Economic Update with Richard D. Wolff

Episode: Capitalism Makes Few Winners, Many Losers

Date: May 31, 2018
Host: Richard D. Wolff | Democracy at Work

Episode Overview

This episode of Economic Update delivers an incisive critique of capitalism, arguing that it perpetuates economic inequality, creates systemic losers, and enriches only a select few. Host Richard D. Wolff provides updates on global and domestic economic issues, before engaging in a compelling interview about a successful worker-student alliance at the New School University cafeteria. The episode is both analytical and energizing, offering real-world stories of resistance and hope alongside hard-hitting economic analysis.

Key Discussion Points & Insights

1. Political Change vs. Economic Transformation (00:10–07:40)

• Armenia's Spring and its Lessons:
  Wolff opens with Armenia’s recent political upheaval, cautioning that political revolutions are insufficient without accompanying economic transformation.
  • Quote: “A political revolution without the economic transformation needed to go along with it will not succeed.” — Richard Wolff (03:10)
  • Connects this to broader examples (Arab Spring, Tunisia), arguing entrenched problems persist if the basic economic system isn’t reformed.

2. U.S. Banks: Profits, Politics, and Pay-to-Play (07:41–12:23)

• Banking System’s Post-Crisis Recovery:
  • U.S. banks are reporting record profits, debunking claims that regulations like Dodd-Frank or tax reform threaten their survival.
    • Quote: "The same banks that are rolling in the profits have been complaining bitterly...about the Dodd-Frank bill...And yet here it comes—the Dodd-Frank bill has nothing to do with bank profitability." — Richard Wolff (08:40)
  • Wolff argues that banks use political influence to secure profits while avoiding real reform—emphasizing a “pay-to-play” dynamic.

3. The Harley Davidson Paradox (12:24–18:35)

• Corporate Profits vs. Workers’ Welfare:
  • Despite receiving tax cuts and political support (notably from Trump), Harley Davidson plans to close a Kansas City plant, eliminate 800 jobs, and offshore production.
    • Quote: “What did Harley Davidson say? ...We are grateful to them and the Kansas City community...Wow. Thank you. We're dumping you. Have a nice day.” — Richard Wolff (15:32)
  • Demonstrates the disconnection between political theater and economic reality, with workers bearing the cost of “profit-driven decisions.”

4. Disproportionate Justice: The Case of the 15-Year-Old vs. Wall Street CEOs (18:36–22:28)

• Justice System Inequities:
  • Contrasts a 15-year-old boy fined $36 million for a fire with Wall Street CEOs (e.g. Jamie Dimon, Lloyd Blankfein) who faced no penalties after the 2008 crisis.
    • Quote: “They got no probation, no hours of community service and no fine whatsoever. Crime befitting what? Punishment befitting what crimes?” — Richard Wolff (21:39)

5. America’s Economic Precarity (23:24–27:41)

• Federal Reserve Survey Findings:
  • 40% of Americans can’t cover a $400 emergency expense without borrowing or selling possessions; majority can’t handle a $1,000 emergency.
    • Quote: “The majority of Americans are in tough economic shape. That's the truth.” — Richard Wolff (25:22)
  • Discusses the opioid crisis: 20% know someone addicted to opioids.

6. Global Capitalism’s Toll: Diesel Scandal and Medical Shortages (27:42–31:12)

• VW Diesel Emissions Scandal—Hamburg, Germany:
  • 200,000+ older diesel vehicles banned due to health risks from falsified emissions tests.
    • Quote: “They damage the health of their own people in huge numbers...by the profit-driven decisions of car companies.” — Richard Wolff (29:09)
• U.S. Medical Shortages:
  • Over one-third of emergency physicians report drug shortages negatively impacting patient outcomes, even though Americans pay higher healthcare costs than elsewhere.

7. Billionaire Wealth Explodes Amid Growing Inequality (31:13–33:54)

• Wealth-X Billionaire Census:
  • Billionaire wealth rose 24% in 2017; global billionaire population shifted from North America to Asia.
    • Quote: “If you're a billionaire, you don’t need [your wealth] to grow like that. If you’re not, you do. But in capitalism, it works the other way.” — Richard Wolff (32:17)
  • Growing gap between rich and rest of society is likened to a train “powerless to stop what's coming.”

Main Segment: Worker-Student Victory at The New School Cafeteria

(Second Half: 33:55–54:25)

Introduction (33:55–34:50)

• Wolff welcomes Roderick Prude (food service worker, New School) and Dylan Nam (student-activist) to discuss a remarkable worker-student coalition.

The Story of the Occupation

The Precipitating Event (34:51–36:15)

• University’s food service contractor (Chartwell) planned to leave; management aimed to replace unionized workers with lower-wage non-union or student workers, giving 32 workers only one month's notice.
  • Quote: “We were notified at that last minute...that you would lose your job.” — Roderick Prude (30:55)

Student Solidarity (36:16–39:55)

• A communist student group mobilized hundreds of students; occupation started on May Day (May 1), with direct collaboration between students and workers.

  • Quote: “The communist student group allied with the other students and the workers and they began an occupation of the cafeteria on May 1st, on May Day.” — Dylan Nam (32:44)

• Cafeteria occupation lasted 16 days, became a community hub and “strike kitchen,” providing meals with donated supplies despite university shutting down facilities.

  • Quote: “We had a full kitchen going. We provided three meals a day for all of the occupiers and for anyone else who decided to come and visit the occupation the following week.” — Dylan Nam (34:55)

Impact and Victory (39:56–44:39)

• Student action gave workers and their union (UNITE HERE Local 100) vital time and leverage.
  • Quote: “...together and both coming from both angles because the union itself can do but so much because of the legal matters...But the kids, they could basically do what they want.” — Roderick Prude (39:54)
• Workers’ jobs were saved: “It was definitely [the students that saved our jobs].” — Roderick Prude (38:47)
• Students express increased “class consciousness” and awareness that solidarity benefits both current workers and their own future prospects.
  • Quote: “I think it's a level of class consciousness that's being spread around...as students educate themselves more in why capitalism doesn't work and how to fight it...” — Dylan Nam (42:11)

Broader Reflections (44:40–54:25)

Worker Co-ops and Democratic Workplaces

• Interest in forming a worker cooperative to manage the cafeteria—seen as a broader alternative to traditional hierarchical structures.

  • Quote: “You are saying...there really is an alternative...and that you want that alternative where you work...That makes this more than a struggle at the New School. It means the world to everybody.” — Richard Wolff (47:49)

• While immediate outcome was a two-year extension for workers under existing contract, the hope is to advance workplace democracy in the future.

Experiential Change

• Both guests describe the occupation as life-changing and inspiring, fostering a new sense of community and possibility.
  • Quote: “It was incredible. I mean that these kids actually stepped up for us, you know, and spoke up for us. But my job, my job, my co-workers' jobs.” — Roderick Prude (49:54)
  • “We built a community that's very strong within the New School...We created a space that people felt comfortable in, that people lived in for two weeks straight.” — Dylan Nam (50:49)
• Lasting solidarity between students and workers, with the potential to continue the movement and inspire similar actions elsewhere.

Memorable Quotes & Moments with Timestamps

• On the myth of regulatory threat:
  “The Dodd Frank bill has nothing to do with bank profitability. They've been more profitable with it than they had been before without it.” — Richard Wolff (08:52)
• On corporate hypocrisy:
  “Wow. Thank you. We're dumping you. Have a nice day.” — Richard Wolff, satirizing Harley Davidson’s statement to workers (15:32)
• On justice inequality:
  “They got no probation, no hours of community service and no fine whatsoever.” — Richard Wolff, on Wall Street CEOs (21:39)
• On economic insecurity:
  “40%, just under half of American families do not have $400 in money readily available in the event of an emergency.” — Richard Wolff (25:02)
• On solidarity and future optimism:
  “I really feel that if [the students] didn't, that we would have had a rougher time getting to where we're at now.” — Roderick Prude (38:43)
• On the significance of the struggle:
  “You guys are, dare I say it, you're kind of pioneers...This is very important stuff. Its importance goes way beyond [your situation].” — Richard Wolff (47:49)

Important Segment Timestamps

• Armenia and the Need for Economic Change: 00:10–07:40
• U.S. Bank Profits and Dodd-Frank: 07:41–12:23
• Harley Davidson and Offshoring: 12:24–18:35
• Legal Double-Standards: 18:36–22:28
• Federal Reserve Survey on Economic Hardship: 23:24–27:41
• Diesel Scandal/Healthcare Drug Shortages: 27:42–31:12
• Billionaire Census and Growing Inequality: 31:13–33:54
• Worker-Student Victory (Interview): 33:55–54:25

Final Reflection

This episode frames capitalism as a system engineered for inequality—showing, through news stories and the New School occupation, that real change only comes through coordinated political and economic struggle. The successful worker-student alliance is presented as a model for future organizing and a source of hope in the fight for a more equitable society.

For listeners interested in labor rights, economic justice, and participatory democracy, this episode offers both a sobering critique and an inspiring blueprint for action.