On this week’s episode of Economic Update, Professor Wolff delivers updates on the New York City council’s vote on a minimum wage for ride-hailing drivers (Uber, Lyft, etc.), 85% of the goods made for the Trump store are made abroad, charter school teachers strike in Chicago, contradictions in the U.S./China trade war and VW begins the end of petrol fueled car production with an all electric fleet of personal vehicles to further evade the growing need for mass public transit.
The second half of the show features an interview with Victor Wallis, the author of Red-Green Revolution: The Politics and Technology of Ecosocialism.
Victor Wallis is the author of Red-Green Revolution: The Politics and Technology of Ecosocialism, published this year by Political Animal Press in Toronto. He teaches political science in the Liberal Arts department at the Berklee College of Music (in Boston). He was for 20 years the managing editor of Socialism and Democracy. His website is victorwallis.com
This transcript has been edited for clarity.
RICHARD WOLFF: Welcome, friends, to another edition of Economic Update, our weekly program devoted to the economic dimensions of our lives: debts, jobs, incomes, all of that—for ourselves, for our children, for the coming generations. I’m your host, Richard Wolff. I’ve been a professor of economics all my adult life, and I hope it has prepared me to be offer you these economic updates.
I want to begin with the defense budget and the story it tells us. President Trump announced early in December that he wanted to do something about the ballooning deficit—the result of the tax cuts he passed last December—by cutting back government budgets for the different agencies, including the Defense Department. He proposed a very modest decrease for the Defense Department for the upcoming fiscal year, the one that runs from 2019 to 2020. He wanted to cut it from 716 billion dollars to 700 billion dollars. He even referred to the request for 716 initially made, as “crazy” in one of his tweets. Very quickly the generals sprang into action, led by General Mattis at the Defense Department. They quickly organized a luncheon with General Mattis, probably involving General Kelly and involving the head of the Republican-dominated House—still for the rest of this year—and the Republican-dominated Senate. They all got together and had a lunch with President Trump. After which, full of smiles, they announced that the new figure for the defense budget would not be the 700 billion that Mr. Trump had originally suggested. It would not be the 716 billion that had been initially proposed. It wouldn’t even be the 733 billion that the military had said was the absolute minimum they could live with. No, it’s going to be 750 billion dollars given to the Defense Department. Well, I’m struck by that and I have only really one comment. Mr. Trump, who promised to be different from other politicians, is here doing what all other politicians have in fact done—namely, giving the government and particularly the military pretty much what it wants, if not more than what it wants. Oh, not much different there. And likewise, like so many politicians and presidents before him, promising one thing and doing another. What has he done? December of 2017, he took care of the business community by cutting taxes on profits. And in December 2018, he takes care of the military. The business and the military, the military and the business. Politicians know what they have to take care of before they get to anything else.
The City Council of New York did something remarkable recently. It passed a minimum wage for on-demand ride hailing drivers. Uber drivers, Lyft drivers—those folks. They hadn’t been covered before. And it’s a final step, in a way, of showing that that industry’s exactly like the taxi industry, because that’s what happened to them. They started out driving taxis a hundred years ago, and they weren’t very well insured and the cars weren’t very well maintained, and the workers were not properly vetted, and they weren’t well paid. And the result was an inadequate, dangerous taxi service until, of course, the private profit hustles of all the taxi drivers led to a demand for better, safer conditions. A Taxi & Limousine Commission was established in New York, as in so many other cities, and a deal was struck. Because relying on the private capitalist economy is too dangerous. Wages were set, prices for cab drivers were set, rules were set requiring insurance and vetting and training and maintenance of the cars, etc. All that Uber and Lyft ever were were an attempt to get around that by calling it not a taxi, but a ride-hailing service. They could for a few years make a ton of money by getting around, by paying workers less, by not taking care of their cars properly, by not insuring them—the same game. And all that’s happening now is once again we’re learning the same lesson: leaving ride-hailing services to do what we originally let the taxis do is forcing us to do what we eventually had to do to the taxis as well. All that those scams were were ways of getting around the rules to make a buck. All the talk about gig economy, sharing economy and technological breakthrough was so much verbiage—to pull a stunt to make money.
Here’s a little one. Party politics in a capitalist society involve promising one thing and doing something else. Because people kind of know, you have to promise and they can indulge the fantasy that maybe you will be different. And so it has been with Mr. Trump. He maintains a website store, Mr. Trump does, where you can buy all kinds of things that have the name Trump on them. You can go to the website and you can order them. And there’s a study that was done by the Quartz podcast and the Quartz website: 85% of the items on the Trump store are made outside the United States. Eighty-five percent.
Here’s another quick one: charter schools. The attempt to get around the public schools, with the democratic unifying structure that they were always intended to have, by taking your kid out and putting him or her in a special school just for you or people who are like you or people who have the same faith you do, etc., etc. Breaking down the unifying, democratic impulse behind public schools, often done by people who are rightly upset with the quality of public schools. But of course you could make the public school better and then you’d have the best of both of these objectives. Anyway, here’s a way that charter schools are not different from public schools. They to try get away with paying teachers very little. It’s led to strikes earlier in 2018 across many states—how bad it was and how badly we have treated our teachers. Well, it’s caught up to the charter schools as well. The Acero charter schools, fifteen of them in the Chicago area, employing 550 teachers and staff—well, they all went out on strike. Demanding the kind of better teaching pay and staff pay in these schools, just like in the public schools. Some things don’t change.
Then there was a wonderful analysis in the Asia Times by one David Goldman. And it’s really interesting, it talks about the kind of absurd debate going on between the United States and China—the yelling, the threats, the counter-threats and all the rest of it. He cuts through all of that and says that basically what’s going on is that the United States has now figured out that the Chinese economy is as dynamic, if not more so, than the United States once was. And it’s not only catching up to the United States, but has already surpassed the United States in a number of areas. This is very upsetting to all kinds of people in the United States, who somehow thought that unlike every other society that has ever been dominant in the world—that dominance eventually came to an end and was replaced by the dominance of another country or of another group of countries. The United States finds it difficult, apparently, to imagine such a thing could happen to itself and so there’s all these efforts. And there’ll be some posturing and there’ll be some tariffs and there’ll be some rule changes and the Chinese will buy some more—all of that. But it doesn’t change, as Goldman nicely points out, the fact that the Chinese are spending way more money in certain advanced technological fields and therefore making great progress relative to the United States. They invest in their universities on a massive scale at the same time that the United States is cutting back on its support for universities. So the basic change is not being affected by any of these pieces of theater. And he notes that the Chinese leadership seems to get that, whereas the American seems to keep railing…
Nothing illustrates that better than the recent arrest by Canadians, at the request of the United States, of a high official of one of the most technologically advanced companies in China. And it’s part of a campaign against Huawei, the company that she’s an executive of, that’s getting companies around the world not to buy their high-tech communications equipment for fear that the Chinese might have embedded in them somehow things that will help their security. Well, you’re in a very slippery slope here. Imagine if companies around the world, fearful of what the CIA might be doing, stopped buying American high-tech goods for fear of how that might compromise their security. This is a very dangerous game to play that the United States is leading in. It could come back and backfire badly on the United States since it is now so reliant on Apple and Microsoft and all these other high-tech enterprises. Be careful what you wish for, it might come back and bite you in a very troubling place. It’s also the case that if we blocked countries from buying the best equipment, then the best equipment made in China will only be available to the Chinese and their friends. Do we really want that advantage to be lopsidedly located because we won’t buy? Very dangerous, these ideas. And probably not gonna last very long. There’s a quick kind of mentality here that misses the larger, deeper picture.
My last update has to do with the decision by Volkswagen, one of the biggest car companies in the world, to stop the production of gas-powered cars forever. The projected date 2026 isn’t that far off and they’re already starting. And their plan is to shift entirely to electric vehicles. Now VW is already the largest car producer in Europe and in China. This will have enormous effects, since it will be followed by other companies. Think of the effects. Think of all the gas stations in the world that will now be out of business. What will happen to those parts of every community? What will happen to the people whose lives depend on them? What will happen to all of the real estate adjustments when we don’t have gas-powered cars? No planning that I know of is underway to deal with this, it’s just being decided by car companies based on their profits and that really brings me to the key point. We always had a choice between individual, private cars and mass transit. Moving people and goods not one at a time, but in groups. Why would that be interesting? Well, let’s go and review again. It’s much cheaper to move people in a bus or a van or a train or a plane than in an individual car. It uses much less energy to pollute the universe and to use up fossil fuels. It causes much less in the way of death and injury from accident. It is much easier and cheaper to insure. I could go on. There ought to be, in any rational society, a choice human beings could make between the private car with all of its costs and public transportation with all of its savings. Suppose we could all have two hours less work a week if we use public transportation. More leisure to be with our families, to have a relationship—those are the real choices we face. But VW doesn’t want that choice. VW wants to make cars, because it’s profitable. And if they can’t make cars using gas, they want the private car electric. Lord help us. If we actually used the end of reliance on gas, because it’s dangerous, to move to public transportation. High quality, fast and efficient. It’s cheaper, it’s better and capitalism can’t accommodate it.
We’ve come to the end of the first half of Economic Update. Thank you for being with me and I look forward to your coming right back after a short break for a remarkable interview.
WOLFF: Welcome back to the second half of Economic Update. Before jumping into our interview I want to remind you, please, take advantage of the YouTube relationship we have. Subscribe to our YouTube channel for Economic Update. Likewise, make use of our website—democracyatwork.info. There you can follow us on Facebook, Twitter and Instagram. And I also want to thank our Patreon community for its ongoing and enthusiastic support.
Well, today I want to welcome Victor Wallis. Some of you may remember, he’s been on our show before. This time he comes as the author of a new book—Red-Green Revolution: The Politics and Technology of Ecosocialism, published this year by Political Animal Press in Toronto, Canada. Victor teaches political science in the Liberal Arts Department at the Berkeley College of Music in Boston. For twenty years he was the managing editor of the journal Socialism and Democracy. You can find out more about Victor Wallis at his website victorwallis.com.
Thank you, Victor, for joining me again.
VICTOR WALLIS: Thanks, Rick, for having me.
WOLFF: OK, let’s start by making sure everyone in our audience understands what you mean by this basic term ecosocialism. What is it—why did you put that in the title of your book?
WALLIS: Well, actually the term itself has been in use for quite a while now, at least fifteen years. In fact, there was an Ecosocialist Manifesto that was released at the World Social Forum in Brazil almost ten years ago. It combines the idea of ecology with that of socialism and I argue in my book that this is a very natural combination in the sense that both of them clash with the idea that production decisions should be made on the basis of profit. They both adhere to the idea that decisions on what to produce, how to produce, how much of it and so on, should be made on the basis of some better criterion. And “eco” calls attention to the natural environment, but the socialist criterion is the interests of the humanity, and the point is that the two are integrally connected. We can’t live without the natural infrastructure. So, in one sense it’s even redundant to put the “eco” prefix on it, because socialism implies that you make decisions on the basis of what’s in the interests of people, and you can’t legislate in the interests of people without taking into account the environment. However, because of the historical evolution of the awareness of these different dimensions, “eco” has to be added on for purposes really of emphasis, to call attention to the fact—yes, definitely, this is integral to our critique of capitalist societies, a critique of what it’s done catastrophically and continues to do the natural environment.
WOLFF: You know, it’s interesting because on our program we often talk about the bad outcomes when you allow decisions that affect everybody to be made by a very small minority in the society whose job it is, in this system, to maximize their profit. So, people who are doing their job maximizing their profit of their business are doing it while the social consequences—or in your case, the natural consequences—could be devastating. And that’s not an intelligent to way organize human life. It strikes me, as you say, it’s an old idea reworded but with the same punch it always had.
OK, we’ve have a bevy of scientific reports. As more and more people become aware of the ecological crises we’re living through, the dangers to our natural environment—global warming, climate change, all of it—tell me what has been the impact of recent scientific statements, studies, research on the interest in and the importance of ecosocialism.
WALLIS: Well, all it does is really confirm, underline, underscore everything that has been really clear for years. And the ironic thing is that it was clear even to the perpetrators of all of this mischief. I mean, the petroleum companies themselves came out not long ago—knew about this stuff back as early as the 1970s, if not even earlier, as it now seems to have been the case. They knew that it would cause global warming—they didn’t care. They not only didn’t care that this would happen, but they set out on a campaign that would obfuscate the whole phenomenon. So, it’s really not just reckless homicide, it corresponds to an actual murder of the planetary system. I mean, the level of criminality of the deliberate decision to continue or to initiate and continue and then hide what they’re doing is incalculable.
WOLFF: You wonder, for me it’s like the saga of the tobacco companies with cigarettes smoke and knowing for years of the link between that and cancer, and basically hiding it or muddying the consciousness of the people. Tell me, does it build a movement for ecosocialism—is there an awareness in the United States or abroad that this really is a system-challenging understanding that we really have to change a system that behaves so badly.
WALLIS: Well, it’s hard for it to develop. It’s true that the most recent report of the Intergovernmental Panel on Climate Change said that we need a new system, but it was just in very vague terms. But, I mean, to actually comprehend that and, I think, in terms of a movement for people to link that up with all the other concerns that they have—that is a task that still remains to be done. And so this denialism, it serves a real political purpose. Because even though the people who are denying what’s evident before everyone’s eyes, even though they may realize that they’re lying, it serves a political purpose to keep people in a state of confusion, keep them distracted with other things and so on. So there’s a lot to overcome, and in this country it’s one the societies in which this denialism has the greatest impact, as shown by the fact that the US stands almost alone—well, now with actually China and Saudi Arabia—in the most recent non-acceptance or failure to recognize and welcome the report that was presented at this current COP24 conference in Poland.
WOLFF: Yeah, if I understand—Russia, the United States…
WALLIS: Saudi Arabia.
WOLFF: Saudi Arabia and Kuwait.
WALLIS: Kuwait, yeah.
WOLFF: …rejected the—the four countries that are major producers and exporters of oil. You couldn’t have a starker kind of—on the one hand the world, on the other hand people producing. You know, the world—which is the vast majority—and what is a tiny minority within that. Extraordinary that that doesn’t provoke a kind of generalized horror at this situation.
I’m sure you’re asked this all the time, but I would like to know your thoughts. Mr. Trump responded to that very Intergovernmental report you mentioned, Mr. Trump responded—if I recall—with the words “I don’t believe it,” the phrase “I don’t believe it,” and otherwise dismissed it, ignored it, pushed it aside. How do you account for that? Why would the government do that?
WALLIS: Well, let’s say that it was the tip of the interests of capital. I mean that capital doesn’t want to make the adjustments that are required in order to address these issues. And so although many of the leading capitalists wouldn’t take that kind of outlandish pose, he’s acting—I mean, saying don’t believe it. He’ll go on saying that, but it serves a purpose, even though the people around him may know that it’s not true. It serves a purpose. And I think one of the things—this was something very important brought out in Naomi Klein’s book, This Changes Everything. She did interviews with capitalists who were involved in the extractive industries and so on, and she found out that they were all very well-aware that an environmentalist-based agenda would really challenge the whole basis of their existence. They didn’t buy the idea that you could have environmentalism and that they could still go on doing what they do. They understand perfectly well that it does present a systemic threat to the continuation of things as they are. It is a question—and this is what I argue in my book—that is raises the question of the whole existence of the class structure of this society, because you can have this or that progressive environmental measure. You can encourage the use of solar technology. You can put taxes here and there and so on. But if it leaves in power the class that currently holds power, those measures can be revoked just as we’re seeing the measures taken earlier—all the environmental protection measures—being systematically undone by the present administration. And they feel under threat now, that’s why there’s more of an acceptance of this kind of extreme response. Plus the fact, you know, looking at it from the angle of the support they get, you have the fact that the other major political representatives of capital are not really willing to make any kinds of adjustments to serve the interests of the population. So there’s a kind of frustration, and therefore a willingness on the part of ordinary people to accept outlandish statements which they can sort of identify with, whether it’s out of vicarious envy of the wealth of someone like Trump or just whether it’s out of ignorance and out of a kind of frustration that their immediate needs are not being met. So they go for this kind of outlandish rejectionism.
WOLFF: Do you think that the arrival of Democrats to now control the House of Representatives—is that going to make a significant difference in how the environment is dealt with?
WALLIS: I don’t think it’s gonna make a great deal of difference. It might slow some of this down a little bit. The thing that has to be kept in mind also is the Democrats have to a large extent enabled the accession of someone like Trump by their failures to do what was necessary in an earlier stage, during the Obama administration or the Clinton administration. They often carried out policies that were similar to those of the Republicans, whether it was in regard to free trade deregulation and so on under Clinton or with regard to waging war with Obama. And even Obama opening areas to oil drilling and to fracking in particular, I mean—fracking is the big thing with the Democrats, Clinton in particular. Hillary Clinton pushing for fracking. So the difference at the level of the party is minimal. I mean, there’s sort of individuals within the Democratic Party recently elected to Congress who may make more of a protest, but that is almost like a token. I mean, it’s not going to affect the actual policy. So I don’t think we’ve gone far enough yet in that direction.
WOLFF: What is the social constituency of a movement that can make a difference? Where would you expect to find—if not now then in the future—the mass interest in, support for, constituency for system change to deal with both the ecology and the class structure of capitalism. Do you see that emerging? Where would you hope to find it?
WALLIS: Yeah. Well, it is a class issue that has to be understood. It’s a class issue—the environmental issue is a class issue in the sense that the capitalist class has an interest in obstructing the measures that will be necessary to protect the environment. That means that the constituency that has to contest that, to challenge it, is the working class broadly understood. And in terms of what’s actually happening in the country now, I think one of the most interesting things that has come out is that many of those in key constituencies who voted for Trump had in the Democratic primary voted for Sanders, who’s identified with a more progressive approach especially on the environmental issue to these questions. So there is a potential interest. It’s just that they’ve been so frustrated by the corporate Democrat leadership that they’re offered that they’ve swung over to Trump. So, the constituency there—and then, if you get into more specific dimensions or components of the working class, the people of color and the siting of ecologically harmful activities in their neighborhoods—environmental racism, as it’s known. This is something which can be very strongly spoken to, as well.
WOLFF: Victor, we’ve reached the end of the time. We, of course, have only scratched the surface. I want to thank you. I want to inform everyone that if you’ve found this conversation of interest then I hope you’ll join us—patreon.com/economicupdate, where we will continue this conversation on Economic Update Extra. And for all of you, please remember we thank you for your support and we look forward to speaking with you again next week.
Transcript by Christian L.
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