Economic Update with Richard D. Wolff (Oct 22, 2020)

Episode: "Cuban Commitment to Worker Coops"

Episode Overview

In this episode, Richard D. Wolff explores the economic strategies and challenges of contemporary Cuba—especially its deliberate shift toward worker cooperatives as part of broader socialist reforms. Wolff is joined by Camila Piñeiro Harnecker, a Cuban professor, author, and leading expert on cooperatives, for an in-depth conversation about Cuba’s unique economic experiment. The episode also provides broader economic updates, including unemployment data, inequality, political funding, Indigenous People's Day, and China’s adoption of digital currency.

Key Economic Updates (00:10 – 17:28)

The Real Unemployment Rate in the US

• Official unemployment rates are misleading; the 7.9% figure omits discouraged workers and underemployment.
  • Quote:
    “If you're working part time and you're not earning very much money, you're considered employed. If you've stopped looking for work because you're disappointed or you're upset or you're living in some way off illegally gotten income...you're also then kind of not counted.” (01:15)
• Alternative, broader measures push unemployment to about 26.1% (comparable to Great Depression levels).
• Only 46% of white Americans and 40.8% of Black Americans over 16 have full-time jobs earning more than $20,000 a year.
  • Quote:
    "The majority of whites and blacks in our country that are over 16 don't have a full time job earning $20,000. You know what? Those people are functionally unemployed. They are not being used to their capacity." (04:40)
• Source for statistics: Ludwig Institute for Shared Economic Prosperity (lisep.org)

Economic Recovery Post-Pandemic Will Be Uneven

• IMF predicts a prolonged and unequal recovery from pandemic recession; inequalities deepened among poor/rich, workers/employers, and along racial lines.
  • Quote:
    "This virus is making our society more unequal than it was before. And you can't blame the virus really, can you?" (06:30)

Who Funds US Politics?

• 3/4 of political donations come from less than 1% of Americans (those giving $200+).
• 0.01% (about 44,000 people) donate $10,000+ and make up a full third of all campaign money.
  • International comparison:
    • UK (2017): $50 million; Canada (2015): $90 million; US (2016): $1.45 billion.
  • Quote:
    "We have therefore, the honor to say we have the best government money can buy." (13:54)

Indigenous Peoples Day

• Marks the violent violence and ethnic cleansing foundational to US history, still affecting society today.
  • Quote:
    "It does something to a culture and a society. And we're still seeing some of what it does." (15:50)

China’s Digital Currency Experiment

• China moves to pilot state-backed digital currency, bypassing banks and enhancing efficiency.
  • Quote:
    "Another way in which capitalism self destructs." (16:54)

Interview: Cooperatives and Socialist Experimentation in Cuba

(Camila Piñeiro Harnecker, Professor and Researcher, University of Havana)

Historical Context and Policy Shift (17:28 – 23:43)

• Fidel Castro's 2005 speech marked a turning point, acknowledging that socialism’s sustainability was not guaranteed.

• Raúl Castro assumed leadership in 2008, initiating the "updating of the socialist model."

• For the first time, reforms officially promoted the creation of cooperatives outside agriculture.

  • Agricultural cooperatives already pivotal: produce 80–90% of output, manage about 70% of land.

  • Worker co-ops and consumer co-ops had existed previously; renewed prioritization now formalized.

  • Camila Piñeiro Harnecker:
    "It was the first time that cooperatives were acknowledged as an important part of the reform process. And they were among the key measures..." (19:50)

• Non-state sector: Includes cooperatives, self-employment, private small/medium businesses, joint/foreign ventures.

  • Goal: Transfer 20–30% of employment and 15–35% of GDP from state-sector to non-state sector.

• Cooperatives currently identified as the "second most important" enterprise type after state enterprises in official policy.

  • Quote:
    "Cooperatives are the second most important type of enterprise after the state enterprises, which are still expected to manage the most important or fundamental activities." (21:40)

Current Status of Worker Cooperatives (23:43 – 26:45)

• Cuba's socialism now mixes dominant state enterprise with a significant (30–40%) non-state sector:

  • Emphasis on worker co-ops as a unique way to "build socialism."
  • Piñeiro Harnecker:
    "That was what I was trying to say....social property includes types of property, like cooperatives, where the workers and the users are the owners of the enterprises, but with the understanding that these cooperatives need to be contributing to a greater good..." (23:46)

• Non-state sector (including co-ops) employs 33% of Cuban labor force; cooperatives alone are 10% of employment as of end-2019.

• While complicated by multiple currencies, co-op impact is significant—most of Cuba’s agricultural output, and new worker co-ops have multiplied worker incomes (by 3–5x) compared to prior state jobs.

  • Quote:
    "Except for a few exceptions...most of the population sees the cooperative as a useful and viable tool for strengthening socialism in Cuba." (26:14)

Are Cooperatives in Cuba Truly Democratic? (26:45 – 28:09)

• Early worker co-ops often maintained top-down management styles due to inertia from state enterprise structures.
• As workers became responsible for outcomes, democratic participation and ownership increased across newer co-ops.
  • Quote:
    "Soon after workers realized that they were responsible for the losses of the enterprises they then you saw a shift and I would say that that now they are more and more prepared and eager to be true owners of their workplaces." (27:41)

Notable Quotes & Memorable Moments

• Wolff, on US unemployment:
  "The majority...are functionally unemployed. They are not being used to their capacity." (04:40)
• Wolff, on political money:
  "We have therefore, the honor to say we have the best government money can buy." (13:54)
• Piñeiro Harnecker, on Cuba’s reform spirit:
  "Everything needed to be reviewed with a critical lens...this was the beginning really of the process that started in 2008." (18:05)
• Piñeiro Harnecker, on co-op impact:
  "In a very short time...around 500 cooperatives...have been for the most part very successful and they have managed to in average multiply by 3 or 5 the income of the workers." (25:35)

Timestamps for Key Segments

• US Unemployment Realities: 00:10 – 06:30
• Post-Pandemic Recovery & Inequality: 06:30 – 08:40
• Political Funding & US Democracy: 08:45 – 14:10
• Indigenous Peoples Day Reflection: 14:25 – 16:10
• China’s Digital Currency: 16:20 – 17:25
• Intro to Interview: Camila Piñeiro Harnecker: 17:28 – 19:20
• Historical Context & Co-ops in Policy: 19:20 – 23:43
• Current Status & Outcomes of Co-ops: 23:43 – 26:45
• Co-op Democracy in Practice: 26:45 – 28:09

Final Thoughts

Richard D. Wolff and Camila Piñeiro Harnecker provide a rare, detailed look at Cuba’s evolving socialist experiment, where worker cooperatives are now embraced as essential for economic democracy and resilience. The episode closes on a note of cautious optimism, highlighting both the practical advances and ongoing challenges of democratizing the workplace at a national scale.