Debating the merits of nationalization
Two old friends argue about the best response to the COVID-19 mega-recession — and almost come to an agreement
by James Kaelan
“I’m trying to read that post again,” Spencer wrote to me. “And I can’t even begin.”
We’ve been best friends since we were four. He majored in business. I majored in English. He works for an international company whose 2019 Q4 profits were nearly $6 Billion. I write shows about CEOs getting disillusioned with capitalism. He shares things-are-actually-getting-better Steven Pinker essays with me. I recommend him books describing how automation will accelerate inequality.
When I’d sent him the first dialogue from this series — “What if we nationalized Amazon?” —I warned that it would probably make him angry. “But you’ll also find it funny,” I said. “And maybe you’ll agree with some of the key points?”
“Nationalizing just to nationalize!” he texted me Saturday morning as he hate-read the article. “Zero plan for distribution. What’s the endgame? What’s the logic? Just Bezos is the richest? Billionaires are evil. So give ‘us’ his stuff.”
“Lol,” I wrote, and sent him a link to a story about homeless families in my neighborhood reclaiming vacant houses. “The revolution has started.”
“As you know,” he said, “I actually agree with a lot of the issues you have with capitalism.”
(This was not our first pitched debate about economics.)
“You guys lay that out pretty well,” he continued. “But your method for resolving things, the avoidance of acknowledging the endgame — it makes it very hard to read.”
“We believe that it’s highly unethical to profit during the pandemic,” I said. “We also believe that Amazon has built the infrastructure that allows for the dispensing of food and durable goods to anyone in the country. The nationalizing part is seizing the fruits of that machine.”
“I’m fine with invoking a temporary Defense Production Act order on Bezos,” he said.
“What’s your objection?” I asked.
“Thinking the seizure would go beyond the pandemic. That the government should continue to own Amazon post coronavirus. And the idea that the government would somehow run the company better than Bezos.”
“The people who run it now would still run it,” I said. “They just wouldn’t be allowed to profit off of it.”
“And they would leave.”
“Then Amazon can die.”
“And another Amazon would open.”
“This is our whole point!” I said, my pulse rising. “The free market has produced an utterly unsustainable rash of goods that we don’t need, and that we’re expending destructive-to-obtain-and-use resources to produce and ship. That needs to end. Now. Suddenly we have a global crisis that’s murdering the economy. Changing things during a disaster is much easier than changing things when times are good.”
“Change to what?” Spencer asked. “To this magical thing that would be magically better?”
“WE CANNOT CONTINUE TO DO WHAT WE’RE DOING,” I text-yelled. “We do not have time to transition smoothly. In a perverse stroke of luck, though, coronavirus fucked everything up for us. We would never have had the will to do this on our own. No political movement could’ve stalled the entire economy.
“But a pandemic has. So, now it’s time to apply all the knowledge we’ve gained over the past three decades about climate change and habitat destruction and apply it, through edict, and make it impossible for any company to come out the other side of this making a single dime in a way that isn’t permanently geared toward the salvation of the planet and the general thriving of all people.”
After a few minutes Spencer still hadn’t responded, and I’d calmed down a bit.
“I know we’re on the same page about climate change and resource exhaustion,” I said. “What’s your narrative about addressing those problems? And when do we do it?”
Pre-text bubbles trembled on my screen.
“If this weren’t the Trump administration,” Spencer wrote, “I’d expect the government would refuse to prop up oil and gas and focus stimulus money on green energy and construction. We’d send funds directly to people so they’re able to buy essentials. We’d demand more say in what the banks and airline industries are allowed to do.
“But I don’t see a full nationalizing of anything except healthcare. I think providing incentives to innovate away from oil and into clean energy goes a huge way.”
“The way you feel about healthcare is the way we feel about ALL industry,” I said. “Or all subsistence industry. The things that people need to survive should not be market-based.”
“I ALSO think we should do more to get essential healthy foods to everyone,” he agreed. “More regulation on building and energy and transportation and food production.”
“Right, but what’s your timeline?” I asked. “What do these regulations achieve, and when do they achieve them?”
“My timeline is now,” he said. “Immediately. But that doesn’t mean you need Amazon’s whole distribution system.”
“Why not?” I countered. “Amazon’s supply system can distribute the means of subsistence around the whole country. And the workers will still be paid. The people whom Amazon uses to do the actual labor required to distribute shit aren’t leaving because it’s nationalized. Jeff and his execs can bounce and go live on Peter Thiel’s island.”
(Thiel has since separated himself from Blue Frontiers. But the libertarian dream lives on.)
“We’re entering a global depression,” I pressed on. “Anything short of seizing industry ensures that the industry that does survive comes out the other end with even more economic and political power than they went in with.”
“We SHOULD be taxing corporations and billionaires more equitably,” Spencer said. “But the last thing you want are these once-in-a-generation people leaving.”
“Pass,” I said.
“I don’t worship them, but I don’t see them as evil.”
“I see their motives as unconscionably selfish. ESPECIALLY at this moment.”
“We want to get the money from them to pay for all Bernie’s/Warren’s plans,” he said. “But they’re useless to us?”
I fired off a link about some hedge-funder making $2.6 Billion off the coronavirus crash. “Fuck these ghouls,” I said.
“Him making money off that didn’t take from your pocket.”
“I DON’T CARE ABOUT MY POCKETBOOK.”
“It didn’t take from poor people.”
“Did he add value by shorting the Dow?!”
“Speculation is a whole other thing…”
My pulse was racing. “This is the time to transition to selfless endeavors. If a bunch of trolls can only get hard by ‘winning,’ let them stay flaccid. Right now, the battle cry is, ‘Use your knowledge and resources to help people — and the planet — survive.’ You can have your prestige for being a big-boy helper. But you don’t get another $100 Billion in profits to control the political narrative for another century. The profit motive is officially invalid as an excuse for why you didn’t help.”
“If you don’t provide jobs or essential services,” Spencer said, “you should not get assistance. If your model doesn’t help the future, you shouldn’t get propped up.”
“We are in 100% agreement on that,” I said. “Though maybe not in 100% agreement on the definition of ‘help’…”
“And not in agreement,” he added, “on what the government could take over and run well. And we aren’t in agreement on how much of the value companies like Amazon are without their innovators. Or on the mechanisms that make them innovate.”
“What about the fucking moon landing?” I said. “The Manhattan project? The Polio vaccine. We’ve somehow come to believe that the profit motive is the only incentive. Saving the world shall be your motivator, now, or you can starve like everyone else.”
The conversation went dark for a quarter of an hour. I cooled down again.
“How about this?” I finally wrote. “Ignore for a second that Trump would have to be the one to do this. But imagine that there’s an executive order that says: You have one month to create a sustainability plan that shows us how you will get to carbon-neutral and manufacturing circularity within 10 years. Every company that creates such a plan that passes muster with [agency in charge of this audit] can continue to operate—but must show monthly progress. Every company that fails will be nationalized. That keeps your innovator-gods in the boardroom if they can meet the standards. Everyone else joins the bread line.”
A few minutes later Spencer responded. “They ‘can continue to operate’ is questionable. But they will not get any subsidy, or participate in the stimulus, if they don’t have a plan. That works for me.”
“Well,” I said, “I’d call that somewhere between a stalemate and synthesis!”
“We should let some companies that don’t support long-term needs fail right now,” he added. “We should take advantage of this situation and keep an eye on who’s profiting and how. But I don’t think we should take over private infrastructure. I don’t think all billionaires are evil. And if we expect them to pay for schooling and healthcare, then we’re admitting they add a fuck-ton of value to our country. But I’m also tired of being the group where the bill lands every time. Salaried middle class workers in my age group are footing the bill for everything that gets passed. Past debts and future expenses. I’m fine with paying my share as long as I get good schools and healthcare, and rich people can’t hide their money in corporations and equity buy-backs.
“No one needs to be a multi-billionaire,” he added. “But it isn’t a sign that they’re evil.”
“Yes,” I agreed. “The system is corrupt. The billionaires are just the most ruthless (or motivated) opportunists. Some are better than others. But the extra value they add by being allowed to be billionaires isn’t worth the downsides, imho. But to be discussed in future weeks!”
A while later Spencer wrote: “I finally watched The Master and the acting is fucking amazing.”
I loved the text.