← Economic Update with Richard D. Wolff
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- [00:10]
A
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, jobs, debts, incomes, our own and our children's. I'm your host, Richard Wolff. I want to begin, which won't surprise many of you, with a small set of comments about the catastrophes in the cold, the failed power, the failed water system, leaving millions of people with absurd electric bills needing to boil the water. A genuine crisis. And I don't want to repeat what you've heard from mass media. I want to focus on some of the particulars. And I might mention that one of the best pieces of journalism I've seen is in the latest issue of Scientific American. If you want a balanced, interesting analysis there, you'll find it. Here's what Texas is a center of the energy business in the United States. As most of you know, oil, gas, and so on. Texas made an unusual decision. Most of the rest of this country, the other 49 states are part of two major electric and energy grids in the United States. That is, they're hooked up together so that they can move electricity and so on from one to the other as their special needs may require. But if you're part of these federally organized grids, you are subject to federal regulations, federal oversight and control to make sure that you are doing it properly, which may not always be the same as doing it profitably. As you will see, Texas didn't want to have its profits limited by federal oversight. Of course it didn't say that. It talked about states rights and the usual noise around something that is other than the real issue. Bottom line, the energy companies in Texas want it to be controlled only by a Texas outfit, not a federal one, because it's cheaper and easier to control the local one, as all businesses have come to understand. So Texas was not part of the grid when a cold snap came. Therefore, they had to rely on their own energy sources, and those weren't enough and they could not get help from the grid they had chosen not to be part of. There's no great mystery here. It doesn't have anything to do with windmills or the Green New Deal or any of the other distractions. Here's the private capitalist enterprises in the energy business led to the Texas disaster, just like a private health care system led to the COVID disaster. In societies that don't permit that, where you have the regulation needed to make sure that the public service is at least partly taken into account alongside of profit. If you don't do that, you get these results and the fact that we have the Texas disaster on top of the coast. COVID Pandemic gives you an idea of the downward slide of the US capitalist system that is in part a result of relying on unregulated private profit driven enterprises. That's the lesson here. I want to turn next to what was called by one of the most astute observers, Mohamed El Arian of Wall street, the near accident on Wall Street. He called it the Robinhood Gamestop Reddit story. Again, I am not going to go over the details. I want to drive home two or three points that haven't been adequately examined. First, let's begin. Make sure we all understand Gamestop is a corporation whose shares trade on the stock market. Something was done to it that is done all the time to all kinds of stocks. At various points in the Wall street saga, people decided some that GameStop's shares are going to fall in value. After all, it's a brick and mortar business. People aren't going to the store the way they used to, et cetera, et cetera, et cetera. So what these people did was say, ooh, it's probably going to go down. And when they do that, when they think that they can engage in a little gambit, a little maneuver that some of you may not know about, you can borrow shares of stock from somebody who owns them with a promise to return them at a specified date, two or three months or longer in the future. You pay a fee to the owner who likes to get the fee because he or she knows they're going to get the shares back at the end of that time. So the borrower gets the shares, pays the fee, and then what the borrower does is sell the shares immediately. You're legally entitled to do that. Why? Because they're counting on the shares to go down in value between the time they borrowed and sold them and the time they have to give them back. So they'll go back into the market, say three months from now, buy them at a lower price, give them back to the person and keep the difference between what they got when they sold them and what they got when they bought them back. Of course, what this does, and here's point number one, it gives these borrowers, shorters they're called, gives these borrowers an incentive to talk down the company because they need that share to go down in price. The further down it goes, the more money they get, because the bigger the difference between what they got when they sold the borrowed shares and what they have to pay to get them back. So suddenly we have people Moving around the world, putting stories in newspapers, making public appearances, spreading rumors, who knows? Because they want the price to go down, has nothing to do with the underlying profitability or viability of the business. It's a manipulation and a maneuver. And people know that. All that happened was some clever young men and women, and some not so young on Reddit, figured out this game and said, hmm, maybe if a lot of us buy the shares when they're low, we can drive it back up and that will be good for us because we'll buy them and then sell them at a higher price. The fact is that that screws the people who shorted it. It's not our problem. So you got two people, both of whom are maneuvering around the stock, pushing it up or down, depending on their strength, the numbers, how many dollars they have to throw into this, and I want you to understand, has nothing to do with the underlying economy. Next point, and the only other major point here, please, all those of you, particularly who are tempted to play around in the stock market, understand how capitalism works. Companies know what they're doing that's different from what they announce publicly in the SEC forms they have to fill out in the documents they have to make public. They put the best face they can on whatever it is they're doing, and they only reveal what they have to. So there's a gap, I'm being as polite as I know how, between the reality of a company and what it says publicly in its documents. Then there's a second gap between what you and I know, which is a smattering of what gets made public and what you can learn if you're a full time professional, studying all the documents they have to fill out for all the different state and federal and local agencies. And you visit the company and you ask questions, you can know a bit more. You still don't know what the real story is, because for that you have to be one of the dozen executives at the top. So most of us, the vast majority, are two gaps away from the reality, two gaps away from what the real story is. Therefore, when you buy a share of stock, you've got to face something you don't know that's not your fault. It's the situation which prevents you from, from knowing. Therefore, it is, to be blunt, a crapshoot. It's a casino. You're throwing the little ball onto the roulette wheel, and where it comes is the end result for you. And you may have noticed that in the casino, the house always wins in the end. The Wall street is no different. My next update has to do with a remarkable development. College and university campuses have been terribly, hardly hard hit by the pandemic. Students are reevaluating what they're getting out of distance learning. Colleges and universities are discovering that the flow of money into them from students particularly, is drying up. And because colleges in America and universities pride themselves on running like a business, they've been doing what businesses do when business isn't so good. They've been laying off people. To be precise, 260,000 employees of colleges and universities have lost their job during the pandemic. That's 15% more than one out of seven of people working. And the result is that working people, employees of all kinds of universities, are doing what they should have done before, but now they realize it, they're organizing into unions. Here's some American university, Brown University, Georgetown University, Harvard University, Oregon State University, University of Arizona, and I could go on. They're forming unions of all kinds. And one of their slogans, which struck me is called Chop from the top. And what that means is they are angry that the administrators sitting at the top of universities get paid wild amounts of money, which, by the way, is when you make a university work like a business, you give the CEO of the university, the president, the crazy money. I like the example from the University of Arizona, where President Crowell, that's his name, made 1.15 million in 2019. That was his salary, 10th highest salary among US public university presidents. But the organizing young people there point out that the school's football coach made three times as much, namely 3.5 million. And they also boosted pay there in Arizona for the vice president of athletics by 150,000 a year, plus gave him a $500,000 bonus. And here we go. While telling faculty and staff that they won't receive any salary increases because of the pandemic. Oh, think about it. Hollywood is now dependent on China. Whoa. Turns out in this bad year when the Chinese locked down, you know, at the beginning, and so they beat the virus pretty well, they've been going back to movies in a large way, and they became a bigger market for Hollywood movies than the United States, which closed its theaters and never reopened them, it's now the case that more and more blockbuster US Movies have to take into account the income they get from showing them in China, which has the interesting consequence that attacking China is becoming more very unwise decision in any movie being made. This is another sign, if we need it, that the relative positions of the United States And China are changing, even for Hollywood. And my last that I have time for lockdowns, I'm going to use New Zealand. New Zealand locks down very, very tightly. It did that when the first virus arrived. It did it last week again. They shut everything down totally. You know why? They argue that's the best thing they can do for their economy by minimizing the COVID disaster in terms of cases and deaths. The United States was unwilling to do that kind of lockdown, and our economy is suffering much more as it is from COVID and from the consequences. Here's the example for you to think about. New Zealand has five COVID deaths per million. The United States has 1,500 COVID deaths per million. We've come to the end of the first part of today's show. Before we go to the second half, please remember our new book, the Sickness Is the When Capitalism Fails to Save Us from Pandemics or Itself. It's available at democracyatwork.info books. My thanks as always, to our Patreon community for ongoing and invaluable support. If you haven't already, Please go to patreon.com economicupdate to join. Stay with us. We'll be right back with today's guest, Marina Citrin. Welcome back, friends, to the second half of today's economic update. I am very pleased to bring to our microphones and our cameras Marina Citrin. I've known her for quite a while, and I know the work that she does will be of interest to you, as it always has been to me. She is an associate professor of sociology at the State University of New York in Binghamton, working on and participating in societies in movement and collective action. Her latest book, co edited with Collectiva Sembrar, is called Pandemic Solidarity. And I'm going to open my questions on that book. But I also wanted to mention that she has also written about horizontalism, a concept associated with her the book she first wrote about that, or at least one of the books, Voices of Popular Power in Argentina and another book, they Can't Represent Reinventing Democracy from Greece to Occupy. So, Marina, thank you very much for joining us today.
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Great to see you again, even if virtually.
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Yes, that's right. These days. Okay. Your recent book, pandemic Solidarity, has a subtitle, mutual aid during the COVID 19 crisis. And it shows how people responded globally in cooperative, collective ways to this pandemic. And it also raises questions about the difference between the official responses, particularly in places like the United States and the United Kingdom versus these, let's call them unofficial responses that people undertook themselves. Do you see such a difference and how would you describe it?
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Yeah, no, absolutely. You know, on the one hand, and this is one of the main reasons actually we decided to do the book, there was a number of us, it's mostly women, the collective from around the world, from places, the US the uk, but also South Korea, Brazil, Argentina, northern Iraq, Italy, all over. Right. Taiwan, a large number of people. And what we found was that our governments and these institutions that are supposed to respond in times of crisis and help people and they fail. And that whether that's will or not, it's the reality as far as finding out what people's exact needs are and then meeting them. And so in place after place after place, it's people, neighbors, regular people. So we're not talking about political organizations or parties or anything most of the time. Not people who have been organized in any way together beforehand, coming together to figure out what people's needs are. So food, medicine, but also things like loneliness over time and then people in these different groups creating networks to meet those physical needs as much as possible, the emotional needs, and creating a real alternative as far as structures and relationships in times of crisis in particular, have they.
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I guess I'm asking you a follow up question. Is this being formulated, in other words, are people learning what you just said? So that there's a kind of emerging, let's call it a movement, for lack of a better term, of people recognizing what you just said and wanting to have that available for whatever next comes?
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You know, I think it's uneven in some places. Absolutely. And it's actually cumulative knowledge. There's crisis after crisis and it's, you know, the combination of external hurricane, whatever happens, pandemic, and then there's capitalism and they come together, it exacerbates the crisis and people are learning. But it depends on the place. I mean, I think that's a question that I want to answer. Yes, absolutely. But it's really uneven. So in some places, for example, in Greece, where there are people who are interviewed as well, the health clinics that already existed, these social solidarity clinics outside of the medical system, they've become broader and deeper and the question of what health even means is questioned and expanded on. So in that sense there's a rethinking and an expanding and a deepening. In some of the neighborhoods of Turkey, people are finding that as well. But I think that's one of our challenges. I think it's actually not, you know, I Don't want to say we don't take ourselves seriously enough, but I think actually sometimes we don't. So that is one of the questions that comes up for me too. Yeah.
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Okay, so how does this connect to horizontalism? And for our audience, could you start us off with a brief definition and then talk about what it means and where you think it's going now?
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Sure. No, and they're absolutely related. Horizontalism, and it's not my term. It's one that I heard for the first time in Argentina after their economic crisis in 2001. And it's really useful to describe. It's a social relationship. So it's not a thing, even though it's ism in English. But it's not like a new vision of reorganizing all of society or something like that. It's about social relationships and how we organize with one another in a way that is kind of as it sounds, that it's horizontal, it's direct. So it has parts of direct democracy kind of implied in it, but it's also about care and recreating relationships with one another. So that idea and that relationship that they saw in Argentina that we saw in 2011, and the different movements of the squares and Occupy, that is also embodied in these mutual aid networks that we're seeing around the world as well. So people not having other people tell them what to do in some hierarchical way, but making decisions together in this horizontal way.
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A
Can you tell us a little bit about how this works in the cases of Argentina and Cuba? And I ask you, because you have direct experience. Experience as well as studying those things.
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Yeah, you know, different. Argentina and Cuba, however, there's similarities. So this seeking this relationship in different forms of organizing and not looking to institutions of power for the most part, to kind of answer problems anyway, not that they're ignored, but that's not the location of the answer. You can see how that's played out, for example, over the years in Argentina with the recuperated workplaces. So after the crisis, workers took over workplaces and they used the. They talked about the language of horizontalism. Horizontal idar. And that was a relationship that's practiced. So the work is organized without hierarchy. There's leadership, but it's not in that sense of power over that hierarchy implies. And now we see that continuing and expanding in Argentina and other parts of Latin America and actually other parts of the world. In Southern Europe, in Cuba, you know, the language of horizontalism wasn't used so much. But when I lived there, and I've been spending time there since actually the mid-90s towards in the 2000s. There emerged kind of informal groupings and some of them became more formal with people also talking about auto restion, self organization, self management, which has history in agriculture in certain areas in Cuba for sure during the revolution, after the revolution. But this way of organizing and talking I think had a very strong effect on the government's decision to bring to have more self organization as a possibility in the economy. As one example, there are many others in the gay lesbian movement also you see it going kind of from movement to then affecting institutional policy.
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Is it appropriate or not to call this something like worker cooperatives in the sense that that term is used in other parts of the world?
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You know, in Cuba maybe a little bit. But with the revolutionary history it's just different because there's already an anti capitalist post capitalist at least desire. So it's not the same as working in the same. I mean yes, it's under capitalism, but it's in a different. So that the economic system is different. And in Argentina it's not worker cooperatives. No, not in that sense also because it's tied in with a larger vision of transformation kind of in an overarching way. And many of the self organized workplaces in Argentina, even if they get institutional funding now, have said they're going to continue without it. It's kind of. Some people have described it as exercising their kind of alternative value and anti capitalist muscles. You know, it's not the actual answer, but it's that flexing of muscular possibility.
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All right, here's the hard question. Is this a kind of movement towards some notion of socialism or is that the wrong way to pose this?
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I don't think it's the wrong way. I think it's a fine way. I mean I'm not saying so committal with what it's called, but is it liberatory? Is it anti capitalist, Is it participatory? Yes. And so that would fall within concepts of socialism. It's more horizontal and participatory. Not looking to what I was mentioning before as far as concepts of power and leadership and hierarchy. So. So it would be a kind of socialism? Yes, I would say it is. We need to scale over more and I think we need to take ourselves more seriously in really seeing what's happening. Millions and tens of millions of people around the world right now are surviving because of each other, not because of our institutions during the pandemic. So that should make us think. And yes, it might be about food and healthcare. But there are broader things that people are doing and thinking about work. Your first question. So, yes, it is full of possibility, and I think we need to take that more seriously and push it outward.
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A
You were a participant in the Occupy movement, as many folks were. What's the connection between horizontalism, the way you've just been discussing it, and Occupy? How do you see the connection there?
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You know, it's not like it's some ideology, horizontalism that then just got kind of picked up. So there's something very different that's been happening, I think, since about post 1989. So it's not the vision of here's the transitional program or whatever political agenda that was useful to many people for periods of time. It's a rejection of so many forms of organizing, and out of that comes this horizontal relationship. So throughout the US and the Occupy movements and all over the world, people were trying to figure things out with one another. And I guess you could look at it as exercising these muscles. Again, these were the democracy muscles, having a say. It wasn't about transforming all of society anyway yet, but beginning to just participate, to be heard, to hear one another.
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A
And you feel that's developing and growing and maturing over the time, say, since Occupy or since the 90s in different ways.
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It's not linear, but yes, absolutely. Since, say, 1989 through to now, more and more, this is the way people are organizing. And then we see it in the ways people organize in different spaces. Then. Yeah.
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A
All right. With a time that's limited, could you give us a couple of examples from the Pandemic Solidarity book? It might be helpful for people just to hear about one or two examples so they can concretely grasp what you're telling us.
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B
So one or two examples could be a really small one. In Taking Care neighborhoods in Turkey found that a lot of people, especially the elderly, were alone, and they organized to have kind of tea with people, but by telephone, they would call people to check in, and they would arrange that they were both drinking tea just so people felt less alone and to not underestimate that importance. In Argentina, Greece, and the U.S. a lot of the people interviewed were doing work with people in the prisons and people in the prisons self organizing to get the word out as far as what was happening so that they could be protected more. And that also had an effect.
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A
Yeah. Okay. All right, let me conclude by asking you sort of to tell us what is this a response to? In other words, how would you explain to someone why this kind of political social action is attracting people, moving people.
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The heart of it is a crisis of capitalism in so many different ways. Political crisis, economic crisis, social crisis, cultural crisis, and people feeling they're not represented and that we have to do this for ourselves and with one another. So if that's a pandemic, if that's Occupy responding to an economic crisis, whichever the crisis, people feeling that we need to do this ourselves and with each other and not have people tell us what to do, but figure it out together listening to one another.
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A
Wonderful. All right, thank you very, very much. I wish, as always, that we had more time, but you've made it very, very clear, and that's why I wanted you, because I know you've been thinking and working on this stuff, and so you're the perfect person to help us understand it. Thank you very, very much, Marina Citrin, and I look forward to talking with you again in the future. Great.
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B
Thank you.
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A
And to my audience, I hope you found this as important as I did. And I will talk with you again next.