Podcast Summary: Economic Update with Richard D. Wolff
Episode: Capitalism versus Democracy
Date: May 6, 2021
Host: Richard D. Wolff, Democracy at Work

Episode Overview

In this episode, Richard D. Wolff critically examines the relationship—indeed, the contradiction—between capitalism and democracy in the United States. Responding to common claims that American capitalism is fundamentally democratic, Wolff challenges this assertion by dissecting both the micro (workplace) and macro (society-wide) levels. Drawing upon historical evidence, empirical research, and recent political events, he argues that capitalism is structurally undemocratic and in practice undermines the promises of political democracy.

Key Discussion Points & Insights

1. Defining Democracy and Setting the Stage

• Opening Context ([00:10]):
  Wolff defines democracy as a system where “decisions that affect people's lives must be made by those people,” emphasizing collective participation in shaping outcomes.
• He responds to the post-January 6th narrative about attacks on “our democracy,” exploring what democracy really means in the context of American capitalism.

2. The Micro Level: The Undemocratic Workplace

• Crossing the Threshold ([02:00]):
  Entering a workplace means leaving behind any semblance of democracy found in public or residential life.
• Workplace Power Structure ([03:30]):
  Decision-making is controlled by a small minority (owners, board of directors), not by the majority (employees).
  • Key Quote ([05:02]):
    “Is the majority, the employees, in a position to participate in the decisions made that affect their lives? Is it a democratic system? And the answer is an unambiguous no.” — Richard Wolff
• The four major workplace decisions (what to produce, how to produce, where to produce, and disposition of profits) are reserved for the elite few.
• “The employees are excluded from that decision. They do not participate, but ... they are required to live with the consequences which affect them deeply.” ([05:38])
• Consequences & Lack of Accountability ([06:10]):
  Employees lack power over those whose decisions shape their livelihoods and well-being, making democracy in the workplace essentially nonexistent.

3. Worker Co-ops: Evidence of Democratic Alternatives

• Research and Real-World Success ([11:20]):
  Wolff cites the research of Professor Virginie Perotin (Leeds University Business School), who systematically compared hierarchical capitalist firms with democratic worker co-ops.
  • Key Finding ([12:08]):
    “The worker co-op enterprise, the democratic enterprise, is more efficient, more profitable, and lasts longer than its hierarchical parallel.”
• Example: Mondragon Cooperative, Spain ([13:10]):
  • Founded in 1956, now Spain’s 7th or 8th largest corporation, comprising over 100,000 workers.
  • Most co-ops decide incomes collectively, resulting in much lower internal inequality.
  • Key Quote ([14:58]):
    “They show, too, that the notion of a democratic workplace ... it's a reality and it has been for a long time.” — Richard Wolff

4. The Value of Democracy in the Workplace

• Churchill Analogy ([15:43]):
  Wolff relates Winston Churchill’s quip—"Democracy is the worst form of government except for all the others"—to economics, arguing that, though messy, democratic workplaces are superior.
• Division of Labor vs. Division of Laborers ([16:30]):
  • Wolff distinguishes between the functional efficiency of task specialization and the harmful effects of rigid workplace hierarchies.
  • Advocates for rotating tasks to foster variety and well-being, as practiced by Mondragon.
• Democracy as Empowerment ([17:41]):
  • Experiencing democracy at work instills a sense of agency and demand for broader democratic participation.

5. The Macro Level: Capitalism Contradicts Democracy

• Inequality as a Systemic Outcome ([20:05]):
  • Refers to Thomas Piketty’s Capital in the 21st Century and the work of Piketty & Saez, highlighting capitalism’s inherent production of persistent, widening inequality.
  • “Literally since 1980 for sure, the line has been a straight line to greater inequality...” ([21:55])
• Universal Suffrage Threatens Capitalist Interests ([23:50]):
  • If the majority (employees) use their democratic power, they could tax and regulate away inequality—but don’t.
• Why Democracy Doesn’t Deliver Majority Interests ([25:26]):
  • “The rich understood they have to prevent that. ... They have to buy the political system. ... That's what they've done.” — Richard Wolff
• Political parties and candidates become dependent on rich donors, leading to policies that reflect donor interests, not popular will.

6. Money, Politics, and Manipulation ([27:30]):

• The rich utilize their wealth to dominate media, hire lobbyists, and literally write legislation, subverting the democratic principle of “one person, one vote.”
• Key Quote ([29:12]):
  “The mass of Americans want less inequality, but in fact it gets worse ... because the money they need for their political careers is more important to their survival than the votes.”
• Politicians use donors’ funds for advertising to sway (rather than serve) the electorate.
• Celebrity Example ([31:35]):
  “When they want to influence people, they use their money. Jeffrey Bezos purchased the Washington Post. That gives him an influence that you and I can't even dream about. That's not democracy.”

7. The Real Threat to Democracy ([33:10]):**

• January 6th’s Capitol attack was grave, but Wolff contends the most profound attack on democracy is systemic:
  • “The biggest assault on our democracy is the economic system we do not question enough. ... It undercuts democracy not just at the workplace, but everywhere else.” ([34:14])

Notable Quotes & Memorable Moments

• On the Workplace:
  • “Whatever the word democracy means, it doesn't apply to the workplace in capitalism.” — Richard Wolff ([06:38])
• On Worker Co-ops:
  • “The worker co-op enterprise, the democratic enterprise, is more efficient, more profitable, and lasts longer than its hierarchical parallel.” — Richard Wolff ([12:08])
• On Systemic Inequality:
  • “Capitalism as a system produces a widening inequality of income and wealth. ... The basic underlying tendency for capitalism is to produce inequality and keep doing so.” — ([20:23])
• On Political Manipulation:
  • “In every way possible, the rich corrupt the political system so it doesn't respond to the mass of people. And you should know that if you don't already.” — ([28:10])
• On the Future of Democracy:
  • “We have the forms of democracy, but they're paper thin. ... And the minute you go behind to see how it works, you find Mr. and Ms. Moneybags in control.” — ([33:17])

Timestamps for Key Segments

• Defining Democracy / Setting the Theme: [00:10] – [03:20]
• Workplace Power Structure: [04:05] – [07:50]
• Worker Co-op Success & Research: [11:20] – [15:05]
• Churchill, Division of Labor Thoughts: [15:43] – [17:41]
• Macro-Level Inequality & Piketty: [20:05] – [23:45]
• Systemic Political Capture by Wealth: [25:00] – [31:00]
• Bezos/Washington Post Example: [31:35]
• Conclusion: Economic System as Main Threat: [33:10] – [34:50]

Tone & Language

Wolff’s tone throughout is incisive, pedagogical, and occasionally wry—plainly laying out facts, drawing on historical and contemporary examples, and challenging listeners to re-examine received wisdom about American democracy and the capitalist system.

Summary Takeaways

• There is a deep contradiction between the ideal of democracy (people’s power over their own lives) and the realities of capitalism (power concentrated in a minority).
• The exclusion of employees from decision-making at work is a persistent, structural feature of capitalism.
• Worker co-ops offer real-world proof that workplaces can be efficiently and profitably run democratically.
• Systemic economic inequality results in political inequality: wealth, not votes, largely shapes policy.
• The most profound threat to democracy is not outside agitators, but the undemocratic structure of our economic system.

This episode invites listeners to move beyond slogans about “our democracy” and seriously question whether capitalism, as currently practiced, is compatible with democracy—at work or at the ballot box.