Economic Update with Richard D. Wolff
Episode: A Deepening Crisis of Capitalism
Date: October 21, 2018

Episode Overview

This episode delves into the growing instability of the global capitalist system, highlighting warning signs of another impending economic crisis, the pitfalls of “market solutions,” and increased labor militancy. In the second half, Richard Wolff is joined by Pulitzer Prize-winning journalist Chris Hedges to discuss Hedges' book "America: The Farewell Tour." Their conversation examines the unraveling of U.S. society—touching on themes like economic decay, the rise of hate groups, denial of systemic problems, and the erosion of democracy.

Key Discussion Points & Insights

1. The Instability of Capitalism & Impending Economic Downturn ([00:13]–[10:50])

• Capitalism’s Pattern of Crisis
  Wolff emphasizes that economic downturns recur every 4–7 years under capitalism, bringing mass unemployment and widespread hardship.

  "Capitalism is a fundamentally unstable economic system. On average, every four to seven years... we have an economic downturn when typically millions of people are thrown out of work..."
  —Richard Wolff [00:22]

• Global Trade Tensions
  Recent trade wars instigated by the Trump administration (tariffs on Mexico, Canada, China, etc.) are leading to reduced global growth and amplified uncertainty.

  "Turns out these trade wars and tariffs are bad for economic growth around the world and are another contributing factor..."
  —[01:30]

• Warnings from Major Financial Institutions
  Both JPMorgan Chase (predicting a U.S. downturn in early 2020) and the Bank of England (warning about excess, subprime business debt) signal heightened risk.

  "The largest bank in the United States, JPMorgan Chase, issued a report ... literally predicting that the next downturn ... will happen early in the year 2020."
  —[03:35]
  "If the economy turns down now ... they won't be able to pay back the excess borrowing..."
  —[05:05]

2. The Limits and Failures of "Market Solutions" ([10:50]–[14:50])

• Market Fixes for Social Problems
  Nobel Prize-winning economist William Nordhaus’s proposed solution to climate change—raising the price of polluting—is criticized for its regressive impact.

  "What an interesting way of solving a problem, hurting large numbers of people. Wouldn't it be easier just to outlaw the practice?"
  —Richard Wolff [11:40]

• Historical Examples of Market Failure

  • Child Labor: Outlawing, not pricing, ended exploitative practices.
  • Tax Havens: Corporate tax avoidance via Netherlands and Ireland continues due to “market freedom.”

  "Market solution? You must be kidding. This is tax evasion using the market as an excuse..."
  —[13:22]

• Political Corruption as a Market Dysfunction
  Wealth can “buy” politicians, shaping laws for corporate benefit.

  "Suppose there's a market in buying [politicians] ... the people with the most money get the politicians who write the laws..."
  —[13:55]

3. Rising Labor Militancy in the U.S. ([14:10]–[14:50])

• Worker Actions
  8,000 workers at Marriott hotels are on strike nationwide, demanding better conditions—a "turning point" in labor activism.

  "...the Marriott hotel chain ... has had to face 8,000 strikers led by the Unite Here union, demanding ... conditions that should have been given ... years ago. This militancy ... is a very important turning point in the labor movement."
  —[14:20]

• Steelworkers’ Response to Tariffs
  Despite tariffs that aided U.S. steel companies, workers did not benefit, sparking demands for a share of increased profits.

  "If you get a benefit from the government's tariff, we want a share of the extra profits you got. Very interesting."
  —[14:35]

Interview with Chris Hedges: “America: The Farewell Tour” ([14:50]–[28:36])

4. Societal Decay and Denial ([16:04]–[19:55])

• Unraveling of U.S. Society
  Hedges lists symptoms: infrastructure decay, oligarchic control, economic mismanagement, loss of civil liberties, rise of “diseases of despair” (addiction, suicide, hate groups).

  "All the warning signs of a decayed society are palpable. The destruction of the physical infrastructure, the capture of power by an oligarchic elite..."
  —Chris Hedges [16:04]

• Denial and Spectacle
  Americans, he says, are immersed in denial, escapism, and infotainment as real crises go unaddressed.

  "...There is a kind of just checking out, a kind of willful hedonism, an infantilism, almost an inability because the problems are so massive, to even acknowledge that they exist."
  —[18:32]

5. Economic Oppression and Magical Thinking ([20:27]–[23:56])

• Working Class Hardship
  Half the U.S. lives in poverty, social mobility has vanished, and elite-driven policies exacerbate debt and wage stagnation.

  "Half of this country now effectively lives in poverty. Social mobility for the working class is all but non existent."
  —[20:27]

• Christian Right and Denial
  Hedges connects the rise of the Christian Right to America’s fascistic tendencies and magical thinking that supports economic and social repression.

  "...our version of a fascistic movement which has embraced that magical thinking... the rapture, which isn't in the Bible..."
  —[21:55]

6. The Proliferation of Hate Groups ([23:56]–[26:16])

• Historic Roots and Modern Threats
  Hate groups have always existed in America, but periods of crisis embolden and unleash them.

  "We should first be clear that that's always been within the DNA of American society... in times of societal distress ... these hate groups will be unleashed."
  —[24:22]

• Political Utility of Hate
  The elite redirect legitimate anger towards marginalized groups to protect their own power.

  "The state wants that rage ... directed away from where it should be ... the elite ruling class that has mismanaged the nation..."
  —[25:28]

7. Democratic Erosion and Political Theater ([26:16]–[27:39])

• Kavanaugh Hearings as Spectacle
  The contentious Supreme Court hearings are described as "political theater," exposing the sham of democratic institutions.

  "It was political theater. The outcome was utterly preordained ... So it was the farce of democratic process ... I think it was a kind of public window into the utter dysfunction of American democratic institutions."
  —[26:31]

• Absence of Real Democracy
  Hedges asserts the U.S. no longer has functioning democratic structures.

  "We don't live in a democracy. There are no institutions left that can be called authentically democratic..."
  —[27:29]

8. The Future: Social and Environmental Collapse ([27:39]–[28:36])

• Societal Unraveling
  Hedges compares Trump to corrupt emperors of decaying societies; he expects further decay, elite withdrawal, and social breakdown.

  "...at the end, the withdrawal by a hedonistic and irresponsible elite into, you know, the Forbidden City or something."
  —[28:15]

Notable Quotes & Memorable Moments

• On Capitalism's Long-Term Instability:
  "This time the instability may be considerably worse because of what Mr. Trump and the Republicans are doing in order to appear to their political base as though Mr. Trump is the tough guy who's redesigning the global economy to better serve the United States. America first. This theater is actually gonna cost everybody, including Americans, an economic slowdown already and a maybe worse crash than usual anytime soon."
  —Richard Wolff [02:40]

• On the U.S. Economic System:
  "...the New York Times had a story the other day that I think by next year we'll be paying, what is it, $370 billion a year in interest. And within 10 years it's $900 billion. It's not a sustainable system."
  —Chris Hedges [21:45]

• On the Spectacle of Political Discourse:
  "We're mesmerized by the vaudevillian reality show which has replaced news, political discourse. And this is characteristic of a dying society..."
  —Chris Hedges [18:32]

• On Democracy's Demise:
  "...all we have left is the facade of democracy. We don't live in a democracy. There are no institutions left that can be called authentically democratic..."
  —Chris Hedges [27:29]

Important Segment Timestamps

| Timestamp | Segment Summary | |-----------|---------------------------------------------------------------------| | 00:13–10:50 | Wolff's monologue on capitalism's instability, trade wars, debt risks | | 10:50–14:50 | Critique of market solutions (Nordhaus, child labor, tax evasion) | | 14:10–14:50 | Rising labor militancy: hotel and steelworker strikes | | 14:50–15:38 | Introduction of Chris Hedges and his book | | 16:04–19:55 | Hedges on social unraveling, denial, climate crisis | | 20:27–23:56 | Economic oppression, magical thinking, Christian Right | | 23:56–26:16 | Hate groups, scapegoating, historical parallels | | 26:16–27:39 | Kavanaugh hearings as spectacle and loss of democracy | | 27:39–28:36 | Final reflections: where is U.S. society heading? |

Tone and Style

The episode maintains a critical, urgent, and analytical tone. Wolff and Hedges combine accessible explanations with historical and theoretical frameworks, offering listeners both a diagnosis of systemic issues and contextual anecdotes. Their language is direct—occasionally biting, often scholarly, and always intended to demystify complex economic and social realities.