Economic Update with Richard D. Wolff

Episode: "Different Economics, Different Policies"

Date: December 15, 2017
Host: Richard D. Wolff

Episode Overview

In this episode of Economic Update, Richard D. Wolff examines how different economic systems and policies profoundly shape societal outcomes. He tackles examples from corporate policy, financial industry misconduct, wealth inequality, and attacks on public higher education in America. The second half dives deep into Marxian economics and the changing political landscape in the UK, centering on Jeremy Corbyn's Labour Party proposals. Wolff’s central message emphasizes the power of economic structures and the potential for alternative models, especially worker cooperatives and more egalitarian policies.

Key Discussion Points & Insights

1. Progressive Corporate Policy: Aviva’s Paid Parental Leave (00:10–06:05)

• Aviva, the UK’s largest insurance company, now offers 26 weeks of paid parental leave at full salary to all new parents (including adoptive and same-sex parents), regardless of gender or role.
• Wolff draws stark contrast to the U.S., which has no federal mandate for any paid maternity or paternity leave.
• He debunks the competitive disadvantage argument, noting that such benefits foster loyalty, reduce turnover, improve mental health, and actually may provide long-term cost savings for businesses.
• Memorable Quote:

  “A company that offers benefits like that will have much more loyal employees. … There’ll be less turnover at a company like Aviva than there will be at a company that doesn’t offer that. You’d have to weigh the positive effect … against any negative effects from the cost.” —Richard D. Wolff (04:16)

2. Corporate Malfeasance: Citibank’s Student Loan Abuses (06:30–10:00)

• Citibank fined $6.5 million for unethical and illegal practices against student borrowers (e.g., misleading information, inappropriate fees).
• Wolff places this in a broader pattern of repeated banking offenses in the chase for greater profit, including mortgage, interest rate, and currency scandals.
• Insight: Systemic drive for profit routinely leads to crossing ethical and legal boundaries across industries.
• Memorable Quote:

  “Mixing the issue of providing educational finance with capitalist profits doesn’t work well, does it?” —Richard D. Wolff (09:37)

3. Corporate Irresponsibility: Tobacco Companies and Delayed Justice (10:05–17:56)

• After a long legal battle, U.S. tobacco giants finally start broadcasting (from Nov 26, 2017) “corrective statements” about the lethality and addictiveness of smoking, 18 years after court action began.
• Wolff emphasizes the power of profit-seeking to override social responsibility, noting immense legal delays serve as de facto corporate shields.
• Notable “Corrective Statements”:
  • “More people die every year from smoking than murder, AIDS, suicide, drugs, car crashes and alcohol combined.”
  • “Cigarette companies intentionally designed cigarettes with enough nicotine to create and sustain addiction.”
• Wolff’s Broader Lesson:

  “This is … in which profit making capitalist enterprises are driven to do socially devastating things as a regular part of business.” (16:05)

4. Extreme Wealth Inequality: Jeff Bezos and Amazon (18:33–23:53)

• Jeff Bezos’ wealth surpasses $100 billion, exceeding the total annual economic output of 14 U.S. states and 50 of 54 African countries.
• Wolff interrogates what democracy means under such inequality and connects Amazon’s profits to harsh working conditions, highlighting ongoing strikes in Germany and Italy.
• Memorable Quote:

  “For one man to have $100 billion is the equivalent of saying that our society has achieved the dubious distinction of having an inequality that takes you back to the ancient pharaohs of Egypt.” —Richard D. Wolff (19:52)

5. Disinvestment in Higher Education and Its Political Context (23:56–34:56)

• Between 2008 and 2016, the U.S. cut $5.7 billion from public higher education despite growing student enrollment by 800,000.
• Arizona slashed funding by 54%—not unique among states—representing a trend that Wolff argues is self-destructive for national wellbeing.
• Cites Donald Trump Jr.’s speech alleging universities teach students to “hate our country,” calling out this as ideological warfare rather than sound policy.
• Wolff’s Critique:
  • Links funding cuts to political motives: educated populations tend toward liberal/Democratic politics, so Republican-led states cut funding.
  • Warns that weakening education for political gain cripples society long-term.
• Quote from Donald Trump Jr. (cited by Wolff at 31:48):

  “Many universities in America offer Americans a raw deal. We’ll take $200,000 of your money in exchange, we’ll train your children to hate our