Economic Update with Richard D. Wolff Episode: Economics: Where Theories Clash Date: February 23, 2017

Episode Overview

Richard D. Wolff, host and seasoned economics professor, dedicates this episode to examining the deep transformation and crisis in American higher education, the reality of growing economic inequality in the US compared to other advanced economies, and, in the main segment, the clash between dominant and alternative economic theories. The purpose is to empower listeners with a critical perspective on both daily economics and the foundations of economic thought, connecting systemic problems like adjunct teaching and inequality to broader struggles over economic theory and public understanding.

Key Discussion Points & Insights

1. The Crisis in Higher Education: The Plight of Adjunct Professors

[01:00–17:00]

• Story of Kevin Birmingham and the Truman Capote Award:
  Wolff opens by summarizing Kevin Birmingham's award acceptance speech—"The Great Shame of Our Profession"—highlighting the legacy of oppression against both literary and academic freedom, and drawing a connection between past censorship (e.g., James Joyce's Ulysses) and present-day injustices in academia.
• Precarity and Injustice Among University Instructors:
  Wolff reveals shocking statistics about adjunct teaching in higher education—only 17% of instructors are tenured, with a rapidly increasing majority working underpaid, insecure, part-time jobs across multiple institutions.
• Adjunct Working Conditions:
  • Median pay: $2,700 per semester course.
  • Typical workload: Teaching 5 courses may yield only ~$27,000 annually, with instructors often unable to provide meaningful support to students due to time and energy constraints.
• Impact on Education Quality and Society:
  Wolff argues that this structural shift in higher ed not only demeans instructors but fundamentally undermines the quality of US education, which will have long-term economic, political, and social consequences.

Quote ([15:45], Wolff):
“The reality is, American colleges and universities don't care about the quality of the teaching. That's why they don't have tenured professors anymore.”

• Notable Anecdotes from Adjuncts (from Birmingham’s speech):
  • One sold her plasma twice a week to pay for her daughter's daycare.
  • Another taught four classes for less than $10,000 a year, worked through her pregnancy without leave, relying on online teaching while giving birth.

Quote ([16:50], Wolff reading Birmingham):
“One English Department adjunct who responded to our survey said that she sold her plasma… to pay for her daughter's daycare. Another woman stated that she taught four classes a year for less than $10,000… It is necessary I continue until the end of the semester in May in order to get paid, something I drastically need. The only recourse I have is to revert to an online classroom and do work while in the hospital..."

• Gender Inequality Highlighted:
  61% of adjunct faculty are women.

2. Comparative Wealth Inequality: US vs. Other Advanced Economies

[17:00–28:25]

• Inequality Internationally:
  Wolff compares wealth distribution in the US to Finland, Canada, France, and Germany, all advanced capitalist economies, using data from Piketty, Saez, and Gabriel Zucman.
  • Finland: Top 1% own 12.5% of wealth
  • Canada: 15.5%
  • France: 18%
  • Germany: 24.5%
  • United States: 41.8%

Quote ([20:56], Wolff):
“How much of the national wealth of the United States is owned by the top 1%? Here’s the 41.8%. That’s right. The richest 1% own 41.8% of the wealth.”

• Why More Inequality in the US?
  • The US lacks robust social institutions (trade unions, left-wing parties) that protect against market-driven inequality; these institutions are stronger in the comparison countries.
  • Decline of unions: 1950s saw one-third of private sector workers unionized; today, less than 7%.
  • Repression of leftist politics (e.g., McCarthyism) historically marginalized these alternatives.
• Political Implications:
  Extreme inequality means the wealthy spend heavily to protect their interests, buying influence, and distracting public attention from systemic change.

Quote ([25:55], Wolff):
“A capitalist system that gives so much of the wealth to so small a part of the population is a central cause of your economic distress... We have a system that generates a level of inequality that corrodes the institutions we depend on.”

3. Theories in Clash: Neoclassical, Keynesian, and Marxian Economics

[32:30–57:45]

• Why Economic Theories Matter:
  Wolff argues economics is not a technical science like auto mechanics; it’s a field of clashing perspectives, influenced by life experience, ideology, and social interests.
• Failure of Narrow Economics Education:
  • The US mostly teaches only neoclassical economics, which Wolff likens to teaching only one cuisine or religion.
  • This single-mindedness, he says, contributed to the Great Depression (1929), 2008’s crash, and the inability to fully recover.

Quote ([37:00], Wolff):
“Your education is narrow, stunted and inadequate if you think economics is one way to go. Now, why do I stress that? Because that's how it's taught in the United States, and that's how it's been taught for most of the last 50 years.”

a. Neoclassical Economics

• Core Belief: Capitalism is a self-correcting, efficient, and fair system that works best without government intervention.
• Moral Claim: Wealth and poverty are justified by individual contribution.
• Impact: Dominates US education and public discourse; aligns with business and political elites.

Quote ([41:45], Wolff):
“Neoclassical teaches the private economy is what should dominate, is the best thing that could happen, should be left alone and works perfectly. Nobody has anything to complain about.”

b. Keynesian Economics

• Core Belief: Capitalist markets are prone to failure (e.g., unemployment, crises); government must intervene—fiscally and monetarily—to stabilize and stimulate the economy.
• Historical Origin: John Maynard Keynes, responding to the Great Depression.

Quote ([46:33], Wolff):
“John Maynard Keynes… looked around him and said, I see a quarter of the people unemployed. I see poverty and misery all around me. Don’t tell me capitalism is a wonderful system..."

• Status: Marginally taught in the US, often by a small minority of faculty.

c. Marxian Economics

• Core Belief: The root problem is capitalism itself—an undemocratic system where a small elite (capitalists, boards of directors) rule over the majority (workers).
• Prescription: Democratization of the workplace; collective, worker-run enterprises.
• Critical Distinction: Focus isn’t on government intervention within capitalism (as in Keynes) but on system replacement.

Quote ([50:58], Wolff):
“For Marxism, that's the problem. You have an undemocratic economic system and it undermines democracy everywhere else.”

• Suppression in the US:
  Fear from Cold War-era politics led to Marxist perspectives being censored, marginalized, and excluded from mainstream teaching.

• Philosophical Point:
  A genuine education requires exposing students to all theoretical perspectives—not just one.

Quote ([55:45], Wolff):
“We need all the insights and all the theoretical avenues available to our people to solve our problems. Shutting us out of two of the three major theories in the world today is self destructive. It’s only done to fearfully support the status quo.”

4. Resources, Action, and Engagement

[29:28, 57:20]

• Democracy at Work & Direct Action:
  Wolff encourages listeners to engage via his websites, join Democracy at Work groups, and access free educational resources.
• Book Recommendation:
  Wolff and Steven Resnick, Contending Economic Theories: Neoclassical, Keynesian, and Marxian (MIT Press, 2012), offers a comparative approach to economic thought.

Notable Quotes & Memorable Moments

• On the tragedy of education and inequality:

  “That is a comment on the quality of our education that is going to hamper and undermine the economic, social and political wellbeing of the United States for decades to come.” ([15:00], Wolff)

• On teaching economics:

  “Economics is not like fixing a car... We do not admit to most of our students in most of our colleges and universities that there are alternative ways of understanding what an economy is, how it works, what’s wrong with it, and how to fix it.” ([33:12], Wolff)

• On the suppression of Marxism:

  “For 50 years, the cold War… made Americans fearful about the Soviet Union. It talked about Marxism, so they didn’t want to talk about that at all. If you talked about it, you lost your career, you lost your job. You were in trouble... a little bit like James Joyce trying to write his novel. You were censored, you were pushed away.” ([55:00], Wolff)

Timestamps for Key Segments

• [01:00] – Introduction; the revolution and crisis in higher education
• [05:00] – The story of Kevin Birmingham and the Truman Capote Award
• [08:00] – Adjunct working conditions and pay
• [15:00] – Impact of academic precarity on educational quality and society
• [17:00] – Wealth inequality: US vs. Finland, Canada, France, Germany
• [21:00] – Why the US stands apart in inequality: institutional factors
• [25:00] – Political consequences of inequality: money in politics
• [32:30] – Why economics is not a “science” like fixing engines; role of perspectives
• [38:00] – Failure of US economics education; impact on crises (1929, 2008)
• [41:00] – Neoclassical economics explained
• [46:00] – Keynesian economics and government intervention
• [50:45] – Marxian economics: workplace democracy and systemic change
• [55:00] – Why do US schools ignore alternative theories? The legacy of fear
• [56:30] – Resources, book recommendation

Tone & Language

• Explanatory, Engaging, Accessible: Wolff’s tone is critical but always seeking to educate and motivate; he uses vivid analogies ("car engines," "different cuisines," "religions") and direct address to the listener. His critique is anchored in personal experience but substantiated by data and historical context.
• Urgency and Advocacy: Clear emphasis on the need for reform, both in higher education and in economic thinking—empowering listeners to question, learn, and engage.

Summary for New Listeners

This episode is a passionate exploration of how systemic economic problems—adjunct precarity, extreme wealth inequality, and the narrow teaching of economics—are intertwined. Wolff shows how American society not only fails its educators and students but also handicaps itself by excluding critical perspectives. By demystifying the clash between neoclassical, Keynesian, and Marxian economics, he calls for intellectual honesty, workplace democracy, and sustained public engagement as paths toward economic justice.