← Economic Update with Richard D. Wolff
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Sam. Saint gonna change. Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Our jobs, our incomes, our debts, those of our children, those looming down the road that we have to plan for now. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and currently I teach at the New School University in New York City. Well, we have a packed program today of economic Updates, and we always start this program with a collection of shorter updates about important events in the last week that you may have missed, whose significance you may not have grasped right away and about which we need to know more to understand the economic system we're living in and to cope with it as it goes through what is at best described as difficult times. One of the most dramatic events of this last week had to do with the Caterpillar Corporation, based in Peoria, Illinois, one of the largest producers of agricultural and earth moving and construction equipment in the world. A reporter led to an investigation led to a series of investigations that the government has done into the affairs of the Caterpillar Corporation that culminated in two events this last week. First, government agencies raided three buildings on the headquarters of Caterpillar in Peoria, Illinois, looking for all kinds of records, which they apparently took. And the second event was a report issued by Professor Leslie Robinson of the Tuck School of Business at Dartmouth College about the tax behavior of the Caterpillar Corporation. This is an evolving story. So let me just give you the bare bones of why this is important. The government contends, and Professor Robinson's report issued this last week demonstrates in great detail that the Caterpillar Corporation has for at least 12 to 15 years, cheated the United States government out of billions. That's with a B in taxes. And it has done this by creating, in effect, a half phony subsidiary in Switzerland. It negotiated with the Swiss government a special tax arrangement in which the behavior and the profits earned by Caterpillar in Switzerland would only be taxed at 4 to 6%. Compare that with the tax rate here in the United States that is officially 35%, and you can begin to see what tempted Caterpillar. So it set up a company, let's call it I'll Be polite, with about 500 employees in Switzerland. This is a very small part of Caterpillar's business since it employs a total of 118,000 people around the world. So this office in Switzerland is very small potatoes for this company, but it booked an enormous portion of the profits. Turns out they don't even have a warehouse. And yet they were handling the parts business of Caterpillar. All the parts made to replace those that wear out in Caterpillar machines. A big part of their business is this parts replacement, and it's very profitable. They arrange, in effect for all the paperwork about buying and selling these parts and making the money for Caterpillar. They booked them all in Switzerland and thereby got away with paying only 4 to 6% rather than booking them here in the United States where the parts were made and paying the appropriate tax. If this were just about one corporation, I wouldn't be bothering you with it. But it isn't. What it in fact is, is a kind of behavior that many US Corporations and indeed many corporations in other parts of the world do as well. It's basically a game in which governments compete for where businesses locate their profits. For Switzerland. Think of it this Get Caterpillar to do the paperwork in Switzerland, to open a small office and to keep all the records. And. And you get 4 to 6% of billions in profits. That's nice for you. In Switzerland basically costs you nothing. You get the company to leave the United States for this purpose, not to pay the taxes in the United States, which would have been much higher for us here in the United States. It's of course, a deadweight loss. We lose a few hundred jobs. It should have been here to handle what was produced here, but. But that's not the big thing. We lose billions. By the way, the estimate of the United States government runs into the $3 to $4 billion estimate of what was lost from this one company alone. Just over 12 to 15 years of watching it, which the government has been doing. Bottom line, when companies do this as they do it all the time, the government of the United States loses billions in taxes. That leaves it with three choices and only three. Number one, with that money not coming in, you can cut government programs. Give less money to poor people, give less money in loans, to students, give less money to maintain the federal highway system. Somewhere there's got to be give. If you're not going to cut programs, then you have to make up the taxes you don't get from the companies that leave by taxing the rest of us working people in one way or another. Raise the tax on alcohol, on cigarettes, on tires for your car, on the income tax somewhere. And the third option, if you're not going to cut services and you're not going to raise taxes on the average person, is to borrow the money and put the United States even further into debt. Every one of Those is bad for us, but it's good for the companies that escape taxes, and that's why they do it. And it is good to see one of them getting into trouble. But it's a tip of the tax evasion iceberg, and many more companies should be caught, should be brought up before the court, both of public opinion and the legal system, because they have done a major damage to this country and to all the rest of us. The next big item over the last week was, of course, the rollout by the Republican Party of what they proposed to be an alternative to Obamacare, which they intend to repeal any day now. Since the Republicans control both houses of the Congress, I don't have much to say that you can't see elsewhere. And I want to reserve my precious time on this program to expose and to analyze things that don't get the attention they deserve. But there's one dimension that I notice is not being covered about this repeal and substitution of the Republican program. And that has to do with how the new version of Obamacare, the Republican alternative, how it is going to be funded. And there's two important things here to understand. First, the amount of support to people provided by Obamacare is about to be reduced by the Republican alternative. Poor people will get less support than they got before. The uninsured will not be required in the same way to have insurance. And so therefore, they will not need or get the kinds of subsidies that poor people got to help them pay for the mandated insurance. That kind of thing will mean that the bill that the Republicans putting in are going to cost less money. And who will that help? Well, here's the key. The money to pay for Obamacare came on taxes that hit only people earning over $200,000 a year if they were an individual, and 250,000, excuse me, if you were a couple, in other words, the payment for extending insurance to the uninsured, for helping people who needed it, came out of the richest. And there is, of course, the central objective of so many who voted against and spoke against Obamacare. It wasn't really about the care it provided. It was about the taxes needed to pay for it. And since the taxes affected the richest Americans, it will benefit them the most to have those taxes reduced or repealed. Under the plan the Republicans announced, the taxes will be repealed as of the end of this year. That is, the repeal will go into effect in 2018. To give you an idea of the taxes to be saved, if you're in the top 1% who earn more than $774,000 a year. You heard me right. Three quarters of a million dollars. The tax cut you will enjoy by virtue of getting rid of Obamacare will, will be $33,000 more money in your pocket if you're a person who earns three quarters of a million a year. If you're in the top 0.1%, the really richest in America, your tax saving will be $197,000. Well, for those people, this isn't much money. But for all of us, of course, here's the bottom line. Rich people will pay less taxes and poor people will get less medical help to be healthy, to not only stay healthy for themselves, but to prevent all the rest of us from contracting infectious diseases because our fellow citizens have a decent health insurance and will keep themselves healthy in that way. The next story is painful. Painful for me to tell you about, painful for me to admit that our country even does such things. But I will. I will. The US Immigration and Customs Enforcement Agency, that's the people who grab immigrants that have no papers, undocumented immigrants, off the streets of the United States by the millions in recent years. And right now, under the Trump administration's focus on that process, this U.S. immigration and Customs Enforcement service, ICE, appropriately named ICE, has been forcing detainees. These are people who have been picked up because they don't have adequate papers, who are now supposed to be given a legal procedure to determine whether they can or cannot stay in the United States. They've been forced to work for $1 a day while being detained. And you'll love this in private enterprise prisons that have contracted with the government to hold these people. And they're the ones, Geo Corporation in particular, that has made them do this. And the federal courts have now intervened and told the Geo Group, this private prison company, that they can't do with what they're doing. They've allowed a class action suit to go forward on behalf of about 60,000 detained immigrants, making it harder for their rights to be violated and made it harder for them to be effectively put into a system of slave labor to make an adult work up to 40 hours a week for $1 a day, often threatened with solitary confinement if they refuse to, quote, unquote, volunteer for working at $1 a day. You can imagine what is going on. The federal courts have now said this is a serious issue. There will be a trial about this. I only want to read you from one brief conversation. And by the way, if you're interested, Christine Phillips is the reporter for the Washington Post, a major newspaper in the United states, who on March 5th carried this story under the headline Thousands of ICE Detainees Claimed they were forced into Labor, a Violation of anti Slavery laws. Before the judge chamber, the Geo Group, that's the private prison company argued, even if we are forcing people to work under threat of solitary confinement, that would be allowed by applicable law, said the lawyer for the Geo Group. The judge in response in the courtroom said, no, it wouldn't be slave labor for the detained immigrants. Gives you something to think about, doesn't it? The next short update has to do with Harvard University, the richest university in the United States. Nobody's even close. Places like Yale and Princeton and the University of Texas are far behind. Recently the president of Harvard, Drew Faust, gave a speech and she herself is a historian of the Civil War in the American south, and she announced last year that Harvard University should face up to the fact that it had a long relationship to slavery in the United States, that much of the early money that built up Harvard to the wealthy position it has today came, came from slave owners who contributed the fruits of their slave empires to building up that university. To give you an idea of what it was called, a conference was held called Universities and Slavery Bound by History. The Harvard history professor Sven Beckert, during a panel in the conference, said the some of our most esteemed educational institutions are also the product of some of the most horrific violence that has ever descended upon any group of people. So Harvard is confronting the role of slavery in building it up. Maybe some of the other schools that have the same history, Princeton, Yale, others may follow suit if they have that amount of courage. It is certainly long overdue. The dependence of Harvard on money from slave masters made that institution much less critical of slavery than it might otherwise have been. And that for obvious reasons. And it made Harvard a place that condoned racism for decades. In this society because of the role that racism played as a justification for slavery, it's good for anyone to confront their history. It's good for Harvard to confront its long overdue complicity with slavery, with the racism that flowed from it, and that still affects our society. But I have a comment to make, and before I do, let me put forward on grounds of transparency. I went to Harvard. I'm a graduate of Harvard. I'm an alumnus of Harvard. I went there without the faintest idea about its history with slavery, which is what was the case for most students, but because not only was it not discussed or taught, it was hidden from us. But what was likewise hidden and also needs some admissions and some confronting with your history is the fact that Harvard's wealth, and that Harvard as an institution has always been dependent on the richest powerful sources of American life. Corporations who made their money by producing weapons of mass destruction. Corporations that abused people around the world not necessarily as slaves, but as exploited, underpaid, poorly treated workers. They gave money to Harvard companies that have wildly polluted the earth, gave the profits, part of them, to Harvard, partly because they got tax advantages from doing so and partly because they wanted good, expensive places to send their children. And maybe out of a sense of Harvard as an institution of higher education, but if they had that sense, it was rather low down on the list of what were priorities for them. And Harvard has been quiet about many of these things, has been very hostile to criticisms of a capitalist system upon which Harvard depended. Oh, it couldn't admit it. It had to talk endlessly, as it did in our classes, about objectivity and telling the truth. And, you know, its slogan is Lux et veritas, if I remember correctly, and that is about truth. I hope I'm not confusing that with Yale. Unfortunately, I went to both those institutions and keeping their slogans of self congratulations clear in my mind has not been my highest priority. In any case, here's a suggestion to my alma mater, Harvard. Face up to the fact that you have benefited from and grown rich on the fruits not only of slavery in the American south, but capitalism everywhere else in the United States and indeed globally. And that that has shaped what you teach, how you think of yourselves, your relationship to the rest of the educational establishment in the United States and much else. If it's true that many of the leaders in the United States have come from places like Harvard, then it means that many of the leaders of this country have been educated in places that keep very quiet about their complicity in a whole host of awful aspects of, of our history, of which slavery is just one. Confronting our history honestly is just as difficult as confronting the reality of who and what our institutions are. Making education a private affair, which, by the way, most countries in the world do not do, means to put them at the service of. Of the wealth that sustains them, rather than making them part of a public service equally available to everyone. Private higher education is dependent on the economic system, and if it is not a just system, then that education will reflect that, and it always has. Before I continue with the updates, we still have time for. I want to make sure you all know that what we do on this program is only a small part of what we do. By we, I mean the group democracy at work. And we maintain websites where you can get this kind of information only much more of it. These websites are available to you 24 7, no charge whatsoever. One is called Democracy at work. That's all one word, democracy at work.info info. The other website is me, rdwolff, with two Fs. Rdwolf.com so please visit rdwolf.com or democracyatwork.info if you are interested in more information, in more video and audio equipment. The websites both allow you to communicate to us, tell us what you'd like to see on this program, what questions you'd like to have answered, what issues, issues you'd like to have analyzed. Those websites also allow you to follow us on Facebook, Twitter, Instagram, and to keep up with us, to partner with us, as we ask you to do, because you're in a position to make this program and the websites available to others who might be interested. We've been very successful partnering with you. We just want to keep it up. The next update has to do with something called the Bloomberg Billionaire Index. If you've never heard about that, let me be the first to introduce you. Bloomberg News, the largest single source of financial news around the world, owned by the former mayor of New York City, Michael Bloomberg, keeps an index up to date of billionaires. And so I thought I would tell you about that part of the world. I imagine some of you may be interested in becoming a billionaire one day yourself. And so you might like to know what their situation financially is. And for the rest of you, well, let's make a comment. But before I do, let's take a look. I chose two of the top 20 billionaires in the world, according to Bloomberg, the first one, and the richest person on this planet, apparently is Bill Gates, associated with the enterprise Microsoft, and with the development of the modern computer. I'm assuming most of you know who Bill Gates is. As of March 3, the most recent publication by Bloomberg of its Billionaire Index, March 3rd of this year, Bill Gates was in possession of $85.6 billion. 85.6 billion. I thought I'd break that down for you by asking you simply, or telling you rather what this means in terms of Mr. Gates income. I'm going to assume that he gives the 85.6 billion of assets he has to financial managers. That's what people like him virtually always do. They have neither the time nor the expertise to manage money themselves. They hire people, pay them very well to do that. And those people, sometimes called hedge funds, they will give him at least 5%. They will promise that they know how to invest money and will make him at least 5%. Often they do much better than that. Rarely do they do less well, so I'm going to use 5% as a benchmark. If you own $85.6 billion as Bill Gates does, and if this money is invested for you at 5%, very modest, by a hedge fund you hire for that purpose, you will be earning $4.3 billion per year on what you have. In other words, you have 85.6 billion. But. But you invest it and you earn another 4.3 billion per year just by investing it. You don't have to do anything. Mr. Bill Gates does not do anything to earn that 4.3. It's his money that does that for him through the intermediary work of the hedge fund. And now I broke it down one step further so you could really understand it. How much do you earn per week? If you earn $4.3 billion per year, the answer is $82 million a week is what Mr. Bill Gates earns every week, 52 weeks of the year. Now you know why Bill Gates does not need to buy lottery tickets. Because he gets $82 million a week without buying lottery tickets. Does that strike you as bizarre? Good. It ought to. Let me explain. Some of our listeners and viewers write to me occasionally and say, well, people like Bill Gates have made a major contribution. They helped to develop the modern computer. They ought to get a reward for that. I could not agree more. That's right. Any creative person who does something particularly useful for us as a community, for the human race, should be recognized, should be rewarded, should be celebrated. There should be a special day, there should be a special plaque. There even can be some money to help create a sense of reward and maybe to provide an incentive. But that is light years from what I just described. That for the rest of this man's life, even though he's not working at computers at all anymore, he should be drawing down $82 million a week and deciding what he would enjoy doing with it, who he would help or not, what he would buy or not shaping the way our economy works. Because when you have that kind of money, you are a big player in this game. Is that appropriate? Is that consistent with a democracy? This has nothing to do with rewarding innovation. It has to do with keeping the reward in line with all the other values a society has. Well, I'm going to bring this first half of the program to an end by promising you that in the second half, which I would hope you stay with us to see and to hear. We can begin with discussing a second billionaire. So stay with us. This is the end only of the first half of Economic Update. After a short interlude, we will be right back.
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I tried to leave it all behind me but I woke up and there they were beside me. It but I guess it's true? Some feelings they can travel to. Oh, there it is again sitting on my chest. Makes it hard to catch my breath I scramble for the light to check you're always on my mind? You're always on my mind? And I never mind living on my own. Then something broke in me and I wanted to go home to be where you are but even closer to you? You seem so very far And I'm reaching out with every note I see And I hope it gets to you on some PAC.
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Welcome back, friends, to the second half of Economic Update here in March of 2017. Before the break, we were discussing the Bloomberg Billionaire Index. And I finished discussing with you briefly the issue of Bill Gates. And I promised to tell you about a second billionaire in the top 20. Actually, I think he's in the top 10. And tell you a little bit about what his situation is. The man's name is Carlos Slim. S L, I M. I may not be pronouncing that correctly. He is a big businessman in Mexico. He doesn't have as much money as Bill Gates. He has only $51.5 billion to his name. So he appears lower in the listing by Bloomberg. Okay, let's do the same math. What does that earn him? Well, per week he doesn't get the 82 million a week that Bill Gates gets from investing his asset, excuse me, at a nominal 5%. But investing his money at 5% is. If that's all Mr. Slim getswould get him $50 million a week. Like Mr. Gates, no need to buy lottery tickets. You have a permanent lottery every week of every year of your entire lifetime. Did Mr. Slim invent the computer or anything like that in way of contribution? Not that I'm aware of. And I did some research. He's just a good businessman. Put it all together and draws down $50 million a week. I ask you simply to think with me whether it is appropriate in the field of democracy, in the field of Christian charity, in the field of ethics and morals, as most people are understand them to be living in a society in which one Citizen of Mexico, Mr. Slim, gets $50 million per week, every week, while millions of his fellow citizens of Mexico are detained in American prisons, forced back into their country, losing whatever wealth they've accumulated back in the United States, entering a society that has no jobs for them and very little public support. Is this a reasonable way to organize an economic system? It is something to think about when you understand what it is that billionaires do financially right now and disconnect it from what contributions to they may or may not have made in the past. The last short update before we turn to what we usually do in the second half of this program, which is look in depth at some economic issues, has to do with two countries that are far apart, two economies that are far apart geographically. Puerto Rico on one end and the country of Greece in Europe on the other. But we're going to look at them together because they are both suffering the same basic experience. Both Puerto Rico and Greece were led by politicians over the last 20, 30 years who had a very cozy relationship with big bankers, most of whom were American, but a good number of whom were also European and Latin American. The big bankers made huge fees off of lending money to the politicians. The politicians were happy to pay these fees because they got their hands on these big loans and could cement their political power by using the loans to provide services of all kinds to Puerto Rican or Greek companies to Puerto Rican or Greek citizens of various sorts. It made the politicians popular, it got them re elected, it made money for the bankers. Everybody was happy so long as the game lasted. However, there was no supervision here. And both Greece in Europe and Puerto Rico here as a part of the United States, which it is, borrowed way too much money from for what their economies could sustain. It was good for the bankers, it was good for the politicians. It was not good for the mass of people. Why not? Because eventually the borrowing got so enormous that the only way Greece could pay back its creditors or Puerto Rico could pay back its creditors was by making their own people go without saying to their own people, we're going to tax you like you've never seen to raise money to pay back the creditors, or we're going to cut public services to you like you've never seen in order to free up the money we used to spend to provide services to you to use instead to pay off our creditors. And interestingly, the creditors of Greece are not mostly Greeks and the creditors of Puerto Rico are not mostly Puerto Ricans. They're nice foreign banks and institutions that are dictating to those two parts of the world what to do. And the answer is the same. In Europe, it's the European Central bank and The European Community and the IMF that are dictating to Greece that they must cut their government programs, they must stop supporting their people's needs and use the money instead to pay off no longer the private banks who lent initially to Greece, but the governmental institutions that took over those debts. Very nice service, paying off the banks so they wouldn't be at risk with Greece anymore. The end result, well, there's no way to describe it other than to say, for example, that last week the Cologne Institute for For Economic Research in Germany said that poverty in Greece had jumped 40% between 2008 and 2015, far exceeding the growth of poverty anywhere else in Europe. There are literally tens of thousands of people leaving Greece every day, particularly young people, because the unemployment rate among young people in Greece is, is over 50%. The unemployment rate for Greece as a whole, 23%. We are savaging, and I say we because we are the people of the world watching this go on. We are savaging this little country in one corner of Europe because of crimes committed, excuse me, by their leaders and by bankers who knew very well that this country couldn't sustain such debts, who could not care less, being confident that the fees they were getting was more than enough and that in the end the politicians would figure out a way to screw the mass of people to cover over what their own mistakes were. And in the case of Puerto Rico, the same. According to Nobel Prize winning economist Joseph Stiglitz, quote, the control board that was established by the Republican Congress to oversee the collapsed economy of Puerto Rico. The control board's plan, says Professor Stiglitz, would, and now I quote, turn the island's recession into a depression of a magnitude seldom seen around the world. The current demand of the board, an American mainland, American entity of the Congress that now controls the Puerto Rican economy, they have told the Puerto Rican government to cut about 7.6 billion in government spending over the next two fiscal years. That includes 1 billion in health care services, 300 million from the public university and 350 million in municipal aid. This will plunge the gross product of the island down by 16% in the next fiscal year. Puerto Rico is the poorest part of the United States and we are savaging the poorest part of this country. We have driven 100,000 people to leave Puerto Rico and come to the mainland to look for work because they're desperate. It's interesting, when we are pushing Mexican nationals out, we are bringing Puerto Rican nationals in. The Puerto Ricans are, of course, citizens of the United States. The Mexicans are not but it is a strangely contradictory policy. Nothing is solved by this unless you think paying off the creditors is worth savaging two parts of the world. And believe me, if they get away with it there, what's to stop them from doing it everywhere else? We are subordinating the needs of millions for the interest and profits of a handful of banks and institutions. This is not acceptable behavior in a decent society, is it? So much for the short economic updates for this week. There are plenty more, but we don't have time and I don't want to lose the opportunity to talk to you in depth about some of the issues you've written to me about. And so let me remind our websites rdwolff with two Fs and democracy at work. That's all one word, democracyatwork.info both of those websites allow you to comment on this program, what you like, what you don't like, what you'd like to see more of, what questions you'd like to see answered. I'm about to respond to a set of questions that you have been sending me, and indeed I chose to respond to this one because a number of you have asked me to do so. The websites also provide you with ways to follow us on Facebook and Twitter and Instagram to partner with us, to bring us to your community to speak, if you were interested to to get us on local radio and television stations, if you're of a mind to do so. We have the people and the personnel ready to work with you. Please help us reach people who might be fascinated or interested in the perspective we offer on what's going on in the economic systems around us. So in that spirit, let me jump right into it. One of the great debates of economics for a long time is, in my judgment, misplaced. So let me tell you what it is. It's the argument that the big issue in economics is how much interference, how much intervention into the private economy should be allowed to the government. In other words, it's the old fight. Should we have what's called a laissez faire economic system? Laissez faire from the French, Let it be. Let the government keep out of our business. Let the government have a minimal role, that the best economy is the one that's private. The old statement in American history that government is best, which governs least all of that. And there's been a debate, is that a good idea? Is that a bad idea? And this has been a debate that has often been presented as if it kind of were the only big issue for our economic system, as if we've exhausted the question of economics in our lives by having a discussion about whether there should be more or less government intervention. You can see that in the debate over the health care program, Obamacare, where the Republicans say there should be less government intervention and the Democrats tend to say more and more, etc. Etc. Well, here's my quarrel. The big issue for our economic system, I would argue, isn't about more or less government, and I'll explain why in a moment. The really big issue, and it's becoming more and more the big issue is whether we have a capitalist system or some other system, since the capitalist system is, as almost everyone would now admit, in a great deal of difficulty. So let's begin. This issue of government intervention or not is partly a little bit crazy. Why? Because the government has always been part of economic systems, not just our capitalist system, but the slave system that existed in many parts of the world for long periods of time, the feudal economic system. The capitalist system in no way unique in having the government play a role. The government of ancient Rome was a powerful government. The government of France in the 15th century was a very powerful government, and so on. All societies, all economic systems, have seen a certain amount of government intervention. And we all know what the government's intervention usually is about. For example, we call upon government to defend us militarily. We call on government to have a certain police function to make sure we live up to the commitments we entered into, the contracts we have, the relationships we maintain. We often ask for the government to have particular activities that haven't worked out well when we've left them in private hands, like, for example, printing money or making sure that the scales that merchants use to weigh the food we buy are properly measuring what it is we're actually paying for. We have commissions to watch for things. Here in the United States, we have the Food and Drug Administration and the interstate Commerce Commission. All of these governmental regulatory bodies were brought in because the American people understood that. That leaving it to the private sector was not in the public interest. So the government has always had a role. Sure. We will debate how big that role should be. And that's fine. Let's debate it. Let's make an argument. It could be larger, could be smaller. The early part of our country's history, we did not give the government the job, for example, of public education. But by the middle of the 19th century, we became clear as a nation, we. We want our people educated. We don't want to limit our economic and political Growth by not educating our people. Everybody should learn to read, to write, to do arithmetic, and so on. And guess what? We didn't think that private education was up to the task. We didn't want to make it necessary for people to have money to pay for a private school. We didn't want to limit education to people who could afford it. We didn't even want to limit education to people who wanted it. We didn't want to leave out all the people who might not want it, because the quality of all of our lives depends on how well educated all of us are. So guess what? We mandated public education. That's right. We did for public education what the current debate over Obamacare is arguing about. Namely, should we mandate that you have medical care, insurance? Well, we're all better off if we live among healthy people, just like we're all better off if we live among educated people. So we mandated public education, and that, of course, meant that we gave it to the public to do it. The government educates us. That's where the vast majority of people get educated, from kindergarten to through the university. The vast bulk of our people educated at all levels are educated by the government. Okay, can there be a debate about this? Of course there can. Most European countries don't have private education of any kind. It's all public. And their argument is that's the only way to keep it equal and democratic. We don't accept that argument in the United States, at least some of us don't. So we don't do it that way, Although that may change. Who knows? But let's go back to the basic. Is that all there is to argue about? No. That's not even the most important thing in our economy. Here's what is. How do we organize production? Before we get into the question of what role the government has, how do we organize the, literally the production of goods and services in our economy in the stores, in the factories, in the offices? Well, the answer is we've done it in a particular way, which is called capitalism. It's indeed what the word capitalism means. We organize it such that a very small number of people, the owner of the business, maybe the owner, and the top managers. If it's a big corporation, then it's the major shareholders, the entities, the individuals that own the big blocks of shares and the board of directors that they elect, because that's how you get to be on the board of directors of a corporation. The shareholders vote for you. They don't vote one person, one shareholder, one vote. They vote one, one Share one vote. So if you're a big bank and you own 2 billion shares, well, you get 2 million votes. So you get the picture. The major shareholders elect the board of directors and they make all the decisions what to produce, how to produce, where to produce, and what to do with the profits. We may all work in an enterprise helping to produce those profits, but what's done with them is, is decided by a tiny minority of people at the top. We call them employers and we call all the rest of us employees. Capitalism organizes production in a system of employer and employee. And you know, that's what distinguishes us from feudalism, slavery, and other systems. In slavery, the the organization is master, slave. The person who makes all the decisions also owns the person who works. In feudalism, it's the lord and the serf. The serf is not the property of the lord, but the serf lives and kind of has to stay on the land that the lord oversees. The lord has all the power and tells the serf what to do. In capitalism, we have the employer and the employee. The employee is not a slave. He's not owned by the employer. And he's also not stuck in a particular job having to stay there. He's not a serf either. In capitalism, the employee is free in the sense that he enters or she enters into a contract with the employer. And that's how work gets done. A contract in which the employer signs a commitment. I'm going to pay you, the employee, such and such an amount of money, and you're going to come and work for me. And whatever you produce while working for me is mine. You're taken care of by me paying you. If you produce a lot more for me than I pay you, that's my good fortune. That's how capitalism works. And that is how capitalism works, whether you have a lot of government intervention or a little. So the question isn't only should we debate more or less government intervention, the real question is for me, is this the way we want to organize production? You know, after all, slavery in the end was overthrown by people who, who didn't want it anymore, above all the slaves. But even a good number of the masters didn't like it anymore. And the same is true of feudalism. It was eventually overthrown, it was eventually allowed or pushed to die when the serfs wouldn't tolerate it anymore and many of the lords agreed to let it go, that it wasn't working as a social arrangement. So here we are with capitalism, the system that in a sense has come after Slavery. That had a good bit to do with overthrowing slavery. It had a good bit to do with overthrowing feudalism. Like it had a good bit to do with overthrowing kings and queens. You remember the American Revolution, we didn't want to be governed by a king in England, the French Revolution, the French people didn't want to be governed by feudalism or feudal lords. So. So they created a capitalism as an alternative. They hoped that a capitalism with employers and employees would work differently, would work better than the master slave relationship that defined slavery and the lord serf relationship that defined feudalism. Well, we've come to a point, I think, here in the United States and around the world that this capitalist system of organizing production, which with employers and employees, is long overdue to be questioned, to be challenged. Is this the only way to do this? Is this enough of an improvement over slavery and feudalism for us to be satisfied? Or can we, should we, Might we do it in a different way? I don't want that question, which I think is fundamental, to be lost in an endless and very repetitive debate about more or less government. Because, you know, that debate leaves unquestioned the capitalist way of organizing production. Well, then is there an alternative? And the answer is kind of obvious. Of course there is. There always has been. Just like there was always an alternative to slavery or feudalism, there's always been an alternative to capitalism. What's the alternative? To end the employer employee way of organizing production. And what would that be? Again, kind of simple, because it's very old. It would be making production into a community affair. What does that mean? All the workers? All the workers. The one who sweeps, the one who works the machine, the one who keeps the records in the office, the one who you fill in the blank. All the workers together, collectively, democratically decide what happens in the workplace, whether it's a factory, a store, or an office. That would be the end of capitalism, because it isn't got employer, employee, or another way of saying the same thing. The employers and the employees are the same people. It becomes a community affair, not the affair of a tiny number making the decisions that a large number have to live with, but they have no control. That's why capitalism is not a democratic system at the workplace, whatever it does in the community. At the workplace, a tiny group of people give orders and a large number of people take them. And the order takers don't get to vote over who's giving them the orders. That's not how it works. Conclusion? Friends don't be taken in by the notion that more or less government is what economics is about or what economic debates should be, could be, must be about. That's simply not the case. Just as important, and in my judgment, and now historically, much more important, is the question, have we come to a point in the capitalist system where the employer employee relationship is itself in play, is itself to be debated and discussed? Is it to be questioned the way we questioned and ended the slave master relationship as a way of producing or the Lord serf? Have we come to that point also with capitalism? That's the central question, in my judgment of this time, and I don't want it to be lost in the shuffle of a rehash of old debates about more or less government intervening in a capitalist system which we don't know how to question or to criticize. We've come to the end of Economic Update for this week. I want to thank you all for participating. I want to thank you for making use of our websites democracyatwork.info and rdwolf.com I want to ask you to partner with us by making this program's existence known to your friends and associates. I want to thank truthout.org, that remarkable independent source of news and analysis that has been partnering with us for a long time. It is a pleasure for me to produce this program, to present it to you, and I look forward to speaking with you again next week. Gonna be my time, my time, babe they ain't gonna change Change, change, change change, change, change fam Gonna change. Yes, it is, Sam. It.