better one. I’m also decreasingly keen on the manufacturing vs services dichotomy at all as production occurs in networks or ecosystems that involve both, and high-value services are often linked to high-value manufacture.

Anyway, the productivist paradigm also involves a more active partnership between state and market as neither, alone, leads to an efficient allocation of resources. The final chapter turns back to globalization and calls for a version built around the provision of global public goods. I’m not sure I see much prospect for any activism on global governance at present.

Still, a constructive argument for an active approach to structural transformation in the interests of populations globally is very welcome. Tune in for the lecture!

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Disenshittificatory countermanoeuvres?

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It’s been hard to remain unaware of Cory Doctorow’s concept of ‘enshittification’ – it was after all a 2024 word of the year. But I finally got round to the book Enshittification: why everything suddenly got worse and what to do about it, which is an excellent read. It has four sections: Natural History, Pathology, Epidemiology and Cure. The first three – as these headings indicate – describe the problem (through case studies – Twitter, Amazon, Facebook and the iPhone), anyalyse its structure, explain how it came about and spreads (policy choices), and proposes some counter-actions.

There are two key revelations for me. One is the sustained role of intentional policy actors in enabling big (mainly tech) companies to get away with this. For example, although the adverse effects of the DMCA are well-known, I had not previously known that it was made possible by US official Bruce Lehman doing what he described as ‘an end-run around Congress’ by bringing in the WIPO and international treaties that then had to be implemented in US law. The US law was then enforced extra-territorially by US Trade Representatives threatening tariffs on countries which did not implement similar domestic legislation. This long predated Trump’s passion for tariffs.

The other is the importance of interoperability. As Doctorow puts it, all computers are “Turing complete universal von Neumann machines” – they can run any programme. “The fact that every computer can run every valid program means that every enshittificatory gambit has a potential disenshittificatory countermanoeuvre.” The obstacle to doing so is – the DMCA and threat of legal action for breach of copyright by jailbreaking the software restrictions.

Everyone who does anything online is wearily familiar with the deteriorating experience, which makes the Cure section especially interesting. Policy was the cause, and policy is the cure. Doctorow emphasises antitrust policy and regulation. Economists who have studied digital markets will warmly agree. Enforcing interoperabiility is a key weapon – if we can’t force the companies to behave better, we could make them less important, reduce their gatekeeper status. Also, the more I think about it, the more I believe copyright law needs a broad rethink; it isn’t serving society well in sectors other than tech.

So there is technically well-informed good sense in these. But it leaves me thinking – as with many things I’ve read recently – that the barriers are political. There are clear policy options, implementable, and yet they seem outside the famous Overton Window. In this excellent Chicago Booth podcast with Cory Doctorow, he observes that political science has under-theorised the role of policy domains such as anti-trust, and this seems correct. Perhaps the EU, now that US hostility has been made so plain in the new National Security Strategy, will stop trading its digital enforcement for favours on tariffs; as the tariff weapon has already been fired it has lost some threat potential.

Hard to predict. But I have a strong sense, given evident public anger about the state of modern market economies, that something, somewhere, will start to give. It probably won’t be pretty.

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From woolly to concrete liberalism

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I got round at last to reading Abundance by Ezra Klein and Derek Thompson, and enjoyed the book. It’s a good read and makes its case well. The pro-growth case has traction beyond the US of course. UK ministers have been on about planning regulations hampering growth ever since the July 2024 election, and a John Collison article in the Irish Times recently got the Irish chatterati talking about it.

Did I agree with the case? Yes and no. I do think restarting economic growth – in an environmentally increasingly sustainable way – is essential. Social and political phenomena have many causes so the electoral success of far right populism (anathema to me as an old fashioned woolly liberal) is not caused in a simple way by the absence of growth since the mid-2000s. But that absence is certainly part of the story. My views about this have long been shaped by my PhD adviser Ben Friedman, and his book The Moral Consequences of Economic Growth. (As for the sustainability component – of course that’s essential, but I can’t think of any far right party/government that is not claiming climate change is a hoax. So significant political change has to come first.)

So Abundance does identify some barriers to growth and describe the implications. But the book is also strangely non-political in the sense that I didn’t find anything about how to get from here to the sunlit uplands of there. The book says, “What we are proposing is less a set of policy solutions than a new set of questions around which our politics should revolve.” OK, nobody wants another list of 10 bullet point policy solutions in the final chapter. But what is the political economy of getting from today’s polarised and disgruntled world of concentrated power and authoritarianism to the Abundance-land of pro-concrete liberalism, where building new things is welcomed by communities and technology works for everybody?

Top marks for optimism to the authors, and I enjoyed the read, but it didn’t rattle my pessimism about the current moment.

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Reshuffle – or how productivity happens

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Term time is not conducive to doing a lot of reading, but I have managed a couple of interesting books recently. One was Abundance – I’ll jot down some thoughts about that later. The other was Reshuffle: Who wins when AI restacks the knowledge economy by Sangeet Paul Choudary, which I read and then listened to a presentation by the author organised by the Dynamic Competition Initiative.

I liked the book because it focuses on an aspect of the impact of AI that is underemphasised in public discussion and to some extent in academic circles. That’s its likely catalysing significant organisational change. So much discussion focuses on labour market change and the specific tasks within jobs that will be automated, and how tasks will be rebundled into new jobs. This is a rich literature, flagging up the interaction between the automatability of tasks and the level of expertise required in each task. However, less attention has been paid (though this is changing) to the consequent changes in processes, work flows and business models.

The core point in Reshuffle is that understanding AI’s impacts on the economy requires thinking about tasks as nested within organisations, which in turn sit within systems of production. The focus needs to be directed towards the broader structural architecture, the book argues. It has a construct of being ‘above’ or ‘below’ the AI – I think this means having or not having agency in decision-making – with implications for distribution. “Much of the value associated with a job is not derived from the task alone but also from the system within which the task is executed.”

I wholeheartedly agree with this perspective, that value creation in organisations has an essential social dimension. Firms are more than a collection of individuals. There was years ago an excellent book making exactly this point, Chasing Stars by Boris Groysberg.

The book also majors on the way AI will unbundle some knowledge tasks from humans – often described as codifying tacit knowledge – and the consequences. Such forms of knowledge are more flexible (there is no human or long-term contractual relationship involved) and can be more easiry reproduced or rebundled. So for these reasons I like Reshuffle.

On the other hand, the author wrote it as an airport-style business book, a perfectly valid decision but irritating for me – it’s somewhat repetitive and fond of diagrams that seem less clear than the words. More irritating is the econ-bashing. Yes, economists have been focused on task-based labour market approaches, but there is now a lot of  economic research taking an institutionalist, transactions cost perspective, building on Luis Garicano’s now-classic work, and the earlier tradition of institutional economics all the way back to Coase.

Nevertheless, Reshuffle is an interesting read, with some useful insights – and can indeed be read on a flight or train ride.

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