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Welcome friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Income, debts, jobs, job security, all of it for ourselves, for our kids, for the community we live in. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and my hope is that it's prepared me to be a useful analyst of the last week's major economic events. So let's get right to it. Over the last week, the intensity with which the European authorities are cracking down on Uber have really made the news. Uber is making enemies faster than it's making friends, at least in Europe. And the authorities are responding to the anger and upset of their own people by fining Uber and finding it doing things that they don't want to have done there. At the same time, I've been getting a number of emails from many of you asking me why I'm critical of Uber, asking me what's wrong with the gig economy. After all, it gives people more flexibility in doing their work in the manner of Uber and so on. So I'm going to take a few minutes to go over this material, helping to understand why the Europeans feel as strongly as they do and why the Americans may in fact pretty soon catch up to what the Europeans are already doing in this area. So let's begin. And the way to do this, as with so many important issues, is to go back a little bit and do the history. Many industries deal directly with the public, that is they provide a good or a service to the public. And in the history of capitalism this has always bred real problems. People pretty soon. Why? Because a capitalist enterprise is there to make money for the people who own and operate the enterprise. That's their prime goal. That's why they go into the business and that's what makes them succeed, if indeed they do. So that's their first concern, the famous so called bottom line. So let's take the example of a company that provides taxi rides. Company owns and operates a fleet of cabs, hires cabbies and they provide us with transportation. What happened when the automobile industry developed in the last century was that pretty soon every city and quite some townshad a cab company working there and the cab company wanted to make a profit. And so the cab company, sooner or later, not all the companies, but many of them began to use shortcuts. I'm being polite here. In order to make more profits. What do I mean? Well, they didn't maintain the cars quite as carefully as they might have. They didn't buy expensive insurance Policies just in case there was an accident. They weren't so careful about who they hired as a cabbie so that they could pay lower wages. Being quite aware that that might mean people who wouldn't be good as cab drivers might get the job, etc, etc. And the predictable happened. Cars didn't work, cars had accidents, drivers of cars didn't treat the passengers very well. And so a demand arose from the riding public. Hey, this isn't safe to get into a cab car. We're having injuries, we're having ugly experiences, we don't want this. What do you do to solve the problem? The way it was solved was not to admit that there's a problem when you want to provide a service for people and you put that job in the hands of a profit making enterprise whose first objective is profit. There wasn't an honest facing that. This is a dangerous situation because there are countless ways in which making more profit can be not so good for the service you're supposed to provide. Cab driving was just one example. So, so here was the solution. A commission was established, the government was called in, set up a Taxi and Limousine commission, for example. That's what it's called in New York City, but other communities have that too. And the commission made the following rule. There must be such and such inspection to maintain the quality of the car. There must be such and such an insurance policy. In effect, there must be these and these qualifications for cab drivers. All of those things have to be met or else you can't be a cab company in this community. These were of course the very expensive things that the cab companies had avoided. So the commission solved the problem by setting the cab rates, what we pay to have a ride in a taxicab, high enough so that the cab company could make a profit and pay for what was necessary to provide a public service. It was a stark recognition, never spoken in so many words, that if you leave it to the private capitalist motive, it isn't safe. You have to bring in the government representing the interests of the people to get the quality of service that you want. And so it came to be that cab drivers were in safe vehicles, well insured, properly vetted, et cetera, and we paid the rates that made that all possible, plus a profit. Well, no sooner is this done than the very solution I've described creates the incentive for what? For Uber? What do I mean? For some company to come in, find some excuse, some way to be able to offer the cab services at the nice high prices that the commission had set and yet not pay the high wages, the insurance policies, the maintenance fees that the other company. In other words, they would then have a real big profit. They'd get the high rate set by the commission or the equivalent, but they wouldn't have to pay what was required of the existing tab companies. All that Uber is, is the latest effort to do exactly that. They had a new technology, they made a big thing about the new technology, then they made a big thing about. Every driver is on his own or on her own, work the hours they want, when they want. The flexible gig economy, the new way of doing business, free flexible hours for workers. Isn't it wonderful? That was the hoopla, that was the hype. Underneath it was a very old game. We're going to get taxi prices without taxi costs because we're going to not maintain the cars, not going to insure the cars, and allow anybody and his brother or sister to drive a cab or to drive an Uber car. Guess what? Around the world, exactly now is happening. What happened in the cab companies in history. What? The insurance isn't adequate, the cars aren't properly maintained, the drivers are not reliable, safe, vetted people. And the results are history repeating itself. Which is why there's an outrage around the world led by the Europeans these days saying, what in the world are we doing? We're simply redoing our own history. We know how badly this story ends. There shouldn't be an Uber. Or to say the same thing another way, we have taxis. We have worked through this problem. If Uber wants to run a taxi business, they have to abide by all the same rules and regulations that we've worked out to make this system work. Hidden again is the wonderful assumptions that that if you leave public services to private capitalist enterprises, sooner or later, and it's usually sooner, you're going to have to bring the government in because relying on capitalists isn't a smart way to do business in the public service. My next update is very short. It's a comment on a sitting senator. He's Senator Ron Johnson, Republican from the state of Wisconsin. At a meeting widely circulated through the Internet, he was asked a public meeting. He was asked by his student, isn't health care a human right? In other words, shouldn't everybody, by virtue of being a human being, be entitled to medical care if and when he or she gets sick, suffers a injury, etc. Senator Ron Johnson gave a forthright answer. I'm going to read it to you and then make a brief comment. Here's what the senator what we have as rights are life, liberty and the pursuit of happiness. We have the right to freedom past that point. Everything else is a limited resource that we have to use our opportunities given to us so that we can afford those things. What the good senator is saying is the if you're born into a rich family, then the quote, unquote, opportunities given to you are enormous and you will be able to afford, for example, health care. And if you happen to be born into a poor family, well, then the opportunities given to you, the senator's words, will not allow you to afford health care. This is a none too subtle way of saying we're not giving anything to anybody who's not rich enough to pay for it. We're not going to inquire how one person got something given to them that another person didn't through no fault of their own, knew, through no mistake and error, nothing. We're going to keep the status quo. The rich will get and the poor won't. He hasn't the decency or the honesty to say what he means. He uses the fancy language. But a United States senator wants to make sure that if you're poor and get sick or hurt, you're on your own. Third update for today. I really just want to shout out to the nation of Norway, they did something extraordinary and they deserve for the world to know. Last week, the Norwegians decided for the first time in their history, and I believe it's the first time in the history of any country that I know of, that the male and female athletes trained and representing the state of Norway in competitions across the sports will be paid the same amount of money. In the past, the males were paid more. If you look at the situation of sports in most countries, certainly the United States, male athletes are paid much, much more, sometimes many multiples of what women doing pretty much the same sport are paid. But I want to see that everybody understands what this step by the courageous Norwegians who put their equality commitments right up front. We're going to pay men and women engaged in training and becoming professional athletes representing our country the same pay. They work as hard, they train as hard, they're intense in their commitment. They deserve the same pay. I'm happy to say that the male athletes supported it and indeed donated part of their pay to make the equalization work. What I like about it, what I want you to think here, is a society that is deciding that the equality between men and women is an important value and that they're going to pay people according to the values they believe in. They're not Going to pay people according to the market, are they? They're not going to say, gee, more people come to male games than to female games and buy the tickets or watch the tv. Is that a relevant factor? I'm sure it is. But there's something that's also important to them, and in this case, more important, perhaps, and that is the equality between men and women. Isn't it interesting that there are societies who set wages not by letting the market decide, but by letting the values of a community democratically arrived at make that decision? I want next to turn to a recent article written by Ralph Nader, a name that many of you know. And he wrote an article in which he criticized capitalist corporations in the United States and elsewhere for using the profits they earn as corporations in order to go into the stock market and buy shares of the company's own stock. Let me explain what Ralph Nader was talking about. I assume everyone understands what a corporation is. It hires a lot of workers. I'll take as an example General Motors. It hires many tens of thousands of workers to produce cars and trucks and so on. And it sells those cars and trucks and it makes enough money when it sells the cars and trucks to pay for all the costs of producing those trucks, the metal, the paint, the plastic and so on. Pays for running the factories, pays for the robots, and also pays the wages for the workers. But it pays all those costs knowing that there's a difference between the revenue they get from from selling the cars made by their workers and the costs of having those cars produced. And that difference, revenue minus costs, are the profits of General Motors. Who decides what to do with the profits? The board of directors. This is sort of interesting. All 150, 200,000 workers of GM help to produce the profits. But the board of directors, roughly 15 people, decide what to do with them. There's no democracy there. Let me state it. Hundreds of thousands of people help to produce the profits. 15 individuals decide what to do with them. They can use them to advertise the GM car. They can use them to build factories in China. They. They can use them. You name it. But here's another thing they can do. They can use the money, the profits they earned, to go into the stock market and buy shares of General Motors. That's perfectly legal. It's done all the time. But of course, it's interesting, because if they do that, they're not creating jobs with those profits, are they? They're not expanding production, they're not buying more machines, they're not hiring more workers. Instead, they're buying shares of stock. And now why would the board of directors do that? Well, it might be that a bunch of those directors, all of them, some of them the key ones, who knows? But it might be that they own shares privately as individuals, perfectly legal. So if the company goes into the stock market and buys a lot of shares, it'll drive up the price of the shares which they as individuals own. So they can then sell their individual shares at the higher price. Their position as an executive of the company, as a director, was now able to advance their wealth as an individual, using the profits all the workers made. They enhance their own position. Ralph Nader calls them out. Ralph has a point. He's not the only one who said this, but I want to draw out the implications. Why do we have an economic system that allows tens of thousands of people to work to produce a profit that is then the property of somebody else? People on the board of directors of General Motors have never helped make a car. They don't do that now. They don't get their hands dirty. How did they come to be in a position not only to decide what to do with the profits, but to be free to do that in a way that personally benefits them, rather than providing the jobs and economic growth that the majority of the people undoubtedly want. That's how our system works. And that's something to think about, isn't it? The next update is about Japan. It's about Japan, but it's a problem we all have in Japan. There has been a scandal of recent weeks about something whichand pardon my pronunciation here is called karoshi in English. K A R O S H I Karachi roughly means exhaustion from overwork. It is so serious a problem in Japan that two recent cases have come to light and caused a national anguish and a national discussion. The first example, a young woman aged 31 years old named Miwa Sado. She died of congestive heart failure at the age of 31 in her home in July of 2013. Her family said she had been covering local and national elections for a television station and had worked 159 hours of overtime. And in the month before, she worked a 40 hour week. Roughly four weeks per month means that you're working about 160 hours. If she worked 159 hours of overtime, she was doing double the normal amount of work that a person should done. Labor officials investigated and discovered that her death was caused by overwork. That's the official Japanese government determination. But the details of that were only made public this last week, wow. Nhk, the name of the television station that employed her, issued a public apology. Wow. A public apology. The second case was that of Matsuri Takahashi. He worked in an advertising agency named Dentsu and he died. A 24 year old young man, he died. And again the Labor Ministry in Japan ruled that his death was from overwork. He was fined. The company Dentsu was fined and had to pay 500,000 Japanese yen. But that works out to US$4,400. That was the determination of a Tokyo court. It was illegal, the court said, to make a person work like that. Why do I bring this up? I bring it up because it's an example yet again that the profit driven imperatives that govern capitalist enterprises intrinsically have no limit. Sure, there are rules and regulations designed to limit because we kind of understand that capitalism drives people to this sort of thing. But what we keep discovering is that corporations have ways to get around those limits, to not pay attention, to hide it, often for long periods of time until there's a national scandal and a lot of outrage and a lot of gnashing of teeth. But if we don't deal with the problem, if we just pass another rule, if we impose another little fine, we're not dealing with the problem because the problem is systemic. It has to do with a system that drives otherwise perfectly good and nice people to do things to one another that are unconscionable, such as having a 24 year old and a 31 year old die from overwork in a society that admits that this is an endemic problem across the society. My next update has to wait until I remind you, please, to know that we maintain two websites that are available for your use. And what I mean by your use is that you partner with us. That's why we do this work, in the hopes that you find it interesting, but also that you will share it with other people and therefore extend our reach. The first website is rdwolf with two Fs and the second one, democracyatwork.info all one word, democracyatwork.info let me say to our listeners that if you would like to see this as a television program, it is available to you at patreon.com P-A-T-R-E-O-N.com economicupdate and you can see the televised version. Make use of these things. Be a partner with us. We want to partner with you. Also, the websites, I should add, allow you to communicate with us what you like and don't like. What you would like us to cover allow you to follow us on Facebook, Instagram, Twitter and so on. Lots of resources available for you. The next update is about New York City, but my guess is it applies to many other cities. Here's the blunt, hard fact covered by the New York Times in a recent story. 10% of New York City public school pupils were homeless part of the time last year. 10%. How many is that? 111,500 students in New York City schools were homeless during the last academic year. If you take the state of New York, which includes much more than New York City, well, then it's 148,000 students. Beside it being an unspeakable tragedy that we are allowing this. I want to pick one particular aspect of it and make sure it's clear. There have been a hundred studies, and the New York Times story documents them. Studies that show that a homeless child falls behind in school, he or she has to move from one relative to the next in one school, out of another, out of school altogether for weeks at a time. All of these things are reasons why their reading, their math skills and so on will slip behind, since of course, these are young kids who come from poor households, by and large, troubled households. What this means is we are keeping the poor poor. There's no mobility here. You're giving the disadvantage of poverty a boost by adding the disadvantage of less schooling than is needed because of the homelessness. And let's remember, the children who are homeless are not responsible for their homelessness. You might want to blame their parents. You might want to blame that they don't earn enough money to be in a home. But you can't blame the kids. You can only make them suffer or choose not to. And in this society, the choice is all too obvious. Last update for which we have time. President Trump and the GOP are telling us that we have to reduce our 35% tax on the profits of corporations. I could call it lots of polite names. I don't have the time. These are lies. Why are they lies? Because corporations have exemptions and deductions that are available to them legal under the law that in fact make them pay a much lower rate of taxes than the 35%. In fact, in economics, we call the 35% the legal rate, but we call what they actually pay the effective rate. A recent story carried by MarketWatch basically tells the truth. Here it looked at the 30 industrials that make up the Dow average, the number you hear when you are told whether the stock market went up or down the Dow 30 industrials. If you add together the federal income tax rate they pay and any state and local taxes they pay, out of the 30 industrials, one paid more than 35%, all of the others paid less. To say that American businesses are suffering from a 35% rate misrepresents the story. The biggest corporations in America haven't paid 35% in many years. They don't need and they don't deserve a tax cut. We've come to the end of the first half of this show. Please stay with us. We will be right back. Welcome back, friends, to the second half of this edition of Economic update. For this second half, I want to deal with a subject that of course we have dealt with before, but is perennially on folks minds. And I've been getting more and more emails from you that make that abundantly clear. And then there have been two events that also kind of put this on the agenda yet again. Recent polls in the United States have shown that people under 30 when asked the question which would you rather have capitalism or socialism? Have surprised lots of us by basically saying socialism. And we obviously are still reacting to the fact that Bernie Sanders made a very impressive run for the presidency inside the Democratic Party with a self identification as a socialist. And so it becomes important to ask, what is this socialism? How has it been understood? And is it in fact, once again on the historical agenda? And I thought it might be useful to go over the story of socialism, its past, its present and its future in order to answer this question. And I mean no disrespect when I say that the young people under 30 that I encounter as a college teacher and in the rest of my life who are saying that they prefer socialism, at least the majority of them are very honest and forthcoming in subsequent conversations that what they really mean is not so much that they like socialism, but that they don't like the capitalism that confronts them. The world of work, the world of income, the world of college debts, all of that. So I want to respond to their questions and to yours by a brief survey of what socialism has meant and can mean and likely will mean. So let's begin. Every economic system, not just our own, has seen people, many who have felt that the system was in some way fundamentally unfair, unjust, just unacceptable, and who found in particular the inequalities of it all, the injustices of it all, so galling, so upsetting, so dangerous, that they set themselves the goal of saying we can, we should do better than this system. The examples are many. I'm Going to pick just a couple. So you get the idea. People who live in slavery, for example, excuse me, Americans in the 19th century reached the conclusion, not all, but many, that it was an unjust, unfair, intolerable system. And we as a nation fought a civil war in part about that. And as part of the history leading up to the Civil War, as part of the movement to abolish slavery, there were all kinds of efforts to imagine another kind of economy, for example, one in which everybody was a free person, which in slavery a large portion weren't. And to imagine an economic system that wasn't divided into masters and slaves, but everybody was equal in some sense, or at least had an equal chance in life. They didn't call themselves, many of these people socialists in those days, but it's where we're going when we see what that word will come to mean. The same is true of another system, feudalism, the system that divided people into lords and serfs that operated in Europe from roughly 500 A.D. to roughly 1500 A.D. a thousand years. Eventually, that system produced enough people who felt it was unfair, unjust, and intolerable that they made a revolution, the most famous of which the French Revolution of 1789. And there again, inside that revolution, there were many people who believed literally in the slogans of the French Revolution, which were liberty, equality and fraternity. We were all to be equal, free brothers and sisters for one another. Those movements show that the impulse, the desire for a society of free and equal people, for an economy in which everybody is a free and equal participant, are very old and sit very deeply in the human community. Let's turn then to the economic system that we have. Capitalism. What comes after slavery? What comes after feudalism, at least in the Western part of the world. And capitalism, like slavery and feudalism before it, has always spawned people who love, admire, and celebrate it, on the one hand, and people who find it deficient, who are critics, who want to do better on the other. Just like in slavery and feudalism, you had that kind of division. And what happened when capitalism becomes the dominant system, and that's something that evolved over the 19th and 20th centuries. So we have that now. It's the world economic system. What happened in the 19th and 20th century was that people who were critical of capitalism, who found it wanting, began to assemble, to talk to each other, to teach each other, to inspire each other, and to build a critical movement to go beyond capitalism. And it took the name socialism on other programs I've talked about. Why that particular name? I'm not going to deal with that today. Socialism became, in particularly in the 19th century, the kind of main critical movement in relationship to capitalism. So let's review. What was the criticism that the socialists made? What was it about capitalism that they didn't like and that they wanted to do better than? The first is the concept of private property. The notion in the socialist mind was that you cannot have an economy that works for all the people if you only allow a very small number of those people to own what they call the means of production. The land, the factories, the offices, the machines. If those are privately owned by a relatively small number of people, this will create an inequality between those people and the mass of people who, who don't own land, equipment, machines, tools, and so on. And the socialists argued that if you are democraticand you mean that seriouslyif you want the economy to serve the majority of people, then you have created a monster if you allow a small minority to own the means of production because they will dominate the economy and. And there goes your democracy. So the socialists said property shouldn't be owned. By the way, they didn't mean personal property. Your shirt, your toothbrush, your socks, they're not interested in that. That's of course, your personal private property. They meant productive property, property that is used to produce the goods and services we need as a society to live. Means of production should not be private property. They should be social property. That's in part what the word socialism comes from. The means of production should be owned by everybody equally. And the only way the socialists understood how that could work was to have the representative of everybody. The government, the state. In a democratic society, it should be, in a sense, the steward, the owner, the master of the means of production, with the job of making sure that the land, the factories, the offices, the stores, the machines were used in a way that benefited everybody equally. That was the idea. The second thing the socialists were angry about in terms of capitalism was the reliance on the market. Capitalists seem to think that the way you distribute goods and services, the products of our work, is to sell them for the best price you can get to the buyer who can afford to pay that price. The market is a place where buyers and sellers meet and navigate and negotiate what price they will exchange their money and their goods for. What the market, of course, does is allocate scarce goods and services to the people with the most money, because they're the ones who can pay for it. And the socialists immediately backed up and said, wait a minute, the goods and services that are produced in a society should Be distributed in some generally equal way to people in that society based perhaps on their needs, based perhaps on what the society as a whole would like to accomplish. But they shouldn't be distributed by giving them to the people with the most money. That would be good for those people, of course, those with the most money being able to get what they want. That's good for them, but it's not good for the society as a whole, said the socialists. So the critique focused on private property and the means of production and markets. They were the institutions that socialists thought made capitalism unfair, unjust, and unbearable. So that the solution the socialists offered kind of flows logically from their analysis. They wanted to replace private property with socialized property, property owned and operated by the government for everybody. Sort of like the government operates the public park for everybody, and the government operates the streets and the roads for everybody. Well, it would operate industry and agriculture again for everybody. And the second thing the socialists said, we don't want markets because markets distribute to the people with the most money. And that's, of course, going to be the people who own the means of production. This is a system for them. So the alternative was that the government would distribute resources and the products of our work according to other rules, not according to who had the most money, but rather according to some notion of need, some notion of equality, and. And some notion of what the society as a whole wanted to achieve in the period ahead for which a particular distribution would be the best way to get that done. Democratically decide on distribution and democratically decide on how the government will use the means of production once it has socialized them. That was the socialist idea. Well, what happened? Not so surprisingly, as capitalism ran into more and more difficulties, particularly in the 20th century, this movement of socialists grew with the difficulties capitalism had. Because it turned out, capitalism did produce growing inequality pretty much everywhere it landed. It did produce a society that was very good for a relatively small portion of the people. So the socialist criticisms made sense to a growing number of people, country after country. The spread of socialism in the 19th and 20th century is truly impressive. From a small group of people, mostly in western Europe, this idea of socialism exploded across this planet. So that today there's not a country on earth that doesn't have socialist parties, socialist newspapers, socialist movements, socialist this, socialist that, it spread like wildfire. And so it's not surprising that when finally one of these movements got strong enough to challenge capitalism, to say, we are not going to accept capitalism anymore, we're going to appeal to the people of a society, Give us the chance to build an alternative system. When that happened, they did what they thought this whole history of socialism meant for them to do. And I'm talking here about what the Russian revolutionaries did in 1917, literally a hundred years ago this month, or what the Chinese revolutionaries did in the 1940s and up till 1949 and so on. And other countries, too. Here's what they did. They took private property and means of production away from the private owners. They literally said to many of them, not all, but to many of them, you're no longer the owner. You're welcome to stay here, you're safe, but you're going to have to be a worker like everybody else. We'll make a society in which we take care of everybody. But you're no longer the owner of this factory, this office, this store, because that is now being owned by, collectively owned by the society, run by the state. And the second thing they did was to say, we're not distributing things in the market. We're not allowing buying and selling to navigate and negotiate and come up with a price. We're not doing that. We're going to have a system of government distribution. We're going to give people shares of the output, depending on what the government thinks is fair, reasonable, and consistent with the broader values and objectives of the society. They did that roughly in Russia. They did it roughly in Eastern Europe, in China, in Vietnam, in Cuba. In all of those places, they did that. But not only there. They also, the socialists captured power in societies where they didn't have exactly the same idea. I'm talking about Germany and France and Scandinavia and lots of other places. Their idea of socialism was, no, you don't have to take the property from the private, and you don't have to do away with the markets and have the government do it. There's a kind of midpoint. Here's the way the midpoint. You leave the property in the hands of private owners and you let the market function. But within limits. The government will regulate, the government will control. The government will make sure that even though you leave the property in the hands of private people, they have to use it in a way that is socially acceptable. And likewise, the market can buy and sell and borrow, but it has to do so within limits set by the government. That's why the government will have, for example, a minimum wage. You can't go below it, or a maximum interest rate. You can charge, you can't charge more, and so on and so on. The whole regulatory apparatus, in a way, socialists divided into two groups. One group you might call the Moderates, who said, okay, we can leave private property, we can leave the market, but we're going to have the government come in and make sure it's less unfair and less unjust than it otherwise would be. That's what Western European socialism is about. And socialism is in other parts of the world. The ones who wanted to go further took a different name that happened after the Russian Revolution in 1917. The ones who said, no, it's not enough for the government to regulate. The government has to take it over. That's the only way to have this work out. And those people took the name not socialist, but communist. That's really the only difference. They don't disagree on the basic idea that the government has to do it. It's that the socialists think it's by regulation and the Communists think it's by taking over the activity. And so communists succeeded in Russia, China and places like that. Socialists succeeded well. For example, the current government of Portugal is a government of the Socialist Party. Many parts of Europe, counties, cities, are governed by socialist parties, a few also by communist parties. But in general, the communist world is Russia, China and all of that. And the socialist world is the more moderate, as I've described it. Well then, where do we bring us to the present and the future? Well, here's the problem. The socialisms of the past, particularly those of the last 200 years, in their moderate version of socialism a la Western Europe and Scandinavia, in their more radical version, communism, Russia, China and so on, have not had the results that the people who want equality, fraternity, democracy want. It may be better than a private capitalism that isn't socialist at all, where private enterprise and private property and markets can do their thing with a government taking a minimum role, minimal regulation and so on. Maybe better than that, but it isn't anywhere near liberty, equality and fraternity. The people of Russia and Eastern Europe got rid of their communist governments, their communist arrangements. Clearly something wasn't working real well. And China today has as big a capitalist sector as private property and markets as it has a government sector. In other words, something didn't work in that socialism. It left too much that was unfair, unjust, and therefore unacceptable. Where are socialists to go? They have to face that their experiment in the communist version of Russia fell apart, lasted 70 years. That's quite a bit of time accomplished. The modernization and industrialization of Russia, no mean achievement, but in terms of a long term satisfaction for the very ideas of socialism didn't work real well. Which is why it's gone. And socialists had to face that. And they have. They've asked themselves the question that, of course you have to ask what went wrong? Is there something we didn't understand that we should have done? Something we did that we shouldn't have done? And they've come up with an answer. And that's the socialism of the future. Why is it a socialism of the future? Because the issues that provoked socialism over the last 200 years, the failures of capitalism that did that, are present in capitalism right now. That's why the future of socialism is assured, because what created socialism is in place. What do I mean? An inequality beyond words. Oxfam in England is telling us that 150 of the richest people have as much wealth in this world as. As the bottom half, three and a half billion people. I mean, a level of inequality that you'd have to go back to ancient Egypt to equal. Is capitalism producing inequality? You betcha. Earlier in this program, I had to report that 15% of the school children, 10 to 15% of the school children in New York City are homeless. This is one of the richest cities on this planet. It can't provide homes for people. What is that? Inequality, injustice, Instability. Capitalism's flaws are screaming today, in some ways more than ever. But the socialists can't do what they've done before. There have been too many failures. Yes, there have been accomplishments too, but the failures are what the problem was and is. So what have the socialists come up with to account for the failures and therefore to allow the projection of where socialism is to go now? And here is the answer. The socialists of the past focused too exclusively too much on who owned the means of production and how distribution of goods and services was to be worked out. What they didn't focus on was how production itself was organized. What happens in the workplace, the factory, the office, the store? What happens there among people as we produce the goods and services without which we can't live? And that's what socialism didn't attend to. Because in capitalism, what's crucial about the organization of production has been and is that a tiny group of people, the major shareholders who own the company and the board of directors, usually 15 people elected by those shareholders. That tiny group of people in enterprise after enterprise, makes all the decisionswhat to produce, how to produce, where to produce, and what to do with the profits that everybody's work helped produce. And to no one's surprise, say the socialists, the tiny group of people who own and operate the enterprises, make those enterprises work first and foremost for them. That's why they are rich, that's why they are powerful, that's why they can buy politicians, etc. Etc, etc. Therefore, if you want to do better than capitalism, if you want to project an image of a future socialism that will not repeat the mistakes of the past, then you have to go beyond private versus public ownership of the means of production and you have to go beyond markets versus planning distribution. You have to add to those conversations something the old socialists didn't do, the transformation of the workplace. It has to become the core of what a future society that socialists would be. And what does that mean? That everybody at the workplace, one person, one vote together, and democratically decide what the enterprise is going to do, what it produces, how it produces, where it produces, and what is done with the profits they have all worked hard to produce. If you transform the workplace and in the process transform the people working there, because they will have a whole new set of relationships amongst themselves, then you can expect and hope that the decisions made by democratic workplaces will be fundamentally different from the decisions made by the capitalist organization of enterprises which puts such a small number of people in such a powerful position and is in the end, why the system hasn't worked better for the mass of people. We've come to the end of this program. 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