Economic Update with Richard D. Wolff

Episode: Capital for Worker Coops
Date: October 6, 2016
Host: Richard D. Wolff

Overview

In this episode, Richard D. Wolff explores both the dire trajectory of the U.S. and global economy post-2008 recession and offers a systemic alternative: the worker cooperative. He analyzes economic stagnation for workers, corporate tax avoidance, wealth inequality, the shrinking middle class, and contradictions in capitalist responses to crisis. The second half zeroes in on practical questions about how worker coops can access capital—featuring the UK Labour Party’s policy as a model—and addresses deeper questions about democracy at work, the intersection of technology, productivity, and the fair distribution of its benefits.

Key Discussion Points & Insights

I. Stagnant Wages Amid Rising Productivity

[09:12 – 13:34]

• Finding: Despite ongoing increases in labor productivity since the 2008 crash, worker compensation (wages & benefits) has remained stagnant or declined.
• Quote:

  “The average compensation to an American worker has gone nowhere since that recession. We are worse off as working people in terms of what we actually get … than we were on average in 2008 and 9 when the crisis hit.”
  —Richard D. Wolff [12:03]

• Insight:
  Productivity gains accrue to employers/capital, not workers. “Inequality continues to get worse, meaning that we are building towards another and worse kind of collapse … favoring capital over labor systematically for the last 40 years” [13:15].

II. Corporate Tax Avoidance and the Public Good

[13:35 – 19:18]

• Finding: Corporate tax payments as a share of GDP have plummeted from 6% in 1952 to 1.9% today, while profits’ share of GDP has increased (Economic Policy Institute, Americans for Tax Fairness).
• Quote:

  “Corporate profits today are 8 and a half percent. … But what about corporate taxes? … They once were 6% of GDP. Today they are 1.9%. That’s right.”
  —Richard D. Wolff [15:59]

• Corporations exploit legal loopholes to keep $2.5 trillion in profits offshore to avoid taxes.
• Insight:

  “They have the money if they’re willing to tax corporations. … The problem isn’t the money, and the problem isn’t the wealth there to do what needs to be done. It’s the political punch to get that job done.”
  —Richard D. Wolff [18:24]

III. Extreme Wealth Concentration: Billionaires and Global Inequality

[19:19 – 23:20]

• Findings: There are 2,473 billionaires globally with $7.7 trillion in net worth.
  • If combined, this group would be the world’s 3rd largest economic unit, after the US and China.
  • The 62 richest people own as much as the bottom half of the world’s population (~3.5 billion people).
• Quotes:

  “$7.7 trillion would do something for the mass of people … far and away greater than any and all foreign aid that all the world’s country have budgeted to help the poor.”
  —Richard D. Wolff [21:40] “Try to square not doing that with whatever moral, ethical or religious commitments you have.”
  —Richard D. Wolff [22:39]

IV. The Shrinking Middle and Struggling Labor Market

[23:21 – 32:22]

• Gallup Poll Insight: Self-identification with “middle or upper middle class” dropped from 61% (2000-08) to 51% in 2015—a loss of 30 million people.
• Workforce Realities (Jim Clifton, Gallup):
  • Only 48% of US adults have a full-time job; the majority rely on part-time, informal, or precarious work.
  • Corporate America grows via mergers/acquisitions, not job creation—public companies have halved from 7,300 to 3,700 in past 20 years.
  • Small business startups are at historical lows; since 2008, there’s a net loss of small business annually.
• Quote:

  “The number of people who can find a job is shrinking. And the number of small businesses isn’t growing, it’s shrinking.”
  —Richard D. Wolff [28:45]

• Insight:
  Public narratives of “recovery” or “entrepreneurial renewal” are false; the underlying structures are hostile to middle/working class stability.

V. Debt, “Cheap Money,” and Risks of Another Crisis

[32:23 – 36:57]

• Context: Central banks responded to 2008 with cheap credit (near-zero/negative interest rates).
• Consequence: Corporations (even unhealthy ones) have borrowed massively; total corporate debt is at record highs.
• Risk:

  “If we enter into a downturn, … and these companies can’t make the money, they still have to pay back these enormous loans … we’re going to see a default … that’s going to make the subprime mortgage default of 2008 look like nothing in comparison.”
  —Richard D. Wolff [36:20]

• The “crisis is far from over.”

Worker Cooperatives: Capital, Policy, and Democratic Potential

I. Worker Coops as a Realistic Successor to Capitalism

[41:38 – 45:35]

• Scenario: Typical small business owners (e.g., “Mr. and Mrs. Smith”) want to retire but don’t want to close, sell to outsiders, or go public.
• Analysis: Selling to workers is a 4th path—transforming to a worker-owned cooperative ensures community and worker stability.
• Central Question:

  “Where is the money going to come from to enable the workers to buy the business from Mr. And Mrs. Smith?”
  —Richard D. Wolff [44:22]

II. UK Labour Party’s Plan: Right of First Refusal & Public Financing

[45:36 – 51:08]

• Case Study: UK Labour Party, under leader Jeremy Corbyn and co-leader John McDonnell, proposes policy for a “significant worker co op sector.”
  • Companies wishing to sell, close, or go public must first offer employees the first right to buy the business (“right of first refusal”).
  • Government will provide loans, grants, and financing to assist worker buyouts.
• Quote:

  “The British government will make loans, grants and other sorts of financing available to workers in that situation to convert their company … into a democratic workers cooperative.”
  —Richard D. Wolff [49:43]

  • This is not an “unfair privileging” of coops—capitalist firms have long received massive public support, subsidies, and bailouts.

III. Building a Co-op Sector: Why and How?

[51:09 – 54:14]

• Argument: Society must create a co-op sector robust enough to offer a “freedom of choice” between workplace forms.
  • Democratic workplaces should be fostered with public support equal to that which capitalist enterprises have long enjoyed.
• Quote:

  “Let’s have an open, free and honest competition. Let’s give our people freedom of choice between top-down hierarchical capitalist enterprises and democratic worker co ops.”
  —Richard D. Wolff [53:44]

IV. Democracy, Community, and Worker Coops

[54:15 – 57:48]

• Question: Should worker coops make all internal decisions independently?
• Response: No: coops must remain democratically accountable also to their communities, particularly on public impacts like pollution.
  • The aim is to build mutual, democratic coordination between workplace and community.
• Quote:

  “It is not responsible. It is not acceptable for a group of workers to decide, for example, to use a technology … that causes pollution of the larger community. That would be unacceptable. Why? Because it denies the democratic rights of the community to have a say in the quality of their air.”
  —Richard D. Wolff [56:32]

V. Technology, Robots, and the Purpose of Progress

[57:49 – 01:07:34]

• Standard Capitalist Approach:
  • New technology (e.g., robots) reduces labor needs; capitalists typically respond by firing workers and pocketing wage savings as profit.
  • Workers resist tech change out of fear; “progress” as defined by capital undercuts worker security.
• Quote:

  “The capitalist says, I’m going to save 10% of my wage bill by firing 50 workers. My answer is just—stop a minute, you capitalists. Here’s an alternative. … Have everybody work 10% less hours a week. That solves the problem. … You haven’t had to fire anybody. … The promise of technology throughout history has been to make our lives better.”
  —Richard D. Wolff [1:02:30]

• Worker Co-op Model:
  • New technology could instead be used to reduce everyone’s hours (with pay maintained), distributing gains as leisure.
• Quote:

  “You want workers to embrace technical change? Give them a big share of the benefits from it and stop making them pay a terrible price for it. … The problem is capitalism, not technology. And that has always been the case.”
  —Richard D. Wolff [1:06:54]

Notable Quotes & Memorable Moments

• On Inequality and Collapse:

  “The inequality continues to get worse, meaning that we are building towards another and worse kind of collapse because we have an economic system that is favoring capital over labor systematically for the last 40 years and continuing to do so despite the dangerous implications and consequences of precisely that.”
  [13:11]

• On Tax Evasion:

  “The role of the corporation in paying taxes has virtually disappeared. And there’s no mystery as to why … Corporations take advantage of loopholes to keep enormous amounts of profit overseas.”
  [16:50]

• On Democratic Co-Determination:

  “If you’re committed to democracy … then of course that extends to giving communities the right to share in the decision making of what the enterprises do, and vice versa. That’s what democracy means.”
  [56:48]

• Rhetorical Highlight (Worker Tech Resentment):

  “You want workers to embrace technical change? Give them a big share of the benefits from it and stop making them pay a terrible price for it.”
  [1:06:32]

Episode Structure & Key Timestamps

• 00:00–09:11: Program intro, announcements, overview of Democracy at Work initiatives
• 09:12–13:34: Post-2008 productivity vs. compensation data and commentary
• 13:35–19:18: Corporate tax avoidance and statistics
• 19:19–23:20: Billionaire census and global wealth inequality
• 23:21–32:22: Gallup poll, workforce participation, company mergers, small business decline
• 32:23–36:57: Central banks, cheap money, and looming debt crisis
• 41:38–45:35: Worker coops as a practical alternative—narrative scenario
• 45:36–51:08: UK Labour Party proposal: Right of first refusal and public support for worker buyouts
• 51:09–54:14: Building a co-op sector: purpose and historical context
• 54:15–57:48: Worker coops and community democracy
• 57:49–01:07:34: Technology, automation, and alternative ways of sharing productivity gains

Original tone maintained: forthright, critical, and encouraging of systemic analysis and democratic engagement. Wolff frequently leavens statistics with accessible analogies and thought experiments, inviting listeners to imagine alternatives and question received narratives.

Summary crafted by AI podcast summarizer for maximum clarity, depth, and contextual relevance.