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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Debts, jobs, incomes, our own, our children. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and that's the basis upon which I offer these economic updates every week. The theme, if there is one today, would be the gap between the economic realities of what's going on and the glib political ideological promises that fill the airwaves not only during election season, but most of the time. And I'm going to give you some examples of that gap. First, all the posturing by President Trump and his allies against China. It's really remarkable what's going on. Having been accused of being too close to the Russians, he's showing us that he's nasty towards the Chinese. That's supposed to compensate, I suppose. Then he has those advisers who, who think that the United States is in a death struggle with the Chinese and that they have to be hurt or damaged or slowed down or something like that. And then there's this strange argument about how the United States wants more concessions from the Chinese. This is a mystery to me, because what does it mean? You want the Chinese companies to be hurt and to make a better deal for the United States, or do you want the better deal from the American companies that are active in China? Roughly half of what comes to the United States from China comes from companies that are subsidiaries of American corporations. So is the Trump administration demanding concessions from American companies? And if so, what does that mean? If you hurt those companies, how will they adjust their activities in the United States? This makes very little sense, or at least whatever sense it has has not been explained. And are you demanding things from the Chinese government, and if so, how do you prevent against them then taking that out on the American companies that are There a very strange theater going on here. But that's not the main point here. The main point is to understand a certain reality. The Chinese are now the second most important economy in the world. They're very strong, they're very large, and they have a lot of influen. I'm going to give you one example of what is going on. China is a major buyer of three American grains, soybeans, corn and sorghum. All are drastically down in terms of the exports from the United States of these crucial agricultural commodities. The farmers and the farm states that depend on the production and export of. Of soybeans, corn and sorghum are really hurting the ramifications of their difficulties, which mean, for example, that they cannot repay loans from banks that they take out as a matter of course. It means that other countries are filling the Chinese demand for those products, and the Chinese are unlikely to go back to the United States afterwards because they don't want to be caught in a dependency that has already shown itself to to be dangerous for them. Have this been thought through? Is the benefit to the United States from all of these secondary consequences worth the theater of being hostile to China? Well, it's worth it politically for Mr. Trump, but for the economy of the United States, unlikely. The second update I want to talk about is Italy. Italy has what we call these days a populist government, mostly of the political right. And here's what they're they are reacting to the rage and anger of the Italian working class. There's no other way to put this. The Italian working class has been really hurt by the crash in 2008 and the austerity ever since. They haven't been hurt quite as badly as Greece or even as Spain. But they are a larger economy than either of those two countries, and they have been really hurt. And they've had a suffering of wages that have gone nowhere, cutbacks in government programs, really bad. And in their anger, they decided to vote in these outsiders, much as in other countries, angry workers are voting in new and different political parties, left and right, because they're disgusted with the center left, center right, that was in charge of the buildup to the great crash and then imposing austerity afterwards. The plan of the Italian government now is to try to save the situation, because when you screw over the mass of people you're going to get, particularly in European countries where there are socialist and communist parties and newspapers. That's a much bigger part of those societies culture. You're going to get people who are angry at the system are able to say this system isn't working. Now, capitalism is a system, the core of which is the business community. And that's always and by that I mean the employers. That's always a tiny minority of a society. And for them to survive on top of the economy, they need what's called a mass base. They need a lot of support. In good times, they're able to get that one way or another. But when the economy fails, the majority of people, they lose it. And then they get frightened at their political security that the very continuation of capitalism becomes a question. And what they do then is extreme. The Italian government is now proposing, in a difficult economy, to have the government spend enormous amounts of money helping people out while cutting taxes on businesses and rich people. Everybody's getting a picnic now. Of course, the only way this works is for the government to borrow more and more money. And that's the lesson here. The buildup of debt, either on the part of the government or on the part of the public, credit card debt, student loan debt, car payment debt, mortgage debt, debt is a way for capitalism to secure mass support when they can't do it any other way anymore, when they have angered and alienated the mass of the people, they try to hold on to their support by giving them a debt explosion so they can maintain their consumption. The Italian government is going to provide services and hire lots of people to do all kinds of things to keep the systems going by the support of a mass of people. And the price of it is the deep indebtedness both of the government and of the mass of people. And that is what has to be understood. This indebtedness is the way for this system to keep going. And of course, when people can't borrow anymore and when the government can't because the lenders don't have confidence, that's when the price will have to be paid for this peculiar way of keeping a system going when it can't serve the mass of the people in a normal way. My next update responds to questions you keep sending me, even though I've dealt with it once before. Lotteries. I understand lotteries are a fantasy. We can indulge by a ticket, buy a scratch, off by a number. But I want you to understand the economic costs of lotteries. And you make the decision whether on balance you're for them or against them. But you need to understand the costs, which of course the state governments that use lotteries don't want to stress on being polite. Let's go through it. A lottery. A lottery takes a lot of money from a lot of people. Each one buys five bucks, ten bucks, whatever it is, most people buy a little. So a very large number of people give up a little bit of money to make the few winners who win anything significant very rich. Let's go through that again. Large numbers of people who don't have much money give up a little so that a few people can become rich. Now, those many who buy the tickets, they would have used those few dollars to buy goods and services which would have given people jobs producing and selling those goods and services. If you put all that money in the hands of 1, 2, 3, 4, 5 people, they're not going to spend all that money on Goods, services, because they're going to be so rich, they're going to save a huge portion of it, which means that money isn't getting spent on goods and services. That's a cost. In an economy where there's already trouble buying things, you're making that process worse. Moreover, the few who win will now take these enormous sums of money and invest them in the stock and bond market. You know what that does? It drives up the price of, of stocks and bonds. 10% of the people in this country own 80% of the stocks and bonds. So by moving money from little people who would never have used 5 or $10 to buy stock, collecting it all and giving it to a few rich people who buy stocks and bonds, you're helping that part of the economy that needs at least while you are depriving the average buyer and seller of goods and services of what they do need most. Next. It's a kind of tax. The vast majority of people who buy lottery tickets do not ever see that money again. They are paying money to the government because the government takes the lion's share of that lottery ticket money that you're paying. So the government gets a revenue, doesn't have to call it a tax because it's voluntary, but it's a way of the government not having to tax corporations and the rich because they're getting more out of average people by calling it a lottery, even though 99% of them will never see anything from that other than losing the money. And since a good part of it has to be given to a few rich people, it's not even as good as a tax. A tax would have at least taken the money from everybody, given it to the government who could then use it to provide some services. But, but with a lottery, a good chunk of it has to be given to a few individual rich people. And though that's not available for the government to do something. And finally, as well known, this kind of thing is a form of gambling and therefore is a boost for the addiction problem that some gamblers have. You should have all that in your mind before you think of a lottery as purely the fun part about winning a lot of money, which very few people do. The last update that we have time for is kind of a shout out. Grinnell College in Iowa, a well known college, been around a long time, a college that is committed to social justice and things like that. I've had many of my students come from Grinnell. I was struck that the undergraduates, the undergraduates who get jobs in the dining Halls in the libraries have formed a union. That's right. Undergraduates formed a union. I've never heard of that before. They did it a couple years ago and they've been very successful. Grinnell College, despite its commitment to social justice, which is about as serious as Harvard and Yale's commitment to Lux et veritas and all the other things they claim to be in favor of. Hired anti union lawyers made statements that a union would erode the egalitarian nature of the college. I guess paying undergraduates as little as they did enhanced the egalitarian nature in some brand of theirs. There the union has been successful. They had not had a wage increase in seven years. They've now had a 9% wage increase. They've gotten bonuses for those who work more than 110 hours a semester. They've got paid rest breaks, a formal grievance procedure that has won 146 student dining hall employees their jobs back when they were wrongfully terminated. And here's something they did I found striking. They demanded and got equal wages for high school students who have jobs in the dining halls alongside the undergraduates. So despite the effort of the college to squash them, they have persevered, they've won and they've done a world of good for the students there. That's a sign, particularly important because it's young people of an understanding of how collective action can transform your work situation and have a better shot for everybody than an individual attempt to escape somehow. Well, we've come to the end of the first half of Economic Update. I want to remind you please to subscribe to our YouTube channel. It's a very important support for us. Check out our website@democracyatwork.info where you can follow us on Facebook, Twitter, Instagram and I also want to urge you to look at the ways you can partner with us which are available on that website. And finally, a shout out to the Patreon community that provides us with support and encouragement that is invaluable to what we do. If you would like to see all of that, take a look at our channel there. Patreon.com economicupdate Stay tuned. We have a wonderful interview in the second half of today's program. Welcome back friends to to the second half of Economic Update Today. I am very pleased, as I have occasionally been in the past, that I have a guest, Professor David Harvey, to talk to us about how he views through his Marxist lens what's going on in the economy we depend on and live in. But before we Jump in. Let me introduce, for the few of you who don't already know who David Harvey is. He teaches at the Graduate center of the City University of New York. He's written extensively on Marx's capital and the insights it offers into the workings of contemporary capitalism. His most recent book is Marx Capital and the Madness of Economic Reasoning. Normally, my introduction might stop at that point, but I am very proud to announce that David Harvey's latest project has been realized with the help of Democracy at Work. We are proud to announce that on Thursday, Nov. 15, 2018, Democracy at Work launched a new podcast featuring Professor David Harvey. It's called David Harvey's Anti Trump Capitalist Chronicles. It is a bimonthly podcast that looks at capitalism through a Marxist lens. You can find Anti Capitalist Chronicles on itunes, on Google Play, and at our website, democracyatwork.info if you would like to support this project, Please go to patreon.com David Harvey, ACC where of course, the ACC stands for Anti Capitalist Chronicles. So with that, let me turn to David and pose the questions for today. And thank you.