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Welcome friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, incomes, debts, our own, those of our kids. I'm your host, Richard Wolff. I've been a professor of economics all my adult life and I hope that that has prepared me well to offer you these insights into what's been going on in our economy over the last week or two. I begin with a storyhorrible story in a way about the arrest and charging of five doctors in New York City for taking kickbacks from the producer of a medication that they were paid to prescribe rather more than they might otherwise have done. The reason this gets a lot of attention is because the medication in question is fentanyl, one of the most dangerous of the opioids that are currently accounting for overdose deaths in the many tens of thousands of across the United States each year. Arizona based Insys Therapeutics is the company and it markets something called Subsys, a spray form of the opioid Fentanyl. Effectively. What the New York Times reported last week was that the company paid doctors, quote, speaking fees. They called them a sham. The New York Times didspeaking fees which went up and were granted in proportion to the number of prescriptions that the doctors wrote. Of course, this is what you get with profit making companies in the medicine business. In order to make profit, the company needs to sell as much medicine as possible. Since this is a prescription medicine, it means it has to get the doctors to write the prescriptions. So suddenly doctors are whisked off to lovely resorts where they can speak to one another. All of this being paid for with or without fees by a company that makes it clear to the doctors what all of this is for. This is normal in the medical business, which it is a business and happens with lots of medications all the time. But. But when you're dealing with a killer of the sort of fentanyl, you can get in trouble. And that's what happened. Imagine with me, as we think about this, what it would be if we made medications, medicines not for profit, that is, we didn't have them be a business driven by the notion let's make more money, which is the guiding notion of capitalist business. We might then have medications produced by organizations that had on them doctors and medical professionals on the one hand, and the consuming public that takes the medications on the other, and that together they would make a decision about what medicines to use, what medicines to prescribe, based on the science and the need, without the intrusion of the profit. And let me drive the point home because medicine companies like to justify the enormous profits they earned, even enormous in relationship to other capitalist businesses. They justify it often by saying, well, we have to charge these high prices and make these big profits in order to pay for the research that produces medicines. Well, two things. One, often that research is, to be blunt, bogus. It's not research on a new medicine. It's often research on how you can make a medicine different enough from an existing powerhouse drug so that you can get a patent for it. It's a little bit different, and yet you can sell it as a competitor. This isn't developing a new medicine. This is developing a profit making strategy. Calling that research and development is an attempt to fool the public into thinking they have to pay these wild prices for medications in order to get medicines produced. Would be a far better and cheaper arrangement to let universities and research outfits have government or other kinds of funding to produce new medications for those diseases we need most, rather than letting the profit motive dictate. It's a wonderful example of what the costs of capitalism are. My next update has to do with a little statistic. Between 2009 and 2016, roughly the presidency of Obama, the federal government's deficits fell straight line down across those years. This is sort of interesting because Democrats are usually accused of being budget busting deficit creators, whereas Obama wasn't. It's doubly interesting because Obama was president at a time of enormous economic stress when you would think the government tries to help out and might legitimately be thought to run a deficit. But instead, Obama's government ran fewer and fewer deficits. Next point, with Mr. Trump, the deficits are going back up and they are predicted to go sharply up over the next several years. What's the significance of declining deficits with a Democrat and rising deficits with a Republican? Well, if you read the mass media, you get the idea. Oh, isn't it odd that the one party that's normally against deficits is, is now running them and the party that normally says it's okay is now cutting them? That would be to make a big mistake. That kind of analysis, because what it does is it takes seriously the debate about more or less deficits. The reasons the Republicans can smoothly and easily shift from one position to another and likewise the Democrats, is because it doesn't really matter all that much. That's not what these policies are about and that's not what these political parties are doing. What the job of both parties is, is to manage capitalism to make it run as smoothly as possible. The Difference between Republicans and Democrats is the Republicans want to run it bald facedly for the people who run the society, the richest, the most secure, and they really pander to them. The Democrats pander to the same folks, but they know the system is more secure if those at the top share at least a little with the rest of the population to avoid the whole game coming to a screeching halt. Neither of them deals with the capitalist system other than to support it, to encourage it, to preserve it and to keep it going. Which is why we don't have any solution to the problems of capitalism. The fundamental instability of the system, its cycles, it's bouncing up and down, such as it did so, so catastrophically in 2008. And likewise, we have no resolution to the problem of the growing inequality that capitalism breeds. Of course both the Republicans and Democrats say they are for stability and they are for less inequality. But because they don't deal with the system, they both preside over worsening situations in both areas. So let's not worry about the details of up and down deficits. We have bigger fish to fry and bigger problems to solve. My next update has to do with what happens if you leave the control of harm caused by capitalist enterprises to them to solve. If you ask them to police themselves, to curb their excesses to prevent the harm, here's what you get. Ingenious solutions in quotation marks that have the peculiar problem of saving the profits of the company and not doing all that well on solving the problem. I'm going to give you the starkest cigarettes, right? I am assuming you all know, as the world does, that here in the United States we went through years and years of litigation and programs that demonstrated beyond all reasonable doubt that tobacco companies knew that their product was dangerous, causing lung cancer and so on. Emphysema, knew it, produced it anyway, advertised it anyway, and that the only way to deal with it was to really come down hard on them, punish them, fine them enormous amounts of money, require them to put warning labels on cigarette packs, not advertise, not, not be near a school. You get the idea. And the companies were told you should deal with this problem on top of it. But a large amount of discretion was left in those companies hands. So guess what? A recent article in the British newspaper the Guardian shows that around the world, not in the United States and not in a number of the countries that have done, like the United States, come down on the cigarette companies where they're in danger of being exposed for what I'm about to tell you. But in Countries where the government is weaker, where there hasn't been that kind of campaign, there is massive marketing of cigarettes, especially to children. And that's what the Guardian went around the world to document and did a really fine piece of work this last week. Here are some of the things the cigarette companies have done. And here, for example, is where their research and development is focused. Massive ads and store placements where children shop in or near candy stores. It's extraordinary, the research. There's a vast program of marketing single cigarettes because children don't have enough money to buy a pack. So it's a big expansion of the sale of cigarettes by the individual piece. Here's one that caught me unawares. Colorful branding, cigarette papers in various colors mimicking children themes. And here's the one that really knocked me. Multi flavored cigarettes. That's right, cigarettes that have been infused with chocolate and strawberry and. And vanilla. Every one of the major cigarette companies talks about their commitment for children and not advertising to them. But the reality exposed by the Guardian shows that if you leave the solution of the harm done by capitalist enterprises to them, they will avoid dealing with the problem while they protect their profits. Let me give you a second example, also drawn from the cigarette industry. One of the things it touts as its great step forward was the development of e cigarettes or vapor or vaping cigarettes. But a recent study released this last week at the Dartmouth College Norton Cotton Cancer center shows that the number of people weaned off of cigarettes and shifting to the vaping cigarettes is much, much smaller than the number, particularly of young people who are hooked onto cigarette smoking. By smoking those E cigarettes, those vapor cigarettes, the evidence suggests that the vapor cigarettes are less dangerous for you. That's a good step. But of course, by hooking large numbers of people on the E cigarette cigarette, you continue to sell the tobacco which is what the company makes its money on. What a bizarre notion. Leaving the control of the harm done by profit making capitalists in their hands to solve. Before moving on to the other updates for today, I want to remind you we maintain two websites. They are available 24 7. No charge whatsoever. We urge you to make use of them. The first one is rdwolff with 2f's.com and the other one is Democracy at work. That's all one word, democracyatwork.info. you can use either of these websites to communicate to us what you like and don't like and would like to see changed. On this program you can by a click of your mouse, follow us on Facebook Twitter and Instagram. You can see extra material that we load up there all the time. And if you are a listener to this program, but you would like to consider looking at it as a television program, since it is available in both forms, we urge you go to the following website where you can do that. Patreon.com P A T R E O N patreon.com Economic update for the TV version Let me repeat those two websites in case you didn't note them. Rdwolf with two Fs.com and democracyatwork.info Our next economic update has to do with a huge case coming up before the U.S. court of Appeals for the Ninth Circuit. This has to do with the decision of the Federal Communications Commission to abolish net neutrality. The requirement that the Internet make available at the same rate to everybody the service, the access to the Internet that we all now require and use on a daily basis. This decision, if you like to get rid of net neutrality, has produced a tremendous battle between two groups of capitalists. Those who stand to make money by being able to charge if net neutrality is indeed affirmed as gone, no longer there. That would mean that the court says that what the FCC did is legal. They can do that. They can get rid of the neutrality versus companies that are going to lose money. Let me give you an idea of the people who are pushing to to get rid of net neutrality because they want to charge. And guess who they want to charge. You and me here they are just a partial att, Verizon, T Mobile, Sprint, okay, Comcast, Charter, Cox and Altice. These are the Internet providers that are in the associations pushing to get rid of of net neutrality. On the other side, pushing to keep it so that we can't be charged this money are the attorneys general of 22 states in the United States. But notice that's a minority of the states in this country and a variety of consumer advocacy groups and a few big tech companies that understand like Amazon, Google, Facebook, Netflix and others that making it more expensive for us to get at the Internet will mean we lose it and use it less. But here's what I want to drive home here we are the public for whom these institutions supposedly exist. The Internet so we can communicate with one another better, so that we can find out about important issues better. We are going to be faced with fees that are going to be fought out between two groups of contesting capitalists. Makes you wonder who runs this system? The people, the vast majority who need it to work for them, or the very small Number of people who profit off of how the system works. Well, the question answers itself. Capitalism is a system in which profit making enterprises are the dominant group. For the rest of us, we live with the consequences while we are excluded from participating in any meaningful way. On the one hand, huge corporations with vast resources to throw into this. On the other hand, consumer advocacy groups who are who go around having bake sales to collect a very small amount of money which can't compete since it's all going to be decided by one warring group of companies on one hand and another warring on the other. Extraordinary way to organize an economy, don't you think? Next, I want to turn to Germany for our update. The German city of Essen, E S S E N got into the news last week when a local food bank which serves 6,000 people per week in this modest sized German city, this food bank distributes leftover or discarded food from restaurants and grocery stores. It made the decision and that's why they got the publicity to stop giving food to, to non German citizens. In other words, your need didn't determine whether you got food, your nationality did. Whoa. What do you say about that? Not exactly your Christian values you might think, but we'll put that one aside. One critic of this decision, Sara Wagan Knesht of the Left Party in Germany asked, in a country as rich as Germany, are we arguing about who gets leftover groceries? And the answer yes, exactly. That's what you're arguing over. And why is this happening? Because there have been cuts in all kinds of social supports, social services, welfare programs. And why is that happening in the rich country of Germany? Well, the answer is the same as why it's happening in the rich countries of, of Scandinavia, of France, of Italy and for that matter Britain, United States and so on. Here's the basic story. Capitalism has abandoned those countries. There's more profit to be made by producing in China and India and Brazil where wages are much lower. And so the capitalists have picked up and gone over there and that means their interest in the United States or Britain or France or Germany and is much reduced. If they're going to have to pay taxes, they're going to pay them in the countries which are on the uptick, where they're making more money, where they see growth. They don't want to pay taxes in the country from which they are departing, so they don't pay taxes and they join movements and they pay for movements to cut back on taxes. So governments don't have enough money. And so the good people of Essen Germany have to exclude starving people who, who don't have a German citizenship. Nothing was more hypocrisy or more hypocritical, I should say, than Chancellor Merkel in Germany who said, quote, it wasn't good to make that decision. But she said the situation highlighted, quote, the pressure that nonprofits are facing, let's be honest, which she isn't. The pressure is as capitalism moves east, paying lower wages brings much more wealth to the people who own those businesses who remain Americans, British, Germans and so on. They're making more profits because they're paying lower wages in China than they used to pay in Germany. They don't want to give up any of the extra wages to deal with the consequences of moving. So they're going to take it out on the poorest of the poor, shifting the burden of capitalism's new direction by making those at the bottom pick up the cost. My next economic update also highlights something that we've talked about on this program before. It has to do with an element, an economics element, of the struggle between Donald Trump on the one hand and Stormy Daniels on the other. For those of you not familiar with Stormy Daniels, I am not going to discuss that since I can't imagine there are too many of you who don't know what I'm talking about. Stormy Daniels signed an agreement, apparently with agents of Mr. Trump, including his personal lawyer, not to discuss the details of a love affair she says she had with the president some years ago. Over the last week or two, Mr. Trump has in turn decided to sue stormy Daniels for 20 counts of damaging him by breaching such a non disclosure agreement. The press picked up that the tactic here is a familiar one. In American law, somebody sues you whether you're guilty or not to be determined. But the way you defeat them is by countersuing, because then you got two kinds of cases and the winner tends to be the one who can afford the best and the largest law firm to do the work to win the case. In other words, it ceases being about facts and justice and becomes about who's got more money, a porn actress, Stormy Daniels, or the President of the United States. You guessed the outcome. It's kind of a reminder of what the O.J. simpson case kind of showed us too. Money plays an inordinate role. If you allow a capitalist system to produce gross inequality, it's naive to imagine that, that that inequality will not find its way into the legal system and make the outcomes reflect the money and not the justice of what's going on. According to The Guardian newspaper, particularly of March 16, there's a new law in the United Kingdom and Britain that mandates the reporting of the pay that is given to men versus women and to different layers of the society, particularly top executives. We don't have that law in the United States, at least not yet. And the results are really interesting and I wanted to present them to you first for Great Britain. And these are the numbers for the year 2015 and 2016. So it's very recent. Listen to these numbers. As to the gender difference in those years, 618,000 men in Britain earned over $140,000 a year. Let me do that again. Roughly 600,000 men earned over 140,000. How many women earned over 140,000? 179,000. You understand? Three times the number of men earned those high salaries than the number of women. Let's go even higher. How many men and women in England earned over £1,000,000? That's the British currency per year. That would be over $1.4 million a year. 17,000 men in Britain earn that much. 2,000 women do. In other words, all the discussion of gender equalization, all the discussion of ending gender and sex discrimination has not gone very far in capitalist Britain. And sadly, this is all too typical. I'm bringing you the British numbers not because they're worse than anybody else or better, but because they're typical and we know them. Other countries, we don't have them quite yet. On average, women in Britain get 25% a quarter less than men. Finally, on this same point, the Guardian did a calculation based as best it could on, on the available statistics on how men and women do when it comes to sharing or facing, let's call it, their income situations. The United States ranks 13th. In other words, there are 12 other countries where the ratio of men and women is closer to equal than the United States. Britain is slightly worse than the United States, but roughly the same. I thought you might be interested in the 12 countries that do better, that pay women closer to what they pay men. Less inequality. Here's the list of those 12 countries, starting in the most equal and then down getting closer to the U.S. here we go. Iceland, Norway, Sweden, New Zealand, Slovenia, Denmark, Finland, Canada, Luxembourg, Switzerland, Poland and Belgium all pay people more equally for their work. We've come to the end of the first half of Economic Update. Please stay with us for the important and interesting interview that is to follow. And please remember that after a short break, we will be right back. Welcome, friends, to the interview portion of our program. Economic Update. You know, we've talked often on this program about the transition from capitalist enterprises with their hierarchies of owners and boards of directors and then the mass of people doing the work, the transition from that kind of system and structure that we're familiar with to an alternative. Sometimes we call that the democratization of enterprise, sometimes we call it worker co ops. There's a lot of words for it. And we've been talking about what the pros and cons are, what's happening in that area, why that's a important part of our history. So it's with enormous pleasure that I offer you and all of us today a chance to talk with somebody going through that process, trying to figure out as he and his cohorts do this, how to do it, how to solve the problems that arrive, and to do that in the process of what is really a historic movement of change. So my guest today is Ken Byrne. He's the academic director and one of the co directors of the Conway school, a small 10 month graduate program in sustainable planning and design located in Western Massachusetts. He had been a graduate student at the University of Massachusetts in Amherst, where he worked with the economic geographer and a colleague of mine, Julie Graham, and the Community Economics Economies, excuse me, Community Economies Collective, to research and write about alternative economic practices in the Pioneer Valley of the state of Massachusetts. So it is with enormous satisfaction and pleasure that I want to now welcome Ken Burn to this discussion. Thanks for coming, Ken.