Economic Update: Corporate Capitalism in Decline

Podcast: Economic Update with Richard D. Wolff
Host: Richard D. Wolff (Democracy at Work)
Guest: Chris Hedges
Date: September 14, 2017

Episode Overview

In this episode, Richard D. Wolff explores the systemic failures of corporate capitalism as they relate to recent social and economic crises, such as natural disasters, the opioid epidemic, resurging poverty diseases, and the erosion of public institutions. The second half features an in-depth interview with journalist and author Chris Hedges, focusing on signs of capitalist decline, growing inequality, creeping authoritarianism, resistance potential, and the prospects for meaningful systemic change in the United States.

Key Discussion Points & Insights

1. Capitalism and Disaster Response

Wolff begins with a critique of how capitalism handles natural disasters, particularly recent hurricanes in Texas and Florida.

• Price Gouging during Disasters (01:55):

  • Delta Airlines and Best Buy were cited for exorbitant price increases in times of crisis.
  • "Markets...depend on the laws of supply and demand...if the demand becomes desperate...you can charge quite what the market will bear." – Wolff (03:01)
  • Wolff criticizes economists and pundits who defend profiteering during crises as "reasonable," noting widespread public outrage instead.

• Market Failures in Insurance (05:15):

  • Large insurance companies withdrew from risky markets (e.g., Florida) due to unprofitable repeated storms, replaced by small undercapitalized insurers.
  • Government, and by extension, the taxpayer, is left to "backstop" these failures.

• Inadequate Preparedness (07:30):

  • Underpreparation for storms is a systemic feature: developers and private interests prioritize short-term profit over long-term safety, leaving government unable or unwilling to properly regulate or invest.
  • Contrast drawn with Cuba, where strong government planning leads to effective disaster preparedness and response.

Notable Quote

"We have a system that systematically underprepares...because it’s not privately profitable, no one is doing it. And the government, demonized by the very private profit mechanisms...is unable to raise the money to do these things."
— Wolff [10:48]

2. The Opioid Epidemic and Economic Interests

Wolff details the economic drivers behind the ongoing opioid crisis in the United States.

• Comparative Death Rates (14:10):

  • U.S.: 185 overdose deaths per million; Portugal: 3 per million.
  • Portugal’s decriminalization and emphasis on treatment is strikingly more effective than the U.S.'s war-on-drugs approach.

• Drug Industrial Complex (16:40):

  • Economic interests that benefit from the status quo include pharmaceutical companies, medical care providers, the prison system, and law enforcement.

• Lawsuits against Pharmaceutical Companies (19:15):

  • New Mexico becomes the 8th state to sue opioid manufacturers for deceptive practices.

Notable Quote

"We’ve had this war on drugs now for many years...it hasn’t done very well...I suspect the economic interests that have money to be made...are not a small part of why this war seems to be so horrible and unsuccessful."
— Wolff [17:54]

3. Return of Poverty Diseases in the U.S.

Emergence of hookworm in Alabama is cited as a symptom of growing social inequality.

• Alarming Statistics (21:35):
  • 34% of tested individuals in Lowndes County, Alabama, showed hookworm infection.
  • "Poverty has returned of a kind we thought we had eradicated, and with it come diseases like hookworm." – Wolff [22:49]

4. Elite University Wealth and Tax Exemption

Wolff critiques the preferential treatment received by elite universities.

• Disproportionate Wealth and Benefits (25:21):

  • 75% of endowment wealth is held by just 4% of universities.
  • Example: Yale paid $480 million to hedge fund managers in one year—far more than allocated to student aid.

• Regressive Tax Burden (27:32):

  • Tax exemptions for universities shift the burden of public services to the bottom 60%, yet these students are largely excluded from attendance at these institutions.

Notable Quote

"It is a bizarre upside down Robin Hood in reverse situation, isn’t it? It’s taking from the middle and the bottom to service the top."
— Wolff [29:23]

[Second Half] Interview with Chris Hedges: The Twilight of Corporate Capitalism

5. Marx, Capitalism’s Decline, and Cannibalization

Hedges elaborates on Marx’s predictions and present-day America:

• Cannibalization of State Machinery and Commons (32:50):
  • Hedges argues that we are witnessing advanced corporate cannibalism: "You have large corporations essentially consuming the very machinery that sustains the state."
  • He details the hollowing out of public institutions (e.g., education, intelligence, defense privatization), leading to extreme inequality and service degradation.

Notable Quote

"We're in the twilight stage of capitalism when, as Marx predicted, what capitalism does...become[s] parasitic but cannibalistic."
— Hedges [32:36]

6. Privilege, Surveillance, and Authoritarian Drift

• Preparation for Social Blowback (37:25):
  • Elites recognize the risk of unrest and have militarized police, advanced surveillance, and legal mechanisms to suppress dissent.
  • Hedges points to the widespread stripping of rights in marginalized communities as a testing ground for broader social control.

Notable Quote

"The elites are well aware that there’s blowback. What I worry [about] is...the collapse of the left...[If] there are anarchic uprisings...they’re easily quelled...the state has accrued [numerous] mechanisms..."
— Hedges [37:28]

• Legal Pathways to Repression (41:57):
  • Expansion of government powers to detain without due process, as in the aftermath of the National Defense Authorization Act.
  • Pervasive mass incarceration of poor people of color serves as a form of social control.
  • "Once rights become privileges, then they can be taken away from anybody." – Hedges [44:43]

7. Media, Ideology, and the Marginalization of Dissent

• Corporate Ownership of Media (49:13):
  • Discussion of how mainstream media (e.g., PBS) is controlled by corporate interests, making rational discussion of economic pillage and climate change "unacceptable within the mainstream discourse."
• Information Barriers (49:42):
  • Those seeking alternative viewpoints must proactively seek out independent outlets like Democracy at Work.

8. Tax Reform, Small Business, and Corporate Kleptocracy

• Two-Tiered Legal System (47:57):
  • Hedges: Tax "reform" actually serves as a "tax boycott" for big corporations; small businesses and individuals are still heavily taxed and regulated.

9. Blowback, Resistance, and the Future

• Potential for Social Change or Reaction (51:49):
  • Hedges sees inevitable blowback, though warns it "may be a far right blowback" due to the absence of a strong, organized left.
  • Dismantling of Occupy Wall Street revealed the state's fear of even modest reform and willingness to use force.
  • Disenfranchised white working class is vulnerable to reactionary mobilization; widespread access to firearms is noted as a dangerous factor.

Notable Quote

“Given the fact that the left has been so decimated...we could very well slip into a kind of corporatized, militarized...very frightening dystopia.”
— Hedges [56:12]

Memorable Moments & Quotes

• On Disasters and Democratic Socialism (10:13):

  • Wolff contrasts preparedness in Cuba (state-directed) with disarray in capitalist systems, quoting the NYT on Cuba’s "well-oiled machine" for disaster response.

• On Systemic Pillage (47:57):

  • Hedges on tax "reform": "It’s not a tax reform, it’s tax boycott. I mean, most of these Fortune 500 companies...don’t pay any taxes at all."

• On Resistance and Moral Imperative (57:05):

  • Hedges, quoting his own book: “I don’t fight fascists because I’m going to win. I fight fascists because they’re fascists.”

Timestamps for Important Segments

| Timestamp | Segment Summary | |-----------------|-----------------------------------------------------------------------| | 01:55–10:48 | Capitalism’s failure in disaster response and profit-driven crises | | 14:10–22:49 | Opioid epidemic, Portugal’s comparison, economic incentives | | 25:21–29:23 | Elite universities, wealth concentration, tax burdens | | 32:32–36:30 | Chris Hedges on capitalism’s “cannibalism” and hollowing-out of state| | 37:25–46:58 | State response to possible unrest, mass incarceration, legal drift | | 47:55–51:02 | Tax "reform" as corporate tax avoidance; media’s marginalization | | 51:49–56:59 | Prospects for resistance, dangers of far-right blowback | | 57:05–57:16 | Moral imperative to resist, regardless of outcomes |

Summary Tone and Closing Thoughts

Richard D. Wolff’s critical, data-driven, but conversational style sets the tone for an episode that balances detailed economic analysis with plainspoken social critique. Hedges amplifies and sharpens the sense of urgency with historical parallels and a focus on rising authoritarianism and social decay. Both suggest that while the system breeds crisis and “blowback” is inevitable, the outcome and direction of such upheaval remain uncertain—hinging on whether the public can reclaim the commons from parasitic corporate interests.

For listeners seeking a deep critique of declining corporate capitalism and its political, social, and ethical costs, this episode is an urgent, accessible starting point.