← Economic Update with Richard D. Wolff
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- [00:10]
A
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, debts, incomes, and the economic crisis all around us. I'm your host, Richard Wolff. In the first half of today's program, I want to underscore something that the capitalist economic system provides incentives. And the basic incentive is money, profit. And I want you to see examples of the pursuit of what this system incentivizes, the pursuit of profit during a pandemic, during an economic crash. Undaunted, the profiteers are driven to make money. And I want you to see many examples. I don't have much time, but enough to give you a sense of what's going on. So let me begin with Cadbury Chocolates. Some of you may know Cadbury chocolate bars. They've been around a long time. They were bought up by something called the Mondele Corporation. That's an American multinational corporation based in Chicago. You may know some of its other brand names that it owns and produces goods. Nabisco, Kraft, Cadbury, Oreo, Ritz, Toblerone, Trident gum. And I could go on. This is one of the major food companies in the world. Okay. It recently announced that it is going to shrink its Cadbury chocolate bars. The weight is going to be reduced by a good 15 to 20% less chocolate and other ingredients in the chocolate bar. But of course, the price will remain the same. You will pay the same, but you won't get as much chocolate bar. This would be bad enough at a time when people's budgets are pressed, at a time when maybe for the sake of the society as a whole, you could put that sort of thing aside. No, no, no, no, no, no, no. But better than all of it is the public statement made when, predictably, the Twitter universe came alive with people making nasty cracks about paying the same for less chocolate. So Cadbury issued a statement. And I'm going to tell you this because you couldn't make this stuff up. Cadbury announced that this was part of its program to combat obesity. You see, they're doing you a favor by charging you the same for. For less chocolate. 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? Mm. Mm. Cause it's not about obesity, of course, it's about profit. And Cadbury is famous for this. Few years ago, they changed the Toblerone chocolate bar. You might have thought that Toblerone was made in Switzerland. And yes, once, long ago, it's now made by Chicago Mandalay they tried to do the same. They even jiggered the whole structure of the bar to get less weight for the same money. There was such an outcry that after two years of making money like that, they went back to the original weight. People complained there's a lesson there somewhere. Then I discovered that the Office for National Statistics in Great Britain did a study and it found, and I have to look at my notes to get it correct. Between January 2012 and June 2017, that's before the pandemic, 2,529 products shrank in size while their prices remained the same. And they were mostly food and drink. Capitalism has an incentive system and the bottom line is we get screwed. Barcelona, Spain. A different kind of story. They have some radical people in office in Barcelona, as they do throughout Catalonia. And they recently did something interesting. They wrote a letter, the City politicians to 14 companies that collectively own 194 empty apartments in Barcelona, telling them that if they didn't find a tenant within one month, the city would take possession of the properties, pay them half the commercial value of the apartment and rent them out to middle and lower income people who need housing. I could go on because Catalonia has done a number of things like this. I just want everyone to understand that there are places in the world where you actually fight against the incentives of capitalism in order to help human beings who need it. Next item. You'll see how these add up. Malls are dying across America by the thousands. And the retail stores anchoring them in them are also dying. One of them is Macy's that many of you have heard of because it's been around as a department store for a long time. Its stock is currently down 60% from its recent high. But that doesn't dissuade the directors of the company who just gave $9 million bonus to the top six executives. Before COVID hit, they had announced they were planning to close 125Macys. That's tens of thousands of people losing their jobs. After Covid hits, they're going to close more. CEO Jeff Jeannette took a pay cut in April, but it was reversed since April and he has now gotten a $3.7 million bonus, the biggest of all the executives. 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. Then there's the International Monetary Fund with a red face announced last week that $10 billion that had been given to countries to fight the COVID 19 virus turned out to actually have been used by those countries to pay back private banks that had lent to those countries. 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. What an interesting capitalist incentive system at work. Then there's what might be called my favorite of this week, if the word favorite can be used here. The United Health Corporation, one of the largest health insurers in the United States, proudly announced last week record profits. Kind of strange, you know. We're fighting a disease that's killing us, and the health insurer is making record profits. I kind of scratched my head because I kind of understood there's got to be a bit more to this story, and I'm happy to report to you there was. So let me tell you and share it with you. And if this isn't an example of profiting off people's suffering, I don't know what is. Here's the problem. It turns out that with over 50 million people who have had to file unemployment compensation claims in the last 16 weeks, folks are really pinched in terms of covering their budgets. That's why we're facing a crisis of evictions and rents not being paid and mortgage monthly payments not being made, and people in really desperate trouble. So it turns out, now that you think about it, I think you'll share with me the understanding that it's not that surprising. It turns out that people have decided to defer visiting a doctor or a hospital or. Or a clinic. Why? Because they can't cover the deductible. And the co pays, modest as they are sometimes, sometimes they're not modest at all. But whatever they are, people can't. So the insurer has a wonderful situation. The premiums keep being paid, but the people don't go. So the insurance company keeps raking in the premiums, but they don't have to pay out, not to the doctor. And that helped me understand another puzzling statistics that a large number of people laid off over the last 16 weeks in this pandemic are nurses and health workers. I thought we had a shortage. We do, but we also have an excess. Is that crazy? Yet? That's capitalism. Because you see the doctors who can't get reimbursed by the insurer because people aren't coming, fire their nurses, fire their clerks, fire their physicians, associates, and so on. So we are losing jobs for health care people while we have a shortage. And since our government doesn't function. Nobody is putting together the unemployed healthcare workers in the places where we have too few health care workers to deal with the COVID 19 crisis. If you want an example of capitalism's incentives producing perverse results, there it is. But then there was another reason why UnitedHealth is doing well. It wasn't just to avoid co pays and deductibles that people didn't go. But they were terrified that going anywhere near a hospital or a clinic or a doctor brought you closer to COVID 19. All those stories about people having to share masks in these facilities, not having enough of the ppe, the personal protective equipment needed means you don't want to go to a hospital or a doctor's office unless literally you're at death's door. Because if you weren't before, you would be at the door if you went. But that's the way it works. And UnitedHealth is making an extra buck off of the literal suffering, the terror at the disease and the shortage of money because you lost your job. That afflicts the American people. And worse than they're making money. And I'm going to give you the worst example in a moment of all of them. But worse than all of it, no one in power, not the Republicans and not the Democratic Party either, has dared to say that maybe if you're making more profits after the middle of March than you were before, that any extra profit to you pay to Uncle Sam to use to fight the virus, because that would be a responsible way for you not to profit off of the suffering of other people. But there's silence because our political system is committed to the same capitalism that provides these incentives. And now for the last example. I left it to last because I've mentioned it before, but I wanted to mention it. The Amazon Corporation. Now, of course, profit is falling into their laps like there's no tomorrow because we can't go to stores, so we order everything. So is this because Amazon did something new and different? No. Have they invented a new system of distribution? No, they didn't do anything. They just sit there collecting the money. In March, the low of a share price of Amazon was $1,750 per share of the Amazon Corporation. On July 17, the date that I checked, the price of that Same share was $3,000, 1,700. So if you owned a share in the time of 52 million people going on unemployment, the value of your holdings of Amazon shares roughly doubled. There's no excuse for this. There's no need for this. That Money could be used for a thousand better uses than making Jeffrey Bezos, already the world's richest man, even richer by something in the neighborhood of 20 to 25 billion dollars. That's the product of a capitalist incentive system. Think about it the next time you hear stories about how capitalism is an incentive based system. Yeah, it is. But the incentive is often for the worst, conceivable antisocial behavior. This is Richard Wolff. Stay with me. We will be right back. Welcome back, friends, to the second half of today's ECONOMIC update. Before jumping into my interview with epidemiologist Rob Wallace, I wanted to remind you that you should please remember to subscribe to our YouTube channel, where you can follow us on Facebook, Twitter and Instagram, and also to Visit our website, democracyatwork.info where you can learn more about our democracy at work shows, our Union Co op store and the two books we've published, Understanding Marxism and Understanding Socialism. And as always, a special thanks to our Patreon community whose invaluable support helps make this show possible. All right. It is with great pleasure that I introduce my guest for today, Rob Wallace. Rob is an evolutionary epidemiologist with the Agroecology and Rural Economics Research Corps. He is the author of an important book called Big Farms Make Big Flu, and I'll be returning to that in a moment, and also of a forthcoming book, dead Epidemiologists. I hope that does not include himself. He has consulted for the Food and Agriculture Organization of the United nations and for the United States center for Disease Control and Prevention. So first of all, Rob, thank you very much for joining with us today.
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B
It's a pleasure to be here. Thank you very much for having me.
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A
Okay, so let's start with that book of yours that was published back in 2016. The date is important because it was long before the current pandemic hit. And in a sense, you predicted this or you certainly predicted the possibility of this kind of thing happening. So I want to begin, since it's very rare to have a person in your position who can do the I told you so bit, but basically to ask you, how do you see the relationship between your book and the arguments you make there and the present catastrophe we're living through?
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B
Well, I mean, those things are very much connected. I mean, I certainly don't feel any sense of vindication. I mean, we're at 14 and a half million infections, which is probably a gross undercount. And 600,000 dead worldwide. It's nothing to click my heels at. But certainly as A bunch of us have been screaming and shouting about this for near a couple decades. And if you recall, the first celebrity outbreak was a celebrity virus that came out about turn of the century, H5N1. That was the bird flu that spilled over into Hong Kong. There was great worry then that something like that can go human to human and become a pandemic. Since then we've had viruses that have emerged almost annually. At this point, there's a whole bunch of them. There's the H7 and 9, there's the Ebola, Macona in West Africa, there's the Zika virus. There's of course the H1N1 2009 that emerged off farms outside Mexico City and did indeed go pandemic. So 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.
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How do you, and I'm sure you've been asked this question, how do you account, given what you've just told us for at least in the case of the United States, but other countries too, but particularly here, such a spectacular lack of preparation, a lack of capacity to contain this thing once it hits. How do you, how do you begin to account for that to those of us who are not in your field but heard what you have to say?
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B
Yeah, I mean, it's quite stunning, isn't it? In a matter of months, we have in essence declining empire in full view of the world. It's something of a contradiction going on. On the one hand, you had Bush too, and Obama, who were actually quite concerned about the possibility of a pandemic. Considerable resources went dedicated to trying to come up with plans and interventions that would keep such a thing from emerging. I put these things in a kind of long durer view of it. Post World War II, the United States took the reins for in essence running the global capitalist system. And that extended to making sure that the system worked around the world, including cleaning up various messes to make sure that bourgeoisie from whatever country could in essence reap the profit that they needed. But what we have here, and this extends into dealing with potential outbreaks. So cdc, which is an important agency to have. Part of its job, however, was to quash outbreaks from happening as they emerged in part out of the capital, led deforestation development that was being launched in countries around the world largely backed by centers of capital such as New York, London and Hong Kong. So our group have kind of converged on the notion that those three cities and others are in essence, the worst disease hotspots because they're funding some of the worst deforestation development. So the US Was on the hook for cleaning up many of a potential pandemic. And you can see the last of that happened in 2013 under Obama, which CDC sent team over to West Africa to deal with an Ebola that spilled over, infecting 35,000 people, killing 11,000 and leaving bodies in the streets of a regional capital. But what we see here is in essence, in my view, when Trump came into office, he in essence threw the handbook out on that. He didn't see it. He had not been schooled in the notion of what every administration has done since World War II, which is to, in essence, protect the system of expropriation and extractivism. So he in essence abandoned all the plans necessary to deal with an outbreak, whether it happens elsewhere or when it actually comes to our shores. But we don't want to get lost in personalities here, because Bush II and Obama were in essence not just as Personas, but as representing programs, were in essence, riven by a contradiction. Because on the one hand, the political class is on the hook for making sure these outbreaks don't happen, but it is also on the hook to in essence, help those companies in agriculture and in other sectors to help, in essence, bring the outbreaks in the first place. So our business as a political class here is in essence to support companies and their efforts extractivism around the world, leading to the deforestation development that leads to the very outbreaks that in essence, CDC was on the hook for stopping along the way, in essence, in my view, the US is on the far side of its cycle of accumulation. So in essence, it's turning capital back into money. As you very well know, that means that the bourgeoisie here in essence cashing out and in essence abandoning very much many of the public comments that we view as part of governance. So the public health system has in essence been either abandoned or monetized. And our view of public health is down to what vaccines and tests the marketplace can deliver when an outbreak happens, or your individual doctors should you have insurance. Of course, that is not the means and mechanism by which to fight back against a virus that is so infectious and can get from one side of the world to the other in a matter of weeks. 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, in an astonishing fashion, in a matter of months, all those issues kind of converging to a spot where the US is in essence one of the worst to respond to an outbreak. While countries elsewhere, whether it's Vietnam, whether it's Cuba, whether it's Taiwan, could be socialistic or more capitalistic, have proven themselves to be much better in terms of dealing with an outbreak than we have.
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If I follow you, then the remarkable thing is that the same big business interests, led particularly by banks, are perfectly happy to continue funding all of the deforestation, agricultural extension of planting, mono crop, all of that that you point to as a cause of this disaster. But they are also willing, by letting a man like Trump do what he does with the at least complicity of the big bank's community, they are willing, in a sense, or am I going too far, to pay the price literally in life itself, for the ability to continue that other part, namely the funding of these kinds of developments?
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B
Well, it's a really complex possibility to unpack there clearly. In the election 2016, Wall street backed Hillary over Trump. Trump wins. He's dedicated to supporting the largest corporations, as the CARES act shows, in which much of the money that was supposed to go towards coronavirus control was basically given to cronies and large banks and much of the capitalist class in such a way that much of the rest of the country was largely abandoned. The American people were given one lousy $1,200 check, some unemployment at 600amonth that's already run out. So there really is conflicting signals of one, at the same time attempting to preserve the last of the extractivism involved in that here at home, also abroad, but at the same time entering some truly dangerous territory for them, because even the American people have long backed this very system, are finding that such a system, as you were getting at, is perfectly happy to allow many thousands of Americans to die.
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A
Yeah. Do you see more of these pandemics and viruses coming down the pike?
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B
Yeah, I mean, that was the kind of the shock of COVID 19, which is caused by a SARS 2 that most of us had our eye on. African swine fever in China that had killed half their hog and showed potential to be able to transmit through multiple modes of infection. And given that hog have very similar immune systems to humans that look bad already, the China this year identified another influenza that seems to be capable or likely to be able to go human to human. So certainly what was previously something that was a new infection that could be potentially pandemic was emerging one year to the next. Now we have multiples circulating in parallel in such a way that clearly SARS 2 this COVID 19 isn't the end of the story. And the likelihood of having a virus that kills many more people more beyond the 1% case fatality rate, I mean something like 15 or 20% is certainly possible. And the notion that we would wait another hundred years for something as terrible as this to emerge is unlikely. That something else is already circulating out there with the human race as its target. And unless we foundationally shift out of our means of social reproduction, whether it's in agricultural self or more broadly speaking, the capitalist class, capitalism itself is we're at a historical moment, a crossroads that requires us to foundationally shift the way that we do business.
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Rob We've come to the end of the program. Often I ask for someone to tell us, you know, what do we do about it? Or looking up. But I don't want to end on a overstressed plus. I would rather let the importance of what you've said sink in. Thank you very, very much for being with us and sharing your expertise. Good luck with the Dead Epidemiologist book. And once again for my audience, this is very important material to think about and digest, and I look forward to speaking with everyone again next week.
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Sam. Sa.