Economic Update: "Transcending Capitalism"

Podcast: Economic Update with Richard D. Wolff
Host: Richard D. Wolff (Democracy at Work)
Date: December 13, 2015
Episode Theme: Exploring the failures of capitalism through current events and presenting real-world examples of cooperative, worker-run enterprises as alternatives. Special guest: Dr. Kathy Mulder, author of Transcending Capitalism Through Cooperative Processes and Practices.

Episode Overview

This episode is divided into two segments. In the first, Richard Wolff analyzes current economic events—including Puerto Rico’s debt crisis, wealth inequality, and the politics of Social Security—in the context of systemic issues with capitalism. The second segment features an in-depth interview with Dr. Kathy Mulder about her research on worker cooperatives and organizations that offer democratic, collective alternatives to traditional capitalist business structures.

Part 1: Recent Economic Events & Systemic Critique

(00:00 – 27:27)

Puerto Rico’s Debt Crisis

• Crisis Summary: Puerto Rico has reached a debt impasse, unable to pay back $72–75 billion while providing basic services to its 3.5 million residents, who already have the lowest incomes in the US.
• Congressional Response: Both Republican and Democratic parties have agreed on “no bailout” for Puerto Rico—starkly different from the 2009 massive bailouts of major banks, AIG, and General Motors.
• Insight:

  “What was done for the biggest banks, the big insurance company, the big automobile company, and others… suddenly… cannot be done for three and a half poor people in Puerto Rico.” (05:23)

Wealth Inequality in the US

• Key Data: According to Forbes and the Institute for Policy Studies (IPS.org), the 20 richest Americans possess more wealth than the bottom half (~160 million) of the US population.
• Historical Comparison:

  “You have to go back to ancient Egypt, to the pharaohs… millions of people barely surviving… and a handful of people who build pyramids to themselves… get something like this.” (09:00)

• Case Studies from Wisconsin:
  • John Menard: Worth $9.2 billion; managers threatened with a 60% pay cut if their department unionizes.
    • “That gives an incentive to a manager to do all kinds of things to prevent something... that would cut his or her salary by 60%. That’s how Mr. Menard became wealthy, by preventing unions, by putting unspeakable pressure on managers…” (11:42)
  • Herbert Kohler: Worth $7.4 billion; workers on strike after 5-year wage freeze.
    • “The wealth of Mr. Kohler is predicated on squeezing and undermining the wealth of all the other people who make the Kohler industry what it is…” (14:55)

Social Security and CEO Pay

• Legislation: Bills by Senator Elizabeth Warren (S.2251) and Rep. Tammy Duckworth (HR.4144) propose a 3.9% increase in Social Security and Veterans payments for 2016, matching average CEO raises.
• Key Argument:

  “If we're going to let the richest people get a 3.9% increase, on what conceivable basis would you deny that to the Social Security recipients who need it and the veterans who need it?” (18:37)

The Gun Industry and Capitalist Advertising Logic

• Analysis: Gun proliferation in the US is fueled by corporate profit-motives and advertising exploiting public fear, diverting attention from root socio-economic issues.
• Anecdote:

  “They latch onto the fear of people living in America... But… that’s a clever ploy. You know what that’s like? That’s like the manufacturers of soap bars of soap giving you an advertisement… the words in the advertisement suggest if you buy the soap and use it properly, your sex life will improve dramatically and overnight. … So it is with how we in the media and so on handle gun violence. It is carefully worked out to be a mechanism for getting you to buy more guns.” (24:35)

Part 2: Interview with Dr. Kathy Mulder – "Transcending Capitalism"

(28:37 – 56:48)

Introduction to Dr. Kathy Mulder & Her Book

(28:37 – 31:26)

• Associate Professor of Economics at John Jay College, CUNY.
• Longtime labor activist and author; new book: Transcending Capitalism Through Cooperative Processes and Practices.
• Aim: To highlight democratic alternatives to “top-down” capitalist work structures.

Dr. Mulder:

“I don't like capitalism. I don't like the top down. I don't like Menard’s and Kohler’s and the way they treat workers. And I get angry about those kind of things. So I believe in democracy and justice...” (31:26)

Main Discussion: Worker Cooperatives in Practice

The London Symphony Orchestra (LSO)

(32:00 – 41:28)

• History: Founded in 1904 by musicians who left their exploitative boss; have hired/fired managers and conductors themselves, including firing Elgar.
• Structure: Run as a full cooperative—decisions and management by the musicians themselves.
• Scale: LSO disproves the myth that cooperatives “can’t scale.”
• Quote:

  “The London Symphony Orchestra is a cooperative in every sense of the word. However, there’s no ownership there. ... But they run their own business.” (37:36)

• Relevance: Among five major UK orchestras, four are cooperatives.

The Lusty Lady (San Francisco)

(41:28 – 45:47)

• Background: Peep show club; unionized under SEIU after a struggle; later, as profits declined, workers bought out and formed a coop.
• Challenges: Secured funding via owner-financing due to lack of collateral; ultimately forced out by corporate landlord raising rents (“Deja Vu”).
• Demographics: Many co-op members were pursuing advanced degrees, countering stereotypes about sex workers.
• Quote:

  “The only thing these workers had to sell was their ability to do work, whatever work that is. ... They finally made a deal with the capitalists that they would buy it from them and they paid it off very quickly and they were doing fine.” (44:00)

New Era Windows Cooperative (Chicago)

(46:56 – 49:48)

• Origin: Factory workers at Republic Windows & Doors conducted sit-down strike after management tried to close the business and remove assets.
• Outcome: With support from the union (UE) and Working World, workers purchased the plant and now run it as a co-op.
• Skill Building: Workers had to learn all aspects of running the factory, from plumbing to bookkeeping.

Cuban Urban Farms (Havana)

(49:48 – 52:54)

• New Policy: Cuba shifted from state-run to worker cooperative enterprises in many sectors.
• Case Study: Urban organic farm—workers make collective decisions; higher wages; teach the next generation.
• Quote:

  “It is the quintessential example of a worker self-directed enterprise… They make the decisions collectively. All the business decisions.” (52:06)

The Green Bay Packers (NFL Football Team)

(53:40 – 56:17)

• Structure: Over 500,000 shareholders, no dividends or profit motive; largest community-owned team in US pro sports.
• Governance: Strict share ownership limits prevent control by any individual; all profits go to charity.
• Relevance: Model of collective ownership, even if day-to-day operations are more conventional.

Key Takeaways and Memorable Quotes

• On capitalism’s priorities:

  “It’s a sign of who gets the benefits… the very public who… will not be bailed out by the elected officials who bailed out those large corporations.” (07:31)

• On inequality:

  “The fruit of 200 years of capitalism may be progress technologically, but it is the reverse of progress in terms of equality.” (10:10)

• On the cooperative alternative:

  “The notion that workers can collectively own and operate their business is proven in these case studies.” – Richard Wolff (56:48)

• On obstacles facing co-ops:

  “Cultural norms and laws in the United States… do not support cooperatives. And even our banking system does not support cooperative endeavors.” – Kathy Mulder (37:14)

• On the myth of small scale:

  “Everyone thinks, oh, a little cooperative… scale is not an important factor in this. We can have a large institution…” – Kathy Mulder (33:13)

Notable Moments by Timestamp

• 00:00 – 05:23: Introduction, Puerto Rico’s debt crisis.
• 07:31 – 14:55: Inequality, Wisconsin examples (Menard & Kohler).
• 18:37: Social Security & CEO pay gap.
• 24:35: Capitalism, marketing, and the gun industry analogy.
• 28:37 – 31:26: Introduction to Dr. Kathy Mulder and her work.
• 32:00 – 41:28: London Symphony Orchestra as a large-scale cooperative.
• 41:28 – 45:47: The Lusty Lady’s worker-ownership journey.
• 46:56 – 49:48: New Era Windows Co-op in Chicago.
• 49:48 – 52:54: Cuba's cooperative urban agriculture.
• 53:40 – 56:17: Green Bay Packers’ collective ownership structure.
• 56:17 – End: Concluding thoughts from Dr. Mulder & Richard Wolff.

Tone & Language

The episode blends Richard Wolff’s incisive, critical style—often laced with humor and righteous indignation—with Dr. Mulder’s practical optimism and passion for real-world democratic solutions. Both promote cooperative models as empirically valid, hopeful alternatives to the inequality and exploitation endemic to current capitalism.

Summary for Listeners

If you want to understand how cooperative, democratic organizations function in the real world—not just theory—this episode offers a concrete, accessible exploration. Dr. Mulder’s case studies range from world-class orchestras and NFL teams to urban farms and factories, demonstrating that collective ownership and management are not only possible, but successful across a spectrum of industries and scales. The episode also lays bare the systemic failures of capitalism, vividly and engagingly illustrating why alternatives matter.