Economic Update with Richard D. Wolff: "Prisons and Sugar Babies" (April 18, 2016)

Overview

This episode of Economic Update, hosted by Prof. Richard D. Wolff, delves into the interconnected crises of global capitalism, rising inequality, and their real-world consequences—from the scandal of hidden wealth (Panama Papers) to mass incarceration, student debt, and the startling rise of "sugar baby" relationships. Wolff frames these issues within the failures of contemporary economic systems, drawing connections to the structure of capitalist economies and highlighting grassroots movements fighting back. He finishes by exploring worker cooperatives as a systemic alternative not just for capitalist societies but also for so-called socialist states.

Key Discussion Points & Insights

1. Global Economic Slowdown and Illusions of Escape (01:00–06:35)

• The IMF has downgraded global and U.S. growth projections for a second time in less than a year.
• "The world economy is slowing down, and everybody is affected by it." (Richard Wolff, 01:22)
• Wolff stresses the interconnectedness of global economies and the myth that the U.S. can avoid the repercussions experienced by other regions post-2008 crash.
• Uneven development is intrinsic to capitalism; while some U.S. regions fare better, others suffer, especially in the wake of sector-specific crises like fracking.

2. Inequality as Life and Death (06:35–07:39)

• A new AMA study confirms that wealthier Americans live significantly longer than poorer ones.
• "Inequality is a matter of life and death as well as all of its other horrible consequences." (Richard Wolff, 06:39)
• The report sharply underlines how deeply economic class shapes basic outcomes like longevity.

3. The Panama Papers and Institutional Secrecy (07:42–14:15)

• Recap of the Panama Papers: global elites using shell companies to hide assets and avoid taxes.
• Many countries—including U.S. states like Delaware and Nevada—offer similar "services."
• “The amount of taxes not paid around the world is to be estimated in the trillions of dollars.” (Richard Wolff, 10:55)
• Wolff argues that the structure of global capitalism incentivizes secrecy and tax avoidance, making effective crackdowns nearly impossible.

4. Tax Corporate Loopholes at Home—The Colorado Case (14:15–19:03)

• The Colorado Senate blocked a referendum that would have eliminated a tax loophole for corporations holding foreign revenue.
• Only D.C. and five small states have similar tax laws, reflecting the power of big business over policy in most states.
• "Getting out of paying taxes is the name of the game. And corporations are doing it all the time in a wonderful array of ways." (Richard Wolff, 19:03)

5. Popular Resistance and Worker Victories (19:03–24:42)

• Examples of collective action: French workers protest labor reforms; California State University faculty narrowly win contract negotiations; University of Puerto Rico students strike austerity.
• "Concerted effort by people getting into the streets can do." (Richard Wolff, 23:57)
• Wolff emphasizes the power—and necessity—of popular resistance for change.

6. Betraying Public Trust: School Funding Redirected (24:42–27:51)

• In New York, casino money once destined for schools is being redirected to casino operators.
• "This budget, this governor, this legislature is not going to tax corporations and the rich to fund our public schools. Not only that, it's going to take money set aside for the public schools to help out the profits of a casino operator." (Richard Wolff, 26:02)
• Reflects broader trends of broken political promises and corporate capture.

Major Themes (Second Half): Incarceration, Sugar Babies, and Systemic Reform

7. Economic Roots of Mass Incarceration (34:45–46:51)

• Wolff examines the economic context behind the explosion of the U.S. prison population after the 1970s.
• "What we began to do, starting already in the 70s... was a completely different strategy. Incarceration, putting people into jail." (Richard Wolff, 38:30)
• Declining real wages and fewer jobs led to desperation at the bottom; society responded not with economic reform but by jailing the most vulnerable.
• Mass incarceration disproportionately affected African American and Hispanic populations.

8. Prisons, Policing, and Social Dysfunction

• The expansion of the prison system and police force addressed symptoms, not causes.
• “Whatever the problems of the individual you put into a prison, given what's going on there, it’s likely that he … will come out more disturbed, more upset, more angry than he was when he went in.” (Richard Wolff, 42:49)
• Jokes about prison sexual violence reflect deep societal dysfunction.

9. Sugar Babies: An Economic Phenomenon (46:51–47:48)

• Economic pressures force college students, mostly women, into transactional relationships (“sugar babies”) to cover tuition and living expenses.
• "Is that awful? Sure it is. Does it come out of the desire of these two people? Hardly. This is explained by the impossible economic burden put by this society on college students." (Richard Wolff, 47:25)
• Student debt as a new social crisis linked to failing economic structures.

10. Worker Cooperatives—The Alternative Model (47:48–57:43)

• Wolff advocates for worker self-management (cooperatives) as a structural change—workers democratically control workplaces, sharing decisions and profits.
• Extends idea to socialist states, imagining an alternative history where Soviet and Chinese revolutions had empowered workers at the enterprise level, not just nationalized property.
• “Then the state would have confronted a working class that owned and operated all the wealth of society…” (Richard Wolff, 54:48)
• Cuba is cited as the current positive example of this transition (moving from state enterprises to worker co-ops).

Notable Quotes & Memorable Moments

• “We have to live with the chaotic, uneven development of a capitalist economic system, both inside the United States and globally, but with more and more interconnections.” (Richard Wolff, 02:40)
• “Inequality is a matter of life and death as well as all of its other horrible consequences.” (Richard Wolff, 06:39)
• “The amount of taxes not paid around the world is to be estimated in the trillions of dollars.” (Richard Wolff, 10:55)
• “Getting out of paying taxes is the name of the game. And corporations are doing it all the time in a wonderful array of ways.” (Richard Wolff, 19:03)
• “Concerted effort by people getting into the streets can do.” (Richard Wolff, 23:57)
• “Is this a sign of a system that's working well? Is this the sign of an economic system whose efficiency we should celebrate? The question answers itself.” (Richard Wolff, 47:48)
• “Think about it. Because the new direction toward worker co ops is a response not only to the private capitalisms of Western Europe... but likewise to the state capitalisms, the state socialisms traditional in Russia, China and so much else of that part of the world.” (Richard Wolff, 56:30)

Timestamps for Key Segments

• Global Slowdown & IMF Warnings: 01:00–06:35
• Wealth & Lifespan Inequality: 06:35–07:39
• Panama Papers, Secrecy, and Tax Avoidance: 07:42–14:15
• Colorado Tax Loophole Fight: 14:12–19:03
• Protests and Worker Victories in France, California, Puerto Rico: 19:03–24:42
• School Funds Raided for Casino Profits: 24:57–27:51
• Economics of Incarceration: 34:45–46:51
• Prison Dysfunction & Policing: 42:48–46:51
• Sugar Babies & Student Debt: 46:51–47:48
• Worker Coops—Capitalist and Socialist Contexts: 47:48–57:43

Conclusion

Wolff ties the episode together by reaffirming the need for systemic change in the face of economic stagnation, social crisis, and political dysfunction. He champions collective action and the cooperative model as the overdue answer to both capitalism’s failures and the shortcomings of past socialist experiments.

For further information, connection, and activism, Wolff encourages engagement at rdwolff.com and democracyatwork.info.