← Economic Update with Richard D. Wolff
Economic Update with Richard D. Wolff
Solidarity Cities as Alternatives to Capitalism
00:31:35
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- [00:20]
Richard Wolff
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. Quickly, a reminder that Charlie Fabian is awaiting your suggestions and comments about the program. Charlie.info438mail.com is how you reach him. And again, a reminder that there's a companion volume to this program called Understanding Capitalism. It is what we do in each program, but we can only do it to a limited way and also trying to be topical. The book gives you the background, the depth of a real serious engagement critical with capitalism. Today, we're going to be talking about social welfare, we're going to be talking about veterans, we're going to be talking about the uncertainties surrounding Mr. Trump's tariff policies and indeed most of his policies. And finally, we're going to have something to say about the emerging economic isolation of the United States. The second half we'll be talking with Maliha Safri and Stephen Healy about serious experiments around the world in trying to develop new and different kinds of, of economic systems going on now when we need them more than ever. Okay, here we go. Jacobin magazine for spring 2025 had an article in it by David Kalnitsky, and he deals with an argument heard often that capitalism is to be credited with the fact that over the last century or two or three, living the length of life has increased longevity, we are healthier, we eat better, we have better diets and all of that. That capitalism has been happening together with increased well being. And David Kalnytsky correctly says, wait a minute, why is capitalism getting all that credit? Socialism should get it, too. Jacobin is a socialist magazine, and he's right, of course, that socialists fought very hard for many of the laws and the rules and the regulations that are part of increased well being. Giving all the credit to capitalism is not accurate, not appropriate, and politically retrograde. All true, but there is a further point in this discussion that David Kalnitsky doesn't address and he ought to have. Capitalism not only is demanding credit for the improvement in people's standard of living, but it is doing so after unrelenting opposition to every one of those improvements. It is staggering when you take a look at it in that light. For example, capitalists did not raise wages so that people would have enough money to have a decent home and a decent diet and decent education and decent health care. Not at all. Corporations are institutions committed to lowering what they pay workers in every way they can. They leave the United States to go where you can get away with paying workers less. They bring in immigrants from poor countries cause you can pay em less. And they automate jobs so they don't have to pay them at all by replacing them with machines, leaving them of course, unemployed, no income, sick, all the rest. Let me take an example, even though I don't think you really need it, the minimum wage. The business class of America opposed ideas of a minimum wage in the 19th century. They opposed them in the first third of the 20th century when finally you had a complete collapse of capitalism, weakening the business class because of it. Finally, through an uprising of socialist communists and labor unionists, you got the Roosevelt government in the 1930s to establish a minimum wage. But that was not capitalists who helped that happen. Capitalists were involved in blocking it, delaying it, postponing it, and then minimizing it. And that never stopped. The last time the federal minimum wage was raised was in the year 2009, 16 years ago. Every year since, prices went up in America, sometimes a little, sometimes a lot. But throughout that time, people at the bottom, the minimum wage recipients, didn't get an increase. We savaged the poorest amongst us working people earning the minimum wage. What kind of a society does that? And were there some who wanted to raise the minimum wage? Yes, Unions pushed for it, liberals pushed for it, the labor movement pushed for it. And you know who pushed against it? Yeah, the business community, like they always do. So yeah, the capitalists take credit that trying to deny the socialists the credit they deserve and trying above all to erase how they were obstacles to every bit of that improvement throughout the last several centuries. That's the truth of the situation. I want to turn now to veterans. I don't talk about them much and this is an opportunity to do that. And to give you some background, in 1944, toward the end of World War II, the Congress of the United States passed something called the Veterans Preference act into law. President Roosevelt signed it and what it did is gave veterans a preference. In those days they didn't use the phrase. I'll use the more modern affirmative action for veterans. It meant that employers should favor veterans over non veterans in hiring, give them a preference to get hired, and in layoffs, give them a preference by postponing or delaying their layoffs. That's why 30% of employees in the federal government are veterans. They got the preference and half of them are disabled veterans, people who not only spent time in the military but suffered bodily harm as a result. Why is it that the government felt that it ought to do that. Two reasons. But the basic reason was soldiers lose out economically. Those years that they spend in the service are years they're not spending. Acquiring usable skills, making the right connections in the world of work, moving up the career ladder as best they can. All of that is delayed, and they pay a price economically for much of the rest of their lives. And if they contract a physical or mental disease or problem, as an enormous number of them do, that's a further problem that they have. And they have it because of a governmental policy. What was it? Going to war, obviously, and sending them into harm's way in battles. I want to remind you, the logic of affirmative action for African Americans and others like them is that the government allowed a regime of repression, denial, discrimination for a long, long time. And that hurt the ability to save money, the ability therefore to pass through on generations, the means for later generations to get the educations the way other social groups in the society were able to do. So. The government owes them for its malfeasance, its failure to do things, its complicity in racisms of various kinds, just like it has an obligation to the soldiers it asked to go and fight. So the logic is very similar. Now, of course, Mr. Trump and the Republicans dare not speak out against veterans the way they have against black and brown Americans on so many levels, but they're doing the same thing. The way they're doing it is wholesale firing of people working in the Veterans Administration. Many of the people fired from the Veterans Administration, as they have pointed out, are veterans, and including many who are disabled. We are going back on the promise to those people made by the 1944 Act. And everybody should be aware. No, they won't tell you about it. So many words. But the denial of affirmative action to our black and brown brothers and sisters is exactly the same operation as denying preference to the veterans. And it tells you something about a government that does both of those things. The next topic is Trump's tariffs. Not the particulars, but the fact that it's up and down that one day it's this number, the next day it's another number that he suggests or his people do that they'll negotiate with this country or that country, and if they get something from the country, they'll lower the tariff. You know what this means? No one can calculate. No business can decide where to locate its next factory or its next warehouse or where to source their inputs from, because Lord knows it'll have to go through this in this country, paying this. And the chaos now. And I'm not even talking about the retaliations to come that we don't even know about yet, because they haven't been decided. The uncertainty is leading businesses not to invest. And you know what that produces? Recessions. Cause we're all in capitalism held hostage to what businesses decide to do. If they invest, our economies in good shape. If they hold back, we call it a recession. The media are careful never to blame the corporations, but they're the ones. The rest of us what the working class part of it saves, the other part of it overspends. So you take workers altogether, there's no problem. Whatever they get, they spend. Not with corporations. What they get in their profits, they may or may not invest. If they do, our economy bubbles along. If they don't, we have recessions. That's what I mean by we're held hostage to the business community. And wow, they are affected by the uncertainty. So are all the countries in the world. And one of the consequences no one wants to talk about is that the United States is the cause of the uncertainty. Mr. Trump's tariffs shook and are still shaking the world. That may look like the bold character he wants us to think him to be, but the uncertainty is devastating. And you know what every country is doing. They're not just calling Mr. Trump to cut a deal. Some of them are doing that and some of them will no doubt cut a deal. But those with any kind of backbone and self support are not going to do that. They're going to look for ways to get around this and you know what that means. They're going to look for other buyers, other sellers, other investors. And now there is an other to the United States. It's called China. And the BRICS allies, they're a bigger economic powerhouse together than the United States is, and that's where they're going to go. What we are watching is the uncertainty that deepens and quickly the isolation of the United States in the larger world. We are, as Americans, 4.5% of the people of this planet. China and the BRICs are 60%. Don't forget the statistic. It'll save you unspeakable grief if you do as Mr. Trump clearly does. We've come to the end of the first half of today's show. Stay with us. Will be back with two people studying and celebrating alternative systems to capitalism as ways to organize an economy that will not work the way this one is treating us.
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Maliha Safri
Now.
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Richard Wolff
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@infoomocracyatwork.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. I am very happy to bring to the microphones and to our cameras Malia Safri and Steve Healy, because I've known them for years. I know the research that they're doing. I cannot but compliment them for doing it and urge all of you to take a look, particularly at their recent co authored book along with others called Solidarity Cities. And it's because of that book and that research that I've asked them to be with us. So first of all, thank you Malia and thank you Steven for being here. Malia is a professor of economics at Drew University. Her research has focused on collective economic practices, including worker food and housing co ops. Her publications include a new book, Solidarity Confronting Racial Capitalism, the Mapping Transformation. With several co authors including Stephen Healy, this book examines Worcester, Mass. Philadelphia and New York City, showing how solidarity economies there fulfill crucial needs in food, housing and fair finance and also fight contesting harmful economic forces such as exploitation, gentrification and predation. Stephen Healy is a geographer and an associate professor of geography and Urban Studies at Western Sydney University, all the way from Australia. His work draws on insights from Marxism, feminist and psychoanalytic theory to understand processes of social transformation. So let me begin with you, Malia takes tell us what the point and purpose of Solidarity Cities as a book project, what that was and what readers will find in it.
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Maliha Safri
Well, in a way we open with a kind of story that I think exemplified a little bit of the project for us, at least one piece of it. The project had a lot of different pieces, but we started the book with the story of Iglesias Gardens, which was started by the Philly socialists in the 1980s, named for actually a famous Puerto Rican communist leader, political leader, and the garden became this sort of intergenerational prism Producing food, bringing together people from lots of different racial groups. And even though this community stabilized this neighborhood in the middle of the 1980s, when it was experiencing what Ruthie Gilmore calls organized abandonment and disinvestment, they secured these neighborhoods, right? And then now US bank has been aggressively targeting lots and lots of communities of color and buying and taking those parcels of land and developing and gentrifying those neighborhoods. So over some of those pieces of land, we see this big struggle taking place. And one thing we could see was how it was that mapping these communities and identifying what it was that US bank does when it tries to prey upon communities. That's one example of how we could see counter mapping as intervening very concretely in city struggles. But also we wanted to think about contra mapping at a larger scale, at the city scale, right. And thinking about all of the different kinds of economies outside of the. So it. Sometimes it feels like we're just presented with two options, either the gentrified city or the disinvested city. And we wanted to take a look at what happens when we think about this third dimension, the not capitalist spaces, the economies rooted in solidarity.
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Stephen Healy
Stephen, could I just add a little bit to that story? Malia, please? Thanks so much, Rick, for the opportunity to speak. And you know, one of our co authors, Craig Boreak, was intimately involved in doing some of that counter mapping work with Iglesias Garden. So I think for each of us that were involved in the book project, it was our involvement in social movements that played a huge role in motivating us to collaborate together to write the book. And this is over the span of many years. So I was living and working in Worcester, Massachusetts from 2007, and there was a self identified solidarity economy movement that was centered in the Main south neighborhood, which is a majority Latinx community. And so there was a group of activists there that were thinking about the role of cooperatives and sort of alliances amongst progressive social movements, including movements that were concerned with immigrant rights and thinking about what is the potential for people who live there exercising sort of economic autonomy. And so, you know, it wasn't just worker cooperatives, housing cooperatives, credit unions, all the things that we feature in the book, but also environmental movements and food justice movements and how those might play a role in helping us to collectively shape a city. And so the activists there were trying to think about how to do that work, but also how to build effective relationships with the local government, including ultimately the role that Worcester, the Worcester city government, might play in supporting the development of cooperative movements. So that was you know, a process that I was involved with for over a decade. Craig was doing similar work in Philadelphia. Malia and our other co author, Mariana Povla Skaya, was doing similar work in New York across various sectors. So we couldn't have written this book without working with the movements that we were involved with.
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Richard Wolff
You know, I want to intervene just with an observation. All my life I've been involved in one after another of these sorts of struggles. And the fatalism used to get to me, the way people struggled hard and then resigned themselves to what appeared to everyone to be the inevitable dilemma that Malia points to, that either we collapse in the face of big capitalists coming in here and making the housing project or the mall or whatever it is they were going to build there, or we stay as a marginal, poor, abandoned community. And what you're doing is saying there really is a third option, that the co op could be a way for these communities to thrive without the dependency on the capitalist model. And that has enormous, I think, enormous potential. We do, yeah.
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Maliha Safri
In some ways, the Solidarity cities are a lot bigger than people think.
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Richard Wolff
In your experience is that these are. Because this is the question I get all the time. Your experience seems to be that these really are not just a strategic alternative, but that they're practically workable. Of course you have lots of problems, but there is a way forward here that would make a lot of sense for a lot of communities abandoned in many American cities these days by effectively a capitalism that's not interested anymore because of its abandonment of many other things, just willing to write off city and town neighborhood after every other one.
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Stephen Healy
Yeah, I think that's right. Well, I guess I was going to relate another part of the story too, which was that while we were doing this work, one of the things that we noticed was that there were Solidarity Economy movements operating in other parts of the world that are a bit further along, in Brazil and Italy and France and elsewhere. And one of the things that they were doing in the mid 2000s was generating dynamic maps where people could see and visualize the size of cooperative practice in each of those countries. So part of the inspiration for this book, and this was around the time when the U.S. solidarity Economy Network was forming, was to say we should have a map in the United States that represents various forms of cooperation. There have subsequently been a lot of maps produced. But one of the things that we've done in this book is use spatial analysis to really see where cooperation is taking shape in different cities. And one of the interesting patterns that we found There is that neighborhoods that were historically redlined in the 1930s seem to have the highest density of cooperative activity in the present period. So, in a sense, solidarity becomes a intergenerational response to the dynamics of racial capitalism, to forms of financial exclusion, repression, and exploitation. And if we can see that trajectory in history, then I think we stand a much better chance of making arguments about what the future of cooperation could be if we do learn to do it more effectively.
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Maliha Safri
So if I could piggyback on that, like one of the things that we're picking up and to make that argument that there are multiple types of economies that are resisting, let's say, key racial capitalist processes like residential segregate, racialized segregation, but exploitation, as in different rates of exploitation for people of color. And one of the things that we looked at was, in this is, in chapter six, we did something that not a lot of people actually, no one has actually done before, which was to aggregate and think about the total economic impact of all of the worker cooperatives in New York City. And we took a baseline year, actually the year before the worker cooperatives started to get funding from the city council. And we took. We wanted to see how do they spend out of the total revenues, what do they spend on payroll? What are their supply chain effects and what are their demand side effects? And do a basic, basically multiplier analysis. And we wanted to see this total number. And we saw, okay, all the worker cooperatives together contributed $125 million to the local Lakotan York City economy. And then, you know, because these models, it's. We're your students, and we. We learned also how models are created with particular kinds of economic structures. And so input output modeling actually assumes capitalist firms are the norm, in which case what we saw was, okay, how would. How would capitalist firms in the exact same industries. And by the way, I want to point out that this is a highly feminized workforce. In our data, 99% women, 70% Latina, including and excluding our major outlier, which is a large outlier. But of course, the data has changed with newer cooperatives. Nonetheless, take the snapshot for a second highly feminized workforce. People of color generating 125 million. If these firms had been capitalist, they would have generated $110 million. Why? Because capitalist firms have a different split between payroll and surplus, which goes to the capitalists. And capitalists don't actually have that much of a demand side effect because, well, in some ways, this is the poor people's multiplier effect a little bit Right. So you don't even necessarily. I can understand lots of critiques that we should have about growth and. But you could just be for local stable economies and see that this model is better for local demand side growth. Right. And so this is the kind of work that we think, you know, what if we could, this is just one slice of what we looked at. We wanted to see what would it look like if you looked at the different kinds of ways that affordable housing cooperatives stabilize neighborhoods against gentrification, against excessive extraction by landlords, what would it look like? And this is exactly the pattern that Steven was just talking about. One of the things that we see is because of redlining, was excluding from credit communities of color. Communities of color formed their own collective means of resisting that exclusion and predation. Because let's face it, this is. It's community of color that have pawn shops and, and payday lenders and really high secondary. Right. Lender markets. So. So I felt like we were trying to see how in each different sector, economies that were based in solidarity were ending up providing necessary goods and services, food, work, fair finance. These were not luxuries, these were core human needs. And these kinds of economies were doing a better job at it than capitalist firms.
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Richard Wolff
You know, I wish we had more time. We don't. We really don't. I wish we did, but you're making a really good argument to bring you back. For me, the decline of capitalism, creating this space for the alternative systems to emerge puts us right in the middle of history. That's how feudalism in many places, as it fell down, it opened spaces where a new system, in that case capitalism, could find soil in which to grow. You're explaining something very parallel, very powerful, very powerful for activists, but very powerful for people to see that the decline of capitalism isn't the end of the world. You've been very, very good. Thank you very much for your time. And I will try to bring you back before too much more time to my audience as usual. I look forward to speaking with you again next week.