Podcast Summary: Economic Update with Richard D. Wolff

Episode Title: "System Broken"

Date: March 22, 2018
Host: Richard D. Wolff
Guest (Interview Segment): Ken Byrne, Conway School Co-Director

Overview

This episode of Economic Update, hosted by economist Richard D. Wolff, explores how the structure and logic of capitalism create and perpetuate systemic economic, social, and ethical problems. Wolff covers recent news stories—from pharmaceutical profit scandals and government deficits to net neutrality and global inequality—highlighting how profit-driven motives undermine societal well-being. The episode concludes with a practical, inspiring discussion about workplace democracy and the transition to non-hierarchical organization at a unique educational institution, demonstrating alternatives to the standard capitalist model.

Key Themes & Segments

1. Pharmaceutical Kickbacks and the Opioid Crisis

[00:10–06:55]

• Story: Five New York doctors charged with taking kickbacks from Insys Therapeutics to prescribe Subsys, a fentanyl-based opioid.
• Profit Motive in Medicine:
  • Pharmaceutical companies incentivize overprescription for profit.
  • Example: "Doctors are whisked off to lovely resorts...all of this being paid for...by a company that makes it clear to the doctors what all of this is for." [02:03]
  • This model leads to devastating public health crises.
• Alternative Proposal: Non-profit, science- and needs-based medication production involving both medical professionals and the public in decision-making.
• Critique of Industry Justifications:
  • Claims that high prices are necessary for 'research' are largely misleading; often, efforts are just to slightly alter existing drugs for more patents and profits, not for genuine innovation.
  • Quote: "This isn't developing a new medicine. This is developing a profit making strategy." [04:03]

2. Deficits, Political Parties, and Systemic Management

[06:56–13:41]

• Obama vs. Trump Deficits:
  • Under Obama, deficits declined, contradicting stereotypes. Under Trump, they are rising again.
• Analysis:
  • Political debates about deficits are superficial; both parties work to "manage capitalism to make it run as smoothly as possible," with Republicans more openly favoring the rich and Democrats attempting to share wealth just enough to maintain stability.
  • Neither party addresses capitalism’s inherent instability or inequality.
  • Quote: "Neither of them deals with the capitalist system other than to support it, to encourage it, to preserve it and to keep it going." [11:15]

3. Self-Regulation and Harm in Capitalist Industries

[13:42–21:20]

• Cigarette Industry's Ongoing Malfeasance:
  • Despite regulations, tobacco companies exploit loopholes globally—marketing to children, selling single cigarettes, using colorful branding, and introducing candy flavors to attract youth (as documented by The Guardian).
  • Quote: "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." [18:55]
• E-Cigarettes:
  • Touted as harm-reduction, but studies show more young people start smoking via vaping than quit cigarettes, sustaining the tobacco market.

4. The Net Neutrality Battle

[23:28–27:40]

• FCC Abolishment of Net Neutrality:
  • Battle between internet service providers (profit from new fees) and tech companies/consumer advocates (who want open access).
• Deeper Critique:
  • The public is largely excluded. Conflicts are "fought out between two groups of contesting capitalists," leaving the populace to live with the consequences.
  • Quote: "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." [26:47]

5. Austerity, Migration, and Social Programs in Germany

[27:41–30:46]

• Essen Food Bank Excluding Non-Germans:
  • Illustrates how social services are strained and nationalism rises as capital shifts to more profitable locales with lower wages.
• Underlying Mechanism:
  • As profits move offshore, rich nations cut welfare, making vulnerable people fight over dwindling aid.
  • Quote: "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." [29:20]

6. Money and Justice: The Trump-Stormy Daniels Case

[30:47–32:50]

• Legal Maneuvering:
  • The wealthy can often “win” legal battles not by truth, but by affording more expansive legal resources.
  • Quote: "It ceases being about facts and justice and becomes about who's got more money." [32:42]

7. Gender Pay Inequality: UK and International Comparison

[32:51–34:02]

• Britain’s New Mandate for Salary Disclosure:
  • Statistics reveal stark gender inequality at high income levels.
  • U.S. ranks 13th globally; several Nordic, European, and Commonwealth nations have more equitable pay structures.
• Key Quote:
  • "All the discussion of gender equalization, all the discussion of ending gender and sex discrimination has not gone very far in capitalist Britain." [33:32]

In-Depth Interview: Workplace Democracy at Conway School

Guest: Ken Byrne
[29:53–53:45]

Transition to Democratic Management

• Background:
  • Conway School, a graduate program in sustainable design, shifted from a traditional hierarchy (Board/executive) to collective self-management.
  • Prompted by turnover and the realization that staff knew the institution best and could collaboratively run it.
• Implementation:
  • Staff proposed to manage the school collectively, with the Board retaining oversight.
  • Participatory budgeting introduced—staff collectively adjusts spending in response to needs and unexpected events (e.g., tornado damage).
  • Decision-making largely consensus-based; formal voting rarely needed.

Memorable Moments:

• Ken Byrne: "Not everyone was sure we could do it... But small success bred more confidence in it, better transparency and communication..." [34:01]
• On participatory budgeting: "You get together 20 employees in a room, you project a budget in an Excel spreadsheet, and you just start playing around with the numbers." [33:56]

Decision-Making Structure

• School board: 12–16; Full-time staff: 5–6; Part-time: 14.
• Three co-directors coordinate administration and report to both staff and the board.
• Major decisions (tuition, financial aid, property acquisitions) made collectively.
• Students involved in discussions, see democratic processes in action.

Quote:

• "Pretty much for two and a half years now, we've been able to run the school. Some pretty major decisions...were made with relative ease." [39:37]

Impact on Students & Community

• Students are deeply interested in workplace democracy, often inquire and participate in governance-related discussions.
• "Not only are they receptive, but you're suggesting that they're being drawn also into a role in the decision making process..." [42:10, Wolff]

Outcomes and Lessons Learned

• Staff gained new skills (budgeting, strategic planning) through collaboration, breaking traditional boundaries.
• Misconception confronted: Employee control doesn't mean reckless self-enrichment; rather, a focus on sustainability and the institution’s health.
• Benefits to all levels: More transparent, less hierarchical, shared responsibility—reducing executive isolation and anxiety.
• Ken Byrne: "Maybe I'll take the first question first. What we've all observed is the capacity for growth in each other." [46:40]
• On universality: "The confidence to say we can do it. We have been doing it actually in so many different ways...Yes, this is possible we can do this." [53:11]

Closing Reflection – Richard D. Wolff:
"It's extremely powerful, you see, precisely because it's very particular, as it will be in each situation. That's the universal...with the trepidation, the fear, the unknown, the skepticism—all appropriate. You did it. And I want to congratulate you." [53:22]

Selected Notable Quotes with Timestamps

• “This is normal in the medical business, which it is a business and it happens with lots of medications all the time. But when you're dealing with a killer of the sort of fentanyl, you can get in trouble.” —Richard D. Wolff [02:36]
• “What a bizarre notion. Leaving the control of the harm done by profit making capitalists in their hands to solve.” —Richard D. Wolff [21:09]
• “The reasons the Republicans can smoothly and easily shift from one position to another... 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.” —Richard D. Wolff [09:56]
• “All the discussion of gender equalization... has not gone very far in capitalist Britain.” —Richard D. Wolff [33:32]
• “We are it. So if we have a problem, we have to figure it out and sort it out, and we have to understand how all those pieces fit together." —Ken Byrne [48:08]

Conclusion

Throughout the episode, Richard Wolff makes the case that capitalism’s drive for profit shapes not only economics, but also healthcare, political debates, legal systems, global production, and even humanitarian aid. The interview with Ken Byrne offers a vibrant counterpoint—demonstrating that collective, democratic organization is possible even in traditionally hierarchical institutions, providing more empowerment, transparency, and community involvement.

For those seeking alternatives to the current system or real-world optimism about workplace democracy, this episode delivers both critique and hope.