Economic Update: Capitalism and Mental Health

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[S9 E37]

This week on Economic Update Professor Wolff delivers updates on the ICE raid in Mississippi, global comparisons of gun violence and conservatives’ reactions to Democrats’ proposed wealth tax ideas.

In the second half of this week’s show, Professor Wolff Dr. Harriet Fraad on how capitalism is affecting mental health in the U.S.

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Transcript has been edited for clarity.


Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives: jobs, incomes, debts. I'm your host, Richard Wolff.

I want to begin today's program to talk to you about the Koch Foods company – that's right, Koch, as in the Koch brothers – one of their many, many industries that they own. And in particular, Koch Foods operates poultry processors. That's a nice phrase for ripping the feathers off of chickens, and so forth and so on. These plants that they run are in Mississippi, particularly in the town of Morton, Mississippi. And in early August, the ICE people, immigration folks, staged the greatest raid in American history against immigrants. They rounded up 600 to 700 immigrants working in those poultry-processing plants. Let me give you the picture of what happened here. Six hundred agents of ICE – that's an awful lot of people – got together, with helicopters, they were wearing black body armor, they were carrying guns, the staging area was a local National Guard base. Wow. 

What was this for? It was to arrest people on the job. It meant that those people's children either watched all of this or had no parents when they were expected at home. It separated people from one another. It terrified everybody, which clearly was part of its purpose. You could have arrested those people, if indeed you felt you had to, on a weekend, or in their homes, or in the evening. You could have made arrangements so it wouldn't terrify the children – all of the things a sane, decent human being would understand. 

But it is much worse than that. In this made-for-TV ICE raid – to placate, perhaps, the president, or maybe his election base, who knows – here's what we found really stunning: The employers of these 600 undocumented, or allegedly undocumented, immigrants weren't touched. No employer was arrested, no employer was taken into custody, no employer was affected at all. Their problem was to go find replacements for the people who no longer work there. Needless to say, these are some of the worst working conditions, and the lowest-paid jobs, you can imagine. Of course the employer knew. The claim that the employer didn't know that these were undocumented immigrants is as believable as is the person who's trying to sell you the Brooklyn Bridge. But we're supposed to believe this sort of nonsense. I guess that's what patriotism requires of us.

Why do employers want undocumented workers? The answer is simple: because they are afraid to do anything. You don't pay them on time, they're not going to go to the police and complain. You don't pay them at all, they're not going to go. They'll come back next week, and hope next week they will get paid, because they're terrified and they're terrorized, which is what this is all about. Eric Schlosser, the famous author of Fast Food Nation, wrote an article in The Atlantic Monthly, dated August 16th. If you have a chance, take a look. He documents that raid, and all that it means, in full, gory detail. The word "shame" is not strong enough to describe what is going on.

I want to turn next to another specialty of our day: guns. And I want to report to you from the center, it's called the Institute for Health Metrics and Evaluation, maintained by the University of Washington – Washington State in the Northwest. They keep track of gun deaths per hundred thousand of the population across the world's countries. The United States has the following: 4.43 gun deaths per hundred thousand American citizens as of 2017, the latest year for which data are available. Let me give you an example. If the United States has 4.43, what is the rate in China and Japan? Ready? 0.04.  Let me stress: That's 100 times less of a rate of gun deaths per hundred thousand people. Canada – a place rather like the United States with lots of people who have guns – how many gun deaths do they have? Again, we in America have 4.43, the Canadians 0.47 – one-tenth the rate of the United States. Let me give you the names of two countries that also have less gun deaths per hundred thousand than we do. One is Afghanistan, and the other one is Iraq. Here's the statistic: Afghanistan 3.96. They're getting close to us, but they still – in a country that is war-ridden for the last umpteen years – they still have fewer gun deaths per hundred thousand. And in Iraq it's 3.54 – close, but still less than what we have in the United States. In Britain 0.06, Denmark 0.15. Here are some countries that have higher rates of gun deaths per hundred thousand: El Salvador, Honduras, and Guatemala. In El Salvador 43.11 –that's 10 times worse than the United States. That, of course, is why those people are coming to the United States, to escape a level of gun violence that ought to make us welcome them seeking safety, but of course, you know what we do instead.

My next update has to do with how conservatives in America are responding to the proposals of some of the Democrats running for president, particularly Elizabeth Warren and Bernie Sanders, to tax wealth in the United States. Oh, they are getting their passions riled up about it. Let's take a look. I'm going to focus on Elizabeth Warren's plan because it is the most clearly and worked-out of detailed plans. Here's her plan: She would require an annual two percent tax – two percent – on all portfolios, or all net-worth individuals, who have (get ready, now) more than $50 million. So a lot of you listening and watching can relax, because Elizabeth Warren is not after you. If you have $50 million or less, none of what I'm about to describe to you will affect you. You're not part of the story. Ah, and how are they going to be taxed? Two percent of what they have above $50 million – the first $50 million nobody gets taxed, including these wealthy people, only what you have in excess of $50 million – will be subject to a two percent tax. And if you have more than $1 billion, you will be subject to (get ready) a three percent tax per year. Okay, how many families in America are going to be affected by this tax? Answer: 75,000 families. That's in a population of 325 million people. I did the arithmetic. Here's the percentage of Americans that will be affected (ready?):  0.0002. Wow. 

How could you get really excited about this if 99.99999 percent of the people are not affected by this tax? Well, our conservatives – ever ready to defend the 0.0002 percent – are on the job. This tax will raise, over 10 years, $2.75 trillion of revenue. You'd be able to solve many of the most egregious problems of American society. Wow. You could help 325 million people by taxing (ready?) two percent of the money owned by people who have more than $50 million, leaving them, of course, with 98 percent of what they had. They would still be the richest people in the country. But the conservatives are apoplectic. One of them on Fox News recently referred to this as a confiscation tax. They're taxing our property. That is awful. That's my property. And you know something? It's even worse than awful because I already paid an income tax when I earned that money. And now I used it to buy property and they're going to tax my property. Isn't that awful? And to go even one more step, they said, you know, over 10 years, you multiply 10 years times two percent a year, that's 20 percent of my money. They really got excited. 

So let me respond, because their excitement is based on a level of ignorance which is so enormous that I don't really believe it. I think they know better, but they think we don't. So I want to deal with that. Let's start. Taxing twice: You're right. You are taxed when you earn your income, and then if you buy certain kinds of property, you're taxed again. One is a tax on income, and the other one is a tax on property. But there is nothing new and nothing exceptional about this. Let me give you an example. If you earn money, you pay an income tax. Suppose you use that money to buy a home. Guess what. There's a property tax on your home in the town where you live. So you paid income tax, and then you pay a tax on your property. That's not new, and that's not exceptional. What are you screaming about, Mr. Conservative? There's nothing new here. If you earn money, you pay an income tax. If you then buy a car, you pay a property tax on that car. Once again, income tax and then property tax.

Ironically, what the conservatives don't want you to know is that there is a kind of property that doesn't pay a property tax in the United States. You know what it is? It's property in the form of stocks and bonds. In every community in America they tax land, they tax buildings, they tax automobiles, but they do not tax stocks and bonds. It's the one kind of property that is exempt, through the history of the United States, most of it. Wow. The fact is, it's a highly unjust system, this property tax. It taxes cars, homes, and land. That's the property average people sometimes have – at least a better half of them, in terms of income. Ten percent of the people own 84 percent of the shares of stocks and bonds. They're the ones escaping from a property tax on the property they're rich enough to own. And Elizabeth Warren and Bernie Sanders are going after that, which should have been done 100 years ago. There's nothing new and nothing confiscatory about it. If you're really worried about confiscating property, you should have been complaining about the tax on homes, and the tax on cars, which you conservatives carefully avoid doing.

And now the funny joke about multiplying 10 times two, and – I'll give it to the conservatives, it adds up to 20, you're right. But what you forgot to remember is the wealth grows each year. It's two percent, but not of the same amount. It's two percent of the wealth as it grows. And two percent is a lot less than they're going to make, because if you have this kind of money, you hire a hedge fund to manage it for you. By the way, you know what hedge funds charge rich people like this? Two percent a year of the value of their assets, plus 20 percent of how much it goes up. It's called the two-and-twenty rule. So rich people are used to paying two percent a year to their hedge-fund manager, plus 20 percent. The government is only coming and asking for two percent, not 20 percent of what it goes up. So the joke is, it's a fake. They don't want to pay the tax. That's all that's going on. Rich people don't want to pay the tax, which should come as hot news to nobody.

All right, folks, we've come to the end of this first half of Economic Update. I want to remind you, please, to become a subscriber to our YouTube channel. It's very, very important for us, it's just a click of the mouse for you, and it changes our situation, and it supports what we do. I also want to invite you, as we always do, to make use of our websites: democracyatwork.info or rdwolff(with two F's).com. Through those websites you can communicate to us, with email, you can follow us on Facebook, Twitter, and Instagram. And of course, and this is so important, our special thanks and appreciation to our Patreon community. Patreon.com, Democracy at Work, Economic Update, this program – your support means the world to us, and we thank you for it. Stay with us. We'll be right back.


Welcome back, friends, to the second half of Economic Update. I'm very pleased to be able to welcome again Dr. Harriet Fraad. She is a health counselor, mental health counselor, in private practice, a hypnotherapist in New York City. You can find her work, which you're familiar with if you watch or listen to this program, at her website harrietfraad.com. Recently she has begun to produce a bimonthly podcast called Capitalism Hits Home. I think you'll find this kind of work that we will be talking about available on that podcast, and we urge you to take a look at it. It is available on itunes, Google Play, and at our website democracyatwork.info. If you'd like to support it, please go to patreon.com/capitalismhitshome. 

RICHARD WOLFF: Welcome again.


RICHARD WOLFF: I want to ask you about the relationship between capitalism, as an economic system on the one hand, and our mental health. Even though it's a bit odd, let me quote our dear president, Mr. Trump, who in defense of his advocacy for guns everywhere, and as many as possible, and doing the work of the NRA, explained that the recent horrible shootings are not about guns, but are actually about mental health. He thought thereby to defend himself and his record, even though it implies for the rest of the world that the United States' problem, which they thought was bad with guns is actually much worse because we have such a mental health that we have 10 to 20 to 30 times the amount of gun violence, apparently because of our mental health. But putting that aside, there is a serious relationship between the two. So I'd like to explore with you how capitalism as a system shapes, influences, the mental health of the American people. And to focus us, I want to talk about two parts of capitalism: the goods and services that are produced in the employer-employee relationship that we're all familiar with in a factory, the office, the store, on the one hand, and the other part of capitalism: the buying and selling in markets that we do with the products of our goods and services, where we buy and sell with one another. The market, in short. So let me begin by asking if you could tell us a little bit about what mental health is, and then begin to explore how capitalism, as a system, affects it. 

HARRIET FRAAD: Oh, what mental health is among human beings is connection. We're herd animals. We're never supposed to be all alone. That's why solitary confinement is the worst possible torture, and the worst possible punishment, banned by civilized countries. In any case, people depend on connection. There's a table of connection. The first leg is intimate connection. It could be with a lover or a husband – emotional connection not necessarily present with a husband or a lover or a wife – or it could be with the best friend to whom you really can confide, and who will stop what they're doing and hear you if you need them to, or a relative who has that function in your life. That's one leg of the table. A second is a series of friendly acquaintances, people with whom you connect, either because you go to a dance class together, you're on a team together, you're working on a PTA, working on a blood drive, you both work on a political campaign. There's something that joins you in a friendly and purposeful way. Another one is connection to a wider circle, a feeling of being connected to your community, being connected to your city, to your country. And the fourth is being a world citizen, having a sense that I am part of this world. So if climate change is happening, and drying up places that are flooding, and so I'm part of that. I have to face that. I am a world person. 

RICHARD WOLFF: So you're connected intimately, acquaintance-wise, community, and world.

HARRIET FRAAD: Exactly. And capitalism . . .

RICHARD WOLFF: So if I can just push you a little bit. So if you're cut off from these connections, is that when a mental health problem surfaces?

HARRIET FRAAD: Absolutely. Psychosis, which means insanity, happens when people lose even the social connection of language, and they just speak entirely with their own meaning system, which is undecipherable by anybody else. They even lose language, the basic way we have of connecting ourselves to other people. And in a brief study that I did over three months of mass shootings – and there is now one every day; there has been one every day in 2019, and I haven't kept up with all them – but the shooters are mainly Millennials between 23 and 28, they're all men, and they've lost a connection. They've either lost a romantic relationship, or they've lost a job, usually, both of which are things that connect them to other people and to the world. For a man, the two important connections are a woman and work, employment. And so they've lost primary connectivity.

RICHARD WOLFF: And that in some sense . . .

HARRIET FRAAD: . . . makes them feel enraged, and unmoored, and fosters the kind of mental illness you have to have in order to kill people you don't even know, just go in and mow them down. But you also need a kind of alienation from other people, and how does capitalism fit in there? Well one of the key things that allows people to feel healthy and connected is equality. And we are now the most unequal nation of all the wealthier nations. When you have advertising everywhere you look, ads that are lying to you and you know it, you lose trust. Millennials, who are the loneliest people of all and the least connected, also lose trust that they have a future, because they don't. They're not even sure they have a planet, no less a job, because everything is shaking, everything is precarious. 

RICHARD WOLFF: So the connections are attenuated; they are weakened.

HARRIET FRAAD: Absolutely. They're weakened you can't plan on anything. In the old days, you fell in love, you got married, you settled down in one place, you had children. Now, the biggest increase in married-couple types are married couples with no children. Most Americans aren't married between 18 and 35 – the years of primary fertility, so they say – and people are unmoored; they're disconnected. Women are less disconnected because we've been given permission to be emotionally open and affectionate with each other. So you can walk into the bathroom, in any women's room, and say "Oh my god, I'm feeling fat," the other women will interact with you about your feelings, or "This guy's a creep," you know. You immediately can bond with people. Men don't have that. They're much more guarded. Women walk around with their arms linked, or their arm around each other. Men don't. They're much more physically isolated from another because they're afraid they'll be accused of homosexuality. There is a whole alienation of people from one to another. Plus, the way employment works is, no one will hire you to do a job if you can't make more for your employer than you're getting as a salary. So you're always being robbed. He's always getting more. He's always trying to get more for him or herself than they give to you, which doesn't breed trust and kindness amongst people.

RICHARD WOLFF: Right, it's an old argument of the critics of capitalism, who use often the word "alienation," that being, if your job is always a situation where the employer, the boss, is trying to get more out of you, and pay you less, in one way or another, you're setting up a tremendous adversarial situation in which you're on guard, you're distrustful, you're bitter, you're unhappy. You know, we call the hours right after the end of the job a "happy hour" in the bar because it underscores how unhappy. These are – is it your argument, let me ask you, that these conditions disconnect people from one another?

HARRIET FRAAD: They disconnect people from one another; they make each other suspicious. Someone else will get the promotion; then they'll get more; you won't get more. At the office, people are jockeying for position so that they can get more, and they can have more power, so that they can have more influence. And the CEO at the top gets between 250 and 350 times more than they get, even though he's not doing all that much – that's a big contribution. And the idea is getting more, and also the humiliation of the mass of people who have less. So the kid who doesn't bring their milk money is humiliated in front of the class. In one of the states (luckily, this was defeated), but they had the idea that kids who didn't bring in their lunch money because they didn't have it should have to clean up after the other kids in order to have lunch. That there is a humiliation. You think of the people at the top – rich and famous and lucky – you look at somebody like Epstein, who came from a working-class background and amassed $577 million, but didn't have a close relationship with anyone. Everyone was someone to use. And he was in a wealthy circle, where they all used each other and did each other favors, like procuring adolescent girls to rape, or money and connections. His whole life was money and connection until he died.

RICHARD WOLFF: But you're saying that kind of connection is not what you referred to before.

HARRIET FRAAD: No, it's a transactional connection. 

RICHARD WOLFF: That's the point.

HARRIET FRAAD: It's you get more than you give. So that he did Wexner a favor (Wexner was a billionaire who he served, by hooking him up financially) for which he got $200 million in compensation at one point. Everything you do has a price. When Epstein was in jail recently, before his murder or suicide, he put money in the commissary accounts of the different reputedly rougher people at the jail so they wouldn't rough him up. Because he'd always paid everybody off, and he did it to the end.

RICHARD WOLFF:  So in a way we're going back to your earlier point. The inequality creates an interruption, or a blockage, of connection. You can't feel connected because that person is so much wealthier than you, or that person is so much poorer than you. It's an argument that inequality really is, in its own way, an endangerment to mental health.

HARRIET FRAAD: It is. And people more and more, if they have the money, they live in gated communities. They join golf clubs where you have to pay over $100 thousand dollars to be a member. They make sure that those others can't get anywhere near them. Wealthy people send their children to private school. Dalton, where Epstein taught – where our Attorney General's father gave him a great big favor, which one doesn't understand what he got in return, but in any case – where he taught cost $51,350 a year for kindergarten. What kind of kids are going to be in your class, even if you get a partial scholarship at Dalton?

RICHARD WOLFF: So the irony is they want to connect to a few people . . .

HARRIET FRAAD: . . . a few people . . .

RICHARD WOLFF: . . . but they disconnect . . .

HARRIET FRAAD: . . . disconnect from the masses, who are trying to get their hands on their money. And even among those few, they have transactional connections. There's a book called Primates of Park Avenue, which is a study of the one percent, who doesn't even talk to you unless you have money and connections, because everything is a transaction. You don't find someone who seems sympathetic and become a friend. No, you watch how they're connected, and what they can do for you, and whether playing with their kid can get you into a better school.

RICHARD WOLFF: So in a way, is it too much for me to say, to draw from your comment, that in a society that interrupts, or blocks, or thwarts connections on such a systematic basis, it isn't that surprising that occasionally people go over the edge with a level of mental upset, of disconnection, and then act in these bizarre ways that are kind of the extreme form.

HARRIET FRAAD: Well it's a combination of the mental and emotional disconnection that allows you to kill people, and also the proliferation of guns in a society that doesn't care if you die. They're selling, they're selling, and they're lying to sell, so that they're cut off from other people. And you are cut off. And people are very lonely. Twenty-two percent of Millennials say they don't even have an acquaintance, no less a friend. Sad.

RICHARD WOLFF: We'll come back to this topic at a future point. Thank you very much. I hope you found this as interesting as I did. You know, evaluating capitalism as a system should always have asked the question what are its implications, not just for our physical health, and our jobs, and our incomes, but for the mental health upon which a civilized society depends. I look forward, again, as always, to speaking with you next week.

Transcript by Marilou Baughman
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Showing 1 comment

  • John Lamb
    commented 2019-10-20 19:58:55 -0400
    The piece on capitalism and mental health was very direct and provides much to think about. I am interested in hearing more about millennials and their mental health. Thank you.

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