Economic Update with Richard D. Wolff

Episode: How Economies Change

Date: October 27, 2017
Host: Richard D. Wolff
Guests: Dr. Umberto Miranda Lorenzo (Institute of Philosophy, Havana, Cuba), Dr. Richard McIntyre (University of Rhode Island)

Overview

In this episode, Richard D. Wolff explores the question of "How economies change" by moving from current issues confronting the U.S. economic system to an in-depth discussion of Cuba's evolving approach to workplace democracy and economic organization. The conversation, featuring two expert guests, focuses on the Cuban experiment with worker cooperatives as a third way beyond state versus private ownership—considering its implications, challenges, and the broader movement for economic democracy.

Key Discussion Points and Insights

1. Economic Updates: U.S. and Global Context

Privatization & Its Consequences

• Towns and counties are struggling to perform basic functions due to corporations and wealthy individuals evading taxes.
• Example: Privatization of probation services in places like Craighead County, Arkansas, resulting in exploitative practices reminiscent of debtors' jails (03:34).

Growing Economic Insecurity

• Shocking figures on electricity shut-offs:
  • Texas: 900,000 homes went dark last summer—triple the number a decade ago.
  • California: 714,000—the state record (07:00).
• Federal programs for low-income support (LIHEAP) are being cut, with minimal evidence of fraud.
  • "To use a tiny fraction of corruption to cancel out what millions of people need, there's no justification for that. There never was." — Richard Wolff (09:50).

International Example – New Zealand

• New PM Jacinda Ardern and coalition vow to address "failure(s) of capitalism" such as rampant homelessness.
• Plans to raise the minimum wage significantly (11:20).
• Contrasts with ongoing struggles for wage increases in the U.S.

Healthcare Politics in the U.S.

• Ongoing struggles with the Affordable Care Act (Obamacare) as the Trump administration withholds subsidies, likely pushing insurers to raise rates or exit markets (16:30).

Neoliberalism Under Critique

• Even establishment economists now question neoliberalism's record.
• Oxford's Dean Ngaire Woods: Touts success of state-managed economies (e.g. China, India), while criticizing the crisis of neoliberal nations (Britain, U.S.)—citing rising inequality and child poverty (19:52).
  • "Now it’s going the other way and people increasingly are believing it." — Richard Wolff (23:41).
• Wolff: The stale debate isn’t about more/less government, but about the structure of decision-making itself—issuer of democracy in economic life.

Uniqueness of U.S. Labor Law

• U.S. uniquely lacks federally mandated paid vacation (25:10).
• Achievements of unions and workers always remain "tentative" in capitalism, since ultimate control stays with employers, resulting in ongoing erosions of rights.

Role of Corporate Money in Education Policy

• Highlights "Families for Excellent Schools" as a front for wealthy interests to promote charter schools for profit, defeating democratic controls in education (27:00).
  • "Society allows money to trump democratic decision making." — Richard Wolff (27:56).

2. Main Interview: The Cuban Cooperative Experiment

Participants:

• Dr. Umberto Miranda Lorenzo (Cuban expert on cooperatives)
• Dr. Richard McIntyre (U.S. academic with expertise on Cuba and labor)

Setting the Stage

Cuba's Experiment

• Move toward organizing parts of the economy via worker cooperatives.
• Not simply a debate between public vs. private, but "top-down hierarchical vs. collective democratic" organization (32:00).

The State of Co-ops in Cuba

Historical and Policy Background

• Since 2011/2012, Cuban policy formally encourages cooperatives beyond agriculture—previously the only cooperative sector.
  • Intended both to substitute for shrinking state sector and to avoid full privatization (34:45).

Structure of New Cooperatives

• State retains ownership of physical assets, but management is handed to workers.
• Profits and improvements (patrimony) accrue to the cooperative collectively (36:00).
• Issue: Management boards often appointed by the state rather than elected—so, in practice, many co-ops are in "limbo": neither fully state-controlled nor truly worker-managed (37:07).
  • "The state-centered economy is going away, but the cooperative economy is not quite ready to be born yet. It's somewhere in the middle." — Dr. McIntyre (37:34).

Ambitions vs. Blockages

• Official rhetoric commits to expanding co-ops—policy once called for 35% of the economy to become cooperative—but license issuance has stalled (38:00).
• Example: Umberto Miranda's son and friends are unable to start a cooperative bakery due to suspended licensing.

Impetus for Change

• Economic crisis and fatigue in the state sector prompted reforms; co-ops viewed as a "middle path" (38:48).
• Barriers include lack of cooperative education/understanding and fragmented legislation.

Learning from Latin America

• Cuban co-op activists look with interest to vibrant Latin American movements in Argentina, Uruguay, Brazil (42:33).
• But co-ops in Cuba remain an economic sector, not a social movement, unlike Argentina where worker control came out of struggle and solidarity.

Challenges and Democratic Potential

• Need for real democratization, not mere formalities; currently, even leaders of "co-ops" are often former state managers, not elected by the membership (46:45).
  • "We need to implement more democratic ways of decision making. Decentralizing decision making for me is crucial." — Dr. Miranda (47:20).
• Broader implication: workplace democracy has the power to kindle real political democracy; without economic democracy, political democracy remains hollow.

The Movement—Cuba and the U.S.

• Both Cuba and the U.S. see a growth in co-ops, but both fall short of a true "social movement."
  • "There has to be some chemistry... to give people the notion that they are not just making an enterprise, they are part of social change." — Richard Wolff (49:00).
• U.S. immigrant communities may serve as "seedbeds" for the co-op movement due to Latin American influences (50:17).

Cultural and Institutional Barriers

• Cuba’s decades of statist structure create inertia and suspicion about worker autonomy.
• In the U.S., the dominant question is whether "regular people" are even capable of self-management—an "ignorance that's just unbelievable" to McIntyre (49:55).

Reaching a Tipping Point

• If Cuba truly hands workplace control to people, it may catalyze a movement for broader social and political democracy (54:30).
• "If you give people these rights, these positions in the workplace, they're not going to stop. They're going to want them everywhere." — Richard Wolff (55:16).

Internal Bureaucratic Resistance

• Some within the Cuban state resist this process out of fear for their own positions, not for ideological reasons (55:45).

Dissemination and Mutual Influence

• Student exchange and dialogue foster mutual learning; both U.S. and Cuban participants benefit from seeing different models in action (56:31).

Notable Quotes and Memorable Moments

• On Tax Evasion and Privatization:
  "Corporations in America have dozens literally of ways of evading their share of taxes. Wealthy people likewise either have the laws in place to allow them to escape taxation, or they buy the political influence that gets them those laws." — Richard D. Wolff [03:00]

• On Budget Cuts:
  "To use a tiny fraction of corruption to cancel out what millions of people need, there's no justification for that. There never was." — Richard D. Wolff [09:50]

• On New Zealand and Homelessness:
  "For her [Jacinda Ardern], she called this a, quote, unquote, failure of capitalism. Her words." — Richard D. Wolff [12:05]

• On Neoliberalism's Crisis:
  "Now we see, says Dean Woods, that if you remove the government it can have the same effect and that therefore we have to rethink this." — Richard D. Wolff referencing Dean Ngaire Woods of Oxford [20:00]

• On Co-op Ambitions:
  "The state-centered economy is going away, but the cooperative economy is not quite ready to be born yet. It's somewhere in the middle." — Dr. McIntyre [37:34]

• On Democratic Management in Cuba:
  "We need to implement more democratic ways of decision making and decentralizing. The decision making for me is crucial." — Dr. Miranda [47:20]

• On the Limits of Formal Democracy:
  "One of the arguments was made, you're never going to have a political democracy that's vibrant and real because you exclude any democracy in the workplace..." — Richard D. Wolff [54:30]

• On Passing the Torch:
  "If you give people these rights, these positions in the workplace, they're not going to stop. They're going to want them everywhere." — Richard D. Wolff [55:16]

Timestamps for Key Segments

| Timestamp | Segment | |-----------|---------| | 00:10 | Introduction and Updates (tax, probation, utilities) | | 07:00 | Disconnections and the LIHEAP debate | | 11:20 | New Zealand: Minimum wage, homelessness, policy shift | | 16:30 | U.S. Healthcare and subsidies crisis | | 19:52 | Neoliberalism, state vs. private: Fresh critiques | | 25:10 | U.S. lack of paid vacation—systemic implications | | 27:00 | Charter school privatization v. democracy | | 32:00 | Start of Interview: The Cuban economic experiment | | 37:07 | Challenges of democratizing Cuba’s cooperatives | | 42:33 | Learning from Latin American co-op movements | | 47:20 | The challenge of real democratic management | | 49:00 | Co-ops as the basis of a social movement | | 55:16 | Implications of workplace democracy for society | | 56:31 | Exchange between Cuban and U.S. students | | 57:11 | Closing thoughts on opening U.S.-Cuba dialogue |

Conclusion

Richard D. Wolff’s "How Economies Change" episode offers a conversational yet deeply analytical tour through modern economic failures, international reform efforts, and the emergent possibilities in Cuba's cooperative sector. The episode ultimately challenges listeners to look beyond binary choices of state vs. private control, urging serious consideration of economic democracy as practiced in workplaces—and points to its potential as a catalyst for broader societal transformation. The guests' insights, paired with Wolff’s sharp critique, provide plenty to reflect on for those interested in systemic change and economic justice.