Economic Update with Richard D. Wolff

Episode: The Capitalist Corporation

Date: October 24, 2019
Host: Richard D. Wolff
Podcast: Democracy at Work

Overview

In this episode, Richard D. Wolff explores the structure, power, and justification of the modern capitalist corporation, highlighting its dominance in economic life and its impact on workers, consumers, and society at large. Wolff critically analyzes how corporations have evolved, examining the ways in which a small elite controls vast economic resources and decision-making processes, while also challenging mainstream arguments that justify the current system. The episode closes with a call for democratizing workplaces, likening today’s corporate power to the monarchies of old.

Key Discussion Points & Insights

1. Why Analyze Corporations?

• Corporations are the "dominant form in which our economy is organized. It's the decision-making center" ([00:36]).
• Recent corporate scandals (Boeing crashes, Volkswagen's emissions cheating, Juul vaping, Purdue Pharma and the opioid crisis, Koch brothers' climate disinformation, Amazon's executive pay) illustrate the outsized influence of corporate decisions on society ([01:07]-[03:30]).
• Quote:

  "What is a corporation? It's very important to understand that a corporation, otherwise known as a public company ... is the dominant way decisions are made in our society." – Richard D. Wolff [03:31]

2. Corporate Ownership & Decision-Making Structure

• Corporations are owned by shareholders. Voting power is proportional to share ownership, concentrating control among the wealthy ([03:45]-[05:00]).
• "10% of shareholders in America own 80% of the shares. So a tiny number of people have the dominant say on who gets to be on each corporation's board of directors." – Richard D. Wolff [05:28]
• The real power lies with the board of directors (15–20 people), who "make all the basic decisions about the corporation," including what to produce, technology, location, and profit distribution. Employees are excluded from these decisions ([05:50]-[07:30]).
• Top managers (CEO, etc.) are chosen by and placed on the board, further concentrating power ([07:36]).

3. Corporate Concentration & Integration

• The number of large corporations has halved in 20 years, making each one far larger and more powerful ([07:58]-[08:15]).
• "Companies merge... That’s called a highly concentrated system. Very few corporations have enormous wealth and enormous power that derives from that wealth at their disposal." – Richard D. Wolff [09:28]
• Explains horizontal integration (companies merging with similar businesses) and vertical integration (companies acquiring suppliers or distributors) ([08:25]-[09:20]).
• In 1975, 109 corporations earned half of all US corporate profits; by 2016, that number had shrunk to just 30 corporations splitting half the profits ([09:30]-[09:55]).

4. Power Dynamics & Societal Impact

• Corporations seek to maintain their power through PR, lobbying, and political donations ([10:16]-[11:30]).
• “They also buy the politicians. They provide the experts... They buy the lobbyists... They give the big bucks, donations to their political campaigns...” – Richard D. Wolff [10:54]
• The metaphor: Today's major corporations are modern-day monarchies, with tiny leadership ‘courts’ wielding massive influence ([12:00]).

5. Challenging Justifications for Corporate Power

a. The “Risk” Argument

• Investors are said to deserve control and profits for risking their money ([15:03]-[15:40]).
• Wolff counters: Workers and consumers take significant risks (health, job security, product quality) but are not similarly compensated or given control ([15:40]-[17:25]).
• Quote:

  “Workers take a risk when they go to work for any company... their job will be lost, their income will be lost because of decisions over which they have absolutely no power.” – Richard D. Wolff [16:10]

b. The “Entrepreneurship” Argument

• The argument that corporations reward special “business skill” or entrepreneurship is misleading, especially since most corporations are not run by their original entrepreneurs ([18:10]-[18:54]).
• Suggests worker management as an alternative: “If entrepreneurship is something you want to reward and encourage, why not have the workers themselves become their own collective entrepreneurs and reward them for it...” ([19:00])
• Calls out the hypocrisy in excluding workers from decision-making after thanking them for their contributions at corporate parties ([19:35]).

6. The Role of Ownership & Extraction

• Workers produce goods/services (including profits), yet owners of land, tools, and raw materials (who may not have created them) can withhold the means of production to extract profits ([21:00]-[23:30]).

• "...a corporation is ... concentrated ownership of land, tools, equipment, money... that forces the working people to part with part of what they produce, or otherwise be denied access to [what they need]." – Richard D. Wolff [23:30]

7. Corporations as Modern Monarchies

• Draws a parallel between kings of old and corporate boards today, suggesting both rely on mythology to justify their absolute power ([24:10]-[25:15]).

• "We got rid of those kings, didn't we? But we established them inside a new institution called the capitalist corporation..." – Richard D. Wolff [24:45]

• Proposes democratization of workplaces, predicting "nothing will collapse and the world will actually be better off" ([25:35]).

Notable Quotes & Memorable Moments

• On the concentration of power:

  "We don't live in anything like the textbook conversations about capitalism. We don't have a lot of employees working for a lot of different employers. We have a very large number of employees working for a stunningly small number of employers." – Richard D. Wolff [12:28]

• On workers and production:

  “…the very people who were just thanked for all they contributed ... are excluded from having any say whatsoever over the fruits of their labor.” – Richard D. Wolff [19:44]

Important Timestamps

• 00:10 – 03:30: Introduction, examples of recent corporate scandals affecting society
• 03:31 – 07:36: Structure of corporate ownership and shareholders' disproportionate power
• 07:36 – 09:55: Corporate concentration, integration, and profit distribution
• 10:16 – 12:28: Mechanisms of power retention: lobbying, politics, PR
• 15:03 – 17:25: The “risk” justification challenged
• 18:10 – 20:08: The “entrepreneurship” justification and alternative models
• 21:00 – 23:30: How ownership structures extract from workers
• 24:10 – 25:35: Corporations as monarchies; call for workplace democracy

Summary Flow & Tone

Richard D. Wolff delivers a forceful critique, blending empirical examples, economic history, and biting analogies. His tone is direct, accessible, and occasionally sardonic, especially when mocking the "justifications" for corporate power. The episode is both an explainer of how corporations work and a call to imagine structurally different, more democratic workplaces. Wolff’s analysis is rooted in left-economic critique, encouraging listeners not just to understand but to challenge the current order.

This summary preserves Richard D. Wolff's original critical, explanatory tone and highlights the main arguments and moments of the episode for listeners and non-listeners alike.