[S11 E13] New
On this week's episode, Prof. Wolff talks about the structural failure of Biden's American Rescue Plan, Nigerian mass workers' movement, private electricity for the US rich, big vs small business struggles, and why opposition to lockdowns only prolongs Covid. On the second half of the program, Wolff interviews author Rob Urie on criticizing capitalism.
Transcript has been edited for clarity
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives: jobs, debts, incomes — our own and those of our children. I'm your host, Richard Wolff.
I want to begin with something you may — many of you, I think — have already understood. But I want to say it one more time. The American Rescue Act, passed by Congress, signed by President Biden, is definitely, to give it its due, better than what we've seen for a bunch of years — certainly under Trump. It does provide some relief to people who've really had a very, very hard time. It's overdue. It's what should have been done before. All of that I don't mind saying. But comparing that to what has gone before it over the last 10, 20 years is to accept a very low bar. We've had a 30- to 40-year redistribution of wealth, from the bottom and the middle to the top. This act provides relief to the victims of that redistribution, but it does not reverse that redistribution. It doesn't even come close. So when Joseph Stiglitz, a Nobel-Prize economist, refers to it as “transformative legislation,” I literally have no idea what he is talking about.
If you want to deal with the problems of the American economy, you have to begin by admitting what they are. And they are structural, and they are deep. And they have come to a head for no surprising reason. We are now in the middle of the worst economic downturn since the Great Depression of the 1930s, and simultaneously the worst public-health disaster since the Spanish flu of 1918. We've never had the coincidence in time and place of two catastrophes. There is no precedent for that. And given the redistribution of wealth that led up to all of this in good part, you need an unprecedented response. And that's not what this is.
I can drive it home yet another way. Some comparisons have been offered by over-the-top-hype people that this is another rerun of Franklin Roosevelt. No, it isn't. And that's an insult to the Roosevelt period. Let me explain. What Roosevelt had to do, because of pressure from below, were structural changes — things that had never been done before and that were not scheduled to expire six months or 12 months from now, as most of the American Rescue Plan is.
For example, he set up the Social Security System in the 1930s, at a time when the government had no money. We had a program that said, if you've spent a lifetime working, when you reach 65 years of age the government will provide you with a pension for the rest of your life. Something you can count on, and that your children can count on, so they won't have the extra difficulty of taking care of you the way they would have before. That's a fundamental, open-ended commitment. That's a structural change.
So was unemployment compensation. So was the first minimum wage — set at a high level, not the pathetic $7.25 that the federal minimum wage is today. And finally, Mr. Roosevelt set up a government hiring program. Between ‘34 and 1941 he employed 15 million American unemployed people.
Nothing remotely like that is part of the American Rescue Plan we just passed. No minimum-wage increase, no federal jobs program, nothing comparable to Social Security. So, no, there's no comparison. This is a temporary relief; we are all appreciative of it. But the transformation of this economy, the overcoming of its grotesque inequality? No, this law does not do that.
My next update is a kind of a hats off to the workers and unions in Nigeria, in Africa. They have a mass, nationwide union protest movement going on against an effort made to lower the minimum wage of public employees. What is the minimum wage in Nigeria? I thought you'd be interested to know. It was last set in 2018 at $65 per month. That's the minimum wage in Nigeria. Notice how low it is. Notice that the unions fight for what the lowest get paid, not just for what each union gets paid, but a solidarity of all unions to help those at the bottom first and foremost. And notice also no split between private and public. It's the private unions that are out there on the streets supporting the maintenance of that minimum wage for public employees. They will not allow employers, whether they're private or public, to split the working class. No wonder my hat's off to the Nigerian union worker nationwide movement.
My third update has to do with another sign of the inequality settling deep into the American system. There's a growing business in what are called “private power grids.” If you're rich enough, you can now get machinery installed in your home, on your piece of land, that will provide you with a way of generating a variety of sources of electricity and storing them in high-quality batteries on your property. Why? Because then when fires in California cut off your electricity, or cold in Texas cuts it off, or cold in Mississippi denies it to you — if you're rich, you'll have your own supply to fall back on, to get you through the failure of the public system. Notice, the mass of us will depend on an increasingly insecure source of the electricity without which modern society doesn't work. But if you're rich enough, you'll solve the problem privately. That's a breakdown of the solidarity of any society, and we should recognize it for what it is.
Next, an inquiry was started in the United States over recent months about what might appear to you to be a minute little problem, but opens up into a social problem. Here's the problem: toilet paper. You remember at the beginning of the pandemic, suddenly there was a shortage of toilet paper. And people began to hoard toilet paper, since being without it is indeed inconvenient. Well, it has surfaced again, this shortage of toilet paper, only now it's not quite a shortage. It turns out that if you want toilet paper, go to Walmart, or Amazon, or Target. They’ve got plenty. It's all the little independent, small stores that are kind of short on the toilet paper. You get to that part of the shelf in the little store, and there's only one roll left, and it isn't quite wrapped properly.
What's going on? Turns out — and this is very important — that in the difficulties of the pandemic, and in the difficulties of the economic crash, and in the difficulties of global supply chains that bring these products to us, one of the ways that the companies making and distributing them handle shortages is by favoring some customers over others. And it will come as no surprise to you that they favor the companies that are the biggest, that are the largest source of profits for them. And that means you're destroying small business. You're teaching, customer by customer, that when you leave your home to go get something you need, you probably shouldn't go to the store nearby — not to the store where you know the family, not to the store that you've been going to for all these years, but to one of those big-box stores because they're more likely to have it.
For those of you that are not familiar, this is a problem small businesses have had. The so-called “competitive market” destroys small business and is a very useful thing for big businesses, who can use their size to crush the little ones. That's why on the 4th of July the speeches about the joys of competition tend to come from bigger businesses, not from little.
And the little ones got together, and they got something done in the 1930s — partly by being allied with the working class. Here's what they got: It's called the Robinson-Patman Act, a law passed in 1936 here in the United States that expressly forbids companies that sell to favor large over small businesses. And the Antitrust Division of the Justice Department is supposed to monitor, and control, and enforce that law — which it has not done and is not now doing. That has led, for example, the National Grocers Association to call on Congress and federal antitrust agencies to scrutinize large retailers for violating the Robinson Patman Act of 1936.
We need that, but it's not going to happen because the big companies have always reacted, first by opposing laws like that, which they did. And if those laws pass anyway, then they evade the laws, they get around the laws, they amend the laws, they buy the politicians to repeal the laws. You know, like Glass-Steagall with the banks; it's the same game. And if they can't get rid of the law, well then they work around it.
The thing that passed the law is the only thing that will get the law enforced. That would be a political alliance of workers and small businesses, to help each other and to see who their common enemy is — and that's the biggest businesses in this society. It's been that way, and the sooner these two movements — working class, small businesses — understand the alliance they need, the sooner they'll be able to solve these kinds of problems, rather than complain, when it's a little bit late in the game.
Finally, there is something going on that is so frightening that I need to talk to you about it. A game has been played, a kind of hustle, in which we are told, gee, the pandemic, COVID-19, is terrible, but we shouldn't lock down the economy because that would add an economic problem, you see, to our health problem. That's a mistake. But it's a very purposeful mistake. Businesses don't want to close; they want you to keep coming there because that's the only way they're going to make profit. And they're willing to push for that by this little game of suggesting, gee, let's not add a lockdown of business, because that'll hurt the economy, to the pain of the pandemic.
The actual experience of most countries is the opposite. The countries that locked down hardest, first, have done the best. Whether it's Taiwan, or the People's Republic of China, Vietnam, or New Zealand — you can pick the country. Where the lockdowns were undertaken, you were able to keep the disease from spreading, and therefore the economy from being hurt anywhere near as bad as in the countries not locked down. And the worst example today? Brazil, where Bolsonaro has refused the lockdowns. And Brazil has now surpassed the United States.
We've come to the end of the first part of today's show. Before we get to the second half, I want to remind you: Our new book, The Sickness Is the System: When Capitalism Fails to Save Us From Pandemics or Itself, is available now at democracyatwork.info/books. I also want to thank again our Patreon community for their ongoing and invaluable support. If you haven't already, please go to patreon.com/economicupdate to learn more about how you can get involved. Please stay with us; we will be right back with today's guest, Rob Urie.
WOLFF: Welcome back, friends, to the second half of today's Economic Update. It is my pleasure to bring to our microphones and our cameras author/journalist Rob Urie. Rob has a graduate degree in economics, just like me, from the University of North Carolina, and he spent two decades doing statistical research in economics professionally. He left this in 2011 to write Zen Economics, and he now writes regularly on politics and economics from a Marxist perspective. He lives in New York State with his wife and, as he wrote to us, too many cats to state publicly. Welcome, Rob, and thank you for joining us.
URIE: Thank you.
WOLFF: Okay. I want to start with part of the reason why we were excited about getting you on the program. Your work is part of a growing recognition that a basic problem facing the United States, beyond this or that particular issue, is a systemic problem, and that the system in question is the economic system, capitalism, whose function, whose structure, whose dynamic, lies behind so many of the domestic and foreign crises. Would you agree that this is your perspective? And could you expand a bit on it for us?
URIE: I certainly do agree that it's my perspective. It's been a focus of my writing to connect the crises that we've been living through in recent years to capitalism, and explain the relationship. And the crises that I’ve focused on have been economic disenfranchisement, which has resulted in depths of despair; I've spent a fair bit of energy on militarism (and I'll get into a little bit of detail with that); and then environmental crisis. We're currently facing a fundamental threat to the continued existence of humanity that we need to pay close attention to. And my contention is that all three of these are tied to capitalism.
WOLFF: All right, let's start and follow up exactly on that middle one. You've recently written about the connection between capitalism in the United States as a system and the practices of violence, both domestically and abroad, which we have seen more and more of. Tell us a little bit about how you see that connection.
URIE: Okay. I'd like to break that into two parts, if it's okay.
URIE: A lot of people understand militarism to be about contests between nations. Militarism is generally framed in geopolitical terms, and the business aspects to militarism are left out of the conversation. However, my contention would be that they are a fundamental motivator of the business of war. And I would put these into the categories of military production. When bombs are created and dropped, profits are earned.
I would put it into the context of wars for resources. The United States was recently involved in trying to overthrow the government of Bolivia in order to — well, Bolivia is a major source of lithium for electric-vehicle car batteries, and so that's one resource motivation. And then I would throw the US war against Iraq from 2003 in there as well, as it suggests that militarism is motivated by the desire to control natural resources.
And then third — and something that people don't think that much about — is that for capitalism to function, it requires a legal infrastructure. And as globalism has taken off in recent years, the legal infrastructure has been built out domestically and overseas through trade agreements. But they require a credible threat of violence in order to assure that profits can be repatriated.
So in the realms of the business of building war materiel, and resource control, and globalization, my argument is that militarism is amply tied to the capitalist profit motive and to capitalism.
WOLFF: Yeah. You know, there was a recent story — maybe you saw it — from the BBC, noting that the United States has increased its role in global arms sales to being 37 percent — by far the largest country in the world distributing lethal weapons around the world. And that fully one quarter of the entire arms sales, and the many, many billions of dollars, go to one country: Saudi Arabia. And it occurred to a lot of people, including the BBC, that letting the leaders of Saudi Arabia off the hook around the Khashoggi murder is not unconnected to, as you put it, the business dimension of these arms sales.
Okay. Let me turn next to a question: Do you find that the capitalism of the United States is significantly different from the capitalism in other countries? Or would you not think that? What's your view?
URIE: Well, it's a very interesting question because associated with neoliberalism over the last 40 or so years of capitalist development has been globalization. There have been, depending on how you want to count them, two or three bouts of globalization in capitalist history, and the most recent would be the neoliberal epic here. And so, depending on how you consider capitalism, there are individual countries (and I'll speak to that in just a minute) who have capitalist economies. But globalization is the effort to build out the capitalist infrastructure internationally. And this shifts the focus from countries specifically to a kind of global capitalism.
And I would like to speak to what's framed as competition between the United States and China. I do not care for the terminology; I think that it's misleading and militaristic. But it does serve to frame the difference that you're speaking about, the country-specific difference.
The Chinese government has responsibility for the largest population in the world. And they've spent the last four decades developing economically, with a focus on raising the living standards of the Chinese people. And I would like to contrast this with the last four decades in the United States, where the industrial core has been hollowed out, and the focus has been on concentrating income as highly as it can be concentrated, by immiserating workers, by cutting industrial jobs — and in the process destroying lives, through depths of despair, and entire communities.
WOLFF: Yeah, it's a remarkable difference. It's a remarkable difference.
Here's a question that I get a lot, and I would like your thoughts: Do you believe that the mass of the working people in the United States basically accept capitalism? And if you do, why? And if you don't, why don't you?
URIE: I do, but with some qualifications. There's a difference between the way that the people who I speak with — and I speak with a wide variety of people; I make it a point to — they have an idealized idea of what capitalism is that's fairly divergent from the way that capitalism actually functions. And I believe that this came to the fore in 2009 when people saw the bankers being bailed out while the rest of the country was left essentially to its own devices. And what this resulted in was what's currently called “populism.” But the 2016 election was extremely contentious, and what's followed has been extremely contentious as well.
I see it as a fundamental questioning of the distance between the ideal of capitalism and the fact that bankers were bailed out and everybody else was left to their own devices. This has been described in the media as “populism,” “left-wing populism,” “right-wing populism.” I would argue that right-wing populism is focused on making purer forms of capitalism — this is a perpetual quest; capitalism can never be pure enough for its advocates — versus the left-wing populism, which is more welfare-state populism, a return to the compromises of the New Deal.
And so, there is an acceptance. And where this goes from here will depend on the ability of the current liberal government to bridge the gap between the way that capitalism is perceived and the way that people actually experience it.
WOLFF: Rob, in the short time that we have left, could I get a quick response from you? How do you see the role of major mass media in the United States — themselves capitalist corporations — and their relationship to the problems of US capitalism today?
URIE: Well, it's a very interesting question. The traditional role of the media as providing information to citizens, to provide an informed citizenry, was reoriented with the essential privatization of media and the consolidation of media that's taken place in recent years. And this has changed the role of the media from informing a public — which was always questionable, but that is the perception — to a for-profit motive of the media. And so what we have now is media where the customers are the advertisers, rather than the news consumers. And this has changed the focus of media from providing information to trying to convince people to buy goods and services. Ideas are considered a service, or a good, if you will, in the modern age. And this is what the capitalist media is doing today.
WOLFF: All right, my last question. I would like your opinion, because you work on this, you write about it. Do you feel that there is an anti-capitalist movement in the United States? And if you do, is it growing? Is it shrinking? Tell me how you see such a proposition as such a movement existing here.
URIE: I think most certainly in recent years we've seen a growth of anti-capitalist protests and activity. The presidential candidacy of Bernie Sanders allowed a self-described socialist to put on a credible run for the presidency. And so where we go from here is whether a few minor social-welfare programs will be enough to head off what has been a major movement away from capitalism, a fundamental questioning that came out of the 2009 financial crisis and what followed. The New Deal was a compromise that was forged to save capitalism, not to end it. And so it's a question of whether welfare-state programs are intended to save capitalism.
Where this goes from here, it goes to something I said earlier. If the powers-that-be are able to close the distance between the way that people's lives are being impacted and the myth of capitalism, then there will be limited motion going forward.
WOLFF: All right. Thank you, Rob Urie. Thank you very much for sharing your work, your thoughts, your sense of what's going on, with us. I'm really glad that you participated.
And I want to close today by saying that it is this kind of discussion that we want to have more of on Economic Update. And thank you all for joining us today, and I look forward, as always, to speaking with you again next week.
Transcript by Marilou Baughman
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