[S11 E45] New
On this week's show, Prof. Wolff talks about teacher burnout economics, inflation as an employer-employee fight, the "labor shortage" isn't, "Build Back Better" does not begin to approach what Europe already has, the basic political economy of last November's elections, the critique of obscene wealth.
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 — our own, our children's. I'm your host, Richard Wolff.
I want to begin today's show, by talking about the phenomena known as “teacher burnout,” across the United States. There’s lots of evidence rolling in, if you're interested to find out about it, that teachers are quitting their jobs — part of the so-called “great resignation” that's been going on for the last half of a year. But the teachers are particularly noteworthy because, of course, when a teacher burns out— when he or she can't really continue to do do the job — in some cases pretending and keeping going, in other cases taking time off, in still other cases quitting and leaving the teaching profession — it impacts all of the students who've come to depend on that teacher, to feel a relationship to that teacher, to learn in all the subtle ways that children do from the teachers they have.
And why has it been happening? Well, it's been happening in an interesting way. Number one, more to substitutes: those folks called in when teachers cannot come to class because they're ill or have some other family emergency. And it's likewise happening to regular teachers. And here's what some of them have said when asked the question: Well some are afraid of the disease, covid, because children haven't been vaccinated, and children are known to be carriers and capable of making others sick. Of course, they don't want to, but that's really not the issue. Then there are those that are worried that the school systems themselves have not taken anywhere near the level of precaution, of regular cleaning, of regular testing, and so on, that is necessary to have some semblance of safety.
And then there is a third group that I would like to bring your attention to: those who say (and of course they're right) that the pandemic, the vast experience with unemployment that half the US labor force has endured for some period of time over the last 18, 19 months — this has produced extraordinary suffering, tension, anxiety, and change in students’ lives, making it harder for them to learn and harder for the teachers to teach.
And have the school systems stepped up to do something about this social catastrophe? Very little. Very few of them. And what they've done is too little and often too late. And I want to juxtapose what I've just described to you to what we saw a few weeks ago, when two or three of the richest men in the world used hundreds of millions of dollars to amuse themselves in rocket ships for a few minutes flying around.
Yes, I want you to think what kind of a society sacrifices children, and teachers, and the whole learning process upon which civilization depends, while at the same time enabling, enriching, and indulging those who don't need that money — who if they lost half or three quarters of what they had, would still be the richest people on the planet. It is beyond words, but it's a society that is revealing uglier, and uglier, and self-destructive qualities.
My next update is about something getting a lot of attention too: inflation. Prices are rising most recently over six percent, heading towards seven, over the last year. I want to talk to you about that. It's a very real inflation. In fact, many of the things you buy every day have risen much more than six or seven percent — 10, 20, 30, 40, 50. Those numbers are not exaggerations. What's going on?
Well, here's the single most important fact: Prices are rising faster than wages. So if you've enjoyed a wage increase — which most Americans haven't — but let's say you've enjoyed a wage increase of five percent more than what you got last year. Do you understand? Those five percent extra dollars in your pay envelope will not allow you to buy what you were able to buy last year, because prices have gone up six to seven percent. So you're falling behind. Your five-percent wage increase is your ticket to a declining standard of living.
And when is that being served to you by this capitalist economy? Right after you've suffered unemployment, right after you've suffered illness during this pandemic, right after you've gone through god-knows-what extra problems: children at home from school, questions about whether you'll get your job back, and if so what kind of job it'll be.
Now let's be clear here. You know what happens to people whose standard of living shrinks when they're told all the time you're measured, you're valued according to your spending, your level of consumption? People will borrow more. Their debts will go up. We see that already. So an already indebted population becomes even more indebted. Signs of economic decline.
Some enjoy blaming this on Mr. Biden. Childish. All economics knows (we've studied it for decades) that there's something called “lags.” It takes many months for any decision made in Washington to have its impact (whatever that impact is) on the larger society. That doesn't happen overnight. Any inflation over the last year is the product of policy decisions made before that. And you know who was president before that? Mr. Trump was president before that. Sometimes the mass media go beyond bias and become downright stupid. And I don't want to let that pass.
The inflation's also not about money creation. This is another popular myth. “Oh, gee, the government is printing a lot of new money and pumping it into the economy” — that's true. And that's the cause of inflation — that's not true. Why not? Well, first of all, we've been
pumping record amounts of new money into the economy for the last 20 years and we
haven’t had an inflation. So anyone who thinks that extra money means inflation, has got the last 20 years of contradictory evidence. Now I understand evidence is boring, but if you’re at all interested in it, it proves that this is not the case. And theoretically, it’s easy to show why it isn’t.
When the government pumps money into the economy — when the federal reserve literally injects new money into the economy, which it’s doing right now and which it has been doing (as I say for 20 years), the question really becomes: what do private employers do facing that money.
And they have a choice — that’s what free enterprise gives them.
Free enterprise means the employer can say, “wow i know all these people have more money in their pocket. The government has just put more money in people’s pockets, so here’s something I can do: I can order more goods in my store, because I'll be able to sell more of them, because they have more money to spend. And that’s what the government kind of wants, because if the stores say we want more stuff because we’re going to sell more to the public with its extra money, then more will have to be produced and jobs will be created producing the more that the employers choose to sell and to make.”
But of course employers are free not to do that. Here's what employers can do when there’s more money in the economy: they can jack up the prices of what they sell, of what they make, of what’s in their inventory. Can’t they? Yes they can. Free choice. By the way, the majority of us pay prices. A very small minority of us employers set the prices. The government doesn't set prices, you and I don’t set prices, prices are set by employers. Two, three-percent of our population. They’re the ones who cause inflation.
And of course they never take responsibility, they're always doing it because they have to. You don’t believe that when your child tells you that (don’t believe it). When the childish adults try to tell you that, they’re not to blame when they’re the ones who chose as free entrepreneurs to raise their profit prices. And why? because they want more profits, Jack, that’s why they raise prices. You know when you go to business school you learn that’s why you do everything — for that bottom line, the profit you get. The only thing is the employers know that we’ll be mad at them because they raise the prices and that hurts us, so they always have to come up with somebody else to blame. (ie) The government, the money creation, Mr. Biden, Mr. Trump. Don’t be fooled. You have a system that puts the employer in the position of raising prices whenever they think they can make a profit doing so.
You want to know what causes inflation? The profit system. It’s only a question of the employer deciding when is the right moment to jack those prices up.
In the time I have left in the first half of today’s show, I want to talk again one more time about the labor shortage that isn’t there. There is no labor shortage, there never was a labor shortage. If you actually look at the number of people quitting their jobs, more American workers quit their jobs in 2018 and 2019 than they did last year and this year. Only it’s a big hot topic now, and you know why? Because employers want those people back at work. And they don’t want to pay them more, and they don’t want to improve the work conditions.
They want to save money on work conditions, they want to save money on workers, they want to recoup the profits they didn't get during the pandemic of 2020 and 2021.
And so they want to squeeze more profits out, and talking about a labor shortage might get them some government programs to help them profit at the expense of the working class.
Nothing illustrates that better than the half dozen republican states where republican legislatures are now debating passing laws to allow 15 and 16 year old young people to work more hours than they were allowed to before, doing more jobs than they were allowed to before. A hundred years struggle in the United States to outlaw child labor is under attack as this country goes backwards compared to every other country. And in order to drive that home, I wanted to give you again a comparison between what the western European countries have done, and what this country is doing.
A comparison made even more poignant- even more by the very modesty of what the build-back better bill of Mr. Biden promises to accomplish. In Europe - across Europe, five-week paid vacation is the norm for all workers because it’s the law. You want to really help people do that. Most workers in America don’t get five weeks paid vacation at the end of a 30-year stint, if they’re lucky enough to have a 30-year stint for an employer. European countries have freedom of choice; they don’t allow a monopoly in politics, two parties that look very similar trading off the way we do. They don’t allow monopolies in politics any more than they allow them in the economy- we do. We often do.
The following countries in Europe have zero tuition to go to college- not just a community college, all the colleges. Ready? All public schools- which is how most people get an education. I'm just going to read you the names of the countries: Germany, Norway, Iceland, Austria, France Czech Republic, Slovenia, Hungary, Greece and Poland. We’re going to give a few community colleges help. It’s not enough.
We’ve come to the end of the first part of today’s show. I want to thank all of you as I always do, asking for your support for Economic Update. Please go to, “patreon.com/economicupdate” or visit, “democracyatwork.info”, our website. There you can also find out about our new book, newly released, Understanding Marxism which you can get a copy of through the website. Stay with us. We’ll be right back.
Welcome back friends, to the second half of today’s Economic Update. I want to continue with two major sector segments for this second half. The first is a commentary now that the furor has died down about the last election. The election early in November of 2021, widely viewed as a defeat for the democrats and a victory for the republicans, and I want to talk to you about that.
Here’s how I’m going to handle it, because I do a lot of historical approaches to things which I find to be particularly useful. Over the last 30 to 40 years, the working class of people in the United States- employees, the vast majority of us, have had a pretty rough time- most of us. the quality of the jobs we have, the quality of the income we can get from those jobs, the costs of living, the conditions of our lives have deteriorated. Every economic sign shows it. Our jobs are more precarious- we don’t hold them very long the way we once did. Our incomes are precarious. Our debts have made up the difference and have become so enormous that it’s a real burden to keep carrying them. You all know the stories with the particulars of your life. So, let’s begin with understanding that we have a working class that was promised the American dream, and has been tortured for decades by finding that dream floating further and further out of reach.
So people are frightened, anxious, bitter and angry with the mix varying from one of us to the next one, based on our histories, our personalities and so on. The republican party, especially the trump wing of it has decided that this is for them an opportunity. They can tell a story, which they do, about these last 30 to 40 years that enables them to win over working class people to a political party historically associated with the employers, not the employees. Why? Because here’s the republican story that shows you why this is happening:
Once upon a time things were really good. You workers had it really good; a golden age, a good old days, whatever you want to call it. And then that has been taken away from you over the last 30, 40 years- don’t you know? You feel it, you see it, you experience it. It’s horrible, it’s bad. We need to make America great again. We have to undo all the bad changes and that will get us back to the happy place we once were. Now, 10 minutes of reflection will show you we weren’t all that happy 20, 30 years ago either, but it’s a story. And it allows Mr. Trump to rage, because that’s the issue: the rage, the bitterness, the anger to find people to unload the rage on. That was Mr. Trump's achievements. I’m trying to be nice to the guy. The immigrants- rage against them. China- rage against China. All those liberals- rage against them. All the people who aren’t evangelicals of one kind- rage against them. All those who worry about guns and every- rage. You get the picture? This is an opportunity to vent your anger. Did Mr. Trump change any of that? No, very little- very minimal- not more than others- less in many cases. Did he help the rich the way republicans traditionally do? Even more than usual. But now let’s look at the democrats.
Did they engage the anger, the bitterness and the rage of the working class? Not at all. They could have, but they didn’t. They disputed Mr. Trump, they vilified Mr. Trump, they pushed back a little, not a lot on the immigrants. They didn't push back at all on the anti-chinese stuff. They did a little on guns and they compromised, they kept feeling they had to come, but right up to the build back better, it’s all a big compromise. They allowed the republicans to whittle down the programs that they said would help people. But there was no place for the rage, no place for the anger. Yeah, some workers appreciate that they’re going to give them some help. The democrats typically do that and that’s good for some, but it doesn’t engage the feeling, the bitterness of loss.
Could the democrats have done that? Sure they could have. They chose not to. Who would the rage have been directed against if the democrats had the courage and didn’t have the fear? You all know the answer.
The rich, the corporations, the people whose decisions actually mattered over the last 30 to 40 years. They’re the ones who took the jobs overseas. Nobody else did that. They’re the ones who replaced workers with machines. Nobody else did that. They're the bad guys and democrats could have mobilized the suffering mass of employees against the ruling class of employers. You know how I know we could have done that? Because that’s what FDR and the democrats did in the 1930s. Sure they were goaded by the CIO and the socialist parties and the communist party that pushed in those days too. They didn't do it alone. But nobody’s doing that now in the democratic party, with the exception, still modest, still small of that progressive voice and it’s hesitant too.
But if you’re hesitant, if you don’t engage the anger, the bitterness and the rage, you won’t get the votes. Because in fact whether you like it or not there’s a struggle: how the working class shafted in this country by capitalism is going to respond, “go to the right or go to the left one way, or the other”. The republicans have a program to engage that anger, by focusing on scapegoats that they can beat up over and over again. The democrats have to come up with something and they came up with nothing. No comparable object of rage. They could have by going after the people who run this society, but they’re afraid of offending their donors. Aren’t they?
What other reason? Why no mass demonstrations? Why aren’t the democrats calling people out into the streets to fight for these things? That’s what happened in the 1930s that is conveniently forgotten now. They don’t do anything. They don’t upset the apple cart and the voters don’t like it. And the only question is: Can they learn this lesson? Will they learn this lesson?
In the time left for today’s program, I want to offer to you what I would like to call a critique of obscene wealth. I want to deal with the fact that we are treated, every day in the press, to the antiques of the billionaires of whom, by the way, there are less than a thousand in the United States. We are a country of 330 million people and we love the antiques of the “Elon Musks” and the “Jeffrey Bezos” and all the rest of those people. I want to talk about the kind of wealth they have and why I think it deserves the adjective obscene.
First of all, why are these people getting this kind of money? Some of you would like to say, “well they made a contribution!” (i.e.) Mr. Musk developed the electric car, Mr. Bezos developed a better delivery of goods system. I don't begrudge them getting some reward for that. Sure. But let’s be clear: the only way Mr. Musk could make an electric car is if a lot of work had been done on the theory of electricity for hundreds of years, a lot of work had been done, over the last
century, on the concept of a battery, and what it is and what goes into making a battery and tons of work had gone into making automobiles in a hundred different ways. All of that work was part of the development of the electric vehicle.
You know what it’s like giving all that money to Mr. Musk? It’s as if you had a flood problem in a town, and the people realizing the river was about to crest and flood their homes, got together, and had a truck deliver a big bunch of sandbags. And the people of the town lined up in a long line from the truck with the bags, to the edge of the river. And each person handed the bag that they got from the person on their left to the person on their right, ‘till it went to the last man or woman, and he or she piled the bags up by the river to prevent the city from being flooded- and
it worked. The flood was avoided, the city was grateful, and they decided to give a reward, but to whom did they give it? The last guy on the line. He got ten thousand dollars and all the other people looked at each other, “what’s going on here? It was just the luck of the draw, whether John was at the end, or Mary was at the end, we all did the same work, we all contributed. If you’re going to reward, reward us all. Not one more than the other.”
The person who made the breakthrough with electricity or the breakthrough with the battery, and there were hundreds of breakthroughs and thousands of breakthroughs. They all get nothing; Mr. Musk gets trillion, billion what? There’s no sense in that. Not only that, it’s a disincentive to all the people disappointed in that way. Who factors that in? Do you? Do the people who want to keep supporting the super rich? Let me turn to the second argument.
They invented something, these people. Well let’s say they did. Let’s say that “Jeffrey Bezos”, America’s favorite delivery boy, really invented something by being able to deliver faster. Okay let’s give that young man a reward. Let’s do it to the young man who came up with the electric car aspect of Mr Musk. I’m going to give you an example of how other fields handle.
I’m a professor of economics. Every year there’s a Nobel prize in economics. One of the economists, who is considered by a committee in sweden to have made a major contribution- and say, “you made a major contribution Mr, Ms economist, and we’re going to recognize it, and we’re going to celebrate it, and ask you to give a talk, and give you some money (Nobel prize about a million dollars). Some of these inventions by economists have changed the world way more profoundly than the electric car or the rapid delivery boy ever did or could. But they’re not billionaires. They’re barely millionaires, but it’s enough. Economists love the idea of working to be maybe one day a Nobel prize winner. You don’t need to make billionaires out of people to provide incentives and rewards and recognition that drive people.
Economics has been at least as productive as have many fields in medicine, many fields across the spectrum of human effort. And I'm not even talking about great musical inventions, great artistic contributions. Reward them, fine. Make billionaires? Don’t be obscene. Billionaires are not made by inventions, they’re made by people who can take an invention and monopolize it so nobody else can get at it. To use trademarks, and patents, and copyrights to get big bankers to fund you, so you get into it sooner than the other. It’s a conniving economic game that makes billionaires. Invention is just the opportunity.
Let’s support education, get more inventions. You don’t need more billionaires. And it’s fundamentally undemocratic. Why? Because when Elon Musk spends money, it will create jobs over here and not over there, because of how he chooses. Millions will depend for their economic well-being, on the choice of a handful of people. That’s not democracy, that’s the opposite. We live in a society that produces, promotes, and celebrates obscene wealth. And here’s the irony: we are poorer as a country because of it.
This is Richard Wolff, looking forward to speaking with you again, next week.
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NEW 2021 Hardcover edition of “Understanding Marxism,” with a new, lengthy introduction by Richard Wolff is now available at: https://www.lulu.com/
“Marxism always was the critical shadow of capitalism. Their interactions changed them both. Now Marxism is once again stepping into the light as capitalism shakes from its own excesses and confronts decline.”
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Teacher burnout across US: https://www.npr.org/2021/11/13/1055503597/teachers-are-asking-for-extra-holidays-and-mental-health-resources-to-fight-burn
US decline versus Europe: https://www.edmit.me/blog/countries-with-free-or-virtually-free-college-tuition
Showing 7 comments
Subject: What is in store for the future of the world?
Dr. Richard Wolff,
I was looking in my library for something to read and this book (see reference above) nearly fell into my hands. This was 2 o’clock in the morning and I was not in a sleep mode.
Even though this book was published in 1974, the book describes what the world is in for today, and the future of society that will not get back as we once were. As you point out in your essays and video presentations, society is breaking down, the social fabric is deteriorating around the globe, and our own presidential election has become a farce from Washington. The United States will never be the same again, and for the world society too.
Capitalism is almost dead for the rich 1%, and not functioning for the other 99% who will work at anything or for anybody at a wage/hours/benefits that the employer chooses. The money supply is for the rich who keeps it and plays the stock market like a game of chance.
If you have the opportunity, I suggest you read each chapter about the flood of Filth, economic confusion, the drastic weather changes, earthquakes, etc. To read this old book you immediately think the author is describing 2020 and our future, the sin of our young people.
What is in store for the future of the world? No one knows for sure, but your commentaries and this book help us see the future and it is not bright.
When will end? You and others have been analyzing our present economic system for a long time (many years) with many short videos and many panelist/speakers. I have listened to you for I think over five years now. Is the final failure of our economic system going to happen before the end of this year? I think so!
Our two presidential candidates leave me with the feeling of gloom and doom for the USA. The economic mess created over the last 30 years (since 1970’s) is coming to a complete failure for us (USA) and the rest of the world. All you and other and like you can explain is how the world is collapsing and nothing can be done to fix it. Our present leaders cannot see or care as long as they make money, which may become inflated or worthless.
The French Revolution did not achieve it’s intended results. You sometime mentioned the French Revolution. Are we (USA) headed for the same fate? You need to talk more about the coming collapse and how to get ready for life during the collapse and after!
Prof Wolff, you would know this if you followed Modern Monetary Theory (MMT).