Economic Update with Richard D. Wolff
Episode: Learning from Economic Defeats
Date: July 14, 2015
Host: Richard D. Wolff (Democracy at Work)
Overview
In this episode, Richard D. Wolff explores the enduring lessons—both positive and negative—of major economic struggles, focusing on the New Deal era and the labor movement. He examines what made past progressive policies successful, why their victories were later reversed, and how the labor movement might secure real, lasting gains in the face of capitalism’s instability and corporate power. Wolff urges listeners to reflect on these historical lessons and consider bold new strategies for economic and social transformation.
Key Topics & Insights
1. Lessons of the New Deal (00:55–26:10)
Historical Context & Achievements
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The New Deal arose from a mass collective response to the Great Depression, a time marked by 25% unemployment and widespread economic hardship.
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Workers organized into unions at historic rates and thousands joined socialist and communist parties, forming a powerful coalition that pushed President Franklin D. Roosevelt for comprehensive change.
“In the 1930s, Americans joined labor unions in huge numbers. It was the greatest unionizing drive in American labor history. ... They joined by the tens of thousands across the United States.”
—Richard D. Wolff, 05:22 -
Roosevelt, recognizing the threat of mass unrest or even revolution, negotiated a deal between this coalition and the elite, resulting in:
- Social Security
- Unemployment compensation
- Federal minimum wage
- Public employment programs (creating 15 million jobs, national parks, infrastructure)
Why the New Deal Isn't Being Repeated
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Despite the positive impact, these gains weren't made permanent.
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The wealthy agreed only as a short-term solution to avert revolution, retaining control of businesses and profits.
“They did it because they felt they had no better option and no real choice. But they also were sharp. And they knew that as long as what Roosevelt gave the mass of people was something they would be in a position to take back as soon as the political winds shifted, that they could live with it for a while and then undo the New Deal.”
—Richard D. Wolff, 17:51
Undoing the New Deal
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Corporate and political elites systematically weakened the coalition (unions, socialists, communists) that powered the New Deal.
- Demonization and destruction of the Communist and Socialist parties.
- Systematic undermining and decline of union power.
- Massive corporate-backed anti-tax and anti-worker campaigns.
Positive and Negative Lessons
Positive:
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Mass, organized movements can win substantial improvements for workers and society.
“The lesson we have to learn is that the masses of people, if they organize themselves … they can achieve absolutely stunning results. The reason we know it is the New Deal proves it.”
—Richard D. Wolff, 21:36
Negative:
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Without changing the underlying economic power structure (ownership/control of production), even huge gains can be reversed.
“The New Deal did not put into place the mechanisms to secure what they won. ... By failing to do that, they created the opportunity for everything they had won to be undone, to be withdrawn from them, to be taken back by the employers in the United States.”
—Richard D. Wolff, 23:31 -
True security means changing not just policy but who owns and runs enterprises.
2. Labor’s Strategy for Real Security (27:24–54:05)
Limits of Current Trade Union Tactics
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Unions historically focus on short-term goals: better wages, benefits, working conditions, enforced through collective bargaining.
“Unions spend a great deal of their time either bargaining collectively or once they have worked out a contract... to make sure that the employer does not intentionally or otherwise violate the agreement.”
—Richard D. Wolff, 29:16 -
Capitalism’s instability (recessions, downturns) consistently undermines these gains.
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Employers use economic slumps to demand concessions, threaten closures or outsourcing, weakening unions.
Why Defensive Tactics Fail
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Employers commonly threaten to relocate to lower-wage countries unless workers accept worse conditions.
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Laws or political lobbying have proven inadequate because corporations outgun unions in influence and resources.
"The unions have tried all that, but their record of success there is poor. The companies understand this strategy and they have way more resources to devote to—I'll be polite now—persuading politicians not to do what the unions want."
—Richard D. Wolff, 42:47 -
The "fallback" for employers is always: leave the location entirely.
A Bolder Alternative: Worker Takeover & Cooperative Enterprise
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Instead of conceding, unions and workers could counter employer threats by taking over and running workplaces themselves.
"When you leave, when you close this place, we are going to reopen it. ... We're going to come right back to this place and we're going to run this business. We're going to run it better than you because we know how it works. Because we're the ones who make it work. ... We're going to set up, in short, a workers enterprise. We're going to own it, we're going to work it. And we're going to make the decisions in a cooperative, democratic way."
—Richard D. Wolff, 46:24 -
The proposed strategy includes:
- Launching worker-owned cooperatives to take over abandoned businesses.
- Mobilizing community and political support and pressuring politicians to back workers over absentee owners.
- Drawing on union solidarity and public opinion to support the cooperative alternative.
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This approach could restore unions’ role as broader community leaders and champions, not just agents negotiating for their members.
"Here's my thought. Many companies never dreamed they would face this set of problems by threatening their workers. They're not going to do it the way they used to. They're going to slow down. And for those that do do it, here's a chance for the union movement to recapture what it once had: its position as the leader of the progressive part of our culture."
—Richard D. Wolff, 48:48
Lasting Change Requires Systemic Change
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Only by transforming who owns and controls the means of production can workers protect their achievements across generations.
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Otherwise, future victories will be just as vulnerable as those of the past.
"You have to change the system or else those programs will be taken back even if you're strong enough to win them."
—Richard D. Wolff, 25:04
Notable Quotes & Memorable Moments
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On historical mass organizing:
“This was not a bluff. These were tens of millions and they were well organized.” (10:13) -
On why we don’t have a new New Deal:
“We're not doing anything like it. ... Because the businessmen and the corporations and the rich ... don't want to pay for it. And that's the reason, it's not complicated.” (15:55) -
On the dangers of leaving capital in elite hands:
“The irony is it's the mass of people who produce the profits that flow into the hands of a few. That's what capitalism is—who could then use it to undo the New Deal.” (24:49) -
On the future of labor organizing:
“This is a strategy that can work better than the failed strategies... It's also a moment of worker heroism and that can do extraordinary things for the spirit, for the solidarity and for the future...” (52:17)
Timestamps for Major Segments
- 00:55–13:00: The crisis of the Great Depression and the rise of the New Deal coalition
- 13:01–22:00: Achievements and positive lessons of the New Deal
- 22:01–26:10: How and why the New Deal was undone—negative lessons
- 27:24–37:38: The short-term vs. long-term goals of unions; why collective bargaining is always under threat
- 37:39–44:44: The persistent threat of relocation and global competition
- 44:45–54:05: Worker takeover/cooperatives as transformative strategy
Conclusion
Richard D. Wolff’s message is clear: while history proves that collective, organized action can deliver transformative economic reforms, failure to address the underlying structure of ownership leaves the door open for elites to reverse those gains. The labor movement must consider more assertive strategies—not just for immediate bargaining, but for fundamentally reshaping who holds power in the economy. Only this, he argues, can ensure real, lasting security and progress for American workers.
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