Snow: A Splendid Little ‘Blackout’
by Nathanael Snow, Ph.D.
I just received information of a call for an economic ‘blackout’ on Feb. 28, There is no reason to be opposed to participation in a blackout, but the reasons given for this one have shaky foundations, even in the legitimate context of “voice and exit” in political theory.
Voice and exit comes up in discussions of economics, especially in regard to how people respond to failures in institutions or governments. In simpler terms, it’s about whether people choose to try to fix things (voice) or just leave (exit).
In this case, a group called the People’s Union USA, founded by John Schwarz, is promoting the blackout, and may have originated the idea. The email I received, however, did not include the People’s Union name nor did it name any other organization. The Instagram account held by John Schwarz, with 156,000 followers, named “TheOneCalledJa.” has been promoting the blackout. Some news reports suggest that the blackout is a response to President Donald Trump’s attempt to eliminate DEI programs.
Again, there is no reason to oppose grass-roots actions. Indeed, there are reasons to encourage exercise of voice and exit. Voting is the least expensive way to participate in a democracy, so we should not be surprised that it is also the least effective. Direct exercise of voice and exit is much more powerful. We can encourage civil disobedience, economic disruption and other forms of subversion. In particular, subversive action, action that erodes existing power but that does not seek to capture power for itself, communicates to those in power that it has exercised that power beyond what is legitimate.
Does the Feb. 28 Blackout qualify as a subversive act? Perhaps. It is articulated in terms of a collective “we” that does not identify any formal organization or institution with which it is affiliated. Informal social action can be powerful because an informal group does not have any individual authorized by the group to negotiate with outsiders. An informal group does not compromise. An informal group does not necessarily present a list of demands or a list of goals. The Occupy Movement of 2011 is a good example.
The Feb. 28 Blackout, like other boycotts, is an instrumental act of expression. Instrumental action seeks a pecuniary outcome and engages in expectation of personal pecuniary gain. Expressive action seeks to articulate values and demonstrate group solidarity and identity. Public Choice economists have demonstrated that due to the negligible impact of any one person’s vote most voters are rationally ignorant about instrumental issues in politics and instead tend to indulge their biases by voting expressively. The Feb. 28 Blackout uses pecuniary action to express vague disagreement with the current political climate.
Some people will derive expressive value from participating, and again, we can applaud the subversive and collective nature of the activity. However, the open letter calling for participation in the Blackout has no concrete objectives. The Feb. 28 Blackout seeks to make an impact in economic terms, and primarily by targeting corporate revenues on one particular day. The letter states, “Corporations have billions. Politicians have lobbyists. We have each other.”
Of course, not every corporation has billions. Many corporations fail or go bankrupt. “Business [bankruptcy] filings rose 33.5 percent, from 17,051 to 22,762 in the year ending Sept. 30, 2024. ”Among bankruptcies were household names such as Red Lobster, True Value and Tupperware.
What is meant by “corporations have billions” seems to be that there is something unfair or unjust about the distribution of corporate profits. However, those profits represent earnings from voluntary exchanges with consumers who generally benefit more from those exchanges than do the corporations. The recipients of those corporate profits include anyone who has savings stored in the stock market, banks, pensions or insurance policies. Also, among the billions held by corporations are the investments in capital, property, equipment, safety gear, intellectual property and employee training materials that all augment employee earnings.
Wherever corporations enjoy protection or privilege through regulation or tariffs, those profits represent economic rents that can involve economic harm.
The blackout will succeed, if at all, by getting a large number of people through decentralized organization to act in concert. It certainly will not have any direct economic impact, and least of all on corporations. Most participants will not fast on Feb. 28. Instead, most participants will make purchases before that day or after that day such that their total consumption for the week surrounding will not be affected at all. If firms expect the blackout to be a success they will send employees home on that day. Those most affected are likely to be those hourly employees at the margins who will suffer lost wages. This is certainly not the intention of the movement, but good intentions are meaningless to those actually affected.
The letter goes on to say with a sneer that “politicians have lobbyists.” Lobbyists inform politicians about issues and attempt to sway a politician’s vote on bills in favor of the entities those lobbyists represent. Not only corporations and businesses have lobbyists. The American Association of Retired Persons (AARP) represents one of the largest and most powerful lobbying groups in the U.S. More progressive special interest groups like the United Way and the Sierra Club also hire lobbyists. Wherever the law is vulnerable to influence lobbyists will be the influencers. Perhaps the law could be more constrained such that it was less liable to influence. That does not seem to be among the goals of the Feb. 28 Blackout, though constraining the actions of the current regime might be among the implied outcomes.
The letter also claims that “we have each other.” This places the “we” in contradistinction to corporations and lobbyists, though “we” are certainly entangled in various ways with both, and if they are culpable for anything so are “we.” But the “we” also implies a unified vision of society. That sentiment is lovely. However, the most direct route to that end runs directly through the reconciling function of markets.
“TheOneCalledJai” is well intentioned. And, if, as I understand, views on social media platforms are associated with compensation, it now also is a bit wealthier. A nice act of solidarity is always exciting and uplifting but let us not fool ourselves that it is much more than that, especially if it is not well thought out.
Nathanael Snow, Ph.D., an adjunct scholar of the Indiana Policy Review Foundation, is Assistant Teaching Professor of Economics at Ball State University and an affiliated scholar with the Institute for the Study of Political Economy. He researches the constitution of informal social groups.
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