Podcast Summary: Economic Update with Richard D. Wolff

Episode: Capitalism's Unemployment Problem
Host: Richard D. Wolff
Date: April 23, 2020

Overview

This episode of Economic Update focuses on the recurring and systemic issue of unemployment under capitalism, especially spotlighting the unprecedented surge in job losses during the early months of the COVID-19 pandemic. Richard D. Wolff critically analyzes why unemployment is a permanent feature of capitalist economies, the wide-ranging personal and social consequences, and explores viable alternatives to mass unemployment, including policy interventions and the structural shift towards worker cooperatives.

Key Discussion Points & Insights

1. Unemployment: A Longstanding and Recurring Crisis

• Statistical Context:

  • The U.S. experienced a loss of 20 to 25 million jobs in just a few weeks due to the COVID-19 crisis—an unparalleled rate surpassing even the Great Depression (00:40).
    • “This is a faster crash into deep unemployment than we've ever seen... In the Great Depression it took four years to get to that level of decline. Those people then had some chance to try to adjust. And they also didn't have a deadly disease threatening them at every turn.” — Richard D. Wolff (01:12)

• Cyclical Nature of Capitalism:

  • Crashes and spikes in unemployment occur every 4–7 years in capitalist economies, a persistent pattern for over 400 years (02:41).
  • Attempts to solve this systemic instability — via government policies, Keynesianism, or monetary and fiscal measures — have all failed to eliminate regular downturns.

• Naming the Problem:

  • The precise cause that triggers each crash varies (dot-com, subprime, COVID-19), but the underlying instability is inherent to the system (05:44).
    • “Hint, it’s the system itself that is unstable. What only varies is what sets it off.” — Richard D. Wolff (05:58)

2. Structural Unpreparedness and Policy Failure

• Chronic Lack of Preparation:
  • Despite the predictable nature of economic crises, capitalist societies consistently fail to prepare for mass unemployment or develop robust support systems for the unemployed (06:16).
  • Lacks include: systematic counseling, retraining programs, creative public employment options, and coordinated responses to protect at-risk groups.

3. Personal and Social Costs of Unemployment

• Dramatic Personal Toll:

  • Psychological depression, substance abuse, family strife, and criminal behaviors increase alongside job losses, while self-esteem, job skills, savings, and health plummet (08:13).
    • “What I just listed to you is billions and billions of dollars worth of lost value. And I'm not even talking about the hurt to the individuals, the communities, the families involved.” — Richard D. Wolff (09:16)

• Economic Inefficiency:

  • It is deeply inefficient and wasteful to have millions idle for months or years every cycle, contradicting the narrative of capitalist “efficiency” (09:35).
  • Employers dislike unemployment too, as profit depends on labor, but systemic incentives nonetheless lead to periodic layoffs (10:24).

• Unemployment as a Tool of Social Control:

  • Persistent unemployment benefits capitalists as it sows fear among workers and disciplines the workforce, maintaining downward pressure on labor (12:34).
    • “Because it scares working men and women. It always has. Because when employment shoots up, the great question in the minds of workers: Will it come to me too?” — Richard D. Wolff (12:45)

4. Waste Amidst Need

• Idle Resources vs. Unmet Social Needs:
  • Society is left with people who want to work, unused tools and facilities, and significant public needs unaddressed — simply because private profit cannot be made from matching them (13:31).
    • “Capitalism doesn't put these things together, but we as a people need it... Capitalism doesn't do it because it isn't profitable for capitalists to hire. And so we're all held hostage to the profit system of capitalism.” — Richard D. Wolff (13:47)

Notable Quotes & Memorable Moments

• “Unemployment never serves the unemployed. They don't want it, they fear it, they endure it and they suffer it. For the employer, it's the lesser evil.” — Richard D. Wolff (32:22)

• “We haven't any mechanism to cope intelligently with the unemployment that has crashed around us. Think about it. This is a waste of human potential and a waste of human resources. That stands as the most profound criticism of capitalism one could ask for.” — Richard D. Wolff (25:53)

Alternatives to Mass Unemployment

1. Work-Sharing

• Instead of layoffs, reduce all workers’ hours so that the pain of decreased demand is shared equitably (18:22).
• Stronger trade unions in some countries have demanded this, which also prevents employers from using layoffs to divide and discipline the workforce.

2. Public Employment Programs

• Drawing from the New Deal, Wolff proposes large-scale government hiring to fill pressing needs, similar to Roosevelt’s response in the 1930s (21:09).

  • “If the private companies were either unable or unwilling to hire, well then the government would and it did. From 1934 to 1941, somewhere between 12 and 15 million people were hired.” — Richard D. Wolff (21:35)

• Possible Modern Programs:

  • Millions could be employed as:
    • Testers or contact tracers during health crises (22:15)
    • Cleaners/disinfectors for public safety (23:15)
    • Online tutors, especially with schools disrupted (24:00)
    • Workers in ecological initiatives (“Greening of America”) (24:57)
  • “There could be a public employment program that could have been planned and could be up and working now — instead, leaving people idle. That's a disastrously failed response.” — Richard D. Wolff (25:44)

3. Worker Cooperatives

• Structural Transition Proposal:
  • Worker co-ops prioritize multiple goals — profit, job security, work conditions, and well-being — not profit alone (27:14).
  • Unlike capitalist firms, co-ops have no incentive to shed workers; workers-as-owners would actively seek to retrain, relocate, and retain employment within their communities (29:31).
    • “In a worker co-op you'd have multiple bottom lines... You'd also want job security.” — Richard D. Wolff (27:24)
  • Systems could be devised to facilitate fair transitions between industries or enterprises according to expertise, tenure, family need, or skills (30:40).
  • The social interest — preventing idleness, maximizing collective well-being — would guide decisions, rather than the narrow pursuit of profit by owners.

Important Segment Timestamps

• 00:40–04:30: Historical context and speed/scale of the 2020 unemployment spike
• 05:58: Analysis of systemic instability in capitalism
• 08:13–09:35: Social and economic costs of unemployment
• 12:34–14:02: Unemployment as a management tool
• 18:22: Introduction of alternatives; work-sharing
• 21:09–25:53: The case and specifics for public employment programs
• 27:14–32:22: Worker co-operatives as long-term solution; dismantling profit-as-single-bottom-line

Tone & Style

Richard D. Wolff’s delivery is clear, direct, and emphatic, laced with urgency and moral critique. He balances analytic rigor with plain-spoken advocacy, often returning to rhetorical questions and concrete historical examples to reinforce his points.

Conclusion

Wolff closes with a challenge: to question why working people tolerate a system that, by design, imposes devastating insecurity and waste for the benefit of a small minority. He suggests that viable, well-established alternatives exist and that a rational, humane society would seize them.

“Profits for the few versus unemployment for the many. It's not so hard to understand why capitalists choose to keep such a system, irrational and wasteful, in place. But the mystery for me is how and why working people… would ever tolerate and endure a system in which every four to seven years throws people out of work, wasting their lives, hurting their income, smashing their families, and for what? For the profits of a small minority.” — Richard D. Wolff (33:12)

Useful for listeners who want a critical, systemic analysis of why unemployment persists, why capitalist economies fail to address it, and what can be done differently, with historical lessons and concrete proposals.