Karl Marx Can Easily Explain Boeing's Woes

Is this a mere coincidence? Trump's pick to replace the former Secretary of Defense Jim "Mad Dog" Mattis is the current acting Secretary of Defense, Patrick Shanahan, a former Boeing exec. He joined the administration in 2017, and had been with the Chicago-based company for three decades. CNBC reports that before Shanahan came "to the Pentagon" he "...oversaw the management of profit and loss for the 737, 747, 767, 777 and 787 programs. In 2017, he left the company to become the 33rd deputy secretary of Defense, a role that oversees the Pentagon's colossal $700 billion budget."

The relationship between Boeing and the state's massive military budget has always been close. It was made more intimate when Boeing absorbed McDonnell Douglas Corp in 1996. But all of this becomes even more interesting when you consider that Shanahan is moving to the top defense position at the very moment Boeing's commercial division is in deep trouble.

Yes, Shanahan was there before the crashes, but you must agree that all of this fits together very nicely. It will help investors believe that trouble in the commercial division will not be dangerous because of the corporation's depth in what Paul Krugman calls "weaponized Keynesianism." John Maynard Keynes was a leading 20th century economist who believed it is the business of the state to manage/regulate capitalism when its working and repair the economy (mass unemployment) when it's broken. His ideas were shaped by the post-World War One decline of British capitalism and the Great Depression.

In essence, Keynesianism, in what ever form it takes, is not at all capitalism as it's understood by types like Jordan Peterson. It is instead the gradual blurring (post-Second World War) and ultimate vanishing (21st century) of the line between private enterprise (as it's classically understood) and socialism (big government). Karl Marx, of course, foresaw these developments over 150 years ago. He called it the socialization of capital.

Marx in the third volume of Das Capital:

Aside from the stock-company business, which represents the abolition of capitalist private industry on the basis of the capitalist system itself and destroys private industry as it expands and invades new spheres of production, credit offers to the individual capitalist; or to one who is regarded a capitalist, absolute control within certain limits over the capital and property of others, and thereby over the labour of others. The control over social capital, not the individual capital of his own, gives him control of social labour. The capital itself, which a man really owns or is supposed to own in the opinion of the public, becomes purely a basis for the superstructure of credit. This is particularly true of wholesale commerce, through which the greatest portion of the social product passes. All standards of measurement, all excuses more or less still justified under capitalist production, disappear here. What the speculating wholesale merchant risks is social property, not his own. Equally sordid becomes the phrase relating the origin of capital to savings, for what he demands is that others should save for him.

Read this passage over and over. There is much in it that expresses the capitalism of our times.

If the nomination of Shanahan is approved, Boeing's growing mass of market-related problems will effectively be nationalized. There will be nothing about that corporation that is much different from, say, NASA. And here we face the deep question: What exactly is capitalism then? Jordan Peterson, judging from the debate he recently had with the anti-postmodernist philosopher Slavoj Zizek, has a view of this kind of economy that goes no further than the first half of the 19th century, which is why, when criticizing socialism, he drew heavily from The Communist Manifesto (published in 1848 by a very young Marx).

But nothing in the 21st century's experience of capitalism has much to do with that idea of the market—the entrepreneur as warrior, the investor as patient. Instead, we have a revolving door between not one but two prominent capitalist sectors and the state. There is the finance and the state—look at Steven Mnuchin, the head of the treasury (and do not stop there; also go back to the administrations of Obama and Bush and beyond). The other and older revolving door is between big industry and the state. How is any of this capitalism as it is classically defined? It is instead "...the abolition of capitalist private industry on the basis of the capitalist system itself."

Here is what Peterson cannot understand in his popular, pro-male-the-animal framing of the economy: Why two of Boeing's commercial planes fell right out of the sky recently. The answer is, of course, class struggle—the structuring principle of the entire society. It is still bitter, still ubiquitous, and, as a long article posted by Bloomberg, "Former Boeing Engineers Say Relentless Cost-Cutting Sacrificed Safety," still worsening. An explanation of the economy that excludes class struggle (or, put another way, the theory of surplus value) is the same as an explanation of life that excludes evolution. At the heart of Boeing's woes we find blue-collar workers, engineers, and even managers in constant confrontation with executives, whose alliance is not with the company as such, but with its shareholders.

The Bloomberg piece states that, before the 1990s, the top of Boeing was not far from the rest of Boeing. It's only in the late 90s, after the merger with McDonnell Douglas Corp, that shareholder value became the company's end and be all.

Bloomberg:

The relentless message [after the merger]: Shareholders would henceforth come first at Boeing. The important thing was not to get “overly focused on the box,” [the then-Chief Financial Officer
Deborah] Hopkins said in a 2000 interview with Bloomberg. “The box”—the plane itself—“is obviously important, but customers are assuming the box is of great quality.” This was heresy to engineers, to whom the box was everything.

So we have class struggle in the heart of the airplane manufacturer, an increased dependence on the public purse for profits, and a religious commitment to transferring the company's capital to speculators. With Shanahan, we see private enterprise in the 21st century as having no distinction from what's normally understood as nationalization. The same can be said about the banking sector, which can no longer exist on its own but must be propped up by gigantic (and expected) amounts of public cash. Chase, for example, would exist in a much smaller form, or not exist at all, if the state did not purchase $4 trillion worth of paper from the securities market (this is called quantitative easing). If all of this tells us anything, it is that the standard description of capitalism, the one Jordan Peterson promotes (an economic environment that encourages and rewards the virtues of individual imposition), is totally empty. In the light of this fundamental emptiness, we must then ask: What exactly is Peterson telling his followers?

Peterson is pushing something that has nothing do with capitalism, an economy that, in its present condition, is wholly dependent on state support—socialism. We can even go as far as to ask: Was there even really capitalism ever? And we can ask this question because it seems that its classical definition (laissez-faire—leave "me the hell" alone), is not telling us the truth about what it actually it is. Capitalism is something else. It is, simply, class domination by any means necessary—the markets, the state, the whatever. Any reading that does not have this understanding as its starting point is nothing more than the kind of fiction Jordan Peterson feeds his hero-starved fans.

Lastly, Marxism (as a body of work by Karl Marx) is not about communism. This is one of the main things Peterson fails to see about his enemy, and he spreads this blindness to his benighted followers. Anyone who is a Marxist does not point to communism but to the dynamics of capitalism, which, it is believed, if the Marxist orthodoxy is maintained to the end, leads, by a kind of phase shift, as it is called in systems thinking, to socialism. (I, personally, do not agree with the teleology of a utopian socialism emerging from a dystopian capitalism—I instead see a dystopian socialism that blindly evolved from a dystopian capitalism.)

Marx does indeed pack Das Capital with tons of moral firepower, but a deep reader of this and other mature works well knows that, in the main, the philosopher's project was the sober dissection of a form of political economy that is historically specific and, in its essence, justifies the concentration and consolidation of wealth in a few hands. In short: r > g.

But the big and final question is: Why can't capitalism ever purge itself of class conflict? The answer: It begins and ends with class conflict. Capitalism is not free markets but markets directed to a specific class-determined end. This is your 21st century sharing economy. It's what's missing in Peterson's YouTube lectures. It is the nomination of Shanahan.