On this week's Economic Update, Prof. Wolff provides updates on the exploitation of adjuncts that weakens US higher education and on US's extreme wealth inequality. Major discussion of the three main economic theories (neoclassical, Keynesian, and Marxian) clashing in today's world.
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Of course, Finland is neither a pure Socialist system, and that is why Social Democracy is on the decline in Europe.
In other words, in Europe, Social Democracy failed to get rid of Capitalism, and that is why they are struggling with stagnation, rising inequality and unemployment… And in US, a reversion to deregulated capitalism has produced the same issues: stagnation, rising inequality, unemployment, etc.
If by a good education system, you mean tuition free education, you should also consider the question, who is going to pay for the expenses of a tuition free education system? The rich are not willing to pay taxes that could make a tuition free education system possible. Keynsianism and the New Deal, which by the way was only possible because of the historical conditions of its own time, tried to force the rich to pay for it. It worked for a while, but then it was undone completely, hence the student debts today.
His solution is quite clear: increase the political power of workers through unions and political parties.
My solution is even clearer: educate the people to be citizens.
Finland has the best education system in the world. THAT is why it has a highly functioning, mostly egalitarian society.
Capitalism v socialism is very much secondary in importance to education.
The USA has the worst education system in the developed world and the lowest rate of unionization.
Woolf’s own arguments undermine his long-held premise that capitalism itself causes our problems. He is just wrong.
Keynsian economic died in the 1980s, to be precise, when Reagan rose to power. There was a severe and global recession going on, which was partly exacerbated deliberately by the Fed raising interest rate to historic high of over %20. It was in a way a coordinated move between the Fed in coalesce with the biggest American capitalists and corporations. Economy was kept hostage to allow Reagonomics gain popularity. A similar movement was going on in UK under Thatcher. On the academic front, Milton Friedman and Chicago School theorists presented an alternative to Keynsianism. It was a war between American Capitalists and worker on the one side and between US as the sole Imperialist power and the rest of the world on the other side. You could see a detailed account of this history in two great books by Michael Hudson: 1) Super Imperialism, and 2) Global Fracture.
Professor Wolff summarises all of these into a simple argument: That Keynse tried to reform the economy by redistributing wealth (taxing the rich and providing social services to everyone). But he failed because he allowed the rich to remain on the top of Capitalist hierarchical chain of command and control of industries and work-places.
This is not at all self-contradicting, but sharp eyes might perceive it that way, because a lot of details are left out.
When Wolff says Keynsianism failed because we saw 2008 crash, he means:
1) Keynsianism promised to have found the way out of crises forever
2) Keynsianism failed to see the possibility of undoing all of its reforms by those who did not like it
3) 2008 GFC was the proof that Keynsianism was not the end of all crises (because it was pretty undone!)
Besides, had the United States not entered into WWII, Keynsianism would have failed long before. The main reason the US economy recovered from the Great Depression and rose to the rank of the biggest economic power, was devastation of the rest of the world on the one side and massive military expenditure by US government which drained all of the economic surplus which was the main reason for the Great Depression. This history is diligently analyzed and elaborated by Paul Sweezy and Harry Magdoff in their famous relic, Monopoly Capital.
Professor Wolff pursues a clear and, in my opinion, practical agenda. Moving out of capitalism and toward Socialism through empowerment and dominance of worker coops. These coops do exist in the context of Capitalism and even Marx was quite interested in the potential these small organizations carry and how they may be the true seeds of Socialism.
A zero-growth and sustainable economy is impossible under Capitalism. As long as proft motive remains the primary principle of the economic relations of production, growth too remains the only incentive for the circulation of highly concentrated wealth that is accumulated by the top %1.
He makes the cause of today’s inequality in the USA abundantly clear: the systemic undermining and diminution of unions.
Woolf also says Keynsian economics failed because of 2008 but that’s not accurate at all. 2008 happened because of deregulation. Keynsian economics prevented a major economic collapse from happening for over 70 years, by far the longest stretch in the USA’s short history.