Economic Update with Richard D. Wolff

Episode: Capitalism's Leaders
Date: July 14, 2017
Host: Richard D. Wolff

Episode Overview

This episode of Economic Update focuses on the failures of leadership under capitalism, both in the U.S. and internationally. Professor Richard D. Wolff critically examines current healthcare debates, minimum wage comparisons, and labor struggles in the U.S. He also highlights significant events like Seattle’s progressive income tax, the Pope’s remarks on labor and pensions, and innovative worker-ownership experiments. The second half of the episode scrutinizes global leaders from the G20, the transformation of Detroit, and the deeper meanings behind worker-owned companies as practical alternatives to the capitalist model.

Key Discussion Points and Insights

1. U.S. Healthcare Debate and Medical Monopoly

• Healthcare Gridlock [03:15–08:50]
  • Wolff criticizes America’s inability to deliver affordable, universal healthcare, noting "it is, after all, shameful that the United States, one of the richest countries in the world, is unable to provide decent medical insurance to its people the way literally all of the other advanced industrial countries have been doing for decades." (03:40)
  • The U.S. has the most expensive healthcare system—double that of other advanced nations—due to the unchecked monopolistic practices of medical industries.
  • He explains Obamacare’s partial successes and its failure to address the root cause: private sector monopolies driving up costs.
  • Neither Democrats nor Republicans challenge the structural profiteering of the medical-industrial complex. This leaves Americans "struggling and choosing between one inadequate plan and another." (08:44)
  • Memorable Quote:

    "The bottom line is the two political parties protect the medical industrial monopoly because they're afraid to confront them." – Richard D. Wolff (09:18)

2. Minimum Wage: U.S. Lags Behind

• International Comparison [10:03–11:10]
  • Wolff shares findings from the World Economic Forum: after-tax minimum wages put the U.S. behind Australia, Luxembourg, Belgium, Ireland, France, Netherlands, New Zealand, Germany, Canada, and the UK.
  • He laments America's low standing and the implications for economic justice.

3. Unions: Labor Action and Its Potential

• AT&T & Nissan Case Studies [12:00–15:54]
  • AT&T workers in California and Nevada rejected a contract with minimal wage increases offset by rising healthcare costs—a sign of growing worker resistance.
  • United Auto Workers (UAW) make a bid to unionize a Nissan plant in Mississippi, potentially signaling a renewed labor movement.
  • He draws parallels to labor upsurge during the Great Depression and questions if a new wave could be emerging.

4. The Pope on Labor and Unions

• Pope Francis’ Economic Teachings [16:05–21:39]
  • Wolff examines Pope Francis' speech to Italian trade unions, highlighting the need for a "healthy culture of idleness," meaning the right to rest and have a life beyond labor.
  • The Pope insists that "a good job is one that gives you time to be a human being" (17:47) and that both excessively high and low pensions are wrong.
  • Francis challenges unions not to lose their "prophetic nature," urging them to serve the excluded, not just their members.
  • Notable Quotes:
    • "We must also think of a healthy, healthy culture of idleness, of knowing how to rest. This is not laziness; it is a human need." – Pope Francis (16:55, read by Wolff)
    • "The capitalism of our time does not understand the value of the trade union because it has forgotten the social nature of the economy of the business. This is one of the greatest sins." – Pope Francis (20:23, read by Wolff)

5. Seattle’s Progressive Tax Initiative

• Historic Local Legislation [22:05–26:46]
  • Seattle City Council passes a 2.25% income tax on individuals earning over $250,000 (or $500,000 for couples), challenging Washington State’s regressive tax system.
  • Wolff contextualizes the move as a rare progressive tax and recalls that the original federal income tax in 1910 also targeted only the very wealthy.
  • Anticipates legal and political battles but lauds the initiative as a model for other U.S. cities.
  • Memorable Moment:

    "For a maximum benefit for the vast majority of Seattle residents, in fact, including those at the top who will also get benefits from a better school system, a better park system, and a less divided by income community." (26:24)

Second-Half Highlights

6. The G20 and “Capitalism's Leaders”

• Leadership Analysis [31:30–37:45]
  • Wolff describes the recent G20 summit, then critiques the character and backgrounds of these world leaders:
    • Angela Merkel: Led opposition to same-sex marriage in Germany despite “modern” image.
    • Shinzo Abe: His party beset by corruption scandals (“He’s dishonest Abe.”).
    • Emmanuel Macron: Benefited from conservative rival’s corruption, governs conservatively.
    • Michel Temer (Brazil), Jacob Zuma (South Africa), Enrique Peña Nieto (Mexico): All mired in corruption allegations.
  • He uses a German proverb: "The fat as in a soup or the scum as in a pond, rises to the top," to characterize this new global ruling class.
  • Memorable Moment:

    "This system puts them in the position of leadership. Well, nothing would further summarize this than to give you a famous German quote... The scum rises to the top." (37:44)

7. Detroit: From Boomtown to Two-Tiered City

• Rise, Fall, and False Recovery [37:46–43:14]
  • Recaps Detroit’s postwar prosperity, union victories, and subsequent decline after auto companies relocated for higher profits.
  • Notes current so-called "renaissance" is limited to downtown; most residents remain in poverty (60% child poverty, 40% below official line).
  • Detroit has become an emblem of broader U.S. inequality: "a glitzy center and a vast, impoverished hinterland." (43:10)

8. Worker-Ownership: Modern Times Beer and Beyond

• ESOPs and Genuine Workplace Democracy [43:15–51:30]
  • Tells the story of Modern Times Beer in San Diego, where founder Jacob McKean is transferring ownership to employees through an ESOP, aiming for eventual 100% worker ownership.
  • McKean’s words reflect his ethical commitment:

    "When that time comes, I'm not going to screw the people who made my success possible in the first place. That would be an unethical choice I could never be proud of." (45:49 – quoting McKean)

  • Wolff emphasizes that true transformation requires both worker ownership and management—not just stock, but control.
  • Advocates extending workplace democracy to community integration, where both workers and residents share authority.
  • Key Insight:

    "The way to change that is not to pass a law that corporations will evade. It's a change of the structure of the enterprise, to make the enterprise a place where those who work in it own it and direct it." (49:07)

  • Celebrates McKean's approach as a template for "moving beyond the capitalist system"—practical, ethical, and democratic.

Notable Quotes and Moments

• On U.S. Healthcare Costs:

  "We spend almost twice what other countries do... That is being ripped off in our country in a way that no other country permits." (04:41)

• On Minimum Wage Ranking:

  "We fall below all of those. Well, there's nothing I can say that would be adequate to what that's about." (11:00)

• On AT&T Contract Vote:

  "The workers understand they are, the bottom line in the end... if they don't go along, everybody else has to scurry and come up with another solution." (14:45)

• On Detroit’s Transformation:

  "It's being reorganized into a rich, comfortable, glitzy center and a vast sea of impoverished excluded others." (43:06)

Key Timestamps for Important Segments

• Healthcare Monopoly & Debate: 03:15–09:30
• Minimum Wage Comparison: 10:00–11:10
• Union Action (AT&T, Nissan): 12:00–15:54
• Pope Francis on Labor & Unions: 16:05–22:00
• Seattle Progressive Tax: 22:05–26:46
• G20 Leaders Critique: 31:30–37:45
• Detroit's Divided Recovery: 37:46–43:14
• Modern Times Beer & Worker Ownership: 43:15–51:30

Tone and Style

Professor Wolff’s tone is incisive, critical, and at times sharply ironic. He blends data and analysis with ethical reflection and rhetorical flourishes, inviting listeners to consider both the unfairness and the possibilities for systemic transformation.

Summary for the Uninitiated

This episode delivers a sweeping yet detailed critique of capitalist leadership, public policy, and workplace organization. It exposes the failures of bipartisan inaction and elite-driven policy, while offering glimpses of hope in grassroots labor actions and experiments in worker ownership. Listeners are equipped not only with information but with a sense of the stakes and strategies for meaningful change.