Economic Update with Richard D. Wolff

Episode: Meanings of Class

Date: October 28, 2015

Overview

In this episode, Richard D. Wolff explores the multifaceted concept of "class" within society, tracing its historical and theoretical interpretations. He connects these lessons to current economic and political issues in the U.S. and abroad, highlighting systemic inequalities rooted in capitalism. The episode also delves into recent news items—including insurance burdens on the poor, municipal finance in Ferguson, the VW emissions scandal, and California’s drought—before Wolf offers a thorough theoretical discussion on the meanings of class and examines policy ideas like a guaranteed job versus a guaranteed income.

Key Discussion Points & Insights

1. Proposals for Transitioning to Cooperative Economies (03:12–07:05)

• Wolff shares a historical example from Sweden in the 1980s, where the Social Democratic Party proposed a payroll tax scheme to gradually buy out capitalist enterprises and convert them into worker cooperatives.
  • Funds would come from taxes on both business and wages.
  • Enterprises would be purchased at market value and transformed into democratic co-ops, with oversight from workers and local governments.
  • The business community fiercely opposed the plan, which was adopted by the party but never implemented due to strong resistance.
• Quote:

  “Here was a simple, straightforward way… A socially desirable transition to a collective, cooperative, democratically organized economy.” — Richard D. Wolff (05:11)

2. Car Insurance Burden on the Poor (07:10–10:42)

• Wolff highlights a Consumer Reports piece revealing how low-income Americans, unable to afford mandatory car insurance, sometimes let policies lapse.
  • Insurers in states like Michigan use these lapses to justify drastic rate hikes (up to $834 more).
  • He criticizes this as exploitative, noting it punishes those who can least afford it while providing no risk-based justification.
• Quote:

  “Adding to poor people’s difficulty by a grotesque penalty… is an outrage, and it ought to stop.” — Richard D. Wolff (10:34)

3. Fiscal Crisis in Ferguson, Missouri (10:45–13:40)

• Following scrutiny after the Michael Brown case, Ferguson is no longer able to fund itself through excessive ticketing and fines.
  • Moody’s downgraded Ferguson’s municipal bonds due to its shrinking revenue base, as the city can’t rely on fines.
  • Wolff explains this is an example of regressive and unjust municipal finance strategies backfiring.
• Quote:

  “They’re beginning to have to pay the price of something they shouldn’t have been doing all along.” — Richard D. Wolff (13:37)

4. Corporate Scandals and Profit Motive—VW Emissions Case (13:45–19:24)

• Responding to listener questions from the previous episode about Volkswagen’s “defeat device” scandal:
  • Wolff points out this profit-driven malfeasance is not unique to VW; similar scandals involved Ford, Volvo, GM, and Toyota.
  • He questions why dysfunctional behavior in private enterprise rarely results in calls for systemic change, as it does with public enterprises.
• Quote:

  “Profit is the problem… They subordinated our safety to their profits. That’s what they did. And that’s what capitalist competition leads companies to do.” — Richard D. Wolff (16:40)

5. California Drought, Climate Change, and Public Democratic Planning (19:30–25:45)

• Wolff frames the California drought as both a result of climate change and failed economic planning.
  • Critiques the power of private profit-driven enterprises in blocking public planning and ignoring scarce resources.
  • Argues for publicly directed economic planning responsive to social and environmental needs, rather than profit.
• Quote:

  “We subordinate all that to the private profit seeking of individual capitalists. This is neither necessary, nor advisable, nor in the people’s best interest.” — Richard D. Wolff (25:12)

6. THE FEATURE: Meanings of "Class" (Second Half, 30:30–50:30)

A. Definitions and History of Class (30:30–36:55)

• “Class” is simply a way of classifying a population; in economics, the traditional usage is to divide people based on wealth (rich/poor/middle).
• Alternative approach: classifying by power—those who give orders, those who take orders, and those who do both.
• The goals of equality (of wealth) and democracy (of power) are not always synonymous or equally achieved.

B. Progress and Limits of Equality and Democracy (36:55–40:55)

• Society has made progress (abolition of slavery, end of monarchies), but remains far from real equality or democracy.
• French and American revolutions strove for “liberty, equality, and brotherhood,” but didn’t resolve the persistent class stratification.

C. Marx’s Theory of Class and Surplus (40:55–48:15)

• Marx’s core insight:
  • In all societies, workers produce more than they consume (a "surplus").
  • The key question: Who gets the surplus, and who decides its use?
• In slave societies: masters take the surplus.
• In capitalism: owners/directors take the surplus as profit, and decide its use, maintaining concentration of wealth and power.
• This process replicates inequality and prevents real democracy.
• Quote:

  “If you allow the surplus produced by the many to flow into the hands of the few, you will not get liberty, equality, fraternity or democracy.” — Richard D. Wolff (47:20)

• Quote:

  “Worker co-ops, collective worker democratic enterprises… are the only way to go if what you want is to overcome the failure so far to get equality and democracy.” — Richard D. Wolff (48:02)

D. Implications for Genuine Democracy & Equality (48:15–50:30)

• For egalitarian and democratic society, those who produce the surplus must collectively control it.
• Existing capitalist models fundamentally block this, hence repeated failures to fulfill revolutionary promises of equality and liberty.

7. Guaranteed Income vs. Guaranteed Job (50:32–End)

• Discusses policy debates around universal basic income (UBI) versus guaranteed employment:
  • Wolff prefers a guaranteed job system, arguing that UBI could foster social tensions and fail to utilize societal talent.
  • With guaranteed jobs, society could more easily adopt necessary changes (like public transportation) without fear of unemployment.
• Quote:

  “If our society guaranteed everybody a job, we wouldn’t hold back progress…” — Richard D. Wolff (52:00)

Notable Quotes & Memorable Moments

• On capital and co-ops:

  “The business community of Sweden opposed it, yelled every name in the book, hoping that it would not have to pay for all of this.” (05:27)

• On power dynamics:

  "To have wealth doesn’t mean you have power, and to have power doesn’t mean you have wealth." (35:50)

• On systemic change:

  "You’re not going to get equality if you leave in place a system in which the mass of people produce a surplus for a minority." (46:40)

Timestamps for Key Segments

• Swedish Coop Transition Proposal: 03:12–07:05
• Car Insurance and the Poor: 07:10–10:42
• Ferguson Fiscal/Justice Crisis: 10:45–13:40
• VW and Corporate Misconduct: 13:45–19:24
• California Drought & Economic Planning: 19:30–25:45
• Meanings of Class (main theory segment): 30:30–50:30
• Guaranteed Income vs. Guaranteed Job: 50:32–end

Tone and Language

Throughout, Wolff uses clear, accessible language peppered with pointed critiques and an engaging, explanatory tone. He draws on historical references, personal anecdotes, and direct listener questions to connect abstract theory with everyday relevance—always emphasizing the democratic values and social aspirations embedded in economic struggles.

Summary Prepared for Listeners New to the Episode
This episode serves as a primer on understanding the multiple meanings of “class” in society and the structural reasons why equality and democracy remain elusive goals under capitalism. Wolff uses case studies and theoretical analysis to challenge listeners to imagine and strive for fundamentally different economic arrangements—grounded in collective worker control and public planning—as real alternatives to the profit-centered status quo.