Economic Update: Capitalism and/or Socialism

Summary

Economic Update with Richard D. Wolff

Episode: Capitalism and/or Socialism

Date: December 28, 2015

Overview

In this episode, Richard D. Wolff examines the shifting tides of capitalism and socialism in both the U.S. and globally. He offers a critical look at recent political developments in Europe, the economic realities faced by Americans, and the evolving definition and prospects of socialism. Wolff emphasizes the need for systemic change, particularly workplace democracy and worker cooperatives, as core to moving beyond the limitations of capitalism. The episode is rich with historical context, contemporary examples, and a candid, critical tone.

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Key Discussion Points & Insights

1. European Political Shifts and the Issue of Austerity

Timestamps: 02:01–09:09

• Wolff discusses recent elections in Spain, Greece, Portugal, and France, noting a backlash against austerity measures imposed in response to the economic crisis of 2008.
• Spain: The rise of the left-wing Podemos party, paralleling Greece’s Syriza, signifies widespread discontent with austerity, though Wolff cautions about the challenges of maintaining anti-austerity policies.
• Quote:

  “When the capitalist system breaks down, as it did in 2008, it turns to the government of all the people to bail them out. ...it then decides that the mass of people should pay the cost of the bailouts that they didn’t get to fix an economic system that they didn’t break.” (03:26)

• Greece and Portugal: Both countries replaced traditional parties with left-wing coalitions in response to imposed austerity, though Wolff notes the difficulties in creating genuine alternatives.
• France: An apparent rightward shift is actually a reaction to failed anti-austerity promises; the public is shifting parties but remains opposed to economic injustice.

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2. Economics in Everyday Life: U.S. Examples

Timestamps: 09:13–29:32

• NFL Concussion Research: Government-funded research on sports-related brain trauma reveals the NFL’s lack of support; Wolff critiques how profit motives override public health.
  • Quote:

    “Here again then, an example of trying to face up to the human costs of capitalist money making and investment and finding it very difficult to do that.” (13:00)

• Harvard Endowment Debate: Critique of Harvard’s justification for not using more of its endowment to support students and communities. Wolff points out the tax-exempt status and lack of social accountability.
  • Quote:

    “This multi billion dollar corporation that prides itself on running like a business to preserve its assets rather than like a school who might talk first and foremost about its educational mission in the community. … That’s why they have all this money, because the public subsidizes them by not charging.” (16:31)

• Fresno Hunger Report: Half of Fresno households report food insecurity, highlighting deep inequality even in wealthy societies.
  • Quote:

    “51% of households in Fresno indicated food insecurity one or more months of the year. More than half. One of the richest countries in the world has delivered so much of its wealth to so few people...” (19:35)

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3. Stock Buybacks & the Gig Economy

Timestamps: 21:08–28:01

• Stock Buybacks: Explained as a mechanism for corporations to enrich shareholders and executives, often at the expense of broader investment in the company or workers.
  • Quote:

    “Does that sound to you like a conflict of interest? Good. Then you’ve understood. Is that normal business in our capitalist system? Yes, it is.” (24:59)

• Gig Economy: Debunking the idea that the gig economy is modern or beneficial mainly for workers; instead, it's a tactic for employers to shift risk and costs onto workers, undermining stable employment and benefits.
  • Quote:

    “In a significant sense, the gig economy, just like the service economy, is a fake. It’s just another installment in trying to get an advantage for the employer at the expense of the employee.” (27:16)

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4. What Is Socialism? Contemporary & Historical Perspectives

Timestamps: 32:07–55:36

• Wolff traces the history of socialism, from post-WWII anti-communist hysteria in the U.S. to its resurgence in the present.
• Socialism often meant government intervention in the economy, either through regulation or outright ownership (as in the Soviet Union or China).
• A core tension: Democratic ideals imply majority rule, but capitalism puts critical decisions in the hands of a minority (owners/executives/major shareholders).
  • Quote:

    “In a capitalist economic system, a tiny number of people are in a position to make this system work really well for themselves, far better than it works for the average person.” (44:51)

• Socialists historically compromised, regulating capitalism rather than offering a full alternative, leading to watered-down policies (as seen with European Socialists or left-of-center parties today).
• Recent movements (e.g., Podemos, Syriza, Sanders) propose reforms but often stop short of fundamentally changing ownership/decision-making structures.
• Critical Insight: Emerging socialists argue that true systemic change requires democratizing the workplace and ending the separation between those who make decisions and those who must live with them.
  • Quote:

    “A modern socialist position, learning … from the achievements and the shortcomings of the past, focuses on overcoming the quintessential core of capitalism—the enterprise, the factory, the office, the store, in which a tiny group of people … make all the decisions for a mass of people … But they have no control over it.” (54:19)

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5. Worker Cooperatives & Democracy At Work

Timestamps: 55:00–56:48

• Wolff underscores the growing movement for worker self-directed enterprises ("worker co-ops") as the practical answer to capitalism’s undemocratic structures.
  • Quote:

    “When you hear people like me talk about worker co-ops or worker self-directed enterprises, we are the tip of the iceberg of a recognition that it’s the core relationship among people that has to be changed.” (55:02)

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Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote/Paraphrase | |-----------|-----------------------|---------------------------------------------------------------------------------| | 03:26 | Richard Wolff | "When the capitalist system breaks down... it then decides that the mass of people should pay the cost of the bailouts that they didn’t get to fix an economic system they didn’t break." | | 13:00 | Richard Wolff | "Here again then, an example of trying to face up to the human costs of capitalist money making and investment and finding it very difficult to do that." | | 16:31 | Richard Wolff | "This multi billion dollar corporation that prides itself on running like a business... That’s why they have all this money, because the public subsidizes them by not charging." | | 19:35 | Richard Wolff | "51% of households in Fresno indicated food insecurity one or more months of the year. More than half. One of the richest countries..." | | 24:59 | Richard Wolff | "Does that sound to you like a conflict of interest? Good. Then you’ve understood. Is that normal business in our capitalist system? Yes, it is." | | 27:16 | Richard Wolff | "In a significant sense, the gig economy, just like the service economy, is a fake. It’s just another installment in trying to get an advantage for the employer at the expense of the employee." | | 44:51 | Richard Wolff | "In a capitalist economic system, a tiny number of people are in a position to make this system work really well for themselves, far better than it works for the average person." | | 54:19 | Richard Wolff | "A modern socialist position... focuses on overcoming the quintessential core of capitalism—the enterprise... in which a tiny group of people... make all the decisions for a mass of people... But they have no control over it." | | 55:02 | Richard Wolff | "When you hear people like me talk about worker co-ops or worker self-directed enterprises, we are the tip of the iceberg of a recognition that it’s the core relationship among people that has to be changed." |

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Key Segment Timestamps

• [02:01] – European elections & austerity analysis
• [09:13] – U.S. concussion research, Harvard endowment, food insecurity in Fresno
• [21:08] – Stock buybacks explained
• [26:08] – Critique of the gig economy
• [32:07] – Historical context: socialism vs. capitalism
• [43:42] – Democracy, capitalism, and the minority rule problem
• [54:19] – The case for worker cooperatives

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Tone & Language

Wolff speaks in a direct, sometimes wry and critical tone, blending historical analysis with pointed observations on current events. He maintains a focus on systemic change, invites self-reflection from institutions and individuals, and delivers his critique in accessible, engaging language.

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For New Listeners

This episode serves as a primer on the deep tensions within capitalist systems, the recurring failures of superficial reforms, and the need to democratize economic decision-making. Listeners will gain an understanding of the history and current debates within socialism, what real alternatives might look like, and why movements for workplace democracy are gaining traction as answers to persistent inequality and lack of economic control.

Transcript

[Richard Wolff]

Sam. Saint gonna change.

[Richard Wolff (Alternate Voice or Assistant)]

One.

[Richard Wolff]

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, our debts, the prospects for all of those things for our children, all of that. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and currently I teach at the New School University in New York City. Well, here we are coming to the end of the year 2015. And while it's tempting to talk about economics in terms of what has happened in the past, particularly in this year, I actually want to plow ahead. The amount of economic news bubbling up to the surface over the last week is way more than I can handle as it is. So let's, let's just go and take.

[Richard Wolff (Alternate Voice or Assistant)]

A look at what's happening now.

[Richard Wolff]

It really does hint at all that's.

[Richard Wolff (Alternate Voice or Assistant)]

Been happening before as well.

[Richard Wolff]

So it will be with our first story, which is about Spain. Now, Spain just went through the same.

[Richard Wolff (Alternate Voice or Assistant)]

Procedure over the last two weeks that was previously gone through first by Greece.

[Richard Wolff]

And then by Portugal. The difference, of course, is that Greece and Portugal are really quite small countries in Europe, and by comparison, Spain is a giant. So the fact that what Spain has gone through, that I'll describe very quickly in a moment, is like what happened in the small countries means that those small countries experience is, as we said on this program, it would be only a matter of time before it hits the big countries in Europe. Spain is the fourth largest economy in Europe. Here's what happened. There was an election, and in that election in Spain a couple of weeks ago, there was a fundamental issue. Yeah, there were side issues, but there was a fundamental issue, and that issue was austerity. The basic program imposed in most parts of Europe under the pressure, particularly of Angela Merkel's government in Germany, that the way out of the economic crisis brought on to and by a capitalist economic.

[Richard Wolff (Alternate Voice or Assistant)]

System that couldn't work very well starting.

[Richard Wolff]

2007, that the solution was austerity, really whacking the mass of people, either with higher taxes on them or, or with massive government spending cutbacks, reducing the social programs, et cetera, et cetera, and using the money raised by either taxing the mass of people or cutting the social programs to them, including public employment, using the money that was saved in this way to pay back the big banks and others who had been borrowed from to pay for the bailouts that the governments gave, you guessed it, the same big banks and other large corporations. This is simply a way of saying that in economics, as it works in our modern capitalist system, when the capitalist system breaks down, as it did in 2008, it turns to the government of all the people to bail them out. And having done that and spent a lot of money doing it, it then decides that the mass of people should pay the cost of the bailouts that they didn't get to fix an economic system that they didn't break. Well, the people of Greece revolted. And the form of their revolt took a disgust with and an abandonment of the two classic political parties in Greece, that was the New Democracy Party and.

[Richard Wolff (Alternate Voice or Assistant)]

The Greek Socialist Party.

[Richard Wolff]

They had together gotten 2/3 or more of the vote. Election after election for several decades. They were overthrown. They can't get a third of the vote anymore, let alone 2/3. And they paved the way for the left wing Syriza party to take power in Greece, which it still has much more recently. Much the same happened in Portugal, another small European country whose voters went for the left. They created and installed into power literally two weeks ago. We talked about this last week, a new left wing government in Portugal. They threw out the conservatives and, and the traditional opposition who were blamed for instituting and imposing the austerity that was.

[Richard Wolff (Alternate Voice or Assistant)]

Going on in the rest of Europe.

[Richard Wolff]

And was demanded by the European institutions, European Central Bank, European Community, IMF and.

[Richard Wolff (Alternate Voice or Assistant)]

Of course by Germany.

[Richard Wolff]

And the new government in Portugal is a coalition of the Portuguese Socialist Party, the Portuguese Communist Party and, and the Portuguese Green Party. So now we come to the elections even more recently in Spain and there again the same thing happened. The conservative government Popular Party was defeated, lost a huge number of its seats in Parliament, no longer has a majority, neither on its own nor with its right of.

[Richard Wolff (Alternate Voice or Assistant)]

Of center, potential coalition partner.

[Richard Wolff]

That opens the way either to a very insecure government of a coalition on the right or a coalition on the.

[Richard Wolff (Alternate Voice or Assistant)]

Left, which would include the Socialist Party.

[Richard Wolff]

But the big winner in the election was the Syriza equivalent for Spain, called Podemos.

[Richard Wolff (Alternate Voice or Assistant)]

They got the big win, they got.

[Richard Wolff]

The huge number of delegates. They are now the third largest party in Spain, not that far behind the second one, etc. And they are pledged to be against austerity. We will see whether their opposition to austerity will be as strong as they have spoken of it.

[Richard Wolff (Alternate Voice or Assistant)]

That is now a question given what.

[Richard Wolff]

Has happened in Greece, given what is being said in Portugal, it looks like even when opposition to austerity wins, it's a very different matter whether they have the strength, the solidarity and the clarity of program and purpose to really stop it. But the winds of Change are unmistakable even in the one country where a sharp swing to the right has been.

[Richard Wolff (Alternate Voice or Assistant)]

Spoken of in the press.

[Richard Wolff]

It's deceptive. I'm speaking of France. They too had an election recently and they are the second largest economy on.

[Richard Wolff (Alternate Voice or Assistant)]

The mainland of Europe after Germany.

[Richard Wolff]

In France, a year or two ago, in opposition to austerity, the Socialist Party of France swept the entire government. They became not only the presidency, but also took over the Senate for the first time in half a century and.

[Richard Wolff (Alternate Voice or Assistant)]

The National Assembly, a completely socialist government.

[Richard Wolff]

Because they did not deliver on their anti austerity promises. In the most recent election, a mass of the French voters shifted over to a party that that makes anti austerity noises too, but comes from the political right.

[Richard Wolff (Alternate Voice or Assistant)]

It's called the National Front. Its leader is Marine Le Pen.

[Richard Wolff]

But again, I would caution people not to see some right wing shift. In a general sense, this is an electorate in France which like the electorates in Greece, Portugal and Spain, is enraged by the economic policies that are shifting the cost of a dysfunctional capitalism and an outrageously unjust bailout onto the mass of people. And they don't want it and they will not tolerate. We are at an early stage of a fundamental conflict over economics that now has clearly embroiled most of Europe one way or another. Let me turn to another story. On Tuesday, December 22, researchers at several universities and research institutes were awarded a 16 million dollar contract to do a particular kind of research. They got these monies from the national government in the United States, the, the National Institutes of Health and something called the National Institute of Neurological Disorders and Stroke. What was the $16 million for and why am I talking about it on an economics program? The purpose of the research is to study, quote, chronic traumatic encephalopathence. Encephalopathy. My apologies for the mispronunciation. That is the scientific name basically for having major trauma to your head, getting your head hit too hard too many times. As in concussions, as in concussions suffered by sports figures, as in concussions suffered above all by the most violent of our sports, football. This is a subject of a famous movie these days about concussions of football players and the efforts of the football companies, the football teams, the big and wealthy investors who own them, to escape from, if possible, the growing sense that it is a death sentence for many an injury, an early death sentence for.

[Richard Wolff (Alternate Voice or Assistant)]

Others to play football, to suffer the.

[Richard Wolff]

Kinds of repeated hard hits to the head that have caused deaths, that have caused research. This new research is different from the old. In the old they waited till people died, looked at their brains, and discovered how hurt they had been by the hits to the head. This new research is to try to figure out a way to see whether there's damage in, in a living person, to catch it in time, perhaps to do something. A scandal erupted because the NFL has no money in this research, did not contribute to this research. It had given money in what was.

[Richard Wolff (Alternate Voice or Assistant)]

Fairly clearly a public relations ploy earlier.

[Richard Wolff]

Back in 2012, and I believe since then as well. They had promised at that time not, not to interfere. But according to ESPN last week, it was clear to them that the NFL had not given money here because they didn't want the money to go to the researchers at Boston University, who had been critical, as so many have, of how the NFL has dealt with this.

[Richard Wolff (Alternate Voice or Assistant)]

Disaster that's part of their sports, and that they don't want to face up to because of the risk to the.

[Richard Wolff]

Money invested that would come from dealing seriously and honestly with the human cost. Here again then, an example of trying to face up to the human costs of capitalist money making and investment and finding it very difficult to do that. The next update has to do with Harvard. In the November December issue of Harvard magazine, that's a magazine published by the university and sent to its alumni and others, there's an article by the president of Harvard which is a justification for why they don't make greater use of their multi billion dollar endowment. They have the largest endowment in the United States of any school. They're the richest school in the United States. They don't use all of the income generated by the stocks and bonds and real estate that they have invested that money in. And so the question is, gee, if you used more of your endowment or its income, well, then you could help poor students.

[Richard Wolff (Alternate Voice or Assistant)]

You could provide better supports to the.

[Richard Wolff]

Communities in which you work. You could make a better contribution to the larger society. You could charge students less, etcetera, etcetera. The woman president of Harvard will have.

[Richard Wolff (Alternate Voice or Assistant)]

Nothing to do with this.

[Richard Wolff]

She basically says, no, we have to keep our investments going, growing for an uncertain future. This caught my eye for two reasons. One, to be clear to everyone, I get the Harvard magazine because I went to school there. And so I'm being critical, if you like, but of an institution I do know something about. But second, I find it astonishing to read an essay by the president of Harvard which, if it had been submitted by a freshman in an economics class, would have gotten a low grade. Why? Because the way you assess the question, for example, of using more of an Endowment, or an endowment's income for a school is you weigh on the one hand the cost of what it would mean to use more of the endowment. She does that in her letter. But you weigh it against all the good things you could do, which she neglects to do in her letter. So we're treated to a whining complaint about it might eat into our wealth in the future, by the way. It might is the important word. There's no one who knows what the future will bring.

[Richard Wolff (Alternate Voice or Assistant)]

Neither I do, nor does the president of Harvard.

[Richard Wolff]

But she's real worried about it. She's not worried about what the consequences are of not providing more scholarship support.

[Richard Wolff (Alternate Voice or Assistant)]

Of not providing more of a benefit of Harvard to the community, et cetera, et cetera. Not worried about that.

[Richard Wolff]

And here's the last thing she's not worried about. She neglects to mention in the letter that one of the reasons Harvard earns.

[Richard Wolff (Alternate Voice or Assistant)]

As much from its endowment as it.

[Richard Wolff]

Does is is because they pay no taxes.

[Richard Wolff (Alternate Voice or Assistant)]

This multi billion dollar corporation that prides.

[Richard Wolff]

Itself on running like a business to preserve its assets rather than like a.

[Richard Wolff (Alternate Voice or Assistant)]

School who might talk first and foremost.

[Richard Wolff]

About its educational mission in the community. They don't pay any taxes. They don't pay any federal taxes to Washington, they don't pay any state taxes to Massachusetts, and they don't pay an appreciable amount of property taxes to the cities of Cambridge and Boston, where most of their buildings and apparatus is located. That's why they have all this money, because the public subsidizes them by not charging. That means when they call the fire department, other people pay for the firemen.

[Richard Wolff (Alternate Voice or Assistant)]

And women and the trucks.

[Richard Wolff]

When they call the police department, other people pay. When the air that they breathe is cleaned by the city of Boston, someone else pays. Harvard is subsidized by a public, but feels no accountability for what it is.

[Richard Wolff (Alternate Voice or Assistant)]

Or more importantly, isn't doing in the.

[Richard Wolff]

Community it's supposed to serve. And it is supposed to serve the community.

[Richard Wolff (Alternate Voice or Assistant)]

That's the basis for giving tax exemptions to such institutions.

[Richard Wolff]

The community says you don't have to pay taxes to enable you to better serve the community. If you don't do that, you don't get the tax cut, do you? A few months ago I spoke in Fresno, California, and while I was there and I had a wonderful time and.

[Richard Wolff (Alternate Voice or Assistant)]

A really supportive audience in Fresno, I.

[Richard Wolff]

Was handed a document which I did not have the time then to read. It's called the 2014 Fresno Hunger Report. And you can get a copy by going to hunger-count hunger-count.org and what you will see there is a remarkable piece of work done by a whole group of folks in and around Fresno, California. They did a survey, a survey that spoke to 42,000 households. That's an enormous number. And they wanted to get a proper reading, which that size sample will give you, of what the conditions in households in Fresno was, what the conditions were having to do with hunger, or what the statisticians seem to prefer to call food insecurity. But in plain English, how many households indicated that for one or more months of the year, and we're talking 2014.

[Richard Wolff (Alternate Voice or Assistant)]

They didn't have enough food for the people in the house.

[Richard Wolff]

And here's the amazing thing they discovered about America nowadays. 51%. That's the report's conclusion. 51% of households in Fresno indicated food insecurity one or more months of the year. More than half. One of the richest countries in the world has delivered so much of its wealth to so few people that in a major metropolitan area like Fresno, California, in one of the richest states in this country, 51% of the households had a serious problem with food. Once again, you can get the details, all the statistics, all the methods they use to gather it. It's called the Fresno Hunger Report, and you can get that online at Hunger Count. C O U n t hunger count.org turning next to the questions that you send me, I wanted to mention, if I may, the two topics you've asked me about. One, which is interesting because you've asked me this several times over the last year, has to do with stock buybacks.

[Richard Wolff (Alternate Voice or Assistant)]

On the part of corporations.

[Richard Wolff]

And the other one you've also asked.

[Richard Wolff (Alternate Voice or Assistant)]

Me about several times.

[Richard Wolff]

So I thought since these come up so often, I'd try to sum up what I have to say about them. This segment of today's program, first, stock buybacks.

[Richard Wolff (Alternate Voice or Assistant)]

What is it?

[Richard Wolff]

Corporations have the legal right, if they wish to take the profits or a portion of the profits they earned. And remember, all that profits is, is the difference between the revenue they get from selling the output that all the workers help to produce minus the costs producing it. The raw material, the electricity, the maintenance.

[Richard Wolff (Alternate Voice or Assistant)]

Of the building, the salaries and wages.

[Richard Wolff]

They pay, and so on. Whatever's left over from revenue after you subtract costs, that's the profits. And even though the revenues and therefore the profits are produced by the efforts of everybody in the enterprise, it's a tiny group of people at the top, the board of directors and the major shareholders who basically decide what to do with the profits. That everybody helped to produce. They can use them to build the company by hiring more workers, by expanding production, by developing new techniques, all kinds of ways. They can do it, but they don't have to. They can also use it to pay a portion of the profits to shareholders. That's called the a dividend. Every shareholder gets so many cents, so many dollars per share that he or she owns. And they can distribute the profits, therefore to the shareholders. If you Remember that about 1% of.

[Richard Wolff (Alternate Voice or Assistant)]

Shareholders own over 2/3 of the shares.

[Richard Wolff]

If you decide to distribute profits to shareholders, you're making the 1% very happy. Here's another thing they can do. They can pay high salaries to themselves as the top officials. They do that a lot. But here's another thing they can do, and here's the answer to the question. The corporation can use its profits to buy its own shares in the market, go into the stock market and buy from the people who own them the shares in itself. It can become a major shareholder of, of itself. What's more, and this has been going on particularly in the last couple of years, a corporation can borrow money from a bank and use the money to buy up its shares in the market. Why would it do that?

[Richard Wolff (Alternate Voice or Assistant)]

Well, there are a number of reasons.

[Richard Wolff]

But the one I would like you.

[Richard Wolff (Alternate Voice or Assistant)]

To think about, because if you've never.

[Richard Wolff]

Understood this before, it'll make you shake your head in disbelief. When you buy a lot of shares in the market, of course you drive up the price in the market. The price of shares in the market is a function of how many people want to buy them compared to how many people are willing to sell them. If suddenly the company itself goes in and becomes a major buyer of its own shares, it drives up the price. Therefore, this is something shareholders like because they own the shares whose price goes up when, when the company enters the market to buy them. By the same token, many of the top executives have payment arrangements that give them bonuses based on the performance of the stocks. And if they go in and make that performance positive, make the stock price go up, they get a bigger payout. As an executive, there's a nice arrangement. You're in a position to, to use the profits of the company to make your own folks, your major shareholders and.

[Richard Wolff (Alternate Voice or Assistant)]

Your executives even richer.

[Richard Wolff]

Does that sound to you like a conflict of interest? Good. Then you've understood. Is that normal business in our capitalist system? Yes, it is. And if you've understood that, you have.

[Richard Wolff (Alternate Voice or Assistant)]

A better insight than you might have had before.

[Richard Wolff]

The second topic is a so called gig economy. This is a new name for something very old work.

[Richard Wolff (Alternate Voice or Assistant)]

Employers have always tried to control the.

[Richard Wolff]

Work schedules, the behavior, the time put in of their workers. They want the workers only to come.

[Richard Wolff (Alternate Voice or Assistant)]

In when they're needed.

[Richard Wolff]

They want to pay them only when they're working. They don't want to have a moment's dead time. They'd like to avoid paying any kinds of benefits. And maybe if a worker was called a contractor or a part timer or a gig worker or a flexible worker, well then they could get away with controlling the time and schedule of work to advantage themselves, to cut out as much as possible money paid to workers. And workers have always fought against this.

[Richard Wolff (Alternate Voice or Assistant)]

They don't want to live at the beck and call.

[Richard Wolff]

They don't want their whole lives to.

[Richard Wolff (Alternate Voice or Assistant)]

Be disrupted in terms of their personal.

[Richard Wolff]

Existence, their child care responsibilities, their care.

[Richard Wolff (Alternate Voice or Assistant)]

Of their elderly, their desire to have.

[Richard Wolff]

A reasonable life, all of that thrown away to convenience the employer. That always struck workers as grotesque and unfair and one sided. Not the least of the goals of trade unions and has always been to require the employer to plan in advance and work out a compromise with employees to fix schedules so that workers can plan their lives knowing that these are the days and these are the hours and so forth.

[Richard Wolff (Alternate Voice or Assistant)]

This struggle never ends because it's part of capitalism.

[Richard Wolff]

The employers are always looking for some way to undo the the deals they've made, weaken the union, break the contract, start talking about the gig economy. In Europe they love to talk about.

[Richard Wolff (Alternate Voice or Assistant)]

Labor market reform or flexible labor.

[Richard Wolff]

Suddenly you hear stories about how convenient it is for a young mother to be able to see her kids in the afternoon and so have a flexible schedule. Yes, no doubt it is. But that's not why it happens. Conveniencing young mothers has never been a high priority for employers and anywhere ever. In a significant sense, the gig economy, just like the service economy, is a fake. It's just another installment in trying to get an advantage for the employer at the expense of the employee. We've come to the end of the first half of this program. Let me please remind you, as we always do, the to stay with us. The break will be a short time.

[Richard Wolff (Alternate Voice or Assistant)]

We'll come back with analyses of some.

[Richard Wolff]

Major topics of interest to you. I want to remind you please also to make use of our websites rdwolff with 2F's com and of our other website, democracyatwork.info they're both available 24 7, no charge. A way to communicate with us, to follow us on Facebook and Twitter. Please stay with us. We will Be right back.

[Musical Performer]

I was born a lover Everybody knows just the way it is just a.

[Richard Wolff]

Winkle.

[Musical Performer]

She's a cold companion Like a desert rose the worse it is the more she glows.

[Richard Wolff]

Welcome back, friends, to the second half of today's edition of Economic Update.

[Richard Wolff (Alternate Voice or Assistant)]

Once again, I'm your host, Richard Wolff. Been doing this now for four and a half years, and I want to thank all of you that have been kind enough to write in through our websites to let us know what you think about the program, how it could be better, what you don't like, and the very kind words that are enormously supportive and encouraging and for which I simply want to say thank you.

I also want to remind you that we are lucky to have the support.

Not only of the thousands of you that write to us and that listen and that come to the talks I give around the United States, but and which I will resume again in February in California, both southern and northern parts of California.

But I also want to remind you.

That truthout.org, that remarkable independent source of news and analysis, is a partner with us, someone whose support and interest in the work we do is extraordinary. They're sending out once a week an audio, a recording of this program makes it reach many, many more people, which is what we're here to do. And I want to thank them explicitly and with real gratitude for their support all the way through. And indeed, those of you that have invited me this year, my hosts at places like Seattle and Bellingham and Berkeley and Fresno and lord knows, Tampa, St. Pete, Houston, Ames, Iowa, the list is extraordinary. Farmingdale, New York, Boston. It's a testimony to the enormous change in the United States, the growth in the number and quality of the audiences, the quality of the interactions I have.

And this is a good time of year for me to be able to.

Say to you, thank you. I have the sense of being caught on a wave in this country of change, and I couldn't be happier about it. And that's as much due to you. And all that has happened to the audiences I deal with as it is to me. Let me therefore spend some time talking about a topic that has become more important this year than it's been in the United States for 50 years.

We have talked about it before, but.

It is more and more coming to the fore. And so it bears some further attention, let's call it.

That's the issue of socialism. What it was, what it is, what it's becoming. Socialism has always been a complicated, multi.

Level, diverse kind of tradition, or to.

Say the same thing in plain English. It means different things to different people. It means different things to the people who like it. It means different things to the people who hate it and everybody in between. For 50 years, part of the Cold.

War, after World War II, it was.

Impossible to have a conversation about socialism and communism almost at any time, in any public way. It was even difficult in private conversations, in many cases to talk about it. People were polarized. The anti Communist hysteria that swept the United States starting with the McCarthy period right after World War II, made it impossible, if you were interested in socialism, even if you weren't necessarily favoring it, just interested in it, you were looked at as if you were either crazy or subversive or some combination of the two. And if you said something about communism, well, even worse. And we've talked about why that was, why it was that after World War.

II, the right wing in America and.

The business community and the corporate community went to work to dismantle the what was known as the New Deal coalition Communists, socialists and trade unionists who had become so powerful as a movement of resistance against the Great Depression, a demand that the government step into the economy and help people.

[Richard Wolff]

Now, for many who were pro New Deal, just like for many who were anti New Deal, the whole business was.

[Richard Wolff (Alternate Voice or Assistant)]

What they understood to be socialism.

[Richard Wolff]

That is, the government coming into the.

[Richard Wolff (Alternate Voice or Assistant)]

Economy in a major way, intervening, interfering, doing everything from giving people an unemployment.

[Richard Wolff]

Check to mandating a minimum wage to creating Social Security, to regulating businesses.

[Richard Wolff (Alternate Voice or Assistant)]

All of this governmental intervention was understood to be socialism.

[Richard Wolff]

And that was perfectly reasonable. Because for decades before that, both in.

[Richard Wolff (Alternate Voice or Assistant)]

Europe and in North America, socialism had.

[Richard Wolff]

Been generally defined as making the economy more socially responsible. And it struck almost everyone that the.

[Richard Wolff (Alternate Voice or Assistant)]

Best way to do that would be.

[Richard Wolff]

To have the government, presumably the instrument of the people.

[Richard Wolff (Alternate Voice or Assistant)]

The agency that society establishes to look after its communal or collective or social.

[Richard Wolff]

Affairs should be the one to kind of pressure and maneuver and manipulate the.

[Richard Wolff (Alternate Voice or Assistant)]

Private economic system to be socially responsible, to do social service, to take care of people. And given the collapse of the private sector in the Great Depression, this idea, of course, got a tremendous boost. People were suffering. Our unemployment meant that in 1933 and 34, there was no American family not touched by unemployment. One out of four people out of.

[Richard Wolff]

Work means either your husband, your wife.

[Richard Wolff (Alternate Voice or Assistant)]

Your children, your parents, your cousin, your uncle, somebody's unemployed. And the unemployment lasted, which means they ran out of their savings, which means they began to lean on other people in the family to.

[Richard Wolff]

To help them out.

[Richard Wolff (Alternate Voice or Assistant)]

In other words, the Great Depression touched Everybody. So here's capitalism hurting people with unemployment.

[Richard Wolff]

And all the fallout from that. And at the same time, here's an.

[Richard Wolff (Alternate Voice or Assistant)]

Alternative socialism in which the government comes in and does a better job of.

[Richard Wolff]

Serving society than a broken capitalism is.

[Richard Wolff (Alternate Voice or Assistant)]

Showing itself capable of doing.

[Richard Wolff]

So. We get into World War II, end.

[Richard Wolff (Alternate Voice or Assistant)]

Of World War II, the post war period. And not only is socialism kind of strong here in the United States because of all that happened in the Great.

[Richard Wolff]

Depression, but a couple of other things.

[Richard Wolff (Alternate Voice or Assistant)]

Have happened that make socialism stronger still.

[Richard Wolff]

One, in many European countries, the fight.

[Richard Wolff (Alternate Voice or Assistant)]

The resistance against the Nazis during World War II brought to the fore in.

[Richard Wolff]

Country after country, and here I'm thinking.

[Richard Wolff (Alternate Voice or Assistant)]

Specifically of places like Italy and France and Spain and so on. Brought to the fore the leadership of the resistance, which in many cases was socialist and communist. So they emerged from the end of the war, the defeat of Hitler, Germany.

[Richard Wolff]

As the people with the most credit for having made that fight.

[Richard Wolff (Alternate Voice or Assistant)]

The new governments right after World War II in these countries often had socialist and communist ministers in the government to drive that point home. Next there was the explosion of the old colonial world. All those countries and areas in Asia and Africa particularly that threw off sometimes centuries of being a colony of a European country. Think of India having been a colony for hundreds centuries, becoming independent under the leadership of Mahatma Gandhi. Think of all the African countries that broke away from Germany, from Britain, from Belgium, from France and so on.

[Richard Wolff]

And many of the people leading those.

[Richard Wolff (Alternate Voice or Assistant)]

Fights were not only anti colonialist, but they were also socialists. Indeed, not a few of them had.

[Richard Wolff]

Become socialists during periods of time when as students they studied in universities in.

[Richard Wolff (Alternate Voice or Assistant)]

The countries that were controlling them. From Europe, Africans went to Paris or.

[Richard Wolff]

To London.

[Richard Wolff (Alternate Voice or Assistant)]

Or to Rome.

And the same thing in Asia.

[Richard Wolff]

Then also socialism got still another boost out of World War II.

[Richard Wolff (Alternate Voice or Assistant)]

The world suddenly discovered that there were two superpowers, the United States. But the other one was the Soviet Union, which had somehow managed to become a modern industrial country, having been to just a few years earlier Europe's most backward rural country to have its own nuclear weapons. It was a testimony to the fact that a socialist economy can take you from poor to pretty well off in a very short amount of time, very effectively, in a way that no private capitalist country had yet achieved. And finally, shortly after World War II, the biggest country by population in the world, the People's Republic of China, exploded in a civil war that brought the communists there, under the leadership of Mao Tse Tung, to become the new socialist government of China, meaning that the largest country by geography, Russia and The largest country by population, China, were now both socialist countries.

[Richard Wolff]

In the 60s and 70s, it looked.

[Richard Wolff (Alternate Voice or Assistant)]

Like socialism was the wave of the future.

[Richard Wolff]

And by socialism, people kind of meant massive government intervention. Now, some people understood it to be the government intervening in what was still.

[Richard Wolff (Alternate Voice or Assistant)]

A private enterprise economy. In other words, and by the way, that was the norm in North America and Europe.

[Richard Wolff]

Their socialists, by and large believed that.

[Richard Wolff (Alternate Voice or Assistant)]

The government should regulate, should control, but.

[Richard Wolff]

Still leave in the private hands of individuals and investors the ownership and operation of enterprises.

[Richard Wolff (Alternate Voice or Assistant)]

Government control, private enterprise. That was the socialism, if you like, in the west, in the Soviet Union and the People's Republic of China and other countries that came to be like them, Vietnam, Cuba and so on.

[Richard Wolff]

There was a somewhat different notion there. The notion was, yes, the government would.

[Richard Wolff (Alternate Voice or Assistant)]

Come in, but it would not leave the enterprise, ownership and control in private hands.

[Richard Wolff]

It would complete government intervention by taking.

[Richard Wolff (Alternate Voice or Assistant)]

Over the private enterprises and making them government enterprises. The government would then not just regulate and control, but literally own and operate the enterprises. Russia did that with its industry, China did that with its industry.

[Richard Wolff]

And Russia didn't do it at first.

[Richard Wolff (Alternate Voice or Assistant)]

With its agriculture, but moved slowly in.

[Richard Wolff]

That direction and more or less the.

[Richard Wolff (Alternate Voice or Assistant)]

Chinese, the People's Republic of China as well. So let me summarize.

[Richard Wolff]

Socialism has been for most of the last century or so, a philosophy, a.

[Richard Wolff (Alternate Voice or Assistant)]

Movement, an ideology, a commitment for a.

[Richard Wolff]

Greatly expanded role of the government, either in shaping, controlling and regulating private enterprise.

[Richard Wolff (Alternate Voice or Assistant)]

Or literally substituting itself for private enterprise. Sometimes the word communist only sometimes was used for the more extensive government intervention, and socialism reserved for the less intrusive government intervention.

[Richard Wolff]

But government intervention was the common idea.

[Richard Wolff (Alternate Voice or Assistant)]

Government inserting itself, and the idea of the socialists was always having the government play a large or larger role is a way to ensure that capitalism benefits the society as a whole and not just the relatively small part of the community that owns and runs private enterprises.

[Richard Wolff]

Notice here that another way to describe.

[Richard Wolff (Alternate Voice or Assistant)]

This, which I find very useful and.

[Richard Wolff]

Would urge you to consider is that the modern notion that we live in.

[Richard Wolff (Alternate Voice or Assistant)]

A democratic society carries the clear implication that what happens in society should be what the majority of people prefer.

[Richard Wolff]

By all means, you protect and you.

[Richard Wolff (Alternate Voice or Assistant)]

Do not oppress a minority, but it is the majority that gets its way and that the minority is told. If you want to get your way, you have to persuade enough people that you become the majority, because majority rule is the basic rock on which democracy stands.

[Richard Wolff]

Well, if that's true, then capitalism has.

[Richard Wolff (Alternate Voice or Assistant)]

Always got a problem if it exists in a democratic political system, because in an enterprise, in a capitalist Enterprise.

[Richard Wolff]

It is a tiny minority of people.

[Richard Wolff (Alternate Voice or Assistant)]

Who make all the basic decisions. What to produce, how to produce, where to produce, and what to do with the profits. Earlier in this program we made comments about that. We do that often on this program because to no one's surprise, since a.

[Richard Wolff]

Small number of people, major shareholders and.

[Richard Wolff (Alternate Voice or Assistant)]

Top executives, make all the decisions. In the modern corporation, which is the institution that does most business in a capitalist system, we've noticed that they pay themselves very well with dividends for shareholders and they pay themselves very well with high pay packages to top executives. Earlier in the program we went through stock buybacks as yet another way. All of this is managed.

[Richard Wolff]

But the point is, in a capitalist economic system, a tiny number of people.

[Richard Wolff (Alternate Voice or Assistant)]

Are in a position to make this system work really well for themselves, far better than it works for the average person.

[Richard Wolff]

And that under stress, these folks will not only do that, but they will take care of themselves, even if it's.

[Richard Wolff (Alternate Voice or Assistant)]

At the expense of other people. That the gains for the few come at the losses for the many. In good times, the gains of the.

[Richard Wolff]

Few still permit gains for the others.

[Richard Wolff (Alternate Voice or Assistant)]

Even if they're not so generous. But in hard times, and that's what we're living through, the gains of the few come at the expense of the many.

[Richard Wolff]

This is a problem. It means that the capitalist system, in.

[Richard Wolff (Alternate Voice or Assistant)]

Terms of how each enterprise is organized.

[Richard Wolff]

Is in conflict with, stands in contradiction to the democratic norms that are upheld.

[Richard Wolff (Alternate Voice or Assistant)]

As basic values of our society and basic shapers and of our politics. This is a serious problem. What has happened with this situation?

[Richard Wolff]

Well, socialists, especially after the 1970s, found themselves having two kinds of problems. One, they discovered that to the degree.

[Richard Wolff (Alternate Voice or Assistant)]

That they either controlled and regulated private enterprises, leaving the running of the businesses to them, they that those businesses then.

[Richard Wolff]

Had the usual capitalist problems.

[Richard Wolff (Alternate Voice or Assistant)]

Gross inequality, instability, business cycles, crashes, coming up to the big one. In 2008 and even in the so called communist countries, mainly Soviet Union, Eastern Europe and People's Republic of China, they had the government running the enterprises, but they were still a tiny group of people, government officials running the enterprises and.

[Richard Wolff]

And the mass of people doing the work and the tensions between those two.

[Richard Wolff (Alternate Voice or Assistant)]

And the lack of democracy in which workers were told, you live in a communist democracy, but when you go to work each day you do what you're told. This contradiction which afflicts people in the west just like it does people in.

[Richard Wolff]

China, made that society have a whole.

[Richard Wolff (Alternate Voice or Assistant)]

Network of problems too. And it meant that accommodations were reached. Socialists backed off of their confidence that they had a real alternative and they.

[Richard Wolff]

Made lots and lots of compromises.

[Richard Wolff (Alternate Voice or Assistant)]

That's why the government of France today really doesn't look that different from the government of France under Mr. Sarkozy. The Socialists took over, but the difference between them and what they replaced is minimal. That's why they people of Greece, when.

[Richard Wolff]

They threw out the right wing party.

[Richard Wolff (Alternate Voice or Assistant)]

That had been dominant in Greek politics.

[Richard Wolff]

Also threw out with them the Greek Socialist Party, because it too, like in.

[Richard Wolff (Alternate Voice or Assistant)]

France, wasn't all that different.

[Richard Wolff]

Socialism became really just another kind of normal political party.

[Richard Wolff (Alternate Voice or Assistant)]

It tilted a bit more towards government programs and government help of people. That's its heritage. It does a little more of that.

[Richard Wolff]

The conservatives do a little less of that. But it's a very everybody happy in.

[Richard Wolff (Alternate Voice or Assistant)]

The middle kind of approach. Socialism got watered down. It becomes a critique of the privatization.

[Richard Wolff]

But what it proposes is not to.

[Richard Wolff (Alternate Voice or Assistant)]

Take away industry from private owners, not to take away industry from private managers and executives, but to hedge them about with rules and regulations. There's the kind of socialism that, that Bernie Sanders is proposing for the United States and it is a significant movement in that direction, but it's not an alternative to capitalism. That has proved to be elusive, that.

[Richard Wolff]

When the government comes in, even in the People's Republic of China and Russia, it is a government reproducing inside the.

[Richard Wolff (Alternate Voice or Assistant)]

Schools, the offices, the factories, the stores.

[Richard Wolff]

Pretty much the same arrangement as was.

[Richard Wolff (Alternate Voice or Assistant)]

There before, but the government in charge rather than private enterprise. That's all. Well, this kind of accommodation, which you can see not just in Russia, which literally gave up its Soviet background and became another more or less capitalist country with a big role for the government, because that's where they've been for the last 75 years.

[Richard Wolff]

But even in the People's Republic of.

[Richard Wolff (Alternate Voice or Assistant)]

China, where there is now the freedom for private enterprises, both Chinese and foreign, to function with, again, big role for the government. But what's remarkable is the accommodation to a private sector that has become stronger and stronger since Mao Tse Tung's passage from the scene. Well, this has not left socialists untouched. They don't only make accommodations.

[Richard Wolff]

It has led to socialists becoming self critical, perhaps in ways they should have become long ago.

[Richard Wolff (Alternate Voice or Assistant)]

But there's a part of the socialist.

[Richard Wolff]

Tradition that looks at all the accommodations made by the Francois Hollande in France.

[Richard Wolff (Alternate Voice or Assistant)]

By Bernie Sanders in the way he understands it, by the Syriza government, the way they and Alex Tsipras, their leader, understands it, by Pablo Iglesias, the leader of Podemos, and by the leaders in the People's Republic of China, Raul Castro in Cuba and so on. They're all making various kinds of accommodations.

[Richard Wolff]

But they also include among them and in their circles people who don't want.

[Richard Wolff (Alternate Voice or Assistant)]

To make a accommodations.

[Richard Wolff]

And let me explain what that means. It's not that they're against the particular.

[Richard Wolff (Alternate Voice or Assistant)]

Proposals these folks are making, Syriza or Bernie Sanders or others, that this kind of, let's call it moderate or reformist socialism is a real historical phenomena and responds to real issues that socialists have had to deal with.

[Richard Wolff]

But these are people who believe that.

[Richard Wolff (Alternate Voice or Assistant)]

Capitalism itself remains the ultimate problem that has to be solved, the ultimate system.

[Richard Wolff]

That has to be gone. Beyond that, the difficulties we face are not going to be solved by having.

[Richard Wolff (Alternate Voice or Assistant)]

A government regulation or a new government rule or a bit more government intervention. That the private sector has been able to evade those as it needs to, to soften them, as it needs to, to force compromises from the socialists pushing for them. It's done it over and over again for at least 75 years and in every country on the face of the earth. And that means lessons have to be learned. And for these socialists that I'm talking about, the lesson is we have to formulate we different socialists, a concept of socialism that breaks with the past. And they've done that. And I want to conclude today by making sure that's clear in everyone's mind. So you can decide whether you find it persuasive or not, interesting or not, whether it will or won't play a major role in shaping American and other countries histories in the months and years ahead. I frankly think it will. But that's just one person's opinion.

[Richard Wolff]

Here's the idea.

[Richard Wolff (Alternate Voice or Assistant)]

Old socialists made a mistake. They focused on the government making the logical link. The government represents everybody in a society where everybody votes. And so it's the agency that can make this system work. Well, they were wrong. That is, they underestimated the power of the private capitalist sector or the power.

[Richard Wolff]

Of capitalists even when they're government officials.

[Richard Wolff (Alternate Voice or Assistant)]

But are stuck in a system in which a tiny number of people make all the economic decisions that everybody else, the vast majority, have to live with. They made a mistake in not addressing that question. If you want this economic system to serve everybody, to be a social institution, not a private institution, you can't let a private, a small group of private individuals, whether they hold state positions or.

[Richard Wolff]

Not, you can't let them make all.

[Richard Wolff (Alternate Voice or Assistant)]

The decisions that's not democratic. But worse than that, it's going to produce economic decisions that serve them, but not the average person even serve them at the expense of the mass of people.

[Richard Wolff]

And that's not a sustainable position, can last for many years. It will blow up. And the reason we believe it is it always has.

[Richard Wolff (Alternate Voice or Assistant)]

Therefore, a modern socialist position, learning both.

[Richard Wolff]

From the achievements and the shortcomings of the past of socialism, focuses on overcoming.

[Richard Wolff (Alternate Voice or Assistant)]

The quintessential core of capitalism, the enterprise, the factory, the office, the store, in which a tiny group of people, the owner, the board of directors, the major shareholders, the partners, whatever you call them, make all the decisions for a mass.

[Richard Wolff]

Of people, employees, their families, the larger community which will shape their lives, their incomes, their futures, their hopes. But they have no control over it.

[Richard Wolff (Alternate Voice or Assistant)]

You have a tiny group of people, that's the problem.

[Richard Wolff]

And so when you hear people like.

[Richard Wolff (Alternate Voice or Assistant)]

Me talk about worker co ops or worker self directed enterprises, we are the.

[Richard Wolff]

Tip of the iceberg of a recognition.

[Richard Wolff (Alternate Voice or Assistant)]

That it's the core relationship among people that has to be changed.

[Richard Wolff]

That's the issue that socialists, pro and con, capitalists, pro and con, that's what.

[Richard Wolff (Alternate Voice or Assistant)]

They'Re going to be struggling with in the years ahead. That's the way the wind is moving. That's the issue to fight over.

[Richard Wolff]

The whole year has been a pleasure producing these programs.

[Richard Wolff (Alternate Voice or Assistant)]

I appreciate your listening. Please partner with us to share what you hear on this program with others. Use Facebook, use Twitter, use all the social media, follow us on Facebook and Twitter. We which you can do by going to our websites rdwolf.com and democracyatwork.info that's what they're there for. They all both websites have ways for you to communicate your thoughts, your questions, your feelings. Let me conclude by asking you to also think about something I've mentioned more and more on the program. We are now partnered with a specialized firm, lawyers, accountants, financiers who help businesses convert from top down undemocratic capitalist structures to worker cooperatives. If you're contemplating that as an employer.

[Richard Wolff]

Or an employee, get in touch with us.

[Richard Wolff (Alternate Voice or Assistant)]

We will connect you to that firm which can advise you and let you know what the conditions are under which you could make that change. We also are looking for more and more radio stations to carry this program.

[Richard Wolff]

If you have any connections to any.

[Richard Wolff (Alternate Voice or Assistant)]

Local radio station, community station, NPR station, College University Station, you name it. Get in touch with us through the websites and we will follow up in order to arrange for more. We're crossing the 50 station mark, we hope for 100 by the end of 2016.

[Richard Wolff]

And finally, if you're interested in having.

[Richard Wolff (Alternate Voice or Assistant)]

Me speak to your church, to your labor union, to your community organization to.

[Richard Wolff]

To do a fundraiser for your public.

[Richard Wolff (Alternate Voice or Assistant)]

Service organization, your radio station. Get in touch with us. I do a great deal of that. I travel around the country. It's a chance for me to meet you and vice versa and build this partnership to have an influence on where America goes and where the world goes at a time of momentous economic and social change. Thank you very much, and I look forward to speaking with you again next week.

[Richard Wolff]

Sam.