Working Paper No. 97, Business Sabotage in Theory and Practice

This inquiry seeks to establish that theoretical advances offered earlier on by one Karl Marx and some decades later by one Thorstein Veblen offer insights into forms of business sabotage. Drawing upon their writings, this inquiry considers how in the writings of Marx, already in the mid-nineteenth century surplus value extraction and pecuniary sabotage serve as structural features found in a market-based economy. Marx’s consideration of surplus labor and artificial scarcity reveals how private investment seeks to constrain production in order to preserve and enhance profitability. Veblen’s theory of institutional sabotage complements Marx’s view by showing how firms could delay introducing efficiency measures and/or manipulating scarcity in order to protect a market position. These approaches to sabotage advanced by Marx and Veblen are then applied to offer insights into recent economic events using evidence from Isabella Weber, Evan Wasner and the UN Conference on Trade and Development. What is demonstrated is that inflation in contemporary times has been driven less by supply disruptions and more by corporate coordination, financial speculation, and market concentration. These findings lead us to conclude that sabotage does not suggest a breakdown of the market system—rather, sabotage should be understood as integral and even intentional.