Economist Richard Wolff on Capitalism Run Wild

Economist Richard Wolff on Capitalism Run Wild


BILL MOYERS:
Welcome. There’s hardly a sentient grown-up in this country who isn’t aware that our
economy is no longer working for vast numbers of everyday people. The rich and powerful
have more wealth and power than ever; everyone else keeps losing ground. Between 2009 and
2011 alone, income fell for the 99 percent, while it rose eleven percent for the top One
Percent. Since the worst of the financial crisis, that top One Percent has captured
the increases in income while the rest of the country has floundered. Stunning, isn’t
it? The behavior of many of those One Percenters brought on the financial crisis in the first
place. We turned around and rescued them, and now their wealth is skyrocketing once
again. At the bottom, working people are practically flat on their back. President Obama has finally
recognized they need help. In his State of the Union, he proposed an increase in the
minimum wage: PRESIDENT OBAMA:
Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time
should have to live in poverty, and raise the federal minimum wage to nine dollars an
hour. BILL MOYERS:
But as the economist Dean Baker points out this week, “If the minimum wage had risen
in step with productivity growth it would be over $16.50 an hour today.” We talk a
lot about what’s happening to the middle class, but the American Dream’s really become
a nightmare for the poor. Just about everyone has an opinion about the trouble we’re in
– the blame game is at fever pitch in Washington, where obstinate Republicans and hapless Democrats
once again play kick-the-can with the problems we face. You wish they would just stop and
listen to Richard Wolff. An attentive and systematic observer of capitalism
and democracy, he taught economics for 25 years at the University of Massachusetts and
has published books such as “Democracy at Work,” “Occupy the Economy,” and “Capitalism
Hits the Fan: The Global Economic Meltdown and What to Do about It.” He’s now visiting
professor at The New School University here in New York City where he’s teaching a special
course on the financial crash. Welcome, Richard Wolff. RICHARD WOLFF:
Thank you, Bill. BILL MOYERS:
Last night, I watched for the second time the popular lecture that is on this DVD, “Capitalism
Hits the Fan.” Tell us why you say capitalism has hit the fan? RICHARD WOLFF:
Well, the classic defense of capitalism as a system from much of its history has been,
okay, it has this or that flaw. But it quote, unquote, “delivers the goods.'” BILL MOYERS:
Yeah, for most everybody. RICHARD WOLFF:
Right. BILL MOYERS:
That was the argument. RICHARD WOLFF:
And so you may not get the most, but it’ll trickle down to you, all the different ways— BILL MOYERS:
The yachts will rise. RICHARD WOLFF:
That’s right. The ocean will lift all the boats. The reality is that for at least 30
years now, that isn’t true. For the majority of people, capitalism is not delivering the
goods. It is delivering, arguably, the bads. And so we have this disparity getting wider
and wider between those for whom capitalism continues to deliver the goods by all means,
but a growing majority in this society which isn’t getting the benefit, is in fact, facing
harder and harder times. And that’s what provokes some of us to begin to say, “It’s a systemic
problem.” BILL MOYERS:
So we put together some recent headlines. The merger of American and US Airlines, giving
us only four major airlines and less competition. Comcast buying NBC Universal, also reducing
competition. The very wealthy getting a trivial increase in taxes while the payroll tax of
working people will go from 4.2 percent to 6.2 percent. Colossal salaries escalating
again, many subsidized by tax breaks and loopholes. The postal service ending service on Saturday.
What’s the picture you get from that montage of headlines? RICHARD WOLFF:
Well, for me it is captured by the European word “austerity.” We’re basically saying that
even though the widening gap between rich and poor built us up, many of the factors
that plunged us into a crisis, instead of dealing with them and fixing that problem,
we’re actually allowing the crisis to make the inequality worse. The latest research from the leading two economists,
Saez from the University of California in Berkeley, and Piketty in France confirms that
even over the last five years of the crisis, through 2012, the inequality of wealth and
income has gotten worse, as though we are determined not to deal with it. All of those
headlines you talked about are more of that. I mean, the astonishing capacity to make it
harder for people to have a delivery of their mail on Saturday, to save what is in a larger
picture, a trivial amount of money, but that will really impact– thousands of people will
lose their jobs, everyone will lose a service that is important, particularly in smaller
places around the United States that are not served by anything comparable to the Post
Office. And then as you pointed out, and I have to
say a word about it, this amazing display in which we raise the top income tax on the
richest people from 35 percent to 39.6 percent only for those over $450,000 a year, while
for the 150 million Americans who get a weekly or a monthly check, their payroll tax went
up a whopping 48 percent from 4.2 to– this is so grotesque an inequality that you’re
watching a process that is sort of spinning out of control in which those at the top have
no limits, don’t recognize any constraint on how far they can take it. BILL MOYERS:
If workers at the bottom get the increase in the minimum wage that President Obama proposed
in his State of the Union message, they will still be faring less well than their counterparts
did 50 years ago. RICHARD WOLFF:
That’s right. BILL MOYERS:
What does that say to you? RICHARD WOLFF:
The peak for the minimum wage in terms of its real purchasing power was 1968. It’s been
basically declining with a couple of ups and downs ever since. So that if you adjust for
the current price, the minimum wage was about $10.50 roughly, back in 1968 in terms of what
it could buy. And it’s $7.25 today in terms of what it can
buy. So you’ve taken the folks at the bottom, the people who work hard, full-time jobs,
and you’ve made their economic condition worse over a 50-year period, while wealth has accumulated
at the top. What kind of a society does this? And then the arguments have come out, which
are in my profession, a major staple for many careers, are arguments that, “Gee, if you
raise the minimum wage, a few people who might’ve otherwise gotten a job won’t get it because
the employer doesn’t want to pay the higher wage.” Well, if that logic is really going to play
in your mind, then you should keep lowering the wage. Because if you only made it four
dollars an hour, just think how many more people could get a job. But a job under conditions
that make life impossible. BILL MOYERS:
Who decided that workers at the bottom should fall behind? RICHARD WOLFF:
Well, in the end, it’s the society of the whole that tolerates it. But it was Congress’s
decision and Congress’s power to raise the minimum wage, as has happened from time to
time. Even this time, not to be too critical of
our president, but when he was running for office, he proposed a $9.50 minimum wage.
Here we are in the beginning of his second term, and something has happened to make him
only propose a nine dollar minimum wage. So even he is scaling down, perhaps for political
reasons, what he thinks he can accomplish. When, if we just wanted to get it back to
what it was in 1968, it would have to be $10 or $11 an hour. BILL MOYERS:
Many economists say, “We just can’t do that because it would be devastating.” RICHARD WOLFF:
Well, the truth of the matter is that there’s an immense economics literature, I’m a professional
economics person, so I’ve read it. And the literature goes like this. On the one hand,
there may be some jobs that are lost because an employer having to pay a higher minimum
wage, will not hire people or will hire fewer. That will happen in some cases. But against
that, you have to weigh something else. If the 15 million, that’s the estimate of the
White House, the 15 million American workers whose wages will go up if we raise the minimum
wage, we have to count also, the question, those people will now have a higher income. They will spend more money. And when they
spend more money on goods and services, that will create jobs for people to produce those
goods and services. In order to understand the effect of raising the minimum wage, you
can’t only look at what will be done by some employers in the face of a higher wage in
lowering the employment. You have to look at all the other effects. And when economists have done that, economist
from a wide range of political perspectives, you know what they end up with? There’s not
much effect. In other words, the two things net each other out and so there isn’t much
of a change in the employment situation overall. To which my response is, “Okay, let’s assume
that’s correct. At the very least though, we have transformed the lives of 15 million
American working people and their families from one of impossible to get most of what
America offers, to a situation where at least you’re closer to a decent minimum life.” BILL MOYERS:
Are you suggesting then that there is no economic reason why those at the bottom should not
share in the gains of economic growth? RICHARD WOLFF:
Absolutely. There is no economic reason. And in fact, I would go further. We know, for
example, that the lower the income of a family, the more likely it is to cut corners on the
education of their children because they don’t have the resources. So here’s an unmeasurable
question about the minimum wage. How many young people who are born into a
minimum wage family, that is it’s so low as we have it today, will never get the kind
of educational opportunities, the kinds of educational supports, to be able to realize
their own capabilities and to contribute to our society? That alone is a reason, whether
you think of it in terms of the long-term benefit of the country, or you just approach
it as a moral question or an ethical question. By what right do you condemn a whole generation
of young people to be born into families whose financial circumstances make so much of what
they need to become real citizens impossible? BILL MOYERS:
You remind me of something that President Obama said in his second inaugural address. PRESIDENT OBAMA:
We are true to our creed when a little girl born in the bleakest poverty knows that she
has the same chance to succeed as anybody else, because she is an American. She is free
and she is equal. Not just in the eyes of God, but also in our own. BILL MOYERS:
That’s eloquent, but hardly true. RICHARD WOLFF:
That’s right. And it’s painful for some of us to hear that, because it is so obviously
untrue. It is so obviously contradicted by the realities, not just of those who work
at the minimum wage, but all of those who work at or even at 50% above what we call
the poverty level. Because when you look at what families like that can actually afford,
they have to deny huge parts of the American dream to their children and to themselves
as a necessary consequence of where they are put. And I don’t need to be an economist to put
it as starkly as I know how. We can read every day that in the major cities of the United
States, apartments are changing hands for $10 million, $20 million, $30 million, $40
million. People have enormous yachts that they cruise — we all see it. We all know
it. We even celebrate it as a nation. How does that square with millions of people in
a position where they can’t provide even the most basic services and opportunities? We don’t have equality of opportunity. Because
there is no shortcut. If you want equality of opportunity, you’re going to have to create
equality of income and wealth much closer to a genuine equality than anything– we’re
going in the other direction. And so I agree with you. It’s stark if our president talks
about something so divergent from the reality. BILL MOYERS:
When study after study has exposed the myth that this is a land of opportunity, how does
the myth keep getting perpetuated? RICHARD WOLFF:
Well, my wife is a psychotherapist. And so I ask her that question often. And here’s
what she says to me. Often, people cling all the harder to an idea precisely because the
reality is so different and becoming more different. In other words, I would answer
the myth of equal opportunity is more attractive, more beautiful, more something people want
to hold on, the more they know it’s slipping away. And they would like to believe that
this president or any president who says it, might somehow bring it back. BILL MOYERS:
When you say that there’s no economic argument that people should be kept at the– should
not share in the gains of economic growth, the response is, “Well, that’s what the market
bears.” RICHARD WOLFF:
Well, you know, in the history of economics, which is my profession, it’s a standard play
on words. Instead of talking about how the economy is shaped by the actions of consumers
in one way, workers in another way, corporate executives in another way, we abstract from
all of that and we create a myth or a mystique. It’s called the market. That way you’re absolving everybody from responsibility.
It isn’t that you’re doing this, making that decision in this way, it’s rather this thing
called the market that makes things happen. Well, every corporate executive I know, knows
that half of his or her job is to tweak, manipulate, shift, and change the market. No corporate executive takes the market as
given. That may happen in the classroom, but not in the world of real business. That’s
what advertising is. You try to create the demand, if there isn’t enough of it to make
money without doing that. You change everything you can. So the reference to a market, I think,
is an evasion. It’s an attempt to make abstract the real
workings of the economy so nobody can question what this one or that one is doing. But let
me take it another way. To say that it’s the market is another way of saying, “It’s our
economic system that works that way.” That is a very dangerous defense move to take. BILL MOYERS:
Why? RICHARD WOLFF:
Because it plays into the hands of those like me who are critical of the system. If indeed
it isn’t this one or that one, it isn’t this company’s strategy or that product’s maneuver,
but it is the market, the totality of the system, that is producing unconscionable results,
multi-million-dollar apartments next door to abject poverty, then you’re saying that
the system is at fault for these results. I agree with that. But I’m not sure that those
who push this notion of “the market makes it happen,” have thought through where the
logic of that defense makes them very vulnerable to a much more profound critique than they
will be comfortable with. BILL MOYERS:
You graduated from Harvard. RICHARD WOLFF:
Right. BILL MOYERS:
Then Stanford. RICHARD WOLFF:
Right. BILL MOYERS:
Then Yale. RICHARD WOLFF:
That’s it. BILL MOYERS:
Was this the economy you were taught at those three elite institutions to celebrate? RICHARD WOLFF:
No. No, this is the economy that I came to understand is the reality. For me, and I learn
things at all those institutions, it’s not that. I came to understand that in America,
economics is a split, almost a schizophrenic kind of pursuit. And let me explain. On the
one hand, there are the departments of economics in colleges and universities across America. But side by side with them is an entire other
establishment that also teaches economics. You don’t have that in other disciplines.
There aren’t two history departments or two anthropology departments, or two philo– so
what is this? I looked into this. It’s because there are two separate functions performed
by the economics departments and then by the other ones. And the other ones are called business schools
and business departments. In fact, in most universities, in all those I’ve been at, the
economics department is in one set of buildings, and across the campus in another is the business
school. And there’s actually tension in the university about who teaches the basic courses
to students that they’re required to take and so on. Here’s what I discovered. The job of economics,
to be blunt but honest, is to rationalize, justify, and celebrate the system. To develop
abstract theories of how economics works to make it all like it’s a stable, equilibrium
that meets people’s needs in an optimal way. These kinds of words are used. But that’s
useless to people who want to learn how to run a business, because it’s a fantasy. So they are shunted someplace else. If you
want to learn about marketing, or promotion, or advertising, or administration, or personnel,
go over there. Those people teach you how the economy actually works and how you’ll
have to make decisions if you’re going to run a business. Over there, you learn about
how beautiful it all is when you think abstractly about its basic principles. BILL MOYERS:
The invisible hand. RICHARD WOLFF:
Yeah. BILL MOYERS:
The market. RICHARD WOLFF:
All of that. So for me, I began to realize, “Okay, I’m an economist. I’m in that one.
But I want to understand how the real economy works.” And then I discovered that I needed
to reeducate myself. I had to go learn things that I was never assigned to read. BILL MOYERS:
After Harvard? After Stanford? And after Yale? RICHARD WOLFF:
It actually happened while I was there. I was already, there were a few people– BILL MOYERS:
–as heretics. RICHARD WOLFF:
Yes, they do. BILL MOYERS:
A few. RICHARD WOLFF:
You know, but you know, capitalism– I like to say to people, capitalism, like
all systems, when it comes into being, is born a few hundred years ago in Europe and
spreads around the world, like other systems before it. It has always produced those who
admire and celebrate it and those who are critical of it. I used to say to my students, “If you want
to understand the family who lives down the street, suppose there’s mama, papa, two children.
And one of the children thinks it’s the greatest family there ever was, and the other one is
quite critical. If you want to understand the family, do you choose only one child to
interview, or do you think it might be wise to interview both of them?” For me, I began to interview the critics of
capitalism, because I thought, “Let’s see what they have to say.” And that for me opened
an immense door of critical insights that I found invaluable. And I’ve never forgiven
my teachers for not having exposed me to that. BILL MOYERS:
But so few have done that. As you know, as you’ve written, as you have said, we’ve not
had much of a debate in this country for, I don’t know, since the Great Depression over
the nature of the system, the endemic crisis of capitalism that is built into the system.
We have simply not had that kind of debate. Why do you think that is? RICHARD WOLFF:
Well, I think we have had it from time to time. We have had some of the greatest economists
in the tradition, for example, Thorstein Veblen, at the beginning of the 20th century, a great
American economist, very critical of the system. Someone who taught me, Paul Sweezy, another
Harvard graduate. These are people who have been around and at various times in our history,
the beginning of the 20th century, during the 1930’s, again in the 1960’s, there
was intense debate. There has been that kind of thing in our history.
I mean, we as Americans, after all, we take a certain pride, which I think is justified,
we criticize our school system. We just spent two years criticizing our health delivery
system in this country. We criticize our energy system, our transportation system. And we want to believe, and I think it’s true,
that to criticize this system, to have an honest debate, exposes flaws, makes it possible
to repair or improve them, and then our society benefits. But then how do you explain, and
that’s your question, that we don’t do that for our economic system? For 50 years, when capitalism is raised, you
have two allowable responses: celebration, cheerleading. Okay, that’s very nice. But
that means you have freed that system from all criticism, from all real debate. It can
indulge its worst tendencies without fear of exposure and attack. Because when you begin
to criticize capitalism, you’re either told that you’re ignorant and don’t understand
things, or with more dark implications, you’re somehow disloyal. You’re somehow a person
who doesn’t like America or something. BILL MOYERS:
That emerged, as you know, in the Cold War. That emerged when to criticize the American
system was to play into the hands of the enemies of America, the Communists. And so it became
disreputable and treasonous to do what you’re doing today. RICHARD WOLFF:
And for my colleagues, it became dangerous to your career. If you went in that direction,
you would cut off your chances of getting a university position or being promoted and
getting your works published in journals and books, the things that academics need to do
for their jobs. So yes, it was shut down and shut off. And I think we’re living the results.
You know, if I were– BILL MOYERS:
Of the silence? Of– RICHARD WOLFF:
Yes. Of the lack of debate.
We’re living in an economic system that isn’t working. So I guess I’m a little bit like
one of those folks in the 12-step programs. Before you can solve a problem, you have to
admit you got one. And before we’re going to fix an economic system that’s working this
way, and producing such tensions and inequalities and strains on our community, we have to face
the real scope of the problem we have. And that’s with the system as a whole and at the
very least, we have to open up a national debate about it. And at the most, I think
we have to think long and hard about alternative systems that might work better for us. BILL MOYERS:
I was intrigued to hear you
say elsewhere that this is not just about evil and greed. And yet you went on to say
capitalists and the rich are determined not to bear the costs of the recent bailouts or
the crisis itself. You even go so far as to suggest, as to question their patriotism,
and that they may not have the country’s interest at heart. If that’s not greed, what is it? RICHARD WOLFF:
Oh, I think it isn’t greed.
It’s– and let me explain why. Yes, I’m critical of corporations and the rich because they
do call the shots in our society, and so that brings on them a certain amount of criticism,
even though they don’t like it. So I will do that. But beyond that, let me absolve them
in the following way. Bankers do what this system goads them to do. If you talk to a banker, he or she will explain
to you, “These are the things that will advance the interests of my bank. These are the problems
I have to overcome. And that’s what I try to do.” And my understanding, and I’ve looked
at this in great de– is that– that’s correct. They’re not telling a story. They’re doing.
They’re following the rules. They do the things that advance their interests and they avoid
the things that would damage their interests. That’s what they’re hired to do as executives
or as leaders of their institutions. And that’s what they do to the best of their ability.
So for example, I’m not enthused about arresting these people or punishing them in this or
that way. And the reason is simple, if we get, I won’t mention any names, but we get
some banker and we haul him up in front of a court, and we find out he’s done some things
that are not good. And we substitute the next one. He gets arrested
though, he gets fined, he gets removed. The next one is subject to the same rewards and
punishments. The same inducements. The same conditions. If we don’t change the system,
we’re not going to change the behavior of the people in it. So in a sense, I do absolve
them even when they are greedy, because they’re doing what this system tells them to do. And
if we don’t change the system, substituting a new crop will not solve our problem. BILL MOYERS:
You’re also not enthused about
regulation, which is what so many liberals and others are calling for now. Is there some
parallel reason for that? RICHARD WOLFF:
Yes. I find it astonishing
to hear folks talk about regulation. We regulated after every one of our great panics in the
19th century. By the way, in those years, we were more honest. We didn’t refer to a
“Great Recession.” We used much more colorful language, “The panic of 1857.” I mean, that
describes what people felt. Anyway, after every one of our panics, crises, recessions,
depressions, we have regulated. And the regulations were always defended, first by lower-level
officials and eventually by the president and the highest authorities, usually on two
grounds. “With this regulation, not only will we get
out of the crisis we’re in, but,” and there was a pregnant pause, “we will prevent a recurrence
of this terrible economic dilemma.” It never worked. The regulations never delivered on
that promise. We’re in a terrible crisis now. So all the previous promises about all the
previous regulations didn’t work. And they didn’t work for two reasons. BILL MOYERS:
Yeah, why? RICHARD WOLFF:
Either the regulations that
were passed were then undone, or they were evaded. And that’s the history of every regulation.
During the Great Depression, it was decided, as it has happened again now, that banks behaved
in an unfortunate way that contributed to the crisis. So in the Great Depression, a bill was passed,
a regulation called the Glass-Steagall Act, 1933 Banking Act, which basically said, “There
has to be two kinds of banks, the banks that takes deposits cannot make risky investments.
For that we need something separate called an investment bank. The first thing will be
a commercial bank, takes deposits, and we’ll make a wall between them.” Okay. The bill was passed. For the banks,
this was trouble. This was a problem. They didn’t like this. So they spent the first
30 years, 20 to 30 years evading it in a hundred different stratagems. Meanwhile, they began
to realize that with some work with politicians, they could weaken it. And after a while, they decided that even
better than evading and weakening, why don’t we just get rid of it? And so in the 1990s,
they mobilized, led by some of our biggest banks, whose names everybody knows, and they
finally succeeded. The Congress repealed the Glass-Steagall Act, and President Bill Clinton
signed the repeal. BILL MOYERS:
It was a bipartisan repeal. RICHARD WOLFF:
Right. It’s a joke. That
allowed the banks to make risky bets with their depositor’s money. Eight years later,
our financial system collapsed. It’s like a joke. This is a system that creates in the
private enterprise a core mechanism and a logic that makes them do the very things that
need regulation and then makes them evade or undo those regulations. BILL MOYERS:
You probably saw the recent
story that Facebook, which made more than one billion dollars in profits last year,
didn’t pay taxes on that profit. And actually got a $429 million rebate from you and me
and all those other taxpayers out there. GE, Verizon, Boeing, 27 other corporations made
a combined $205 billion in profits between 2008 and 2011 and 26 paid no federal corporate
income tax. What will ultimately happen, Richard if the big winners from capitalism opt out
of participating in the strengthening, nurturing, and financial support of a fair and functioning
society? RICHARD WOLFF:
Well, the worst example I
just learned about a few days ago. And I got it actually from Senator Bernie Sanders from
Vermont. That during the very years 2009, ’10, ’11, that the federal government was
basically bailing out the biggest banks in the United States, they were busily establishing
or operating subsidiaries in the Cayman Islands, in the Caribbean, in order to evade taxes. And it’s a wonderful vignette in which the
very government pouring money to salvage these private capitalist institutions is discovering
its own revenue from them being undone by their evasion of the regulations about income
tax by moving to Cayman Islands where the corporate tax is zero instead of paying their
corporate tax in New York or wherever they’re based. BILL MOYERS:
Your assumption that runs through
your books, through your teaching, through this very interesting DVD, is that democracy,
theoretically if not practically, but you hope practically, acts as a brake, B-R-A-K-E,
a brake on private power and greed. And it’s clear that that brake doesn’t work anymore.
That it’s not slowing down the growth of power to the capitalist class. RICHARD WOLFF:
Right. And I think it’s very
poetic here in the United States. In the 1930s, when we after all had a crisis even worse
than the one we had now by most measures, higher unemployment, and greater incidents
of poverty and so on, we did still have a political system that allowed pressure from
below to be articulated politically. We had the greatest unionizing drive in the
history of the United States, the CIO. We had strong socialist and communist parties
that work with the CIO, that mobilized tens of millions of people into unions who had
never been in unions before. And they went to the power structure at the time, President
Roosevelt as its emblem. And they said, “You have to do something for
us. You just have to. Because if you don’t, then the system itself will become our problem.
And you don’t want that. And many of us in the union movement don’t want it either.”
Although some of the Socialists and Communists might have been quite happy to go that direction.
And I think Roosevelt was a genius politician at that time. He understood the issue. He went to the rich
and the corporations of America, the top, who had become very wealthy at that time,
and he basically said to them, “You must give me, the president, the money to meet at least
the basic demands of the massive people to be massively helped in an economic crisis.
Because if you don’t, then the goose that lays your golden egg will disappear.” And he split the corporations and the rich.
Half of them were not persuaded. And I believe they represent the right wing of the Republican
Party to this day. But the other half were. And they made the deal. And so we had this
amazing thing. Politics, the threat of the mass of people from below to politically act
to change the system led us to see something we’ve almost unimaginable today. A president, who in the depths of the Depression,
creates the Social Security System, giving every American who’s worked a lifetime of
65 years a check for the rest of their life every month. He created unemployment compensation
to give those millions of unemployed a check every week. And then to top it off, he created
and filled 12.5 million federal jobs because he said, “The private sector either can’t
or won’t do it.” So in the midst of a terrible depression,
when every level of government says, “There’s no money,” Mr. Roosevelt proved there is the
money. It’s just a question of whether you have the political will and support to go
get it. And when people listen to me explain this history, and it’s always amazing to me
how many Americans kind of never got that part– BILL MOYERS:
Don’t know it. RICHARD WOLFF:
But when I do that, and they
say, “Well, that’s a very risky thing for a politician to do, support the mass of people
by taxing the rich, unthinkable.” And then I remind them, Roosevelt is the most popular
and successful president in American history. Nobody had ever been elected four times in
a row before that. And it was so upsetting to the Republicans
that after Mr. Roosevelt died, they pushed that law through that gives us a term limit
of two presidential terms. So it wasn’t the end of his political career, it made him the
most powerful popular president we’ve ever had. There must be a lesson here somewhere. BILL MOYERS:
Well, it was one of the few
times in history in which the political elite and a few financial elite formed an alliance
for the people. RICHARD WOLFF:
Right. BILL MOYERS:
And yet, Richard, it still
took the war the create the spending that pulled us out of the depression, right? RICHARD WOLFF:
Right. Because they were
always large groups of corporations and the rich who were angry at all of this, like they
are today, who didn’t want to pay higher taxes, much higher than corporations pay today, who
didn’t want to pay high personal income tax rates, much higher than they are today. But
they had to. Right, people don’t remember in 1943, President Roosevelt proposed a top
income tax bracket of 100 percent. BILL MOYERS:
Yeah. RICHARD WOLFF:
His bill that he sent to
the Congress, a proposal, was that anyone who earns over $25,000, which would be roughly
$350,000 a year now, in current dollars, would have to give every nickel of it, beyond the
$25,000, to the government, 100 percent. That’s maximum income. The President of the United
States, with massive popular support. And when the Republicans said, “No, we can’t do
that.” They fought. And the compromise was a 94 percent top rate. RICHARD WOLFF:
Compared to the 39 percent,
and .6 percent that we have today. I mean, you can see there that that– that was a lesson.
That I believe the corporations and the rich in America have learned. They saw that they
were forced between two choices. A real revolutionary possibility, or a compromise. They voted for
the compromise. They gave the mass of people real support, far better than anything they’re
getting now. And they did that because politics was a real
possibility to undo their economic system. After the war, I think our history is the
history of a destruction of the Communist and Socialist parties first and foremost,
and of the labor movement shortly thereafter. So that we now have a crisis without the mechanism
of pressure from below. And that may look to those on top as an advantage because they
don’t have that problem. They don’t have a C.I.O. They don’t have Socialists
and Communists, the way they do in Europe. But I think it’s a Pyrrhic victory, because
what you’re teaching the mass of the American people is that politics, debate, and struggle,
is a dead end. And if you think people are just going to sink into resignation, that’s
wishful thinking. They’re going to find other ways to protest against the system like this,
because the pressures are building in that direction. I think this is a capitalism that
I would say has lost its sense of its social conditions, its social limits. It’s killing
the mass support without which it cannot survive. So it is creating tensions and hostilities
that will take left wing, right wing, a variety of forms. But it’s producing its own undoing
and doesn’t imagine it because it focuses so much on making more money in a normal way
of business that it somehow occludes from itself. It doesn’t see the larger social conditions
and what its behavior is doing to them. BILL MOYERS:
For a moment, wasn’t there
kind of quirky or eccentric symbiosis between the Tea Party and Occupy Wall Street? That,
’cause in their own different ways, they were reacting to the colossus that was coming apart
all around them. And upending their lives. RICHARD WOLFF:
Absolutely. I think in country
after country going through this crisis, you’re seeing more or less the same thing. A upsurge
of right wing agony and hostility and opposition to what’s happening in this capitalist system
and a left wing one. But only difference from country to country is the balance between
the two. And I think the Tea Party comes first because
being a right wing party in this country’s much easier, much more socially acceptable
to form, and there’s the old roots of it, anyway, in the John Birch societies and all
the rest in American history. So we have a Tea Party resurgence. Then echoed a couple years later by the Occupy
Wall Street, which is a left wing response to all of this. And I don’t think we’ve seen
the end of either of these. I think these were the first explosions of this process,
the first reflections and signs of a society coming apart because capitalism can’t deliver
the kind of society and results that people want. And I think we’re going to see more
of it and there may be difficult forms of it. But it is part of a system that has come,
I think, closer and closer to its historical if not end, then a severe crisis. BILL MOYERS:
But there is no agitation here. People seem not to know what to do here. RICHARD WOLFF:
I think Americans are a little
bit like deer caught in the proverbial headlights. They thought that they were in a society that
kind of guaranteed that each generation lives better than the one before. That the American dream gets better and better
and is available. They promised when they got married to one another to provide the
American dream to each other. And then they promised their children to provide it to them,
that the children would have a good education, that children would have the opportunity.
They can’t quite believe that it’s not there anymore. You know, for 30 years, as the wages in America
stopped rising since the 1970s, Americans reacted by doing two things. Because they
couldn’t give up the idea that they were going to get the American dream. How do you buy
the American dream, which becomes ever more expensive, if your wages don’t go up, per
worker, per hour? Which they haven’t since the ’70s. The first thing you do is send more and more
people out to work. The women went out in vast numbers. Older people came out of retirement.
Teenagers did more and more work. Here’s a statistic. The OECD, leading agency gathering
data on the world’s developed economy shows that the average number of hours worked per
year by an American worker is larger than that of any other developed country on this
planet. We work ourselves like crazy. That’s what
you do if the wages per worker don’t go up. You send out more people from the family in
order to be able to get that American dream. But of course if you do that, everybody’s
physically exhausted. The stresses in your family become more powerful.
What’s happened to American families is a well-known result over the last 30 years.
But the other interesting thing, to hold onto the American dream that Americans did when
their wages didn’t go up anymore, was to borrow money like it’s going out of style.

You cannot keep borrowing more and more if your underlying wage is not going up. Because
in the end, it’s the wage that enables you to pay off what you’ve borrowed. And it was
only a matter of time, and 2007 happened to be that time, when you couldn’t do it anymore.
You couldn’t borrow anymore because you couldn’t pay it back. And so you stopped your mortgage or you stopped
your credit card payment or you couldn’t make your car payments. And this is a situation
that explodes the expectations of a good life. And I think Americans are stunned. And they
haven’t yet kind of gotten their heads and their arms around the reality they face. And
so what– we see people in shock, if you like. I mean, I’m stretching the metaphor, but– BILL MOYERS:
That’s all right. RICHARD WOLFF:
The American dream that they
thought they could access, that they were told they could access, if they just worked
hard or went to school or both of the– it’s not there. A whole generation of young people
is learning that in order to get the education, without which the American dream is not possible,
you have to borrow so much money that your whole situation is put in a terrible vice. Then you discover, at the end of your four
years and you have your bachelor’s degree, that the job you had thought you were then
entitled to and the income you thought would go with it, they’re not there. And yet you
have the debt, the effects of this on our society, not just for the young people confronting
it daily, but for the parents who helped them, who led them to expect something, that is
producing a kind of stasis, immobility, shock. But beware, if my psychiatrist wife is right,
as she usually is, what happens after that period of stasis, of shock, is a boiling over
of anger, as you kind of confront what has happened. And that you were deceived and betrayed
in your expectations, your hopes. And then the question is, where does that go? BILL MOYERS:
I’m struck by the fact that
you give a fairly dire– not fairly, a dire analysis of what’s happened to us in the last
several years. But at the end of both your book and of your lecture, you don’t wind up
cynical or pessimistic. You– RICHARD WOLFF:
Not at all. BILL MOYERS:
You sound like you’re saying,
“Let’s take to the barricades.” RICHARD WOLFF:
Yeah. I think there’s a wonderful
tradition here in the United States of people feeling that they have a right, even if they
don’t exercise it a lot, to intervene, to control. There is that democratic impulse.
And I put a lot of stock in the hope that if this is explained, if the conditions are
presented, that the American people can and will find ways to push for the kinds of changes
that can get us out of this dilemma. Even if the political leaders who’ve inherited
this situation seem stymied and unable to do so. BILL MOYERS:
Richard, I want you to come
back in a few weeks. Before you come back, I want to alert our of readers of our website,
have them submit some questions. You’ve opened so much of it, I know they’ll have some questions. RICHARD WOLFF:
Well, I’ll– BILL MOYERS:
But I’ll bring them here and
we’ll deal with this. ‘Cause I know you have some alternatives, that you’ve given a lot
of thought to the critique, but you’ve also given a lot of thought to the correcting of
our system. And will you do that? RICHARD WOLFF:
I would love to, because
one of the things that has happened to me in the last two years is as we’ve developed
the criticism and people see the process of how we got here, the most insistent questions
is, “What do we do? Where do we go? If regulation isn’t the solution and if punishing this one–
if it is a systemic process, how can we conceive and talk about an alternative system?” BILL MOYERS:
Richard Wolff, I’ve really
enjoyed this conversation. The DVD is “Capitalism Hits the Fan.” And the book is “Democracy
at Work: A Cure for Capitalism.” Thank you for being with me. RICHARD WOLFF:
Thank you, Bill, for the
opportunity.

100 Comments on "Economist Richard Wolff on Capitalism Run Wild"


  1. The oft-repeated statistic: "If wages had kept pace with productivity increases, the minimum wage would be such-and-such" neglects the fact that those productivity gains were won with contributions from new sectors of the economy, the software and information technology industries. If all the gains had gone to labor, there would be no funds available for the creation of those new sectors of the economy. Investments were made into IT because those investments produced productivity gains. If additional investments in labor brings increased productivity, then industries will invest more in labor.

    We see in this conversation an assumption that we can continue to rely on economic growth as a foundation of economic justice. Perpetual growth is not possible. We should start acknowledging this fact and change our system accordingly.

    People concerned about disparity and poverty should join a call for equal sharing of natural wealth.

    Equal sharing of Natural Resources promotes Justice and Sustainability:
    http://gaiabrain.blogspot.com/2011/06/golden-rule-and-public-property-rights.html

    Reply

  2. Jewish own the fed federal reserve the bank of America goldman sac and all your banks in America European creece spain a and the bank of England all Jewish owned. They own nbc cnn fox news all your media companies your book shops your anti christian Hollywood all Jewish run ,the porn industry satanic Jewish run your electricity and water company's you are a slave to the Jewish run people.

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  3. Thank you for the comments I hope all people live a happy life christian Jewish Muslim Hindus all people but look at the banks media new Hollywood they make people slaves the banks do and Hollywood is anti christian , I want All people around the world to be free and not debt slaves, I do not want you a slave to the Jewish run Rothschilds and I hate war .

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  4. thank you richard. i was talking to ancaps all day and was beginning to hate humanity

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  5. The professor is right. That is what happened to Cuba. It was 100% Capitalist with no social program to help the lower masses so that is how the Cuban Revolution broke in 1959 on July 26.. I pray that will never happen in the USA but if the elite get greedy o they open the door to revolt. The same happened to the French in 1789.

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  6. Around 10:20 he asks us to imagine a minimum wage family… let that sink in… a couple decided that in spite of the fact they can barely keep their own lives afloat, they want to introduce additional financial burdens by having children. I swear, if low IQ people weren't allowed to breed, there wouldn't be a single Marxist alive making dumb arguments.

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  7. Although I am a growing fan of Wolf he fails to address the biggest flaws of marxism and that is there is no instance of note that exemplifies a marxist implementation that allows criticism. Thereby allowing marxism to manifest its worst traits. The day he addresses this then there maybe some hope of getting better traction on the subject. Minute 42 is the it.

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  8. Nâng lương căn bản lên để người dân có tiền để người dân có tiền mua. Song song đó nó có thể giúp nền kinh tế cải thiện hơn.

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  9. Yes, capitalism is designed so that it fits the rich capitalist class who exploit the workers. Its just like slavery, but just slightly polite.

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  10. This guy is impossible to understand in Amurica……….he's a so called Socialist.must be nuts. On the other side of greed.

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  11. If you earn less than $500,000 and vote Republicon, you're voting against yourself and your chances of success in the U.S. economy.

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  12. The one percent not only are greedy but selfish and even cruel in the gross share of total income. Most of us know what history teaches whenever a handful at the top get all the fruits the majority will ultimately rule. FDR warned the one percent just before the historical doom but today the one percent squeeze even tighter. History will repeat not maybe but when? It's coming…

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  13. Your full of shit , since more socilsism bigger government . Private sector shrunk since the 70 s . Happen in Australia under gough

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  14. What boggles my mind is that people stay in dead in jobs because they THINK they cannot do better, but one look at a jobsite, or classifieds says so differently. So many middle class positions available. Having a socialized society is so much easier to explain to those at the top subsidizing those at the bottom when those at the bottom have the common cause of bettering themselves and improving the society around them. The bottom rung of society isn't even capable of mowing their grass or painting their houses let alone seeking better opportunity. Weird twist that what motivates immigrants holds naturals back.

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  15. Wolff for president! Let's start a new people's party with people like Wolff on the helm and really drain that swamp of ours!

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  16. Maybe the story of Cain killing Able is about a disagreement about what is valuable. The approval of God was the valuable thing, which Cain could not get! God did not explain what solution might be available to Cain. Cain got angry and killed the competition. God did not explain what the rules were? He never said, "What I want is animal sacrifices!" Could this be the fault if God? God does what he wants.

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  17. The "brake on greed" does not work, because the rich are global greed citizens. At least Trump is willing to do the job, whereas others just avoid patriotism. This is why no one really worthy ran for President. The rich chose to be patriotic to a wealthy elite on a global basis.

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  18. Copyrights and patents need to be limited when abuse causes excessive enrichment. One danger is the artificilal intelligence with become a corruption of the economy to help elite stay "King of the Hill" and rolls down rocks on the poor.

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  19. He talks about the US as if it is the whole continent. He calls it "America". Maybe he does not know much about geography.

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  20. If you are not in that 1% and still think the capitalist system works for you then you have consumed far too much of the KoolAid to be helped.

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  21. there must be a law which bans americans from investing outside the country, no off-shore tax avoidance, all money earned there must stay there.

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  22. “That's why they call it the American Dream, because you have to be asleep to believe it.” – George Carlin

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  23. How sad it is that Professor Wolff had to wait until retiring from the faculty at the University of Massachusetts before being able teach a version of economics that attempts to describe the real world rather than the world according to the neoclassical "two-factor" model. I have spent some time reading what he has written and listening to his lectures and interviews. He is certainly correct that the causes of income and wealth concentration are systemic. Where there is great room for discussion and debate is over the exact nature of the systemic problems. His guide is Karl Marx. My primary guide is Henry George. Henry George did a remarkable job of analyzing and correcting the analytical contradictions in the works of his predecessors (e.g., Smith, Ricardo, Turgot and even John Stuart Mill) in order to develop a closed system of how wealth is produced and distributed back to the factors of production, as well as what systemic laws and policies are required to lead to a full employment society with a just distribution of wealth.

    Edward J. Dodson, Director
    School of Cooperative Individualism
    www.cooperative-individualism.org.

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  24. Good to see Richard Wolff getting grouchy about the status quo on Jimmy Dore's youtube Show! just out

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  25. I really like the sound of the interviewer's voice. It sounds so deep, but wise at the same time. Like a wise wizard of some kind.

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  26. Everything bad he describes, is done by the government. And even he admits that. Yet you people blame the "free" market. It's mind boggling.

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  27. To pay for increased government spending, in 1941 Roosevelt proposed that Congress enact an income tax rate of 99.5% on all income over $100,000; when the proposal failed, he issued an executive order imposing an income tax of 100% on income over $25,000, which Congress rescinded.[293] The Revenue Act of 1942 instituted top tax rates as high as 94% (after accounting for the excess profits tax), greatly increased the tax base, and instituted the first federal withholding tax.
    https://en.wikipedia.org/wiki/Franklin_D._Roosevelt

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  28. I'm 63 now 2018. I really feel I'm living the 30s depression in my second half of my life lately

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  29. US Capitalism is a combo whore house/credit card. The markets are inflating, debt is exploding, and the meltdown will be AWESOME. Hahahahaha

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  30. Capitalism is a very evil system period. The capitalistic system rob from the average citizens and gives money to the Rich and Rich Corporations period That what capitalism is. It has not worked and it will not work that what happened in 1929 and 2008 capitalism destroy the United States of America It survive because it stole money from the average citizens to help capitalism to keep going. Only Democratic – Socialism will works that is the answer

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  31. prof wolff makes a beatifull presentation credible to those the reality of the real free entreprise system i i am an oconomist i am 9o years of age  i spent all my life in theindustry idid business in all the world  i knowwhy our sysem has some difficulties and what has tobe done i would like to confront him and othe economists

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  32. This man is as economically minded as Marx. Minimum wage doesn't work. It only creates inflation – the government can't raise the value of labor. The lesson is don't be worthless in the job market. There is nothing moral about a third party with a gun interfering in a mutual agreement between 2 consenting parties. Minimum wage forces business to cut hours and increase demand for productivity to survive. This dumb regulation is especially punishing for young adults and the future of the society. This policy always hurts the most vulnerable in society. The business owner can't hire more people so he will always go for the more competent and more people will be left behind. Minimum wage is am insane idea.

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  33. Why aren't they mentioning behaviour economics. It's a reality, our stinking species is still stuck on self interests and savagery towards one another.

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  34. Dr. Wolff you are a true revolutionary because you speak truth to power. You are also and example to those of us who hate the system of economic, and, by extension, political tyranny that shrivels our souls.

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  35. This video has given me a better understanding of the political situation the US is in today. Thank you.

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  36. " CAPITALISM is the one perfect, self sustaining system to ever exist. Only government regulations hinder capitalism from allowing all nations to settle into their natural position and enrich every person in every society connected to the market".
    Karl Marx, 'Dast Kraputnicz'. Okhrana Publishing, 1881
    Yeah, those billionaires would be better at sharing if they didn't have legal obligations to do so.

    (SaRCaSM)

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  37. …. yeah and you can thank the gridlock from the republicans and the comprising corporate democrats with Nancy Poloski and now after the November 2018 elections get set for a so called "blue wave" of the same old same old with current corporate democrats ….

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  38. If 10% has all, who are they going to sell something to? Capitaiism should work for all, not a few! Very high minimum wage leads to more efficiency and products and services at a higher level: that is exactly what developed countries need!

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  39. High consumption tax pushes up cost to live , Australia has high consumption tax up to 23% on goods ,up to 51% tax on new cars

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  40. With respect to Dr. Wolfe, Bill Moyers, and Noam Chomsky it may be said with at least partial truth that "a prophet is not without honour save in his own country."

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  41. Capitalism is, win-win, but we don't all win equally. Socialism is state wins, everybody else lose's, but everyone else lose's equally.

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  42. Professor Wolff is brilliant but doesn't understand that, with our current system, federal spending and federal taxation are completely divorced from one another. We're a free floating fiat currency and have been since 1971. Spending or appropriations are funded by fiat, taxes has nothing to do with it.

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  43. Does anybody else notice that he only bitches around about capitalism and doesn’t offer any solutions?

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  44. 9 bucks minimum wage? lol, in france it's 11 euros. Makes 12 dollars. american dream indeed

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  45. omg is that means corporation if pays tax about 20%,they owe united states govt about 40 billion dollars to the system!! I pay 40% in taxes,corporation pay zero taxes!! what is the govt and inland revenue doing? what are the politician and rulers doing? omg I think muslims and immigrants are coming!! run sir run we are under attack run sir run terrorist are just round the corner,watch out for them,spy on ur collegues they r ur hidden enemies……I love America and Europe with all the warts and sypillis….

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  46. I call this kind of discussion millennial enlightenment, which is most desperately we need for our future.

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  47. This was 5-6 years ago, .. today the real economy is even much more difficult….
    EVERY AMERICAN SHOULD AND MUST LISTEN TO THIS
    Oh Boy! … We Must elect BERNIE SANDERS………..
    This is really serious……..

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  48. Tell everyone to STOP BUYING ANYTHING! Stop buying,especially from corporations!! Stop buying!

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  49. This interviewer, Bill Meyers, is the way all interviews should be done: ask a question, and listen, and let the other speak without interrupting! Thank you, Mr Meyers!

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  50. What will it take for the poor and working class to raise the pitchforks for seriously? Do we really want it to end like the French or Russian revolutions….

    Reply

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