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- [00:10]
A
Welcome, friends, to another edition of Economic Update, our weekly program devoted to the economic dimensions of our lives. Jobs, debts, incomes, our own and those of our children. I'm your host, Richard Wolff. I want to begin today with a perennial issue and bring you up to date because of new statistical work. The issue is what exactly is the unemployment rate? It comes up often on this program and in the news media all the time. It has become recently and over the last two or three decades a regular political football. Whatever political party is in power tries to represent that unemployment is low. And whatever political party is trying to get into power argues the reverse. And each of them has their numbers just like they have their different polling data and the different worlds they increasingly seem to live in. So I wanted to cut through this and talk about unemployment a little bit with you so that you get a handle on how serious this problem actually is. So let's start. The official rate these days is listed as 7.9%. And here's what that 1 in 12, that's what it means. 1 in 12Americans that are in the labor force are out of work but looking for a job. That's what that number counts. But unfortunately, 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, and we're not talking about small numbers here. We well, you're also then kind of not counted. You're not part of the unemployed. This has led people, and the government is doing this, I'm going to assume, in reasonably good faith when it does this kind of counting with qualifications. So some people have said let's ask the question differently. And it's the results here that I want you to think about. Now, here's the first step these folks took. Let us ask who's unemployed and count everybody who's either not working or given up looking or not earning very much because they work haphazardly a few hours here, a few there, who's really kind of virtually out of work. And the number zooms from 7.9% right now to 26.1%, which puts it right at the worst of The Great Depression, 1933, when we peaked at 25% of the labor force. But they've gone on, these folks, I'm gonna give you their name in a minute to ask another question. And this is the one that struck me. They asked, let's look at all Americans over the age of 16. Right. And who have a full time job paying more, more than $20,000 a year. Okay, so all Americans over 16 adults who are working full time and are earning more than $20,000 because you really don't want to count the ones that are working full time and, and earning $20,000 because those people are in trouble. They are not really employed in the sense of a decent job and a decent income. What are the numbers? 46% of white Americans in America right now over 16 are earning more than $20,000 a year. 46%. That means the majority of white Americans over 16, the majority are not doing a full time job earning $20,000 or more. And among black Americans it's 40.8%. So 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. They are not earning a decent living. They cannot live a decent life. That's the level of problem and it's been these numbers for a long time. If you're interested in taking a look, the Ludwig Institute for shared economic prosperity lisep.org will give you the information in detail. The International Monetary Fund for our second update has issued its forecast for the year 2021. Here's what they the recovery from the pandemic and the crash will be long and uneven. It will not be quick and it will not be a tide that lifts all boats. And I want to expand on it because there's a particular reason I want everyone to understand. The pandemic and the crash have hit poor people worse than rich people, employees much worse than employers, and black and brown people much worse than white people. In a simple because of the way our economy works, this virus is making our society more unequal than it was before. And you can't blame the virus really, can you? Because we don't have a society that spreads the pain equally. We have a society that exacerbates the already existing inequality by unequally preparing for and unequally containing the virus. The long term consequences of the growing economic divisions worsened during this pandemic, worsened during this economic crisis. They will be with us for a long time. And this is an important issue far beyond the elections. Coming up will be this question of the inequality worsened by this pandemic because the elections are coming up. My third economic update for today is a kind of perennial. I wanted to look again at how the numbers Shape up in terms of who's giving money to the political process, who's investing in this or that candidate, this or that party. For all the usual reasons and because it's not well known, here are the basic 3/4 of all money given. Senate races, House races, presidential race, everything. Three quarters of it comes from less than 1% of the American people. These are people who give. This is the way the statistics are set up. $200 or more into the election. Less than 1% of Americans. Good. Bit less than 1% give $200 or more. And that makes up three quarters of all the money. So right away you can see that the 99% of us who don't have that kind of money to give $200 or more, we're kind of out of it. We're not relevant to the money raising. And by the way, the estimate this year is that the money raised for this election will be a record in excess of $11 billion with a B. I'm going to come back to that. I then looked at the tiny 100th of 1%. So we're not talking about the top 1%. We're talking about the top.001%. Them. I'm sorry, 0.01%. The top people. These are folks who give $10,000 or more to the political process. This year it's roughly 44,000 people and they are giving roughly a third of the money. So now we're getting to the people who give a third one out of every three bucks to the politicians are people who can give $10,000 or more. And obviously most of you, like me, can't do that. And then here's the last number. I thought you'd be interested in the United Kingdom. I'm comparing the United Kingdom, Canada and the United States, their last national elections. Okay, the last one in the United States, 2016, when Mr. Trump won and defeated Hillary Clinton. The last national election in Canada was a year before 2015. And the last national election in the United kingdom was in 2017. So I'm now going to tell you how how much money was donated in each of these three countries. Start with the United Kingdom. The most recent 2017, they spent ready $50 million. Five Zero Canada, 2015, they spent $90 million. The United States between those two years, 2016, spent ready $1,450,000,000 on their national election. We are not even close. We spend more than every we have. Therefore, the honor to say we have the best government money can buy. My next update has to do with a Small matter that if you think about it, turns out not to be small. There are 10 states in the United States out of 50, 10 that celebrate on October 12th something called indigenous Peoples Day. It is a celebration of the people who lived for many, many, many millennia here in what we now call the United States before the Europeans arrived. It's a remembrance this day that they were here, that they had very elaborate cultures and societies and histories, and that what the Europeans did when they came to this country was one of the greatest examples of, and I use great in a loose way of ethnic cleansing that we have in world history. And there ought to be a recognition that something strange happens to a society that begins its first three centuries, the 17th, the 18th and the 19th centuries. The bulk of the history of the European colonization of the United States was a protracted 3 century long slaughter of the people who were here. And that does something to a culture and a society. And we're still seeing some of what it does. My last update that we'll have time for is is a small item, which again, isn't so small. The People's Republic of China has unveiled what they believe now will be their next new currency. It's a digital currency. It's not money as we know it. It's the new form of money, electronic money, digital money that is much more easy to pay between businesses and people, to settle debts among people, to settle the debts that we have to the government for our taxes. It's a much quicker, much cheaper and much more efficient system. And why are the Chinese rolling it out? Because it's being blocked in the west by the big banks who see it as a threat to the stranglehold they had on our monetary system. Another way in which capitalism self destructs. We've come to the end of the first part of today's show. Before we move on, I want to remind you that we recently published my third book with democracy at work. It's called the Sickness is the System When Capitalism Fails to Save Us from Pandemics or itself. It's a compilation of essays that aims to explain how and why capitalism is the sickness of underlying all those symptoms. Get your copy today at our website, democracyatwork.info books. I want to thank our Patreon community, as always, for their ongoing and invaluable support. It helps make this show possible each week. So if you haven't Already, go to patreon.com economicupdate and sign up today for access to to exclusive content and more. Please stay with us. We will be right back with today's guest, author and activist, Camilla Pinero Harnecker. Welcome back, friends, to the second half of Economic Update for today. It is with great pleasure that I welcome to our microphones and to our camera a friend and an associate who does the kind of work I want us to have more of on this program. She's a professor at the university in Havana, Cuba. Her name is Camilla Pinero Harnecker. She's a researcher and consultant and her work focuses on economic democracy with special interest in worker cooperatives and public policy towards enterprises, in this case on the part of the government in Cuba. She's the author of many articles and book chapters, three books on cooperatives, and she edited a very important volume which for those of you that are interested in the topic, I would recommend in English. It's called Cooperatives and A View from Cuba, and it was published in 2012 by Palgrave Publishers. So first of all, thank you very much. I'm going to call you Camilla because we know each other, but I want to introduce you to my audience. Okay, let's jump right in. You are an expert on Cuba. You live in Cuba, you work in Cuba. And Cuba is very important for this program, for the work that we do, because it took a remarkable step. It made a decision some years ago to shift from the reliance it had had on state owned and operated enterprises, typical of what had happened earlier in, in Russia and China and many other places, and to shift over to a different economic structure of enterprises, namely worker co ops owned and operated by independent groups of private Cuban citizens. So I want to begin by asking you how big a worker co op sector was created in Cuba? How is it doing? Has it been able to reproduce itself? Has it grown? Bring us up to date, if you will, on this remarkable strategic innovation, let's call it, for socialism in Cuba.
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B
Well, good morning, good afternoon, good evening to your listeners and viewers, and thank you for the invitation. And I have to make a little of history to answer that question. And I have to say that in 2005, then President Fidel Castro, who I'm sure you all know, made a speech at the University of Havana, where for the first time he acknowledged publicly that there were very important challenges for the revolution in Cuba that made the sustainability of socialism and the revolution in Cuba not granted. Right? Like before, there were many statements where it was like, revolution is invincible and socialism is irrevocable. Not sure what the. It's not like something we can take back, but this was the first time. And he said that they were not sure really what socialism, how socialism was built, that everything needed to be review with a critical lens. So that was the beginning really of the process that started in 2008, once Raul Castro assumed power, after Fidel was ill. But still Fidel was alive and he was in agreement with this process, which was called the updating of the socialism model in Cuba. And the first time that cooperatives were mentioned as part of the reform process was as a result of the nationwide consultation that happened twice. The second time was to approve a set of guidelines in 2011. And so these guidelines, recommended for the first time cooperatives were open, were going to be open beyond agriculture for the creation of these cooperatives. Rion agriculture in Cuba Because I don't know if many of your listeners know that cooperatives in agriculture are very important in Cuba. They produce around 80 to 90% of agricultural output and they manage around 70% of land. So there are already many agricultural cooperatives in Cuba. But throughout the life of a few initial years of the revolution, there were other cooperatives like consumer cooperative, worker cooperative, in the sugar industry were very important, but only at the beginning. So this was very important because it was a request from the academic and from other sectors for many years. Because Cuba has had different cycles of reform and rethought. It's not the first time that this happens, but it was the first time that cooperatives were acknowledged as an important part of the reform process. And they were among the key measures that were acknowledged. And so in around 2010, what was said is that the plan was to transfer between 20 and 30% of employment from the state sector to the non state sector and around 15% of GDP to around 35% of GDP that this non state sector will be producing. And the non state sector is comprising cooperatives, self employment, small and medium, private enterprises, and also joint and foreign ventures. And so it's not just cooperatives, but as you see in part of the. Another important document that was produced as a result of yet another nationwide consultation was this conceptualization of what the socialist model in Cuba should look like. And there is very clear that 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. But it's recognized that the state sector has to take a step out of activities, economic activities that doesn't make sense for the state to be managing. And so that's where the non state sector and cooperatives in particular are expected to grow. Right? The expectation is that this cooperative, as I said, and the non state sector in general will play an important role. These were expectations or plans that were made more than 10 years ago. So I'm not sure. I cannot tell you what's the specific size that the Cuban leadership is hoping for the cooperatives to fill in, but we know it is important. And after the result, the crisis, economic crisis that has been created by the pandemic in July, there was another statement by the now president Miguel Diaz Canel and the Ministry of Economic and Planning saying that the cooperatives are expected to play an important role as part of the recovery from this crisis and that until now.
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A
Camille, let me interrupt because this is so important. Is it then correct? Am I hearing you right, that we can say that Cuban socialism, as we are speaking, has the strategy of building socialism by a mixed situation in which a dominant position is played by the government with state owned and operated enterprises, but a large portion, maybe 30, 40% of the economy, will be private enterprises, with an emphasis, not exclusively, but an emphasis on worker cooperatives as being a core part of the other part of the economy, and that this is a different concept of building socialism than than we have seen anywhere else in the socialist world. Is that a reasonable reading of what you're saying?
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B
Yes, yes, that was what I was trying to say. And how the idea evolved. And underneath that these policy decisions is the understanding that social property, or social control of the economy, that in socialism, in Soviet style, socialism was understood as state property in control over the means of production, is not necessarily that equivalent, that 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, as true cooperatives should do anyway, if they comply with the seventh principle of commitment with communities. Right, and so, yeah, that's a correct statement.
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A
All right, give us a sense, if you can, and I know we don't have enough time, but give us a sense. Is this sector growing? Is it accepted in Cuba? Is there opposition? How would you help us outside understand the position of this new strategy in terms of Cuban society?
- [25:05]
B
Yes. So what I can say is that the non state sector now, which includes cooperative, employs 33% as of the closing of 2019, employs 33% of the labor force, and cooperatives are 10% of employment. The contribution to GDP is very hard to calculate. Cuba has different currencies. It's a very complex economic system, but we can say it's a significant one if you consider that 80 to 90% of agricultural produce is produced by cooperatives. And in a very short time when around 500 Cooperatives Worker Cooperative beyond outside agriculture were approved, these cooperative 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. So what these workers were paid as stay employees. They have now they're earning now three to and also they have better working conditions. They can decide how to invest in their own workplaces, how they want to work, et cetera. So except for a few exceptions and some I think uses of the cooperative model that were not the best, I think most of the population sees the cooperative as a useful and viable tool for strengthening socialism in Cuba.
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A
One last question. We only have very short time, so I need almost a yes and no question. In your judgment, as a person who watches and consults, do these worker cooperatives run democratically? Is it a collective in the sense that all the members make the basic decisions together?
- [27:08]
B
Well, I think it's hard to generalize because as I being part of a team of people who studied the new worker cooperatives that emerged after a year of the so around 2015, we know that the first like 100 cooperatives that were created and most of these were created out of state enterprises because they didn't have the right conversion process. Many were kept doing as functioning as state enterprises in that the managers were the ones making the most important decisions. But 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.
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A
Camilla, I'm very glad. I'm sorry we've run out of time. I'm really glad that you came on the program and I hope that people will understand the importance of this initiative that Cuba has taken redefining socialism for a new century. And I'm sure the whole world is watching to see how this works out. Thank you very much for participating.
- [28:33]
B
Thank you. And to your listeners and viewers, bye bye bye.
- [28:37]
A
And to all of you, my audience, thank you so much for participating. This was an important message to bring to you from an important development in the world. And I look forward to speaking with you again next week.
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B
Sa.