On "Capital in the Ruins"

A book that is very good on the eighties and very poor on the present.

The first half of this book is the best thing of its kind in years. Working from factory gazetteers, internal circulars and oral accounts from retired workers, the author reconstructs in fine detail how state factory assets were disposed of in the mid-1980s. Chapter three in particular — on the valuation of equipment — sets the three prices of a single lathe side by side: the price on the books, the price in the assessment report, and the price it actually changed hands for. No commentary is required.

The trouble starts in the second half. From chapter six the author transplants the analysis onto present-day platform firms, arguing that a platform’s commission on couriers continues "the same mechanism" as the asset drain of the eighties.

That is too large a step. What happened in the eighties turned on the transfer of ownership of existing assets; the decisive links were valuation and approval, and the participants had names, positions and signatures. Platform commission turns on rules for allocating new flow. There is no transfer of ownership in it, and no document anyone signs. Calling them one mechanism costs you the very thing that is specific about the second: that no one signs is precisely why an appeal today has nowhere to go.

The author clearly anticipates the objection and spends six pages of chapter seven answering it, by raising the level of abstraction: both, we are told, are "a one-way flow of value". True enough — but at that altitude almost any two things are the same thing.

Read the first five chapters. I would skip the second half, not because it is wrong, but because it dilutes the conclusions of a good book.