Economic Update with Richard D. Wolff
Episode: What Brexit Means
Date: July 5, 2016
Host: Richard D. Wolff (Democracy at Work)
Overview
In this episode, Prof. Richard Wolff unpacks the economic and social implications of Brexit, the United Kingdom’s vote to leave the European Union. Drawing historical parallels and taking a critical lens to global capitalism, Wolff not only analyzes the causes and reactions to Brexit but uses it as a springboard to discuss broader systemic issues—especially the undemocratic structures at the heart of Western economies. The episode also features commentary on recent developments in Puerto Rico, France, the US, and the global ramifications of economic policy both before and after the 2008 crash.
Key Discussion Points & Insights
1. Puerto Rico’s Economic Crisis
[07:50-16:20]
- Context: President Obama signed a new Congressional bill to address Puerto Rico’s economic crisis—over $70 billion in debt and a 45% poverty rate.
- Root of the Crisis: Wolff traces the crisis to decades of collusion between Puerto Rican politicians (offering services without taxation) and US banks (profiting on loans), culminating in bankruptcy.
- Oversight Board: The bill institutes a federally-appointed oversight board, effectively stripping what little self-governance Puerto Rico had.
- Quote:
“What little democracy Puerto Rico had before, and it wasn’t much, is now gone. People in Washington will make the decisions, and the folks in Puerto Rico will be told what to do.” [12:45]
- Quote:
- Parallel: Puerto Rico is described as “America’s Greece,” foreshadowing policies that could spread to other parts of the US.
2. Labor Conflict in France: The Socialist Paradox
[16:21-20:03]
- French Labor Protests: Widespread clashes between unions (CGT) and the Socialist government over labor law reforms that paradoxically serve corporate interests.
- Politicized Violence: Socialist government, elected by workers, uses police force against those very workers.
- Quote:
“We are witnessing the self-destruction of the French Socialist Party.” [18:45]
- Quote:
- Historical Parallel: Similar paths of decline seen in other European socialist parties, connecting this to a crisis of ideas among left-leaning governments.
3. German Power and the VW Scandal
[20:04-25:09]
- Brexit Fallout: Angela Merkel and German officials quickly moved to assert control post-referendum, revealing a ‘German-dominated Europe’.
- Volkswagen’s Cheating: Wolff criticizes German leadership by highlighting VW’s emission fraud—pointing to corporate greed and the complicity (or ineptitude) of the German government.
- Quote:
“This is not a country and this is not a set of big companies that ought to be in any position to tell anybody else in Europe—British or otherwise—what to do.” [24:32]
- Quote:
4. Cleveland’s ‘Revitalization’—A Local Example of Broader Trends
[25:10-28:30]
- Superficial Renewal: Wolff argues that Cleveland’s downtown ‘revitalization’—focusing on luxury hotels and developments—serves corporate interests, not residents.
- Quote:
“Until you deal with the underlying reality, talking about a revitalized Cleveland is a hideous abuse of both the language and the reality.” [26:49]
- Quote:
- Public Money for Private Gain: Taxpayer funds support major corporate projects, neglecting real needs (jobs, schools, poverty reduction).
5. National Parks—Privatization vs. Public Good
[28:31-29:50]
- Funding Cuts: The National Park Service faces underfunding, and proposals to offset losses by privatizing or commercializing services.
- Notable Moment: The potential spectacle of beer sponsorships in national parks used as a satirical example of misplaced priorities.
Brexit: Analysis and Meaning
[29:50-54:00]
a) Historical Context—From Thatcher to Today
[30:00-34:15]
- Thatcherism & Reaganomics: Both UK and US shifted in the 1970s-80s to a model that deregulated business, cut wages, crippled unions, and increased inequality.
- Globalization’s Impact: Integration of new labor forces (post-Soviet Eastern Europe, China, India) led to global wage competition, outsourcing, and immigration.
- Quote:
“Basically, over the last 40 years, at least a billion workers who were not part of global capitalism have become part.” [33:00]
- Quote:
b) Blame, Anger, and Scapegoating
[34:16-39:27]
- Rising Anger: As capitalist promises failed, citizens turned to blaming immigrants and ‘the other’ rather than questioning the system itself.
- Quote:
“This suffering that we are doing here in Britain is because [of] immigrants. This is a kind of scapegoating that often happens. If you don’t like immigrants, there are other groups you can get angry at.” [36:10]
- Quote:
- Immigration & EU: The freedom of movement allowed by the EU is used as a convenient target for economic frustration.
c) Elite Cluelessness—Brexit as Protest Vote
[39:28-44:10]
- Purpose of the Referendum: David Cameron called the Brexit vote expecting “Remain” to win, misjudging public anger.
- Result: Masses used Brexit not as a calculated plan, but as a protest—an anti-elite, anti-austerity statement.
- Quote:
“Brexit is a statement of anger and rage… But it isn’t the solution to your problem.” [44:03]
- Quote:
- Parallel with the US: The UK elite’s disconnect mirrors the US political establishment's surprise at the rise of Trump and Sanders.
d) Consequences and European Domino Effect
[44:11-48:13]
- Lack of a Clear Plan: Brexit offers no solution to the underlying economic issues—anger remains, problems persist.
- EU Fragmentation: Other nations consider similar referenda. Scotland and Northern Ireland weigh separation; right-wing figures like Marine Le Pen seek their own ‘Brexit’.
- Systemic Roots: Brexit is seen as fallout from decades of neoliberal policy, not merely a local or cultural phenomenon.
e) The Real Problem & Democratic Alternatives
[48:14-54:00]
- Root Critique:
“Capitalism is a system of severe, profound contradictions. And like those proverbial chickens, they’re coming home to roost. That’s what Brexit is all about.” [47:55] - Failure of Capitalist Democracy: Decisions are made by boards and shareholders, not by workers or communities.
- True Solution: Real democracy—put economic and institutional decision-making in the hands of those affected, i.e., the workers and communities.
- Quote:
“Capitalism is the negation of democracy. It gives the decisions to too few people and it produces the results we don’t want anymore.” [52:18]
- Quote:
- Broader application: Suggests democratizing all institutions—schools, hospitals, social clubs—not just businesses.
Notable Quotes & Memorable Moments
-
On Puerto Rico’s Oversight Board:
“What little democracy Puerto Rico had before, and it wasn’t much, is now gone.” [12:45] -
On Socialist Parties in Europe:
“We are witnessing the self-destruction of the French Socialist Party.” [18:45] -
On German Economic Leadership:
“This is not a country and this is not a set of big companies that ought to be in any position to tell anybody else in Europe—British or otherwise—what to do.” [24:32] -
On Cleveland’s ‘Rebirth’:
“Talking about a revitalized Cleveland is a hideous abuse of both the language and the reality.” [26:49] -
On Scapegoating Immigrants:
“This suffering that we are doing here in Britain is because [of] immigrants... It’s scary to think that you have to change the system.” [36:10] -
On Brexit as Protest:
“Brexit is a statement of anger and rage… But it isn’t the solution to your problem.” [44:03] -
On Capitalism’s Contradictions:
“Capitalism is a system of severe, profound contradictions. And like those proverbial chickens, they’re coming home to roost.” [47:55] -
On the Need for Democracy in the Economy:
“Capitalism is the negation of democracy. It gives the decisions to too few people and it produces the results we don’t want anymore.” [52:18]
Important Segment Timestamps
- Puerto Rico Crisis & Oversight Board: [07:50–16:20]
- French Labor Protests & Socialist Party Decline: [16:21–20:03]
- German Power & VW Scandal: [20:04–25:09]
- Cleveland ‘Revitalization’ & Public Funds: [25:10–28:30]
- National Parks Privatization: [28:31–29:50]
- Deep Dive – Brexit Analysis: [29:50–54:00]
- Historical context, globalization, scapegoating, protest vote, European fallout, call for true democracy, and vision for alternatives.
Conclusion
Professor Wolff’s analysis situates Brexit as a symptom of deeper structural issues in modern capitalism—unaccountable elites, declining democracy, and scapegoating born of economic anger. The episode frames authentic democracy—especially worker/community control of economic institutions—as the necessary and radical alternative, while warning that protest without systemic change leaves underlying problems unsolved. Throughout, Wolff’s tone is direct, urgent, and uncompromising, challenging listeners to see beyond media narratives and superficial divides.