Podcast Summary: Economic Update with Richard D. Wolff

Episode: History's Lessons on Capitalism's Failures: Germany and US

Date: February 4, 2021

Overview

In this episode, Richard D. Wolff examines the systemic failures of capitalism, especially as revealed during crisis moments such as the COVID-19 pandemic. He draws parallels between the historical trajectory of Germany in the early 20th century and the contemporary United States, highlighting how unresolved economic injustices and crises can drive a society toward political extremism and authoritarianism. Wolff argues for the need for systemic alternatives and urges listeners to learn from history to prevent repeating past mistakes.

Key Discussion Points and Insights

1. Assessing Capitalism in Crisis

• Performance in Crisis: Wolff asserts it's insufficient to judge an economic system only by its success in normal times; its true measure is how it responds to crises like COVID-19.
  • “You have to look not only at how it performs in what we might call normal times, but you also have to look at how it performs when confronted with unexpected, unusual, irregularly occurring challenges. COVID-19 is a perfect example…” (01:00)

Systemic Failures Exposed by COVID-19 (01:30 – 14:00)

• Unpreparedness: Neither private enterprise nor government prepared contingency plans (masks, ventilators, trained staff), exposing a fundamental system weakness.
• Rising Food Prices and Hunger: The pandemic saw food prices increase 7–10%, exacerbating hunger.
• Evictions: Mass evictions contradict public health advice (“shelter in place”) and worsen inequalities.
• Educational Inequality: Only 5% of private schools (serving the wealthiest) closed, vs. 62% of public schools, disproportionately affecting low-income families.
  • “We are responding to this pandemic by greater inequality than we had before. That's not an effective systemic response. That's a failure, and it's very serious.” (06:49)

Inequality in Job Losses (14:00 – 17:30)

• Gender and Racial Disparities: December 2020 saw 156,000 women lose jobs (while men gained), and whites gained jobs as non-whites (particularly Latinx) saw losses.
• Quality of Jobs: Many new jobs were in the risky hospitality sector, not safe or secure employment.
  • “White people gained jobs in December. Non white people lost them. And among them the big loser, Latino Americans...This system is not working well.” (16:31)

Corporate Accountability: The Boeing Example (17:30 – 22:50)

• Boeing’s Settlements: Following deadly crashes, Boeing paid $2.5B for lying to regulators – considered minor compared to their profits.
  • “There's a systemic dimension. Boeing puts profits first. That's what they're there for…It is insane to say that people's safety comes after the profits.” (21:35)
• Public vs. Private Good: Wolff argues essential services like airline safety should be public or cooperative enterprises, not ruled by shareholder profit.
  • “Public transportation is too important for too many people to be sacrificed, held hostage by a group of people who have a different priority, namely profit.” (22:15)

2. Historical Parallels: Germany and the U.S. (23:30 – 44:00)

Germany’s Precarious Trajectory (24:15 – 33:00)

• Rise of German Capitalism: Late 19th-early 20th century saw Germany’s explosive growth, comparable to the U.S. “German dream.”
• Series of Crises:
  1. WWI Defeat: Economic destruction began with military defeat.
  2. Hyperinflation (1921–1923): Savings of the working/middle class wiped out. (“Over the previous 70 years, as German families, very frugal, had accumulated savings, those savings were not worth a quarter pound of butter.” – 29:40)
  3. The Great Depression (1929): Working class split between radical left and right.
  • The Nazi rise leveraged this split and business fears of communism, leading to fascist rule.
  • “It was in the autumn of 2003 [sic – he means 1923], at the Apogee of that inflation, that a right wing military veteran named Adolf Hitler tried to march on the city center in Munich…” (31:04)

America’s Cycles and the Erosion of the Left (33:00 – 38:30)

• Post-crash Transformation: Like Germany, the 1930s Depression crushed the U.S. working class, leading to New Deal reforms pushed by an empowered left (Social Security, unions, etc.).
• Postwar Backlash: Post-WWII, the business elite suppressed the left (McCarthyism), diminishing socialist/communist influence and weakening unions.
• Recent Crises: The 2008 crash and COVID-19 pandemic dealt further blows to American workers, but with the left weakened, economic insecurity fed right-wing populism instead.

Contemporary Parallels and Political Extremism (38:30 – 44:00)

• Rise of Right-Wing Populism: The lack of strong left alternatives led angry, dispossessed Americans toward politicians like Trump, echoing the German experience with Nazism.
  • “So they go to the right and they end up storming a building. Of course they do. And then they will be arrested. ...But what will be learned from that is by all those people watching that, realizing they have to find a different way, but it's a different way to the same objective, some kind of fundamental change that will make America great again.” (41:46)
• Comparison of Slogans: “Return to the German Reich” mirrors “Make America Great Again.”
  • “It's exactly the same slogan. It's the same story. Yes, it has its differences, but if there aren't fundamental changes made, we're going to find that the German story is going to try to be repeated here, too.” (42:38)
• Warning: Without deep, systemic reforms, the conditions that produced past authoritarianism remain dangerously present.

Notable Quotes & Memorable Moments

• “It doesn't help to say, well, it works okay when we don't have a crisis. That's only half the story. The other half is what it does in the face of a crisis. And there the results are unambiguous.” (07:44)
• “The critique of capitalism now has gotten to the point where the bizarre question is, why are there people not understanding this still?” (17:10)
• On Boeing: “You don't allow a person's testimony to mean much in a trial if they've admitted to lying in the past. ...What are we doing here? Allowing this company to continue to produce most of the airlines all of us use... There is no excuse for this.” (20:55)
• “Sometimes people write to me, say, well, you make good criticisms, but what do you propose? Okay, let me propose: aircraft, public transportation is too important for too many people to be sacrificed...by a group...who have a different priority, namely profit.” (22:05)
• On historical cycles: “So when along comes a right wing politician who smells, aha. Here's a way for me to shortcut my way to the presidency. Hello, I'm Donald Trump. I'm going to say how angry I am too. I'm going to be Mr. Angry and ask everyone, vote for me.” (40:45)
• On structural warning: “...if there aren't fundamental changes made, we're going to find that the German story is going to try to be repeated here, too. It will not go away because the basic conditions that created Mr. Trump haven't gone away. So he may go, but the next one is just waiting in the wings.” (43:05)

Timestamps for Important Segments

• 01:00 – Assessing economic systems during crises
• 03:30 – Systemic failures in pandemic preparation
• 06:50 – Pandemic impacts on education and inequality
• 14:00 – December 2020 job loss data and disparities
• 17:30 – The Boeing settlement and consequences
• 23:30 – Introduction to history segment
• 24:15–33:00 – Economic and political crises in Weimar Germany
• 33:00–38:30 – The Great Depression and the American left
• 38:30–44:00 – Contemporary US: rise of right-wing populism and repeating history

Conclusion

Richard Wolff’s episode is both a factual analysis and a stark warning: systemic weaknesses in capitalism become undeniable in times of crisis, exposing deep inequalities and setting the stage for dangerous political shifts. Through the lens of German history, he argues that the US risks similar authoritarian outcomes unless bold systemic reforms are enacted. The episode ends with a call to learn from history—before it is repeated.