Economic Update with Richard D. Wolff
Episode: Capitalism's Problems Provoke Oppositions
Date: August 23, 2018
Episode Overview
In this episode, Richard D. Wolff analyzes a series of recent economic and political events to illustrate how the problems inherent to capitalism are increasingly provoking resistance and opposition. He discusses labor victories, the crushing burden of student debt, corporate and governmental irrationalities, and the way companies and states respond to both activism and profit motives. In the second half, Wolff interviews Troy Walcott, a striking Spectrum Cable worker from Brooklyn, whose story exemplifies labor struggle and offers a vision for worker-owned cooperatives as an alternative to the status quo.
Key Discussion Points & Insights
1. Missouri Rejects "Right to Work" – A Labor Victory
- (00:09-04:45)
- Context: Missouri voters heavily rejected a "right to work" law (by a 2:1 margin), which would have made it illegal to require union dues or fees from non-members, thereby weakening unions.
- Significance:
- Wolff frames this as a pivotal moment indicating a shift in public sentiment: "The unions went to the people of Missouri and said, 'You need unions and you need them to be strong because otherwise your wages will go nowhere.'" (02:00)
- Wolff argues this result signals rising anger among workers, who feel betrayed not only by Democrats (historically seen as the working-class party) but now by Republicans and Trump as well.
- Quote: "The voters are beginning to be angry at the betrayal... workers are beginning to become angry and bitter and feel betrayed by Mr. Trump and the Republicans, and they're going back the other way." (03:13)
2. The Crushing and Irrational Costs of Student Debt
- (04:45-08:15)
- Overview: Student debt has soared to over $1.5 trillion, surpassing credit card debt. New research highlights profoundly negative social and economic effects.
- Impacts:
- Young people delaying or foregoing marriage, children, and home buying, all with "enormous social but also economic costs."
- Home foreclosures increasingly linked to student debt burdens.
- Systemic Critique:
- "It's irrational. In our capitalist system, the losses that are being suffered as a consequence of student debt are greater than the profits earned..." (06:54)
- Wolff expands the concept: “It would be more rational to lose the profit for the private corporations because that’s less than the social costs...” (07:10)
- Draws a parallel to prison costs: "Turns out it costs more to put a human being in jail for a year than it would to give him or her a decent job paying 35 grand a year..." (07:36)
- Quote: "The irrationalities of this system are mounting and they're all around us." (08:00)
3. U.S. Sanctions on Iran – Geopolitical and Economic Fallout
- (08:15-13:20)
- Background: Trump administration re-imposes sanctions on Iran, despite Iran honoring its nuclear deal commitments, as acknowledged by other signatories (Europe, China, Russia).
- Global Impact:
- U.S. threatens penalties for non-American companies doing business with Iran, essentially forcing European corporations to choose between violating their own countries' laws or U.S. mandates.
- European governments push back—some threaten counter-sanctions.
- Many companies nevertheless pull out of Iran to avoid U.S. penalties, but “they are enraged... They are being squeezed and above all by Mr. Trump, who is making them enemies, both of him and of the United States.” (11:37)
- Long-Term Consequences: U.S. is at risk of global isolation; partners view American actions as bullying and increasingly unsafe for business.
- Quote: "The long term effects of isolating the United States in this way ought to make every American not caught up in phony patriotism think long and hard about where this country is going and what it means." (12:42)
4. Monsanto, Bayer, and the Costs of Profit Over Public Health
- (13:20-15:14)
- Case Study: Bayer acquired Monsanto for $62.5 billion. Monsanto’s herbicide Roundup found likely responsible for causing cancer; $389 million awarded to a cancer victim by a jury.
- Systemic Problem:
- Wolff emphasizes the core incentive structure: “Monsanto and Bayer who keep pushing this, do it because it's profitable. And the people who are opposed do it because they fear our health is at stake.” (14:12)
- Preference to err on the side of public health versus profit, and reluctance of capitalist systems to adopt this logic absent regulation.
- Quote: "Capitalism works the other way. It puts the incentive and the profits in the hands of people like Monsanto who have been producing Roundup for years while people said it made for cancer." (14:42)
5. Louisiana Politicians Punish Banks for Opposing Assault Rifle Manufacturers
- (15:14-15:47)
- Context: Louisiana bars Bank of America and Citibank from handling pension funds—punishment for banks limiting loans to gun manufacturers.
- Hypocrisy Highlighted:
- These banks previously implicated in money laundering, market manipulation, and causing 2008's crash, yet received no reprisals from the state for those actions.
- "Through all the crimes they committed... the legislature of Louisiana had nothing to say or didn't punish them. That's not a problem. But when they wouldn’t lend to assault rifle producers, well, then the legislature of Louisiana rose up." (15:37)
- Systemic Critique: "When a system spins out of control, these are the kinds of stories that become the norm in the society." (15:45)
Interview: Troy Walcott – Striking Spectrum Cable Worker & Worker Coop Advocate
Background and Struggle with Spectrum
- (15:48-18:46)
- Troy Walcott describes 20 years at Spectrum (formerly Time Warner Cable), where takeover by new management led to demotions, shifting focus to numbers over quality, and hostile bargaining.
- Primary issue: Spectrum attempted to eliminate long-fought-for union benefits—retirement and health care—as “a direct attack on the union.”
- Strike has lasted 15 months, affecting 1,800 workers.
- Quote: "Once they did that, they knew it was a direct attack on the union. And that's about the time we went on strike." (17:18)
The Human Toll of the Strike
- (18:23-19:09)
- Striking workers forced to piece together livelihoods, risking loss of homes and dreams.
- Quote: "It's very hard on a lot of people and a lot of families." (18:40)
- Catch-22: Even if they didn’t strike, retention of benefits was uncertain—“Either stick to your principles... or you just kind of give up now.” (18:57)
- Negotiations turn hostile: “I promise on my mother's grave, you'll never get back the retirement and medical plan for you and your family.” (19:40)
Solidarity and Broader Message
- (20:00-21:15)
- Walcott advocates for unity against divide-and-conquer tactics used by corporations: “What these corporations and companies seem to do is try to pick away from us piece by piece. They pit us against each other.” (20:29)
- The struggle is widespread: “If you win, it'll make it better for them, and if you lose, it'll make it worse for them.” (20:01)
- “If we can't collectively get together, ... It's just going to start there. So... there has to be a living wage, where people working 40 hours a week should be able to get by and provide for their family...” (20:52)
The Worker Cooperative Alternative
- (21:15-26:28)
- Walcott describes the genesis and logic of a worker- and consumer-owned cooperative as an alternative to profit-driven cable companies. Inspired by Chattanooga’s publicly-owned internet and TV services, and by the persistent experience of workers retaining expertise while company names change.
- “We're the workers... the name on the door changes [but] we always stay." (23:00)
- Cooperative would align worker, customer, and public interests, removing exploitative middlemen: “Why not we—the workers that have built this system and put it together—combine with the customers who are pissed off at this company...?” (23:51)
- Building the coop: Research, organizing, and learning from US worker coops.
- Wolff supports this direction, seeing the momentum for coops across multiple sectors.
- Quote: "Worker co ops is something that I believe in. I think it's the wave of the future." (24:34)
The Need for Systemic Change and Spread of the Idea
- (26:28-28:08)
- Strong audience resonance: “I was like, I'm not a business person, I don't know economics. So it seemed very far-fetched for me to even think of this plan. But I was like, if I can't do it, I can always find somebody who can help me do it...” (26:56)
- Other workers express similar ideas—trade workers, farm workers—suggesting this is a fertile moment for broader cooperative organizing.
- Key insight: “We, we wouldn't be looking for this. But because they're cutting on us so badly, maybe it's time to come together and form a different option where we could set the standard for ourselves.” (27:53)
Closing Thoughts
- (28:08-28:36)
- Wolff reiterates professional support for worker-owned alternatives: “We much rather work for this than work for those big companies that are screwing not just you, but us too, when they get a chance.” (28:28)
- Walcott thanks Wolff and listeners for supporting the movement.
Memorable Moments & Notable Quotes
- On Missouri's labor victory: “2 to 1, they went for the union position. They defeated the Republicans and the GOP. Wow." (02:27)
- On student debt irrationality: "The losses that are being suffered as a consequence of student debt are greater than the profits earned by the colleges..." (06:54)
- On international sanctions: "This is the bully in the neighborhood telling everybody that they have to shape up." (11:52)
- On Louisiana's bank punishment: "Unbelievable, isn't it? Well, when a system spins out of control, these are the kinds of stories that become the norm in the society." (15:45)
- On corporate attack on union benefits: “I promise on my mother's grave, you'll never get back the retirement and medical plan for you and your family.” (19:40)
- On worker coops: "Why do we need these five guys?" (23:50); "Worker co-ops... I think it's the wave of the future." (24:34)
- On hope and determination: "If we can't collectively get together, ... there has to be a living wage, where people working 40 hours a week should be able to get by and provide for their family..." (20:52)
Timestamps for Key Segments
- Missouri Union Election: 00:09 – 04:45
- Student Debt Crisis: 04:45 – 08:15
- Iran Sanctions: 08:15 – 13:20
- Monsanto/Bayer Lawsuit: 13:20 – 15:14
- Louisiana vs. Banks: 15:14 – 15:47
- Troy Walcott Interview (Spectrum Strike): 15:48 – 28:36
This episode offers a sweeping critique of capitalist contradictions and the mounting resistance to its failures, illustrated through both topical analysis and the powerful, personal account of Troy Walcott. The show energetically champions solidarity and presents worker cooperatives as a practical and inspiring alternative.