Economic Update with Richard D. Wolff

Episode Title: When Profits Come First
Date: November 1, 2015
Host: Richard D. Wolff
Podcast by: Democracy at Work

Episode Overview

In this episode, Professor Richard D. Wolff explores how the relentless prioritization of profit in capitalist systems leads to critical social and economic issues. He examines examples from technology, sports, and politics, and unpacks recent economic developments, systemic inequalities, and the resurgence of socialism as a viable alternative. The episode is rich with economic analysis, real-world cases, and listener questions—all with Wolff’s signature clarity and directness.

Key Discussion Points & Insights

1. Extreme Poverty in America

• Book Recommendation: $2 a Day: Living on Almost Nothing in America (Katherine Edin)
  • Highlights that “millions of people in the United States, particularly children, [are] living on less than $2 a day.” (04:07)
  • $2/day is the World Bank’s standard for “extreme poverty,” making this revelation in the U.S. especially shocking.
  • Insight: Poverty is not relegated to “other places;” it’s systemic and persistent in the U.S., affecting millions.
  • [04:07] Wolff: “The idea that there are any such folks condemned to such a life in the United States, let alone that they number in the millions, makes this book an important milestone to note.”

2. Corporate Collusion in Tech Industries

• Legal Case: Engineers v. Apple, Google, Intel, Adobe (2011–2015)
  • Companies colluded to avoid “poaching” each other’s engineers, suppressing wages and restricting worker mobility.
  • Major executives (Steve Jobs, Eric Schmidt) directly implicated via email evidence.
  • Settlement of $415 million is negligible for these corporations, but revelatory.
  • [06:14] Wolff: “That’s how a profit driven corporation works… My guess from everything I have studied is that it happens a lot. But these fellows got caught.”

3. Profit Motive in Sports: NFL and Concussion Cover-up

• Film: Concussion (Sony Pictures) and corresponding New York Times exposé
  • NFL worked to have “unflattering” depictions cut from the film—attempting to control the narrative on player health.
  • The league paid hundreds of millions to settle with affected players but continues profit-driven behavior.
  • [10:48] Wolff: “If you allow your sports activities that millions of Americans enjoy to be run as profit driven corporate businesses, you really can’t be surprised if … profits, overcome, overwhelms, subordinates and neglects anything that might interfere with profits, like the injury and death of players.”

4. The Rise of Donald Trump: Economic Anger and Scapegoating

• Analysis of Trump’s Appeal:
  • Trump, a billionaire, criticizes other candidates as “controlled by rich donors” and positions himself as independent.
  • Social Security & Medicare/Medicaid: Contrasts other Republicans by supporting social programs, appealing to broad public support.
  • Tea Party Dynamics: Many in the Tea Party shift to Trump, revealing that their opposition is less to government itself than to who receives government benefits.
  • Anti-Immigrant Rhetoric: Trump capitalizes on economic frustrations, redirecting anger at immigrants as scapegoats.
  • [17:02] Wolff: “The Tea Party folks are angry about who gets government support, not about the support itself. They want more support for themselves, even if it’s at the expense of others.”
  • [18:04] Wolff: “The evidence for that [immigrants causing economic problems], slim to none, but it’s a very popular way to unload some steam, to find a bad guy, a scapegoat. Blame it on the immigrant.”

5. Policy Spotlight: Oakland and Worker Co-ops

• Oakland City Council’s resolution supports worker cooperatives.
  • Moves beyond "jobs" to quality, empowerment, and dignity of work.
  • “A job is not what most people want. A decent job, one that they can believe in, one that pays a decent salary, one that recognizes the dignity of work.” (20:35)
  • [21:09] Wolff: “Oakland is committing itself to worker co-ops—jobs where workers themselves have the power to make sure they get treated properly. Hats off to Oakland, California.”

6. Q&A: Who Paid for the Crisis?

• Did “we all tighten our belts” post-2008 crisis?
  • Answer: “No. Of course we have not.” (21:55)
  • The top 20% have seen their real wages rise; the bottom 80% saw theirs fall (Economic Policy Institute data).
  • Poorest suffered most; wealthy saw gains.
  • Taxation: U.S. Federal, State, and Local tax systems together are flat or regressive—lower-income Americans pay a higher share of income.
  • [27:15] Wolff: “The poorest 20% of Americans pay 11% of their income in state and local tax. The top 1%, the richest pay 5.4%.”

Major Segments & Timestamps

• [04:07] – U.S. Extreme Poverty highlighted via new book
• [05:05] – Silicon Valley wage-fixing/collusion case summary
• [09:01] – NFL concussion controversy and profit in sports
• [13:02] – Trump and the economics of political appeal
• [17:02] – Tea Party and shifting politics over government support
• [18:04] – Trump, immigration, and scapegoating
• [19:49] – Oakland’s pro-worker-co-op resolution
• [21:35] – Listener Q&A on post-recession “shared sacrifice”
• [23:47] – Data on wage inequality after 2008
• [27:12] – Tax policy: Poorest pay highest effective rates

Second Half: Markets in Turmoil & Systemic Instability

1. Stock Market Volatility Explained

• Recent wild swings on Wall Street, large up/down days—mirrored globally.
• Six Key “Anxieties”:
  1. China slowdown: Overcapacity from uncoordinated capitalist competition, leading to factory closures and global ripple effects.
     • “Overbuilt in China. That’s right. Overcapacity… They created factories to produce more cars than there is a market for in the world.”
     • [38:21]
  2. Oil glut: U.S. fracking led to oversupply, crashed prices, harming oil-producing countries and U.S. regions (Dakotas, Texas).
     • “If the supply of something goes sharply up, but the demand for it doesn’t, then all of the extra supply is going to have a hard time finding anyone to buy it.”
     • [42:20]
  3. Federal Reserve Uncertainty: Will the Fed raise rates? Would that undermine any recovery or tank global economies?
  4. Stagnant Europe/Japan: No recovery, becoming more of a drag.
  5. U.S. Inequality: Shrinking middle class and weakened consumption dampen growth prospects.
  6. Instability as a Defining Feature of Capitalism:
     • [48:01] Wolff: “This is a system whose innate instability stares us in the face as a screaming illustration of its inefficiency, its waste and its failures.”
     • Recurrent cycles no one wants or benefits from except a tiny minority.
  • Conclusion: “A rational society would begin to question a system that works that way. We don’t want unemployment, we don’t want jobs disappearing… But that’s what market instabilities produce.” (34:09)

2. Why Capitalism Remains Unquestioned—And Shouldn’t

• Despite instability, people accept the system as “the best we can do.”
• Wolff pushes listeners to challenge this notion and look to alternatives.

3. Socialism: The Taboo Returns to the Mainstream

• Resurgence of Socialist Ideas:
  • “Socialism is everywhere. Only the desire to pretend otherwise has kept this understanding from the American people.” (52:42)
  • Context: Bernie Sanders’ presidential run, Socialists in European governments
• Core Critique: Capitalism promised liberty, equality, democracy—but has not delivered.
  • Corporate workplaces function undemocratically: “Your job is to work there… But you are excluded from participating in deciding anything of importance in that business. That’s not democratic, friends, that’s undemocratic. And that’s how capitalism works.” (55:49)
• Social Inequality: Decades of deepening inequality—contrary to capitalist promises.

Notable Quotes

• On Tech Collusion:
  “What these folks often celebrated for their entrepreneurship actually do when it comes to working and succeeding in this economic system… They got caught.” (06:14)
• On the NFL Concussion Case:
  “If you have private enterprise in sports, this is what you are going to get.” (11:36)
• On Economic Scapegoating:
  “It’s a very popular way to unload some steam, to find a bad guy, a scapegoat. Blame it on the immigrant. That’s what’s going on here.” (18:04)
• On Wage Inequality:
  “Capitalism has not only subjected us to another one of its unstable downturns, but in an exercise of the opposite of justice, it has cost those at the top the least and imposed the highest costs on those at the bottom. Capitalism is an unjust economic system.” (25:03)
• On Systemic Instability:
  “This is a system whose innate instability stares us in the face as a screaming illustration of its inefficiency, its waste and its failures.” (48:01)
• On Workplace Democracy:
  “Your job is to help produce the profits. But you are excluded from participating in deciding anything of importance in that business. That’s not democratic, friends, that’s undemocratic. And that’s how capitalism works.” (55:49)

Episode Highlights and Memorable Moments

• Wolff’s clear indignation at the hypocrisy in tech industry practices ([06:14])
• Dissection of Trump’s appeal—not just as bluster but an economic phenomenon ([13:16]–[19:08])
• Listener Q&A giving concrete data on recession recovery realities ([21:47]–[25:23])
• Systemic critique of recurring market volatility, refusing to excuse it as ‘natural’ ([34:09]–[49:36])
• Articulation of how socialism is no longer a forbidden word, and why it’s reemerging ([49:41]–[56:22])

Summary Takeaways

• Profit Above All: When profits come first, worker rights, public health, and economic stability often come last—even in celebrated industries.
• Inequality Is Structural: The richest faced the fewest losses and quickest recoveries after the 2008 crisis, while the vast majority are left further behind.
• Systemic Instability: Recurrent crises are not aberrations but features of capitalism—yet widely tolerated or treated as inevitable.
• Alternatives Exist: Worker co-ops and socialist ideas deserve a place in mainstream discussion, especially when longstanding systems fail to deliver justice or stability.

Additional Resources

• democracyatwork.info
• rdwolff.com
• truthout.org
• Economic Policy Institute (EPI)
• Institute on Taxation and Economic Policy (ITEP)

For listeners:
This episode is a powerful, accessible look at how prioritizing corporate profit permeates every aspect of economic and social life, and why questioning those priorities—with real data and historical perspective—isn’t just useful, but vital.