On this week's EU, Prof. Wolff presents updates on costs of NBA offense to China, worsening global inequality, poverty mocks Nobel prize for 3 economists working on "incremental solutions" to poverty, why Google donated to global warming deniers, and latest crisis in defaults on US auto loans.
The second half of the show features an interview with Richard Hobbs, Human Agenda Director, San Jose, CA, expert on worker co-ops.
Prof. Wolff's latest book "Understanding Marxism"
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Richard Hobbs is an immigrant rights attorney and the Executive Director of Human Agenda in Silicon Valley. He is also a member of the South Bay Progressive Alliance and Democratic Socialists of America. He has a Master’s degree from the National Autonomous University of Mexico, where he studied dialectical and historical materialism for five years, and a law degree from Golden Gate University. He is the organizer of Emulation Tours to Cuba in January 2020, and to Mondragon, Spain in July 2020, to highlight the benefits of worker-owned cooperatives.
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 jump in today with a story that made headlines for quite a while recently. And it had to do with a statement made by one Daryl Morey, who is the General Manager of the Houston Rockets basketball team, part of the NBA. He made a tweet, he issued one, and it said the following, “Fight for freedom, stand with Hong Kong.” This little tweet of this high official caused and is still causing a bit of a firestorm inside China. Turns out the Chinese people in large numbers and the Chinese government, probably in response to the upset of its people, took offense at this remark, immediately began cancelling NBA events scheduled to take place in China.
For those of you not familiar with it, China is the second most important market for basketball in the world after the United States. It is the future of the NBA. It is crucial to the NBA’s financial viability. What the leadership of the NBA and in particular of the Houston Rockets just did was to threaten their entire future by this tweet. Mr. Morey immediately apologized. The head of the NBA immediately apologized. And both of them indicated, quote, “They meant no offense to the Chinese”, which is either honest, having to do with their feelings, or financially driven because they just shot themselves financially in the foot.
But there’s a deeper problem here that needs to be addressed, because the same difficulty, now encountered by the NBA, is being encountered by the national government of the United States in its trade war with China. Even though that trade war has carefully avoided mentioning Hong Kong, it is the same issue and so, I wanted to explain it. The problem here is a gross ignorance of Chinese history or, if it is an ignorance, an unwillingness or inability to draw the obvious conclusion. So let’s go and do it briefly, so that Mr. Morey and others like him can learn.
For two to three hundred years—over the last three certainties—the Chinese have been committed to one overarching goal. And that is to hold on to their integrity as a nation, their unity as a nation. The last 300 years have been the years of primary capitalist colonialism carving up the whole world into specialized sectors dominated by Britain, or France, or Germany, or the United States, but Spain, Portugal, we all know it. The map of Latin America is carved up. The people of Brazil don’t speak their native language, they speak Portuguese. The people in the other parts of that continent speaks Spanish in addition to their own languages, etc. Africa is the same story, Asia—much of the same. China prided itself that even though it was told what to do by European countries, humiliated in the so-called Boxer Rebellion, at the end of the 19th century by the European countries, they at least, they said, held their country together. That’s what their primary focus has been. When the Communists made their revolution in 1949, one of the reasons of their success had to do with they had been a leading force fighting against the Japanese who had invaded China in 1931, taken over a huge part of it called Manchuria. And when then opposed by the Chinese, who were trying to drive them out to re-establish their unity. The Communists did that. And everybody thought somehow after a civil war and having gone through all of that they’d be easy push over for Europeans to do what they wanted. First test was the Korean War in which a fight was had between North and South Korea. The United States, led by general MacArthur, thought it could dictate the results. Big mistake. The Chinese fresh from another war, nonetheless, were prepared to fight for the integrity of their society and for their neighbors to be secure and safe. The French made the mistake in 1954 in Vietnam, not understanding that the Chinese would again support their friends, particularly on their border. To attack the Chinese on the question of Hong Kong, is what? It’s to attack them. “Hong Kong freedom” reads in China, “We’re going to take Hong Kong away from you. We’re going to make Hong Kong ours. Not yours.” And the Chinese responds to that, as it has been to every other attack on them is, “No, you won’t.” Mr. Trump went after them with tariffs to knuckle them down, to force them to make agreements with the United States. And he’s learning, “No, they won’t.” He promised 18 months ago that the trade war was an easy war to win and a quick one too. Well, here we are 18 months later, quick it’s not, and he hasn’t won anything. That was the mistake of the NBA and the Rockets. They didn’t understand Chinese history. You do something over there that questions their unity, their integrity as a nation, you’re going to get blow back of the sort that will make you very sorry, as the NBA surely is, for having not understood Chinese history and having made a consequential disastrous move.
My next update has to do with two things brought together. The Nobel Committee in Sweden issued the Nobel Prize in Economics to three economists who are specialists and having come up with interesting little ways they call them “incremental solutions to poverty”, particularly in Kenya, in East Africa, and in India. I take nothing away from these economists, they’re working on this problem, they’re finding little ways that they can help the horrific poverty that besets most of the world. But my attention is caught by another statistic that might have been even more impressive to the Nobel Committee.
The 25 richest families in the world today together own $1.4 trillion dollars of wealth. On the 11th of October the Bloomberg News service carried a story about that where you can get the details. Over the last year these 25 richest families increased their wealth on an average of 24%. So to all of you listening and watching, if your wealth and your income didn’t go up by 24%, you are falling behind. Turns out then that the rich must be getting richer and you’re not doing that, at least not at that pace.
Let’s look closely at these numbers. The average amount of wealth of these 25 richest families is $56 billion dollars. If they went up by 24% last year, that means the average increase of wealth of these families each was $10 billion dollars. The capitalist system we’re living makes the richest people on earth grow their wealth faster than everybody else. The gap between rich and poor in this economic system is getting worse, in case you weren’t paying attention. You want to do something about poverty, why don’t you deal with that? Not little incremental programs in Kenya and India, valuable as they may well be, an important for the children involved—no doubt. But a serious approach to the problem of poverty requires facing a system that is producing ever greater extremes of wealth and poverty. And the Nobel Committee might look in that direction alone, if you’re expecting that. My advice is: “Do not hold your breath.”
The next economic update has to do with the Google corporation. Yes, the Google corporation. They got caught recently by releasing information—they released it—about the institutions, particularly the charitable institutions, the tax exempt institutions, to which they give money. A dozen or so of them—they give to many—a dozen or so of them are climate deniers, that’s what they call. The companies… institutions, let’s call the non-profits, that give out lots of information questioning whether we have global warming, questioning whether we’re in trouble in this planet, questioning all of that and throw in a way, throwing sand in everybody’s face and eyes on this subject to avoid the regulations that would otherwise come down particularly on the fossil fuel companies: the oil, the gas, and so on. When confronted by critics Google explained—quite correctly, I believe—that they gave to these… to other groups, they gave to groups that were important in the deregulation or non-regulation of high tech, which, you can understand, Google wants to avoid. The fact that these organizations also, also work to avoid regulation of fossil fuels was not Google’s interest or concern. So they gave money to somebody who does something they’re not concerned about, because they are concerned about keeping regulation away from themselves. That’s how it works, folks. That’s how these groups that work against many of the interests many of you have. That’s how they fund themselves by doing some other favor for another donor. And so they end up being the institutions that help all the donors. It’s good for the donors, it’s not so good for the rest of us.
Last update, I’ll have time for today, has to do with auto loans in the United States. Auto loans are again in increasing default. What do I mean? People, who borrow money to buy an automobile, discover two, four, six, eight months in that they can’t come up with the monthly bill to pay for the car. And so the car is repossessed, taken away from them. What’s interesting this time—two things I want to bring to your attention. First, the biggest sufferers, the biggest defaults, the biggest repossessions of cars, are cars that are ten years old—eight, nine, and ten years old. So the first thing I want everyone to understand, because it was news to me, is that more than ever before used cars, even old cheap used cars, cannot be afforded by Americans unless they borrow the money to buy them. Number two, nine and ten years ago was the worst of the crash of 2008. So bad was at crash that American car companies cut back production of new cars drastically, which is why 9- and 10-year-old used cars are now in—you guessed it—very short supply.
So the dealers in them jack up the prices forcing the buyers, want them to go into debt, which they can’t carry. So they lose the car, which is their only way in our society that has such poor public transportation for them to hold on to their jobs. Ten years after the crash of 2008, we’re still producing personal tragedies based on the instability of the capitalist economic system.
We’ve come to the end of the first half of this program. I want to remind you, please, to subscribe to the YouTube channel that we maintain, to check out social media where you’ll find us. And, of course, our special thanks to the Patreon community, which is our friend and our much appreciated supporter.
Lastly, I want to remind you that we’ve written a book “Understanding Marxism” that tries to introduce that topic to the many of you that have shown us with your questions and comments, that you’re interested in that kind of a thing. If such a book were of interest to you, please, it is made available by us as a service to respond to your interests. Stay with us. We’ll be right back.
Welcome back, friends, to the second half of Economic Update.
Before jumping into today’s interview, I wanted to mention again to all of you, the Economic Update is supported by the New School university in New York City where I, myself, am a professor in the International Affairs program. The New School offers master’s degree programs and international affairs that are rooted in progressive interdisciplinary scholarship, and they prepare engaged global citizens to build a more just and sustainable world. The New School students focus on challenges such as the rise of authoritarian regimes, refugee crisis, jobless youth, and climate change. Students have unique learning opportunities both at the United Nations and at field research locations around the world.
Wolff: So I’m very pleased today to introduce you to Richard Hobbs. But first let me thank you before I even introduce you.
Hobbs: Thank you.
Wolff: Richard Hobbs is an attorney, is an immigrant rights attorney, and also the Executive Director of Human Agenda in Silicon Valley based in San Jose, California. He is also a member of the South Bay Progressive Alliance and of the Democratic Socialists of America. He has a number of advanced degrees, but part of why we brought him today, is that he’s an organizer of Emulation Tours to Cuba, the next one, I believe, in January of 2020, and to Mondragon, Spain, in July of 2020, where he focuses the attention of interested folks, like us, on worker co-ops, and what they mean, and what their trajectory is. So I want to talk to Richard Hobbs both about Human Agenda and about worker co-ops, and the links between them. So, Richard, why don’t you tell us a little bit about what human agenda is, where it came from, and why you’ve devoted so much of your life to it?
Hobbs: Human Agenda began 17 years ago, and it does have a method. First of all, we do look at the objective conditions. We see that the concentration and centralization of capital and also the commodification of life is globalized. We’re completely surrounded by capitalism. Right now, in the United States the life expectancy actually has declined in the last two years, because of drug overdoses and suicides. In Silicon Valley, we’ve seen a 42% increase, for example, in homelessness in the last two years. And we know that six white men control half of the wealth of the United States. Secondly, we look at needs. Human Agenda has asked over 80 different groups, what are your human needs? And within 15 minutes, organizations can come back and say what their psychological and their physiological individual needs are as well as the conditions that it would take to reproduce any society. Third, we have a vision based on those needs. That vision basically has five parts. First, we believe that everyone should participate in and be responsible for care work. That means the time and resources to take care of ourselves, to take care of our family, and to take care of our immediate community. It also means, for example, that men should also be engaged in care work at home. Secondly, as part of the vision of Human Agenda, we believe that everybody needs to give a contribution to societies. This means that they need to produce something of value for society at a living wage with reduced working hours. Reduced working hours it’s really key to a new vision. Third, we think everybody should have the opportunity to have access to lifelong learning with accurate information. Forth, we think that everyone should have the time and the resources to participate democratically in all of the institutions of our society. And finally, we believe, just as Abraham Maslow believed, that we all need time for self-realization. Now, in terms of the vision of Human Agenda, we know that we cannot reach that vision under our existing society. We need a new set of values. We like to say that our economic system is based upon exploitation, our financial system is based on speculation, and our political system is based on corruption. We need new values. And all of those are legal by the way under capitalism, under our society. And so we need new values. Human Agenda has five values, we call them deck values: democracy, equity, cooperation, kindness, and sustainability. We are looking for institutions that actually meet those values, because we know, for example, that Monsanto or Wells Fargo are not democratic, egalitarian, cooperative kind, and sustainable. But there are institutions that can be established including economically worker-owned co-ops, land trusts. We can also provide Medicare for all, public education. In terms of our political system, we can actually move to a system whereby campaigns are publicly financed. And as the director of the part of South Bay Progressive Alliance that deals with elections, we’re trying to also get corporate-free candidates elected. And in California in terms of our financial system, the governor just signed into law public banking in California. So we do know that there are important alternatives that can be created as an alternative to our existing economic, political, and financial system.
Wolff: Wonderful. Thank you for that summary. It must have taken a real effort to get it all in, but that’s good, that’s good. A good place for us to start. Before I talk to you a little bit about these institutions, you’re looking at, that might help us, let me provoke you a little bit. How do you respond when people listen to what you say, not in agreement, but then kind of throw up their hands and say, “Well, it’s too good. It’s pie in the sky. It’s a wonderful list. But the human race somehow can’t get there.” How do you cope with that?
Hobbs: Well, first of all, a lot of people are at a point of their lives where they understand that we need fundamental change in our society. They see that, for example, there’re homeless in the middle of Silicon Valley, which is the heart of capitalism, and yet they can’t find a home. And so people are honestly looking for alternatives right now. I believe that Silicon Valley is the poster child of overwork. People are working 70 and 80 hours on the high-end for tech and they’re working 70–80 hours on the low-end in order to pay the rent. And in both instances people are completely exhausted and alienated. And so I believe that people are looking for answers. Obviously, it’s difficult to get busy people involved in political work, but on the other hand, I’ve never seen the plethora of groups in Silicon Valley that has existed since the election of Donald Trump.
Wolff: Wow, that was my next question. Are you seeing a growing response to the kinds of concerns, issues that Human Agenda is focused on?
Hobbs: Absolutely. Human Agenda itself is involved policy-wise in many of these issues. And more particularly, we’re trying to create worker on cooperatives. We have helped create the Smart Yards Cooperative, and we’re working right now in the creation of four other immigrant-based cooperatives in San Jose, California. But we’re also trying to create those policies that can make a difference: Medicare for all, public education instead of charter schools, etc. We’re working on all of those issues.
Wolff: Tell me why you think worker co-ops are an important way forward towards the issues and goals of Human Agenda?
Hobbs: Well, I’m going to talk about our values and co-ops. First of all, worker co-ops are democratic. “One worker, one vote” means that they have a very high participation rate inside their own workplace. Secondly, they are equitable. Not only do they share the profit, which is unheard of in capitalism, but also they have the lowest disparity between the highest and the lowest paid. In Mondragon, it’s basically 5 to 1. In the Arizmendi bakeries, in the East Bay in California, it’s 1 to 1. And so, that enormous disparity doesn’t exist in cooperatives. Third, they are cooperative by nature. They make a collective decision making, and they are not coercive as the workplaces are under our existing economy. Forth, they are much more kind. They resolved their problems through mediation, and they don’t just follow the orders of the boss. And finally, they’re more sustainable, because once workers are making their own decisions, they tend to have modest, but fair income, and with that income, they have modest, but fair consumption. And so most co-ops are not engaged in over-consumption, and they also really don’t make decisions that would harm themselves in terms of the environment or their local community.
Wolff: Alright, this gets me to one of the things I’m most interested in in terms of what we do in this program. You’ve laid out a notion of how worker co-ops can move in a direction you believe it. But more than that, you have concrete experience. And one of the reasons you’re here today is because you have been for years going to Mondragon to study and investigate the worker co-ops they’ve set up there and likewise in Cuba. Tell us about them and tell us, particularly, what you learned about them that gave you the feeling of the importance of this institution going forward.
Hobbs: Honestly, after three generations both in Mondragon and in Cuba, I believe there’s a fundamental shift in human nature. It’s a generational shift after people have been living in a cooperative environment for 60 years, as in both cases, Mondragon and in Cuba. I see that people are fundamentally different when you get to talk. I’m lucky I speak Spanish and I talk to people when I’m in Mondragon and when I’m in Cuba. And so it’s a big help to be able to do that. But I’d say that because in the case of Cuba, for example, we have the example of obviously a state that has socialized the means of production and now is working to decentralize and democratize the economy through the creation of worker owned co-ops. In 2012 under the experimental worker co-op law, for the first time non-agricultural co-ops could take place. And with that, we have about 400 service and industrial cooperatives in Cuba where their wages have tripled ever since they’ve begun. The workers are much more motivated to work then they when they work for the state sector, and they’re very pleased making decisions about the prices of the food at the restaurant, about their own wages and so it’s a fundamental shift in Cuba and I think that Cuba is on a path. Luckily, they have the island and so they can make these kinds of changes, but it does take an enlightened group to be able to move in that direction of decentralizing and democratizing the economy.
Wolff: So, simple question. If the workers make the decision, for example, about their own wages, did, what capitalists have always said, did it all blow up because the workers don’t care about running the business, they just want more wages, and so it all falls apart? Implicitly, what you’ve said, they didn’t have that problem.
Hobbs: No, they don’t have that problem. I mean, in Cuba the new worker owners in 400 cooperatives outside of the agricultural sector, which is actually much bigger than these 400 non-agricultural co-ops, the workers have been extremely pleased to have access to making their own decisions about the cooperative, and they also understand that they can’t provide goods or services beyond the level of income of the average human, which is very low. I mean, Cubans have the inverse of what we have in the United States. In the United States through our private system, we have to pay for almost everything: housing, food, education, etc. In Cuba, it’s really the opposite. Health and education are completely free for life. 85% of the people own their own homes. There are still subsidies for food. I was in Cuba in January, and I paid the equivalent of five cents to get on a bus. And so, on the other hand, the actual income of Cubans is very low, and I think that’s one reason why a lot of young Cubans want to leave Cuba, because they’re listening to Miami, and they’re ready to buy their Nike shoes. And they can’t buy them in Cuba.
Wolff: But in other words, you’re telling me that the workers with their also their own bosses understand that the limits of what they can pay and wages relative to everything else to keep the enterprise going.
Hobbs: Correct. And this is a highly integrated democratic system in Cuba. Ever since 1976, when people’s power came into place, there’s been a lot of participation throughout the local provincial and federal levels in Cuba. And, of course, they have mass organizations in Cuba that we can’t even begin to dream of in the United States.
Wolff: Richard as always, I wish I had more time to go into that, but I’m particularly grateful for your specifics about Cuba and also about Mondragon, because they help make it real and concrete, how we can get from where we are to the vision of Human Agenda. Thank you very much.
Hobbs: Thank you.
Wolff: And thank you all for being part of this. I hope you found that as interesting as I did. And I look forward to speaking with you again next week.
Transcript by Aleh Haiko
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