← Economic Update with Richard D. Wolff
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Sam. One of these days I ain't gonna change. 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, those of our children, those we're worried about and have to stay up nights worrying about. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and I continue to teach now, as well as do programs like this. So let's jump into Economic Update for today. I want to talk about a set of problems. They have to do with major failures of large capitalist enterprises. And as I go through them, I want you to bear with me. The point here is not the particulars of each case. The point is to understand that these are all examples, symptoms, if you like, of an underlying system that makes enterprises work like this. The problem isn't this or that official or this or that company. It's a problem of a system whose rewards and punishments lead people to behave in particular ways. So let's start. Well, I was blown away by the first one. Here is the CEO of General Motors, wonderful example of leading American corporations, Mary Barra. She's in Beijing, China, and she's lecturing Chinese leaders. Here's what she's lecturing. The Chinese government, like other governments around the world, is moving in the direction of outlawing all diesel motors and diesel engines in vehicles for all kinds of reasons, including the emissions scandal. That's when major companies, auto companies around the world, many of them, but the most important was vw, were shown to have intentionally fiddled with the control mechanisms so that what you measure in a lab in the way of emissions is much lower than the actual emissions on the road when the vehicles are used. And she didn't like that. She didn't like government stepping in. And she gave them a lecture that, you know, she said, putting on her most serious face, it shouldn't be governments that make those decisions about technology. It should be consumers. Oh, what a wonderful idea. How nice this is. From a company that lied for years to consumers about the ignition scandals that cost a good number of them their lives and an even larger number of them serious injury. She wants us to trust large businesses to tell consumers what they need to know. Wow, that takes a lot of nerve. I admire her for that. But now let's go on, because the examples come thick and fast. Last week, the Ford Motor Company announced that its very famous Explorer models from years 2011 to 2017, right to the moment, are facing recalls. Why? Because of fumes in the cabins that have Bothered a number of people. A state trooper driving one of those was killed. There have been, Listen to this. 2,700 complaints about fumes in the cabins of Ford Explorers. There have been more than a million that have now been identified as at risk for this problem. And that's how many will be recalled. It is extraordinary. By the way, it was years of these 2,700 complaints accumulating before we hear this last week, that a recall may happen. Yeah, we should trust big corporations. Let's move on. Big item over the last few weeks was a wonderful action by one of the three great credit agencies in the world, Equifax. What did they do? Well, this is really wonderful. They had a vulnerability on their website that made it easy to hack in. Now watch the dates. They found out about it. This last spring, there was a patch developed that could fix the problem on March 6th. All of this has been reported in the press. The hack happened in mid May and it was reported a month or so later. During all of that lost time. Get ready. Now. Over 100 million Americans, and it turns out another hefty number of British citizens have had their entire credit histories, including their personal information, their Social Security numbers, made available to hackers who in turn sell them. Wow. And the nerve goes even further. One of the few things Equifax has done since being exposed for having not managed this situation well and having not told people for months about its own failure. Remember the advice of Mary Barra that we shouldn't have government interfere. We should just trust the corporations to tell the consumers what they need to know. Equifax offered compensation if the recipients were to waive their rights to go into court to sue Equifax for damages if they accepted what is called compulsory arbitration, which always works to the company's favor. But now, in a way, the biggest example of all, on September 18th. The front page of the New York Times on that Monday carried a remarkable story. Here it is, in brief. Insurance companies. Medical insurance companies have been urging and pushing onto the people that they insure who suffer from serious pain a variety of addictive opioid medications, addictive painkillers, even when less addictive drugs were available to treat the pain. Why? Because the more addictive were cheaper for the insurance company to cover than the less addictive ones. And you know, when a company has a choice between what's profitable for it and what might be less addictive for this population, it's clear which way they choose. Once again, it's the government coming in and looking at the situation because if we leave it to the companies, we know what they will do. So Mrs. Barracks of General Motors advice that we don't have the government, that we have consumers. You must be kidding. And I'm giving you the benefit of the doubt when I even say that. And what would be the alternative? You know, if public enterprises had performed as horribly as the four examples I just gave, there would be howls out there to get rid of public and let the private sector do that. On the specious argument that the private would somehow avoid it. Where are the howls today that if the private automobile companies and the private medical insurance companies and so on and the private credit companies, when they don't work right, we ought to have the government step in? You don't hear those howls. Those are muted. The howling seems to push in one direction, not the other. Now, for me, just as a comment, as an economist, the issue really isn't whether a private company does it or a government company does it. The issue is that all these decisions ought to be made by two those who make the substance and those who consume it. There should be panels, institutions that allow the consumers and users of a product to, together with the people who produce it, to do something that meets both of their needs. There is no warrant, no need, and much to be lost by allowing profit calculations to get involved in this situation. As my examples show, the next update has to do with Bernie Sanders. He's been in the news the last week or two because he's proposing that the Medicare program, which currently covers people 65 years of age and older with a kind of general government medical insurance program, be expanded to include everybody. It's basically Medicare for all. And he introduced a bill. That part I'm sure many of you know. But I want to go a little bit further and ask a question. Why is he having trouble getting people to line up with this? And I asked this question in the awareness which I want to share with you, that the Pew Research Foundation, a very well known, well respected research organization, polling organization, has repeatedly shown that 60% of Americans support the federal government making sure all Americans have have health coverage. 33% of Americans support the single payer program, which is close to what Bernie Sanders calls Medicare for all. So in view of 60% who want the government to do this and at least 33% who like exactly what Bernie Sanders is doing, how much support has he got in the US Senate? Well, way more than he had before. The first time he introduced a bill like this, it was the support of One senator, namely him, this time he has 16, 16 Democratic senators that have co sponsored that bill. Now that works out to 16% of the hundred senators who make up the US Senate. So please note with me the numbers. 60% of Americans were want this. 33% of Americans want exactly what Mr. Sanders has proposed. But he can only get 16% of the senators who supposedly represent the people to support him. And then comes the explanation. Somebody did the research. It was published by Common Dreams, so you can find it there. Someone did the research to look at how much money medical insurers, they're the ones who stand to lose if the government becomes the real insurer. How much do medical insurance companies give to senators? And here's what we got. Senators who do not sponsor or at least have not yet sponsored, got an average of $55,000 from medical insurance industries. Those who sponsored got less than half of that on average. Mr. Sanders is the only senator who from medical insurance companies gets absolutely nothing. Wow. Out of the Democratic senators who have not agreed to sponsor, I thought you might be interested to find out which of them got the most money. And you might be surprised. Out of all Democratic senators, the most, averaging $130,000 for their campaigns on average, were Senators Peter from Michigan, Wyden from Oregon, and Schumer from New York. Well, there's new studies about the opioid epidemic, the epidemic that last year took 64,000 lives in the United States. This epidemic of painkillers, both legally prescribed and illegal, is a far more deadly scourge in America than all the wars we're fighting. Even these days when we fight so many much more deadly than car accidents. It's really extraordinary. A new research study undertaken by Princeton economists shows a direct connection between painkiller addiction on the one hand, and something called the labor force participation rate on the other. The labor force participation rate, excuse me, is a very important statistic. It measures what part of the adult able bodied population in America is either working or looking for work, participating in the labor force, and what part isn't. And the reason that number is very important is if your labor force participation rate goes down, if the percentage of your adult people that are working or looking for work shrinks. Think of it this way. It means a smaller number of people are working to support a larger number of people who aren't. And that puts a strain on every family. It means somebody in the family who used to participate and therefore kick in money to sustain the family is now not participating and therefore not kicking in money to sustain the family. It puts an enormous burden on the population. We have a reduced labor force participation rate in this country, particularly since the crash of 2008. It has not recovered. Recovery has not happened there. And that's why so many families feel pinched, because they have millions in this country, millions of people fewer in the labor force than were there before. And now we have part of the explanation. Addiction to painkillers makes it very hard to look for a job, makes it very hard to keep a job, makes it unfortunately very easy to live outside the world of work, coping or struggling or zoned out on whatever it is that you're addicted to. The problem of addiction is an economic problem as well as personal tragedy. The next item Well, I couldn't help this one, but before I get to it, let me remind you that we maintain two websites that are available 247 at no charge whatsoever that carry a lot of the information that is available on this program. Indeed, there's an archive of all of these programs that you can listen to at your leisure. The first website is democracyatwork.info all one word, democracy at work. And the second One is rdwolff with 2f's.com. please make use of either website at your leisure. You can communicate with us through them. You can follow us on Facebook, Twitter, and Instagram. It's a way of our partnering with you and you making use of the work we do for that purpose. Also, if you wish to see a video version of this program, you can find that on patreon.com P-A-T-R-E-O-N.com and we urge you to take a look that way. This next website has to do with the price gouging that came out of the storms Harvey in Texas and Irma in Florida. Price gouging is simply a technical term for people, but usually businesses who use the crisis of a storm, either the storm coming or the storm having already hit, to jack up the prices of whatever it is they sell. So I've noticed in the last two weeks a number of big business spokespersons and conservatives saying something like the don't blame, in this case, oil companies for the oil price hikes. Blame market forces. Other companies and other businesses have been saying that too. In other words, don't blame the people who actually raised the price. Blame somebody else. I was reminded of how in the old days, kings and emperors and czars used to evade blame for the awful things they did by saying they were just doing what the gods dictated, or that it really was the gods who made it all happen, not them or maybe other magical forces that were at work. Prices rise, friends and neighbors, if and only if businesses raise them. There is no other way for the price to rise. And businesses spend a great deal of time, energy and money manipulating supply and demand for what they produce. That's what advertising is, manipulating the demand. That's what controlling production lets you do, manipulate the supply. So to say that supply and demand and the market determine things is. Is a way of suggesting it's somebody other than you. They work hard to disguise that they're responsible for the price. Don't be fooled. I next want to talk a brief economic update about a troubling reality. Some of you are upset, I assume many of you, by the things you watch and see President Trump doing. But President Trump has his imitators. He has others who do pretty much the same. And one surfaced this last week that I think bears watching. His name is Boris Johnson. He's the foreign Minister, the foreign Secretary in Great Britain, the equivalent there of what Rex Tillerson is here as secretary of state. Mr. Johnson is trying to use the Brexit vote, the vote that the British went through to withdraw from the rest of Europe, not to be part of the European Union. He's using that in order to promote himself. Basically, he is going to save Britain. He is going to make Britain great again, literally. And he is doing something very interesting. He's pandering to the business community, just like Trump. He's doing the deregulation that the business community wants, just like Trump. And then he's promising to save the National Health Service in England, kind of like Trump promised to save Social Security. It's an attempt to suggest I'm a little different from the usual population of leaders and politicians. But in the end, it's not so different. It's a beginning of a kind of coming together of business and government, which does raise the bad smell of fascism, which was the formal way in Germany and Italy that led up to the Second World War of a virtual merger between big capitalist enterprise on the one hand and the government as the muscle and enforcer of what they wanted on the other. The final economic update I want to spend some time talking to you about. Well, let me do another one, and then there'll be a final one. I want to go back to the price gouging in places like Houston and Florida. I also read, not only that somehow it's market forces. We talked about that. But I also read that, you know, you should be grateful in a Way I heard some of my colleagues, professional economists, of whom I am frankly ashamed, saying, well, you see, if the price, say, of oil or water or something else is jacked up, people will be much more careful about using it. So you see, people will be careful and isn't that a good thing when the things are scarce? So raising the price gets you a good outcome. Here's another thing they said. If you raise up the price, there's more incentive for people to come in with more water or oil or gas precisely because the price is high. So let it go, let the gouging happen. Because, you know, it's the system of supply and demand and it all works out well in the end. I've heard this kind of thing from my economics teachers all my life. So this is not a casual or surprising thing to hear. This is hearing about jacking up the prices of food and water and fuel in the midst of a crisis that comes logically to the minds of people who've been taught mainstream economics in this country for 50 years. Let me drive home how awful this is. It's the equivalent of saying something like a person drives a car into a crowd and hurts people. And the answer then comes from the economists. Well, you know, there's a good outcome. People going into crowds are going to be more alert now after having seen or experiencing that than they would have been before. Oh God, yes. Every event has a few good and many bad, or many good and a few bad. To say that there is something that happens that's good is never a justification. You have to begin to look at the balance of the goods and the bads. Let's go back to the storms. If you raise the price of water and food, you're basically saying that we are going to let people go hungry, go thirsty in the middle of a crisis because they don't have enough money. Not because we don't have enough stuff, but because they don't have enough money. You're deciding to ration what may be life saving items based on ability to pay, not based on our shared humanity, not based on our equality before the law, or the equality before a God, if you believe in one, etc. Wow. That is moral depravity. And it doesn't get any better if an economic argument is a fake veneer over the underlying depravity. The instinct of people to help one another is a much more important maintainer of community and solidarity and a viable society than listening to economists and telling yourself stories about what one or two positive outcomes can be. From an event you know to be horrible. If you drive a car into a crowd of people and they become more alert because they've been hurt, in the future, they'll be more alert. That's not a justification for driving cars into crowds of people, now, is it? Well, the last economic update comes out of a Census Bureau report on income inequality that came out this last week. It immediately provoked a flurry of statements from the Trump administration because it showed that in the last two years there's been some improvement in inequality, some improvement in incomes for people at the bottom end of the society. And there has been, there's no question, the last two years it's gone a little bit up. But men and women listening to me, it's gone up for two years in a system that has been going in the other direction for 40 years, since the 1970s. And everybody who pays any attention to knows that to fasten on two years. And by the way, if you looked at the statistics, 2015 was a better improvement than 2016, so that the improvement is already shrinking. But put that aside, you had two years of improved numbers, but they don't begin to change the basic picture. And to drive that home, let's take a look at the very statistics that were released. Here's what it shows, that from 1947, that's the end of World War II to 1979, if you divide the American population into fifths, the poorest fifth, the middle fifth, the richest fifth, they all grew roughly in terms of their real income, how much they had to buy, how much they could afford to buy. They all grew between 2 and 2.5%, the poorest, the richest and those in the middle. So you had the ability to say from 1947-79, as capitalism grew, it treated its population, at least in the United States, roughly equally because of the limits of time. Let me jump to the later period, 1979 to 2007, in all except the richest, it drops to almost nothing. Let me do that again. In all except the richest fifth, it drops to almost nothing, no increase. The richest fifth gained more in those latter years than they had before. Their situation went up. Everybody else's went down. And in the last period, 2007 to 2016, there is negative for the poorest and way better than everybody else for the richest 5% who really cashed in. That's the reality, folks, of 40 years, 50 years. It's not changed by two years. Shame on the New York Times and the others who pretended otherwise. We've come to the end of the first half of Economic Update. I hope you found these discussions interesting. Please stay with us. We will be right back.
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Well, she's just waiting for the summertime when the weather's fine she could hit you right out of town and so far away from that low down good for nothing mistake making fool with excuses like maybe that was a long time.
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Ago.
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But that's just a euphemism if you want the truth he was out of control But a short time's a long time when your mind just won't let it go.
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Welcome back to the second half of Economic Update. Before I jump into our major conversation for today, I want to remind you that we maintain these two websites that I want to urge you to make use of, to partner with us in making use of. The first is democracyatwork.info. that's all one word, democracyatwork.info and the other one is rdwolf with two f's. Com. You can follow us on Facebook, Twitter and Instagram. You can communicate to us what you like and don't like. Lots of very interesting functions and services available to you 24 hours, seven days a week, no charge whatsoever on both those websites. I also want to take this moment to thank truthout.org, that remarkable independent source of news and analysis that has been partnering with with us for years. And that serves as a kind of model of how you can work together with us and amplify the reach that this program can achieve. And finally, if you're interested in a video version of this, let me remind you to go to patreon.com where you can see that P-A-T-R-E-O-N.com all right, what's the big topic for today? Well, it has to do with a literally earth shaking event, an event that has to rank up there with the top four or five events of the last century. And indeed, it happened a century ago. Here we are in 2017. This event happened in 1917. I'm speaking, of course, of the revolution in Russia, the revolution that created the USSR, the Union of Soviet Socialist Republics, 100 years ago this month. The reality is that that revolution not only transformed the lives of the people in that part of the world, and let's remember, Russia, and particularly all of the Union of the Soviet Socialist Republics is the largest country by geography in the world. It was then, it is now. It changed the whole world in fundamental ways that I want to talk to you about. It was also, and this is the most Important thing, the first sustained effort to go beyond capitalism to form a kind of new economic system called socialism. Up until that time, socialists had been active, there had been lots of them. Karl Marx and others were socialists, but they were critics of the existing system, they were interested in changing it, but they had never achieved power within a large society to actually try to do it. And between a critical point of view towards capitalism and figuring out how to build an alternative, there's quite a distance and they didn't have much time to cover it. They went in a very short time from capitalism in what had been Russia to socialism, or at least the attempt to construct socialism in the new ussr. So let's review a little bit what happened and even more important, what the lessons are for us now from what happened. Russia in 1917 was the poorest country in Europe, the vast majority of its people living on farms, being illiterate. It was a society that hadn't come out of feudalism, the pre capitalist system, for a long time. It then got itself involved in World War I and it was no match for the much more developed British, German and American forces in that war. So it basically lost that war. And while it was losing the war, it was also becoming clear that the mass of people were no longer willing to live in the kind of society that Russia had been. A top down society led by a czar, which is the Russian word for emperor, for super king, even bigger than the conventional kings. The early capitalism in Russia from 1850 to the time of the revolution was a bitter, poor capitalism. Think of Russia the way you might think of England at the time of Dickens novels. Indeed, if you ever want to understand what Russia was like at the time of the revolution, you can't do better than to read the novels of the leading thinker and novelist in Russia at the time, Maxim Gorky. G O R K Y In any case, the revolution that bubbled up in the midst of a lost war, a destroyed economy and a situation in which the existing government had lost all support and confidence from the people. The Czar abdicated, the Tsar was overthrown, a whole new society was born. But because the war was sapping the strength, the early effort to make a kind of modern constitutional government as the new society didn't succeed either. There was too much suffering and too much turmoil. And in that, a very small political party at the time, the Russian Social Democratic Workers Party, later called the Bolsheviks, was able to seize the power and the men associated with it. Lenin, Trotsky, Stalin, became the new leaders of this new Soviet Union. It's important to know that this revolution was highly contested as you might imagine. It was a small political party that emerged from all the chaos and took over the government with the support of some workers, some returning soldiers who literally returned from the war because the war effort had collapsed. And so the rest of the world, which was capitalist at that timeand I'm talking about Western Europe, North America, Japanthey were horrified at the thought that a major country, which Russia was, was going to be now run by, taken over by, led by people who claimed that they were anti capitalist, that they were going to get rid of capitalism and develop a new system. And so, and this is important because, you know, the Cold War has badly distorted our understanding of this society because we were as a nation, particularly Americans, at a kind of Cold War with them for so long. They tended to be portrayed as terrible, bad by comparison to us, as wonderful, good. And that's a simple minded approach which we're not going to indulge ourselves in. After all, the Cold War is gone now and we don't have to play by those rules. So it's important to learn some facts in case you didn't know them. Immediately after the revolution, France, Britain, Japan and the United States supported an effort inside Russia to overthrow that new government. There was a war inside Russia, a civil war between what was then called the Red army led by Trotsky, and the White army, led by all those in Russia who didn't like that there had been a revolution. And they fought for years to determine whether this new socialist government would survive in that struggle. France, Britain, the United States and Japan invaded. The Soviet Union sent troops. The United states sent about 10,000. It's important for folks to understand that the United States invaded the Soviet Union. The reverse never happened. And if you're wondering why the Russians have been worried about the United States, that little fact might help you understand. The last Japanese soldier to leave Russia didn't leave until 1922. That's five years after the revolution of 1917. It took that long for this new government, this socialist government to become secure, to become dominant. In other words, the effort to overthrow the new government failed. The Red army defeated the White army and the foreign troops, including the Americans, were forced to withdraw. But this new government that took over the Soviet Union, this socialist government of Lenin, Trotsky and Stalin and all the rest, began as a terrified government. Since they had been invaded and threatened by a civil war. They were never confident very much. They were frightened. Everything was a little bit of a kind of paranoia that took over. And so here's the adjustments they made. The slogan on which they got into power was the slogan of bread, peace and land. They would provide food and survival to the Russian people. They would get out of the war, which they did, and they would provide land to the millions of Russian farmers who had no land, who were tenants and who were dependent on large landowners. They did all that. The irony for some of you interested in the history of socialism is that this first effort at having a socialist society took as its first major economic act the distribution of land to the mass of peasants. Let me make that clear. The distribution of land as the private property of the individual Russian was the first act of a socialist government. Therefore, to think that socialism means, and always has meant, the abolition of private property. Anyone who says that to you doesn't know anything about Soviet history, Because their first act was a celebration of private property, making the average Russian peasant, for the first time in many of their lives, the owner of the property they cultivated. By the way, if you want to know why the Russian Red army defeated the White army, it's because this act of giving the land to the peasants got the loyalty of the peasants. And that's why the Soviet government survived. They let the land be in the hands of the peasants. What the new socialist government did, and this is so crucial, was to reorganize industry. And here's how they reorganized it. They took the industrial companies away from the private owners. They said to the private owners, you aren't the owners anymore. You can have a job if you want to work here like everybody else, but you don't own anything. They closed the stock market. There was no more buying and selling of shares because the people as a whole, through the government, took over. The government was now the owner operator of enterprises. They were called state enterprises. The second thing they did was say, we're not distributing resources and products by markets. We're not going to have you bargain with him or her over the price of what. No, no, no. We're going to plan it all out. The government is not only going to own and operate the industries, the government going to distribute. And that became the definition of socialism. By this first successful socialist experiment. Can you set up an economy? Their answer was, yes, we think we can. It's going to be private ownership of the land by individual peasants. And in industry, not agriculture. In industry, we're going to have state enterprises owned and operated by the government in the name of the people, with the products distributed in state stores. And according to what we think is a reasonable way to distribute food, clothing, shelter and everything else among the people. And that was the definition of the 20th century. Socialism came to be understood as government enterprises and planning versus capitalism, which was private enterprises and markets. And eventually the great alternatives, Soviet Union, United States, Soviet Union, public enterprises and planning, the United States, private enterprises and markets. Okay. There were always other definitions of socialism from the beginning. There were socialists who, for example, didn't like what was going on in the Soviet Union. They didn't like it, for example, because they didn't think the government should own everything. They liked there to be private enterprises, the government should regulate them. Socialists usually thought that control them, limit them, but not necessarily take them over. Socialists like that didn't like what was happening in the Soviet Union. They particularly didn't like that the Soviet Union, partly because it was terrified, was very limited in terms of what civil liberties and civil rights it allowed, didn't allow other political parties. It was very strict, had a powerful government police apparatus. This horrified other socialists. So from the very beginning, there were those socialists who liked and applauded the Soviet Union as the first place socialism got going. But there were plenty of socialists who didn't like what was happening there and wanted to keep a distance. Starting in the nineteen early twenties, these two kinds of socialists not only split from one another, but created competing organizations. Those socialists who liked what was happening in the Soviet Union changed their name and called themselves communists. And those who didn't like the Soviet Union held on to the name socialist. And to this day, socialist parties and communist parties are two separate attitudes towards what happened in the Soviet Union. And that continues even though the Soviet Union isn't there anymore. Okay, let's then talk about the more important thing that I want to talk with you about today. What can we say were the achievements of the Soviet revolution that changed the world? And what were the flaws, the failures, the things we have to learn not to do again, as opposed to the lessons that we can learn about what can be done. I think that's a balanced approach. I think that's what we ought to do with every experiment in changing society. Look at what it achieves if it gets a chance, and look at what it messes up and what we don't want to see. So let's go with the Soviet Union first. The Soviet Union, by setting industry up as a government enterprise, achieved something absolutely remarkable between 1917, when the society begins, and 1989, when it falls apart, it achieves the most rapid economic growth any modern industrial society has achieved. Up until that point. In other words, if your standard of measurement, if your standard of evaluation is how fast a country can go from poor to not poor, then the Soviet experiment is a success by that standard. Why? Because in 1917, it was the poorest country in Europe. It went through World War I, a civil war, a foreign invasion in the 1930s. It brought together the individual peasants to whom it had given land and pressured them pretty heavily into forming state and collective farms that roiled up the society. And then they went through World War II. If you're already the poorest countries, you go through two world wars that were more damaging to Russia than to any other country that was involved, and a civil war and a revolution, then the following statement is a sign of by 1975, this poor country ravaged by war, is the second superpower, right after the United States. That is a level of achievement from a modern railroad system to a modern armaments industry to nuclear capability and so on. That is an achievement of economic growth that you have to hand to the Soviet Union, because they did achieve that. And you can say what you like, that doesn't go away. That's indeed why so many other countries around the world paid a lot of attention, because they too, want to go from being very poor in Asia, Africa and Latin America to a modern industrial powerhouse. They saw the Soviets as the most successful way to do that, the fastest grower, and they went in that direction. Indeed, the one country that has grown even faster for 30 years than the Soviet Union is the country that modeled itself on what the Soviets had done, and that's the People's Republic of China, proving again that this model, this alternative, this kind of socialism, does have the ability to say we grow faster for poor societies than anything else has been able to achieve. The next thing you might list as an achievement was, well, they spread the whole critique of capitalism around the world. They published all the works of Marx and all the other thinkers who have developed critiques, not just of this or that aspect, but of the system as a whole. They made the critique of capitalism known around the world. And in the long run, that may be a bigger achievement than the fast economic growth they got. Only time will tell. Those were the achievements. What about the failures? Well, they have pretty impressive failures, too. If you concentrate. This is the biggest failure, at least in my judgment. If you concentrate power in the hands of the government, it's the owner, operator of enterprises, it's the distributor of goods, you are giving an enormous amount of power to the political leadership of your society. Did the Soviet Union have within it the system of checks and balances that would make sure that that concentrated political and economic power would not be abused. And the answer one has to give is no. They lacked that. And that power was abused. It was abused above all by the leader, Stalin, who comes after Lenin dies and after he pushes Trotsky out of the Soviet Union, literally, and his followers as well. You had a society that cut back on civil liberties and civil rights, that was determined to ram through economic development, which they did, but at the price of cutting away personal freedoms and political freedoms and civil liberties, and all of that has to be faced. It means that something was missing. They may have gotten economic growth, but they hadn't done something to make sure that that didn't come with all kinds of negative failures and flaws that society today evaluating this first effort at socialism would have to say, need to be avoided. That the lesson has to be learned. Don't do something or do something they didn't do because you don't want those side effects, if you like, of rapid economic growth that characterized the Soviet Union. And even if those arguments weren't enough, there's a kind of ultimate failure of the Soviet Union to deal with. It collapsed. The Soviet union collapsed in 1989. It didn't collapse because it was attacked by capitalist countries. It collapsed of its own internal contradictions, to use the language they themselves used. They couldn't manage to survive. That's a very serious flaw for a society that wants to present itself as a model to others, because who else would want to go down that path? So the question that socialists, Communists, critics of capitalism are presented with by the history of the Russian Revolution a hundred years ago, and by what happened in the Soviet Union since, the question is, is there a way to harness, to hold, to get rapid economic growth, which is a condition for escaping poverty, whether you're a family, an individual, or a whole society, is there a way to get that that doesn't bring with it the absence of personal freedom, the absence of civil liberties, the horrors that happened in the Soviet Union along the way as they fought out the battles to keep themselves going. And I think that question is the number one question for those who are critical of capitalism today. Now that capitalism has shown, particularly in the last 40 years, that the critique that it's an unstable system, the critique that it's an unequal system, the critique that it's therefore an unjust system, is now gaining supporters. That critique is by the millions, literally every week. The system seems determined to rush toward a level of Inequality and instability that will make it unable to survive. And as people ask questions about a system that is abusing so many and serving so few, they will of course go back to the big biggest critique of the last 300 years of capitalism, which is socialism and Marxism and all of that. And that will bring them to the Soviet Union. So what's the answer? The Soviet Union never changed. Something fundamental in all of the big changes they made. You can put it this before the revolution, the average worker in industry and in a farm and in a household got up, had their tea and breakfast and went to work. And the conditions under which they did that after the revolution weren't that different from what they had been before. Let's take the example of industry, which is what changed the most in Russia before the revolution. Industrial workers went to work in the morning, worked all day and went home. The decisions in their enterprises what to produce, how to produce, where to produce, and what happens with the products of people's labor. That was decided by a tiny group of people. They were called commissars or in English, commissioners. They were state officials because the government now owned and operated enterprises. They weren't the board of directors elected by shareholders, because there were no shareholders, shareholders. They didn't get to elect anybody. Government officials, state officials were put in the position. You're now the board of directors. You 12, you run these factories, you run these stores, you run these offices for the mass of workers. It really wasn't all that big of a difference. These individuals, private capitalists, were gone. These individuals replaced them. State officials. But the structure, the organization of the enterprise didn't change all that much. They worked and then they went home. And the fruits of their labor were decided on and distributed by somebody else. To say the same thing, in the simplest words, the internal organization of the factories, the farms, the stores, the offices didn't change. You didn't have what socialists had talked about, namely the workers themselves running the enterprises, the workers as groups, owning and operating. You didn't change it. You didn't keep them private, but now run by the workers. You made them state, but still not run by the workers. Oh yes, by representatives who said they represented the workers. But after all, a private capitalist typically also says that he is doing the best for his workers. The trick will be, and this is the lesson socialists have to learn, that this early experiment, this first experiment in setting up a socialist economy that was started 100 years ago this month in Russia made a mistake it never understood and it never enacted. The transformation of the enterprise itself. It shifted them from private to state. But that's a different matter. It didn't alter that. And in not altering that, it left in place the angers, the resentments, the bitternesses and the conflicts that go with organizing production so that a mass of people are doing something, a tiny number of people are telling them what to do. This is a problem, has always been one. It's why the master has trouble with the slaves, why the Lord has trouble with the serfs, and why the employer has trouble with the employees. The lesson is that a socialism for the 21st century, the one we're entering, has to learn from the efforts and experiments of the 20th. Don't make that mistake again. If you're going to go beyond capitalism, it has to start and to include the transformation of the workplace, whether that's in an office, a store, a factory or a household. It has to be democratized. It has to get all the people into a position of being decision makers. That's what a commitment to democratic socialism would have to mean if it's going to learn the lessons of that enormous experiment that changed the world, the Russian Revolution of 1917. I hope this has been of interest to you. It's a different kind of program than we've done in the past. Thank you for joining me, and I look forward to speaking with you again next week. Gonna be my time, my time baby Things gonna change, change, change, change. Sam.