Book SummaryVulture Capitalism, by Grace Blakeley

1-Page Summary1-Page Book Summary of Vulture Capitalism

The fusion of business power with governmental control.

This section delves into the profound symbiosis between governments and business entities, illustrating their intertwined existence rather than separate entities. Grace Blakeley argues that the perceived separation between state governance and market economies is actually a facade that conceals the significant control corporations have over government power. This occurrence takes shape through multiple channels, such as financial incentives for businesses, the influence exerted through political lobbying, and the lack of severe penalties for corporate wrongdoing.

Government-provided financial assistance and bailouts for corporations.

Grace Blakeley argues that the act of extending financial support and implementing rescue strategies for corporations is not an aberration in the capitalist system, but an intrinsic element of its functionality. She provides numerous examples to support her claim, illustrating how such behaviors distort competition in the market, prioritize the interests of specific companies or financial players over the public good, and result in a growing imbalance in the distribution of wealth and assets.

Governmental support encourages corporate recklessness, prioritizing financial profit over safety, as demonstrated through Boeing's dealings with American authorities.

Blakeley underscores the evident depiction of the dangers stemming from governmental monetary aid to businesses and the resulting implications for the safety of the public, as demonstrated by the circumstances at Boeing. Boeing, despite its history of manufacturing faulty aircraft, still benefits from significant backing by the US government, which includes multibillion-dollar subsidies, favorable tax treatments, and financial rescues. Blakeley argues that with government support, Boeing prioritized financial objectives over adherence to safety measures, leading to the tragic outcomes associated with its 737 MAX aircraft. Even though Boeing benefited from an $8.7 billion tax incentive provided by the state of Washington, the company subsequently decreased its number of employees by several thousand. Their enduring presence, despite substantial public opposition and legal challenges, is guaranteed by their strong ties to the defense sector and the common practice of personnel moving between the industry and government roles.

Blakeley attributes the calamities involving the 737 MAX to Boeing's unwavering focus on cost-cutting, driven by an insatiable pursuit of profits for shareholders. Boeing opted for a cost-effective software fix – the MCAS system – rather than addressing the intrinsic design issues of the plane, a decision that led to catastrophic outcomes. The lack of proper oversight, as highlighted by Blakeley, was due to a regulatory authority that was heavily influenced by the influence of Boeing and relied on a policy of "self-regulation," which permitted the company to monitor its own safety protocols. The tragic loss of hundreds of lives due to Boeing's emphasis on financial profits rather than ensuring the safety of passengers was facilitated by a culture of non-accountability stemming from its intimate relationship with regulatory agencies.

Other Perspectives

• The relationship between government support and corporate behavior is complex and influenced by a variety of factors, including industry regulations, market conditions, and internal management practices, which can mitigate or exacerbate the risk of recklessness.
• Subsidies and tax incentives are common practices globally to maintain competitiveness in key industries, and aerospace is an industry where the U.S. competes with heavily subsidized foreign companies.
• The aviation industry is highly competitive, and maintaining a reputation for safety is crucial for business success, suggesting that Boeing has a vested interest in ensuring the safety of its aircraft to remain competitive.
• Tax incentives are often provided with the intention of stimulating economic growth and are not necessarily tied to employment levels; companies may use these incentives for various purposes such as research and development, infrastructure, or other investments that could lead to long-term economic benefits.
• The design and implementation of the MCAS system, while flawed, may not have been solely for cost-cutting but also a technical solution to meet certain aviation standards and regulations.
• The aviation industry often operates under the principle that existing aircraft designs are continuously upgraded and refined, which can include software updates as a legitimate and effective means of enhancing safety and performance.
• The regulatory framework often includes opportunities for industry input to ensure that regulations are practical and informed by technical expertise, which does not inherently imply undue influence or lack of proper oversight.
• Regulatory agencies have their own mechanisms for accountability, such as internal audits and congressional oversight, which can act as checks on corporate influence.
• The pursuit of profits in the corporate world is not inherently negative and often drives innovation and improvements; thus, it is possible that other factors contributed to the tragedies, such as technical oversights or unanticipated interactions between systems.

The US government's rescue of AIG, a move that effectively shielded Goldman Sachs, illustrates how governmental power is employed to protect financial institutions from the consequences of their actions.

Grace Blakeley highlights how the government intervened to shield the significant insurer AIG from the repercussions of its decisions during the financial turmoil of 2008. She contends that the AIG bailout was principally aimed at averting significant financial damage to Goldman Sachs, a firm that had taken speculative risks in the American housing market. The author...

Vulture Capitalism Summary Financial entities play a substantial role in perpetuating disparities in wealth.

The book scrutinizes the manner in which financial institutions, such as banks and investment firms, shape the economic landscape and exacerbate wealth inequality. Blakeley asserts that these institutions wield immense power over investment decisions, effectively acting as "time lords" who determine which entities survive and thrive within the capitalist system. She challenges the traditional view that banks are neutral intermediaries, highlighting their substantial role in creating currency and influencing economic outcomes.

The influence of currency generation.

Blakeley challenges the widespread assumption that banks merely serve to allocate savings that already exist. She argues that the significant power of banks in shaping economic results is derived from their capacity to create currency from thin air, which in turn gives them a strong influence on market operations.

Banks possess the capability to create capital ex nihilo and wield significant influence over economic outcomes, a fact that becomes apparent when examining the shortcomings of the loanable funds model.

Blakeley argues that the common view of banks as mere channels for distributing already...

Vulture Capitalism Summary The proposal is for the creation of a system that is planned through democratic processes.

This passage underscores the necessity for crafting a fundamentally distinct method for engaging with the prevailing capitalist structure. The writer argues that the seemingly clear-cut decision of increasing or decreasing government intervention is misleading; instead, a transformative approach is necessary to empower people to have a real impact on how resources are allocated and created.

Contesting the overly simplistic notion that government and economic domains are distinct entities.

Blakeley challenges the traditional dichotomy in political discourse that frames the debate as a choice between state control and unregulated market environments. She argues that this viewpoint is deceptive and undermines individual liberty by masking the actual workings of capitalism, thereby limiting the imagination of alternative economic systems.

The book emphasizes the importance of recognizing that complex societies require organized management, and the crucial choice lies in whether this coordination is governed democratically or by a small elite.

Grace Blakeley argues that the common depiction of political debates as a dichotomy of state intervention versus laissez-faire...

Vulture Capitalism Summary The persistent outcomes of imperialist pursuits have led to the broadening of dominance and control.

This part examines the evolution and present manifestations of imperialism, suggesting that wealthy nations deliberately maintain their economic dominance, a critical component of the worldwide capitalist framework, in relation to countries in the Global South. The author scrutinizes how policies acclaimed for advocating "free trade" often play a role in maintaining worldwide inequalities, and how the transformation of assets into financial instruments has facilitated the transfer of wealth from emerging nations.

The notion of dominance through global trade disguised as unrestricted business dealings.

Grace Blakeley argues that instead of advancing global development, free trade has continuously maintained imperialistic connections and intensified inequalities between nations. She exposes the hypocrisy of wealthy nations that advocate for open markets while simultaneously protecting their own industries and taking advantage of the low-cost labor and natural resources of developing countries.

The book challenges the assertion that affluent countries achieved their status through unfettered trade, demonstrating instead how burgeoning capitalist nations employed...