Economic Update: Capitalism's Self-destruction

Host: Richard D. Wolff
Date: June 22, 2017

Episode Overview

In this episode, Richard D. Wolff provides a critical examination of how contemporary capitalism in the United States is undermining its own foundations. Through a mix of current events and historical context, Wolff illustrates the disconnect between economic growth and the well-being of the majority. He analyzes key sectors—including higher education, energy, real estate, and taxation—and discusses the political consequences of economic disillusionment. The episode culminates in a discussion about rising interest in worker cooperatives as a possible alternative to capitalist enterprise.

Key Discussion Points & Insights

1. Higher Education Crisis in California

• [03:20] Wolff opens by citing Seth Sandronsky's article in Comstock Magazine on California State University (CSU) funding.
  • While CSU enrollment grew by 150,000 (between 1985 and 2015), state support per student fell by 41% (adjusted for inflation).
• Quote:

  "This is a society shooting itself in the foot. The decision by governors and legislatures in California to undermine public higher education by not supporting it the way they used to... It's awful for these families, it's awful for these students, it's awful for their future."
  — Richard D. Wolff ([07:00])

• Wolff argues this underfunding hurts the entire U.S. economy, especially since most college students attend public institutions. He connects this to politicians' fear of taxing wealthy corporations and individuals.

2. Coal Industry Decline and Political Hype

• [11:10] Wolff critiques President Trump's claims of reviving coal mining, pointing to the opening of a Pennsylvania mine that will employ only 70 people.
• Historical perspective: U.S. coal miners numbered 800,000 in the 1920s; by 2016, only 50,000 remained.
• Transition from coal to natural gas is driven by economic—not regulatory—factors, particularly the rise of cheap fracked natural gas.
• Quote:

  "The irony that the President is going to celebrate the opening of a mine for 70 miners while tens of thousands of them lose their jobs because of the fracking Mr. Trump's government supports... It takes your breath away."
  — Richard D. Wolff ([16:40])

3. Hudson Yards: Luxury Amidst Urban Neglect

• [19:18] Examines New York's Hudson Yards: a luxury real estate development with apartments selling for $3.8M to $30M.
• Contrasts this with New York City's tens of thousands of homeless people and disintegrating public infrastructure—like the subway system.
• Quote:

  "Any reasonable person looking at the city of New York with even a little bit of democratic impulse... would know that morality, ethics, decency would spend money repairing a subway system... or it would spend money to deal with the homeless in a decent way... But we don't do that because we are told... there isn't the money. But there is the money to spend billions... [on] apartments for people who already have more money than the vast majority of Americans..."
  — Richard D. Wolff ([22:20])

4. Lotteries and Legal Marijuana: The State’s Regressive Taxation

• [26:34] Discusses the rise of state lotteries and the legalization—and taxation—of marijuana in several states.
• Main driver is not social liberalism, Wolff argues, but the state's desperate search for revenue without taxing the wealthy or corporations.
• These revenue sources are regressive taxes, disproportionately affecting the poor.
• Quote:

  "Lotteries hit the poor more than the rich and cost the poor a bigger share of their income... These are escape hatches, friends and neighbors, ways for irresponsible Democrats and Republicans to get out of what they ought to be doing, which is taxing the wealthiest and the business community."
  — Richard D. Wolff ([29:40])

5. Political Betrayal and the Crisis of Legitimacy

• [33:10] In the second half, Wolff explores the political consequences of economic trends.
• Both high non-voter rates and increasing anger among voters are rooted in feelings of betrayal—by both conservative and liberal parties—over failed economic promises.
• Quote:

  "We were promised things that weren't delivered or in simple language. We were betrayed by our political leaders, left and right, center left and right."
  — Richard D. Wolff ([36:20])

• He outlines how conservatives channel anger into anti-government sentiment, while liberals simply promise to soften neoliberal cuts.
• The result is increasing skepticism, disconnection, and search for genuine alternatives.

6. Austerity and the Trump Budget

• [43:00] Wolff briefly characterizes President Trump's budget as a textbook "austerity" measure.
• Notes the budget will disproportionately cut social services while cutting taxes for the wealthy—continuing the longstanding strategy of shifting the burden of economic crises away from elites.
• Quote:

  "The point of austerity is to shift the burden of pain from that crash off of the people at the top to everybody else. That's what it's about."
  — Richard D. Wolff ([44:45])

7. The Rise and Logic of Worker Cooperatives

• [48:00] Closing third focuses on the growing interest in worker co-ops—as both new ventures and conversions from traditional businesses.
• Motivations: Owners approaching retirement, desire to protect jobs and local economies, and preference for democratic workplaces.
• Wolff refutes the notion that co-ops need special treatment: business subsidies have always existed, and co-ops should receive equal support.
• Co-ops enhance freedom of economic choice for both consumers and workers.
• Quote:

  "There is nothing inappropriate, nothing unusual and nothing to apologize for in having worker co-ops ask for and get help from the government. Indeed, what they're asking for is a level playing field... To give Americans freedom of choice."
  — Richard D. Wolff ([52:30])

• Suggests democratic workplaces foster social skills—cooperation, collective decision-making—often neglected in capitalist enterprises.

8. Democratization of the Economy

• [59:10] Wolff concludes that capitalism is "in deep trouble," unable to serve the majority, and that the worker co-op movement offers a path forward.
• Co-ops will have flaws but, unlike capitalism, will not systemically privilege a few at the expense of the many.
• Quote:

  "It’s now finally the time that our economic system catch up and do one better than our political system by being genuinely democratic."
  — Richard D. Wolff ([60:15])

Notable Quotes & Memorable Moments

• "This is a society shooting itself in the foot." ([07:00])
• "Let me explain. The speech he gave announced that he was going to the Acosta Deep mine... See, he said, I am helping to open mines. The number of jobs announced... is 70 jobs. Not 70,000 folks, 70." ([13:10])
• "That's what gentrification means. That's what the market delivers us. If you want to know why people are critical of capitalism... visit Hudson Yards and marvel." ([23:05])
• "Caught between not wanting to lose votes and not wanting to lose the money they need to be politicians... they're desperate. That's why they borrow so much money..." ([30:50])
• "We were betrayed by our political leaders, left and right..." ([36:20])
• "Mr. Trump's budget is an austerity budget." ([43:05])
• "To have the government help is to do nothing that the government hasn't done to capitalist enterprises and to do a lot to enhance the freedom of choice of the American people." ([53:00])
• "It's now finally the time that our economic system catch up and do one better than our political system by being genuinely democratic." ([60:15])

Timestamps for Important Segments

• [03:20] — California public higher education funding crisis
• [11:10] — Trump’s “revival” of the coal industry debunked
• [19:18] — Hudson Yards and New York’s real estate priorities
• [26:34] — Rise of regressive taxation: lotteries and marijuana
• [33:10] — Political betrayal and loss of faith in the system
• [43:00] — Trump's austerity budget explained
• [48:00] — Worker co-ops: growth, logic, and policy
• [59:10] — Conclusion: Why democratize the economy?

Tone & Language

Wolff’s commentary is passionate, clear, and laced with irony and moral urgency. He frequently emphasizes how political and economic elites perpetuate inequality and how growing numbers are seeking alternatives grounded in democracy and social responsibility.

For Listeners Who Missed the Episode

This episode is a must-listen for anyone wanting to understand:

• The disconnect between reported economic success and widespread insecurity
• Why public goods are being starved while luxury consumption surges
• How political disillusionment is rooted in bipartisan economic betrayal
• The logic and promise of worker-owned enterprises as a transformative alternative