Podcast Summary: Economic Update with Richard D. Wolff – “Solving Old Economic Problems”
Episode Date: February 10, 2017

Overview

In this episode, economist Richard D. Wolff dissects persistent economic challenges through a critical lens, offering systemic solutions amid ongoing debates around labor, power, and capitalism. Wolff draws on real-world developments, philosophical analysis, and recent political events to highlight the limits of current economic systems and the promise of alternatives such as worker cooperatives and democratized workplaces.

Key Discussion Points and Insights

Worker Cooperatives: The Switchback Brewery Example

[01:16 – 06:52]

• Highlight: Switchback Brewery in Vermont transitions to a worker cooperative model.
• Two founding owners sold the brewery to employees as they approached retirement, ensuring:
  • Job security for 30 families,
  • Continued community economic contribution,
  • Democratic workplace governance.
• Employees purchased the company via a loan to be repaid over 15 years, gradually acquiring equity.
• Wolff’s Insight: This move embodies economic democracy and local resilience, for which both the workers, the founders, and state officials (like Governor Scott) deserve recognition.

“Switchback Brewery in Vermont has become a workers cooperative, owned and operated by the workers themselves.” – Richard D. Wolff [04:57]

Coal Industry, Profits, and Uncounted Costs

[06:53 – 15:45]

• Issue: The Trump administration’s support for coal, framed as helping workers, but in reality, helping coal companies’ profits.
• Wolff explains that actual coal miner needs (good jobs, healthy environments) would be better served by investing in alternative energy sectors like solar, which already employs more Americans than coal.
• Profit Calculation Critique: Profits in coal ignore unaccounted social costs (health issues, climate damage), falsely suggesting coal's profitability justifies its existence.
• If coal companies had to internalize all costs, their profits would evaporate.

“If the coal companies had to count those costs, it would have eaten up all of their profits. …if you actually count all of its costs, [coal] is a losing proposition.” – Richard D. Wolff [13:17]

Generational Critique of Capitalism & Lack of Political Alternatives

[15:46 – 26:04]

• Case Study: Trevor Hill (a college student) confronts Rep. Nancy Pelosi at a CNN town hall, citing Harvard poll results showing youth disaffection with capitalism.
• Pelosi replies: “We’re capitalist and that’s just the way it is.” [Quote relayed by Wolff, 19:56]
• Wolff notes:
  • Both major US parties are fundamentally capitalist in orientation.
  • Despite public discontent, there’s no major political party challenging capitalism, unlike other capitalist nations.
  • Discussion of how major parties (including Democrats under Obama/Clinton/Pelosi) work to suppress movements challenging the status quo (e.g., Occupy Wall Street, Bernie Sanders’ movement).

“There is no opposition to capitalism in the United States that takes a political form. …if such a party emerged … it would have very quickly a very sizable constituency…” – Richard D. Wolff [22:45]

Pensions and the Fiduciary Rule Rollback

[26:05 – 30:12]

• Context: More workers manage their own “defined contribution” pensions (like 401(k)s), relying on financial advisors.
• Wolff explains the conflict of interest: advisors often put their own interests (fees) ahead of retirees’ welfare.
• Obama’s “fiduciary rule,” meant to require advisors to work in clients’ best interest, was set to take effect. Trump’s Labor Department seeks to delay or reverse it.
• Wolff’s critique: Undermining the fiduciary rule hurts middle-class Americans, regardless of Trump’s claims to champion them.

“If that strikes you as perhaps standing in criticism or, or contradiction to his helping the middle class in America… well, then you’ve got a problem with Mr. Trump.” – Richard D. Wolff [29:24]

Immigration and Crime—Debunking Stereotypes

[30:13 – 32:18]

• Research Findings: As immigrant population increases in US cities, crime rates drop.
• Immigrants often revitalize neglected neighborhoods, countering political rhetoric that links immigration with crime.
• For further details, Wolff recommends visiting theconversation.com and searching for “immigration and crime.”

“In the higher the percentage of immigrants in a community, the lower the rate of crime. That’s right.” – Richard D. Wolff [31:24]

Philosophical Deep Dive: Hegel, Dependency & Capitalism

[33:03 – 47:14]

• Subject: Hegel’s Master-Slave Dialectic as a lens for understanding capitalism.
• The master (capitalist) appears dominant over the slave (worker), but the master is also deeply dependent on the slave.
• Capitalists depend on workers not just to produce goods, but to form the market for those goods.
• Workers have power through their numbers (“the majority”), the vote, collective action (strikes, sabotage), and their roles in law enforcement and military.
• Endless conflict between capital and labor can only be overcome by transcending the relationship—moving to worker self-management and cooperatives.

“The capitalist depends on workers to produce whatever it is he has to sell. But he also depends on workers to buy what it is he has to sell.” – Richard D. Wolff [41:19]

• Historical note: Attempts through the ages—religious orders, collective farms—to organize work cooperatively.

Lessons from the 1930s and Today

[47:15 – 55:54]

• Parallels: After the 1929 crash, the US took a leftward turn under FDR (public jobs, Social Security), while recent crises (post-2008) have seen a political turn rightward.
• Social reforms of the 1930s were temporary; the capitalist class spent decades dismantling these programmatic gains.
• Wolff predicts today’s rightward shift (Trump, European conservatives) will also face backlash from capital if their interests are threatened, without systemic change.

“If you don’t change the capitalist system, it will continue to produce the instabilities and the inequalities that led you to make the efforts you did. You just didn’t go far enough to make them permanent.” – Richard D. Wolff [55:29]

Notable Quotes & Memorable Moments

• On Worker Cooperatives: “Bringing democracy to the workplace is something that he, as the governor too, should be proud of, as he was to his credit.” [05:45]
• On Pelosi’s Capitalism Remark: “But I have to say, we’re capitalist and that’s just the way it is.” – Nancy Pelosi (quoted by Wolff) [19:56]
• On Counting Costs: “Please keep that in mind the next time anyone tells you that because any industry … is profitable, that that should be taken as proof … that it is something society wants or needs or benefits from.” [14:37]
• On Systemic Power: “Workers are the majority, the capitalists are the minority, as it was with masters and slaves.” [43:25]

Recommended Resources

• Studies on Immigration and Crime:
  theconversation.com – search for “immigration and crime”
• More from Wolff & Democracy at Work:
  democracyatwork.info
  rdwolff.com

Timestamps for Key Segments

• [01:16] – Switchback Brewery becomes a worker cooperative
• [06:53] – Trump administration, coal industry, and unaccounted costs
• [15:46] – Trevor Hill/Nancy Pelosi town hall exchange on capitalism
• [22:45] – Why the US lacks an anti-capitalist political party
• [26:05] – Trump targets Obama’s fiduciary rule
• [30:13] – Immigration, crime, and social research
• [33:03] – Hegel’s Master-Slave dialectic and its relevance to labor
• [47:15] – Parallels between the 1930s New Deal era and today
• [55:29] – Why systemic change is necessary for lasting stability

Wolff closes with a call to action—inviting listeners to engage, organize, and share alternative economic ideas—framing democratized workplaces as key to solving old socioeconomic problems.