Transcript
A (0:02)
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, the money our children need to get a college education, all of that, the prospects we face, the disappointments surrounding us, the crises of the economic system in which we live. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and I teach today at the New School University in New York City. Later in the program, I'll have something to tell you about the websites we maintain and the way to follow and participate in in our work. I'll also introduce you to my guest for today. But in the first half of this program, as usual, we're going to do some short updates and then I'm going to respond to some of the comments and criticisms and questions that you've sent in to the websites we maintain. Well, this is the time of year when many people around the world celebrate May Day, the 1st of May. So it is incumbent on a program like this to say a few words about Mayday and what it means and what it could mean. May Day begins as a holiday with an event, May 4, 1886, in Chicago, when a group of police shot and killed people who were engaged in a general strike to limit the length of the working day to eight hours. That's right. It was an event that was part of the long struggle to get the working day down to eight hours. In many parts of capitalism in its earlier years, the working day had been 10, 12, 14 and even more hours. Ever since that tragic event that was also a heroic event in 1886 in Chicago, most countries around the world have celebrated May 1 as May Day, a time for labor unions, socialist and communist parties, social movements of working people of all kinds, to demonstrate in the public arena, to talk about their goals and plans, and to celebrate working people as the majority. In all those countries, however, a little bit of reflection is needed. Most of those celebrations, like most of the struggles that came out of the 1886 events, have been an attempt to get better conditions for working people, to pressure capitalists to give higher wages, shorter hours, better benefits, improved conditions. These days, it's a little different now. Most working organizations, working people's organizations, are fighting rather a different battle, a defensive battle, trying to limit the amount of benefits taken away, to limit the deterioration of their conditions, to limit the decline of their wages and so on. But either way, when you're getting better benefits or you're trying to limit the loss of benefits. What the working class has mostly done is try to focus on getting a better deal within the capitalist system. I would like respectfully to suggest that maybe we've come to the end of the road of that strategy. Maybe working people need to reassess over a hundred years of trying to get a better deal in capitalism, sometimes succeeding only to discover a decade later that the forces arrayed inside capitalism are strong enough to take back, to undo what. Whatever benefits you got before. So that maybe now the strategy we ought to turn to is to say we can do better than capitalism. We have to make the kinds of fundamental change that do not have us begging and working and struggling for better conditions that we can never hold onto very long anyway. Maybe the time is to think seriously about labor and working people having a strategy summed up in the words change the system. Put the working people themselves in charge so they don't have to depend on somebody else to give them the decent working conditions, the decent wages, the decent control over their own lives that they've been fighting for since 1886, if not before. There's a way to summarize what I'm saying. It goes like. If you want to make sure that the economy serves working people, the majority, then you must put working people in charge of producing the goods and services we all need. It's not that complex an idea. Enterprises should be owned and operated by the workers in them if you want them to serve workers as the majority in any society. That, for me, is the deeper lesson of May Day. I want to turn next, as of course I must, to the events in recent days in the city of Baltimore, Maryland, racked by demonstrations, racked by police violence against largely unarmed people. That's what set it off this time, the problem of Freddie Gray, who was killed in police custody under conditions that remind us of the worst of what we have seen in recent weeks from Ferguson, Missouri, on across the country, is the violence and the upset. Is the struggle. Is the tension in Baltimore. Is it an issue of race? Sure, that's obvious. Too many people are spending too much time, in my judgment, on that dimension. Of course, this is partly a race problem. We can see that. Is it a problem of police misconduct? Again, yes, of course. That's been obvious for weeks in this country. In fact, it's been obvious for years, as has the race problem. But to focus on that is to miss something that I want to talk about that tends to go relatively much less attended to. I want to talk about the failure of our economic system. Baltimore Is a screaming example. You have heard me previous weeks repeatedly go to Detroit as an example. I could have chosen Baltimore. So today I won't talk about Detroit. I will talk about Baltimore. The conditions in Baltimore, particularly in the neighborhood where Freddie Gray lived his life, are awful. It's called the Sandtown Winchester neighborhood. More than half the people in that neighborhood between the ages of 16 and. And 64 are unemployed. Let me say that again. People in the ages of 16 to 64, that's the overwhelming majority of adult working age people. More than half of them have no work. This is an unemployment rate that is double that for the city of a whole. Wow. Median income in this neighborhood is $24,000 a year. That's below the poverty line for a family of four. 1/3 of the families in the District live in poverty. Between one quarter and a third of the buildings are vacant. Abandoned stores, abandoned homes. I could go on, but there's no need. Once upon a time, Baltimore was a thriving city. Its biggest enterprise was Bethlehem Steel. Over the last 40 or 50 years, the steel industry abandoned Baltimore, much like the automobile industry abandoned Detroit. When you add to this loss of jobs, the loss of revenue for the city, as there were no jobs as industries left, by the way, why? To make more profits for their boards of directors of those companies. They saw more profits going somewhere else. You had decade after decade in which something could have and should have been done to provide jobs, to maintain the lives of these families, to maintain the homes in which they lived and the businesses that. That they patronized. But it wasn't done. It was neglected. Then for a while, people believed that maybe if you elect these politicians rather than those, it would make a difference. It didn't. Then we were told if we elected African American politicians in a city that had become majority African American, well, then the changes would come. But they didn't. It turns out that the capitalist system that governs Baltimore in reality is stronger than whatever it was that people fantasized could be a political change. So nothing was done in a deteriorating situation because capitalist enterprises were. Were free to get up and leave, make more money elsewhere, and have no responsibility for the disaster left behind. It no longer was a question of whether. It was only then a question of when things would explode. And now they have, and what have we got? We have an African American president, an African American mayor of Baltimore. Their best is to say, gee, there's a problem here. Hello. That's only 40 years late. And, gee, something must be done. I have no comment on that. We all agree on that the only disaster is to explain how nothing was done. Well, here's the answer, and I wish it were easier. But there are no easy answers. I know that because the president, the mayor, and 99% of commentators assure me of that. The answer is to change a system. If the private sector cannot provide the jobs, the public sector has to. Lord knows we have lots of needs. The people of Baltimore could tell you all about them. So we have lots of people who want to work. We know from the Federal Reserve that we have more than enough tools, equipment and raw material for the unemployed to work with. So we need the output, we need the jobs, we have the wherewithal, but we have an economic system that not only cannot put those together, but allows the deterioration of people's lives that then blows up. In all of those images of Baltimore, the lesson, like the lesson of May Day, change the system. As if we needed another lesson. A terrible earthquake in the far off Asian nation of Nepal. Tens of thousands. It now looks injured and or killed. We hear that 40% of children under the age of five are malnourished, suffer from malnutrition. We see a disaster in all of the people traumatized, injured by this earthquake, who don't have a functioning medical care system so that they will die or suffer permanent injuries even though they didn't need to. It turns out that the problem of Nepal isn't an earthquake, is it? The problem of Nepal is the poverty and underdevelopment of that economy that puts them in such a vulnerable position. We probably can't do much about earthquakes. The best way to deal with the potential of an earthquake is to have in place the roads, the homes, the architecture, the structure, the medical care, production and delivery systems, all of the things that Nepal lacked for the last umpteen years and about which an international community of stupefying wealth did nothing. Save us the crocodile tears for the suffering of the Nepalese system. Change is what they needed and what they need now more than ever. Next. The American press enjoys attacking the finance Minister of Greece, Mr. Yannis Varoufakis. I've spoken about him on this program. He and I are friends. I've known him for some time, and something happened to him over the last few days that I thought illustrated an interesting point. So I want to tell you about it. He went with his wife to a restaurant in the middle of Athens for dinner. At that restaurant, during their dinner, he was confronted by a group of anarchist young people wearing hoods so they could not be identified by the police and the camera they were enraged by the suffering imposed on the Greek people by the economic crisis since 2007 and then by the austerity program imposed on Greece by the European Union, the IMF and the European Central Bank. And they were angry that that suffering was continuing despite having voted in the Syriza government back in January of this year, which was committed to doing something. And they were angry at Yanis Varoufakis for not having done more in these few months than has so far been accomplished to reverse that austerity that the majority of the Greek people voted against. There was a little bit of pushing and shoving, but Varoufakis decided to get off his motorcycle. He's quite famous for riding around Athens on his motorcycle. He got off his motorcycle, asked his wife to step aside. She rides on the motorcycle with him. And he spoke with his confronters, the hooded anarchists. And when the conversation was done, they each went their separate way. And Varoufakis was asked by the press what he thought about it. He said he understood and sympathized with their impatience and their anger. And he said the response of our government to, to such outbursts is to say to them, you are right. We will not retreat from our campaign against austerity and we will not repress with police and army the expressions of a people who want that to happen. In a poll taken after this story surfaced, According to Bloomberg, 55% of randomly polled Greek citizens expressed their support for Yanis Varoufakis. 55% is more support by a huge factor than any of the sitting presidents, prime ministers or chancellors of the major capitalist countries imposing austerity on Greece could get in their own societies. Last update for which we will have time today. This one has to do with an advertising campaign by the Anheuser Busch InBev Corporation pushing its Bud Light brand of beer. It has been really in trouble recently and I have to tell you why. It has to do with an advertising campaign that goes by the name up for whatever that is. They've been trying to get more people to drink beer by saying, if you're up for whatever, this is the beer to drink. According to the New York Times on 29 April, they are in a desperate, that's the New York Times term, desperate effort to court women to drink more beer. Before I tell you about the thing that got him into trouble, I want to show you again that we are blessed here in America by a private enterprise beer producing company which is in a position to spend billions of dollars if it chooses to Promote the drinking of more beer by American women. Now, that's a way we would want our resources to be utilized. Isn't it wonderful how efficient capitalism is in allocating resources? But back to Bud. Back to Bud Light. In February, they got into trouble because they had a slogan that they were using to push their up up for whatever campaign. Here's how it On St. Patrick's Day, you can pinch people who don't wear green. You can also pinch people who aren't up for whatever. Gee, you want to associate beer drinking with pinching people? Everybody with even a vague notion of the current problems in the United States with sexual harassment might have thought, wow, you can't do better than that. And they got into trouble and they said they would be more sensitive. Well, that was February and March. What did they do in April? They came up with a new slogan. I'm going to read it to you now. The perfect beer for removing no from your vocabulary for the night. You heard right. Beer pushed at women is advertising that it's the right thing to drink. To remove no from your vocabulary. A country battling epidemic levels of sexual abuse, sexual imposition, particularly on women, sees a company that obviously learned nothing from violating its social responsibility in February and March and so went right on and did it again. Which, by the way, in a free enterprise system, it is free to do, isn't it? And we can all live with the results because we don't control that they do. We live with the results. They're just out there making money. I want to turn in the time I have left to respond to your questions. And we're going to only have time because I want to focus then on the interview that often comes in these programs. In responding, I want to answer the questions many of you have sent. And this one has to do with cooperatives. You hear me talking about worker co ops and quite understandably you get a little confused between all the different co ops you know about and the particular worker co ops that I talk about. And, and you've asked me repeatedly now to clarify this. So here we go. Cooperatives are a very old idea. Cooperatives of all sorts have existed for hundreds, probably even thousands of years. The new interest in co ops is more about dissatisfaction with capitalism than it is with something new. The interest in co ops is as an alternative to the normal business of capitalism. And that's why it's so interesting and why it's historically important. But as I say, co ops are different. So let's go through the differences so we can be clear about them. From now on, one kind of cooperative happens or takes place in the area of ownership. That is, one can own something. I'm going to give you examples in a minute. One can own something as an individual or one can own something as a group. If one owns something as a group, you can speak of a cooperative ownership. So for example, a whole community can collectively, together, cooperatively own, for example, its electric utility company. There are roughly 2,500 cities and towns across the United States who do not get their electricity from a privately owned electric company. Neither a family owns the electric company, nor do private individuals buy shares in such an electric company. No, in those 2,500 cities, the community collectively, the whole city cooperatively owns and operates the electric utility, which sells its output electricity to each of the co owners. And that's the way the problem is solved. Another example of cooperative ownership has to do with many companies in the United States where the workers, through their pension funds, cooperatively own. So cooperative ownership is one thing. Does it mean that the company operates in a radically different way? Not necessarily. It can well happen that the cooperative owners run the business like any other capitalist business. They turn the day to day management over to managers. They give a board of directors the power to make all the basic decisions. And the only thing that is really a result of cooperative ownership is that all the co owners get a dividend or get a share of the profits of the company. When I talk about worker co ops, that's not what I'm talking about. Here's a second kind of co op. When you do cooperatively buying things. Most typical in America these days are when groups of people in a neighborhood set up a food co op. So together they own and operate a food buyer who buys and then resells the food. And the reason for it is simple. You could get a much better price if you buy large quantities cooperatively and then distribute them to each of your members than if each of you goes and buys at the supermarket. That's cooperative buying. It's. It doesn't change necessarily how the co op works in terms of the workers inside the co op food distribution store. I could go on. There are cooperative selling arrangements. There are cooperative management arrangements where workers don't need supervisors because they manage themselves. Those are all ways of cooperating. I'm in favor of them all, I support them all. But that's not what I'm talking about. What am I talking about? I'm talking about a worker co op, sometimes called a producer co op. And here's what I Mean the workers in such an enterprise may or may not own, self, manage, buy, sell, none of that. What the workers do in a worker self directed enterprise is just that they direct themselves. They make all the key decisions, what to produce, how to produce, where to produce and what to do with the profits. Workers collectively do what the board of directors does in a regular capitalist corporation. The board of directors is not who owns capitalist corporations and the board of directors is not who manages the capitalist corporations. The board of directors decides what to produce, how to produce, where to produce and what to do with the profits. And that is the single most powerful position in a capitalist enterprise. When I talk about worker co ops, it's having the workers finally stop that arrangement. No more other people making those decisions. The workers make them themselves. That's a workers co op. That's a workers self directed enterprise. Maybe if workers own an enterprise, they could convert how it's run to be a worker self directed. Mostly they don't. And whether they could or not is the question. Whether they do, that's the issue. And more and more in the United States, it's this that's being understood and as the central problem. Well, folks, we've come to the end of our first half of our program. I want to thank you all for joining and being with us. Please stay with us for a short break. After the break, I will be very happy to introduce you to my guest for the second half of the program. I think you'll find it extraordinarily interesting. So stay with us. We will be right back. Who got away? Welcome back from welcome, friends, to the second half of Economic Update. Today's program involves me introducing my guest, Professor Yahya Madra. And I want to begin by saying to Yahya, whom I've known for many years, welcome to the program.