Economic Update with Richard D. Wolff
Episode: Lessons About and From Socialism
Date: February 7, 2016
Guest: Pete Dolack, Activist & Author
Episode Overview
In this episode, Richard D. Wolff examines the extraordinary shift in American attitudes toward socialism, highlighted by the Iowa Democratic caucus. Wolff discusses the emergence of critical conversations about capitalism, the historical background shaping these debates, and why socialism is resurgent. In the second half, activist and writer Pete Dolack joins to discuss lessons from 20th-century socialist experiments, the meaning of socialism today, and what might be learned for future alternatives to capitalism. Together, they dissect the past, address common misconceptions, and explore what effective democratic socialism could look like.
Key Discussion Points & Insights
1. The Iowa Democratic Caucus: A Turning Point
(00:55 – 11:50)
- Breaking Taboos: For decades, critiquing capitalism or expressing interest in socialism was taboo in the US. The Iowa caucus, where Bernie Sanders—a self-declared socialist—received about half the Democratic votes, signals a significant cultural shift.
- “A clear half of the people who went to the polls on the Democratic side in Iowa voted for a person who calls himself a socialist, Mr. Sanders. … This is an enormous change.” (05:30)
- Generational Shift: Exit polls showed 84% of Democratic voters aged 18–29 supported Sanders, indicating younger generations are not deterred by socialist labels.
- “84% of young people were not intimidated by the socialist label. … That is a sea change in the consciousness of the American people.” (08:15)
- Economics as the Driver: The main factor for young people’s shift is dissatisfaction with current economic conditions, not necessarily a pure attraction to “socialism.”
2. Historical Lessons: Crisis and Reform in Capitalism
(11:51 – 21:12)
- Keynes and Roosevelt: Wolff reads from a 1933 letter by John Maynard Keynes to President Roosevelt, highlighting the need for “reasoned experiment within the framework of the existing social system”—urging reform, not revolution.
- Polarization in Crisis: When capitalism falters, political polarization increases—between orthodoxy and revolution.
- “When capitalism begins to break down, you have the polarization into those on the far right and … the far left. And that is scary because when the middle collapses, … the stability of the system itself is called into question.” (13:40)
- Elite Fear of Change: Historical examples from Roosevelt’s presidency and Joseph Kennedy illustrate how fear among the wealthy of mass unrest pushed them to accept New Deal reforms for social stability.
3. The Oil Market Collapse: A Case Study in Capitalist Chaos
(21:13 – 27:56)
- Overproduction and Bust: Fracking led to a surge in US oil production just as global demand slowed (notably in China), crashing prices and resulting in mass layoffs and bankruptcies.
- Failure of the Free Market: Wolff criticizes capitalist decision-making in the oil sector for ignoring supply-demand basics and proper risk assessment—leading to massive socio-economic fallout.
- “They made one blunder after another. … Did the oil companies … really think they could enormously increase the supply of oil and that wouldn’t have a depressing effect on the price? Did they forget the first lesson of supply and demand?” (26:05)
- Planning vs. Profit Motive: Wolff suggests rational, democratic planning of energy production would avoid such disasters.
4. Money and Politics: Rising Resistance
(27:57 – 29:44)
- Unequal Democracy: The influence of money in politics continues to undermine true democracy.
- “You can't have that if one person with one vote has $100 million to spread the idea around and the other person has 14 cents. … This is the use of unequally distributed wealth to undercut … democracy.” (29:10)
- Reform Movements: California is highlighted as a leader in grassroots efforts to reduce money's role in politics (recommended resource: yesfairelections.org).
[Interview] Lessons from Socialism — With Pete Dolack
5. What Socialism Means Today
(32:32 – 36:09)
- Broadened Understanding: Dolack emphasizes that socialism is not a monolith; the Soviet model is only one variant.
- “What socialism really is about is about people having control over their lives, both political democracy and economic democracy. … Without economic democracy, there’s no such thing as political democracy.” (33:08)
- Economic Democracy: It’s undemocratic for the workplace to have such radical income inequality and lack of worker participation.
- “If you show up, you do the work, why shouldn't you have a decision? … Why should an executive at the top make 400 times more than the average employee?” (34:15)
6. Why Isn’t Socialism “Over”?
(36:09 – 40:41)
- Response to Capitalist Crisis: As long as capitalism creates inequality, alternatives will persist.
- “As long as there’s capitalism, there’ll be socialism, there’ll be some kind of alternative to get beyond capitalism.” (36:22)
- Limits of Keynesian Reform: The unique conditions that allowed postwar prosperity no longer exist; globalization reduces possibilities for incremental reform.
- History Is Not Inevitable: Socialism won’t inevitably replace capitalism—organization and adaptation are essential.
7. Centralized Planning vs. Democratic Socialism: The Soviet Union’s Lessons
(42:00 – 45:39)
- Context Matters: The specific authoritarian culture of Tsarist Russia shaped Soviet socialism.
- Pitfalls of Overcentralization: The Soviet bureaucracy (Gossnab for distribution, Gosplan for planning) lacked genuine information from below, leading to inefficiency.
- “No matter how well intentioned … a central planner might be, you just simply can't have enough information. … You just cannot have that level of overcentralization.” (44:30)
8. The Prague Spring and Democratic Experimentation
(46:07 – 48:33)
- Czechoslovakia’s Missed Opportunity: The Prague Spring was a grassroots movement for workplace democracy—stifled by Soviet invasion.
- “It was going to be grassroots democratic control of the entire Czechoslovak economy. … Tragically, the Soviet Union invaded and cut off this [experiment].” (48:07)
9. Cooperatives: Strengths and Potential Pitfalls
(49:10 – 54:28)
- Variety and Adaptability: Different countries and cultures may experiment with different blends of state, cooperative, and market controls.
- Market Competition vs. Solidarity: If worker cooperatives compete in a market, they risk “becoming their own capitalists,” recreating some of the very problems cooperatives aim to solve.
- “If the cooperatives compete … for market share with each other, what’s going to happen is … you would start to redevelop some of the problems of capitalism.” (50:10)
- Democratic Planning: True opportunity lies in democratic planning and cooperation—vertically and horizontally—between enterprises.
- Mechanisms for Coordination: Transparent, negotiated supply chains and price-setting among cooperatives, rather than competition, may offer a path to socially beneficial production.
10. Learning from Experimentation
(54:29 – 56:54)
- Lessons Matter: Dolack and Wolff agree: To move forward, society must critique and learn from both the failures and successes of past socialist experiments, rather than simply rejecting or romanticizing them.
- “Let’s learn what we can from the last experiments. So we build on what they did well and we avoid on what they didn’t do well because that’s how reasonable people make progress in any part of life.” (55:30)
- Capitalism, Too, Was Experimental: Like socialism, capitalism developed through trial and error; it’s normal for new systems to have successes and failures along the way.
Notable Quotes & Memorable Moments
-
On Taboo Topics:
“If you thought there was something wrong with capitalism, the majority of your fellow citizens would look at you as if you were either ignorant, poorly educated, or downright evil.”
— Richard Wolff (03:35) -
On the New Generation:
“84% of young people were not intimidated by the socialist label. Not turned off? Not at all. What does that mean? That is a sea change in the consciousness of the American people.”
— Richard Wolff (08:15) -
On Mistakes in the Oil Industry:
“Did the oil companies in the Midwest of the United States really think they could enormously increase the supply of oil and that wouldn’t have a depressing effect on the price? Did they forget the first lesson of supply and demand every student learns in school? Looks like it did.”
— Richard Wolff (26:15) -
On Democracy and Inequality:
“If somebody has $100 billion and someone else is scraping enough money and deciding should they eat or get their medicine this way, this is not an even situation, not even close to it.”
— Pete Dolack (33:15) -
On Cooperatives Becoming Capitalist:
“The cooperative producers would become their own capitalists because they would get to a point … ‘oh, wait a minute, we’re losing market share … we’d better cut our own wages’ ...”
— Pete Dolack (50:20) -
On the Need for Rational Analysis:
“We should interrogate [socialist experiments] as intelligent human beings. What can we learn from people who decided it was important to go beyond capitalism?”
— Richard Wolff (55:10)
Timestamps for Important Segments
- 00:55 – 11:50 – The Iowa caucus, generational attitudes, and the shift in American discourse on socialism
- 11:51 – 21:12 – Keynes, Roosevelt, and the history of capitalist crisis/reform
- 21:13 – 27:56 – Oil market collapse, its causes, and flaws in capitalist coordination
- 29:45 – 32:31 – Guest introduction: Pete Dolack
- 32:32 – 40:41 – What is socialism? Why it persists, how capitalism restricts democracy
- 42:00 – 45:39 – Critique of Soviet socialism: overcentralization, lack of information flow
- 46:07 – 48:33 – Democratic socialism in practice: Prague Spring and its suppression
- 49:10 – 54:28 – Cooperatives: strengths, risks, and the challenge of market competition
- 54:29 – End – The importance of learning from history, capitalism's experimental roots
Tone and Style
The conversation is probing, thoughtful, and seeks to demystify both socialism and capitalism. Wolff’s tone is candid, educational, and occasionally passionate, aiming to empower listeners for critical engagement. Dolack’s tone is accessible, reflective, and focused on clarity and pragmatic lessons.
Summary Takeaways
This episode of Economic Update encourages listeners to critically assess both capitalism and socialism, recognizing the complexity and variation of each system. The renewed interest in socialism, propelled by dissatisfaction with capitalism’s failures, especially among young people, opens space for much-needed debate and experimentation. Dolack and Wolff urge listeners to learn constructively from history—both its successes and its failures—so that attempts at democratic socialism in the future are more robust, adaptable, and genuinely democratic.
Recommended resources from this episode:
- Pete Dolack’s book: It's Not Over: Learning from the Socialist Experiment (Zero Books)
- Blog: Systemic Disorder
- Yes Fair Elections: yesfairelections.org
- democracyatwork.info for archives and further content