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Welcome friends to another edition of Economic Update, a weekly program devoted to the economic dimensions of of our lives and those of our children. I'm your host, Richard Wolff. A few quick announcements at the beginning. I want to let you know that we are very proud of our fast expanding Substack program. All kinds of materials up there for you to look at and enjoy and share with others that you think might be interested. Just go to democracyatwork.com likewise, I want to make sure that you are aware of the other shows that we produce at Democracy at Work and that we distribute through our YouTube channel. You can find them by clicking on Playlists tab on our YouTube channel. Please take the time to check them out and see the expanding universe of people working together with with us here at Democracy at Work. And lastly, I have to remind you about those fake videos. They are proliferating now in various languages on top of English. And I need to remind you all that we appreciate your letting us know. We are working with both lawyers and Google to get them taken down, but they pop up as fast as we can do that. Easy to change the name apparently. And all the rest. If you want to be sure that you're getting the work we do and what I say rather than what some anonymous people are making up, then be sure to look for our logo, the Democracy at Work logo. Check us out on the YouTube channel, substack, democracy at Work website and so on. That way you will avoid and help us combat this scourge of fake videos. And again, Charlie Fabian is there to pick up whatever suggestions you have. We are grateful for them. Charlie.info438mail.com and our book, my book, Understanding Capitalism, which is a companion to this program. Okay, let's turn now to today's topic and it's a topic many of you have asked me about. It's a topic that has been in the public mind again over recent years and perhaps very intensely now with the New York City mayoral race that was conducted until the election November 4th. So the crucial thing that I want to get across today is that capitalism as a system has always been, and I want to underscore the word always has always been a place where classes struggle, where class warfare is going on. Now, some of you know about that from a kind of personal experience, let's call it, you know what a strike is. You know that when workers have finally had it at a workplace, they go out on strike. They don't do it very often because when you're striking, you don't get paid and if you're a worker, not getting paid puts you in an extraordinarily difficult position. I am reminded, as I have spoken about on this program, of the remarkable recent effort of the 51,000 schoolteachers in the province of Alberta in Canada who went out on strike after months of fruitless negotiations when the conservative government of that part of Canada turned against the teachers and the students and the parents and the communities. Almost every other province in Canada has put a cap on the size of classes because, as every honest teacher will tell you, more than a certain number of students in a class becomes unmanageable and undercuts the quality of the education they can get. 51,000 people went out on strike. The school children went out to support them, other unions and the public. Only the government turned against them and then used a bizarre clause of their law up there, their so called notwithstanding clause, to force the teachers who started their strike on the 6th of October to go back to work. And the teachers obeyed the order. But now everyone is talking about a general strike. Employers who don't want to pay taxes control the government, use it against it. That's class warfare. That's the kind you know, you recognize, you see it more and more. But I want to talk to you about the less visible forms of it, to underscore again that it's always there, that capitalism is a system ridden with class conflict and a lot of terrible social consequences of that conflict. So I'm going to begin at the workplace, you know, where you go to work nine to five, mostly five days a week. How do you experience class warfare there? Well, here's the you're aware or you should bethat your employer is forever looking for waysand. I'm going to use the language of business to save on labor costs. All right, now let's unpack that in simple it means to replace you with a machine. If they can do it. These days there are glowing discussions in the business world about the number of people they can lay off and replace with artificial intelligence. The glee in the mind in the face of the employer when he can do something or she can do something. That is an immediate disaster emergency for workers in large numbers already gives it away. That's why we call it struggle or warfare of one class against another. By the way, the employer doesn't do it because he's mean. The employer does it because that's how business works. The employer is competing with other employers. He needs to cut his costs so he can afford the machine that replaces the workers, so he gets the Machine that pays for itself. Because he cannot have those many workers and the money he wasted on wages to them can go to pay for the machine with a nice little extra for his profits in the process. What else can an employer do to save on labor costs? Well, here's one you know all about, or you should. He can move the production. That's right. Close the factory in Cincinnati and move it to Shanghai. Or close it in Chicago and move it to Sao Paulo, Born Brazil. Why would he do that? Because he's saving on labor costs. Turns out the wages you need to pay people in Shanghai or Sao Paulo are much lower than the wages you would have to pay for more or less the same work in Cincinnati or Chicago. Now the employer doesn't have to worry about what this all might mean to the people of Cincinnati and Chicago. To the worker who loses his or her job, to their husband or wife, to their children, to their family, to their neighborhood, to their community, who will suffer because if they don't have a job, they can't spend in the local bowling alley. The decisions of a few employers designed to improve their profits have enormous social effects that they don't care about. And again, why not? Because they're bad people. Of course not. Because of the system. This is how the system works. The system doesn't. Look, Mr. Employer, if you do something that causes a social problem, you have responsibilities to deal with this problem. You can't just walk away. You can't just, as we used to call them, have a runaway shop that leaves Cincinnati and Chicago and moves instead to China or Brazil. You have to accept that many of the workers in your have been there for a long time, have produced lots of good products that generated big profits for you, that may well have moved their entire family from God knows where to come and work in this factory that you have now closed. You're responsible for all of this. You've benefited from these people. You can't. But you can hear it as I explain it. It's not the way our system works. It demands of the employer nothing. It actually cheers the employer. Go where the profit is the best. And. And if that means you go another part of the world, well, that's the way the system works. Exactly. And then there's a third thing that a capitalist can do beside automating. Replacing a worker with a machine or relocating overseas, as in the examples I just gave you. Here's another one. Bring less expensive workers into the workplace to replace the more expensive. The whole history of capitalism is that the first century of American capitalism. We had all over the place what we then came to call child labor. Little children, 4, 5, 6 years of age, with their little deft fingers, were hired in the textile business and many other businesses paid very poorly because after all, they were little kids. We had to fight for years to get laws passed outlawing what capitalists routinely did, namely employ and abuse children. Then there was the whole movement of getting women out of the household to come and work and taking advantage of their situation by pressing the family to do this and then not paying the women equal. We even had a struggle for the Equal Rights Amendment to try to get women to be paid equal pay for equal work. Capitalists didn't volunteer to do that. They resisted it. Decade after decade, that's all class war. That's doing what they do good for their profits at the expense of the mass. The vast majority of people. I want to remind, According to the US census, 3% of our people are employers and the other 97% of us are not. Class struggle pits the 3% who sit at the top of every business against the rest of us. And at the workplace, as I've shown you, automation, export of jobs, relocating abroad and bringing cheaper workers, children, women, immigrants in, has been a plot and a ploy of the capitalist class struggle from day one. You should be aware of it. It's a very costly part of capitalism. It does. One more thing I want to stress as we close out the first half of today's show. It brings into the life of all societies that have capitalism the concept of endless conflict. We are all working for an employer who's trying to figure out how to give us less for the work we do, knowing full well that the less they give us, the harder the life is we lead. We're supposed to work together with an employer. The employer counts on us to do it and yet treats us again, not because they are personally good or bad people, but because of the way the system works, rules them, rewards them if they cut our wages or cut their labor force, punishes them if they don't. And we end up having a society riven by the conflict that begins and flourishes in a capitalist workplace. We've come to the end of the first half of today's show. Please stay with me as I talk to you about the class struggles involved in unemployment, in inflation, and in tariffs like President Trump's. Before we jump into the second half of today's show, I wanted to thank you for your very generous response to our fundraising efforts this year, and in particular in the last couple of months. And in part responding to that, we are extending the availability of our limited edition, linen covered hardcover version of Understanding Capitalism, the book I wrote and that we have been making available now for quite a while. If you are interested, I will be signing copies of that hardcover and they will be available to you as they have been over the last few weeks. Just simply send an email to us@infodemocracyatwork.info and put in the subject line limited edition. We will send you all the information you need to order and receive your copy signed copy of Understanding Capitalism in its hardback. And thank you again for your kind attention to the fundraising dimension of what we do. Welcome back, friends, to the second half of today's economic update. We were talking about how capitalism evolves right from the beginning, throughout its history and starting in the workplace, class conflict, or if you like, class warfare. On one side the employer, on the other side the employees. But now I want to turn to looking at the economy as a whole and to show you how the class struggle is at work when perhaps it isn't as immediately obvious as it was in those examples in the first half of today's show. I'm going to begin with the tariffs that President Trump has imposed on virtually the whole world. And I want to teach a lesson, if you like, about the tariffs that will show you what an illustration they are, what a perfect illustration they are of the class struggle that haunts capitalism morning, noon and night. Okay, let's begin. Mr. Trump imposes tariffs for a multitude of reasons, but here are a couple that he stresses. One, he says they hit other countries. So you might think, yeah, there's warfare and struggle involved, but it pits the United States against other countries. And Mr. Trump, in his own words, is putting America first. The answer to that is it's nonsense what he's speaking. If an undergraduate student taking a course in international trade or international economics, which I have taught, were to say what I just said, that student would flunk the course. Tariffs are not put by one country on another. That's not what a tariff is. A tariff is a tax. It's just another name for a tax. Any government can only tax its own people and businesses. It cannot tax another. The king of Spain cannot tax us in the United States. A Nigerian leader cannot tax a Costa Rican population. You can only tax your own people. You can only tariff your own people. Mr. Trump's tariffs fall on the American businesses and the American individuals who bring goods in the produced in other countries for sale inside the United States. The tariffs are paid by the Americans, not by foreigners. Now let's show you how the tax on the American businesses that bring most of the goods in individuals don't do that. Businesses do the bulk of that. I'm going to show you how the class struggle works there. Here we go. The government puts a tariff. The American company that brings the French wine or the Japanese electronics or the Brazilian coffee into the United States pays the tariff to Washington. Mr. Trump is very happy. He says, look, I am improving the finances of the United States government. Wait a minute. I'm going to show you. This is class struggle. How so? After all, it's a tax on businesses. The tariffs fall on American businesses. That means they have to be paid by whoever owns the business. Yeah. But now I have to remind you of something you may have forgotten. Before April, when Mr. Trump really took off on his tariff tear, he got another piece of business done in the new Congress that he controlled as a result of the November 2024 election. That first piece of business, you may remember its funny name, he called it a big, beautiful tax bill. Let me remind you what that bill did. One, it continued indefinitely. The enormous tax cuts to business that Mr. Trump accomplished in his first term as president. And not only did he continue them, they were, by the way, scheduled to expire at the end of this year. Next month, he got them extended indefinitely. And he added a whole additional bunch of tax cuts on business. So when he turned around and put the tariff, guess what, friends? He had prepared the ground by cutting taxes on corporations. Their income tax, tax on their profits was cut, and then a tariff was imposed on them. But that's neutralized. The one cancels the other. And the business community, of course, knew that. They knew that the tariffs were an afterthought. Number one, cut the taxes. He did that. Put the tariffs. And now the rest. The best part, what do the businesses do? What do they do when they're hit with a tax that they don't want to pay? They're not even willing to pay them, having been given that fat tax cut beforehand. No, no, no, they don't want to. So they do two things. Number one, they raise the prices to us as consumers. They jack up their prices. That way we have to pay more, which they use to pay those taxes, despite having got the tax cut before April of this year. And those who don't raise their prices, you know what they do? They cut back on production. They use the excuse, well, you know, tariffs. We have to pay the tariffs and we're Going to have to lay off. That's why you're hearing big layoffs at Target, at Amazon, you name it, they're pushing the burden of the tariff onto us in rising prices and in a looming recession with layoffs, even though they got their tax increase from the tariff, offset by the prior cutting of their income and profit tax. It is gross once you see it. Don't tell me there isn't class struggle. Mr. Trump is doing exactly what the business community of this country wants. Don't burden us, burden the working class. That's what he's doing. And if you want to understand why he's still in power despite doing a lot of outrageous things, the answer is he's taken care of business in all the ways you can understand that phrase. Let me turn to inflation and show it to you there yet again. What is inflation? Answer very simple. In economics, rising prices. That's all it ever meant. An inflation is when prices rise, okay? They don't all have to rise at the same amount. They don't even all have to rise. It's just in general, prices are going up. Even a few, maybe going down a few, not changing much at all. If the general averages of prices going up, we talk about an inflation. This is a very old story. In what sense is class struggle involved? Here we go again, that statistic. 3% of our people are employers, 97% of our people, Americans are not. Who sets the prices to 3%? You and I, working people. When were we last called into a meeting to participate in deciding what the price is of whatever it is we helped to produce? No one ever asked me to come to a meeting at the universities that I have taught at, saying, what do you think we should charge as tuition for the students that come here? I never participate. I've been on a hiring committee. I've been on a variety of other functions at the university, which is unusual, as businesses go, but setting the price, no, no. The tiny handful of people at the top do that. And that's typical of all businesses. A tiny handful. The board of directors of a corporation, the owner of a business, the president of the business, whatever. You all know, they set the prices, we take the prices. Let me do that again. They set them, we take them, we pay, they collect. Oh, here we go. But the story isn't done. They also pay our wages. They are the ones who decide whether or not to pay us, more or less. Sure, we can protest and we can ask, but we know where the bulk of the power is. And to go back to my STORY ABOUT Alberta Every now and then the workers do push back, luckily. But it's clear the employers are playing with us. They either make a profit by raising the price higher, or they make a profit by saving on labor costs, paying less out in wages. Or if they're really energetic, they do both at the same time. This is class war. But you don't know it because no one discusses it that way. We talk about inflation. What is causing it? What is the role of the government? Stop an inflation is when the employer raises the price. Governments don't set those prices. Workers don't set them either. Capitalists, employers. They're the ones who decide, price up, price down, price the same. And now let's finally do unemployment. Although I think you're already getting the picture. 3% of us are employers and 97% are employees. What is employment? When you get fired, that's unemployment. When the employers decide not to hire you if you're already working, it's when they decide to fire you if you're not yet working or you not happen to be working now. It depends on whether they hire you. Notice who's in charge here? The employer. And does the employer hire you to do you a favor? No. No. You know, it's nothing personal. It's just business. The employer hires you if it's profitable for the employer to do so. If it isn't, you're fired. If it isn't, you're not even hired in the first place. Is it the responsibility of the employer to deal with what happens in society if large numbers of people are fired? No. If large numbers of people are not hired? No. I'm in business. I'm here to make money. I don't have any. If I don't need you to make profit for me, I don't care what you do. Go down and lie down in traffic for all I care. I'm a nice person. I don't mean anyone any harm. But I'm busy making money. That's how the system works. It's a class war. Whether you admit it or not, whether you see it or not, that's a whole other question. It's my hope that helping you to see it when it's all around you will motivate you to realize that we don't have to live like this. We don't have to have an economy where we're set against each other all the time, where those of us in charge have an incentive to fire, to jack up the price, to move abroad. All the things that we suffer from have to do with the way we've organized our economy. The problem is capitalism, which, if anything, is the message of this program. And the ubiquitousness, the everywhereness of the class struggle is one of the reasons why capitalism is a system to which the answer of good people can be and should be. We can do better than that. We've come to the end of today's program. Thank you very much for your attention. And as always, I look forward to speaking with you again next week.