Economic Update with Richard D. Wolff

Episode: Liberating Technology from Capitalism
Date: August 19, 2021
Host: Richard D. Wolff
Guest: Wendy Liu, author of Abolish Silicon Valley: How to Liberate Technology from Capitalism

Episode Overview

This episode of Economic Update undertakes a two-part exploration. In the first half, Richard Wolff offers economic commentary on current events related to labor struggles, wealth distribution, workweek reforms, education debt, and alleged labor shortages. In the second half, Wolff interviews Wendy Liu, a former software engineer and the author of Abolish Silicon Valley, about her critique of capitalism’s grip on technology, the myth of innovation under capitalism, and her personal journey from enthusiast to critic of the tech industry.

Part I: Economic Events and Systemic Critique

Recent Labor Movement Victories

• Vermont AFL-CIO Conflict Resolved ([00:10])
  • Vermont labor leaders threatened a general strike if President Trump refused to concede power; the national AFL-CIO initially resisted but later withdrew, seen as a “victory for a new, revived labor movement.”
• Smithfield Pork Processing Plant Strike ([02:30])
  • After a severe COVID outbreak at a Smithfield Foods plant (1,300 infections, 4 deaths), 98% of union members voted to strike. The company quickly agreed to union demands.
    • “It is one of those victories we should know about and think about.” – Wolff ([03:40])

Wealth Inequality and Pandemic Profiteering

• Global Capitalism During COVID ([04:08])
  • The 500 richest people gained $8.4 trillion during the pandemic, a time when millions died or became ill.
  • “What kind of a system works this way? One that has lost the historical right to continue.” – Wolff ([06:44])
  • This wealth, if taxed, could have vaccinated the world’s population multiple times over.

Workweek Experiments Challenge Capitalist Assumptions

• Iceland’s 4-Day Workweek ([07:09])
  • Iceland reduced government employee workweeks from 40 to about 36 hours (four days, same pay). Result: higher productivity and broader worker satisfaction.
  • 86% of Icelandic workers now covered by four-day workweek contracts.
  • Similar moves in Spain and New Zealand, with environmental and work-life benefits.
  • “Capitalism isn’t the efficient engine it wants you to believe. It’s inefficient because it could have gotten more with fewer days, but didn’t do it in part because the workers wanted it.” – Wolff ([08:58])

Student Debt and Economic Structure

• Master’s Degrees: Cost vs. Return ([11:18])
  • Wall Street Journal analysis: Many master's graduates are unable to repay student debts due to low post-degree incomes.
  • Columbia University cited as a major offender; students offered menial jobs like “walking the dogs of the President.”
  • “There’s an economic inefficiency here... There’s a gap between the incomes people have and the cost of getting a good education that shouldn’t exist in the first place.” – Wolff ([12:29])
  • Problem is systemic, not just institutional or individual.

The “Labor Shortage” Myth

• Why People Aren’t Returning to Bad Jobs ([13:50])
  • Companies claim worker shortages but are offering inadequate pay/conditions.
  • Highest quit rate in history; workers refuse to return to “lousy jobs.”
  • “This is class war, folks... a class struggle, not a labor shortage.” – Wolff ([14:51])

Part II: Interview with Wendy Liu – Liberating Technology from Capitalism

Introducing Wendy Liu ([15:04])

• Former software engineer and startup founder; author of Abolish Silicon Valley: How to Liberate Technology from Capitalism
• Now a writer and activist focused on inequality and technology

Key Discussion Points and Insights

Why Technology Must Be Freed from Capitalism ([15:44])

• Concentration of Wealth and Power in Tech
  • Top technology firms (Apple, Amazon, Alphabet, etc.) have become the world’s wealthiest corporations in record time.
  • “There is a lot of money to be made from harnessing the use of digital technology... that doesn’t mean that there’s something especially new about it.” – Liu ([15:53])
• Tech’s Role in Deepening Exploitation
  • Technology has enabled unprecedented wealth accumulation for a few, facilitating worker exploitation and ecological destruction.
  • “There is a special moral urgency… What if we used this technology for something other than enriching a few billionaires so they can go off to space?” – Liu ([17:57])

The Myth That Capitalism Drives Innovation ([19:05])

• Capitalist Apologists’ Defense
  • They claim we owe all advances to capitalism, as if without it, we’d be “working with donkeys and wheelbarrows.” ([19:05] Wolff)
• Wendy Liu’s Rebuttal
  • Innovation is not the sole product of capitalism. Workers, not CEOs or shareholders, create technology.
  • “The best case you can say for [tech CEOs] is that they were in the right place at the right time... All of the work that these companies have produced is produced by teams.” – Liu ([21:16])
  • Many innovations throughout history predate or exist outside capitalism (e.g., Isaac Newton).
  • Current capitalist tech systems often create products that are undemocratic or even “toys for rich people.” ([22:43])
  • “Capitalism is the reason we have all of these useless products, and it’s why we have all these exploited people.” – Liu ([23:19])
• Potential of Democratic Alternatives
  • Explores democratic, cooperative models as more conducive to meaningful innovation.
  • The undemocratic nature of capitalist firms skews tech development toward profit rather than public good.

Personal Testimony: From Silicon Valley Insider to Critic ([25:52])

• Liu’s Journey
  • Entered tech world as an idealist, believing merit, creativity, and effort led to success and social contributions.
  • Disillusioned upon encountering stark inequality in San Francisco—juxtaposed wealth and poverty.
  • Exposure to Marxist critique clarified that “all the wealth that was being generated was deliberately not being used for the greater good.” – Liu ([28:06])
  • This realization motivated her to write Abolish Silicon Valley.

Notable Moments & Quotes

• Wolff’s Synthesis on Opportunity Costs of Wealth Concentration ([24:30])
  • “That’s money that is not being used to provide the education, the opportunities for millions of other people whose mental creativity is thereby undercut.”
• Liu on Capitalism’s Core Technical Consequence ([23:57])
  • “What we have now is almost the worst of both worlds, where you have innovation, but for very destructive and not useful ends. And that is what I think of as the core of capitalism. Sure, there’s innovation, but at what cost? And who is it actually benefiting?”

Timestamps for Key Segments

• Vermont Labor Movement and Smithfield Strike: 00:10 – 04:08
• Global Wealth Inequality During COVID: 04:08 – 06:44
• Iceland’s 4-Day Workweek and International Trends: 07:09 – 10:33
• Master’s Degrees and Student Debt Crisis: 11:18 – 13:44
• Myth of the “Labor Shortage”: 13:50 – 14:55
• Wendy Liu Interview Begins: 15:09
  • Why Free Tech from Capitalism? 15:44 – 17:57
  • Myth of Capitalism’s Innovation: 19:41 – 23:57
  • Wendy Liu’s Personal Journey: 25:52 – 28:06

Learnings and Takeaways

• Recent modest labor victories suggest a revitalized movement, but the deep systemic issues of capitalism remain.
• The pandemic exacerbated wealth inequality globally—but also revealed opportunities for challenging capitalist orthodoxy.
• “Efficiency” claims of capitalism are belied by real-world cases like workweek reforms and education debt; alternatives are not only possible, but empirically better.
• The tech industry, touted as the engine of modern innovation, is exposed as deeply entangled with old patterns of exploitation, concentration of power, and ecological harm.
• True innovation—and a tech sector devoted to the broad public interest—demands alternative models, democratic governance, and a clear-eyed critique of the capitalist system.
• Liu’s personal narrative underscores the gap between the promises of tech and the realities of capitalist society.

Recommended Action

• Readers interested in systemic critiques of capitalism and the tech industry are encouraged to read Wendy Liu’s Abolish Silicon Valley for deeper analysis and personal perspective.
• Reflect on labor struggles and the potential for organizing in workplaces and beyond.
• Challenge dominant narratives that ascribe all innovation to capitalism, and explore alternative, more democratic economic structures.

Memorable Closing

“What if we used this technology for something other than enriching a few billionaires so they can go off to space?”
— Wendy Liu ([17:57])

End of summary.