Economic Update with Richard D. Wolff

Episode: Seeds of Fascism?

Date: March 7, 2016
Summary by: [Expert Podcast Summarizer]

Episode Overview

In this compelling episode, Richard D. Wolff examines the critical economic issues shaping 2016, with a particular focus on the roots and risks of fascism in contemporary societies. Drawing from recent developments in international finance, papal pronouncements, U.S. economic data, the presidential race, and historical analysis, Wolff dissects how capitalism's failures can breed exploitation, inequality, and political extremism.

Key Discussion Points & Insights

1. Argentina’s Debt Crisis and "Vulture Funds"

[02:51 – 15:01]

• Wolff opens with a detailed retelling of Argentina’s debt saga since 2000.
• Explains how governments, instead of taxing the wealthy or corporations, fund services with borrowing, especially from foreign creditors.
  • "How in the world is any government going to provide the services its people and businesses want without taxing its people and businesses? And the answer is borrowing." — Richard Wolff [04:25]
• Outlines the cycle of debt, default, negotiation, and settlement, typical in global finance.
• Highlights the entry of aggressive hedge funds ("vulture funds") that bought defaulted Argentinian bonds cheaply and demanded full payment through U.S. courts.
• Example: Paul Singer’s NML Capital bought Argentinian bonds for $48 million—will now receive $620 million after a court settlement ([14:15]).
  • "They will get back for that $48 million they spent, $620 million. That's a very good deal." — Richard Wolff [14:23]
• The outcome saddles Argentina with $5 billion more debt, to be repaid at the expense of public services and the general population.
• Connects this to broader critiques of international capitalism and parallels to the 2008 U.S. banking crisis.

2. Pope Francis: Dirty Money and Exploitation

[15:02 – 23:15]

• Wolff discusses Pope Francis’s remarks that the Church will not accept money from businesses built on exploitation.
  • “Please take your checks back and burn them... the people of God and the church don’t need dirty money.” — Pope Francis, quoted by Wolff [17:05]
• Explores two meanings of 'exploitation':
  1. Obvious mistreatment and underpayment ("slave-like conditions").
  2. Systemic exploitation: all wage workers produce more value than they are paid—profit comes from this excess ("surplus value").
     • "The only way the employer will give you…the employee $20 an hour…is if for each hour you work, he earns off of your labor from what you do more than $20." — Richard Wolff [20:29]
• Proposes worker cooperatives as an alternative to systemic exploitation.
• Suggests Francis’s rhetoric could be interpreted as a challenge to capitalist foundations, not just egregious abuse.

3. U.S. Median Income and the Illusion of Recovery

[23:16 – 27:12]

• Examines real median household income in the U.S.:
  • 2000: $57,371
  • 2008 (pre-crash): $57,800
  • 2011 (post-crash): $52,000
  • 2016: $57,000 (still below 2000 levels)
• Despite higher productivity and growth, the median income “has gone exactly nowhere,” meaning all gains channeled to the top strata.
  • "The average, the mean, the basic condition of the American working class has gone nowhere. That's the achievement of capitalism over the last 16 years." — Richard Wolff [26:50]
• Critiques talk of "recovery" as misleading for ordinary Americans.

4. Worker Co-ops vs. Unions: Questions from Italy

[29:27 – 38:48]

• Responds to listener concerns that worker cooperatives might weaken unions and the labor movement.
  • Historically, unions and co-ops have been allies; co-ops can be a practical outgrowth of union battles.
  • Envisions roles for unions within co-ops—for example, as oversight to ensure managerial committees remain accountable.
    • "Unions could become a kind of in-between agent…to monitor what the managing committee does, to make sure it does what the workers want." — Richard Wolff [34:45]
• Addresses the risk of co-ops being used to undercut wages (as in some Italian cases), noting that like any institution, co-ops require ongoing vigilance and struggle.
  • Draws parallels to the abolition of slavery: ending exploitation does not end all struggles—the fight continues in new forms ([37:50]).
  • "It doesn't automatically mean that the co-op is a wonderful place…there will still need to be struggles inside a worker co-op economy..." — Richard Wolff [38:00]

5. The Bernie Sanders Campaign and Occupy Wall Street’s Legacy

[38:49 – 44:40]

• Remembers Occupy Wall Street’s message of 1% vs. 99%, which authorities dismissed as fringe.
• Notes that the scope and resonance of Sanders’s campaign proves that millions agree with this analysis.
  • "The Bernie Sanders campaign…has proven already, no matter what happens from this point onward, that millions and millions of Americans basically agree with the 1% vs. 99% analysis..." — Richard Wolff [43:10]
• Criticizes the establishment (including the Obama administration) for ignoring and dismantling Occupy rather than addressing its grievances.

6. What Is Fascism? How Capitalism Breeds It

[44:41 – 54:05]

• Explains the historical emergence of fascism in Germany, Italy, and Japan as a reaction to crises in capitalism.
• Capitalism creates wealth concentration; to maintain power, elites forge alliances (with religious groups, conservatives, etc.). But crises (like the Depression) can threaten these alliances.
• In such crises, elites may support or install authoritarian movements to maintain order—this is the classical path to fascism:
  • "Fascism is when capitalism cannot rule any longer except with the iron fist of a disciplinary, top-down society." — Richard Wolff [52:30]
• Warns that contemporary economic instability can sow similar seeds.

Notable Quotes & Memorable Moments

• On Hedge Funds & Debt:
  • "They were led by a famous hedge fund vulture named Paul E. Singer, whose company, NML Capital, bought a whole bunch of these bonds at their discounted value before all the deals were worked out." — Richard Wolff [09:18]
• On Exploitation:
  • "You get a job if and only if you produce more for your employer than he pays you. And in this view, that's exploitation..." — Richard Wolff [20:50]
• On Income Stagnation:
  • "...the real income, the real portion of those goods and services that an American household gets, has gone exactly nowhere. Which means all the increase went to whom? To the folks at the top." — Richard Wolff [26:18]
• On Worker Co-op Optimism:
  • "Democratizing the enterprise…is a momentous step forward, like abolishing slavery. But it doesn't automatically mean that the co-op is a wonderful place..." — Richard Wolff [38:09]
• On Sanders & Occupy:
  • "So we now know there was support in 2011…if anything, it has grown stronger since then for a fundamental declaration of war against…1% have the economic, political and cultural dominance." — Richard Wolff [43:43]
• On Fascism’s Roots:
  • "When you do away with democratic procedures, you do away with the parliament…you do away with civil liberties…the government becomes a powerful security force, making sure capitalism survives a rough time." — Richard Wolff [52:00]

Timestamps for Key Segments

• Argentina & Vulture Funds: 02:51 – 15:01
• Pope Francis on Exploitation: 15:02 – 23:15
• US Median Income Analysis: 23:16 – 27:12
• Worker Co-ops and Unions: 29:27 – 38:48
• Occupy Wall St. & Sanders: 38:49 – 44:40
• Fascism Explained: 44:41 – 54:05

Tone & Language

Wolff’s tone is conversational but forceful, blending educator’s clarity with pointed critique. He balances detailed economic explanation with historical analogies and moral urgency.

For Listeners Who Haven’t Tuned In

This episode is a cogent exploration of how international finance, systemic exploitation, labor organization, and rising inequality can produce conditions ripe for authoritarianism. Wolff doesn’t just diagnose our economic ills—he draws connections between today’s political movements and profound questions of justice, democracy, and the future of capitalism.