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 our children’s), and I'm your host, Richard Wolff.

Before jumping into today's updates, I want to bring us up-to-date on something we learned about a few weeks ago, when we had as a guest on this show David Van Deusen, the head of the state of Vermont AFL-CIO. He and a group of like-minded progressives had won the election to become leaders of the state of Vermont's AFL-CIO and took that situation to declare that if then-President Trump did not leave in the event that he lost the election, there would be a general strike, at least in Vermont, to protest this sort of thing and other proposals along those lines. The head of the national AFL-CIO, Richard Trumka, then proceeded to criticize and campaign against the Vermont action of their member AFL-CIO. This of course produced a conflict, and I'm happy to report to you that President Richard Trumka has withdrawn his intention to pursue this matter. It is now a closed matter. The national will not interfere in what the Vermont elected officials leading the AFL-CIO want to do. It is a victory for a new, revived labor movement, and even though there's much to be done, it's important to recognize it, and because of that I want to briefly mention a second, small, modest victory.

This one took place at the pork processing plant of the Smithfield food company in Sioux Falls, South Dakota. It is one of the largest pork processing plants in the United States. It has almost four thousand workers, and it became famous last year when it became a COVID hot spot – when out of the four thousand, thirteen hundred workers came down with the COVID disease. Four of them died. It was a catastrophe because of the way the work there is organized – large numbers of people in very close quarters. This was a terrible loss to the workers there. It led them to demand changes. The company refused and then some weeks ago, the workers voted. And here's the victory: in a union election to go on strike immediately, the Smithfield food company caved in. A contract was suddenly able to be achieved. The union got at least some of the things it was looking for. It's a small victory. Much more needs to be done, but it is one of those victories we should know about and think about.

Okay, first update: there's another way to evaluate any economic system and that is to see how it performs in terms of its wealth distribution during a crisis, a little bit like evaluating a person and his or her character in terms of how they handle a crisis. So take a look at how global capitalism handled the crisis of COVID in terms of its wealth distribution.

Here we go. The five hundred richest people in the world gained over the last year and a half – that is the time of pandemic and crisis – a total of $8.4 trillion dollars in their wealth. Let me do that again: these are already the richest people on this planet – the five hundred richest people. Their wealth grew. Global wealth was already unequal, before the pandemic hit. We were faced with a pandemic that threatened everybody and we were told we all have to pull together, we all have to sacrifice to get us through this grave crisis. But what we in fact did, or what the system we live under did, was arrange for some of us not to make it. Millions died. Many more millions have gotten sick with God knows what long-term consequences in the years ahead. But for the five hundred richest, they gained wealth to the tune of $8.4 trillion dollars. The inequality and the injustice here is monumental. If they had not gotten wealthier, if that increase in their wealth had instead been taxed from them, we could have vaccinated, by now, every person on this planet, two times over. What kind of system works this way? One that has lost the historical right to continue.

My next update has to do with the little country of Iceland. It did something remarkable and the results have now been announced. Between 2015 and 2019, it made an experiment. It reduced the length of the working day in government offices throughout Iceland from five weeks to four weeks, from 40 hours a week to roughly 35 to 36 hours a week. Here's what they discovered with this four-year, carefully monitored experiment. At the end of the time, during the four weeks at roughly nine hours a day, the workers did more work – that is, they were more productive per week than they had been before, [when] working 40 hours in five weeks.

Wow. You got an extra day for the life of all these workers, and you got a greater output of work from them. Not only is this infinitely better for the workers who wanted this, but it's actually better for the employer, too. It's just that in the capitalist system, the employers are too stupid or too locked into what they do, to actually do [this]. Capitalism isn't the efficient engine it wants you to believe. It's inefficient, because it could have gotten more with fewer days, but didn't do it, in part because the workers wanted it, and they see the workers as their adversaries. The experiment tested over one percent of all the workers in the country of Iceland, and because it was so successful, 86 percent of Iceland’s workers now have union contracts providing them with four-day work weeks. Let me be clear. Nine hours a day, four days: that's 36. Not 40, in five days.

And in case you're wondering, “well, this is an isolated event,” – it isn't. Spain is piloting a four-day work week for companies, in part to cope with the COVID fallout. The Unilever Corporation in New Zealand is giving its staff a chance to cut their hours by twenty, without cutting wages. And let me stress that in Iceland, as in these other experiments, the wages paid are the same. It's just fewer hours, so there's more of your life you can enjoy when you're not working, because it doesn't hurt the work you do. It's just that capitalism couldn't figure that out. And in May, a commission in London came out with a suggestion that they should cut the work week in the way Iceland did, but their reasoning was a little bit different, because that would reduce Britain's carbon footprint. In other words, it's good for the environment, too. It's just our system, which couldn't find its way to do that, until pressured by the workers and the sympathetic government (which you had in Iceland).

My next update has to do with another inefficiency. The Wall Street Journal did a wonderful piece of work and I want to report on it. It studied the effect on students who went and got a master's degree here in the United States, asking a simple question: what is the comparison between the debts these students undertook, and their ability to repay those debts once they had the master's degree and went out into the world to look for a job, with that as a credential – the master's degree. Well, here's the problem. The overwhelming majority, as The Wall Street Journal documents, are in terrible financial stress. The basic reason, and I think many of you know this, is that the kinds of income you can now get with a job, with a master's degree, simply will not provide you with the income you need to get rid of this debt hanging over your head. It's a problem that afflicts millions. The story gave a couple of examples that are so stunning, I want to share them with you.

It turns out, the university with the worst record of doing this – bringing in students, urging them to study, dangling the master's degree in front of them, charging an arm and a leg to get it – is Columbia University here in New York City. And when a student complained and told The Wall Street Journal about it, here's the answer this student got from the university: “You know, you could take a job while you're finishing your studies. That might help you, and we we have one for you – walking the dogs of the president, Mr. Bollinger, the president of Columbia University.”

I mean you can't make this stuff up. Why is this awful? Because there's an economic inefficiency here. There's a gap between the incomes people have and the cost of getting a good education that shouldn't exist in the first place. So we have cost of education too high, families can't afford it so they borrow, but then the jobs they can get don't pay enough, so they can't pay off the debt. And the whole system is falling apart as a result of all of this, and what do we get? We get blame. The universities blame the companies, the companies blame the universities, both the universities and the companies blame the government, the government …

You know what this is about? This is a failure to understand that this is a systemic problem. It's not either/or. Yes, the university charged too much. Yes, the companies don't pay enough, and yes, the government doesn't provide the supports. But the reason they're all doing this, and doing nothing but blaming each other, is none of them dares to face the system, [which] is the problem – which this program repeats to the point where I have to be careful not to upset you all. So, I won't repeat it, although it screams here out of this situation.

The final update, before we take our break, is once again about this nonsense having to do with quote-unquote “a labor shortage.” There is no shortage of workers in this country. We have millions of people unemployed, looking for work. We have millions more who have stopped looking, but that's not because they're not interested in the job. It's because they've given up in finding a decent job. What do I mean? Well, we have lots of companies that lost money over the last year and a half. You know: COVID, the economic crash we've all gone through, all those closed restaurants, all those closed department stores. They didn't make any profits because they didn't have any workers, and they didn't have any customers, because they couldn't. Now [that] they're able to go back to work, they want to make up for the profits they didn't get. So you know what they're doing? They're offering jobs at lousy pay, or even more common, they're hiring people back, and four of them working in that department discover that it's four of them, whereas when the pandemic hit there were five of them. Yeah, we're hiring people back, but at lousy jobs – too much work, too much time, too little money – and that's why we have this remarkable statistic, which other commentators seem to have a hard time understanding. The government keeps track of how many people are quitting their jobs. We are now having the biggest quit rate ever. You know why? Because the job-hiring is hiring people back to jobs that are lousy, because the company wants to squeeze more profits. You know what that means: the workers who have to recoup from their year and a half, where they were unemployed and used up their savings and had extra medical expenses, etc., etc., and they want … This is class war, folks. This is the employer versus the employee. It's a class war and a class struggle, not a labor shortage.

Well, we've come to the end of the first part of today's show. Before we move on, I want to thank all of our supporters who have, and [who] continue to help make this show possible. In particular, we'd like to thank those whose regular monthly support makes it possible for us to plan future programming. If you haven't already, please go to Patreon.com/EconomicUpdate
to learn more about how you can get involved in supporting the show. Please be sure also to follow us on Facebook, Twitter and Instagram, and if you're watching on YouTube, be sure to
hit the subscribe button below. Also, DemocracyatWork.info is a place where you can sign up for our mailing list, to stay up to date with all of our projects. Stay with us. We'll be right back with today's special guest, software engineer and author Wendy Liu.

Welcome back, friends, to the second half of today's Economic Update. It is with great pleasure that I welcome to our microphones and our cameras, Wendy Liu. Wendy is a software engineer and startup founder, who left the tech industry to pursue a master's degree in inequality from the London School of Economics. She has written about technology and politics for Logic Magazine, Dissent Magazine and Tribune. She is notably the author of a book, Abolish Silicon Valley: How to Liberate Technology from Capitalism. She lives in San Francisco, and we're really pleased that you were able to join with us today, Wendy.

LIU: Thank you so much for having me.

WOLFF: Okay, let me jump right in. Ten years ago, Occupy Wall Street helped awaken the United States to the need for a critique of capitalism, something that had become a kind of taboo in the previous sixty to seventy years. In 2020, you publish a book, Abolish Silicon Valley, that takes the critique of capitalism further. Could you briefly explain your reasoning behind arguing that we need to free technology from capitalism?

LIU: Sure, thank you for that introduction. So I guess we'll start by saying, if we look at the top ten corporations by market cap today, you know, maybe six, seven, eight of them are what we think of as technology companies. Look at the top five – all of them except Saudi Aramco, an oil company – they're all technology companies. They're all founded in the last fifty or so years. They all involve some kind of software and hardware, and they're what we traditionally think of as tech companies. So I'm talking about Apple, Amazon, Alphabet – companies like that – and I think what that says is, that tells us that there is a lot of money to be made from harnessing the use of digital technology. And that doesn't mean that there's something especially new about this kind of digital technology. Its technology has always been something that has enabled a variety of people to produce a lot of wealth, and to accumulate that capital, and just keep it within their own hands, even as that technology itself is produced by a variety of people, including their workers that they employ, and by scientists, by people who are working outside their company. Still, what's interesting about technology today is that it has allowed so much wealth to accumulate in such a short period of time. And so we're seeing companies that were founded in the last twenty years, that are now worth billions and billions of dollars.

So I think part of the reason that I felt the need to write my book, and to make the argument that I'm making, is because I think there's a special urgency today around technology, and around what capitalism has done to technology, in that it has mostly put technology at the hands of a very small number of people who are using it to enrich themselves, who are using it to exploit and dispossess workers, who are using it to really just deepen the exploitation of the natural climate. You have all these technology companies who are working hand-in-hand with oil companies and who are intensifying the extraction of natural resources from our planet. And so I think if you look at all of these different separate threads – you look at income inequality, you look at the fact that our planet is hurtling towards ecological catastrophe, you look at the fact that you have so many people who are working these jobs where they have no control over their lives, where they do not have any of the wages or benefits that they they really do deserve, and they're increasingly damaging their bodies because they're being directed by an algorithm – I think if you put all these factors together there is a special moral urgency, not to mention a temporal urgency, to the topic of “What if we use this technology for something else? What if we used it for anything other than enriching a few billionaires so they can go off to space?”

WOLFF: Wendy, very good. Thank you. That really gives us a sense of what your book is trying to get across, and as someone who's begun to look at it, I can strongly encourage people interested in this kind of analysis to go get it.

How do you respond to a classic defense move by the people who want to defend capitalism, that somehow all of this technological advance – the credit for it goes to capitalism, that without capitalism somehow we would all be working with donkeys and wheelbarrows, or something like that? How do you respond? You must get that a lot.

LIU: For sure. I think people in the tech industry especially like to weaponize it. They will say things like “the only way to have technological progress is if you have a certain degree of inequality.” And I think they have something to that argument. What they're saying is that in the kind of world we have now, if you just look at history, there has been both technological [progress] and innovation and this very capitalist kind of inequality at the same time. So if you just take it purely from a historical perspective, there is something to that. I don't think that's necessarily true in the abstract, and I don't think that it is impossible to design a society where you do have innovation, where you are producing and inventing useful things without these kinds of capitalist structures. Moreover, I think the important point here is who is actually creating these technologies? Who is writing code, who is soldering hardware, who is coming up with these ideas that are being commodified by these capitalist enterprises? It's not the CEOs, it's not the shareholders – it is the workers. And it’s workers in a whole variety of different roles, a whole variety of different places. You have people who are in all these different parts of the supply chain, who are creating the technologies that are being used by these companies, and most of them are not being paid very much for it. They're not being recognized for it. None of them are going to be on the cover of Time magazine. None of them are going to be shot into space along with Jeff Bezos. And so I think what we have is a very classically capitalist example of a few people on top taking credit for the work done by millions and even billions of other people.

And there is a way in which the media and society as a whole ascribes all of these inventions to the people on top, despite all evidence to the contrary. You know, it's not like you
have to thank Jeff Bezos for every Amazon package that's delivered to your house. You don't have to thank Elon Musk for every Tesla. I don't think he even knows how to build a car on his own, right? … The people who we recognize as being these captains of industry, the best case you can say for them is that they were in the right place at the right time. They were able to assemble a lot of people together. They were able to create these teams and create these brands. Sure, that may be something to be applauded, but by the end of the day all of the work that these companies have produced is produced by teams. It's produced by a lot of people, and I would say that if we can do it under these circumstances, if we can create the products that are being created in this way, well, what if we could create it in a more egalitarian way?

And I know your work has a lot to do with cooperatives and much more democratically governed ways of running a workplace. I think that is very fruitful and that's definitely something we should be looking into, and especially because there is a strong critique to be made of the kinds of products that come out of capitalist enterprises, because they are inherently undemocratic. They are inherently made for the benefit of a small number of people, and in a way that benefits shareholders, and so if we think about what are the products that we actually want to congratulate capitalism for – what? Cryptocurrencies? Gig delivery apps that result in gig workers being exploited to the bone? With all these “software as a service” platforms that don't actually deliver much value for society as a whole?

I think that there is a strong correlation between the kinds of products that are being produced and the way that companies run, and that if you had a much more democratic corporate structure, then maybe we would have more useful products. Maybe we would have products that aren't incredibly exploitative or just degrade the natural environment, or are just not useful for the vast majority of people, are instead toys for rich people to play with. And so I think, to the argument that capitalism is the only reason we have a technological process, I would say, well, capitalism is the reason we have all of these useless products and why we have all these exploited people. It's why we have all these billionaires. There is a kernel of innovation that capitalism has been able to take advantage of. I don't think that is intrinsic to capitalism. I don't think it's impossible and if you look at, for example, historical examples of scientific innovation, many of them were produced completely outside the realm of capitalism.

WOLFF: It's always struck me, just to add, that the enormous wealth concentrated in the Jeff Bezos's and the Elon Musks, and all of that that's money that is not being used to provide the education, the opportunities for millions of other people whose mental creativity is thereby undercut – they have wonderful ideas of how to improve human society, but they'll never see the light of day because that money is being used to send Jeffrey Bezos off into space because it's an amusement. And then to claim, “well, we are the efficient cause of technical change” – you are at least, at the very least, a major barrier to the technical change we could have in a society that distributed its wealth more equally.

I don't mean to pry personally, but I'm intrigued and I'm sure my audience is. You went into Silicon Valley, probably like most of those of us who did that, with hope and imagination that you were going to the forefront of human creativity and blah blah, all of that, and then you chose not to stay. Tell us a little bit about what made you make that decision to change your life, to go study in the London School and then to write this book.

LIU: Well, I will say that this is not anything I could have predicted when I was younger and just starting up programming. I started programming when I was a teenager, just on my own, you know, making websites, talking to people on the Internet. I had this very glamorous and quite naive understanding of what Silicon Valley was. I thought it was this amazing place where intelligent people could do whatever they wanted, and they were producing great things. I think for me, it was kind of an escape because I was really not flourishing in my everyday life, and the Internet and everything it represented seemed to me like the possibility of a better future, one where I could work on whatever I wanted and be amply rewarded for it. And also, you know, have some sort of society around that and just really feel like I was able to belong somewhere. So it wasn't exactly a coherent idea in my head when I was younger, and it was only as I grew older and started learning more about the industry, started working – I interned at Google in 2013 – that I began to understand the limitations of the idea I previously had about what Silicon Valley was. Because the press really likes to glamorize it. There's all this mythology around these brilliant value-creators who just have this idea, they're in the garage and then they create something amazing, and then society gives them a ton of money, and it's almost as if they deserve it, because they started out in the garage. And so when they become billionaires and they have their mansions, well, it's just society giving them what they’re due.

And there was a really long time where I did believe that. I would say the moment it started to kind of crack, where that idea began to feel less convincing, was when I was in San Francisco, working at Google in San Francisco (they have an SF office), and just seeing how much poverty there was in the very city where the Google office was. Just on my commute from the intern housing that I was [living] in, which was about five, ten minutes away from the office, I would see numerous homeless people. I would see people who were clearly very, very poor, did not have any of the power and the wealth that the tech industry had generated, and that made me start to question: well, if this industry really does care about making the world a better place, why am I seeing this inequality? What is the problem here? And it wasn't until several years later when I discovered more Marxist critiques of capitalism, that it started to make sense to me. I started to understand that all the wealth that was being generated was deliberately not being used for the greater good, and that is what led me to study inequality and write my book.

WOLFF: Well, it's lucky for all of us that you did. Thank you so much for spending this time with us, and again everybody, this is a book that you ought to go out and get and read. This is a remarkable personal testimony that is also very powerful social criticism. Thank you again, Wendy Liu, and I hope we'll have a chance to talk again in the future. And to my audience, thank you all, and I look forward to speaking with you again next week.

Transcript by Cindy Mitlo

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