Economic Update with Richard D. Wolff

Episode: US Midterm Elections (November 15, 2018)

Episode Overview

In this episode of Economic Update, host Richard D. Wolff critically examines the 2018 US midterm elections against the backdrop of economic realities and political spectacle. The episode features timely economic updates—touching on US-China trade tensions, the Italian government's response to populist anger, lotteries as a regressive economic tool, and a notable labor victory at Grinnell College. In the second half, Wolff is joined by renowned Marxist scholar David Harvey for an in-depth discussion of the elections’ democratic deficits, class composition of the US workforce, and the international context of rising right-wing populism.

Key Discussion Points & Insights

1. The Gap Between Economic Realities and Political Theater

Richard D. Wolff (00:10–05:00)

• US-China Trade Tensions:
  • The Trump administration's antagonistic stance towards China is more about political posturing than sound economic policy.
  • Quote:

    "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?" (02:11)

  • The resulting tariffs have hurt US agricultural exports (soybeans, corn, sorghum), impacting farmers' livelihoods and local finance with ripple effects on bank loans and rural economies.
  • Wolff questions if political gains are worth these economic downsides for the majority.

2. Lessons from Italy’s Populist Response

Richard D. Wolff (05:00–10:00)

• Italy, facing mass working-class anger from post-2008 crash austerity, has seen the rise of a right-wing populist government.
• The government aims to maintain public support via spending increases and tax cuts for the wealthy—funded by unsustainable public debt.
• Quote:

  "Debt is a way for capitalism to secure mass support when they can't do it any other way anymore." (08:25)

• Wolff sees growing indebtedness both public and private as a sign of system stress and a regime of “kicking the can down the road.”

3. The True Economic Costs of Lotteries

Richard D. Wolff (10:01–13:34)

• Lotteries act as a regressive, voluntary tax on the many, funneling small amounts from ordinary people to a handful of winners and state coffers.
• Shifts consumer spending from goods/services (which create jobs) to savings/investment for a wealthy few.
• Quote:

  "A lottery takes a lot of money from a lot of people...to make the few winners who win anything significant very rich." (11:08)

• Governments rely on lottery revenue as a hidden form of taxation on the poor, avoiding direct taxation of corporations and the rich.

4. Student Labor and Union Success at Grinnell College

Richard D. Wolff (13:35–16:37)

• Students formed a union at Grinnell College, securing significant wage increases, bonuses, rest breaks, and formal grievance procedures.
• The union also achieved equal pay for high school students working alongside undergrads.
• Quote:

  "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." (15:46)

• Wolff highlights this as a sign of renewed collective action among young workers.

Interview with David Harvey: Post-Election Analysis

The Undemocratic Foundation of US Elections

David Harvey | Starts at 16:39

• Critiques the Senate’s structure, which lets a small rural minority dominate the majority’s votes.
• Quote:

  "20% of the population of the United States actually controls 60% of the votes in the Senate." (17:14)

  • Results in a misalignment between the popular vote and legislative outcomes, exacerbated by ongoing voter suppression and gerrymandering.

Shifting Class Composition and Political Power

David Harvey & Richard Wolff | 18:45–23:01

• The old unionized white working class, once the Democratic Party's base, has lost power.
• A “new working class” emerges, comprised mainly of:
  • Women in the labor force
  • African Americans and people of color
  • Hispanics/Latinx workers
• Quote:

  “We’ve got a new working class which is made up of some sort of alliance... between those three categories.” (19:54)

  • The challenge: will this “class in itself” become a “class for itself”—an active political force?
• Speculates on the transformative potential if crucial service workers (e.g., airport staff) were to strike collectively.

The Role of Elections in Capitalist Stability

David Harvey | 23:09–24:11

• Gridlock between parties is often desirable for capitalists, as it prevents threats to their interests.
• Quote:

  “The outcome is satisfactory from the standpoint of capital... They don't want an activist Congress. They don't want legislation to be passed apart from tax reform and a few things like that.” (23:10)

Rise of the Global Right and Disaffection with the Center

Wolff & Harvey | 24:11–27:13

• Trends in the US, Brazil, and Europe reflect a backlash against perceived failures of center-left and center-right parties post-2008 crisis.
• Populist anger, betrayed by the traditional left, has shifted right, often manipulated by deflecting anger toward immigrants and foreign competition, not capital itself.
• Quote:

  “The media is not going to say capital did it. They’re going to say, where did it come from? Oh, it’s China or it’s immigrants.” (26:13)

• Harvey believes the left could regain ground by fighting for public goods and services and reversing austerity, as exemplified by the Labour Party in Britain.

Conclusions and Hopes for Left Mobilization

Harvey & Wolff | 27:13–28:28

• The potential for a renewed left presence exists, especially if there is a focus on public ownership and expanded social services.
• Harvey is optimistic about the new generation’s collective movement if it can overcome division and realize its latent power.

Notable Quotes & Memorable Moments with Timestamps

• On the contradictions of Trump’s China policy:

  "Is the Trump administration demanding concessions from American companies?” — Wolff (02:11)

• On debt as a holding strategy:

  “Debt is a way for capitalism to secure mass support when they can't do it any other way anymore.” — Wolff (08:25)

• On lotteries and class transfer:

  "A lottery takes a lot of money from a lot of people...to make the few winners...very rich." — Wolff (11:08)

• On the Senate’s lack of democracy:

  "20% of the population...controls 60% of the votes in the Senate." — Harvey (17:14)

• On the new working class:

  "We've got a new working class...women, African Americans, Hispanics...If it could form an alliance...we would have a very, very different kind of electorate" — Harvey (19:54)

• On capital’s preference for gridlock:

  “The outcome is satisfactory from the standpoint of capital. They don't want an activist Congress.” — Harvey (23:10)

• On the right’s shifting blame:

  “The media is not going to say capital did it. They’re going to say, where did it come from? Oh, it’s China or it’s immigrants.” — Harvey (26:13)

Suggested Listening Timestamps for Key Sections

• [00:10–05:00] US-China Trade Policy & Economic Ramifications
• [05:01–10:00] Italy’s Populism and Debt
• [10:01–13:34] Why Lotteries Hurt the Working Class
• [13:35–16:37] Student Union Organizing Victory at Grinnell
• [16:38–24:11] Interview: Elections, Democracy Deficit, & Class Composition
• [24:11–28:28] Right-Wing Resurgence & Prospects for the Left

Summary Table of Themes and Insights

| Topic | Insight/Conclusion | Key Quote & Timestamp | |-------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------| | US-China Trade | Political theater outweighs real economic benefit; harms US farmers | (02:11) “Is the Trump administration demanding concessions from American companies?” | | Italy's Economic Policy | Right-wing populism sustains consent via debt-fueled spending; system instability looms | (08:25) “Debt is a way for capitalism to secure mass support…” | | Lotteries | A regressive, voluntary tax shifting money from poor to rich, hurting overall demand | (11:08) “A lottery takes a lot of money from a lot of people…” | | Student Unions | Collective action can reshape power balance, even in progressive institutions | (15:46) “Despite the effort of the college to squash them, they have persevered…” | | US Senate Power Structure | Massive democratic deficit: rural states control majority of Senate influence | (17:14) “20% of the population…controls 60% of the votes in the Senate.” | | New Working Class | Women, people of color, and Hispanics are the potential heart of a future labor movement if they unite | (19:54) “We've got a new working class...” | | Capital vs. Governance | Big business thrives on Congressional gridlock, impeding progressive reform | (23:10) “The outcome is satisfactory from the standpoint of capital…” | | Right-Wing Populism | Disaffected masses redirected by media toward xenophobia rather than anti-capitalist organizing | (26:13) “The media is not going to say capital did it…” |

Tone

The episode’s tone is incisive, critical, and rooted in the tradition of radical political economy. Wolff presents complex ideas in an accessible manner, using clear examples and rhetorical questions. Harvey brings academic rigor and international perspective, engaging in a constructive dialogue about challenges and potentials for the left.

This summary provides a comprehensive yet engaging distillation of the episode’s core arguments, memorable exchanges, and lasting messages relevant to both regular listeners and newcomers.