Economic Update: The Deepening Fragility of US Power

[S12 E31] New

Direct Download

In this week’s show, Prof. Wolff presents updates on successful unionization at Trader Joe’s, lottery tickets as disguised regressive taxation, gasoline inflation brings record profits to big oil companies, and pharmaceutical industries' ad campaign to block gov't plan to buy medications in bulk and pass savings onto public. In the second half of the show, Wolff interviews Vijay Prashad on his new book with Noam Chomsky on the fragility of US global power.


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. And I'm your host Richard Wolff. Today we're going to be talking about unionization at Trader Joe's, about the lottery system and the economics of lotteries, about the extraordinary profits being raked in by the largest oil companies in the world, and an advertising campaign by Big Pharma that I want to alert you to. And in the second half we will have a wonderful interview, in my judgment, with Vijay Prashad about the fragility of global U.S power and what is happening as we live - the decline of that power.

So let me begin. Hadley, Massachusetts is a small community. But one that I've known well because it's right next door to Amherst, Massachusetts, which is the location of the main campus of the University of Massachusetts, where I spent many years as a professor. So my attention was grabbed when I learned that the Trader Joe's located right there on the border between Hadley and Amherst was experiencing an effort by the 80 workers there to unionize. And on July 28th they voted, and it was officiated by the National Labor Relations Board, and the union won with a vote of 45 to 31 - that is all but four workers voted. It's an independent union they formulated, it's not affiliated - at least not yet - with any of the national unions in the United States, and it's called Trader Joe's United. It is not the only Trader Joe to be unionized or to be engaged in a unionizing effort. There's at least another one in Minneapolis, Minnesota and another one in Boulder, Colorado. And when I did a little more research I discovered that I should have been mentioning Canada where there is a similar unionization effort going on. It may be going on with Trader Joe's, I don't know, but it is definitely going on with Starbucks because they have organized several Starbucks in Alberta, British Columbia and beyond.

Why is this important beyond yet more evidence of the growing militancy of the efforts to unionize American workplaces? It's important because places like Starbucks and Trader Joe's spend a lot of time, energy and money projecting a notice of being progressive, being friendly to working people, having good working conditions and so on. And yet as these unionization efforts got off the ground information came out that shouldn't surprise us. That alongside whatever they do that's positive there's a great deal that they do that's negative. And one of the things most stark is the hiring of professional union busting law firms trying to buy off workers by giving them benefits that they had taken away earlier. As if to bribe, you might even say, people not to be for the union. And, again, I'm not interested in criticizing the management of these companies (I really don't care much about that.) I'm interested in understanding that the logic of capitalism makes even the nicest people do some of the ugliest things imaginable. And that's why the system is the problem, not this or that particular employer.

My next update has to do with the lottery. And here's what struck me: the amount of lottery tickets drawn for the July 29th drawing just a few weeks ago was four times the amount of lottery tickets normally sold. What's going on? Well the simple answer is people are desperate; caught between the inflation and the fact that wages are not going up anywhere near enough just to keep up with rising prices, let alone to advance your standard of living. Desperate people make desperate gambles. Buying a lottery ticket, as I'm about to explain to you, is a desperate gamble. Lotteries exist now in 45 states out of 50, and in the District of Columbia and in the U.S Virgin Islands. Out of every two dollar lottery ticket that you buy here's what happens to the money: 90 cents out of two bucks goes to the state government, 75 cents goes to the jackpot winner, 35 cents go to the non-jackpot winners. What are the odds that you are a jackpot winner? 300 million to one. Folks it means that your chances of winning the jackpot are not as good as your chances of being hit by lightning or being bitten by a shark. What is the lottery? The answer is it's a tax. It's a way of getting tax payments out of the poorest people in the state, the middle income people in the state who would have revolted against another tax, because they came close to doing that in most states. So here's what the system did to get money out of them. Ninety cents out of every two dollar ticket goes to the state government. You gave them a shot at a jackpot, only the odds were 300 million to one. In other words 99.99% of the people who buy a lottery ticket are giving 90 cents to the local state government for every two dollar ticket. As if that weren't bad enough, kind of bribing people to pay a tax, here is what we know: the richer you are the less likely you are to buy lottery tickets. Lottery tickets are a way of squeezing money out of the people who have the least amount of it. Other people, rich people don't buy lottery tickets. Extraordinary, not only that you're taking money out of the pockets of millions of average citizens who would otherwise have used it to buy something that might have given other people a job but they don't have that money, they buy the ticket and all of that money, 75 cents of it, is given to a person who's now super rich. And here's what we know about super rich people: they don't spend most of their money. So the money isn't getting spent, it isn't creating jobs. Because it isn't capitalists who create jobs, it's the demand for output that capitalists merely serve that create jobs. And if you take money away from average people and make one person rich you're diminishing the demand and therefore the job creation. Lotteries are a crappy way and an unfair way to support state government. No wonder rich people make a joke: lotteries are a wonderful way, they say, to shift the burden of taxes off of us and on to the people who can afford it least.

My next update is a simple report to you. There's not much I can add, I just want to give you the numbers. The three biggest oil companies in the world are ExxonMobil, Chevron, and Shell, you all know the names. The largest of them, ExxonMobil, earned four times more in the second quarter of 2022 - that's the latest full quarter that we have... they earned four times what they earned the year before, that would be the second quarter of 2021. Why am I telling you this? Because from the second quarter of 2021 to now is a year during which time we have had a horrible inflation that has hurt the overwhelming majority of the American people. But not ExxonMobil, whose profits quadrupled. And there's no mystery here. They're making tons of money because we're paying more for gasoline at the pump than we ever dreamed we would. Please notice it's not costing ExxonMobil significantly more to bring the gasoline to us, to get the oil out of the ground, to refine it, to deliver it. The costs haven't gone anywhere but the price has gone crazy, as you all know. Here's what it means: everyone knows that it was the sanctions imposed by the United States on Russia, and that the United States demanded that the Europeans likewise cut back on importing Russian oil and gas. Which disrupted the global oil and gas market, driving up the prices, as Russia shifted to other parts of the world, allowing who remained in the oil business to jack up their prices. Whatever you think about the sanctions imposed on Russia, the oil companies are applauding so that their hands are raw. They are laughing all the way to the bank. Because the sanctions on Russia have been one of the greatest bonanzas to the oil business that anyone can remember. And if you don't think there's a link between the extraordinary profits of the oil companies and the policy chosen by the United States apropos Ukraine you are very naive.

Last update: the big pharmaceutical companies are conducting an advertising campaign denouncing any possibility that the Biden administration might get through Congress a program that would have the Federal Government buy in bulk pharmaceuticals from the companies. By buying in bulk, of course, they can bring the price way down, because they're buying for hundreds of millions of people. Much easier for the companies to fill that kind of an order then the government turns around and sells at a much lower price so all of us who have to buy pharmaceuticals save money. Kind of important, especially during a difficult inflation. They don't want that to happen. And they're conducting a program by suggesting that if you do that they will hurt you in response, if the prices of drugs come down because the government buys it. And, by the way, many, many, many governments around the world do that exactly. That's why Americans go to Canada and Mexico and many other places to get the same drug they could get here, but to pay much less because that's what they do there which we don't do here as a gift to the pharmaceuticals. They want that gift to continue. And if we, you and I, let them they will be as happy running this government as the oil companies have been.

We've come to the end of the first part of today's show. And before we move on I want to remind everyone that Economic Update is produced by Democracy at Work, a small donor-funded non-profit media organization celebrating 10 years of creating system-challenging content. Like David Harvey's podcast show Anti-Capitalist Chronicles that looks at capitalism through a Marxist lens. You can find it, along with other shows, books, and lectures we produce on our website democracyatwork.info. You can also follow us on social media, sign up for our mailing list, join our growing community of invaluable supporters who make what we do possible. Stay with us, we'll be right back with an important interview with author and professor Vijay Prashad.

Welcome back friends to the second half of today's Economic Update. I am very pleased and proud and honored to have before our cameras and microphones Vijay Prashad. Vijay is an Indian historian, the Chief Editor of LeftWord Books and the Director of Tri-Continental Institute for Social Research. He is a senior fellow at Chongyang Institute for Financial Studies at the Renmin University of China, the author of over 20 books, including his latest co-authored with Noam Chomsky entitled 'The Withdrawal: Iraq, Libya, Afghanistan, and the Fragility of U.S Power.'

WOLFF: So first of all Vijay, thank you very much for joining us.

PRASHAD: It's a great pleasure and honor to be with you Rick, really happy to join you.

WOLFF: Good. All right, let's jump right into it. In light of the United States', shall we call them, misadventures (I know that's an understatement) in Iraq, Libya, and Afghanistan, as you work it out in your book with Chomsky, are we, in your judgment, living at a time when it is appropriate to say that there is a decline in the U.S empire? And by that I mean something at least roughly comparable to what we mean when we talk about the decline of the British or the Roman or the Greek empires? Do you see it that way? How do you understand the broader implications of what you yourself have written about?

PRASHAD: There's two things to say about this. The first is from whose perspective? You know, I've been both a historian, I've taught at universities and so on, but I've also for most of my career been a journalist, a reporter. And I've reported from many of the, let's call them, sacrifice zones of U.S imperialism such as Iraq, Syria, Libya, and so on, most recently in the Sahel Region of Africa, in Niger, and in Mozambique. When you look at the world from the standpoint of, let's say, the person who is watching the bombs fall from the skies, it's difficult for that person to say something like 'U.S power has decreased.' You see if you are sitting, as the people in the Sahel are sitting now, in a country like Niger where the United States has built the world's largest drone base in Agadez, just south of Arlit, which is the world's capital of yellow cake uranium - Rick, you might remember Niger and yellow cake uranium during the lies that led up to the war, the U.S war, illegal war against the Iraqi people... well, if you are a resident of Agadez and you watch the United States build this enormous drone base at the heart of of a major city in the Sahel Region of Africa, a drone base which has been built with barely any comment... I don't know if there's even Congressional oversight. And I'll tell you why I don't think there's even Congressional oversight. Because when a couple of U.S soldiers were killed in Niger the head of the U.S armed forces, of Foreign Services Committee in the Senate said 'oh, I didn't know we had troops in Niger.' Well troops in Niger? You built the world's largest drone base in Agadez in Niger. From the standpoint of a Nigerian; from the standpoint of an Afghan; from the standpoint of an Iraqi and so on, I don't think they are experiencing a depletion of U.S power. On the other hand, as you and I know, that power has to be gauged along multiple axes, not just the axis of, you know, you're standing on the ground and the bomb is falling on your head. Without a doubt the United States still has an extraordinary military, an extraordinary ability to destroy any country in the world - military power unparalleled. Including to threaten Russia, to threaten China with nuclear primacy.

Without a doubt there has been a decline in economic power. And as you have also been talking about there's been a decline. And how do we understand that decline? It's not a question of merely, you know, looking at, say, GDP growth. It's not a question of looking at the size of the economy, it's about forecasting the future of the economy. You know, the United States has found in the last 10 or so years that in very many areas of economic activity, whether it's robotics, high-speed rail, whether it's telecommunications or indeed computer technology the Chinese have leapfrogged in many spheres over U.S and European companies. This is an existential threat to U.S capitalism which has come to rely on collecting rents on a number of these areas of human life, particularly telecommunications. There is a fragility, certainly, on display when the United States decides that rather than compete with China strictly on commercial grounds. You're threatened by Huawei? Make better phones, make cheaper and better phones than Huawei rather than compete on strictly, you know, commercial lines. The United States is using military force, diplomatic force and so on to try to get China to surrender it's advances.

In that sense I feel that there has been depletion of power. I think it's too much to say that the world merely repeats old stories; that what happened to the Romans or what happened to the British is going to happen to the United States. History doesn't function like that. We're in a different phase. We need to look the present in the eye. Perhaps look at analogies from the past but not be too analogical in our approach. But if we look history in the eye now what we see is a depletion of economic power in particular. And the United States substituting military force for economic power. And that is an extraordinary dangerous situation for most of the world.

WOLFF: Would you go so far as to say roughly the following: that the United States' economic primacy, political primacy coming out of that, cultural primacy for so much of particularly post-World War II... that these things are declining? And in their place not only is the military primacy maintained but somehow becoming more and more important in the mentality of those who govern the United States precisely because the other forms of power seem, even to them, to be slipping away?

PRASHAD: Well certainly Rick, I would say that the economic and political primacy are in decline. Or rather, as I would like to keep repeating this word, are in a kind of fragile state. Cultural primacy is complicated. The United States has an enormous reservoir of cultural power, both institutional and ideological. Just to take an example, you know, there is an incredible way in which the United States and other western countries are able to dominate the news cycle, the media having built up, let's say, you know, wire services like Reuters, the Associated Press, Agence France-Presse. And then built up cable television networks like CNN, Fox News and so on. They're able to compete against any ideological challenge and trounce their competitors for a couple of reasons. One, institutionally. You see how easy it was for western companies or western governments to get platforms which are supposed to be - let's say ideally - the commons, like YouTube, how easy it was to get YouTube or Twitter (which could be a global commons) to indicate when a Cuban official is speaking that this is a Cuban state official on their Twitter handle. Or to say that RT, for instance, is a state-backed entity. Meanwhile, of course, western entities... similar entities like BBC, a state-backed entity that doesn't carry the disparagement that this is a state-backed entity. So institutionally they are able to maintain a kind of hegemonic position. But this is also ideological, cultural. There is a way in which people trust western news outlets much more than they trust Chinese news outlets. They think there's a kind of patina of objectivity despite the fact that people living in the United States know that Fox News is essentially a bundle of lies. But still Fox News might carry a patina of credibility, a kind of credibility that perhaps, you know, a Chinese news program will not. And I think that is an enormous advantage the United States does have. But still that's insufficient.

You can't win hearts and minds merely through ideological means. Because you have to produce for people cheap phones. If you live in Africa it is easier for you to go and buy a Huawei phone than to buy an Apple phone. So practical realities like that, you know, get in the way of ideological high-mindedness. You might want to buy an American phone but you simply can't afford it. Look at the case how this cultural hegemony slips: Volodymyr Zelenskyy of Ukraine. Very eager to speak to African countries, you know, push the African Union to hold a meeting. There are 55 governments in Africa, 55 countries when Mr Zelenskyy eventually had his meeting sponsored by
the African Union. Out of 55 heads of government only two came for the meeting because the mood in places like Africa, South America, in Southern Asia and so on the mood is not to walk under the kind of, you know, the orders of Washington DC. There's a new mood emerging in the world. And this is where this cultural hegemony, which is still pretty strong, seems to be fraying at the edges. People are not willing to take orders from Washington like they used to.

WOLFF: Do you think that the aggressive imposition of sanctions against Russia, coupled now with the clearly provocative noises about the situation in Taiwan, is this a fragile power reaction? In the sense that this is some sort of desperate effort to reverse everything you've just been talking about?

PRASHAD: You know, when you look at the world map, Rick, and you see the most amazing continental span that runs from, you know, the edge of China all the way out perhaps to the end of France, if not Britain (although Britain, increasingly under the leadership of Boris Johnson wanted to be part of the United States so, you know, there's always that,) that massive Eurasian land mass has over the course of the last 20 years or so been more been integrating with a greater and greater density. So just take two examples. Increasingly, and we don't need to get into this, but as a consequence of U.S sanctions on Iran, as a consequence of the really criminal war against Libya, the Europeans have had to rely more and more on Russian energy sources, particularly Germany. As you know, about 35% of it's energy was supplied by Russia. So there was a kind of energy integration taking place between Europe and Russia, at least. Over the same period there's been an integration of the Chinese economy with Europe. 17 countries in Europe joined the Belt and Road initiative. Poland, not for ideological reasons but for practical reasons, joins the Belt and Road initiative, Italy joins the Belt and Road initiative. One saw a kind of historical integration of Eurasia taking place. The United States actually had an interesting problem when faced with this. What does one do? Does one accept this historical integration of Europe and Asia including Russia in this new configuration? Well no, the United States, first during Obama, but then Trump and now Biden have tried to either prevent that integration or to delay it. Well how have they done that? Putting pressure on European states not to use Chinese telecommunications. That was the first salvo. You remember 'don't use Huawei, it's dangerous' and so on? The pivot to Asia, to militarize this entity called the Quad to try to put pressure on China and so on. So in my opinion the squeeze on both Russia and China have been because the United States is unwilling to deal with this historical integration. So certainly it's a sign of fragility.

WOLFF: Vijay I wish we could go on. But this has been exactly what I wanted. I wanted people to see how someone with the focus you bring sees all of this. I'm very, very grateful. And to my audience as always I look forward to speaking with you again next week.

Transcript by Brendan Tait

The original content of this program is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. Please attribute legal copies of this work to democracyatwork.info. Some of the work(s) that this program incorporates, however, may be separately licensed. For further information or additional permissions, contact us.

Want to join the volunteer transcription team? Go to the following link to learn more:
https://www.democracyatwork.info/getinvolved


**Economic Update with Richard D. Wolff is a [email protected] production. We make it a point to provide the show free of ads. Please consider supporting our work. Become an EU patron on Patreon: https://www.patreon.com/economicupdate  and help us spread Prof. Wolff's message to a larger audience. Every donation counts!

A special thank you to our devoted EU Patreon community whose contributions make this show possible each week.

If you would like to make a one time or monthly donation, visit our donation page.

Find quick and easy access to past episodes of Economic Update, including transcripts, on our EU Episode List page.


About our guest: Vijay Prashad is an Indian historian, the chief editor of LeftWord Books, and the director of Tricontinental: Institute for Social Research. He is a senior fellow at Chongyang Institute for Financial Studies, Renmin University of China, and author of over 20 books, including his latest co-authored with Noam Chomsky and released this month. It is entitled The Withdrawal: Iraq, Libya, Afghanistan, and the Fragility of U.S. Power.


SUBSCRIBE: EU Podcast | Apple Podcasts | Google Podcasts | SpotifyiHeartRADIO
SUPPORT: Patreon

Follow us ONLINE:

YouTube: 

Facebook:

Twitter:

Instagram:  https://instagram.com/democracyatwrk

DailyMotion:  https://www.dailymotion.com/democracyatwrk

Shop our CO-OP made MERCH:  https://democracy-at-work-shop.myshopify.com/

Want to help us translate and transcribe our videos? Learn about joining our translation team: http://bit.ly/


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.”

Check out all of [email protected]’s books: "The Sickness is the System," "Understanding Socialism," by Richard D. Wolff, and “Stuck Nation” by Bob Hennelly http://www.lulu.com/spotlight/democracyatwork


SOURCES FOR SHOW SEGMENTS: 

Be the first to comment

Please check your e-mail for a link to activate your account.

Donate to Become a

[email protected]

Monthly Supporter


Customized by

Longleaf Digital