Economic Update with Richard D. Wolff

Episode: Today's Pandemic as a Crisis of Capitalism
Date: July 23, 2020

Episode Overview

In this compelling episode, Richard D. Wolff explores how the COVID-19 pandemic serves not just as a public health emergency, but as a glaring exposure of capitalism's incentive structure and its consequences. Wolff methodically connects pandemic-era profiteering to the failures and contradictions of capitalism, before diving into a thought-provoking conversation with evolutionary epidemiologist Rob Wallace. The dialogue explores how global agribusiness, deforestation, and profit-driven governance create fertile conditions for pandemics, and why the system is likely to generate future outbreaks.

Key Discussion Points & Insights

1. Capitalist Incentives Exposed by the Pandemic

(00:10–15:56)

• Shrinking Products, Same Price:
  Wolff highlights how firms like Cadbury (Mondelēz International) shrink product sizes (e.g., chocolate bars by 15–20%) while maintaining prices, and then use dubious PR—such as claiming the move combats obesity—to justify the changes.
  • Notable moment: Cadbury's "obesity" defense is ridiculed.
    Wolff (03:10): "You see, they're doing you a favor by charging you the same for less chocolate... It's not about obesity, of course. It's about profit."
• Widespread ‘Shrinkflation’:
  He references a UK study (Office for National Statistics) that found 2,529 products shrank in size with unchanged prices between 2012–2017, emphasizing this practice as systemic to capitalism.
• Barcelona’s Radical Housing Policy:
  The city wrote to companies hoarding empty apartments, threatening to expropriate and repurpose them as affordable housing if not rented within a month—an example of fighting capitalist incentives for human need.
  • Wolff (06:30): “There are places in the world where you actually fight against the incentives of capitalism...”
• Executive Profiteering Amid Crisis:
  Wolff details how Macy’s executives received multi-million dollar bonuses despite plummeting stock and large-scale layoffs, illustrating that “not at the top of the capitalist system. They're doing just fine.”
• COVID Relief Misallocated:
  $10 billion from the IMF intended for pandemic aid was used by recipient nations to pay back private banks, not to help citizens.
  • Wolff (11:00): “They don’t have the money to help the people who are fighting for their lives, but they paid back the biggest, richest banks in the world.”
• Healthcare Paradox:
  UnitedHealth, a top insurance company, makes record profits during the pandemic—not because of increased care, but because people defer treatment out of financial fear, so insurers keep premiums while paying out less. Layoffs of healthcare workers follow, even as they are needed most.
  • Wolff (13:38): “If you want an example of capitalism's incentives producing perverse results, there it is.”
• Profiting from Suffering—Amazon’s Windfall:
  Amazon’s share price nearly doubled while millions lost jobs—making Jeff Bezos $20–25 billion richer with no added value to society.
  • Wolff (14:38): “That money could be used for a thousand better uses than making Jeffrey Bezos, already the world's richest man, even richer.”

2. Interview: Rob Wallace – How Capitalism Breeds Pandemics

(15:56–27:21)

The Roots and Predictability of the Pandemic

• Wallace’s Forewarning (16:37):
  Wolff opens by noting that Wallace’s 2016 book, Big Farms Make Big Flu, essentially predicted the present crisis, exploring how industrial agriculture and profit-driven expansion breed new pathogens.
  • Wallace (17:44): "We've been given warnings time and again, not only from epidemiologists, but from the viruses themselves..."

Why Was the U.S. So Unprepared?

• Systemic Contradictions Explained (18:30–22:36):
  Wallace traces the contradiction between the U.S. government’s historic role in preventing pandemics (as a protector of global capitalism) and its support for capitalist extractivism (fueling pandemics through deforestation and mono-cropping).
• Public Health Abandoned:
  Public health has been either abandoned or monetized, leaving the response to pandemics in the hands of the market, with catastrophic results.
  • Wallace (22:06): “Our view of public health is down to what vaccines and tests the marketplace can deliver... that is not the means and mechanism by which to fight back against a virus that is so infectious...”
• Decline of U.S. Leadership:
  The decline of U.S. imperial stewardship under Trump is highlighted as intensifying the crisis.

Willingness to Sacrifice Lives for Profits

• Capital’s Priorities:
  Wolff asks if business interests are “willing to pay the price, literally in life itself,” for continued profit.
  • Wallace (24:19): “Such a system... is perfectly happy to allow many thousands of Americans to die.”

Future Pandemics Loom

• Pandemics Will Continue (25:34–27:21):
  Wallace notes that multiple dangerous pathogens are circulating at once; a “foundational shift” in agriculture and socioeconomic structure is required to prevent worse crises.
  • Wallace (27:15): "...unless we foundationally shift out of our means of social reproduction... capitalism itself is we're at a historical moment, a crossroads that requires us to foundationally shift the way that we do business."

Closing

• Wolff refrains from a forced optimistic conclusion, stressing instead the urgency of understanding and acting on these systemic issues.

Notable Quotes & Memorable Moments

• On Shrinkflation:
  Wolff (03:10): “It didn’t occur to the public relations department that you could combat obesity by reducing the amount of chocolate and lowering the price. Maybe. Couldn’t you?... Cause it’s not about obesity, of course, it’s about profit.”

• On Executive Bonuses During Crisis:
  Wolff (08:17): “Macy’s may be going down the tube. Malls may be going down the tube. You and I may be having economic problems, but not at the top of the capitalist system. They’re doing just fine.”

• Healthcare Perverse Incentives:
  Wolff (13:38): “If you want an example of capitalism’s incentives producing perverse results, there it is.”

• On Pandemic Prediction:
  Wallace (17:44): “We’ve been given warnings time and again, not only from epidemiologists, but from the viruses themselves that we are in a dangerous situation and many a pathogen is circulating that has the potential to do exactly what we’ve seen.”

• On U.S. Exceptionalism Failing:
  Wallace (22:06): “So to wrap up to sum up, basically, we find ourselves in a historical moment in which the US is are exiting out in its role as the major protector for the World capitalist system. And we see here...the US is in essence one of the worst to respond to an outbreak.”

• On Capitalism’s Willingness to Sacrifice Lives:
  Wallace (24:19): “Even the American people... are finding that such a system... is perfectly happy to allow many thousands of Americans to die.”

• On Future Pandemics:
  Wallace (27:15): “…Unless we foundationally shift out of our means of social reproduction... capitalism itself is we're at a historical moment, a crossroads that requires us to foundationally shift the way that we do business.”

Important Segments & Timestamps

• 00:10–03:45: Cadbury’s “shrinkflation” and perverse PR on obesity
• 04:30–06:30: Systemic shrinkflation in consumer goods
• 06:30–07:45: Barcelona’s radical housing intervention
• 07:45–10:00: Macy’s executive bonuses amid collapse
• 11:00–12:15: IMF COVID aid redirected to banks
• 12:16–14:00: Insurance companies profiting as health care is deferred
• 14:00–15:56: Amazon’s skyrocketing valuation during crisis
• 15:58–17:59: Interview—Wallace on pandemic predictability
• 18:30–22:36: U.S. preparedness failure rooted in capitalism’s contradictions
• 23:29–24:19: Capitalist interests tolerating mass suffering for profit
• 25:34–27:21: Wallace on likelihood and causes of future pandemics

Summary Flow & Takeaways

• The COVID-19 pandemic is portrayed not as a "natural disaster," but as a direct result of capitalism’s relentless pursuit of profit—visible in everything from consumer price maneuvers (‘shrinkflation’) to healthcare and pandemic response.
• Structural solutions—like those tried in Barcelona—contrast starkly with the U.S. and U.K.'s deference to capital at the expense of public wellbeing.
• The episode’s interview with Rob Wallace deepens the analysis: the pandemic is not an anomaly, but inevitable in a system that promotes ecological disruption and dismantles public health for profit.
• Both Wolff and Wallace urge listeners to recognize the crisis as a systemic failure requiring radical rethinking of the organizing principles of our society and economy.