ECONOMIC UPDATE: CO-OPS VS CAPITALISM

Podcast: Economic Update with Richard D. Wolff
Date: October 25, 2015
Host: Richard D. Wolff, Democracy at Work
Guest: Laura Flanders, Journalist, The Laura Flanders Show

Episode Overview

In this episode, Richard Wolff examines the contrast between traditional capitalist business structures and worker cooperatives (co-ops), highlighting both theoretical and practical dimensions. He’s joined in the second half by journalist Laura Flanders, who shares her insights from reporting on the growth of co-ops in the U.S. and the historical significance of these movements for economic and social justice.

Key Discussion Points

1. The Cultural Shift: Criticizing and "Saving" Capitalism

[08:30–13:00]

• Wolff reflects on the recent political climate: referencing Hillary Clinton and Robert Reich’s suggestions that capitalism "needs saving"—a significant cultural shift after decades where capitalism was nearly sacred in U.S. discourse.
  • “It used to be taboo to say anything negative about capitalism, to be anything other than a cheerleader … What a change we saw the other night when we’re now having to talk about saving capitalism from itself...” [10:12, Wolff]

2. Signs of Economic Fragility

[13:25–21:45]

• Wolff provides updates on worrying economic signals:
  • Flat retail sales and a 12% projected profit drop at Walmart indicate trouble ahead.
  • Federal Reserve statistics reveal widespread insecurity: 78% worry about comfortable retirement; nearly half of Americans couldn’t cover a $400 emergency.
  • Decline in homeownership rates and the real power of banks over so-called “homeowners.”
  • "This is a very fragile economy going into an economic downturn." [17:52, Wolff]

3. Mass Protest Against Secret Trade Deals

[21:50–24:58]

• Wolff highlights the 250,000-strong protest in Berlin against the secretive Transatlantic Trade and Investment Partnership (TTIP), commending German unions for their organizing role. He stresses the absence of labor or consumer voices in these negotiations.

4. The Puerto Rico Debt Crisis

[25:00–28:03]

• Puerto Rico is compared to “America’s Greece”—caught in a debt trap caused by predatory lenders and irresponsible governance.
• Wolff warns against the U.S. Treasury’s proposal to have the IRS collect Puerto Rican taxes to pay creditors, describing it as anti-democratic and a dangerous precedent.

5. Q&A: The Truth About Economic Planning

[28:04–31:00]

• Responding to a listener’s question, Wolff dismantles the myth that economic planning led to Soviet shortages, arguing that planning is routine in large capitalist corporations.

  • “The different parts of General Motors do not buy and sell to one another in a market transaction. ...They move goods and services among the parts of these large corporations according to a plan.” [31:00, Wolff]
  • He suggests that fear of democratic (not corporate) planning is behind the capitalist criticism of planning.

Interview Segment: Laura Flanders on Worker Co-ops vs. Capitalism

[28:51–56:42]

Discovering the Value and History of Co-ops

[30:03–33:10]

• Flanders describes her shift from reporting on capitalism’s failures to seeking out solutions, particularly the growth of worker-owned cooperatives.
  • “After covering the problems for a very long time, I think a natural appetite develops to try to cover some of the solutions.” [30:35, Flanders]
• She highlights the deep (though underreported) American tradition of cooperative businesses, noting that 130 million Americans are members of some type of co-op.
• Flanders links the civil rights movement and Black nationalism to co-op organizing and self-determination.

Human Yearning for Democratic Workplaces

[33:10–37:10]

• Wolff reminisces about his high school visit to a Shaker Village as an early example of democratically organized workplaces.
• Flanders emphasizes that mainstream culture often portrays human nature as inherently competitive, but historical and living alternatives exist, evident in co-op and community models.

Media's Role and Reporting on Alternatives

[37:10–39:33]

• Flanders critiques commercial media’s fixation on division and competition and positions independent media as a facilitator for collective understanding.

• She shares concrete examples from her reporting: New Orleans' youth reimagining schools and Central Brooklyn’s cooperative development, including a documentary, "Own the Change", that educates groups about starting co-ops.

  • “Our role is to deliver the public to each other.” [37:45, Flanders]

Transitioning Conventional Businesses to Co-ops

[39:55–44:09]

• Flanders and Wolff discuss practical tools and support for transitioning businesses to co-ops, particularly as many U.S. business owners near retirement.

  • “We can now help people move in the direction that your film 'Own the Change' helps them see clearly as an option.” [40:31, Wolff]

• They highlight international examples of supportive policy (e.g., Puerto Rico, Spain’s Mondragon, Italy, France, Canada) and stress the need for U.S. policy to assist co-ops.

  • “You can be very efficient if your workers really care because it’s their own business, and you can outcompete the capitalist.” [42:24, Wolff]

Personal and Societal Impact of Worker Ownership

[43:01–47:44]

• Flanders shares stories from worker-owners who describe improved quality of life, happiness, and community connection.
• Wolff notes the transformative power and political potential in scaling up co-op ownership, envisioning co-ops supporting political candidates attuned to community needs.

Co-ops, Social Justice, and Structural Change

[45:13–49:03]

• Flanders connects the co-op movement to broader social struggles, including resistance to racialized violence and economic marginalization highlighted by the Black Lives Matter movement.
• She references Paul's Mason's forthcoming book "Postcapitalism" on the emerging new order.

Journalism, Mass Media, and the New Economic Debate

[49:03–56:42]

The Role of Independent Journalism

[49:03–51:32]

• Flanders describes her mission as “asking what else?:” spotlighting historic and current examples of cooperative economics, especially among Black Americans and Indigenous communities.

  • “This topic of socialism, this topic of the critique of capitalism, is not half as difficult to talk about today as it was 20 years ago.” [50:25, Flanders]

Responding to Pessimism about Media Control

[51:32–53:41]

• Mainstream media audiences are shrinking, providing space for alternatives. The challenge now is building community and spreading the word.

• Flanders asserts that wage labor and the capitalist system are relatively recent constructions that aren’t serving people, planet, or relationships well.

  • “Before capitalism was communism. If you go back to the traditions of most of the indigenous nations, it was much more ... communitarian.” [53:29, Flanders]

Signs of Progress and the Dialectic of Change

[53:48–56:42]

• Wolff and Flanders highlight how grassroots social movements (LGBTQ rights, Black Lives Matter) have achieved change from below.

• Flanders remains optimistic despite systemic criticism. She observes a growing movement, greater openness to ideas like socialism and co-op economics, and tools for collective action.

  • “We have a big struggle ahead ... But at least people have their hands more closely engaged with the tools, the machine ... of our economy.” [56:18, Flanders]

Selected Notable Quotes

• “What a change we saw the other night when we’re now having to talk about saving capitalism from itself, from its own failures, from what it is doing to most of us as opposed to the few...”
  — Richard Wolff, 10:12

• “There are now such an accumulation of signs that we’re about to go into another economic downturn that it’s time for me to comment on them.”
  — Richard Wolff, 13:25

• “130 million people in this country ... are members of one kind of co-op or another.”
  — Laura Flanders, 32:13

• “People don’t just want to survive, they want to thrive ... I think people are realizing there have got to be other ways to organize ourselves and our communities.”
  — Laura Flanders, 35:16

• “When I explain Mondragon to people and say it’s not the managers who hire the workers, it’s the workers who hire and fire the managers, people stare at me because it’s such a new idea.”
  — Richard Wolff, 42:49

• “Imagine how different our political debate would be if there were politicians ... supported by businesses that were rooted in community.”
  — Laura Flanders, 45:26

• “The challenge is, can it get its head above water? Can we create enough of a community to spread the word about what we’re doing, to grow the audience that will help us to have real impact.”
  — Laura Flanders, 52:05

Timestamps for Important Segments

• Capitalism’s legitimacy questioned: 08:30–13:00
• Warning signs in the U.S. economy: 13:25–21:45
• German protests against TTIP: 21:50–24:58
• Puerto Rico’s debt crisis: 25:00–28:03
• Debunking economic planning myths: 28:04–31:00
• Interview: Why cover co-ops now: 30:03–36:13
• Co-ops and social movements/history: 36:13–39:33
• Transitioning businesses to worker ownership: 39:55–44:09
• Co-ops and broader social justice: 45:13–49:03
• Independent media’s role in change: 37:10–53:41
• Optimism and the movement’s growth: 53:48–56:42

Tone and Language

Wolff is passionate, analytical, and sometimes biting in his criticism; Flanders is energetic, hopeful, and deeply informed by historical perspective and grassroots reporting. Both balance critique of the current system with enthusiasm for collective, pragmatic alternatives.

Conclusion

This episode offers a deep dive into the crisis of confidence in capitalism, the reality and promise of worker-owned cooperatives as practical and political alternatives, and the roles of independent media and grassroots organization in making systemic change possible. The conversation is rich with historical perspective, empirical updates, and hopeful possibilities for the future.