Economic Update with Richard D. Wolff

Episode: Capitalism's Results

Date: January 25, 2016

Overview:

In this episode, Richard D. Wolff critically examines the outcomes of the capitalist economic system, specifically focusing on austerity policies, inequality, and the impact on both working people and public welfare. Drawing from contemporary events, global reports, and notable figures, Wolff argues that capitalism not only fails to deliver on its promises of equality and democracy but also actively undermines them. He highlights systemic alternatives and the importance of democratic participation in economic decision-making.

Key Discussion Points & Insights

1. Austerity and Its Consequences in America

• Flint Water Crisis (03:30)

  • Background: The Flint, MI water contamination scandal is presented as the "tip of the iceberg" for austerity-driven disasters.
  • Quote:
    “Taking that kind of risk, then not responding for a year… is beyond words, as President Obama said it was.” —Richard Wolff (05:15)
  • Wolff emphasizes the broader problem of cutting public services instead of taxing corporations and the wealthy.

• Education Crisis in Detroit (07:15)

  • Parallels are drawn between underfunded education and poisoned water, noting both arise from the same austerity policies.
  • U.S.-wide, 400,000–500,000 teacher layoffs since 2008 undermine future generations.

• Kansas Food Tax Example (09:15)

  • Governor Brownback is singled out for increasing food taxes (6.5%)—one of the highest in the nation—while cutting taxes for the wealthy and corporations.
  • Quote:
    “He’s taxing those who can afford it least the most, and he’s reducing taxes on those who can afford it most. What a grotesque mockery.” —Richard Wolff (11:00)
  • The regressive nature of the tax is underscored, with residents driving to other states to escape the burden.

• Auto Industry “Recovery” (14:00)

  • President Obama’s praise of Detroit’s car industry comeback is questioned.
  • Employment in the industry dropped from 1.1 million (2005–2007) to 700,000 (2009). The “recovery” brought only half the jobs back.
  • Quote:
    “It’s not a recovery if half the people don’t get their jobs back. That’s an economic disaster, as any trip to Detroit will show you.” —Richard Wolff (16:30)
  • $80 billion used in the bailout resulted in a $10 billion government loss and only a partial resurrection of jobs.

2. Resistance and Advocacy for Change

• Greek Labor Protests (20:30)

  • Greek sailors and the General Confederation of Greek Workers (GSEE) call a nationwide strike over pension and social security cuts.
  • Outcome of harsh austerity imposed on Greece, serving as an example of grassroots resistance.

• Menards Union-Busting Reversal (22:10)

  • After public outcry, Menards removed a contract clause that would slash managers’ pay by 60% if their store unionized.
  • Demonstrates the power of collective opposition.

• Pollution Policies: LA vs. Newark (24:00)

  • LA required trucks to use pollution-cutting technology, but Newark did not, negatively impacting children’s health.
  • Quote:
    “Shame on them… for condemning the children of Newark who have already much more asthma and other lung problems than the surrounding communities.” —Richard Wolff (25:15)

3. Systemic Critique: Capitalist Decision-Making and Social Costs

• Walmart Store Closures (26:05)

  • Walmart closes 154 stores after poor investment decisions, affecting 10,000 employees and communities.
  • Quote:
    “We allow a tiny board of directors, 20 people at most… to make the mistakes if and when they want to. The workers and the customers all live with the results. Wow.” —Richard Wolff (28:20)
  • Wolff challenges the lack of democracy in corporate decision-making.

• The Public Bank of Santa Fe Proposal (31:55)

  • Santa Fe commissions a study on creating a public bank to ensure the city’s funds benefit the community instead of private banks.
  • Wolff lauds this as an example of community-oriented alternatives.

• FDA’s Fight for Sugar Labeling (33:10)

  • Discusses the epidemic of obesity and diabetes linked to excess sugar, corporate resistance to honest labeling, and the broader tension between public health and corporate profit.

Major Topics in Depth

4. Global Movements: Rise of Socialism and Systemic Criticism (30:01)

• United States & UK Political Shifts
  • Noting the unexpected popularity of Bernie Sanders (US) and Jeremy Corbyn (UK) openly identifying as socialists.
  • Both movements reflect a growing public willingness to challenge taboos around alternative economic systems.
  • Quote:
    “It is renewing the notion that there can be a politics which really discusses the different ways a society can organize itself, rather than making that kind of conversation taboo.” —Richard Wolff (32:20)

5. Staggering Inequality Revealed: Oxfam’s 2016 Report (36:40)

• Key Findings:

  • The world’s 62 richest billionaires own more wealth than the poorest 3.5 billion people.
  • This figure was 388 billionaires in 2010, showing that wealth is quickly consolidating at the top.
  • In 2015, the top 1% globally owned more than the other 99% combined.
  • $7.6 trillion in wealthy assets are stashed offshore, avoiding taxes potentially worth hundreds of billions.
  • Quote:
    “There’s almost no breath in me to comprehend this… the gap between rich and poor is widening faster than even they had thought it would.” —Richard Wolff (38:15)

• Moral, Political, and Democratic Challenges

  • Wolff questions the justification for such extreme wealth concentration.
  • Criticizes the undemocratic nature of allowing a handful of people (like Bill Gates) to control life-altering resources.
  • Quote:
    “Millions of people’s lives depend on the distribution of wealth that is decided by one or two people… That’s why we got rid of kings and princes and emperors and czars and pharaohs… because that’s so grotesquely unfair and undemocratic that it’s not tolerable.” —Richard Wolff (42:30)

• Call for Democratic Decision-Making on Wealth

  • Wolff suggests that society should have a democratic say in how wealth is distributed.
  • Cites broad public support for much less inequality than currently exists.

6. OECD Poverty Findings Among Developed Nations (49:45)

• Child Poverty Rates:
  • Israel has the highest child poverty among OECD nations (28.5%), with the U.S. ranking fifth at 20.5%.
  • Denmark, often cited as a “democratic socialist” model, boasts a rate of just 3.8%.
  • Quote:
    “In Denmark, the percentage of children living below the poverty line is 3.8%. Again, Israel, 28.5%. Denmark, 3.8%. Of course, you would want to look at Denmark and try to understand what they’ve done, how they did it, and what you can learn.” —Richard Wolff (52:30)
  • Suggests that the U.S. has much to learn from countries with lower inequality.

Notable Quotes & Memorable Moments

• On Capitalism’s Promise vs. Reality:
  “Capitalism is a system. This is a report card. You have failed as an economic system to do anything like what is needed and anything like what this system is capable of.” —Richard Wolff (45:50)

• On Austerity’s Human Cost:
  “You can do as much damage to a generation of children by not giving them a decent education… as you can do damage with lead-infested water in neighboring Flint.” —Richard Wolff (08:05)

• On Wealth Concentration:
  “What possible justification is there for one family, two families, five families having 27 homes, 12 yachts and more money than is imaginable, while other people haven’t got enough for the basic…” —Richard Wolff (43:55)

Timestamps for Important Segments

• 00:40 — Martin Luther King Jr. on capitalism
• 03:30 — Flint water crisis & austerity’s effects
• 09:15 — Kansas food tax & regressive taxation
• 14:00 — Detroit auto industry: recovery myth
• 20:30 — Greek labor strikes against austerity
• 22:10 — Menards union-busting and public resistance
• 24:00 — Environmental inequality in Newark vs. LA
• 26:05 — Walmart store closures: who decides?
• 31:55 — Santa Fe’s public bank proposal
• 33:10 — FDA and the politics of added sugar
• 36:40 — Oxfam’s report on global inequality
• 42:30 — Wealth, democracy, and moral critique
• 49:45 — OECD child poverty rates: US vs. Denmark

Summary & Conclusion

Richard Wolff’s “Capitalism’s Results” delivers a sweeping critique of the outcomes produced by today’s capitalist system, from deepening poverty and regressive taxation to colossal inequality revealed by global reports. He highlights both the failures and the resistance movements that point toward alternatives—urging greater democratic control over economic decisions. The episode leaves the listener questioning not just policy details, but the very logic of a system in which the promise of prosperity and equality has been replaced by persistent crisis and staggering disparity.