Economic Update with Richard D. Wolff

Episode: Local Groups, Social Change

Date: June 12, 2016

Episode Overview

This episode of Economic Update centers on the challenges facing the U.S. economy in 2016, the enduring failures of piecemeal reforms, the tangible benefits of worker cooperatives, and—most notably—the crucial role of local grassroots groups in driving social and economic change. Host Richard D. Wolff analyzes current economic setbacks, critiques the limits of reform from above, and, in the second half, interviews Betsy Avila, Digital Organizing Director for Democracy at Work, about building local action groups for greater economic democracy.

Key Discussion Points & Insights

1. Why the Economy Is "Sputtering" (00:00–06:50)

• Misleading Unemployment Stats:
  Wolff points out that the apparent drop in unemployment is misleading, as many have simply stopped looking for work and are no longer counted.

  • Key quote: “The fall in the unemployment rate is a mirage… what it reflects is large numbers of people that have given up.” (01:02)

• Wage Decline:
  New jobs pay less than old jobs, so even those rehired can’t maintain prior standards of living.

  • Key quote: “Even when people get back to work… they’re not able to buy the way they did before.” (01:48)

• Retail Slump and Corporate Inaction:
  Low consumer purchasing affects store sales, leading to limited incentives for companies to invest or hire more workers.

  • Key insight: The logic of profit-driven investment means companies have “no incentive” to expand when sales stagnate.

2. The Illusion of "American" Products (Budweiser Case Study) (06:50–10:10)

• Budweiser's "America" Rebranding:
  Budweiser, now owned by Belgian company InBev, rebrands itself as “America” for elections to shore up nationalist sentiment, including patriotic slogans and lyrics on cans.
  • Wolff’s commentary: “Just remember, this 100% American beer isn’t American… when it says so, that doesn’t change anything.” (09:30)

3. Poverty, Social Mobility, and the Limits of Reform (10:10–16:25)

• Book: "Coming of Age in the Other America":
  A ten-year study on youth from Baltimore’s public housing focuses on why most cannot escape poverty.

  • Key finding: Escaping poverty is rare; systemic barriers persist, and even those who leave often fall back.
  • Key quote: “If you have a poverty condition in a housing neighborhood, the damage you do… is to their children pretty much for the rest of their lives.” (13:10)

• A History of Repetitive Reform:
  Wolff notes how the 1960 book The Other America revealed the same conditions. Decades later, the proposed solutions remain incremental and insufficient.

  • Key quote: “Stop changing the edges of the problem and go to the root and the core… There shouldn’t be a distribution of wealth as unequal as we have it.” (15:23)

4. Worker Cooperatives vs. Capitalist Business: Real-World Data (16:25–23:15)

• Research Report by Virginie Perotin:
  Professor Perotin’s comparative study of worker cooperatives versus conventional firms upends many common misconceptions.

  Major Takeaways:

  • Co-ops are bigger and more capital-intensive:
    “Worker co ops are on average larger than conventional capitalist businesses and use just as much technology, if not more.” (16:50)
  • Equal or better survival and stability:
    “Worker cooperatives survive at least as long as other businesses and have more stable employment.” (17:05)
  • Superior productivity and efficiency:
    “Worker cooperatives are more productive than conventional businesses… the most comprehensive study… proves exactly the opposite [of negative myths].” (17:37)
  • Profits reinvested for improvement:
    Worker co-ops retain more profits for enterprise growth, unlike capitalist firms that funnel gains to shareholders/executives.
  • Less inequality:
    Pay gaps between executives and workers are much narrower in co-ops, directly combating economic inequality.

• Wolff's analysis:
  “Capitalism produces inequality—worker co-ops are a direct alternative, pushing in the opposite direction.” (19:34)

5. The Profit Motive: Pros, Cons, and Social Consequences (23:15–29:12)

• Evaluating the Profit Motive:
  Wolff acknowledges some positive effects (incentivizing efficiency, responding to consumer demand) but emphasizes the negatives far outweigh the positives.

  • Key quote: “If you’re going to make an assessment of the profit motive… you have to balance that… by looking at the ways in which the profit motive pushes us in a negative direction.” (24:00)

• Examples of Harm:

  • Job Offshoring:
    “The reasons companies close their factories… is because it’s profitable to do that. The profit motive made them go.” (25:44)
  • Dangerous Products:
    Cigarettes, defective airbags, and deadly drugs like OxyContin continue to harm because profits come first.
  • Gentrification:
    “We have gentrification… because it’s profitable for building companies… that only the rich can afford.” (27:52)

• Blame-shifting in politics:
  Politicians decry negative outcomes but rarely critique the profit motive itself.

Segment Break: Call to Listeners

(28:50–30:03: music/interlude skipped)

6. Organizing for Social Change: Interview with Betsy Avila (30:03–56:49)

About Betsy Avila (30:17)

• Digital Organizing Director for Democracy at Work, project manager of Democracy at Work local action groups, former field and digital organizer for Bernie 2016, Latinos for Bernie, and Democratic Socialists of America.

Origin Story: Why Organize? (32:46–34:00)

• Betsy started as a fan and volunteer, feeling the “urge” to go beyond listening and become involved.
  • Key quote (Avila): “I wanted to get involved… because I agree with everything you say, I wanted to take action.” (33:19)

Rising Receptivity & Movement Energy (34:00–35:52)

• Shifting political culture:
  From Occupy Wall Street through the Bernie Sanders campaign, it’s become “okay to call yourself a socialist now.”
  • “People are incredibly ready to start moving forward and changing the system… it’s been boiling up for a while.” (34:38)

Mobilizing Local Action Groups (35:53–37:07)

• Strategy:
  Connect supporters in areas to support worker co-ops, spread economic democracy, and form coalitions for ground-up economic change.

  • Avila: “We want to try to connect supporters in the area with other people… generally supportive of worker co ops as a foundation for a new system… focus on trying to change the economy from the ground up.” (36:25)

Tackling American Reluctance Toward Organizing (37:07–42:40)

• Cultural hesitation:
  Americans are often leery of joining organizations—especially political or left-leaning ones.

  • Avila: “It doesn’t have to be a big thing… it really does start at home. You could be a student, or you could be a mother, father, daughter… do small things that really help the movement as a whole.” (38:25)

• Barriers of time/exhaustion:
  Overwork, studies, and family obligations keep people “busy” and too tired for activism.

  • Wolff: “One of the ways a system… keeps itself in power is by making everybody so busy that they haven’t the time.” (41:21)

Grassroots Frustration Is Fueling the Shift (42:41–45:03)

• People are getting increasingly frustrated with systemic problems and want meaningful engagement, not just analysis.
  • Wolff: “They wanted to do something. More and more, they would come up at the end of the talk and say to me, what do I do? Where do I sign up?” (40:35)

First Seeds: Group Formation and Early Successes (45:03–47:07)

• Early efforts to build Democracy at Work groups have gotten strong response in several cities: New York, Los Angeles, Puerto Rico, Detroit, Philadelphia, and Baltimore.

  • Avila: “We sent out the announcement via email… had incredible response from people all over the country. Here in New York… Los Angeles, Puerto Rico… Detroit, Philadelphia, Baltimore.” (45:20)

The Power of Small Beginnings (47:07–48:37)

• Quoting Margaret Mead’s wisdom:
  “Every single movement that ever changed the world started with a very small number of people getting together… don’t be shy, don’t be self-critical.” (47:40)

Action Steps for Local Groups (50:14–52:45)

Concrete Actions:

• Education:
  • Host teach-ins, film screenings, or reading groups on alternative economic systems.
  • Advocate for Economic Update on local stations.
• Supporting Co-ops:
  • Help existing co-ops, research co-op startups or conversions, support favorable legislation.
• Curriculum Change:
  • Petition for Marxist or co-op-focused courses in schools/colleges.

Resources:

• Full action ideas and starter materials available at democracyatwork.info/groups.

  • Avila: “If you go to democracyatwork.info/groups… a list of materials and resources for you.” (52:23)

Contact & Next Steps (52:45–53:47)

• To get started or find others in your area: visit the site above, or email Betsy directly at betsy@democracyatwork.info.

The Meaning of Organizing—Personal Reflection (54:51–56:14)

• Avila on why this work matters:
  “It has become increasingly clear to me that if we ever want to see change, it has to come from the ground up. They [politicians] react to what we do.” (55:30)

Notable Quotes & Memorable Moments

• “Stop changing the edges of the problem and go to the root and the core.” — Wolff (15:23)
• “Worker cooperatives are more productive than conventional businesses… the most comprehensive study… proves exactly the opposite [of negative myths].” — Wolff (17:37)
• “People are incredibly ready to start moving forward and changing the system… it’s been boiling up for a while.” — Avila (34:38)
• “Margaret Mead… every single movement that ever changed the world started with a very small number of people getting together.” — Wolff, recalling Mead (47:40)
• “It has to come from the ground up. They react to what we do.” — Avila (55:30)

Timestamps for Important Segments

• 00:00–06:50 — The state of the economy & unemployment analysis
• 06:50–10:10 — Budweiser’s “America” rebranding case
• 10:10–16:25 — Persistent poverty, limited reforms, and echoes from history
• 16:25–23:15 — Evidence on worker cooperatives vs. capitalist firms
• 23:15–29:12 — The profit motive’s positive and negative social impacts
• 30:03–34:00 — Betsy Avila joins: why organize?
• 34:00–35:52 — Political culture's shifting openness
• 35:53–37:07 — Mobilizing local Democracy at Work groups
• 37:07–42:40 — Cultural reluctance and the practicalities of organizing
• 50:14–52:45 — Specific actions and local group resources

Episode Takeaway

This episode clearly articulates that meaningful economic change must come from the grassroots, not just policy tweaks at the top. Worker co-ops are a viable, evidence-backed alternative to profit-driven corporations; local organizing, now more feasible than ever, is the driving force that can make such alternatives real. The Democracy at Work project is building tools and providing leadership so anyone can get connected and start making change at home.