This week on Economic Update, Professor Wolff delivers updates on the sale of a co-op craft brewery to a large corporation, U.S. medical costs are by far the highest in world, and capitalism’s defense of inequality and instability with the "overcoming poverty” concept.
The second half of this week’s episode features an interview with Laura Flanders, a long-time independent journalist, about the idea of an independent media.
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Transcript has been edited for clarity.
Welcome, friends, to another Economic Update, a weekly program devoted to the economic dimensions of our lives: jobs, incomes, our own, debts, our children’s—all of that. I’m your host, Richard Wolff.
I want to begin today with a story about a worker co-op of a sort called the New Belgium craft beers, pretty well known, and it got quite a bit of attention over recent months, as it went about the process of selling itself to a major international beer capitalist namely Kirin beer from Japan. And so some stories seem to imply that this was a symbol or a representative of co-ops not being viable or having to sell themselves out and give up their co-op strategy. That’s wrong for several reasons and I want it quickly to go over them. Number one, the new Belgium craft beer is not really a worker co-op. It’s a worker owned enterprise, and that’s different, and that difference needs to be understood. “Worker owned” means that the shares in the company are owned by the workers in the company. But that leaves open the question of whether the worker owners will organize the work process making the beer in a cooperative way or whether they will choose to reproduce the capitalist system—have a few people at the top, call them a board of directors, telling everybody else what to do and gathering the profits into their hands for distribution. ESOP is the legal entity, employee stock ownership plan, that operates in entities like New Belgium beer. They chose not to make a co-op the way they organize their business. They left it as something workers owned. Not to make that unimportant, it is a very interesting step worker ownership that could be a step to a real co-op, but they didn’t choose to make it. And as owners, they decided their best way forward would be to sell to Kirin beer. Kirin beer then we’ll be the owner. It will no longer be workers owning anything. And so the step that could have been taken, now won’t be taken. That is a moment of sadness for folks like us. But be assured, there are many co-ops in the beer business, who have taken this step not only to own the business, but to make it run as a co-op, in other words to make all the decisions democratically—one worker, one vote—and not to have a board of directors to reproduce the very capitalism to which co-ops could and should be an alternative.
The second economic update for today has to do with the report put out by the International Federation of Health Plans. This caught my attention, because I have, as you know, fairly often talk to you about the medical industrial complex. That grouping of four industries in the United States: doctors, hospitals, medical insurance companies, and the drug and appliance makers in this country. Those four have gotten together, take care of each other, get each other’s back in order to charge more for medical care than in any other country on Earth. And the International Federation of Health Plans did a study. It was reported on—for those of you, who’d like the details, in the 28th of December New York Times, if you want a shortcut to it. But let me give you the bottom line, as they say. The United States was compared with other countries carefully chosen to be quite different. So let me tell you what the other countries were: Switzerland, South Africa, the United Kingdom, [the] Netherlands, Germany, and the United Arab Emirates, if I have their name right. Okay. Here was the bottom line. For most procedures in the hospital, you know—appendectomies, births—the things you go to hospitals for. For most hospital procedures and for most drugs, most of the rest of the world—get ready—measured by these countries, pays less than half what it costs to do exactly the same thing in the United States. It’s extraordinary. It’s a wonderful summary statistic of how medical care is a gigantic rip-off in the United States that is not equaled anywhere in the rest of the world on the scale that we are ripped off, in classic way, by a monopoly that these four industries have organized. It’s almost as lucrative for the medical–industrial complex as it has long been for the military–industrial complex.
My next update takes a moment of explaining. Capitalism around the world is coming under enormous criticism. The level of inequality in the United States is off the chart. It’s going back to the 19th century. And the level of inequality inside most other countries from China to Britain, to you name it, are likewise off the charts. Not only is capitalism producing gross inequality, but capitalism is just now slowly emerging from the second worst collapse in its history, 2008 and 2009, with everybody expecting the next downturn to happen soon and to be a doozy. So we got capitalism producing inequality and instability. So no wonder, it’s getting criticized left and right. And that puts its defenders in a bit of a bind. How are you going to defend a system that works this poorly for the vast majority of people? Capitalism is in danger of being understood, as it long should have, as a system that’s really good for the 1%—end of story. So the defenders have a hard time. But they’ve come up with something to which I want to respond.
Here’s their defense. Many years ago, sometimes a century is used, sometimes two or three centuries is used, extreme poverty in the world was much worse than it is today. So capitalism should be applauded, should be celebrated, because it has reduced extreme poverty from what it once was to what it is today. Let me give you a response. First, extreme poverty is a very fuzzy concept. What exactly does it mean? The World Bank, who keeps records of this stuff, has a definition of extreme poverty. That’s when a human being lives on—get ready now—one dollar and ninety cents a day or less. That’s right. Let me have that sink in, a $1.90 per person to cover the food you eat, the clothes you wear, the shelter that keeps you from the rain and everything and anything else—all for $1.90. If you had to live on that, try to imagine what it would mean. Even at that absurd level, it is admitted by the World Bank that today in the world 700 million people live on one dollar and ninety cents a day per person or less. Suppose we took as a different number $10 dollars. Let me do it again. $10 dollars per person for all the food, all the clothes, all the shelter, and everything else: medical care, transportation, care of children—you name it—$10 dollars a day. If we use that measure than half of the world today is poor. But to hear these people talk, “Oh, capitalism has done a wonderful job.”
Let me take it a step further. This kind of argument reminds me of my mother. Every time something was wrong in our family, my mother in her defensive need explained to us that it could have been—and probably once was—worse. Billionaires today, and let me remind you, the top 400 billionaires in the world have together more wealth than the bottom half of the people of this Earth. That’s all those people living under $10 dollars a day. What the people defending capitalism can’t defend against is the outrageous inequality and the gross immorality of this kind of inequality. You don’t distract us, and you don’t deflect criticism of the here and now by telling us what it once was, using measures that are—I’m going to be polite now—dubious in the extreme. But it’s worse. When we look at what got people out of poverty, for those who managed to, here’s what we discover about capitalism and poverty—that capitalists in the majority opposed every one of the steps. When, for example, in the United States it was proposed to have a minimum wage, so people weren’t in poverty, capitalists opposed it. They’ve been opposing it ever since. You know the last time the minimum wage was raised in the United States? 2009. That’s a decade ago. Prices have risen across the decade, but not the minimum wage. That’s not fighting poverty, that’s causing it. What capitalists want to do—and you shouldn’t be fooled—is having tried to oppose—minimum wage, family leave, a progressive income tax—all of the things that take people out of poverty. Having failed to stop them, capitalists now want us to give credit for those things that they fought against. Stop it. Don’t be fooled. And, you know, there’s some things I can give you as examples in which capitalists, after they’ve lost the fight to prevent an emergence of poverty, bring it back—the poverty. There was a middle class created in America out of the Great Depression, Social Security, unemployment compensation, public jobs, and a minimum wage all of which were done in the 1930s, were ways to lift people out of poverty. We don’t have a public employment anymore, we’ve gutted Social Security, we’ve gutted unemployment and we’ve gutted the minimum wage, which is why the middle class is disappearing as every politician needs these days to say. That’s an example not just of capitalism opposing the end of poverty, but bringing it back. Wow. Vast areas of rural America are simply being thrown under the bus in the last decades. That’s an achievement of capitalism too. It wasn’t always that way. Detroit was once a thriving city, so was Cleveland, so were many others. It’s capitalism that has laid them low. No, you don’t defend capitalism by giving us some hustle about diminished poverty. Face the reality today. And this is the bottom line of bottom lines. We have a capitalism that has the capacity to alleviate poverty here and now, finally, and chooses not to do it. That is the most immoral act imaginable. There is no excuse and looking backwards in history is a lame effort at doing so. And it leads me to be as much ashamed as anything else.
We’ve come to the end of the first half of today’s Economic Update. This is the moment when we remind you, please, subscribe to our YouTube channel. It is an enormous help to Economic Update, cost you nothing but a click of the mouse at the YouTube to add us to those that you support. Likewise, make use of our websites. They are ways for you to communicate with us by email and to follow us on Facebook, Twitter, and Instagram. And, as always, our special thanks and our appreciation to a Patreon community that has rallied and supported us and make these programs possible. Thank you very much. Stay with us. We’ll be right back with an important interview.
Welcome back, friends, to the second half of today’s Economic Update.
I’m very happy to welcome back to our microphones, where she’s been before, a longtime friend and a guest, Laura Flanders. I don’t really need to introduce her, but I’m going to, just to make sure I cover all my bets. She’s an award-winning host and executive producer of the Laura Flanders Show. It’s a nationally syndicated TV and radio program that looks at the disparities and struggles over power and meaning and the future across many disciplines: economics, politics, and culture. She’s worked in independent media, which is what we’re going to be talking about, for a long time. She’s written six books including the New York Times bestseller “Bushwomen: Tales of a Cynical Species”, which is a wonderful title. She recently received major awards and later in our interview we’re going to be talking about them.
Wolff: So, Laura, first of all, welcome.
Flanders: Great to be with you, Rick, always a pleasure.
Wolff: Okay. Well, with that accent, I have to start by asking you, what do you think about the election results in England: Labour Party, Corbyn and all of what’s happening there, which has such parallels to what’s happening here?
Flanders: I mean it was a heartbreak. I think in the weeks and especially the days before the election in December you could see the polling edged towards Corbyn, edged towards Labour. It was always going to be a kind of moon shot, “Could he do it?” But to see the defeat and the scale of the defeat was truly gobsmacking and depressing, disappointing. The campaign had been the sort of grass roots campaign—you and I believed in—had been the kind of engaged community organizing that you want to win. But it just couldn’t overcome the Brexit polarization that had happened. And, frankly, there were problems, I think, with Corbyn’s personal leadership style. He was challenged constantly to address this question of anti-Semitism, never figured out a good way to do it. And I do think that there was just an exhaustion about Brexit that had put people into camps they weren’t going to budge. And finally, he was vilified by the press. From the minute he put his head above the parapet, it never changed. And Boris Johnson, his opponent, the conservative leaders’ strategy was simply not to do media, simply not to give key interviews, not critical interviews, not challenging interviews. He just kept quiet. And that worked for him. I do think there’s a deeper thing to it as well, but I don’t know if you want to go into it.
Wolff: I do want to ask you one question. How important was the notion in England, in Britain, across Britain, that somehow Europe was the cause of their troubles and disengaging from Europe would be a solution? Was that able to become a profound shaper of the outcome?
Flanders: Well, don’t forget this has been the discourse from three years ago, when the first… Brexit referendum happened. That was the idea. Europe is the source of all your problems. Immigration is the source of all of Britain’s problems. And by this point I think it was almost as if people didn’t rethink the question. They just had staked out a position. They weren’t shifting. And to be honest, I think, the kind of work—and this is what I was going to say before—the kind of ongoing political education work, the popular education work that unions used to do, that free schools used to do, that community organizations, even churches, used to do isn’t happening. So you can have a Corbyn–McDonnell revival in the last five or six years of the Labour Party that is finally going back into communities, animating those local Labour Party chapters. But it couldn’t happen quick enough to really help people understand what were they actually up against, what were the challenges with Europe, what certainly needed to be changed, but not in this kind of way, and what’s the truth versus fiction of the relationship between immigration and Brussels and their quality of life. That’s the job of education that takes a long time. And I think while the agenda of the Labour Party and its manifesto was hugely popular with renationalizing energy and localizing control and focusing on local economies and lots of ways, support for co-ops, you name it. While that was popular, it felt kind of pie in the sky in a fight that was very, “Now this moment who you for: this guy or that guy?” We always lose, when it comes down to that, or we pretty much always lose.
Wolff: But there’s buried in there is some optimism too, because if Boris Johnson proves to be as empty as there’s every reason to expect him to be in terms of what he does, all of the bitterness, anger, and all of the momentum will then build across his regime and may make them, in the irony, stronger.
Flanders: Absolutely. I mean one of the things that was so interesting to me was in the context of this Corbyn–McDonnell Labour revival, and let’s not forget, where the Labour Party had been before them—very conservative place, very centrist place. So this is a short-term transformation. While that was happening, you saw local initiatives and experiments happening at places like Preston that we did a special report on, focusing on how do we get people back engaged in their own economy? How do we revive a sense of self-sustainability, not in an exclusionary Brexit kind of way, but in a how do we look after ourselves? How do we have a living peaceful sustainable economy in a good way at a local level? And they were experimenting with all sorts of stuff. So in a sense, this gives you a chance to experiment longer at the local level, try out some policies, some experiments, and then take national office, when taking national office might have been premature, who knows. And in the meantime, Rick, you’ve got, what looks to me like a move towards the United Ireland, weather the Northern Irish loyalists, the ones who support themselves, their membership in the UK—like it or not—you got more nationalists selected in the north, the northern six counties, than ever before—a majority for the first time in a hundred years. And you have what looks like an independent Scotland in the work. So some interesting things are going to be happening on that front, but it’s not immediately great news for the Labour Party.
Wolff: Last question about this and a transition. Boris Johnson was unable in the explosion around Donald Trump’s decision to assassinate a diplomat, general from Iran. Johnson couldn’t come up with anything. The image of the British poodle that has been developed since Thatcher and through Blair and so on, Corbyn didn’t make a strong statement. Do you think the extraordinary act of the United States added to that the fact that no European ally was consulted or shown anything about it? How does that play out in all of this?
Flanders: Well, I think that’s got great resonance fast in the United States, where, I mean, certainly, what you’ve got in the UK is a stark contrast that, I think, will reflect well on the Labour Party and will influence, I hope, the Labour Party leadership elections, because Corbin—whatever you may think of his style on the doorstep—he has a long record of calling not just against war, but for building diplomatic relations and solutions to conflicts first and foremost in the Middle East is where he’s cut his teeth as the co-chair of the anti-war committee that emerged after the Gulf War. The contrast will be huge. And I do not think there’s a majority in favor of what the president okayed this December, this January, January 2nd. And in the UK, I think, Boris Johnson is going to be a horrible follower without the capacity to take his own direction on this. And it will reflect badly on him. It’s very dangerous.
Wolff: Follow the transition. I assume you haven’t been glued to the impeachment.
Flanders: I have not. Well, you know, I watched some of it, but no, I have not been glued. It’s been a distraction from the things that you and I talk about on a regular basis. I think it was a kind of, you know, first quarter or fourth quarter return report for vested Democrats, where they felt pretty cheery for a while. But what’s actually changed? Not whole lot.
Wolff: Tell me the important thing that you’ve contributed most of your life to an independent media. Do you have a sense here in the United States that the independent media, what you and I are in a way, is growing? Is that an impact already? Is likely to have an [impact]? How do you see what we’re trying to do?
Flanders: I would love to know what you think about that, Rick. I mean there are moments, where I’m very optimistic. In lots of ways, there’s never been a better time to tell your story, if your story is your… is a different take from everybody else’s. You can connect with your viewers and listeners online. You can get it funded through individual contributions and crowdsourcing. You can do a lot. But can you actually sustain operations that can compete with the megaphones of the so-called major media, the money media as I call them? It’s rough. And as we all of us, as more of us do crowdsourcing, we’re all kind of crowdsource in the same crowd. It’s a challenge. So I often say it’s, you know, there’s never been a better time to tell a story, it’s never been a harder time to get paid for.
Flanders: Yeah. Well, I mean I think that we are mission driven media. Right? And I think that the mission that I’ve taken upon myself is to try to tell a different story about how change happens. We say the Laura Flanders Show is the place where the people, who say it can’t be done, take a back seat to the people who are doing it. We believe people are capable of way more than they are led to believe they’re capable of, especially by our money media. And that if we can tell the stories of successful collective action, not only successful even, but of collective action that takes on the challenges that people face, and brings people together and surfaces new possibilities, we can hold power to account in a different way than the way our money media suggests, which is you have a choice between two guys or a guy and a few women once every four years and then shut up. We know that’s not how change happens. But the Transformative Cities project that I just came back from in Amsterdam is an effort to do something else to hand out awards to organizations that make change at the city level, to tell stories of collective action that really makes a difference for communities and for people on the ground. I think a lot of us are engaged in this effort if we don’t tell peace stories, we’re going to be ever more vulnerable to the warmonger stories. If we don’t tell stories of people coming together, we’re feeding into people’s sense of nihilism, of fear, of panic. And I think that’s what leads folks to buy their own guns and to vote for people with big guns. And, frankly, we’re dreaming, if we don’t think there were people out there cheering for Trump this week, the wake of these attacks.
Wolff: And there’s an old truth that, when you fight a war aboard, the things you do there, they come home. If you’re willing to shoot people somewhere else, you’re willing to shoot them here. The president, who assassinates foreigners, will have no hesitancy to assassinate non-foreigners. And that’s the rule of history, it’s the lesson of history and woe to the people, who can’t learn it as others have said better than I. You got some awards this year. I want to mention them: an Izzy Award, a Pat Mitchell Lifetime Achievement Award, Urban Journalist of the year. I mean these are some recognitions and I think beside you’re being modest I want to push you again. Is there some recognition that, yeah, the money media are the money media, but maybe Americans are beginning to understand that there’s something to be gained by having diverse platforms, diverse sources of news? I noticed with my students, since I still teach in the university, that there’s a lot of interest in the unusual non-money media. And that they have a sense they need to have access to that.
Flanders: Yeah, no question. And I have thought a lot about these awards, because I’m not one that won lots of awards and then suddenly three in a year, major ones. And I think it’s partly a recognition of duration, I’ve been doing this for a long time, the Laura Flanders Show is ten years old. But I do think you’re right that it’s—and I don’t want to be totally humble, of course, I’m doing great journalism—but I think it is a recognition of a whole field that we can—particularly in the case of the Women’s Media Center Award—this is, you know, this is not indeed left media, feminist, yeah, but not necessarily in the left. And the presentation to me was all about independent media being the future, coming from a woman that used to run PBS, and who worked for Ted Turner, and who was a longtime TV anchor on NBC in Boston. So it’s interesting, I do think, there’s a recognition, if not that our field is the great new hope, but that there’s something deeply wrong with having our news brought to us by the same corporations that bring us our killing. And that there is the capacity, the new technology enables us to do reporting and discussion in a different way. And therefore, let’s look at this, let’s seek, figure out how do we get stronger?
Wolff: Wish we had more time. We will do it together. Thank you very much Laura. And thank all of you and with particular appreciation to our Patreon community for your ongoing support. It means the world to us. Stay with us. We will be with you again next week.
Transcript by Aleh Haiko
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