Economic Update with Richard D. Wolff

Episode: The Political Bias of Conventional Economics

Date: January 28, 2026
Host: Richard D. Wolff
Guest: Prof. Clara Matei (segment two)

Main Theme

Dr. Richard D. Wolff’s episode focuses on how economic policies—particularly under the Trump administration—blur the line between state and private capital, favor elites, and disadvantage the working class. He connects these current events to the systematic political bias inherent in mainstream economic thought. The second half features an interview with economist Clara Matei on her forthcoming book "Escape from Capitalism," delving even further into how conventional economic paradigms reinforce and legitimize inequality.

Key Discussion Points

1. Government-Corporate Fusion: The Pentagon’s $1 Billion Investment

[02:00] – [05:30]

• Wolff highlights the Pentagon's unprecedented investment in L3Harris Technologies through "convertible shares"—a first for the US government but reminiscent of policies in fascist regimes, where line between state and capital is intentionally erased.

• Conflict of Interest: The government, as both investor and contract-issuer, now has immense incentive to favor this company over others.

  "Wow. What happened to the level playing field? … This is a whole new process… a coming together of big business and government so that there isn’t a wall between them... Those countries had a name called fascism." —Richard D. Wolff [04:25]

• Raises alarm over lack of public debate or congressional oversight for such a structural shift.

2. EV Subsidies: Divergence Between U.S. and Global Policy

[06:30] – [12:00]

• Under Trump, the U.S. ends its $7,000 electric vehicle (EV) incentive, resulting in devastating consequences for automakers (e.g., GM’s EV sales drop 43%) and consumers.

• Simultaneously, Germany reinstates its EV subsidies, available to any brand, including Chinese manufacturers—bolstering China’s global competitiveness.

• Canada, responding to U.S.-imposed tariffs, pivots towards China: trading canola oil for drastically reduced EV tariffs (from 100% to 6.1%), opening Canada to Chinese cars.

  "The protection America seeks by throwing darts—tariffs—at everybody are producing the opposite of what they intend. Not less purchase of Chinese goods, more of it." —Richard D. Wolff [14:41]

• Wolff notes, ironically, these policies increasingly help China, not U.S. industry.

3. Strikes, Inequality, and Political Response: NYC Nurses

[15:00] – [18:00]

• 15,000 nurses in New York City strike against wealthy hospitals to protest understaffing, low pay, and executive excess.

  • Hospitals’ annual profits: NYC Presbyterian ($547M), Mount Sinai ($114M), Montefiore ($288M)
  • Executives’ salaries: Up to $26M

• Notable political support: Socialist Mayor Zoran Mamdani and Attorney General Letitia James publicly back the nurses.

  "Millions and millions for their top executives, but not enough nurses to do the job." —Richard D. Wolff [16:09]

• Wolff frames this as emblematic of the broader economic system’s priorities: rewarding capital, punishing labor.

Interview Segment: Prof. Clara Matei on Escaping Capitalism

[19:09] – [33:00]

4. What Does “Escape from Capitalism” Mean?

[19:09]

• Matei: Both a systemic and epistemic escape—rethinking capitalism not as “eternal or spontaneous” but as constructed and maintained through state power.

• Current policies (e.g., cuts to healthcare/food) aren’t aberrations but “accelerations” of capitalism’s logic.

  "The market would not exist without this forceful state intervention to protect the two pillars of our capitalist system: private command over investment…and wage labor." —Clara Matei [20:45]

• Wage labor, she argues, is the “epitome of unfreedom,” obscured by notions of liberty.

5. Economic Narratives: Obscuring Power and Inequality

[21:59] – [24:13]

• Wolff notes: The economic elite never “tighten their belts” but transfer crises onto workers.

• Mainstream economics and media actively “hide so much,” making it harder for ordinary people to imagine alternatives:

  "It's more difficult for him to get people to imagine the end of capitalism than it was to imagine the end of our planet." —Richard D. Wolff [22:50] (paraphrasing a famous quote)

6. Theory from Below: Knowledge and Empowerment

[24:13] – [26:05]

• Matei emphasizes “horizontal” knowledge creation—learned from, and with, grassroots struggles, not Ivy League experts.

  "Knowledge is actually coming out [of] an assembly space... It's hard, but it exposes what needs to be done much better than just taking a class at some Ivy League.” —Clara Matei [25:51]

7. Austerity, Inflation, and Who Pays

[26:20] – [29:00]

• Both critique how so-called “universal” economic policies always shield capital and punish workers.

  • Example: Rising interest rates don’t tame inflation as promised, but increase unemployment—benefiting capital’s need for labor discipline.

  "Unemployment is a solution for our economy. It's a problem for us... but for the logic of profit… it’s the point.” —Clara Matei [28:30]

• Calls for policies that distribute the costs upwards (e.g., tax the wealthy), a basic question rarely even discussed.

8. Capitalism as Political Restriction

[29:00] – [31:00]

• Matei: No amount of reform within capitalism will allow for genuine redistribution or mass empowerment; the system’s structure prohibits it.

• The current crises—imperialism, climate, violence—call for returning to radical traditions that see capitalism itself as the barrier.

  "Once we understand that… there’s nothing that works for everybody. It works for the classes that represent the logic of profit." —Clara Matei [29:57]

9. Participatory Politics and Real Democracy

[31:25] – [33:00]

• Matei praises participatory budgeting as a tool to “bring back agency,” though warns against tokenism; real empowerment involves deciding on actual public money, not just small budgets.
• Local movements, like her work in Tulsa and Wolff’s Democracy at Work, embody these alternatives—experiments that undermine capitalist fatalism.

Notable Quotes & Memorable Moments

• Wolff on government-corporate fusion:

  "Talk about moving in a fascistic direction while pretending not to do so." [04:50]

• Matei on wage labor:

  "Wage labor is actually the epitome of unfreedom because it's based on the fact that we have no alternative but to go sell our capacity to work for a wage that is definitely lower than the value we produce." [20:51]

• Wolff paraphrasing famous quote:

  "It was more difficult for him to get people to imagine the end of capitalism than it was to imagine the end of our planet..." [22:50]

• Matei on unemployment:

  "Unemployment is a solution for our economy. It’s a problem for us, for the logic of need; it’s actually a solution for the logic of profit." [28:30]

Timestamps for Important Segments

• 02:00 – Government buys stake in L3Harris
• 06:30 – End of U.S. EV subsidies and global consequences
• 12:00 – Canada’s new trade deal with China
• 15:00 – NYC nurses strike and political responses
• 19:09 – Interview with Prof. Clara Matei begins
• 20:45 – The “forceful state intervention” making the market
• 24:13 – Horizontal, participatory knowledge creation
• 26:20 – Austerity, interest rates, who pays for crises
• 31:25 – Participatory budgeting and democratic experimentation

Conclusion

This episode unpacks how state policy, far from being unbiased and neutral, consistently reproduces capitalist power structures—through direct investments, regressive subsidies, and the intellectual frameworks of mainstream economics. The interview with Clara Matei emphasizes the need for new categories, grassroots knowledge, and collective agency to genuinely challenge these dynamics and build alternatives. Both host and guest stress: meaningful change requires not just technical reform, but a shift in how we understand, imagine, and organize our political-economy.

For listeners seeking both sharp political-economic critique and practical examples of resistance, this episode offers accessible insights and calls for deep systemic re-examination.