[S12 E20] New
In this week's show, Prof. Wolff talks about the GOP's stance on student debt forgiveness, US corporations replacing home ownership with rentals, today's US economy not "strong," and left unity, as 4 French left parties work to defeat Macron. In the second half, Wolff interviews Prof. Marcello Musto on the history of the left and Marxism, and how they deal with war in the past and in Ukraine.
Transcript has been edited for clarity
Welcome friends, to another edition of Economic Update. I'm your host Richard Wolff. In today's show we're going to be talking about the GOP turning against forgiveness of student loans, the buying up of American homes by investment companies converting homeowners into renters, the really problematic condition of our economy and a remarkable unity of the left in French politics. Then in the second half of the show, I've invited a specialist in the history of the left and of Marxism and socialism who's going to talk about how the left has handled wars both in the past and right up to the present—Ukraine and all of that——so that we learn more about how the left has debated and divided around that question.
So let me jump right in. On the 5th of May——and before and after as well—the leader of the Republican party, Senator McConnell——at least a leader in the Senate—has been slaving away doing his usual political dirty work. This time trying to destroy, to stop, to block the forgiveness of student loans and I wanted to explain what this is about—since Mr. McConnell clearly either doesn't know or isn't sharing that reality.
We are a more indebted economy than we have ever been. The American people are laboring under burdens of debt we’ve never seen before in American history. Mortgage debt, automobile/car payment debt, credit card debt and student debt...the four debt horsemen of the apocalypse in this country. One of the great anxieties of the rich and led by the banks is that this mountain of debt will be renounced by the debtors because in the history of the world that has happened many times.
The fear here is palpable and the problem is that students who have often been the advanced guard, the vanguard of social change demanding the changes that then the rest of the citizens catch on to…the students are demanding forgiveness at least of their debt. That opens the box of the possibility of an anti-debt movement that has the capitalists of this country shaking in their high-priced boots.
Mr. McConnell is there to do the job and he begins as follows: he calls debt forgiveness (and I did not make this up, friends) socialism. Now—besides indicating that he doesn't know much about socialism and what would we expect from a Republican senator? Socialists have had advocated all kinds of things but forgiveness of debt, which is in there somewhere, has never been the major thrust of a socialist platform—but of course Senator McConnell doesn't know or care. He uses that as a swear word to kind of knock it out. But you might be interested that I did a little research and my research took me to the Old Testament in the Bible particularly to Leviticus 25 (for those of you who know about these things) where the Bible says that God is pleased if every seven years—guess what—we forgive debts. It's a way of restoring the community and preventing it from splitting between the debtor and the creditor. But Mr. McConnell (who I'm sure is a good Christian) didn’t know much about it or didn't care. What else did he do? Well, he said, “We really don’t need to help the students, it isn't fair.”
What does he mean? He knows that they're going to do everything in their power to not forgive the people with mortgage debt, the people with credit card debt, the people with automobile payment debt. You know, we have these debts because we don't have enough wages and salaries to buy things outright which we would have preferred to do. Debt is the last resort of people who don't want to give up on the things that are important in life even though they're not paid properly—guess by whom—by the capitalists who employ them. And so, Mr. McConnell wants to turn those who will not be forgiven against those who might be if they mobilize.
Of course the alternative is to say to everybody, “The students are simply the first ones…line up with them…line up behind them. Get for yourself as a debtor what the students are fighting to get for themselves.” That, Mr. McConnell doesn't want...and then his last little dirty shot—he refers to the debtors as Ivy Leaguers. Here the idea is—in case you hadn’t heard it—that we shouldn't give student forgiveness because—get this now—some of the students don't need to have their debts forgiven because they come from wealthy parents. They go to the elite schools, they're rich people.
I love that and I want to remind Mr. McConnell that in December of 2017, a few years ago, when Mr. Trump and the Republicans gave the corporations and the richest Americans one of the biggest tax cut gifts they ever got. Nobody including Mr. McConnell said, “Gee we shouldn't give a tax cut to companies that don't need it.” Many of the companies who got the biggest tax cut have been making wild profits for 5 or 10 or 15 years before the tax cut. They clearly didn’t need it—but nobody brought up the question of need and everybody got the tax cut. But, when it comes to helping students—“No, no, no, no…Now we are going to discuss need.” Mr. McConnell is a faker doing the service of the people he should be challenging.
My next update has to do with an absolutely remarkable phenomenon sweeping this country. It started long ago but it really picked up steam in the aftermath of the Great Recession of 2008. Here's what it is: masses of people losing their jobs, losing their income, unable to make their mortgage debt payments so they have to sell their house. That part isn't all that new… what's new is who buys it…not another family—that's the old story. Now it's corporations who are set up to mass purchase the houses of those who have to leave because they've been rendered bankrupt.
They don't want to sell the house—they want to convert it from a homeowner to a home renter. It's the conversion of more and more American families into renters. The money that is made by these large corporations is enormous because they buy the houses from people desperate to sell them and therefore at a low price. Then, when the economy came back in 2011 and 2012, at least part of the way, the rising value of the home was the benefit of the corporation—not the family that had been forced to leave. Horrible, ugly story about today’s American capitalism but it has side effects that are even worse.
Let me give you an idea because much of the loss of homes in the Great Recession were homes owned by African Americans so that today 75% of whites are home-owners and only 41% of African Americans are home owners. The situation has gone the furthest in this whole country in the big city of New Jersey known as Newark, where half—Half!—of the homes are now owned by companies that rent them out. Here's a side effect, that a visitor to this show on occasion, Bob Henley, made me aware of—he's a specialist in New Jersey where he lives and works. He pointed out that there's been a catastrophic drop in the [voter] registration of African Americans and other poor folk in Newark. Why? Because if you convert a home from homeowner who lives there, who’s invested in the community, who learns about the community because he or she owns the home—they're likely to register to vote—they care, they pay attention. A renter who doesn't know how long he/she will be there has a completely different attitude——doesn’t register to vote, doesn’t participate locally and you know who benefits from that—the Republicans. Because the inner city people who don’t register and vote are overwhelmingly Democrats. People didn't think any of this through and that's how the transformation of this country is continuing just a few inches below the radar but with devastating social effects.
In the first three months of 2022, this is my third update for today——the annual rate of growth of wages slowed. At the rate of January, February and March of this year, we will have a wage increase of 4 percent this year and the inflation is expected this year to be between 8 and a half——which it already is––and 10. In other words, the working class of this country, the wage earners are falling further and further behind.
Let me add a couple more economic statistics. Bitcoin, that gambler's paradise that so many Americans have become interested in, has lost—get ready—50% of its value since November of last year. That is barely six months. The NASDAQ, the largest stock market in this country, since November, has lost 25%. Trillions (with a T) of value have disappeared. Wow, is this an economy that's strong? No…and when the Fed chairman, Powell says, “The economic labor market is tight. We’re going to have to raise interest rates and that's going to cause more unemployment.” I'm saying to myself and I hope you are—“This is an economy that needs help.” It doesn't need more unemployment after the recession that we've just come through after the pandemic and after the inflation. This is an economy that is savaging the majority of people and it ought to be faced.
The last update I have time for is in some ways the most important. You know, as politics has moved to the right—as we see democrats who look more and more like what republicans used to look like and republicans look more and more what we used to call fascists—the question has always been (now for decades) what is the left doing? If the middle and the old left moves to the right and the right moves into the cuckoo land? The left seems to be paralyzed. It seems to be fragmented into many different parts. Well, the old argument is, if the politics move to the left, eventually the pendulum will swing the other way and over the last few weeks—the pendulum has begun to swing. Not surprisingly, it started in France where these kinds of left-wing swings have happened before.
In the first round of the presidential election in France, in April, the two people who got the most votes, Macron, the sitting president and the right-wing extremist, Le Pen were the first two vote getters so they had a run-off at the end of the month. Macron defeated Le Pen. Little known fact—in the first round Mr. Macron, the president, got 28% of the vote. The four left-wing parties, had they come together and backed one candidate, would have gotten (and they did get this together) 30% [combined]. In other words, they would have won but they didn’t—they fought each other. Over the last few weeks, they have come together. Now they are going to back one candidate, in each district of France, in the legislative elections coming in June. Left-wing unity is rearing its head and for the politics of the West—watch out.
We’ve come to the end of the first part of today's show and as as we continue to celebrate the 10th anniversary of creating and producing content, we urge you to take a look at all that we do at democracyatwork.info. For example, Capitalism Hits Home. It’s a podcast that explores the intersection of psychology and economics hosted by Dr. Harriet Fraad. Her show and others can also be found at our website. And, of course we couldn't do all this without your support and encouragement which is enormously appreciated and needed. Please stay with us, we'll be right back with professor Marcello Musto.
Welcome back, friends, to the second half of today's Economic Update. Before introducing our guest (and our friend, because he's been a friend of mine for years), I want to raise the question that motivated the arrangement of this conversation. The middle of political life in Western Europe, in the United States and in other countries has been on the decline and retreat for many years now. The war in Ukraine is an attempt by the middle of our political spectrums to hold on...to hold on to its shift to the right of the last several decades, but above all to hold on to its position of power increasingly threatened from the left and the right.
No one would be better, I thought, to do this than my friend, Professor Marcello Musto. He’s a professor of sociology and sociological theory at York University in Toronto, Canada. He is known globally for his many published books, articles and edited volumes on Karl Marx and on Marxism. He is the founding director of the Laboratory for Alternative Theories at York University and editor of the book series Marx, Engels and Marxisms for Palgrave Macmillan and Critiques and Alternatives to Capitalism for Routledge——two major British publishing houses.
RDW: So first of all and above all else thank you, Marcello, for joining us.
MM: Thank you very much for the invitation, Rick.
RDW: All right, let's jump right in——give us, based on all the researches you've done over the years, give us a sense historically how the left has come to terms with or divided over the question of war.
MM: It’s very interesting to go back to the history of the left because many times we try…that we are facing dramatic times and this is true but it is not the first time that we have to face some of the questions they are debating these days.
So, the issue of war in the debate of the left is as old as the First International in the 1860s, in the 1870’s when, actually, war was considered by the labor movement as an inevitable element of capitalism. So I will say that there was a compelling contribution of socialism that gave the responsibility of war to the development of capitalism—the connection between capitalism and the spread of war—so no longer this idea that war is connected to the ambition of a monarch but to the dominant social economic system.
This is something that we have seen in many authors of the left including in Friedrich Engels. Very few people know that Friedrich Engels, who wrote the Communist Manifesto with Karl Marx, actually wrote, at the very end of his life, a very relevant series of articles on war. The title was: Can Europe Disarm? Engels is actually pointing out the fact that it is essential that there is a process of disarmament—this would be the only guarantee for peace according to Engels. Otherwise it would be a destruction that the world had never seen and it’s talking about, of course, the unprecedented level of production of war, ammunitions etc. But, the debate later became even more complicated because it is no longer a debate about theory but it is a debate and I'm talking about the Second International (1889-1916)——the beginning of the 20th century—about concrete political issues, in particular the aggressive agenda of Germany...of Weltpolitik. This was the beginning of other issues and other problems not only in socialism and Marxism but also in other political families like anarchism or the feminist movement.
RDW: In World War I, there were two major countries, not the only ones, Russia and the United States, that participated in World War I. But, the major leaders, political left-wing leaders, in those two countries, included on the Russian side, Lenin and on the American side, Eugene Victor Debs, a major historic leader of the Socialist party. Both of those men, one in Russia, one in the United States, declared that in their view they would support neither side in World War I. They encouraged young men and women not to serve in the military because these were wars in which working-class people shot at and killed each other for the greater glory of the capitalists who had made the decisions that led into the war. These days, for example, young socialists, elected to the US congress recently, have been supporting the war in Ukraine——supporting the middle in that effort——as if there were some kind of necessity. Could you tell us a little bit about how the the left split around World War I and what the thinking there was?
MM: Unfortunately, the positions of the leaders that you mentioned in the Soviet Union and in the United States were minoritarian at the time. They were following the idea, coming from the First International, that every war is a civil war. That's a wonderful principle and therefore labor movements should struggle for the final abolition of all wars. But concretely, with the Second International, there was no possibility...there was no capability of uniting workers and the majority of socialist and social democratic parties voted in favor of war credit. Right, so this was a dramatic decision for the left. There were people in the anarchist movement...for example Kropotkin, who was the most well-known leader at the time. He was worried about the aggressive politics of Germany. Right so, Kropotkin himself is saying we should support an alliance against Germany. And, even among feminists, there is this idea that war is a positive thing because women will be able to work and substitute conscripted men at the time. But actually, very slowly at the beginning and then strongly later, there is a majority of the left that is understanding that war is the biggest horrible thing in the world and there is actually also opposition to the old idea coming from French Revolution——that war is an opportunity to bring revolution. On the contrary, war is now clearly identified with destruction, with death, with hunger and very slowly at the beginning and then strongly later, in particular, thanks to leaders like Rosa Luxemburg. Her slogan, “War to War," her idea that the main goal of fighting imperialist war is the most important thing that the labor movement should be doing. This was the beginning of a new era and the beginning of a pacifist era slogan and program for the labor movement.
RDW: Yes, you know in European history, which I know through my own family, after World War I, one of the most powerful ways of recruiting young people, particularly, to the socialist movement, the communist movement and so on, was this association of socialism and communism and so on, anarchism, with anti-war. In other words, in looking back at World War I, the position of refusing to participate looked better and better relative to the position of those who had supported it because World War I was such a devastating war.
All right, did it matter to the left in these debates who quote-unquote started the war? Was this an issue that made any difference?
MM: That’s interesting because actually this debate that we are having today——Who started the war? The just war—war of defense—is something that it has been debated again not only in theory but concretely in very dramatic historical circumstances by the left. I will bring the example of the most important French socialist leader at the time, Jean Jaurès, in 1911, he wrote an important book which was in favor of this defensive war. The case was the defense from somebody who had started the war so it is very similar to the case that we are debating today with Russia and Ukraine. But, actually once again, Rosa Luxemburg was very brilliant in her critical analysis of this position because Rosa Luxemburg wrote that it is not easy to say who really started the war and if there are stratagems adopted by a country to make another country start a war——so you cannot measure with the yardstick of justice or through a scheme of defense and aggression about these things of war.
There is another woman, wonderful that this is coming from two women and wonderful, as I mentioned before, that the struggle against militarism was essential for the struggle against patriarchy. The other person is Simone Weil. Reflection on War, in 1933, [is] a very small but brilliant contribution article that she wrote. She's going against this ideology of violence and she wrote that no matter what name it may take——fascism, liberalism, dictatorship of the proletariat——the principal enemy is the administrative policy and military apparatus. War is, of course, the biggest moment in which this apparatus is growing and taking more power [over] self-emancipation of workers and citizens.
RDW: Okay, in the time we have left, let me ask you…Given what you have told us and given this history——How do you understand what is the left is doing in relationship to the Ukraine war? What is your own view as to what the left's position ought to be?
MM: Well unfortunately, this theoretical debate is not there. We are very weak theoretically in some countries. I was born in Italy and this is an example because in my country there was the biggest communist party in Western Europe. Now the left is very weak. In some other countries, it is not the case, like with La France Insoumise and Mélenchon in France. I will say that there are mainly three positions.
The first one is a position with which I don't agree. That is a position of not condemning very clearly Russia. There is this idea United States have done the same or they will have responded in the same way if they were at risk of its security but in my opinion this kind of position will make difficult to denunciate later possible future act of aggression committed by anybody. And, Lenin himself is in favor of self-determination. Why you should suggest that anything different and give this to the nationalist government of Putin?
But, there is a second position that is also very dangerous. It is the position of the left, including in the radical left, that is becoming directly or indirectly co-belligerent. We have seen this many times in the past years——in Italy supporting the war of Kosovo or today with Podemos in Spain or the Left Alliance in Finland. They are all clapping their hands to this military discourse that Zelensky is doing in many European parliaments. I believe that the left cannot have this idea, the famous motto, of Clausewitz, the continuation...“War is a continuation of the politics” by other means.
The left should believe that war is the failure of politics and the left should have very clear that on its banners. Anti-militarism and not-to-war are essential——dramatically essential.
RDW: Marcello, as usual, I wish we had more time, but I do very much appreciate your bringing to the fore and thereby informing the debate that we need to continue in this country and everywhere else about the war in Ukraine. But also, the whole question of war and what the left with its political power can and should do.
To my audience, I hope you take some insight and some thought-provoking qualities from today's interview and as always I look forward to speaking with you again next week.
Transcript by Barbara Bartlett
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About our guest: Marcello Musto is a Professor of Sociological Theory at York University, in Toronto, and is known globally for his studies on Karl Marx and Marxisms. His publications include four single-authored books, eleven edited volumes, and 50 journal articles and book chapters (Google Scholar). His work has been translated worldwide in twenty-five languages and his writings have appeared in dozens of refereed publications from many disciplines.
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“Marxism always was the critical shadow of capitalism. Their interactions changed them both. Now Marxism is once again stepping into the light as capitalism shakes from its own excesses and confronts decline.”
Check out all of d@w’s books: "The Sickness is the System," "Understanding Socialism," by Richard D. Wolff, and “Stuck Nation” by Bob Hennelly http://www.lulu.com/spotlight/democracyatwork
- Student loan forgiveness: https://finance.yahoo.com/news/student-loan-forgiveness-mcconnell-biden-175654682.html
- US corporations replacing home ownership with rentals: https://www.insidernj.com/whats-likely-to-go-missing-in-newarks-2022-election-voters/
- Today's US economy: https://www.axios.com/newsletters/axios-thought-bubble-4d38a9f0-d8e4-4703-8b1b-f7a7c60ab10a.html?chunk=0&utm_term=emshare#story0