Economic Update: Is US Capitalism in Decline?

Podcast: Economic Update with Richard D. Wolff
Host: Richard D. Wolff (Democracy at Work)
Guest: Prof. Richard McIntyre (University of Rhode Island)
Date: July 4, 2019

Overview

In this episode, Richard D. Wolff examines the state of US capitalism, focusing on rising inequality, the implications of mergers, elite philanthropy, government intervention in markets, and proposals for expanding worker ownership. The second half features a thoughtful, big-picture conversation with economist Richard McIntyre on whether US capitalism is entering a period of decline, what the Trump era represents, the labor movement’s condition, and generational shifts in attitudes toward economic systems.

Key Discussion Points & Insights

1. Extreme CEO Compensation and Wealth Inequality

[00:10 - 04:08]

Highlight: Wolff illustrates staggering inequality through CEO pay, particularly noting David Zaslav (Discovery, Inc.):
- Zaslav earned $129.4 million in 2018 alone.
- The average CEO of a top US corporation earns $12.4 million/year ($238,000/week), while the average US worker earns $752/week.
- This is a CEO-to-worker ratio of ~300:1, compared to 30-40:1 forty years ago.
Notable quote:

"Capitalism has been good for those at the top, and for the rest of us, not so much." — Richard D. Wolff [03:44]

2. Corporate Mergers & Their Real Impact

[04:08 - 08:47]

Mergers covered: T-Mobile + Sprint, Renault + Fiat Chrysler.
Key insight: Contrary to PR claims, mergers are not designed to benefit consumers with lower prices, but rather to cut costs (mainly by reducing jobs) and increase profits.
The result:
- Layoffs and higher unemployment.
- Fewer large corporations, tacitly cooperating rather than competing vigorously, leading to price stability (not reductions) for consumers.
- The narrative of consumer benefit is primarily for gaining regulatory and political approval.
Notable quote:

"The whole point of the merger is to cut the costs without dropping the prices. Because that will maximize the profits." — Richard D. Wolff [06:06]

3. Philanthropy of the Super-Rich: The Giving Pledge

[08:47 - 11:30]

Example: MacKenzie Bezos, post-divorce, holds $37 billion and pledges half to charity, joining “The Giving Pledge,” a network of billionaires who commit to philanthropy.
Wolff’s critique:
- The generosity narrative masks the reality that this wealth is amassed off underpaid workers.
- Quotes Warren Buffett’s pledge statement, interpreting it as self-congratulatory and dismissive of workers’ real sacrifices.
Notable quote:

"He really appreciates the people who work for others because the others are him." — Richard D. Wolff, paraphrasing Buffett [10:40]

4. US Government’s Clampdown on Huawei: Global Consequences

[11:30 - 13:48]

Observation: The Trump administration’s bans and restrictions against Chinese giant Huawei are a dramatic, ideologically inconsistent government intervention in private markets.
Broader impact:
- Sends a warning to all non-US corporations: business with American firms has become politically risky.
- Encourages global diversification away from US suppliers, likely harming American business and jobs in the long term.
- Suggests political motives: influencing Federal Reserve policy for electoral advantage in anticipation of possible recession.
Notable quote:

“Every CEO in the world... has just sent a memo... ‘Cut business with Americans. Reduce dependence on Americans.’” — Richard D. Wolff [13:23]

5. Promoting Worker Co-Ops: New Legislative Proposals

[13:48 - 14:51]

Legislation introduced by: Bernie Sanders, Kirsten Gillibrand, Patrick Leahy, Maggie Hassan, Jeanne Shaheen; Rep. Mark Pocan in the House.
Proposals:
- $45 million to establish centers supporting employee ownership and forming worker co-ops.
- Creation of a US Employee Ownership Bank with $500 million in low-interest loans for worker-owned enterprises.
Goal: Level the playing field with capitalist enterprises and empower worker co-ops.

In-Depth Conversation: Is US Capitalism in Decline?

With Prof. Richard McIntyre
[14:56 - 28:09]

The Trump Phenomenon: Symptom or Cause?

[16:45] McIntyre: “I tend to think of Trump more as a symptom than a cause. ...He’s partly a symptom of the dysfunctionality of American capitalism over the last three decades.”
- Notes rising dysfunction for large swaths of the country—e.g., the upper Midwest’s collapse, rising suicide rates, social malaise.
- Argues Trump appealed to “social capital deserts” created by economic decline.

The Success and Failure of Contemporary US Capitalism

[17:51] McIntyre:
- Emphasizes the extraordinary profits amassed by US giants (tech, finance, retail).
- US global success was fueled by holding down domestic wages and exploiting low-wage labor abroad.
- The real underpinning of working-class decline is not globalization/trade per se, but the collapse of unions and worker institutions (deunionization).
[18:40] McIntyre:

"With [unions] gone, it’s been open season."

The State of Labor and Its Prospects

[19:19] McIntyre:
- “Private sector unionization rate is now 6.4%. So how much lower can you go?”
- Points to limited signs of revival: immigrant worker organizing, Fight for $15, labor-ecology alliances.
- Cautions against overestimating a labor comeback, stressing the need for broader social movements—"to confront capital in all its forms: financial, industrial, merchant, and landlord."
- Special note: Trump’s worldview aligns with a “landlord class.”

Is American Capitalism In Decline?

[22:01] McIntyre:
- “On the ideological front, I think there’s no question that things have changed.”
  - Young people now favor socialism over capitalism in polls.
  - Noted shift even if the alternative isn’t well defined; “the idea that capitalism failed is just common sense [to the young].”
  - Democratic politicians now feeling compelled to declare themselves “capitalist.”
  - Bernie Sanders’ 2016 campaign as a marker of increasing openness to alternatives.
- Economically:
  - US capitalism remains deeply uneven, with “both Detroit and San Francisco at the same time”—some sectors hyper-successful, others devastated.
  - Warning against overstating decline; the US dollar is more dominant than ever post-2008 bailout.

Generational Shifts and the Future of Change

[24:37] McIntyre:

"We have the conditions for real change because of what’s happening with young people... People who have been through a crisis that was every bit as bad as 1929... The only way the system was bailed out was by the state."
- Notes the growing willingness among youth to explore socialism, and absence of need to persuade them that capitalism doesn’t work for them.

Pathways for Social Transformation

[26:05] McIntyre:
- Emphasizes three pillars for unifying movements:
  1. Workplace democracy: Workers need a real voice and power within their workplaces.
  2. Political democracy: True democratic practice, particularly at the local level, is needed to counter domination by real estate and business interests.
  3. Ecological movement: Youth will bear the brunt of climate change, and authentic action will require expanding the role of the state.
- Potential exists for a coalition around “economic democracy, political democracy and ecology.”
Notable quote:

"If those three different movements could coalesce around economic democracy, political democracy and ecology, then we would have something. And I think the potential is there today." — Richard McIntyre [27:48]

Memorable Moments & Quotes

On CEO-worker ratio:

"Average American worker gets $752 a week, and the average CEO of a big corporation gets $238,000 per week. ... None of those [ratios] are normal or necessary." — Wolff [02:56]
On philanthropy narrative:

"If you take that [Buffett quote] seriously, I have a bridge I would like to sell to you." — Wolff [11:26]
On US-China tensions:

"It is a message that every CEO of every company in the world has just sent a memo down the line... Cut business with Americans. Reduce dependence on Americans." — Wolff [13:23]
On the labor movement:

"We need a different kind of movement that’s going to confront capital in all its forms...the labor movement can do some of that, but it needs allies." — McIntyre [20:33]
On young people’s attitudes:

"The notion that I don't have to convince students anymore that capitalism doesn’t really work..." — McIntyre [25:12]

Timestamps of Key Segments

[00:10] Introduction, CEO compensation and wealth inequality
[04:08] Corporate mergers: T-Mobile & Sprint, Renault & Fiat Chrysler
[08:47] Billionaire philanthropy: MacKenzie Bezos, Warren Buffett, The Giving Pledge
[11:30] Huawei ban, government intervention, global business risks
[13:48] Worker co-op legislation proposed by Sanders and others
[14:56] Guest intro: Prof. Richard McIntyre
[16:45] Is Trumpism a cause or a symptom? Dysfunction in US capitalism
[17:51] Success for elites; deunionization and working-class decline
[19:19] State of the labor movement and potential for revival
[22:01] Is US capitalism in decline? Ideological and sectoral unevenness
[24:37] Generational change and the new common sense about capitalism
[26:05] Advice: pathways for youth social movements—workplace power, democracy, ecology

Conclusion

The episode presents a dynamic critique of US capitalism’s contemporary state: documenting extreme economic polarization, the true motivations behind corporate consolidation, the hollow self-congratulations of billionaire philanthropy, and the risks created by nationalist economic interventions. The dialogue with Prof. McIntyre broadens this critique, placing current troubles in historical context and emphasizing ideological shifts, the condition of labor, and the generational basis for potential transformation. Both speakers converge on the idea that deep systemic questions about power, democracy, and ecological survival are now on the table—particularly for the younger generation poised to shape the future.

Economic Update: Is US Capitalism in Decline?

Podcast: Economic Update with Richard D. Wolff
Host: Richard D. Wolff (Democracy at Work)
Guest: Prof. Richard McIntyre (University of Rhode Island)
Date: July 4, 2019

Overview

Key Discussion Points & Insights

1. Extreme CEO Compensation and Wealth Inequality

[00:10 - 04:08]

Highlight: Wolff illustrates staggering inequality through CEO pay, particularly noting David Zaslav (Discovery, Inc.):
- Zaslav earned $129.4 million in 2018 alone.
- The average CEO of a top US corporation earns $12.4 million/year ($238,000/week), while the average US worker earns $752/week.
- This is a CEO-to-worker ratio of ~300:1, compared to 30-40:1 forty years ago.
Notable quote:

"Capitalism has been good for those at the top, and for the rest of us, not so much." — Richard D. Wolff [03:44]

2. Corporate Mergers & Their Real Impact

[04:08 - 08:47]

Mergers covered: T-Mobile + Sprint, Renault + Fiat Chrysler.
Key insight: Contrary to PR claims, mergers are not designed to benefit consumers with lower prices, but rather to cut costs (mainly by reducing jobs) and increase profits.
The result:
- Layoffs and higher unemployment.
- Fewer large corporations, tacitly cooperating rather than competing vigorously, leading to price stability (not reductions) for consumers.
- The narrative of consumer benefit is primarily for gaining regulatory and political approval.
Notable quote:

"The whole point of the merger is to cut the costs without dropping the prices. Because that will maximize the profits." — Richard D. Wolff [06:06]

3. Philanthropy of the Super-Rich: The Giving Pledge

[08:47 - 11:30]

Example: MacKenzie Bezos, post-divorce, holds $37 billion and pledges half to charity, joining “The Giving Pledge,” a network of billionaires who commit to philanthropy.
Wolff’s critique:
- The generosity narrative masks the reality that this wealth is amassed off underpaid workers.
- Quotes Warren Buffett’s pledge statement, interpreting it as self-congratulatory and dismissive of workers’ real sacrifices.
Notable quote:

"He really appreciates the people who work for others because the others are him." — Richard D. Wolff, paraphrasing Buffett [10:40]

4. US Government’s Clampdown on Huawei: Global Consequences

[11:30 - 13:48]

Observation: The Trump administration’s bans and restrictions against Chinese giant Huawei are a dramatic, ideologically inconsistent government intervention in private markets.
Broader impact:
- Sends a warning to all non-US corporations: business with American firms has become politically risky.
- Encourages global diversification away from US suppliers, likely harming American business and jobs in the long term.
- Suggests political motives: influencing Federal Reserve policy for electoral advantage in anticipation of possible recession.
Notable quote:

“Every CEO in the world... has just sent a memo... ‘Cut business with Americans. Reduce dependence on Americans.’” — Richard D. Wolff [13:23]

5. Promoting Worker Co-Ops: New Legislative Proposals

[13:48 - 14:51]

Legislation introduced by: Bernie Sanders, Kirsten Gillibrand, Patrick Leahy, Maggie Hassan, Jeanne Shaheen; Rep. Mark Pocan in the House.
Proposals:
- $45 million to establish centers supporting employee ownership and forming worker co-ops.
- Creation of a US Employee Ownership Bank with $500 million in low-interest loans for worker-owned enterprises.
Goal: Level the playing field with capitalist enterprises and empower worker co-ops.

In-Depth Conversation: Is US Capitalism in Decline?

With Prof. Richard McIntyre
[14:56 - 28:09]

The Trump Phenomenon: Symptom or Cause?

[16:45] McIntyre: “I tend to think of Trump more as a symptom than a cause. ...He’s partly a symptom of the dysfunctionality of American capitalism over the last three decades.”
- Notes rising dysfunction for large swaths of the country—e.g., the upper Midwest’s collapse, rising suicide rates, social malaise.
- Argues Trump appealed to “social capital deserts” created by economic decline.

The Success and Failure of Contemporary US Capitalism

[17:51] McIntyre:
- Emphasizes the extraordinary profits amassed by US giants (tech, finance, retail).
- US global success was fueled by holding down domestic wages and exploiting low-wage labor abroad.
- The real underpinning of working-class decline is not globalization/trade per se, but the collapse of unions and worker institutions (deunionization).
[18:40] McIntyre:

"With [unions] gone, it’s been open season."

The State of Labor and Its Prospects

[19:19] McIntyre:
- “Private sector unionization rate is now 6.4%. So how much lower can you go?”
- Points to limited signs of revival: immigrant worker organizing, Fight for $15, labor-ecology alliances.
- Cautions against overestimating a labor comeback, stressing the need for broader social movements—"to confront capital in all its forms: financial, industrial, merchant, and landlord."
- Special note: Trump’s worldview aligns with a “landlord class.”

Is American Capitalism In Decline?

[22:01] McIntyre:
- “On the ideological front, I think there’s no question that things have changed.”
  - Young people now favor socialism over capitalism in polls.
  - Noted shift even if the alternative isn’t well defined; “the idea that capitalism failed is just common sense [to the young].”
  - Democratic politicians now feeling compelled to declare themselves “capitalist.”
  - Bernie Sanders’ 2016 campaign as a marker of increasing openness to alternatives.
- Economically:
  - US capitalism remains deeply uneven, with “both Detroit and San Francisco at the same time”—some sectors hyper-successful, others devastated.
  - Warning against overstating decline; the US dollar is more dominant than ever post-2008 bailout.

Generational Shifts and the Future of Change

[24:37] McIntyre:

"We have the conditions for real change because of what’s happening with young people... People who have been through a crisis that was every bit as bad as 1929... The only way the system was bailed out was by the state."
- Notes the growing willingness among youth to explore socialism, and absence of need to persuade them that capitalism doesn’t work for them.

Pathways for Social Transformation

[26:05] McIntyre:
- Emphasizes three pillars for unifying movements:
  1. Workplace democracy: Workers need a real voice and power within their workplaces.
  2. Political democracy: True democratic practice, particularly at the local level, is needed to counter domination by real estate and business interests.
  3. Ecological movement: Youth will bear the brunt of climate change, and authentic action will require expanding the role of the state.
- Potential exists for a coalition around “economic democracy, political democracy and ecology.”
Notable quote:

"If those three different movements could coalesce around economic democracy, political democracy and ecology, then we would have something. And I think the potential is there today." — Richard McIntyre [27:48]

Memorable Moments & Quotes

On CEO-worker ratio:

"Average American worker gets $752 a week, and the average CEO of a big corporation gets $238,000 per week. ... None of those [ratios] are normal or necessary." — Wolff [02:56]
On philanthropy narrative:

"If you take that [Buffett quote] seriously, I have a bridge I would like to sell to you." — Wolff [11:26]
On US-China tensions:

"It is a message that every CEO of every company in the world has just sent a memo down the line... Cut business with Americans. Reduce dependence on Americans." — Wolff [13:23]
On the labor movement:

"We need a different kind of movement that’s going to confront capital in all its forms...the labor movement can do some of that, but it needs allies." — McIntyre [20:33]
On young people’s attitudes:

"The notion that I don't have to convince students anymore that capitalism doesn’t really work..." — McIntyre [25:12]

Timestamps of Key Segments

[00:10] Introduction, CEO compensation and wealth inequality
[04:08] Corporate mergers: T-Mobile & Sprint, Renault & Fiat Chrysler
[08:47] Billionaire philanthropy: MacKenzie Bezos, Warren Buffett, The Giving Pledge
[11:30] Huawei ban, government intervention, global business risks
[13:48] Worker co-op legislation proposed by Sanders and others
[14:56] Guest intro: Prof. Richard McIntyre
[16:45] Is Trumpism a cause or a symptom? Dysfunction in US capitalism
[17:51] Success for elites; deunionization and working-class decline
[19:19] State of the labor movement and potential for revival
[22:01] Is US capitalism in decline? Ideological and sectoral unevenness
[24:37] Generational change and the new common sense about capitalism
[26:05] Advice: pathways for youth social movements—workplace power, democracy, ecology

Economic Update: Is US Capitalism in Decline?

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Summary

Economic Update: Is US Capitalism in Decline?

Overview

Key Discussion Points & Insights

1. Extreme CEO Compensation and Wealth Inequality

2. Corporate Mergers & Their Real Impact

3. Philanthropy of the Super-Rich: The Giving Pledge

4. US Government’s Clampdown on Huawei: Global Consequences

5. Promoting Worker Co-Ops: New Legislative Proposals

In-Depth Conversation: Is US Capitalism in Decline?

The Trump Phenomenon: Symptom or Cause?

The Success and Failure of Contemporary US Capitalism

The State of Labor and Its Prospects

Is American Capitalism In Decline?

Generational Shifts and the Future of Change

Pathways for Social Transformation

Memorable Moments & Quotes

Timestamps of Key Segments

Conclusion

Summary

Economic Update: Is US Capitalism in Decline?

Overview

Key Discussion Points & Insights

1. Extreme CEO Compensation and Wealth Inequality

2. Corporate Mergers & Their Real Impact

3. Philanthropy of the Super-Rich: The Giving Pledge

4. US Government’s Clampdown on Huawei: Global Consequences

5. Promoting Worker Co-Ops: New Legislative Proposals

In-Depth Conversation: Is US Capitalism in Decline?

The Trump Phenomenon: Symptom or Cause?

The Success and Failure of Contemporary US Capitalism

The State of Labor and Its Prospects

Is American Capitalism In Decline?

Generational Shifts and the Future of Change

Pathways for Social Transformation

Memorable Moments & Quotes

Timestamps of Key Segments

Conclusion