Economic Update (Aug 9, 2018): "Capitalism: One Big Push Against Capitalism"

Host: Richard D. Wolff
Guests: Matt Christman & Will Menaker (Chapo Trap House podcast)
Theme: Critique of contemporary capitalism, its contradictions, systemic impacts, and signs of pushback – including within culture and politics.

Episode Overview

Richard D. Wolff examines how capitalism addresses its inherent problems, often creating larger crises as it does so. He provides current examples—legal marijuana, corporate conglomeration, policing, and financial entanglements—showing how limited solutions frequently lead to unintended (and expensive) consequences. In the second half, Wolff interviews Matt Christman and Will Menaker of the comedic political podcast Chapo Trap House, exploring how their show rose with the failures of liberalism and the resurgence of openly leftist critique in American culture.

Key Discussion Points & Insights

1. Capitalism: Solving Problems by Creating Bigger Ones

• Process of Contradiction:
  • Capitalism, like all economic systems before, faces internal problems, sometimes resolving them, but often in ways that fuel future, larger issues.
  • "That's what happened to slavery, what happened to feudalism... it's reasonable to look at capitalism as likely repeating that process." (Wolff, 00:53)
• Example - Marijuana Legalization (Colorado & Washington, 2010–15):
  • Policing shift: Legal marijuana meant drastic drops in possession arrests, freeing police to address burglary/auto theft.
  • Stat: In 2016, 600,000 people arrested nationwide for simple possession—more than all violent crime arrests. (01:48)
    • "Imagine if the rest of the country had done what Colorado and Washington had... have those cops work on issues of violent crime." (Wolff, 02:44)
  • Racial & Political Motives:
    • The Nixon administration criminalized marijuana to target people of color and young radicals, affecting voter participation (03:48).
    • Clinton-era welfare reform led to increased incarceration, shifting costs to taxpayers (05:07).
• Cost Implication:
  • Incarceration costs: $30,000–$40,000 per inmate annually. "And there's why the taxes went up for many of us... the system shoots itself in the foot." (06:13)

2. Corporate Conglomeration & Worker Disempowerment

• Case Study – JAB Holding Company:
  • Little-known Luxembourg parent company now owns major brands: Krispy Kreme, Insomnia Cookies, Peet’s Coffee, Panera, Snapple, Dr. Pepper, Au Bon Pain, Pret a Manger, among others (07:12).
    • "Here we go. Ready? Krispy Kreme... Peet’s Coffee... Dr. Pepper..." (Wolff, 07:30)
  • Result: Monopoly power allows management to threaten relocating or closing shops to suppress wage demands; workers lack comparable power.
    • "Workers have no comparable organization that can fight that. And that's why wages don't go up. No mystery there." (Wolff, 08:29)
• International Example:
  • Workers in Indian factories facing beatings for organizing; highlights how global capitalism prioritizes low wages over worker welfare (09:01).

3. Finance, Politics, and Corruption

• Signature Bank Example:
  • Lesser-known NYC bank entangled with Trump, Kushner, and associates:
    • Board included: Ivanka Trump, Barney Frank (co-author of Dodd-Frank bank regulation), and Al D'Amato.
    • "[Barney] Frank... author of the Dodd Frank bill... received $280,000 in stock plus annual fees of $60,000..." (Wolff, 12:14)
  • Conclusions:
    • Demonstrates deep ties between finance, real estate, and political elites—contradictory to the anti-corruption "drain the swamp" rhetoric (13:30).

4. Emerging Pushback – Policy Changes & Social Movements

• New Zealand Domestic Violence Leave Law:
  • Recently enacted: 10 days paid leave for victims, a world first; supported by the Green Party; opposed due to alleged small business burden (14:18).
    • "Any victim of domestic violence can... must be given 10 days of paid leave..." (Wolff, 14:34)
    • Wolff criticizes assumption costs fall to small businesses, suggests taxing big businesses to support broad social needs (15:10).
  • Seen as analogous to historic milestones like outlawing child labor.

Interview: Matt Christman & Will Menaker (Chapo Trap House)

(15:39–28:31)

What is Chapo Trap House?

• Origin & Nature:
  • Started for fun among friends (Matt, Will, Felix); combined news, politics, pop culture, and humor (15:55).
  • "It's a podcast that started... just decided to do something to entertain ourselves on a whim..." (Menaker, 15:55)
  • Show demonstrated rapid, organic growth despite amateur production due to the timing (16:49).

Popularity & Political Context

• Growth Factors:
  • Rose during Bernie Sanders vs. Hillary Clinton primary (2016); only pop culture broadcast fully embracing democratic socialism (17:13).
    • "We were basically the only emergent pop culture broadcast... saying... socialism is possible..." (Christman, 17:28)
  • Trump’s election accelerated listenership due to audience disillusionment with liberal promises (18:33).
• Satire’s Target & Impact:
  • Post-election, the show’s anger focused on the liberal class for failing to prevent Trump.
    • "The anger directed at not the Republicans or Trump for getting elected, but the anger at the failure of the liberal class..." (Menaker, 20:25)
  • Their critical tone toward liberals, once rare, found eager listeners searching for deeper left critique.

The Democratic Party’s Identity Crisis

• Wolff’s Question: Is socialism now baked into US culture? (21:42)
  • Menaker: Show’s popularity reveals hunger for political alternatives—liberalism has failed, and policies deemed 'socialist' poll well (22:08).
    • "There is a real hunger out there for people who have realize that the liberalism that they've grown up with... has failed." (Menaker, 22:08)
  • Christman: Democratic Party is institutionally resistant, but disillusionment is real. “It is a house divided moment...” (Christman, 24:33)
  • Menaker: Liberal project is “buying time”—running out of options as crises mount; doubts the party can reform in time (25:53).
    • "They're basically run out of time, and we're going to see another economic crisis or another war..." (Menaker, 26:08)
• Is the Left a Lasting Cultural Force?
  • Menaker: Socialism is now in the culture—maybe not yet a movement, but “not going away.”
    • "We're mean to liberals in a way that was previously only reserved for the loony right wing..." (Menaker, 27:40)
  • Satire and criticism directed at liberals is part of the new political landscape.

Notable Quotes & Memorable Moments

• On capitalist contradictions:
  • "The system shoots itself in the foot. It solves its contradictions, but often by making them worse." (Wolff, 06:13)
• Regarding marijuana arrests:
  • "600,000 people arrested for simple marijuana possession... more than all violent crimes in 2016." (Wolff, 02:24)
• On why Chapo Trap House resonated:
  • "It gave people who felt that but didn’t see it reflected in the media around them sort of a validation." (Christman, 17:38)
• Satirizing both parties:
  • "We're mean to liberals in a way that was previously only reserved for the loony right wing." (Menaker, 27:40)
• On the Democratic Party's struggle:
  • "The institutional controls that establishment Democrats have... is very strong... electoral monopolies..." (Christman, 24:57)
  • "The best case scenario is the Whigs—that they just, like, overnight just collapse." (Christman, 26:40)

Timestamps for Key Segments

• 00:09–06:30 — Marijuana, policing, incarceration economics
• 07:12–10:35 — JAB Holding, conglomeration, worker relations
• 10:36–14:18 — Signature Bank, finance-politics nexus
• 14:18–15:39 — New Zealand law; cultural/policy change as pushback
• 15:39–17:13 — Introduction to Chapo Trap House
• 17:14–21:41 — Chapo’s rise and critique post-2016 election
• 21:42–27:40 — American left, Democratic Party conflict, is socialism here to stay?
• 27:41–28:31 — Closing reflections

Summary

This episode presents a sharp critique of the self-defeating results of contemporary capitalism, showing how attempted fixes to its contradictions—be it through criminal justice, consolidation of corporate power, or finance—often inflame deeper problems. Wolf’s first-half analysis sets the stage for a cultural case study: Chapo Trap House’s rise amid the failures of mainstream liberalism. The interview with Christman and Menaker underscores that an appetite for left critique and even socialist ideas is now intrinsic in US political culture, perhaps marking a historic shift in public discourse and potential future change.