Economic Update: Prisons and Sugar Babies

Summary

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

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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.

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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.

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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).

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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)

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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

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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.

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

Transcript

[Singer]

Sam. Saint Gonna change.

[Richard Wolff]

One of these days.

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the jobs, the incomes, the debts, the futures of ourselves, our children, of the country we live in. I'm your host, Richard Wolff. Been a professor of economics all my adult life, and I currently teach at the New School University in New York City. A little later in the program, I'll talk to you about some of the ancillary services we provide both through this program and this station and the Democracy at Work project of which this program is a part. Let's jump right in here in the middle of April 2016. This last week we had an announcement from the International Monetary Fund, one of the premier international economic organizations that keeps track of how economies around the world are doing. And their latest report caught everyone's attention because it was the second time in the last six or seven months that the IMF downgraded the rates of growth that are happening around the world in general and in the United States in particular. The second downgrade in a short amount of time. There's no indirect way of making something out of nothing, although I can see that many of the pundits reflecting governments, nervous about this kind of information, trying their best. Here's what it means. The world economy is slowing down, and everybody is affected by it. The hype and hoopla that the United States would somehow escape the depression in Japan, the economic turmoil in Europe, the slowing down in China, the chaotic conditions of the economies of Asia, Africa and Latin America that we used to call the Third World, the notion that the United States would somehow escape unscathed from the conflagration of economic downturns that are afflicting all those other parts of the world and that are all traceable to the crash of 2008 that began and festered first, here is an illusion that we will escape. We aren't escaping. And everything points to economic problems worsening in the next 24 months, if we can even say that after that they'll get better, which, of course we cannot know. But there's more here than perhaps meets the eye. We are part of an interconnected economy. Of course it develops unevenly. We develop unevenly inside the United States. In the same way, parts of this country are now reeling everything from North Dakota all the way to Texas because of the fracking disaster and the collapse of the oil prices and so on. They are doing much worse than, say, the two coasts, and the two coasts are doing better than the American south and so on. Uneven development is the way capitalism works. It's one of the results of not having traditionally understood rational planning, trying to make the different parts catch up with one another, not to get too far out of whack. Etc. Etc. We don't have economic planning because we have an ideological bias against it. But therefore 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. That unevenness isn't so much overcome as it is simply shunted around from one part of the world to the other. The first terrible effects of the great crash of 2008 were felt here in the United States. 2008, 2009, even into 2010. The Europeans seemed to gloat over those two to three years that they were not suffering the kinds of economic downturn of afflicting the United States. They stopped gloating in 2010 and 11 as the malaise of the United States spread, as anyone should have seen, it would to Europe. Today the roles are reversed. Europe is in worse shape than the United States. And the gloating, since folks don't seem to learn much, has then proceeded here as if we would escape what the transmission from Europe, from Asia and elsewhere, from back to the United States in this endless chaotic and irrational oscillation from one part of a capitalist world economic system to another. Another economic update that emerged this last week was a report published by the American Medical association, the premier association of medical professionals in the United States show, showing us, as if we needed it, that the latest statistical results prove that the better off you are, the longer you'll live and that the difference is in fact significant. We're talking about years, quite a few years, depending on which precise statistic you look at. But all the statistics agree if you are better off, you will live longer.

Another way to put that which makes it sharper, but is exactly the same.

Point, is that a society that allows fundamental differences between people in terms of.

Great wealth concentrated in some parts of the population, usually a small minority, at.

The price of enormous economic deprivation for vast swaths of the population at the other end, that is a society that is effectively privileging some people to live a longer life and condemning others not to have access to the resources that would allow them to do it. Inequality is a matter of life and death as well as all of its other horrible consequences.

And the latest report of the American.

Medical association leaves no doubt about it whatsoever. Let me go on. I want to talk about a number.

Of other issues that became very important.

The Fallout continues over the last week, as it did the week before, about what has come to be called the Panama Papers. This exposure of a law firm located in Panama who, whose practice was to provide shell companies, phony companies, phony in the sense that they don't produce a.

Good or a service.

They're just there to hide money in an obscure country that has very convenient rules and laws that allow you to.

Have a company without revealing who the.

Principals, who the owners of the company are. And this is therefore a way to hide your money.

You transfer it from wherever you are to, to the property of this company.

Located in a foreign country whose owners don't have to be identified. And you have effectively hidden your assets, whether it's a company, whether it's a pile of cash, whether it's gold, whatever. And it turns out, as we have.

Been seeing, that all kinds of government.

Leaders, business leaders, bankers and others have been taking generous advantage of this law.

Firm'S offers to, to create these companies in Panama.

I want to remind everyone that Panama is not alone. Many, many other countries, I've seen estimates as high as 80 countries offer one.

Or another of this kind of service.

Here in the United States, States like.

Delaware, Nevada, the Dakotas are also specialists in offering these services, hoping to entice companies and rich people to move their.

Money there, getting a little bit of fee income out of it and providing.

The secrecy that's wanted.

And as always, one of the consequences of this is you make it easier.

For criminals to hide the loot that.

Their criminal activity generates for them. And you make it possible for people who want to hide the, their wealth.

Their companies, their profits from the tax man to take advantage of the same service. And we know that they do.

Well, what is being done about it? The answer is mostly nothing. And the reason is that this is an international problem of capitalism. It is people all over the world generating profits in a capitalist system. Mostly people who either are business executives.

Or are owners of businesses or who.

Depend for their incomes upon the capitalist.

System, as most of us do, one way or another.

And so it's what this system generates in the way of scoff. People engaged in criminal activity, people seeking to hide people who don't want to pay taxes. We know from estimates coming out of Europe and from the research of Oxfam in England, which is a major and very well respected institution for studying these questions, that the amount of taxes not paid around the world is to be estimated in the trillions of dollars.

And this is wealthy people and big corporations.

And the reason we know that is.

That the very expenses charged by law.

Firms such as the one exposed in Panama, make the kind of hiding that.

We'Re talking about way too expensive for 95% of the people and the smaller businesses in the world.

So we're talking about big business privileges.

Wealthy people's privileges, to not only pay lower tax rates around the country and around the world than everybody else, but.

To basically hide huge amounts of their wealth from paying any taxes at all. Well, why do we know nothing's going to be done? Because there are too many countries doing it. If you close down one. For example, there was recently really great outrage in Europe about the traditional centuries old game being played in Switzerland.

And so Switzerland had to make adjustments.

For fear of being the bad guy.

In Europe and having costly sanctions against them. So they restricted what they did, forcing people to hide money no longer in Switzerland as much as they used to.

But to move to, you guessed it, places like Panama.

And if Panama, although there's little sign of itif Panama were to change its lovely laws enabling hiding and secrecy and tax evasion, believe me, there are dozens of other places people can and will move their money.

And there's every incentive in the capitalist system for countries, particularly little ones that are poor, to try to offset their condition by offering to hide the money.

Of rich people elsewhere.

In the very minutes that the Prime.

Minister of England, David Cameron, was embarrassed to have, the revelations of the Panama papers indicate that his father had set up these shell companies to hide his assets and who knows what taxes he evaded. The that will take time to figure all that out if we're ever told. But the Prime Minister had to admit that he benefited from it, had to reveal his tax records in whatever way he chose to make the case that he shouldn't be, as he surely will be, held accountable for using the very mechanisms that he is not supposed to use, that he's supposed to uphold the law against, etc.

Well, even as he was saying it.

Where are some of the places that.

People hiding money in Panama may have.

To go if they can't stay in.

Panama to keep it hidden? Well, they'll just go to the nearby British Virgin Islands where the same gambit is underway.

And the Prime Minister, who said he didn't believe in this, hasn't taken a single iota of a step to prevent British territories around the world from continuing to do the very same thing. If it's disgusting, then I've made it clear to you what's going on. But it doesn't stop There I caught this last week.

An example of how the same thing is going on elsewhere.

So that you can see.

It turns out that in the last week of March, that's less than three weeks ago, the state legislature of Colorado here in the United States voted down a bill. To be accurate, the Colorado House voted the bill up, but the Colorado Senate killed it. Wow, this is second year in a row. What would this bill have done? And here you can see just how bad things are. All the bill would have done is to allow there to be a referendum to allow the people of Colorado in the upcoming November election to be able to vote yes or no for a bill that did the the bill says any company in Colorado that has revenue abroad because the things it makes in Colorado are sold there. The things the Colorado people have helped to develop in that company through tax subsidies, through, through direct money gains, through developing courses in Colorado schools all the way up to the university level that would help these companies get more productive workers to hire. All the ways that Colorado has helped generate businesses. If those businesses develop a revenue abroad, money that they earn abroad, and if they choose to keep that money they've earned abroad in a bank account abroad, under current law, they, they don't have to pay any taxes on the money that is parked overseas. That's even legal. They don't even have to go to the extent of hiding it, although for other reasons they may well choose to do so. This law would have said, no, no, no, you can't escape your fair share of taxes just because you have an account somewhere else in the world and choose to park your money there. You can't do that as an individual in the United States. You have to declare the income you've earned somewhere else and perhaps have parked in a foreign account and you still have to pay taxes on it. So this would simply make Colorado business conform to what we demand of individuals. But the Colorado businesses didn't want it. Or to be more accurate, Colorado's big businesses didn't want it because for the small businesses located around Colorado, the vast majority of whom have no foreign business and therefore have no foreign accounts and are not the beneficiaries of this peculiar arrangement, they don't care. In fact, they could see that making the big businesses pay taxes on the revenues they hold abroad would generate important revenue for the state of Colorado, enabling it to provide services to people and small businesses they can't now afford. So they kind of supported the doing this. But the big businesses prevailed. And so Colorado will not permit Notice this Notice this commitment to democracy, too. The Colorado legislature will not permit the people of Colorado who voted them into office to vote on whether or not the loophole that is provided for big businesses to shelter foreign income from taxation here in the United States should be continued or not. And so I did a little more research because this really is like the Panama Papers. This is just another ploy businesses have. If you can't evade taxes by holding your money in a foreign account, well then go to Panama or the British Virgin Islands or Liechtenstein or Luxembourg and, and get out of paying your fair share some other way. The world is full of people that will help you do that if you've got enough money to pay for it. So I looked into it further and here's what I discovered. The District of Columbia and five states in the United States, five out of 50 actually have laws that require companies with money abroad to pay and revenue abroad to pay taxes on that revenue, just like they pay taxes on any other revenue they get from their company that is located in and likely built up over the years in the state of Colorado or in each of these other five states. And I thought you might be interested in the fact that the District of Columbia and five other states have already enacted something that the state of Colorado defeated. Here they are, Alaska, Montana, Oregon, Rhode island and West Virginia.

Now, whatever else you may think, here's.

Something you can know about the District Columbia and those five other states. They are not where the vast majority of major global American corporations are based on. In other words, those are states where small businesses are almost the only kind of businesses they have. And so there the people and the small businesses were strong enough to get a law passed that required big business to pay taxes like everybody else. But in the other 45 out of 50 states, big business has triumphed, as it did in Colorado, to get out of paying state's taxes on their profits. And we know from the Panama Papers how they get out of paying federal taxes on their profits. You see the point? 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. The next update responds also to a question. Are people, one of you wrote to me beginning to act to change a system that is so, as we say these days, rigged against them. And the answer is yes, they are. And they're doing it in a variety of ways that I think are worth recounting moment with you. Last week I did one. The French, the French working people have been out by the hundreds of thousands. Indeed, if you Add them up. Across that country, it's by the millions protesting a new law, a law that comes from a socialist government, by the way, pitting the mass of people, the militants, the working class in that country against the Socialist Party, the very party they voted into office, but with which they are deeply disappointed, presaging a crisis for French socialism of the kind that movement in France has not seen in perhaps a century. What are they protesting? The law, which would allow French employers to raise the length of the working week from the current 35 hours for some workers as high as 48, would allow employers to pay less in, in the way of overtime that they impose on their workers than they are now required to do. And a whole host of other anti worker changes in labor law. And the people are in the streets and the law has already been softened and the government is backpedaling as fast as it can. And we will see in the weeks ahead whether this action will succeed. I want to also take my hat off to the employees at the 23 campuses of the California State University. 26,000 members of the California Faculty association went right to the brink over the last 10 days, threatening a strike. It would have been, according to the union leaders, the largest strike of academic employees in the history of the United States. The government in California, the governor and his office tried to bully them, tried to talk them down, tried to act like they wouldn't listen and they didn't have to. All the usual postures of those in power in the last moments, as they realize their power depends on the willingness of those they impose it on to stand for it any longer. And the California Faculty association held firm. It insisted it would go on strike. And at the last minute, here's what happened. The governor caved in. He gave them a much better deal than he had originally offered. It wasn't perfect. It has its bad things too. But in general, it was a victory for the union. And here's the interesting thing. The union not only got for its many thousands of members the kind of raise they were long entitled to, the kind of raises other workers should also be getting. But more important, they turned around the governor from being the hatchet man doing the job of the rich who don't.

Want to pay taxes in California, who don't want to fund the very system.

They live in, they always want someone else to do it, from being the hatchet man, sticking it to the workers on behalf of the rich. Now the governor is going to go with the union to the legislature to demand the kinds of money that will Make a proper university and school system work for a state like that, from an enemy into an ally doesn't say much for the backbone of the governor.

But it shows what concerted effort by people getting into the streets can do.

And my third hat is off to the students at the University of Puerto Rico or who are fighting the savaging of that state which we have been talking about on this program. Puerto Rico is America's grease being used as the guinea pig and the whipping boy for an economic system that doesn't work well, but that wants to offload.

The cost of its disastrous functioning onto the poorest people.

Puerto Rico that already has an 11 plus percent sales tax, Puerto Rico that's already the poorest part of the United States. Now seeing its students savaged.

The the students are in the streets.

The students are striking hats off to.

People who have the courage to do.

Something about what is being done to them.

But of course, it wouldn't be fair.

If I didn't also talk about the very things that are provoking folks to get out into the streets. And I thought I'd leave you with.

Not only a celebration of those from.

France to Puerto Rico to Colorado to California that are fighting back, but also to give you an idea of what's happening every day just a smidgen below the radar that calls for this action. And here I was struck by a press release on April 6th from Albany, New York.

I will read it to you.

Today it was revealed that the recently enacted New York State budget. This was the project of Governor Andrew Cuomo, who is in the end responsible for these things. Today it was revealed that the just.

Enacted New York state budget will allow.

Resorts World casino at Aqueduct. And now listen to what this new budget enables this company to do. To withdraw 40 million annually from a fund that is supposed to be set aside to fund public schools. You heard me right. 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.

Oh, how nice.

What a wonderful set of priorities. And let's remember, the casinos in New York, like the casinos in many states across the United States, were enacted into law. That is, the laws were passed that allowed the casinos to operate by saying that the revenues of the casinos, all or a large part of them, would be dedicated to helping fund public schools. This was a clever way to get the population to vote in favor of.

A sketchy proposition by promising that the revenue would go to schools.

Well, that was then and here we are now. And the very people who orchestrated those phony promises are now moving the money.

To where the action is and the politicians are taking it from the school kids and giving it to the casino operators.

If only I had more time, I'd.

Stop and I'd play the national anthem just to underscore the patriotic commitments that are so uppermost in the minds of those running this country at this time.

No wonder Republicans and Democrats are thumbing their nose at the establishments of the traditional parties, the ones so deeply in.

Cahoots with all of the things that.

People are protesting and. And that go under the radar, except.

For those of us who expose them.

We've come to the end of the first half of this program. Let me please urge you to stay with us. We will have a short interlude and then we will be back for the second half of this program where we have some major pieces of analysis to offer to you in the hope that.

We can continue to be the source.

Of analysis and information that you can use and you can spread and you.

Can share across the spectrum with the people you interact with. That's the point of the partnership between.

This program and you.

[Singer]

Then I'll come I can bring you to your knees if you're not the one for me why do I hate the idea of being free? And if I'm not the one for you you've gotta stop holding me the way you do Only if I'm not the one for you why have we been through do we have been through? It's so cold out here in your evil darkness I want you to be my keeper but not if you restore reckless if you're going to let me down let me down gently don't pretend that you don't want me out of loving water under the bridge if you're going to let me down let me down gently don't pretend that you don't want me out of in water under the bridge. See the out of water under the bree what are you waiting for? You never seem to make it through the door and who are you hiding from? It ain't no life to live like you're on the run have I ever asked for much? The only thing that I want is your love if you going to let me down let me down gently don't pretend that you don't want me out of a water under the bre if you're going to let me down let me down gently don't pretend that you don't want me out Loving water under the bridge. Sailing under water under the Bree it's so cold. If you're gonna let me down Let me down gently don't pretend that you don't want me I love the water under the Bree if you're gonna let.

[Richard Wolff]

Welcome back to the second half of.

Economic update for this middle of April 2016 before I jump into the major issues, I want to make the appeal that I often make for you to be partners with this program and with this project.

And what I mean by that is.

That you make use of the analyses we prepare and offer to you each week. Share them on social media, talk to your co workers, your relatives, your friends, your neighbors about what's going on. Word of mouth, directly or electronically is the way that change is being made in this country at this time. You can be part of that. We need it, you need it, everybody needs it. It's a way to counter the establishment, the system with its articulated relationships between politicians and big business and the academics they pay for at the university. The alternative is people power. It's always been that way, but now we have all kinds of ways to share what we're learning, what we're understanding, the strategies that are emerging. Please use all of your connections, intimate, long distance, electronic, personal, to spread the word and let us help in whatever way we can. One way for you to partner with us is to use the websites rdwolff with two f's.com and democracyatwork. Both of those websites allow you to communicate with us. If you would like to set up a group in your community that connects to us, let us know.

We have people who will help you do that.

If you would like to comment, suggest things for us to cover, offer a criticism that can make us be more effective and more successful. Use those websites to tell us about it, to make your views clear. If you would like me to come and speak in your area, let us know. If you can get this program on a radio station in your area, let us know. And there are countless other ways, many.

I'm sure you've thought of that we haven't.

Let us know. Again, the way to do all of these things is to connect to us through the website. There's an email function there and many other ways for you to connect to us. Rdwolf with 2F's com and even more importantly, the basic one for this project that produces this radio show, democracyatwork. All1word democracyatwork.info I n f o.

Let'S.

Then turn to some of the major topics that need some attention. Over the last two or three weeks, there's been a great deal of commotion taking Americans back to the bill passed in the 1990s by the Congress and signed by then President Bill Clinton that basically changed the way this country deals with criminals, prisons, and those people that we as a nation hold throw into the priminal, excuse me, the prisons, those whom we call criminals. I'm not going to go over the controversy. It's in the newspapers, it's in the press. You don't need me for that. What I want to do is look at the economics of all of this, which is what we do on this program. And here I want to be real clear something, as I have said many times on this program, something changed fundamentally in the United states in the 1970s. The long history of rising wages that American workers were able, partly through much struggle, to win from a very successful capitalism. Those rising wages for Those hundred and fifty years, 1820 to 1970, they stopped rising in the 1970s. Capitalists began substituting machines for workers. The computer revolution. And those same capitalists decided they could make much more money by leaving the United States and producing our clothing, our appliances. Now it's also our automobiles in other countries where they could pay workers much lower wages than had been won by workers in the United States. So they left in huge numbers. Between replacing workers with machines like computers and leaving the country, American workers found themselves in a weak position. They could barely hold on to their jobs. They could no longer win wage increases. There were too many workers looking for too few jobs because those jobs had been wiped out either by the computer or by the business leaving for other parts of the world. That was a problem for the American working class. And it's a problem that every layer of that class, from the most educated and the highest paid on down, every part of that working class had a choice. It could have banded together and fought against the system that imposed this suffering on them all. Or they could have fought the different layers against one another, each layer trying to come out of this bad situation less damage than they might have otherwise by pushing the problem to the workers less educated, less well off, less well organized than themselves. Unfortunately, the former strategy was not adopted, partly because the kinds of organized militant workers had been hounded out of the working class, given away out of popularity that they might have had by the previous 30 years of this country's history. In any case, the worst problems were solved, were posed on the poorest, on the least skilled, the least educated, the least well organized. That often happens in a layered system, a divided system of the sort capitalism generally generates around the world. So the suffering was worst at the bottom. So it goes. And that started in the 70s, and it got worse in the 80s, and it got worse in THE 90s. Growing numbers of people became desperate at the bottom, and they resorted to all kinds of ways, legal and illegal, to cope, to struggle, to get by. It became harder and harder, some a minority, but some of those at the bottom turned to criminal activities. And there was a problem in that area and nobody knew quite what to do with it. There were those who understood, as I'm explaining now, that this was an understandable result of an economic system ending its period of rising wages, imposing on people the kinds of economic difficulties that were the reality of the last four years. Granted, a reality that was papered over by making believe we were okay as we all borrowed the money to realize the American dream, since wage increases no longer would enable you to do it. But those at the bottom hadn't the resources. So, yeah, there was some more criminal activity. Now, we could have reacted, as I say, by understanding that this was a fundamentally economic problem, and you would have been best off by solving it, by addressing the problem of unemployment, addressing the problem of low wages, doing everything from public sector jobs to raising the minimum wage. These would have been ways to cope with the situation that would have been sensitive and effective. We didn't go that way. What we began to do, starting already in the 70s, accelerating dramatically in the 80s, and really taking off in the 90s, was a completely different strategy. Incarceration, putting people into jail. If you look at the statistics of what the United States does for most of the 20th century, we have the same very low rate of incarceration. Starting in the 1970s, that number turns up and becomes wild. We put people into jails and prisons in a way we never did before as a nation. Those are the years in which we become, which we are today, the country that imprisons a higher percentage of its people than any other country on the planet. And number two isn't close.

Wow.

We tried to solve a fundamental economic problem and how our system works, how it penalizes more and more those who are least able to get through the situation, who start off before the crisis hits, already the least favored.

We squash them.

Sort of like what I said in the first half of today's programs about what is being done to the Puerto Rican people in Puerto Rico right now. Same story? Same story. Well, we put everybody in jail and that, in a way, is the most irrational act of a society that has an obsession with never questioning the system, never changing the system, always thinking that any solution is better than. Than saying, hey, our economic system isn't working very well and we have to change it. That is the taboo, or at least it was until recently. So we put people in jail, and that bill was passed in 1994 that President Bill Clinton signed and that the entire establishment, Republican and Democrat, celebrated as a solution. And what did it do? At enormous expense for the taxpayer, we began building prisons, expanding prisons, hiring more police personnel, giving everyone a sense that this was our social problem to our rising crime problem. Notice how conveniently the dysfunction of our economic system is pushed out of the story.

And guess what?

It becomes a standard joke in the United States to refer to what happens in jail as well. I don't want to repeat it here because I'm polite, but we made jokes on late night television about how sexual predation of prisoners amongst one another is so common an occurrence that a late night comedian thinks it's funny to refer to it. Well, this is an admission of a culture that the prison has the following. Whatever the problems of the individual you put into a prison, given what's going on there, it's likely that he and I use the word he because the overwhelming majority of prisoners in our jails are males, not females. He will come out more disturbed, more upset, more angry than he was when he went in. If you remember that many of the people going in were going in for, quote, unquote, drug offenses, then you can get a fuller sense of the damage our prisons did. It didn't make the society safer, it didn't make the society healthier. We didn't help the people in jail. We threw them in there and threw away the proverbial key. And it didn't solve anything. It produced a police force whose behavior recently indicates that a lot of work that wasn't done to make police better was instead used on making police larger, more of them. And if you don't train police carefully, you don't get the kind of policing that you need and you want on and on. One could go, but the problem of policing is a problem fundamentally of an economic system that doesn't provide decent jobs and decent incomes to people, all of the people. So here's a better do something that really helps the population. Do something for jobs, do something for incomes. We didn't have anything like the incarceration reaction to the collapse of the 1930s because we didn't have the mentality then that we have now and the incarceration epidemic so terrible, particularly for the African American and Hispanic American parts of our population, has been a result we didn't need to have. As if to drive the point home, let me show you another way that the economic downturns of the 1970s and how they have not been addressed in this country to this moment. Leaving the rich to get richer as the difficulties of the middle and the bottom simply accumulate. I'm going to talk about another group of people, not in this case incarcerated persons has been radically shaped and reshaped. And this might surprise you. This is about what is called the sugar baby phenomena in the United states, something that Dr. Harriet Frad in her interviews on this program in recent weeks also mentioned. What are sugar babies? These are young college students, mostly women, who are having more and more difficulty getting through the payments to go to college. We've allowed a college education to become more and more expensive. If you look at the price of a college education, it has risen faster than the cost of living over recent decades. We have made it basically impossible for most young people in most American families to afford higher education. That has led many to get into debts of 50, 100, 150 or more, thousands of dollars burdening them for the rest of their lives.

Wow.

And so some young people decided to solve this absurd problem. Education needed more than ever to get a decent job, costing more than ever and coming at a time when economic difficulties make most families have a harder and harder time. They didn't want to go into debt. Who could blame them? So they entered into a relationship which we now call sugar baby.

Here's what it A young person again.

Mostly young women, agreed to be a companion. To whom? To a traveling business executive or someone else who has a lot of money. And the deal is this person pays for the young student's room, maybe pays for their board, maybe covers the tuition payments to the high priced college or university. And in exchange the young lady is a ready and willing and available companion. Someone for the businessman when he comes to town to have to go on his arm around the evening's events. What else is arranged between them? I don't know and I won't discuss. And you don't need me to spell out. 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. It's really the parallel to the impossible burdens put on unemployed or low paid people. So disproportionately African American and Hispanic American, even though white Americans are in the end just as vulnerable. Those at the bottom imposed on and finding their way into the jails. Those not on the bottom but becoming sugar babies rather than focusing on what ought to be their extracurricular activities as they go through our colleges and universities. 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. My last topic for today is once again worker co ops. This new way of organizing the process of business so that workers themselves, in every store, in every office, in every factory, be given the opportunity to run the enterprise democratically. To have the workplace be a place where one person has one vote and where all the people, each with one vote, make democratic, majority driven decisions about what the enterprise will produce, about what technology and mechanisms will be used, about where the production of the good or the service is done, and about what to be done with the profits that everybody's labor helps to produce. A democratic enterprise Most of the time when I talk to you about this, I point out that it is the new world. It is where a collapsing, dysfunctional, ineffective, unjust capitalism is pointing more and more as it imposes itself more and more on less and less willing masses of people. I believe it is the future. I believe it will come to be understood at what the 21st century has to offer in the way of progressive change relative to all that has come before. But today I want to talk about worker cooperatives in terms of what they might have done not to the capitalist systems of Western Europe, North America and Japan, which is what I usually talk about, but what the creation of such an enterprise might have done in places that went in a different direction. The Soviet Union, the People's Republic of China. I might have added Cuba, but I can't add Cuba, because in Cuba this is already underway. The big new change in Cuba has been precisely to move away from the state enterprises that Cuba used to have as their prevailing form. State enterprises which had a group of state officials at the top functioning pretty much like private boards of directors and giving orders, etc. To the mass of workers who came to work in the offices, the factories, the fields and the stores of Cuba. They are now moving to worker co ops. But that didn't happen in the People's Republic of China in recent decades, and it didn't happen in the Soviet Union for most of its history. So here is what I want to do with you today. Talk about a might have been talk about what might have happened. Suppose the revolution in Russia and likewise the one in China, the one in revolution, the revolution In Russia in 1917, the revolution in China in the last years of the 1940s. Suppose those revolutions had not had only the objectives that they announced. And what were those objectives? The objective of the communist revolutionaries in both countries was were as to take economic power away from the private individuals who owned and operated the industries of the country and give it over to the state. The idea was the state would represent all the people and this way all the people would run the enterprises, rather than having a tiny minority of wealthy individuals being the owners and the the directors. The second big innovation that the revolutionaries were bent on imposing in both countries was to have the government once again to be representative of the people, to arrange for the distribution of goods and services once they were produced. It wouldn't be a market system. You wouldn't distribute goods and services to the people who have the money to buy them, more to those with more money, less to those with less money. No, that was denounced as fundamentally unjust. And instead we would have the government distributing goods and services according to some calculus of people's needs.

And so the revolutions proceeded.

They took the property away from private owners in industry, not in the land, but in industry. In Russia and in China they did similar things again with industry more than with agriculture. They developed what we called a command economy or a state socialism or a state capitalism. The basic idea being that the state was going to do for everybody's benefit, run the economy rather than have it be capitalist in the sense of private individuals owning, operating and profiting most from the economic system. Well, it did get them economic growth.

It did raise the standard of living.

Of the people of Russia in China staggeringly fast, Faster than capitalist private capitalist countries had done. But it also gave the amount of power to the state that has been a problem in both Russia and China, has been associated with the collapse of Russia and Eastern Europe and with fundamental shifts and changes in China. So here's the role that worker co ops could have played. Suppose the revolutions in Russia and China had gone one step further. Not only giving the state ownership, not only giving the state planning authority, but also transforming the enterprises at the base of society into worker co ops. Then the state would have confronted a working class that owned and operated all the wealth of society, the workers either as literal owners or as the people on the spot and in charge. So that the state ownerships didn't mean all that much, because the workers on the ground. Had it, you might therefore, and you might thereby have had a way to control that state, to limit its power to create a countervailing power at the base of society that would have made the history of Russia and China radically different from what it was. Because you had had the daring, the courage and the determination to go that extra step, the step that's now on history's agenda. But that might have been earlier too. The step of creating workers with the wealth of the society under their control in every business, every factory, every field, every store and every office. Think about it. Because the new direction toward worker co ops is a response not only to the private capitalisms of Western Europe, North America and Japan, but likewise to the state capitalisms, the state socialisms traditional in Russia, China and so much else of that part of the world. We've come to the end of our program. Let me urge you once again to be a partner with us, to use social media to extend our reach, to make use of our websites rdwolffwithtwofs.com and and democracyatwork.info to build a better society. Step by step, it's happening. And we ask you to join with us to make it happen faster and better. Thank you very much. I look forward to speaking with you again next week.

[Singer]

Change.

[Richard Wolff]

Thing gonna change.

Yes, it.

[Singer]

Sam.