Economic Update with Richard D. Wolff

Episode: Capitalism and Democracy
Date: March 23, 2017
Host: Richard D. Wolff

Overview

In this episode, Richard D. Wolff critically explores the complex relationship between capitalism and democracy, challenging mainstream narratives and focusing on the real-world consequences of economic systems for everyday people. Through recent examples from France, Puerto Rico, the UK, Canada, and the United States, Wolff demonstrates how economic policies such as austerity, rising inequality, and political decisions disproportionately impact working people. The episode concludes with a foundational discussion on what it would mean to democratize the workplace and organize production beyond capitalism.

Key Discussion Points & Insights

1. Hypocrisy of Austerity and Political Scandals (00:55 - 06:00)

• Case of Francois Fillon (France):
  Wolff highlights the scandal involving French conservative politician Francois Fillon, who advocated for austerity measures but was charged with embezzlement and misuse of public funds for personal gain.

  • Quote: "Yeah, the austerity so often preached by the leaders in Europe...usually, I would say, goes along with an exemption for themselves, for the corporations they serve, for the interests they protect. It's austerity for others as the necessary thing for our times." — Richard D. Wolff (02:55)

• Broader Implication:
  Points out a global pattern: “austerity for others” while the powerful exempt themselves, as seen in other nations’ leadership as well.

2. Debt and Austerity in Puerto Rico (06:00 - 12:00)

• Puerto Rico’s Debt Crisis:
  Congress-imposed financial oversight demands Puerto Rico pay $800 million annually despite severe poverty and mass emigration.

  • Quote: "You're going to squeeze dry. You're going to impose austerity on a savaged Puerto Rico. What society behaves like this?" (07:35)

• Corrupt Political-Economic Deals:
  Describes how politicians and bankers entered self-serving loan agreements, leaving ordinary Puerto Ricans to bear the debt burden.

  • Systemic Issues: Notes similar mechanisms in U.S. states like Illinois.

• Legitimacy of Debt: Highlights global movements refusing to pay illegitimate debts caused by elite deals, questioning the pretense of democratic consent.

3. Slavery in Modern Food Supply Chains (12:00 - 16:30)

• Nestle and Cargill Lawsuit:
  Six former child slaves failed in a U.S. lawsuit against Nestle and Cargill for complicity in West African child slavery in cocoa production.
  • Conditions Described: Children as young as 5, armed guards, no pay, 14-hour days, forced labor, and abuse.
  • Corporate Defense: The judge sided with corporations, reasoning that holding companies responsible would undermine the value of their “corporate responsibility” initiatives.
  • Quote: "The corporate responsibility program clearly didn't prevent these companies from engaging in business with people doing slave labor, about which these companies of course had to know didn't work these corporate responsibility programs very well, did they?" (15:45)

4. Growing Inequality in Britain (16:30 - 18:30)

• Institute for Fiscal Studies Report:
  Predicts rising poverty and inequality in the UK, especially among pensioners and children, exacerbated by benefit cuts and Brexit.

  • Quote: “Growing inequality in Britain is a social explosive. It produces anger, tension, bitterness, envy, resentment. It is a very dangerous path upon which a country embarks.” (17:55)

5. Discriminatory U.S. Border Practices Affecting Canadian Groups (18:30 - 21:30)

• Girl Guides of Canada Boycott:
  The organization declines trips to the U.S., citing mistreatment of minority girls at the border, reflecting how discrimination has economic consequences, especially in tourism.
  • Quote: “Enough so that the Girl Guides of Canada have said, that’s it. We’re not going to a country that treats us this way...It is an indignity and an injustice we will not tolerate.” (19:55)
  • Highlights potential economic self-harm as international groups avoid the U.S.

6. Analysis of Wages and Inequality in the U.S. (22:30 - 29:00)

• Economic Policy Institute Report:
  Notes continuance and acceleration of wage inequality since 2000; gap not just between the 1% and 99%, but also within the 99%.

  • Findings:

    • Higher wage workers see faster wage growth than middle/bottom.
    • Black-white wage gap larger today than in 2000.
    • Half of college graduates earn less today than in 2000.

  • Quote: “The gap between white and black wages is worse today than it was 16 years ago. What is going on? It is a society that is built into inequality.” (26:15)

  • Points to automation, offshoring, and labor force changes due to globalization as key causes.

7. The Core Theme: Capitalism vs. Democracy (29:00 - 44:00)

Are Capitalism and Democracy Linked?

• Definitions:
  Explains the common belief that capitalism and democracy can coexist and have, at times, coexisted (e.g., in postwar U.S.), but are not inherently or necessarily connected.

• Examples:
  Many countries have capitalism without democracy (e.g., past South Africa under apartheid).

• Democracy Limited to Politics:
  True democracy means having a say in all decisions affecting one’s life—but democracy is typically confined to political life, not the workplace.

  • Quote: "Democracy is a basic idea. And the idea is if you are affected by a decision, if a decision changes your life, then you have a right democracy of firms to participate in making that decision. The absence of democracy is when you have to live with decisions over which you have no influence." (36:15)

  • Workplace Democracy:
    The workplace—where adults spend most of their productive lives—is typically non-democratic under capitalism.

• Historical Context:
  Capitalism originally emerged entwined with the rise of democracy as a contrast to feudal monarchies (the American & French Revolutions), but quickly proved hostile to democracy inside enterprises.

  • Quote: “Democracy became something which you allowed in the political sphere to the extent you had to, but not in your own backyard, not inside the enterprise.” (41:45)

• Capitalists and Democracy:
  Capitalists have an ambivalent relationship to democracy—supporting its forms for legitimacy, but often undermining its substance, especially in economic decision-making.

8. Democratizing the Workplace (44:00 - 51:00)

• How Profits Are Controlled in Capitalism:
  In corporations, major shareholders (a tiny minority) select boards that control all key decisions, including how profits are distributed—with predictable results: rising inequality.

  • Quote: “This kingdom inside the enterprise, this board of directors and major shareholders, they make all the decisions...They decide what to do with the profits. And it should come as no big surprise to you that the two things they do that they like the most with most of the profits is give it to themselves and build this enterprise to become bigger.” (46:20)

• What Would Change With Workplace Democracy?
  In a democratic workplace, all contributors would vote on profit distribution, leading to reduced inequality and greater economic justice.

  • Quote: "To democratize the enterprise would be the single greatest contribution to overcoming inequality that I can think of in a modern economy." (49:00)

• Link to Revolutionary Ideals:
  Only by democratizing enterprise, Wolff argues, could societies realize the true goals of liberty, equality, and fraternity promised in major democratic revolutions.

Notable Quotes

• "Austerity for others as the necessary thing for our times." (02:55)
• "You're going to squeeze dry. You're going to impose austerity on a savaged Puerto Rico. What society behaves like this?" (07:35)
• "The corporate responsibility program clearly didn't prevent these companies from engaging in business with people doing slave labor, about which these companies of course had to know..." (15:45)
• "Growing inequality in Britain is a social explosive. It produces anger, tension, bitterness, envy, resentment." (17:55)
• “It is an indignity and an injustice we will not tolerate.” (19:55)
• “The gap between white and black wages is worse today than it was 16 years ago. What is going on? It is a society that is built into inequality.” (26:15)
• "Democracy is a basic idea...if you are affected by a decision, if a decision changes your life, then you have a right...to participate in making that decision." (36:15)
• “Democracy became something which you allowed in the political sphere to the extent you had to, but not in your own backyard, not inside the enterprise.” (41:45)
• "To democratize the enterprise would be the single greatest contribution to overcoming inequality that I can think of in a modern economy." (49:00)

Timestamped Segment Guide

• 00:55 – French political scandal and hypocrisy of austerity (Francois Fillon)
• 06:00 – Puerto Rico’s debt crisis and the “games” of politicians and financiers
• 12:00 – Modern slavery in cocoa supply chains (Nestle & Cargill lawsuit)
• 16:30 – Growing poverty/inequality in Britain (Institute for Fiscal Studies)
• 18:30 – Impact of U.S. border policies on Canadian organizations and tourism
• 22:30 – U.S. wage inequality: Economic Policy Institute findings
• 29:00 – Main analysis: Capitalism and democracy—definitions, relationships, and history
• 44:00 – Profits, governance, and what workplace democracy would mean
• 49:00 – Summing up the case for democratizing the workplace

Tone and Closing Thoughts

Wolff maintains a critical, lucid, and sometimes passionate tone, bringing both data-driven analysis and pointed rhetorical questions. The episode concludes with a call for listeners to reconsider the deeply-embedded structures of economic power and to envision democratized workplaces as the path toward genuine democracy and equality.

Useful For:
This summary is tailored to listeners interested in economics, political theory, social justice, or anyone questioning the conventional relationship between capitalism and democracy. The detail provides a comprehensive picture for those who haven't heard the episode, omitting non-content material and maintaining Wolff’s incisive, accessible approach.