Economic Update with Richard D. Wolff

Episode: The "Great Debate" that Wasn't

Date: July 16, 2020
Host: Richard D. Wolff

Overview of the Episode

In this episode, Richard D. Wolff challenges the traditional framing of the so-called "Great Debate" in economics—namely, whether society needs more or less government intervention in the economy. He argues that this debate, persistent for over 300 years, is a distraction from a more fundamental and necessary conversation: Should we accept the basic structure of capitalism, or consider alternative economic systems, like worker cooperatives? Wolff unpacks how the fixation on government intervention versus laissez-faire has obscured this deeper systemic question, and urges listeners to confront it directly.

Key Discussion Points and Insights

1. The Historical Framing of Economics: Government Intervention vs. Laissez-Faire

[00:00–09:00]

• Wolff traces the origin of the "Great Debate" to the very birth of modern capitalism, beginning with Adam Smith, who advocated leaving economic decisions to free individuals, breaking from feudal lord/serf hierarchies.
  • Quote:
    "Adam Smith was a great devotee of capitalism...where there were no lords and there were no serfs, where everybody was free, a free individual..." (00:51)
• The debate became about how much government should interfere in private contracts:
  • Laissez-faire: Minimal government involvement.
  • Interventionist perspective: Government as a necessary arbiter and fixer of capitalism’s failures.
• Wolff describes how these two perspectives solidified into neoclassical economics (less government) and Keynesian economics (more government), referencing the reaction to the Great Depression (Keynes).

2. Terminological Confusion Across Time and Place

[06:40–09:30]

• Different cultures and regions use varied terms for the same dichotomy—e.g., "conservatives" and "liberals" in the U.S., "neoliberals" and "social democrats" in Europe.
  • Quote: "The names vary, but the issue, it's the same one." (07:33)

3. The Nature and Structure of Capitalism

[09:30–13:30]

• Capitalism is fundamentally about the employer-employee relationship; distinct from prior lord/serf or master/slave systems, but similarly hierarchical.
• Wolff describes recurring systemic crises (e.g., Great Depression, 2008’s financial crash, COVID-19) where the inevitable response is to call upon the government for salvation.
  • Quote: "Whenever the crashes have occurred...the cry went up. In a capitalist system, we need help getting out of this mess...And they turned to the government." (12:22)

4. Historical Cases: New Deal, Recent Bailouts, and Perpetual Intervention

[13:50–17:45]

• The New Deal is highlighted as massive intervention, not to move beyond capitalism, but to save it.
  • Social Security, unemployment insurance, minimum wage, federal jobs programs—all government “rescue missions.”
  • Quote: "His [Roosevelt’s] goal was to fix and to save capitalism. He didn’t set about to get rid of it. He didn’t set about to go beyond it." (15:56)
• Modern politicians of all stripes—Bush, Obama, Trump—engaged in significant interventions (e.g., TARP, bailouts, tariffs), regardless of party or stated ideology.

5. The False Debate: More or Less Government is Not System Change

[17:45–23:00]

• Wolff asserts that the entire debate about "how much government" is built on the assumption that capitalism is unchangeable.
• Both sides agree: government’s job is to intervene to save capitalism, not to transform or replace it.
  • Quote: "The debate between the people who want more government versus the people who want less is not...a debate over capitalism versus other systems." (17:54)
• The supposed opposition is, at most, a debate about “emphasis, nuance,” never the fundamentals.

6. The Ubiquity of Government in Capitalism

[23:00–28:00]

• Wolff illustrates how government is involved in every sphere of capitalist economies—from printing and regulating money, maintaining courts for business disputes, providing police to protect property, to steering international trade and investment through diplomacy and military power.
  • Quote "What is more important in capitalism than money? Well, the government is in charge of the money. The government prints it...regulates it...decides when there’s more and less of it." (24:22)

7. The Real Debate We Should Be Having: Systemic Alternatives

[28:00–33:00]

• Wolff exposes what he sees as the truly neglected, even taboo, debate: whether the basic system of capitalism—employer versus employee—should itself be replaced by a more democratic, worker-controlled model.
  • He likens avoiding this debate to couples arguing about their dog when the real issue is their relationship:
    • Quote: "It’s like a couple having difficulties...debates over the dog and where the dog should sleep...with a little help from a good therapist, the couple would realize it’s not the dog that’s the problem." (28:28)
• Previous historic shifts—ending slavery, ending feudalism—were only possible because people asked "Can we do better than this system?"
• Wolff advocates for a serious consideration of worker cooperatives and workplace democracy:
  • Workers as their own employers, deciding democratically what and how to produce.
  • This, he argues, is what real socialism looks like—not merely more government in capitalism.
  • Quote: “Socialism, at least in the ideas of those most usually associated with the idea, is really a radically different system...It is a system in which the workers finally stop being slaves, stop being serfs, stop being employees, and become their own employer.” (32:08)

8. Challenging Myths: Government ≠ Socialism

[33:00–34:00]

• Having the government play a bigger economic role does not equate to socialism, and has always been used to preserve—not replace—capitalism:
  • Quote: "Imagine...how bizarre it is that there are people who believe that when the government intervenes more, it’s socialism, it’s some other system. No, it isn’t. It never was with Mr. Roosevelt or Mr. Bush or Mr. Obama or Mr. Trump. They want to preserve capitalism." (33:05)

9. The Entrenchment of Power: State and Capital United

[34:10–36:40]

• Wolff lays bare the “revolving door” between government, military, and big business, where leaders pass seamlessly between sectors, reinforcing the status quo.
  • Politicians depend on corporate funding; corporate lobbies write legislation.
  • Quote: "The government is almost always the servant of the system in which it exists. Governments in modern capitalist societies...Their leaders are drawn from the corporations on which the government depends." (34:18)

10. The Call to Real Debate

[36:40–end]

• Wolff concludes that the “real” and necessary debate is about organizing the workplace and economy democratically, not tinkering with government intervention levels.
  • He calls for listeners to question why society remains locked into the employer-employee structure, when democratic alternatives exist.
  • Quote: "The real question, the real debate, is why are we stuck...in a system of employer employee when there is an alternative and when we could be asking questions?" (37:45)
• He reminds listeners that historic change is possible, and urges a shift in public conversation to the search for genuinely democratic workplaces and economies.

Notable Quotes & Memorable Moments (with Timestamps)

• "Adam Smith was a great devotee of capitalism...where there were no lords and there were no serfs, where everybody was free, a free individual..." (00:51)

• "The names vary, but the issue, it's the same one." (07:33)

• "Whenever the crashes have occurred...the cry went up. In a capitalist system, we need help getting out of this mess...And they turned to the government." (12:22)

• "His [Roosevelt’s] goal was to fix and to save capitalism. He didn’t set about to get rid of it." (15:56)

• "The debate between the people who want more government versus the people who want less is not...a debate over capitalism versus other systems." (17:54)

• "What is more important in capitalism than money? Well, the government is in charge of the money. The government prints it..." (24:22)

• "It’s like a couple having difficulties...debates over the dog...with a little help from a good therapist, the couple would realize it’s not the dog that’s the problem." (28:28)

• “Socialism...is really a radically different system...It is a system in which the workers finally stop being slaves, stop being serfs, stop being employees, and become their own employer.” (32:08)

• "Imagine...how bizarre it is that there are people who believe that when the government intervenes more, it’s socialism...No, it isn’t...They want to preserve capitalism." (33:05)

• "The government is almost always the servant of the system in which it exists...Their leaders are drawn from the corporations on which the government depends." (34:18)

• "The real question, the real debate is why are we stuck...in a system of employer employee when there is an alternative and when we could be asking questions?" (37:45)

Important Timestamps

• [00:00–09:00] – Framing of the "Great Debate"; Adam Smith, origins of capitalist rationale
• [09:30–13:30] – Employer/employee structure as the core of capitalism; historical context
• [13:50–17:45] – The New Deal, Roosevelt's rescue, and the point of government intervention
• [23:00–28:00] – Government’s inescapable role in capitalist economies
• [28:00–33:00] – Lifting the veil: Why system change is the real debate
• [34:10–36:40] – Government-business revolving door and structural power
• [36:40–end] – Final call to reframe the economic debate

Conclusion

Richard Wolff’s "The 'Great Debate' that Wasn't" is a dense, provocative critique of economic discourse. He contends that the endless argument over government intervention serves as a smokescreen for the true, and more radical, discussion about capitalism’s employer/employee divide. Wolff invites listeners to look beyond superficial policy debates and begin wrestling with the question: Can we organize the economy more democratically—and if so, why aren’t we even talking about it?