Economic Update: The End of the Megamachine

[S12 E03] New
On this week's show, Prof. Wolff talks about the sharp reduction in US population growth; how "lockdowns" are the anti-Covid policy everywhere, some gov't run and focused while others are private, haphazard, and unfocused. In the second half of the show, Prof. Wolff is joined by Fabian Scheidler, author of The End of the Megamachine: A Brief History of a Failing Civilization.

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, debts, incomes, our own and those of our children. I’m your host, Richard Wolff.

I want to begin by noting something that happened very early this year. I have my disagreements with Bernie Sanders. We've talked about those in the past, but when Bernie does something that really deserves some applause, well, then I want to provide that as well. Early this year, when the Republicans were trying to keep Trump above water in the face of January 6th, and the Democrats were celebrating democracy, as if this were the key issue to deal with in our times, Bernie came out with something remarkable. He gave speeches on the 5th and 6th of January, in part to striking workers across the country who were brought together electronically to hear and respond to that speech. And he gave a remarkable interview to Stephen Greenhouse that was published on January 10th in The Guardian, the British newspaper. We didn't get the interview in the American newspapers, nor was there much coverage, and that's part of why I’m doing it now.

The single most important remark in the speeches, and they had many important comments, but the single one that I want to suggest is the one worth focusing on — here we go: “The Democratic Party has turned its back on the working class.” Whoa. He is a Democrat. Yes, he's independent, but he caucuses and works with the Democratic Party, ran in the Democratic Party for president, etcetera. “The Democratic Party has turned its back on the working class.” He’s issuing a warning, a none too subtle either, as he himself recognized. He talked about all the things that need to be done that aren't being done in our “democracy.” We are not providing the health care, we're not providing the housing support, we’re not providing the child care credits, all the things that he fought for, and that were at least verbally supported by the establishment Democrats. He’s saying ‘we've come to a parting of the ways,’ isn't he? And I want to say to him, “Congratulations.” And maybe, if I'm not too snarky, “better late than never.”

I want to turn to updates, and one of the most important indices of anything that happens in a society is the growth, or not, of its population. So I want to talk a little bit, as I have been doing in other forums, about population growth. So let's begin. The statistics are in for the growth of population between July of 2020 and July of 2021, the latest full year data that I could come to, and we’ve had the smallest growth of our population in over a century. Wow. Something remarkable is happening. Total growth in the United States (we are a country of 330-odd million people) was 395,000 people. That’s how we grew over that year. What’s going on is very important, both to know and then to analyze, how it came to this.

Well, we're in the middle of a pandemic that has killed in our country more people than anywhere else on earth so that's contributing, but it's not a major part of the story. Likewise, our population is aging, so as your people get older a larger percentage reach the end of their lives. That’s understandable, too. And many of you know about the devastation caused by the opioid overdose crisis. It has contributed, too. Pandemic, aging, opioid — all important, but none of them the dominant cause. Here comes the dominant cause of the decline: it’s the fertility rate, the birth rate, in the United States. That’s what's come down. I'll give you just one statistic. Population experts believe that we have to have 2.1 births per woman in our culture to stay even in our population; not grow, not shrink, but to stay even. In 2007, we had 2.12, just enough to keep growing in terms of our birth rate, our intrinsic ability to grow our population. In 2020, we had dropped from 2.12 to 1.64. That, historically. is the killer here, the thing that drops our population. So I want to talk about what it means, and why it happened.

First, why it happened. The story has to start with the decision of American capitalist businesses, starting particularly around the 1970s, to move out of the country in a big way, to drop their factories, their offices, their stores in this country, and move to where economic growth was faster, and wages and other costs were lower. That was a one-two punch most capitalists could not resist, because profits looked better over there, to say it simply. And they closed down their facilities. Whole towns shut down when they were dependent on one factory, or one office, or one big store, and now it was gone. All Americans know this story, because it has happened literally in every part of the country. Visit your nearest dead mall, and you'll get a sense. Just like if you look at the inside labels on your clothes and your appliances. It's all made someplace else.

And you know, when that happened it dealt a real blow to our working class. They lost the jobs, and you know which jobs left first — the ones where the wages were highest here, because if you move them to China where the wages are very low, it would be the biggest add to your profits. You don't move the job of a worker who earns a little, because then you're not gaining that much by moving to China, which has its costs. So you move first the wages of the white American male worker, typically in a union who’s fought hard, and had a good wage and benefit package. That’s what the employer saves most on, so that's why the employer moves. It’s crushing for the white male working class, perhaps more than for anyone else, this departure of the good jobs, so it should come really as no great surprise that that part of our population — a huge part of our population, men and women — start having fewer children. The jobs they can hold on to aren't very good. The factory job is gone, and being a greeter at Walmart will not pay anything like it. So you can't have children. It's too expensive, it's too difficult, it’s too uncertain. Now enter into this reaction of our working class, and particularly our white, but not only our white working class, in cutting back on having babies. By the way, cutting back on getting married, and a lot of other things that go with that.

Now ask yourself the following question: Did people understand what I've just said?That is, the link between the profit-driven moving of our jobs out of the country and replacing workers with machines (because that was going on too) all driven by profit maximization, and the declining birth rate? No. You know how we know it wasn’t understood? Because the right wing politics in our country got people to believe that their economic difficulty wasn't primarily the decisions of big business. We kind of knew, everyone knew a little of it, but no. We got really excited, especially if we were on the right wing, by scapegoating immigrants. You have to appreciate the irony. So we scapegoated the immigrants, as if they were the cause of our economic difficulty, those poor people coming from Central America. What a crazy idea, but it worked. It focused the anger away from the profit-driven decisions of corporations to immigrants, and here comes the irony.

So we turned on the immigrants. We closed our borders off, we sent them back, we hounded them with ICE, all of it. Obama did it, Trump did it, Biden is doing it. It’s not a partisan issue. Everybody got in on it. That's the right wing, and here's the irony: the single biggest headline of the last six weeks that’s been in America? Labor shortage! Hello. We just kicked out the people who, if we had let them stay here, would have been the solution, right off the bat, to the “labor shortage.” We’re complaining now about a labor shortage; Not facing the fact that (A) we did that to ourselves as a nation, and (B) that we did it out of an accommodation, if you like. An accommodation to the decision by private enterprises to make money somewhere else. What a story. What a story of our population, and here's the irony: You know what corporations are going to be doing as a result of the labor shortage? You know what that means? It's one more reason to move production away from this country, where there's a labor shortage problem, and go to another one, where there isn’t. This is right-wing policy, agreed to by the Democrats, that is foolish, and self-destructive. We are, as a nation, shooting ourselves in the foot. And whatever else you think about that activity, it doesn’t make you look real smart.

I want to turn next, in the time that we have left, to this crazy conversation about lockdowns, as if there's a way to react to the COVID crisis that's either ‘locked down,’ like in places like China, New Zealand, and so on, versus ‘liberty,’ or something like ‘freedom’ here. I want to correct this because it's a simple mistake. Lockdowns in China — I’ll use that as an example — are government-run, highly focused, concentrated, and coordinated using private resources and public resources to really focus in on a city or a region. Everybody doesn't go to work. Everybody stays home. Food is brought in, medicine is brought in, hospitals are built, literally, to focus in. That’s one way of doing lockdowns. But it's not that we in the United States or in Western Europe, don’t have lockdowns. We do! Only we allow them to be done ad hoc, privately, everybody makes their own decision. Or, to be more accurate, every employer does. So this government office shuts down, or that company shuts down. Ikea just announced it's not going to allow workers to come back who aren’t vaccinated. We’re shutting down, we’re locking down, but we're doing it in a disorganized, uncoordinated, way by the public, when they feel like it. This school yeah, that school not. That’s chaotic, and we know it's chaotic, and we know it doesn't work, because — and I’ll stop with this because I know it hurts — in the United States we have had 57 and a half million people to this point come down with this disease. In the People's Republic of China, a country four times larger, they have had a total of 133,000 people. We’ve had 825 (or more) thousand dead people. They have had 6,000 dead people. There is no contest between an organized lockdown and a chaotic lockdown, and that's what the world is watching.

We’ve come to the end of the first part of today's show, and as always I want to thank all of you whose support makes this show, and others we produce, possible. To learn more about the different ways you can support and partner with Democracy at Work, and with this program, please go to Patreon.com, slash, Economic Update. Or visit our website: Democracy at Work, dot, info. I also want to remind you of our recently released hardcover edition of “Understanding Marxism.” It’s available now, along with our other publications, at Democracy at Work, dot, info, slash, books. Please stay with us. We'll be right back with today's special guest, Fabian Scheidler.


WOLFF: Welcome back, friends, to the second half of today's program, Economic Update. It is with genuine pleasure that I bring to our microphones, and to our cameras, Fabian Scheidler. He lives and works in Berlin. He is a writer for print media, television, and theater. His book “The End of the Megamachine, a Brief History of a Failing Civilization” has been translated into several languages, including English, French, and Chinese. His latest book, “The Stuff We Are Made Of, Rethinking Nature and Society,” was published in Germany in 2021.

So, first of all, Fabian Scheidler, thank you very much for joining us today.

FABIAN SCHEIDLER: It’s a pleasure to be here.

WOLFF: Good. You know we always appreciate, here in the United States, people who speak our language, English, even though it's not their primary one, because we as Americans are very poor in doing the reverse. In any case, let me begin by focusing everyone on what I think is the key issue here. The book you wrote that I read, and found remarkable and important, was called “The End of the Megamachine,” published in Germany, if I'm correct, in 2015, and then in English in 2020. It is part of a literature that is growing, and growing fast, that reflects the widespread notion that we are at a moment of basic historical crisis, basic historical change, one of those moments when it is both exciting and exhilarating to be alive, and quite scary, because those two go together so often. So let me begin. You have your way of thinking about this and seeing it. You’ve published it in the book. Give our audience a sense of your basic reason for writing a book called “The End of the Megamachine.”

SCHEIDLER: Yes, well, Western civilization, or capitalist civilization, or whatever you would like to call it, or ‘the megamachine,’ as I call it, has created a crisis on earth which is without any precedent in human history. We have created already several means to destroy our species and life on earth. One is nuclear war, of course, the other is the extinction of species. The industrial civilization has created the largest, biggest species extinction for the last 66 million years, since the dinosaurs were wiped out, and this would even happen without climate change. And then we have climate change. We are very close to some significant tipping points in the earth system, like the melting of the Greenland ice and West Antarctica, the breakdown of the Amazon forest, the permafrost, and so on. And if we exceed these tipping points, we have irreversible processes which lead to what scientists call ‘the hot house earth,’ which means that large parts of the earth could become uninhabitable.

So this is a very extraordinary situation. We have to ask ourselves, “Why?” Why is this civilization, which is hailed as a bringer of enlightenment, and progress, and prosperity, why has it created this situation? And the answer I give is by telling a story, a history. When we don't understand the behavior of a person, we tell his story. It helps sometimes, and I tell the story of this civilization. And to sum it up very briefly, the civilization is based on several structures which drive this destructive process. It has also brought a lot of prosperity, but it drives also this destructive process. The pillars on which this historical system, which emerged around 500 years ago, is based on, first, the endless accumulation of capital — that means to multiply money in an endless circle of profit and reinvestment — and this principle is enshrined in our most powerful economic institutions. For example, joint stock companies, which were created 400 years ago, and the 500 largest corporations today control about two-thirds of global trade, in the large part of the global economy. Now these structures, these corporations, they have to grow, they have to expand, they have to multiply the capital, to accumulate. That means they have to transform nature into commodities.

So this is, of course, a problem on a finite planet, if you have a system that has to grow forever. Now this economic system cannot stand on its own. It needs a second pillar, and that is the modern state, which emerged also around 500 years ago. The modern state was basically a military institution based on mercenaries and firearms, and the states didn't have the money to buy all these mercenaries and firearms, so they had to get money from merchants and bankers in Amsterdam, in London and so on. They went to other countries to plunder these countries with their mercenaries and arms, and to pay, as we would say today, the return on investment to the bankers and merchants. So state and capital were very closely interlinked from the beginning. Today we see it in the fact, for example, that the 500 biggest corporations, many of them, could not exist without huge state subsidies. The international monetary fund says that we are subsidizing the fossil fuel industries with 5.9 trillion dollars each year. That means that the taxpayers are financing the destruction of the planet. And the same goes with the aviation industry, the car industry, pharmaceutical industry and, of course, Wall Street. All these banks could not exist without these huge bailouts, and with the huge money from the central banks, and so on. So state and capital are intertwined, and have created this dynamic which cannot stop, in fact.

WOLFF: Fabian, that's quite a story that you tell, but it's wonderful. It opens up a whole host of questions. There is a growing movement, let's call it, of people who see what you've just explained, who feel it, who see it, maybe not all of it, but they appreciate the climate change dimension, or the population dimension, or the inequality dimension, and so on. Do you see such movements as sufficient to deal with this problem, or not? I mean, how do you sense the strength of the opposition to letting this play out?

SCHEIDLER: Well, we have opposition to the system from the very beginning, for the last 500 years, and we had it with the European, and also American history of revolutions, of course. The French Revolution changed a lot, but it did not really change the economic system. We had other revolutions, and it turned out to be very hard to change the real fundamentals. Of course, we had the Socialist revolutions and many others, but the system is still in place globally. You have to remember that each system, every system, every social system has lives. It emerges, it develops, and then there are contradictions coming up, and at some point it will end. There is no eternal system. Even capitalism cannot be eternal, and there are many signs which could show that we are already in a transition phase. And, of course, in a transition phase the system becomes chaotic, and in a chaotic system social movements can play a huge part, because the system will flip to one side or another side. The transition from one social system to a different system is not an event; it’s not one revolution, but it's a process. Sometimes it takes decades, sometimes centuries, and it's really a cascade of crises that we are already seeing. A financial crisis, the pandemic, ecological crisis, and in each and every crisis there are bifurcations. The system becomes more unstable, and society can make choices to go rather to this side, or to another side. And the choices we make will determine the options that we have in the next crisis.

So I think, in the 2008 financial crisis there was a lot of opposition. There was Occupy Wall Street, but it was crushed. In this pandemic, again the states use their money to bail out Wall Street, the aviation industry, and so on, but I think there's a growing sense that the system will not continue forever, and there’s growing resistance. Here in Germany, we had the largest demonstrations in our history, since World War II, against climate change. This was before the pandemic, and I think the pandemic has held some of this growing resistance a little bit under the carpet, but it will come up again, I’m quite sure. We see more and more instability. We don't know where the whole thing goes, but this is a time really where resistance and also imagination of different forms of economic organization is crucial.

WOLFF: Yes. I would only add to that that here in the United States, I think one of the few things everybody agrees on is that the level of social divisions, the hostility the breaking into communication-blocked groups — who can't talk to each other, or listen to each other, or trust each other — that the level of cohesion holding this society together is weaker than it has ever, ever been. I recently noted — you may find it interesting too — in the Canadian newspaper The Globe and Mail, which is one of the leading newspapers in Canada, in Toronto — carried an article by a leading researcher there named Homer Dixon, and that article was that the Canadians have to get ready, because the society south of them, namely the United States, is disintegrating, and it is a threat to Canada's survival. This is an extraordinary thing to say, and even more interesting that a leading researcher at a major think tank is publishing this material in the leading newspaper of the country. It is more evidence of what you say.

Can I ask you — I wish, of course, we had more time — but can I ask you how would you position the relationship between the United States and China, and all that is involved there? How does that figure in, if it does?

SCHEIDLER: Well, China will certainly soon become the largest economy in GDP terms, and of course this is very threatening to the US, which is the hegemonic force in the world still, in a way, but the USA and Germany is certainly in decline. You see that with Afghanistan, with Iraq, and so on. Now there's a lot of warmongering going on in Washington, of course, and this is because the establishment in the US, of both parties by the way, fearing that China will become much more powerful than than the US. They are trying to stop it in every way. It's a very dangerous situation, because when a hegemonic force is declining, it may try to preserve its power by military means. When you look at the relations, you see that there are no Chinese battleships at the coast of California, but there are a lot of US American battleships around China, and a lot of military bases. The US has half of the military budget of the world. The Chinese military budget is tiny compared to the US, and it's completely absurd that the US government is considering China a military threat. I think China is going to avoid war by any means, and they are very clever. For example, they are constructing the largest infrastructure project in the history of humankind, which is the new Silk Road, connecting China to Europe to Southern Asia to Africa, and so on. This is not only because of commerce; it's all also to avoid a military confrontation in the South China Sea, because the Chinese have a historical memory that the British, and other European colonial forces, destroyed China in the 19th century, then invaded China. They started what the Chinese called “the century of humiliation.” The Chinese want to avoid this by any cost, so that's a chance for peace, I think.

WOLFF: Fabian, I wish we had more time, but I really do appreciate your sharing
with us a perspective that rings true for millions of Americans. We have a slightly different perspective. We live in a different country, but I think we all share this sense that something momentous is going on, and we need to talk about it .Your book again that I would urge on people: “The End of the Megamachine,” by Fabian Scheidler. I hope we can do this again sometime in the future.

And to my audience, thank you for participating. Think about what we have just heard, and I look forward to speaking with you again next week.

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About our guest: Fabian Scheidler lives in Berlin, Germany, as a writer for print media, television and theatre. His book “ Civilization ” has been translated into several languages, including English (Zero Books), French (Le Seuil) and Chinese. His latest book “ The Stuff We Are Made of. Rethinking Nature and Society ” was published in German in 2021. Comments on “The End of the Megamachine”: “The topic could not be more important. A very valuable and surely timely contribution.”– NOAM CHOMSKY “A must read for everyone rising against the system that is destroying life on Earth and our future.”– VANDANA SHIVA

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Showing 3 comments

  • Maria Carnemolla-Mania
    commented 2022-02-09 10:54:33 -0500
    Thank you for the insightful comments Pasqual and for supporting our work.
  • Pasqual DiGesu
    commented 2022-02-08 08:37:32 -0500
    Great show and great truths not discussed in mainstream American media. It is distressing that the “draconian measures” exercised in china to control covid spread at the cost to their great economy is not credited with their priority of national health and is instead attacked. Our ridiculous lock down policy being uncoordinated not only among ourselves but internationally which would require statesmanship and diplomacy is a complete failure and demoralizing.
    As for our diminishing population, it is not just corrupt laws regarding job displacement on foreign soil which does play a part, but as the other commenter (on D@W) here states and is confirmed in University sociology texts, the shifting loyalty of woman from the family to the factory plays a great part. This enabled capitalism to increase a stagnant salary work force and doubled the workforce income tax to our government. God works in mysterious ways and so does Capitalisms. The follow up movement of the 60’s which introduced sweeping legal reforms also created a vicious and corrupt divorce and child custody industry which has been very, very prosperous. As a young thinking man would I want to get a state marriage license when we could live together without offending religious institutions anymore or father a child? Of course this is a show we will never see aired.
  • Edward Dodson
    commented 2022-01-26 11:54:39 -0500
    Bernie could has said that the Democratic party long ago aligned with rent-seekers over producers. The special treatment of so-called capital gains over ordinary wages is a prime example. Many others are associated with the many exceptions to prudent accounting methods and financial disclosures that were acquiesced to going back to the 1980s.

    On population, Professor Wolff should at least acknowledge the fact that many young adults as they were forming new families realized that having more than one or two children (or any children) would impose a severe financial hardship. Of course, there were other reasons for these decisions. The huge addition of women in the full-time workforce, women who acquired formal credentials and now put greater emphasis on career over family. Thus, there is this combination of defensive decisions in recognition of the economy of scarcity and stagnant wages for many people and the entrance of more women into more and more areas of the economy.

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