A (0:10)

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host, Richard Wolff. Today we're going to be talking about where the United States ranks among the OECD 38 countries of mostly developed economic systems. I think you'll be shocked. We're going to talk about how the 12 largest corporations have been doing in terms of the prices of their stocks, held mostly by wealthy people. And it'll help you understand what's happening to the US Economy in reality, as opposed to what our political leaders are telling us. Then I'm going to talk to you about solidarity, other unions going out on strike in support of the Writers Guild of America Striking Hollywood. It's a study in internationalism of the labor movement that's very important. Then I'll have a few words to say about the vote to strike by the Teamsters union working for the United Parcel Service UPS. They were voted 97% to go on strike. And I'll talk about what that means. And finally, I'll talk about the meaning of the decision by the Pfizer pharmaceutical company to announce to us, yes, there's a shortage of penicillin. You know, a drug's been around for, I don't know, a hundred years, but they can't keep up because of the way they profiteer. And that's the important issue. Before I jump into doing all this, I wanted to remind you that we now have a wonderful volunteer, Charlie Fabian, who is gathering material sent in by you watchers and listeners. When you see an important story that you think we ought to devote some attention to, let us know. It's a way for you to partner with us and for us to have a network of people feeding us the material that we then analyze on this program. I'm going to give you Charlie's email so that if you'd like to participate, you can talk with him and he can help you do whatever amount of work of this sort you might like to volunteer. And please know we will be grateful. Here's the email to use if you're interested. Charlie. C H A r l I e.info 438mail.com Once again, charlie.info 438mail.com okay, let's jump right in. Forbes magazine, a magazine by, of and for the business community. Forbes magazine on June 14th of this year reported on a study by Oxfam that's one of the most important foundations studying poverty and wealth and income distribution in the world, located in Great Britain. And it did a study with a wonderful title, where Hard Work Doesn't Pay Off. That's the name of their study, if you're interested. It looks at the 38 OECD countries. That's most of the advanced industrial economies of the world. World. And it asks about them. What are the working conditions that average working people face? So they rank from one that's the best conditions down to 38 that's the worst of those countries. On wages, the United States ranks 36 out of 38, just shy of the bottom on worker protections. That means rules in effect and systems in effect to prevent sexual harassment, to prevent discrimination against people with disability. Looks at whether you have sick leave, whether you have parental leave, whether you have chaotic scheduling or not. The United States ranks 38 out of 38. It's got the worst level of worker protections of these 38 countries on the right to organize unions, the US ranks 32 out of 38. Okay, these are disastrous rankings. They go to something Americans tell each other that is no longer true. This is the best place to be a working person. No, it isn't. It's not even close to the best. It's more accurate to say it's the worst. And I want you to keep that in mind. Not because I'm proud or happy that the United States ranks at the bottom. I'm not. I'm horrified and depressed, to be honest. But I want you to see the difference between the kind of talk our political leaders unload on us day after day. This is the best country to be a working per. No, it isn't. And those politicians, well, why beat around the bush? They're lying. They want you to feel good about what they say rather than to face honestly the way the world actually is here in the United States. And these are also these rankings, signs of the decline of US Capitalism. We didn't always be at the bottom of the rankings. We used to be near the top. Now, I want to demonstrate the same point from a different angle. I want to give you the results of an examination of the 12 largest companies by market capitalization in this country, mostly names you're familiar with. And I want to compare how the stocks of those companies did over the last half year, basically the first half of 2023. So I want you to compare your situation, how you've done over the last six months, to how these companies did as measured by the prices of their shares on the stock exchange. I'm going to mention a few of them. We don't have Time for me to go through all of them. The number one, Nvidia is the name of it. It has a lot to do with high tech. Here's how its shares did over the last six months. They went up by, get ready, 192%. If your wages didn't go up by 192%, that's three times what you got before. Then you're not doing as well as Nvidia. The second biggest company was Meta, that's the parent of Facebook. Their shares went up over the last six months, 134%. Next is Tesla. Tesla went up 107%. Amazon up 52%. Microsoft up 45%. Apple up 43%. Alphabet, the parent of Google, up 42%. I could keep going. Wages in America didn't go anywhere near that. Who owns the shares of these companies? Remember this statistic, the 10% richest Americans own 80% of the shares. The richest in America got these kinds of increases in their portfolios of shares, your wages and salaries. No, of course, inequality gets worse in a country that performs like this. If you didn't do these kinds of numbers improvement in your income, then you're falling behind the 10% who own the shares that perform in the way I just summarized. The next item has to do with two interesting facts. The Korean Writers association, four of them there exist in Korea. They developed the decision and they've now done it. They've gone on strike in support of the Writers Guild of America. Korean writers wanted to show their solidarity with American writers when it comes to getting decent wages and working conditions. And you know who else joined and went on strike? The janitors out in California, in the Hollywood area. They went on strike in sympathy with and solidarity with the writers. That kind of worker solidarity is what will make the labor movement real again. What will make it possible to get better wages, better working conditions. That kind of solidarity is what it needs. And I want to make it clear how important that is. If there were real solidarity between the United States workers and workers in the rest of the world, we would all together have boosted the wages and working conditions of people in Asia, Africa and Latin America. And why is that important? Because nobody wants to leave their country, their home, their church, their family, and be a migrant. Immigration in this country is fueled by disastrous conditions out there, which could be opposed. If we were in solidarity with them, we could push up the wages and the working conditions in those countries and those people would never need to migrate. We wouldn't have the immigration problem. But this country's government. The United States works hand in glove with American corporations. They want to make profits so they keep wages and working conditions down in third world countries and therefore promote the very immigration that Americans then don't want. But if you don't want it, if you actually want to help the people who, who are migrants, like most of our ancestors were, that help develop the conditions that will keep them in their country because they can afford to stay where they were born, where they speak the language, where they understand the system. For that we need a different government. That doesn't help corporations keep people down in the rest of the world, but does the opposite. If you help the people around the world. The immigration problem would be solved in the best way for working people, but that's not the best for corporations, which is why we have the problems we have. My next update is a tip of the hat to the Teamsters Union. They're the union that represents 340,000American workers who just voted 97% to strike on August 1st of this year. If they don't have a contract with United Parcel Service, that's what they'll do. And I'd like everyone to understand the International Longshoremen Workers Union in California, on the coast of California, Washington and Oregon. They went out on strike because they negotiated for a year almost and got nothing from the shippers. Now that they're on strike, all the shippers are all in a tussle to come to an agreement, trying to get the government to come in and muscle those workers, which isn't working. That's a tough union. Been on strike many times. Knows the game. The UPS workers would be wise to study what the ILWU has done on the ports. After all, UPS profits doubled over the last five years over this last contract. And they don't want to share any of that with the workers who make UPS what it is. No wonder they voted to go on strike. And then the last update we have time for today. The Pfizer drug companies, one of the largest pharmaceutical enterprises probably in the world, but certainly here in the United States, made an announcement that I found so amazing. I wanted to bring it to you. It announces a shortage. Get ready. A shortage of penicillin injections. These are used particularly for people with sexually transmitted diseases. Pfizer is a profit driven corporation. What were its explanations for the shortage of penicillin injections? Number one, supply chain disruptions. You've heard about that before. That's been the excuse of every company jacking up the prices of what it charges by claiming there were mysterious supply chain disruptions. You know why every company hires a purchasing manager to prepare for and have alternative plans B for supply chain disruptions. Pfizer has those people. It just doesn't turn out they did their job. Wonder if their salaries were cut. The second reason why we have a shortage, says Pfizer, is that there's a rise in syphilis cases in this country over the last two years, which they blame, of course, on the pandemic. Look, Pfizer is a drug company. Their job is to make sure there's enough drugs for diseases. That's their job. If they weren't in the profit making business, they wouldn't hold back and jack up prices, which this is an excuse to do. But we have a private profit medical system didn't do real well with the pandemic and it's not doing real well with sexually transmitted diseases that need penicillin injections. The problem here isn't syphilis. The problem here is a profit based health system. We've come to the end of the first half of today's show. Please stay with us. We will be right back. Welcome back, friends, to the second half of today's Economic update. There are two topics for the second half today, each of which deserves a little bit of extra time we often give in the second half of the program compared to the segments in the first half. This first one was occasioned by my reading and being impressed by an article in a recent issue of the Foreign affairs magazine, one of the leading magazines on that subject in the country. This is the one dated June 14 for those of you who might want to read the article. And the author is the well known economist Branko Milanovic. Here's what Branko Milanovic does in his article the most Important thing he traces from 1820. That's near the birth of the United States. From 1820 to 1980. He traces the statistics on inequality in the world between and among nations. How did nations, 180 of them these days. There weren't that many 200 years ago. But there are many nations in the world. How do we see the inequality or the equality among them? And here's what his article shows. A wonderful graph at the beginning if you want to see it. He shows that inequality grew dramatically and steadily from 1820 to around 1980, 1990. In other words, the 19th and the 20th centuries were periods of time in which the world economy became more and more unequal in terms of some countries becoming very rich and very powerful and other countries not becoming rich and Powerful, so that the gap between them, the inequality, got worse. Why is this interesting? And what happened in 1990 to change it? What happened? That's what I'll answer first. What happened is a reversal of what we had seen. The world has become less unequal in the last 20, 25, 30 years. Half of the inequality that developed over the previous two centuries was removed in the last 30 years. In a way, that's very good news. Global inequality has removed, shrunk. But now let's talk about what this means. First of all, the 19th and 20th centuries were dominated in terms of the world economy by two empires. In the 19th century, it was the height of the British Empire. It was the height, but it was also the end of the British Empire. But inequality rose because the British Empire was an engine of global inequality. It made the gap between rich and poor nations steadily worse. And we know why. That's how empires work. They vacuum up the wealth and the resources, and often the people from the parts of the world they colonize and they bring them all to the center. They all came to London, to England, to the Great Britain of the dominant country in the 19th century. And in the 20th century, where inequality got even worse, was the era of the American Empire. Wow. The American Empire, like the British Empire, was an engine of growing inequality among nations. The United States, as we know in the 20th century, becomes the superpower, the dominant country, the richest, the most powerful, as England had been before. But what these two empires did, which you might not have seen quite so clearly, is make the world a more and more unequal place, engendering bitterness, envy, jealousy, tension, etc. And along the way, a movement of people from the areas becoming more and more unequal on the poor side to the areas that were less unequal on the rich side. But this wasn't the problem of the people who moved, but of a global empire, first British, then American, that created this inequality in the first place. So then what happened over the last 30 years? Well, the short answer, which Mr. Branko Milanovic in the article acknowledges the short answer, the one word. China. Starting 30 years ago, one of these poor parts of the world that had become so unequaldecided to end that story. And it went to work. And the economic growth achieved by the People's Republic of China over the last 30 years has dramatically changed the story. We don't have growing inequality anymore. We have a reduction of global inequality. Significant, as I say, in 30 years, China. Now, with the addition of other countries, India, Brazil and so on, these countries are Diminishing inequality. They're catching up. They're overtaking the old British Empire, US Empire story of the previous 200 years of global history. Now why? Well, because the Chinese have figured out a way of organizing their economy to break out of poverty. That's why countries are joining China. That's why China is the model today of how to get poverty out of poverty. That's why China is the economic success that it is. No mystery here. What China figured out is the fastest way forward, which since the majority of countries in the world escaping poverty, their number one objective is why they are looking to China because they seem to have found one, the most effective way or certainly the quickest way to do that. And the Chinese do it this way. They mix government owned and operated enterprises, a big part of their economy, with privately owned and operated enterprise, also a big part of their economy. Theirs is a hybrid between state and private enterprise, supervised, controlled and regulated by a powerful Communist party and a government controlled by that party. This has been kind of a hybrid. It's not the Soviet Union that was the government own and operate mostly everything. And it's not the United States or Britain where private enterprise owns and operates and controls pretty much everything. It's a hybrid. It's a mixture where with a government operating as a kind of referee managing the whole thing to get certain objectives met. And the most important objective, get out of poverty and do it faster than anyone has ever done it before. And that's what the Chinese have done. And that's why there's reduced inequality in the world. And we ought to think about what that means. It's remarkable. My second longer topic for today is very closely related. It has to do with a remark that I see splattered across the newspapers. Political speeches, the academic lectures of people who should know better. The remark goes like socialism does not work and it never has. This is remarkable. I understand why conservatives say that to each other all the time because it makes them feel better. The problem is it's flat out wrong. This is not a question of discussion or debate, it's simply wrong. Or maybe if I'm going to be generous. Let me put it this way. If you're talking economics, then socialism has been as or more successful than capitalism. If you mean something else like politics or civil liberties, that's a different discussion. We distinguish between the economic performance of a country and its political organization and performance. It's possible that you like both, it's possible that you like neither, and it's possible that you like one and you're critical of the other. That's logic. So let's do it here with China. Over the last 30 years, the Chinese economic system as measured by the number we call gdp, gross Domestic Product, I want to be real clear. It has grown two to three times faster than that of the United States, the leading capitalist country. Let me say it again. The GDP which measures the total output of goods and services, it's a rough number, but it's the one we use in economics all over the world to measure the size, the growth, the capacity of a modern economy. The capacity to produce has grown two to three times faster in China for 30 years than than it has in the United States. They are successful in doing what no other country comes close to doing. Even India, which has done real well in the recent years as a society as a whole, cannot yet come close to the 30 year record of China. Over that time. The real wages, that's what you can actually afford to buy with your wages in China, has gone up about four times. That's a period of time when the American real wage was stagnant over the last 30 years, it's barely above what it was 30 years ago. Wow. There's no contest here. One country is exploding and the other one is not. So if you mean by the phrase socialism the economic system, well then the Chinese, as arguably the leading socialist country in the world today, is a winner, is successful. And to tell yourself socialism doesn't work makes no sense. It's Babel. It's directly contradicts the numbers. Now of course, if you mean something else that you don't like China's political system, you don't like that they don't have civil liberties or civil rights in the way you would like to see them. That's a perfectly legitimate argument. And that's a different argument from whether or not socialism doesn't work. Let me remind you, most countries in the world believe that the number one priority for that country and talk to the people who run the countries of Asia, Africa and Latin America and parts of Eastern Europe are included here. Their number one priority is economic growth. Escaping poverty, escaping being on the wrong end of that inequality we talked about a few minutes ago. And by that standard, China is the number one success for them. And that's going to shape politics for the next decades. Telling yourself Zhao Zheng Lingen doesn't work may give you a nice feeling for five minutes, but it misunderstands what's going on in the world. And in the long run that's not a good recipe. For how to make better decisions. Last point. Some people who understand these numbers try to retreat to a defense that goes like, okay, China did real well, but that's because it opened the space in China for private capitalists to function. The last part of that is true. They opened a space 20 years ago and encouraged capitalists, foreign and domestic, to function. But make no mistake, this is a society run by the Communist Party and the government that keeps an enormous part of the economy directly under their ownership and control. It's socialism, as they say over there, with Chinese characteristics. And by that they mean a government with power of the sort that Americans regularly criticize. We don't want the government to do these things. Well, they do them in China, and the result is an economic success that is the envy of the world. Saying that socialism doesn't work is a sign you either don't know what's going on or you're so desperate you have to tell each other comforting lies. Thank you for your time and your attention, and as always, I look forward to speaking with you again next week.