Corporate Sabotage

Why do corporations destroy their own goods? Why do factories sit empty when people need their products? The answer is corporate sabotage.

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Episode Transcript

Speaker 1 (00:04):
Welcome to it Could Happen here podcast about things falling
apart from what you can do about it. My name
is Christopher Wong, and today I'm gonna 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, slow down strikes, or the myriad of

(00:25):
other tactics that workers have used since time memorium to
strike back at their bosses. No, Instead, I'm going to
be talking about a far more common, an infinitely more
dangerous form of sabotage, corporate sabotage. Now, the most conficuous
form of corporate sabotage is the mass destruction of a
corporation's own products. The fashion company Burberry, for example, destroyed

(00:48):
three hundred and seventy million dollars of its own product
in one year alone. Louis Vutton and Chanel also systematically
destroy their own sold stock every year, joining H and
M and literally lighting their own sold products on fire
in order to prevent anyone from using them. Quote business
insider Richemont, the owner of Cadalier BoNT Blanc, destroyed more

(01:08):
than four million pounds of watches over a two year
period after an excess in goods in the Asian markets.
Nik 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
paints on the unsold stock. These, of course, are only
the stories that have made it into the press, and

(01:29):
this behavior is by no means limited to high fashion.
Grocery stores routinely throw away normous quantities of unsold goods,
and when communities realized they could feed people in need
by taking the still good products from grocery store dumpstairs,
the stories began to destroy their food intentionally. But these
acts of destruction, as callous and horrifically greedy as they are,

(01:50):
are by no means the extent of corporate sabotage. To
explain I turned to the work of the economist Thorston Veblen.
That one 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 in the Price System,

(02:10):
a work that is broadly ignored even by his followers.
Febun wrote a section called on the Nature and Uses
of Sabotage. From that work, Writers and speakers who dilate
on the militarious exploits of the nation's businessmen will not
commonly allude to this voluminous running administration near sabotage, this
conscientious withdrawal of efficiency that goes into their ordinary day's work.

(02:34):
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 One, there was an enormous explosion
and unemployment, an enormous need on half of the population.
But even as the unemployed begged to be let in
to create the products that could build the needs of

(02:56):
their fellow humans, business owners steadfastly refused to open their factories.
As Feblin 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

(03:16):
controlled the staple industries and so regulate the output of product.
Feblen was not alone in observing these are similar conditions.
John Maynard Keynes, writing during the depression, observed newly precisely
the same thing. For Canes, the solution simply was to
have the government step into increased demand. But for Veblen

(03:37):
dismissed the core of the problem. The real problem was
at a core of absentee owners had the ability to
shut down the factories in the first place by simple
virtue of their ownership, Feblen argued, was simply sabotage, no
different from the hated strikes of the I w W
that's so racked and perturbed the capitalist ruling class of
his time. At least, the workers could argue that they

(03:57):
were simply fighting for a better share of what they
had created. 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
they weren't marked by massive depressions in order to make
payments to capitalists, Feblin argued, who expect a certain rate

(04:21):
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

(04:41):
passable fashion on pain of popular disturbances, as it will
always come of popular distrust when they passed a limit
of tolerance. The sabotage Feblan argue 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

(05:01):
of investors, it was necessary when sure that production never
became too efficient to produce too many goods. Feplin used
as his example the twentieth century post office, but we
could just as easily point to Trump sabotaging the post
office in a dual bid to privatize the service by
causing it to collapse and prevent mail and votes from
being counted as part of his attempt to win the

(05:21):
two thousand twenty election. In their book Capitalist Power Condis,
Samshawan Bickler, and Jonathan Needson take Feplin's argument and expand
on it, noting that capitalism, far from encouraging productivity at large,
makes things inefficient on purpose. They used the example of
public transportation, which is by bay essentially any measure, a

(05:43):
significantly more efficient way of moving people around the US
as an example. In the US and the nineteen forties,
a hundred electric rail lines were brought up and destroyed
by car companies. Those same companies likewise twice destroyed incredibly
efficient and popular electric cars, once in the nineteen thirties
and again in the nineteen eighties because the profit rate

(06:05):
was lower than that of gas cars. They then set
out to cause everyone to forget that they had 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 Musks, you could argue that the system at
least produced advancements before it stopped them. But the most

(06:27):
violent forms of sabotage are reserved for productive systems that
are simultaneously efficient and outside of capitalist control together. Perhaps
the best known example of this is the East British
East India companies the industrialization of the Indian textile industry,
not to be outmatched by their British forebearers. American settlers

(06:48):
and their allies in the American military sterminated the buffalo
herds of the Great Plains in an attempt to starve
out the indigenous tribes that lived there. In doing so,
they destroyed it enormously doctive 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

(07:11):
the American army and defence of their lands. We are
used to thinking of capitalism as the system of production,
but here, amidst the fields of buffalo corpses something else
entirely capitalism appearing in its true form, a system of
organized sabotage. To fully untangle what this means, let us

(07:40):
return to Feblin. Feblin divided capitalism into two separate processes.
The first he called industry industry Feblin argued, has existed
long before capitalism and will continue to exist long after
it has a bit Clear and niets and put it
quote when considered an isolation from emporary business institutions. The

(08:02):
principal goal of industry it's raison, according to Veblen, is
the efficient production of quality goods and services for the
betterment of human life. Industry is an inherently collective undertaking.
The basis is cooperation and integration, the creation of communal
knowledge that allows production and scientific advance to occur, and

(08:22):
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

(08:45):
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 the restricting access to it. Part
Clear and Nichs input 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

(09:09):
can get in someone else's car and drive away, But
given order to sell all of Warren Buffett shares in
Berkshire hathaway, the purpose of private ownership is wholly and
only an institution of exclusion. An institutional exclusion is a
matter of organized power. As we can see from the
genocide on the Plans, This power is no abstract force.

(09:30):
Beblin 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 slerve our needs,

(09:50):
there is a cash register in a cop Even the
creators of a Louis Vuitton bag, or for that matter,
a tomato, have no claim on it. Its business takes over,
and business would rather destroy it than see it fall
into their hands. The famous Russian anarchist theorist Peter Kirpopkin
was writing along similar lines to Veblen just a few
years before Feblen, it seems, have been exposed to anarchist

(10:13):
ideas through his association with the Industrial workers of the World.
In early nineteen hundreds, it was not altogether unusual for
economists to move in radical circles. The great Italian economist
Piero's Raffles smuggled pens and papers to Antonio Gramsey, while Grumsey,
the head of the Italian Communist Party, was a prisoner
with the Italian fascist regime. Grapha would later extract the

(10:35):
writings that Crampsy had written in prison Unlesian Gramsey's prison
notebooks onto the world. But Veblin was unique even among
these economists for the extent that he incorporated radical theories
directly into his work. As you've seen was his adoption
of sabotage as a way of thinking about capitalism. This
led Veblen to call the end of the system of

(10:58):
what he described as vested interests and absentee owners. Febulance solution, however,
which he described as a quote sovietive technicians would manage
production for all society leaves a lot to be desired for.
So let us return to the source Herscropotkin in the
Conquest of Bread the minds, so they represent the labor

(11:20):
of several generations, and derive their sole value from the
requirements of the industry of a nation and the density
of the population. The minds also belonged to the few,
and these few restrict the output of coal, are prevented
entirely if they find a more profitable investments for their capital. Machinery, too,
has become the exclusive property of the few. And even

(11:43):
when a machine and contestedly represents an improvements 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

(12:04):
today at a lace factory and bail 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

(12:27):
other to be able to determine where are the proceeds
of their labor go. From industry's point of view, this
is to each other, to those in need, into 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

(12:48):
iterations precisely the same principle, and the world is now
infested by them. Patent trolls haunt they already fraught waters
of intellectual property, buying up patents for cheap or on
rare occasions, creating something themselves for the sole purpose, or
preventing anyone else from using it, making money by suing

(13:08):
anyone who dares try. Large corporations, of course, to precisely
the same thing, see for example, Disney's War. In the
concept of anything, anything at all, falling into the public domain,
the sabotage, and on this all four of our interlocutors
Veblin Kropotkin clear needs and degree as long as private

(13:29):
ownership exists, because sabotage is all private ownership really is.
But it is not simply enough to answer corporate sabotage
with their own sabotage. As Veblin pointed out, this is
simply the ordinary state of affairs under capitalism. For Capotkin,
the answer was simple. This rich endowments, painfully one builded, fashioned,

(13:50):
or invented by our ancestors, must become common property, so
that the collective interest of men may gain forbid the
greatest good for all. There must be appropriate ation 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 two hundred years,
And I am not arrogant enough to propose to solve

(14:13):
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 or five percent rate of return. If we are

(14:36):
to have any hope of stopping the ravages that climate
change promises for our future, we cannot afford to be
sabotaged at every step,