Economic Update with Richard D. Wolff

Episode: Capitalism, Revolution, and Socialism
Date: September 22, 2017

Overview

In this episode, Richard D. Wolff critically examines the failures and systemic issues inherent in large capitalist enterprises, using recent high-profile corporate scandals as examples. The episode connects these failures to broader questions about the structure of capitalism, ongoing debates such as Medicare for All, and contemporary policy issues like price gouging during natural disasters. In the second half, Wolff offers a historical deep dive into the Russian Revolution on its centenary, laying out its profound global impact as the first attempt to build a socialist society, and drawing lessons for contemporary movements seeking to move beyond capitalism.

Key Discussion Points & Insights

1. Systemic Failures in Capitalism – Scandals and Corporate Negligence

([00:00]–[14:00])

• Recurring Corporate Failures: Wolff highlights how repeated scandals, from the auto industry's ignition and emissions fraud (GM, VW, Ford) to Equifax's data breach and insurance companies’ promotion of addictive opioids, all signal deeper flaws in how current capitalism incentivizes behavior.
  • Mary Barra (GM CEO)'s Statement in China: Wolff critiques her argument that “it shouldn't be governments that make those decisions about technology. It should be consumers,” ([02:30]) calling it disingenuous given GM’s own history of misleading consumers and poor safety records.
  • Ford Explorer Recalls: Over a million vehicles at risk due to cabin fumes; consumers filed 2,700 complaints over years before recall ([04:20]).
  • Equifax Breach: Over 100 million Americans’ sensitive data compromised, slow disclosure and attempts to limit liability via arbitration ([06:50]).
  • Opioid Crisis and Insurance: Insurers pushing cheaper, more addictive drugs and endangering public health for profit ([09:35]).

“Yeah, we should trust big corporations. Let's move on.” — Richard Wolff ([05:23])

• Pattern of Blame-Shifting: Across industry scandals, corporations shift responsibility away from themselves, urging the public to trust market mechanisms over regulation—an idea Wolff repeatedly challenges.

2. Structural Critique: Private vs. Public Enterprise

([10:00]–[13:50])

• Accountability Imbalance: Wolff notes that while public sector failures elicit calls for privatization, private sector failures rarely inspire calls for greater regulation or public ownership.

“Where are the howls today that if the private automobile companies and the private medical insurance companies and so on... when they don't work right, we ought to have the government step in? You don't hear those howls.” ([12:09])

• Alternative Proposal: Decision-making should include both users and producers—structurally integrating consumer and worker interests rather than leaving vital choices to profit-driven managers alone.

3. The Medicare for All Debate & The Role of Money in Politics

([14:00]–[17:30])

• Medicare for All: Despite “60% of Americans support[ing] the federal government making sure all Americans have health coverage,” only 16 Senate sponsors (all Democrats) backed Bernie Sanders’ bill at the time ([15:54]).
  • Money in politics is a primary obstacle: Non-sponsoring Democratic Senators received on average twice the industry donations as sponsors; Sanders himself accepted zero.

“Mr. Sanders is the only senator who from medical insurance companies gets absolutely nothing. Wow.” ([16:55])

4. Opioid Epidemic as Economic Issue

([17:45]–[19:45])

• Labor Force Impact: New Princeton research links rising painkiller addiction to declining labor force participation rates.
• Broader Costs: Addiction isn’t just a personal tragedy—it’s causing millions to withdraw from the workforce, straining families and the economic base.

5. Price Gouging During Disaster & The Myth of “Market Forces”

([20:10]–[26:15])

• Hurricanes Harvey & Irma: Wolff condemns the defense of sharply increased fuel/water prices as the result “market forces” rather than explicit business decisions.
• Critique of Economic Orthodoxy: The claim that price gouging yields good (“people use resources more carefully”) is likened to justifying car crashes because survivors become more cautious.

“Wow. That is moral depravity. And it doesn't get any better if an economic argument is a fake veneer over the underlying depravity.” ([25:28])

6. Comparing Western and Global Politics: Trump and Boris Johnson

([26:20]–[27:40])

• Rise of Business-focused Populism: Points to Boris Johnson in UK as adopting Trump-like tactics—deregulation, business pandering, empty promises (e.g. “save the National Health Service”)—warning of historic parallels to fascism’s merger of big capital and government.

7. Income Inequality – Myths of Progress

([27:45]–[29:10])

• Recent Census Data: While there’s been modest improvement in incomes for the bottom earners in the past two years, this doesn’t alter the 40-year trend toward greater inequality.
  • From WWII to 1979, all quintiles’ incomes grew roughly equally; since, only the richest gained while others stagnated or lost ground.

“It’s gone up for two years in a system that has been going in the other direction for 40 years… That improvement is already shrinking.” ([28:44])

Feature Segment: The Russian Revolution 100 Years Later

([29:50]–[58:00])

1. The 1917 Russian Revolution – Global Significance

([30:10]–[34:00])

• Backdrop: Russia was the poorest and among the least developed countries in Europe, crippled by WWI and tsarist autocracy.
• Socialist Experiment: For the first time, a socialist movement seized state power and tried to move “beyond capitalism,” replacing a feudal-capitalist hybrid with a planned socialist economy.

2. Achievements of the Revolution

([40:35]–[42:50])

• Unprecedented Economic Growth: Despite being war-ravaged and starting from immense poverty, by 1975 the USSR became the world’s second superpower.
  • Soviet-style rapid industrial development became a model for aspiring developing nations, influencing countries like China.
• Spread of Capitalism Critique: USSR’s global influence extended to promoting Marxist critique and inspiring transformative social movements worldwide.

“If your standard of measurement... is how fast a country can go from poor to not poor, then the Soviet experiment is a success by that standard.” ([41:01])

3. Failures and Flaws

([42:55]–[46:40])

• Concentration of Power: The shift to state control meant immense power vested in political leadership with inadequate checks, leading to severe abuses—especially under Stalin.
• Suppression of Rights: Civil liberties, political freedoms, and pluralism were heavily constrained.
• Ultimate Collapse: The USSR fell in 1989 due to internal contradictions; this undermines its eligibility as a contemporary model.

“Did the Soviet Union have... the system of checks and balances that would make sure that that concentrated political and economic power would not be abused?... No.” ([43:28])

4. Lessons and Necessary Reforms for 21st Century Socialism

([48:30]–[57:32])

• Key Missed Transformation: Fundamental organization of the workplace did not change—the shift was from private to state management, but workers remained excluded from real decision-making.
• The Real Task: For socialism to succeed now, it must democratize the economy at its roots—transforming workplaces so workers themselves directly participate in decision-making.
• Democratized Socialism: Modern socialism “for the 21st century... has to start and to include the transformation of the workplace,” ensuring genuine participation and ownership by workers, not just nationalization or planning.

“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.” ([56:46])

Notable Quotes & Memorable Moments

• On Corporate Responsibility:
  “She wants us to trust large businesses... that takes a lot of nerve. I admire her for that.” — Wolff on Mary Barra ([03:03])
• On the Flaws of Price Gouging Logic:
  “It's the equivalent of saying something like a person drives a car into a crowd and hurts people... the answer then comes from the economists, ‘well, you know, there's a good outcome, people... will be more alert now.’” ([25:00])
• On the Soviet Model’s Limits:
  “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.” ([56:00])
• On Democratized Workplaces as the Future:
  “If you're going to go beyond capitalism, it has to start and to include the transformation of the workplace.” ([57:18])

Important Segment Timestamps

• 00:00–14:00: Corporate scandals as “symptoms” of systemic capitalist dysfunction (GM, Ford, Equifax, insurance/opioids)
• 14:00–17:30: Medicare for All and the role of corporate money in politics
• 17:45–19:45: Opioid epidemic and labor force participation
• 20:10–26:15: Price gouging, hurricanes, and critique of “market forces”
• 27:45–29:10: Inequality trends—data versus political spin
• 29:50–58:00: In-depth Russian Revolution retrospective—history, achievements, failures, and lessons

Conclusion

Richard Wolff’s episode compellingly links current economic controversies to long-standing systemic flaws in capitalism, using vivid recent examples. His historical reflection on the Russian Revolution is both a balanced reassessment—acknowledging massive achievements and fatal flaws—and a prescription for a new socialism grounded in economic democracy. The core message: genuine systemic change requires transforming not only who owns productive property, but who participates in economic decision-making, especially at the workplace.