Economic Update with Richard D. Wolff
Episode: Karl Marx (1818-1883)
Date: February 22, 2018

Episode Overview

This episode commemorates the 200th anniversary of Karl Marx’s birth, using the occasion to reflect on Marx’s life, his core ideas, and their enduring relevance. Host Richard D. Wolff links Marx’s critique of capitalism with current economic trends, such as global inequality, tax policy, and the organization of production, making the case for greater engagement with Marxist thought, both as a historical force and a lens for understanding persistent economic problems.

Key Discussion Points and Insights

1. Oxfam Inequality Report and Capitalism’s Results (00:10 – 10:40)

• Oxfam’s “Reward Work, Not Wealth” report details the massive and growing global inequality. In 2017, the number of billionaires increased at the fastest rate ever, with 2,043 billionaires holding enough new wealth ($762 billion) to eradicate extreme poverty worldwide.

• Disparity Statistics:

  • 1% of the world population owns more than the other 99% combined.
  • Most billionaires are men.
  • Survey across 10 countries: Over 75% of respondents thought the wealth gap was too large; 2/3 believed it needed urgent attention.

• Democracy and Capitalism:

  • The will of the majority, which opposes inequality, is overridden by systems where wealth heavily influences politics.
  • Quote [04:51]:

    “The consequences of capitalism are not only gross inequality, but also the political corruption that prevents that problem from being addressed, even though the majority of people want it to be.” – Richard D. Wolff

2. How Billionaires are Made: The Case of Leslie Wexner (10:40 – 14:24)

• Spotlight on Leslie Wexner (Victoria’s Secret owner): Details on Wexner’s lavish lifestyle, funded by consumer purchases, to illustrate how billionaire wealth is built from the collective spending of ordinary people.
• Consumer Dynamics:
  • Public funds billionaires through everyday purchases but have no say in how this wealth is spent or reinvested.

3. Debunking the Immigration Distraction (14:25 – 19:58)

• US Focus on Immigration:
  • Wolff argues that the political debate over undocumented immigrants (12 million people out of 325 million) is a red herring. Immigration policy does not fundamentally affect the broader economic challenges (jobs, wage inequality, automation).
  • Quote [18:29]:

    “My response as an economist to the discussion of immigration... is to see a system whose job it is to distract the mass of people suffering from it from the system itself. Nobody's questioning the system. We're fighting over immigrants.” – Richard D. Wolff

4. Trump’s Tax Cuts: Who Benefits? (20:40 – 25:52)

• Tax Policy Center research:
  • For incomes under $25,000: $60 annual tax cut.
  • Incomes between $49,000-$86,000: $930 annual tax cut.
  • Top earners (over $3.4 million): $193,380 annual tax cut.
• Wolff’s Analysis:
  • Most Americans see minimal benefit; the rich benefit disproportionately, with public services likely to suffer due to lower tax revenue.
• Historical Precedent:
  • Kansas (under Sam Brownback) implemented similar tax cuts with negative results—budget crises, no economic boom, and eventual reversal of the policies.

5. Business Model of Universities and the Michigan State Abuse Scandal (25:52 – 29:55)

• USA Gymnastics/Michigan State abuse case:
  • Wolff uses the Nassar scandal to highlight how university behavior, modeled after business interests (protecting income, brand, and reputation over transparency), leads to disastrous outcomes.
  • Quote [28:47]:

    “Being businesslike has always been a very mixed bag. And one of the prices you pay when you mix business with education is you get business type results: hiding, dissimulating, making money even at the expense of the most basic kinds of human care for one another.” – Richard D. Wolff

Main Topic: Understanding Karl Marx on his 200th Birthday (31:06 – End)

1. Why Americans Don’t Learn Marx (31:06 – 35:37)

• Post-WWII, Marxist ideas were sidelined in US culture, schools, and media due to Cold War hostilities with the Soviet Union, despite Marx's global and historical significance.
• Wolff argues this was a political mistake, noting:
  • Marx’s influence on major world powers (e.g., Russia, China).
  • The importance of understanding one’s adversaries, even if disagreeing with them.
  • Quote [34:29]:

    “To do otherwise isn’t a sign of political sophistication. It’s a sign of abject fear mingled with ignorance.” – Richard D. Wolff

2. Marx’s Life and Questions (35:37 – 41:14)

• Born in 1818, middle-class, highly educated (PhD in Greek philosophy), Marx was swept up in the 1848 European revolutions.
• His radicalism led to exile from Germany, France, Belgium, and finally settling in London as a political refugee, where he wrote his major works.

3. Marx’s Central Inquiry: Why Didn’t Revolutions Deliver Liberty, Equality, Fraternity? (41:14 – 45:07)

• Inspired by the failed realization of the French (1789) and American (1776) revolutions’ lofty ideals.
• Core Question: Why, despite revolutionary intentions, do societies still fall short of liberty, equality, and fraternity?

4. Marx’s Key Achievement: The Critique of Production Relations (45:07 – 49:52)

• Marx posited that previous revolutions failed to transform the “mode of production,” i.e., how goods/services are produced and distributed.
• Historical transitions:
  • Slavery: Master owns slave; surplus goes to the master.
  • Feudalism: Lord oversees serf; surplus goes to the lord.
  • Capitalism: Employer hires employee; surplus goes to the employer.
• The unequal power dynamic persists.
  • Quote [48:07]:

    "Employee and employer: once again, the employees do all the work, produce all the output. They deliver it to the boss, the employer. He takes a portion of it, gives it back to them—we call that the wage and the salary. The remaining part... belongs to the employer, who uses it to organize a society that serves him first and foremost." – Richard D. Wolff

5. The Revolutionary Task: Democracy in the Workplace (49:52 – 53:34)

• True liberty, equality, fraternity, and democracy require their realization in the organization of production itself.

• Capitalist firms are hierarchical, with decisions made by a small group (owners/board) despite widespread worker participation.

• Marx’s vision: Workplaces must be run collectively as worker cooperatives; only then can broader social democracy be achieved.

  • Quote [52:05]:

    "If you want liberty, equality, fraternity, and democracy, it begins, it has to begin at the workplace. If you don't do it in the workplace... you will fail. That’s what the history of capitalism shows us." – Richard D. Wolff

• Capitalist ideology, like earlier systems, tries to convince people current conditions are the best possible. But Marx insists that, just as slavery and feudalism were overcome, so too can capitalism—and the way forward is worker control over production.

Notable Quotes & Moments (with Timestamps)

• On Oxfam and Global Inequality (04:51):

  “The consequences of capitalism are not only gross inequality, but also the political corruption that prevents that problem from being addressed, even though the majority of people want it to be.” – Richard D. Wolff

• On Immigration as Distraction (18:29):

  “My response as an economist to the discussion of immigration... is to see a system whose job it is to distract the mass of people suffering from it from the system itself. Nobody's questioning the system. We're fighting over immigrants.” – Richard D. Wolff

• On American Attitudes Toward Marx (34:29):

  “To do otherwise isn’t a sign of political sophistication. It’s a sign of abject fear mingled with ignorance.” – Richard D. Wolff

• On Class Structures (48:07):

  “Employee and employer: once again, the employees do all the work, produce all the output. They deliver it to the boss, the employer. He takes a portion of it, gives it back to them—we call that the wage and the salary. The remaining part... belongs to the employer, who uses it to organize a society that serves him first and foremost.” – Richard D. Wolff

• On Democratizing the Workplace (52:05):

  "If you want liberty, equality, fraternity, and democracy, it begins, it has to begin at the workplace. If you don't do it in the workplace... you will fail. That’s what the history of capitalism shows us." – Richard D. Wolff

Structure and Flow

• Begins with timely economic data (Oxfam report) and personalizes inequality with a real billionaire.
• Moves into contemporary US political debates (immigration, taxes) to highlight systemic misdirection.
• Uses the Michigan State scandal to critique the behaviors of institutions when run like businesses.
• Dedicates the second half to an accessible and passionate presentation of Marx’s life mission, theoretical innovation, and the case for worker self-management.
• Maintains a conversational tone, always returning to the lived realities behind economic systems and the historical arc of struggle for a better society.

Takeaway

Wolff encourages listeners to look beyond surface issues and policy distractions to the root of persistent inequality and undemocratic structures: the way society organizes production. He frames Marx not as a dogmatic, outdated figure, but as a thinker whose central questions—why revolutions failed to achieve their ideals, and how production systems perpetuate inequality—are more urgent than ever. For Wolff, the lesson of Marx is that democracy must extend to the workplace to fulfill the promise of liberty, equality, and fraternity.

For Further Engagement:
Wolff promises future, deeper dives into Marx’s ideas and their applicability today, inviting all to reconsider the taboo and seek out missed lessons for constructing a better, more just society.