Podcast Summary: Economic Update with Richard D. Wolff Episode: Small Victories, Big Lessons (June 27, 2016)

Episode Overview

In this episode, economist Richard D. Wolff examines recent "small victories" in economic struggles, using them to illustrate persistent systemic issues within capitalism and offer lessons for organizing larger social and economic change. The program also covers diverse topics including public health policy, labor experiments in Sweden, corporate incentives and tax competition, subsidies to religion, the impact of technology under capitalism, corporate taxation, and rising corporate debt—all with Wolff's signature critical analysis and advocacy for democratizing economies.

Key Discussion Points and Insights

1. Sugar Labeling Victory: Lessons in Public Health and Activism

• Topic: FDA mandates clearer labeling on sugars in food products.
• Significance: Wolff draws parallels to tobacco, highlighting decades of resistance by powerful corporate lobbies.
• Key Insight: Persistent public advocacy can eventually overcome entrenched corporate interests.
• Quote [06:52]:

  "Struggle works. It takes a long time, way longer than it should have ... That's how capitalism works, vested interests being what they are."
  —Richard D. Wolff

• Details:
  • Americans consume ~126 grams of sugar daily—over double other developed countries.
  • New FDA rule requires labels to distinguish between naturally occurring and added sugars.
  • Example: A single can of Pepsi contains 69g of added sugar, well above the FDA's suggested daily limit of 50g.
• Lesson:
  • Even incremental reforms are hard-won under capitalism, but they are possible through collective action.

2. Workweek Reduction in Sweden: Productivity and Worker Well-being

• Topic: Gothenburg, Sweden experiment with a 30-hour workweek (six hours/day, no cut in pay).
• Outcomes:
  • Increased productivity, reduced sick days, higher worker satisfaction.
  • Even business owners initially opposed found it successful.
• Quote [16:22]:

  "Here was an experiment with something probably all workers imaginable would want ... Turns out the business leaders were wrong and that this experiment was successful." —Richard D. Wolff

• Key Insight:
  • Worker-friendly policies can benefit both workers and employers, challenging the false conflict of interests.
• Broader Reflection:
  • Raises questions about further workplace democratization:

    "What about making workers their own directors? ... Why don't we overcome that soul-searing division?" [18:59]

3. Corporate Incentives and 'Race to the Bottom': The Citibank Relocation Case

• Topic: Citibank moves 150 jobs from Hartford, CT to Tampa, FL in exchange for $14.9 million in incentives.
• Core Problem:
  • States compete in offering taxpayer-funded incentives, effectively "bribes", to attract corporations; often net negative for the country as a whole.
• Quote [22:27]:

  "We are being held hostage, we the taxpayers, in a game that we are structured to lose as more and more ... money is being siphoned into the coffers of private enterprise." —Richard D. Wolff

• Analysis:
  • Leads to resource depletion from public services and a perpetual bidding war among states.
  • Systemic failure: decisions based solely on private profitability, not public interest.

4. Tax Subsidies for Religion: Challenging the Separation of Church and State

• Topic: Lawsuit over tax exemptions for religious housing allowances (Freedom From Religion Foundation vs. IRS).
• Scale of Subsidy:
  • Wolff argues U.S. subsidizes religion at the scale of tens or hundreds of billions annually—beyond just clergy housing.
• Key Point:
  • Churches get all public services (police, fire, schools, etc.) but pay no taxes, unlike other citizens or enterprises.
• Quote [32:17]:

  "In other words, everything the federal, state and local governments do has to be delivered to the churches. But the churches don't have to pay for any of it the way citizens do and the way private enterprises do." —Richard D. Wolff

• Reflection:
  • Raises issue of non-believers subsidizing institutions they may oppose, and questions the constitutionality and fairness of such subsidies.

5. Technology and Capitalism: Reflections on ‘Throwing Rocks at the Google Bus’

• Topic: Discussion of Douglas Rushkoff’s book critiquing tech's social impact.
• Core Argument:
  • Technological advances promised to improve everyone’s lives, but under capitalism primarily enrich a small elite.
• Quote [41:38]:

  "The promise of technical change versus what it delivers is stark ... Mr. Rushkoff is right to be disappointed. But this is a deep problem of how capitalism works." —Richard D. Wolff

• Key Insight:
  • Technology within capitalism is developed and deployed primarily for profit, not broad public benefit.
  • Suggests an alternative system could better harness technology for universal good.

6. Corporate Taxation Failures:

• Detroit/Michigan Example:
  • Michigan corporations in 2016 received more in tax refunds than they paid, a result of past bailouts and political compromises.
• Quote [48:08]:

  "...this year the people of Michigan, the citizens, the working people, are going to have to pay even more than before because the corporations have managed things so that ... they're going to get back in tax refunds more than they're paying in, which is, on the face of it, absurd." —Richard D. Wolff

• Critique:
  • This policy failure burdens citizens, exemplifies detrimental corporate influence, and reflects wider systemic issues.

7. Rising Corporate Debt: Systemic Risk

• Current Situation:
  • Corporations have amassed $6.6 trillion in debt during an era of low interest rates, far outstripping the $1.8 trillion cash on hand.
• Key Risk:
  • If/when interest rates rise, many companies may be unable to repay debts, risking severe economic contraction.
• Quote [52:52]:

  "Capitalism is a system filled with irrational, dangerous behaviors and decisions. And one of the reasons we're so long overdue for a debate over capitalism is that these have to be put into the public eye so we can identify weaknesses and take the necessary steps before we're overwhelmed by them."

Notable Quotes & Memorable Moments

• On struggle and public policy [06:52]:

  "Struggle works. It takes a long time, way longer than it should have ... But that's how capitalism works, vested interests being what they are."

• On the Swedish work week experiment [16:22]:

  "Turns out the business leaders were wrong and that this experiment was successful."

• On corporate incentives and public costs [22:27]:

  "...money is being siphoned into the coffers of private enterprise as they make us beg and compete for where they're going to locate."

• On religious exemptions [32:17]:

  "But the churches don't have to pay for any of it the way citizens do and the way private enterprises do."

• On technology’s broken promises [41:38]:

  "The promise of technical change versus what it delivers is stark ... But this is a deep problem of how capitalism works."

• On Michigan’s corporate tax refunds [48:08]:

  "...they're going to get back in tax refunds more than they're paying in, which is, on the face of it, absurd."

• On corporate indebtedness and risk [52:52]:

  "Capitalism is a system filled with irrational, dangerous behaviors and decisions."

Timestamps for Key Segments

• [02:29–13:00] Victory on U.S. sugar labeling, public health, and lessons in advocacy
• [13:01–18:59] Swedish 30-hour workweek experiment—outcomes, implications for workplace democracy
• [19:00–27:58] Citibank job relocation, the logic of corporate incentives, and the “race to the bottom”
• [29:40–41:37] Tax subsidies for religion; separation of church and state; justice and fairness
• [41:38–48:07] Rushkoff’s Throwing Rocks at the Google Bus, tech under capitalism
• [48:08–51:30] Michigan corporations’ negative tax bills as a case study in failed policy
• [51:31–54:18] Rising corporate debt and systemic economic risk

Final Thoughts

With incisive commentary, Professor Wolff uses recent events and policy changes as entry points to expose broader structural issues: how capitalist dynamics shape health, work, taxation, technology, and risk. Each segment points back to a central lesson—collective action can achieve meaningful change, but capitalism’s systemic priorities regularly thwart the public good. Wolff motivates listeners to look beyond quick fixes, embrace systemic critiques, and engage in organizing for deeper economic democracy.

Resources Cited

• Washington Post (May 20, 2016, Roberto Ferdman) – On U.S. sugar intake and FDA labeling
• New York Times (May 21, 2016) – On Gothenburg’s workweek experiment
• Detroit News (May 19, 2016) – On Michigan's corporate tax outcomes
• Business Insider (May 22, 2016) – On rising corporate debt and economic risks
• Douglas Rushkoff, Throwing Rocks at the Google Bus

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