Economic Update with Richard D. Wolff
Episode: Worker Coops Rising
Date: July 11, 2019

Episode Overview

In this episode, host Richard D. Wolff dives into two key themes: the dysfunctions of American capitalism—especially regulatory capture and deep inequality—and the rising movement for worker cooperatives as a viable alternative. In the second half, Wolff welcomes guest John Duda, Director of Communications at the Democracy Collaborative and co-founder of the worker-owned Red Emma’s in Baltimore. Together, they discuss real-world models of worker ownership in Italy and the United States, practical successes, challenges, and the growing momentum for democratic workplaces.

Key Discussion Points

Regulatory Capture in U.S. Capitalism (00:10 - 10:42)

• Definition and Examples:

  • Regulatory capture: when businesses come to control the very agencies meant to regulate them, often through campaign donations or other means.
  • Striking contrasts: The European Union has banned/restricted 1,300 chemicals in cosmetics; the U.S. only 11.
  • Chemicals in food (dyes, preservatives) are far more tightly regulated in Europe than in the U.S.
  • The herbicide atrazine banned in Europe since 2003 but still widely used in the U.S.
  • Lead-based paint banned in Europe before WWII, but not in the U.S. until 1978.

• Implications:

  • "Once upon a time, liberals, socialists and others looked to the government as a way to...limit the damage that is done by enterprises for whom profit is the bottom line...[But] the government has been captured by those it is supposed to control." (03:41 – Richard Wolff)

The "Great Economy" Myth and Rising Inequality (10:43 - 15:45)

• IMF Assessment:
  • The IMF, contrary to U.S. political claims, finds that benefits from America’s economic expansion “have not been widely shared.”
  • Economic growth over the past decade mostly benefited the wealthy; median incomes barely rose.
  • U.S. life expectancy is falling compared to other developed nations, with rising suicides and drug overdoses impacting stats.
  • "The wealth of the bottom 40% is lower today than it was in 1983. That's not the report card of a great economy." (13:21 – Richard Wolff)
  • Social mobility has collapsed: young people today are less likely than their parents to exceed their parents’ standards of living.

Trump, Trade Wars, and the Specter of Recession (15:46 - 23:29)

• Administration Tactics:
  • The U.S. economy, typically unstable with downturns every 4-7 years, is now overdue for another recession.
  • Trump administration is pressuring the Federal Reserve to cut interest rates to delay a downturn until after the 2020 election.
  • Tariffs and trade wars (especially against China and Mexico) are used partly as leverage for this economic strategy.
  • "We are watching the Republican Party and Mr. Trump ready to destroy vast sectors of a global economy to get themselves reelected." (20:44 – Richard Wolff)
  • Christine Lagarde of the IMF estimates the U.S.-China trade war could cost $455 billion globally.

Worker Cooperatives: Theory, Practice, and Growth

Introduction to John Duda (23:30 - 25:06)

• Who is John Duda?
  • Director of Communications at the Democracy Collaborative, a think tank focused on democratizing the economy.
  • 15 years' experience with Red Emma’s, a worker co-owned bookstore and café in Baltimore.

Emilia-Romagna: Italy’s Cooperative Ecosystem (25:07 - 30:04)

• Cooperative Density:

  • Emilia-Romagna, a region of about 4 million, has one-third of its GDP generated by co-ops—all types (worker, consumer, producer)—across industries.
  • "If you’re talking to somebody on the street, you have a 1 in 20 chance of meeting somebody who's a worker owner at a worker co op." (17:44 – John Duda)

• Success Factors:

  • Not a single large co-op, but an “ecosystem” with mutual support and cooperative finance.
  • Region is among Italy’s most prosperous due to this model.

• Role of Policy and State Support:

  • Supportive policies: co-ops set aside 3% of net profits to help new co-ops.
  • The Marcora Law enables unemployed workers to use unemployment benefits and cooperative financing to start co-ops from failed businesses.
  • Cooperative federations offer advocacy, technical, and financial support—analogous to business lobbies for capitalist firms.

  “The state has been supporting capitalism. All that the worker co ops would ask is...a level playing field of getting that kind of support for their alternative way of organizing business.” (19:49 – Richard Wolff)

Could It Happen in America? John Duda on Red Emma’s (30:05 - 37:20)

• Origins and Growth:

  • Red Emma’s began as a radical bookstore and coffee house, focused initially on paying rent and providing dignified work for a handful of founders.
  • Over time, the model proved viable: “The idea that we could create dignified work for the people who work there...was a little bit outside of the horizons...But what we found is that the model worked.” (23:57 – John Duda)
  • Red Emma’s now has about 30 worker-owners, up from 12 at the start.

• Decision-Making and Worker Ownership:

  • New staff don’t become owners immediately, but after a period of mutual fit, they can join as worker-owners voting on all major issues.

  • Pay disparities are strictly limited: a 2-to-1 max ratio between top and lowest paid, much lower in practice than typical U.S. businesses.

    “You really are...not in a regular business because you’re in the process of having decisions over what everybody gets paid.” (26:11 – Richard Wolff)

• American Landscape:

  • Since Red Emma’s founding, national momentum for worker co-ops has increased: there’s a national federation, better policy engagement, and grassroots financing networks.
  • “You see a tremendous movement...creating grassroots financing to help worker co ops help other worker co ops...all sorts of really interesting shifts in local economic development policy.” (22:45 – John Duda)

Worker Co-ops and the Zeitgeist

• Restoring a Sense of Control:

  • Duda connects the growth in worker co-ops with a broader desire among Americans for control over their economic lives—contrasting democratic work with nativist, reactionary responses to insecurity.

    “People feeling like they’re in free fall, people feeling like the bottom has fallen out of the American dream...And what worker co ops do...is give people a different sense of being in control, a sense that’s grounded in solidarity, that’s grounded in participation, that’s grounded, honestly, in community.” (26:56 – John Duda)

• Generational Appeal:

  • Interest in worker co-ops cuts across ages and ideologies; young people want to join, older business owners see it as a way to leave a legacy.
  • “You have a lot of young people who want to work at a worker co op. You have a lot of older people...thinking about their legacy...they see the same possibility.” (27:56 – John Duda)

Notable Quotes & Timestamps

• On Regulatory Capture:

  • “The government has been captured by those it is supposed to control...It won't work. That old plan of giving the power to the government, at least not until we have very different governments...” (05:39 – Richard Wolff)

• On Economic Inequality:

  • “The wealth of that bottom 40% is lower today than it was in 1983. That’s not the report card of a great economy.” (13:21 – Richard Wolff)

• On Worker Co-ops’ Practicality:

  • “You look at Emilia Romagna though, and you see an economy in which one third of the GDP...is generated out of cooperative business. This is really, really incredible.” (16:56 – John Duda)

• On Policy and State Support for Co-ops:

  • “You have to take 3% of your net profits as a co op and basically kick them down to the next generation of cooperative entrepreneurs.” (20:10 – John Duda)

• On Democratic Decision-Making in Co-ops:

  • “You really are...not in a regular business because you’re in the process of having decisions over what everybody gets paid.” (26:11 – Richard Wolff)

• On the Broader Appeal:

  • “People are really hungry for ways to feel that they are in control of their own economic life.” (27:34 – John Duda)

Timestamps for Important Segments

• Regulatory capture & chemical bans – 00:10–05:39
• Inequality and economic assessment by the IMF – 10:43–14:56
• Trump, the Fed, and Trade Wars – 15:46–20:44
• IMF on trade war consequences – 20:45–23:29
• Introduction of John Duda – 23:30–25:06
• Emilia-Romagna's example – 25:07–30:04
• State support and policy for co-ops – 30:05–32:30
• Red Emma’s story – 32:31–35:20
• Democratic incentives in co-ops – 35:21–36:30
• Cultural, generational, and movement context – 36:31–38:36

Memorable Moments

• Richard Wolff’s pithy summary of the last decade:

  “The rich got richer and the poor got nothing. That's what happened over the last 10 years.” (12:06)

• John Duda on the thriving Italian cooperative model:

  “…one third of the economy is generated out of cooperative business. This is really, really incredible.” (16:56)

• The transformative potential for the US:

  “I certainly think we've seen tremendous, tremendous growth and excitement in worker cooperative models.” (22:36 – John Duda)

• On the deeper meaning of the movement:

  “What worker co ops do...is give people a different sense of being in control, a sense that's grounded in solidarity, that's grounded in participation, that's grounded, honestly, in community.” (26:56 – John Duda)

Conclusion

This episode provides a sharp critique of the American economic and political status quo—especially corporate power over regulators and persistent inequality—while offering the concrete, hopeful example of worker cooperatives. Through both practical stories and international models, Wolff and Duda demonstrate that democratic workplaces are not only possible but are growing, adaptable, and potentially transformative for American society. The conversation closes with a sense that worker ownership could be a key force for empowering individuals, building solidarity, and renewing economic democracy.