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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host, Richard Wolff. Today's program is devoted to a very old, a very perennial, and a very urgent topic for right now. I'm talking about the debate, the struggle between reform and revolution. Whenever societies are in stress, when basic problems have risen to the level of crises like now, but has often happened also in the past. This issue called do we respond by reform or do we respond by revolution? Comes to the fore about 100 years ago. The leader of the German socialist movement, very strong at that time, and as a movement, a Polish woman named Rosa Luxemburg, wrote a famous pamphlet titled Reform versus Revolution, because that was the issue in front of the socialists of her time, right after the First World War in particular. And it has resurfaced over and over again. And I'm talking about it with you because by looking at how it's been in the past, we can understand how it has become yet again. Right now, the issue for us, you and me, one place to start, and we could at many points, is American slavery. You know, at the time of the American Civil War, middle of the 19th century, we had had a growing debate over the question of slavery. The Southern states allowed, provoked, paid for, embraced, endorsed slavery, and the Northern states did not. And so the issue became for everybody, what is our relationship to slavery? Now, of course, those who liked it, loved it, particularly those in the south who eventually fought a civil war about it, were happy with slavery, wanted to keep slavery. I put them to one side. They weren't involved in the debate over reform versus revolution because they weren't interested in. In social change. They were interested in holding on to what they had. But let's take a look at those who didn't like slavery, who wanted to do something about it. The reformers were those people who reacted to slavery by wanting to reform it. That's why they were called reformers. And here's what they meant. Slaves should not be bought and sold in ways that separated parents from children or husbands from wives or siblings from one another. In other words, okay, you could have a slave, the reformer said, but there are limits. There are rules. There are things you shouldn't do and things you should do to make slavery less onerous, less awful. Slaves should be clothed properly. Slaves should be housed adequately. Slaves should be fed decently. These were demands reformers made. Well, then what were the revolutionaries? The revolutionaries were the ones who said, you must go much beyond adequate food. Clothing, shelter, treatment of slaves. For the revolutionaries, the problem was slavery itself. What they wanted was abolition, the end of it. Now, for most of the years leading up to the Civil War, most of the conversation was about reforming. That was thought as far as you could realistically go, even in the North. Those in the north who felt revolutionary was the response end of slavery were in the minority. They're remembered by names like John Brown and others who fought for and advocated and the end of slavery. The reform versus revolution issue came to a head with the war when the north and the south went to war in the American Civil War. And very quickly it became clear to the then president of the United States, Abraham Lincoln, that to win that war, one important step was to end slavery. Lincoln took the revolutionary path and the document that forever showed that was called the Emancipation Proclamation. It declared that slavery was illegal. The 13th Amendment to the US Constitution made slavery illegal in the United States anywhere and everywhere except inside prisons. A very debatable decision that was made, which if we had a lot of time, I would talk to you about. But there was a case in which the revolutionary option was taken. And just so no one misunderstands, it was quite an extreme act. Remember that African American slaves were widespread in the American South. Millions of people had spent money to buy slaves. That was their wealth. They may have had a piece of land, they may have had some farm animals, but they also owned slaves. That's what slavery means. So that the Emancipation Proclamation deprived Southerners, white people, of their property without compensation. The government didn't say, we're taking your slave away from you and here's money. Instead, they just said, your slave is now free to go. You don't own him anymore and there's nothing legally you can do about it. That's what the Emancipation Proclamation made the law of the land. That's a revolutionary act. I want to now jump to a different example where reform won. And then you'll see how that comes in, shapes our situation now here in the United States. The example I'm taking is the Great Depression, the 1930s, let's remember that was a period of strife. It wasn't about masters and slaves, because that problem had been ended in large part by the Civil War and the Emancipation Proclamation. No, in the 1930s, it was about a great struggle between employers or capitalists if you like, and employees or workers if you like, maybe even if you don't like. And the problem was that the capitalists who hired workers fired them as well. And they fired lots of them starting in the great crash of 1929. And by 1933, the unemployment rate in the country was 25%, five or six times what it is now. And in that crisis with hungry, desperate, unemployed people, let's remember in the early 30s, there was no such thing as unemployment compensation. There was nothing taking care of elderly people kicked out of their jobs. There was no Social Security. It was a really difficult, hard time, and a lot of people wanted change. A polite way of saying, we want out of the misery, the unemployment, the suffering, the poverty that was everywhere across the country, from Florida to California to Maine and everywhere in between. And here come the reformers and the revolutionaries. The reformers said there ought to beI'll come up with it. There ought to be unemployment compensation. We ought to do something for unemployed people who lost their jobs through no fault of their own. The whole system broke down. Their work wasn't deficient, their behavior wasn't inappropriate. They were working one day as well as they were the next, except they were fired. And we ought to help them. And we ought to have unemployment compensation. The government should help unemployed people. That's a reform. We should also have a minimum wage. It shouldn't be possible for a man or a woman to work all those hours and get paid so little that they can't live. There has to be a minimum. The employers won't recognize a minimum. They're always wanting to push it down anyway, so the government has to step in notice. The reformers turned to the government, and eventually they said there should be a Social Security system. Well, then, who were the revolutionaries? The revolutionaries were the ones in the 1930s who said the solution isn't fixing it. Because even this was their best argument. Even if you fix it, if you have a minimum wage, if you have unemployment compensation, if you have Social Security, if you get it from the employer by asking for it, then you leave the employer in the position to take it back when and if they can. What you need. Here we go now. Was a revolutionary situation, something that could not be undone afterwards. And what would that be? Well, they all pointed in those days to the Soviet Union, which had had a revolution back in 1917, and that was only 13 years before the 1930s started. So it was in everyone's mind. We don't want the government to tell corporations they should pay a minimum wage. They'll get out of it. We want the government to take over. That became the revolutionary idea. The government would take over the enterprises to make sure that people weren't unemployed, to guarantee a job, to guarantee a minimum pay so that no one would ever again be a poverty stricken person. No one. And to make sure that there was a pension for everybody and so on, the government would come. That was the revolutionary situation. And the people who advocated it in those days were mostly people in the American color Communist party and in the more radical of the two socialist parties. And at the height of the Great Depression, all of those people, socialists and communists, worked with the unions and began to push some for the reforms, some for the revolutionary solution. And who did they push? Well, they pushed the president at that time, Franklin Roosevelt, just like the anti slave owner reformers and revolutionaries had pushed the earlier president, Abraham Lincoln. But Roosevelt went the reformist route, not the revolutionary. He established unemployment compensation, he established a minimum wage, he established Social Security, all of which we had never had before. And he went one further. Government jobs. 15 million unemployed Americans got good jobs working for the federal government, earning a decent income. They went the reformist route. But that meant the revolutionaries were dismissed. They were pushed out of the story. Their proposals were not accepted. And what would they have proposed to the government? Take over if you like, the Soviet solution. We've come to the end of the first half of the show. In the second. I'm going to take those two examples and apply them to the United States under Trump right now. Before we jump into the second half of today's show, I wanted to thank you for your very generous response to our fundraising efforts this year and in particular in the last couple of months. And in part responding to that, we are extending the availability of our limited edition, linen covered hardcover version of Understanding Capitalism, the book I wrote and that we have been making available now for quite a while. If you are interested, I will be signing copies of that hardcover and they will be available to you as they have been over the last few weeks. Just simply send an email to us@infodemocracyatwork.info and put in the subject line limited edition. We will send you all the information you need to order and receive your copy signed copy of Understanding Capitalism in its hardback. And thank you again for your kind attention to the fundraising dimension of what we do. Welcome back, friends, to the second half of today's economic update. We're talking about reform and revolution. We've given the examples of slavery and the Great Depression. Now let's take a look at the last 75 years since the Great Depression was over. The most important economic reality of the last 75 years here in the United States has been the undoing of the reforms Carried out by, by Franklin Roosevelt under the pressure of the socialist, communist and labor movements of the United States. That's been our number one economic reality. The business community had been horrified by those reforms because remember who paid for Social Security, unemployment compensation, who had to pay the minimum wage that was established and who had to fund paying all those people getting government jobs? The, the business community, the wealthy people of America and the corporations that make them wealthy. You know, the top 10% that own 80% of the shares. They were taxed heavily and they had to lend money to the government, whatever money they didn't get lost by taxation. So they were doubly angry. All of this effort by the government to help the mass of people at their expense. So they went to work to undo the New Deal. They stopped government hiring of those millions of people, got rid of that. They nibbled away at unemployment compensation, they nibbled away at Social Security from being a basic way people could live. It's now a support. But only poor people actually live only on Social Security. It's too small. So they've cut back and forget about the minimum wage. The last time that was raised was in 2009. Even though we've had rising prices every year since, nothing has been raised in the minimum wage. We have behaved as a society savagely towards the poor people who depend on the minimum wage. So we have undone the New Deal of the Great Depression. It turned out that the corporations who had to pay for it and the rich people who had to pay for it got together and went to work to undo the reforms. And they have largely succeeded. That's what the Republican party's number one priority has always been. Change the tax laws, change the inheritance laws, do everything necessary for corporations and the rich to reestablish their absolutely dominant position relative to a mass of people who have economic problems all the time. Yep, we're back to where we were before the Great Depression hit. And all the statistics show it. And there's a lesson for us. Reformers are the people who want to make a system work better for average people. They do. They're sincere, they mean it, but they don't want to take the step that might guarantee it. Let me go back to the slave example. Giving the slaves rules, establishing laws in slaves societies. You must feed, clothe, shelter, and so forth in these minimally decent ways. It's like the reforms of the Great Depression. They can be taken away if you leave the master slave relationship because the master has every incentive to undo the reforms that strugglers were able to squeeze out of them in the first place. The employers of the Great Depression had every incentive, namely their profits, to undo the taxes they had to pay, the money they had to lend to the government, and so on. They didn't want this. They wanted the government to work for them and they didn't want to have to pay for it. And so they undid the reforms. Okay, now we come to our situation here. And now the United States succeeded in the aftermath of the Great Depression in ruling out revolution. Revolution was associated with the evil Soviet empire. The government was very bad. The government was intrusive. The government was dictatorial, always to suggest, don't go anywhere near where those revolutionaries are. So all that the Republicans and Democrats debate are reforms. Each of them has some reforms they want, in, some reforms they don't. But the unspoken agreement between them is never to suggest anything that might look, smell, taste or seem to be revolutionary. The state must be kept out. Some of you have a whole philosophy of that called libertarianism. The state is bad, the state is evil. The state grabs power. The state, the state. Where does that come from? It comes from that split between reform and revolution that came into being around the time of the Great Depression and has been fought ever since, mostly by people who either don't want any change, the so called conservatives, or many of the reformers who want to keep everything within the realm of reform because they're terribly afraid of the revolution. And we have problems now that are producing the same result. Let's go back to that minimum wage story. It's $7.25, the federal minimum wage. That's outrageous in terms of what it is you can't afford if you work 40 hours a week and get $7.25 paid per hour. It's so gross that reformers in about 30 states have raised the minimum wage in their state, which they can do way above the minimum. Last time I looked, if I'm not mistaken, there are a number of cities and towns and states who have a minimum wage around 15 bucks or more. That's more than double the federal reformers were able in those states to get the wages raised. That's like people who didn't like slavery because it didn't feed slaves properly, were successful to sometimes get the slaves to be fed better. And you have that here now too. We don't dare even talk about the reform that they did in the 1930s with the government hiring people who don't get a job in the private sector. That's a way of solving the unemployment problem. We have Millions of Americans unemployed right now, the private sector has no work for them. They have no job. Does the government come in and give them a job the way the reformers did in the 1930s? Not at all. Lets them sit out there. Wow. We only discuss reforms, and half of them we don't do. But what would revolution be now? Would it be the government coming in? Well, the answer is no, because what reform and revolution mean, that changes, too. Reform, what it means changes, but so does revolution. One of the things that was learned in the 1930s was precisely that even if you bring the state in, which Roosevelt did, as an employer, as a regulator, as a pension provider, as a minimum wage guarantor, even if you give the state a big role, if that's all you do, then the rich and the powerful remain. The employers who gather the profits into their hands. They can, and our history proves that they will undo the reforms. The lesson of the Great Depression and everything since has been that we shouldn't have gotten caught up in the reform versus revolution, because they shouldn't be seen as either or. They should be seen as reform and revolution. Why? Because the only way to secure reforms is by revolution. It turns out that the way the reformers got slavery to treat the slaves better was by ending slavery. The only way to solve the problems of unemployment and poverty and all the other basic economic issues confronting the United States, which are now building to a crescendo as a desperate government. That's what Mr. Trump's regime represents. A desperate government reaches out and tries unorthodox things. You know, tariffs, firing hundreds of thousands of public employee. These are extreme actions, and they reflect the extremity of the dangers and the crises that have accumulated. They are acts of desperation, however cleverly they are choreographed in front of your evening television news. That's what they are. They are attempts to reform Mr. Trump's tariffs, want to reform the entire global trading system with Mr. Musk, he wants to reform the entire federal workforce. What it does, how it does it, who does it, these are dramatic reforms. But what you'll never hear from the Republicans is one word about changing the capitalist system. And by that I mean, very simply, the arrangement in which, in every factory, store or office, a very small group of people, the board of directors, if it's a corporation, the owner, the operator of the business, the partnership, if that's what it is, they make all the decisions what to produce, how to produce, where to produce and what to do with the profits. And. And, of course, should surprise no one. They take care of themselves first. They're rich, you're not. They're powerful, you're not. They hire and fire, you don't. That's the difference. And the Republicans wouldn't say a word. But because of what happened after the Great Depression, the Democrats won't say a word about that either. During the last presidential election, neither Mr. Trump, nor Mr. Biden, nor Ms. Harris had one word to say about the employeremployee relationship and the imbalance of power and wealth inside every business that that shows us you want there not to be an abuse of the mass of working people, then you're going to have to face it. They're going to have to be in charge. If you don't want masters to abuse slaves, you've got to end slavery. If you don't want employers to abuse employees, you've got to end that relationship. You've got to make the enterprise a collective democratically owned and operated institution. Then when the people run it together, they're not going to give one guy $400 billion. And everybody else wonders how they can pay for their kids college education, right? Those kinds of results plunge us back into what Rosa Luxemburg wrote about referring to reform or revolution. But in the hundred years since Rosa wrote and we learned so much from her, one of the deepest lessons is to not get caught again in the either or. You need a revolution because it's the only way to secure the reforms that people are willing to talk about but are so afraid of seeing the relationship of the reforms they seek to the revolution, they are so afraid of even thinking or talking about, let alone making happen. Thank you for your attention and as always, I look forward to speaking with you again next week.