Economic Update with Richard D. Wolff
Episode: Virus Triggers Capitalist Crash
Date: April 16, 2020
Overview
In this episode, Richard D. Wolff analyzes the twin crises posed by the coronavirus pandemic: the public health emergency and the simultaneous "capitalist crash." Wolff identifies deep failures of the U.S. economic system both to prepare for and to respond to a predictable viral pandemic, drawing lessons from history to show how capitalism—like feudalism before it—responds to crises. The episode pivots in the second half to explore what real, democratic, and systemic change would look like under these extraordinary circumstances, and puts forward specific proposals outside the mainstream narrative.
Main Themes and Section Timestamps
- [00:10] Introduction: The Crisis and Hidden Dimensions
- [01:25] A Historical Parallel: The San Francisco Bubonic Plague
- [05:00] Capitalism's Lack of Preparedness for Pandemics
- [09:03] Pre-existing Weaknesses of U.S. Capitalism
- [14:10] Inefficiency and Stock Market Illusions
- [18:45] What Should Be Done—A Democratic and Systemic Response
- [22:10] Lessons from Europe and Proposed Solutions
- [26:35] The Marcora Law and Worker Cooperatives
- [29:35] Final Reflections: Choose Systemic Change or Suffer the Costs
Detailed Breakdown
Introduction: The Crisis and Hidden Dimensions
[00:10–01:25]
- Wolff opens by stating the episode’s ambition: to focus on neglected aspects of both the health and economic crisis ignored by mainstream media and political leadership.
- He frames the pandemic as a "twin dilemma: a virus and an economic system that cannot cope with it."
Notable Quote:
“This program can be a real contribution, I hope, to our thinking and our acting to work our way out of this twin dilemma. A virus and an economic system that cannot cope with it.”
— Richard Wolff [00:56]
Historical Parallel: The San Francisco Bubonic Plague
[01:25–05:00]
- Wolff provides a historical example from 1900 San Francisco, where officials covered up a bubonic plague outbreak, risking lives for economic and electoral reasons.
- He draws clear parallels between Governor Henry Gage’s denial and current U.S. leadership's reaction to COVID-19.
Notable Quote:
“It was only when federal medical authorities exposed the virus, isolated it in the laboratory, that it was no longer possible for Governor Gage to hide. […] He risked everyone's life because he said it wouldn't be good for business. Which was probably true, and it wouldn't be good for his reelection. But turned out he blew that away too.”
— Richard Wolff [03:00]
Capitalism's Lack of Preparedness for Pandemics
[05:00–09:00]
- Wolff compares pandemic preparedness to maintaining other societal reserves, such as strategic oil reserves.
- He argues that U.S. capitalism failed to produce and stockpile basic protective equipment, not because it was impossible, but because it was unprofitable.
- The government, he asserts, did not compensate for this market failure due to its ideological commitment to private profit.
Notable Quote:
“Who wants to make a mask and store it in a warehouse for years until we need it? Not a private profit-driven company. So they didn't make it, they didn't store it. And the government […] didn't compensate for what the private capitalist sector failed to do.”
— Richard Wolff [06:50]
Pre-existing Weaknesses of U.S. Capitalism
[09:03–14:10]
- Wolff contends that U.S. capitalism was already fragile pre-virus, loaded with unprecedented business and personal debt.
- He draws a historical analogy to the weakened feudalism of Europe before the Black Death:
- Poor soil, growing inequality, undernourished serfs—made the plague even more catastrophic.
- Economic policies following the 2008 crash—massive bailouts and near-zero interest rates—meant that even “bad” companies could borrow massively, papering over structural weaknesses.
Notable Quote:
“After the crash of 2008, the government threw trillions at corporations. They were supposed to hire us all back. They didn't. They were supposed to recreate the economy that was successful before. They didn't.”
— Richard Wolff [13:19]
Inefficiency and Stock Market Illusions
[14:10–18:00]
- Wolff explains how stimulus funds disproportionately benefited corporations and the wealthy, propping up the stock market rather than the real economy.
- The boom was “fake,” a byproduct of government largesse, not genuine growth, and proved unsustainable when COVID-19 struck.
Notable Quote:
“The notion that our economy was great before this virus hit is fake. It always was fake. It's the perspective of those who live off the stock market. And even the stock market's boom was fake because it was all that money thrown in by the government.”
— Richard Wolff [15:55]
- He calculates that the recent loss in market wealth far exceeded the cost it would have taken to prepare for the pandemic, highlighting the inefficiency of capitalist priorities.
What Should Be Done—A Democratic and Systemic Response
[18:45–22:10]
- Turning to solutions, Wolff calls for a genuinely democratic crisis response.
- He critiques the current bailout system, which leaves response decisions to corporate boards and the profit motive.
- Instead, he advocates for organizations where every member—"from the sweeper of the floor to the CEO"—has an equal vote on pandemic response and use of public funds.
Notable Quote:
“Because we know what happened the last time the American capitalist system crashed in 2008. Again, trillions were thrown at the business community... And in case you need a little provocation to be outraged, some of the money...was used by them to lobby the same government so it wouldn't impose regulations on them because of the crash. Whoa. Is that the appropriate way to respond to a crisis that affects everybody? The answer is no.”
— Richard Wolff [20:50]
Lessons from Europe and Proposed Solutions
[22:10–26:35]
- Wolff notes that Europe, faced with the same viral threat, avoided mass unemployment by subsidizing worker wages directly—unlike the U.S.
- However, he maintains this is still insufficient as it keeps people idle rather than employing them for critical public health tasks.
- He lists concrete proposals:
- Reconfigure all businesses to guarantee worker and customer safety (social distancing, disinfecting, monitoring).
- Mass mobilization of the unemployed for testing, tracing, and other essential pandemic-fighting measures.
- Employ teachers and skilled workers in tutoring and reskilling programs, leveraging one-on-one online formats.
- Ongoing investment in public health, greening, and critical infrastructure.
Notable Quote:
“Why are there any people either unemployed or idle? There's lots of work to be done. Only capitalism holding onto the enterprise that's privately profitable [...] solves problems by laying off people or paying them when they're not doing anything, because that's inefficient on a human scale, on any rational scale.”
— Richard Wolff [24:45]
The Marcora Law and Worker Cooperatives
[26:35–29:35]
- Wolff describes Italy’s Marcora Law, which enables unemployed people who create a cooperative with nine others to get their entire unemployment benefit as immediate seed capital.
- He advocates adapting this model in America, using stimulus funds to foster a robust worker cooperative sector.
Notable Quote:
“What about giving Americans a big chunk of the stimulus money to start worker co ops, to get together [...] to develop a business plan, to begin to go into business in whatever ways are safe at this point. You know what that would do? Not only give important creative opportunity to people who are otherwise sitting around feeling terrible, it would also do something more. It would give America a worker co op sector.”
— Richard Wolff [27:40]
Final Reflections: Choose Systemic Change or Suffer the Costs
[29:35–end]
- Wolff closes with a call to systemic change, warning that failure to learn from the crisis will render capitalism as unsustainable as feudalism in its final days.
- He frames this as a rare opportunity to learn from the crisis and build economic democracy.
Notable Quote:
“This is a crisis from which we could learn what's wrong with the system we've had and what always needed changing, but now stares us in the face with this choice. Either change this system or now the costs of not doing it are becoming fatal.”
— Richard Wolff [30:02]
Memorable Moments
- The analogy between today’s economic response and the politically-motivated cover-up of the 1900 plague in San Francisco.
- Wolff’s historical parallel to feudalism’s demise post-Black Death: warning that capitalism may face a similar reckoning if it does not adapt.
- The detailed list of immediately actionable, non-mainstream ideas to employ America’s idle workforce for social good instead of subsidizing corporate profits.
Key Takeaways
- The pandemic exposed pre-existing faults in U.S. capitalism—disregard for public preparedness, structural debt, and wealth inequality.
- Historical lessons show that systems unwilling to address human needs become unsustainable in times of crisis.
- Real democratic management and a focus on worker- and social-need-driven enterprise are not only possible but necessary.
- Practical steps include public control of crisis funds, mass employment in pandemic response, and real investment in worker cooperatives.
For Further Exploration
- Wolff references additional resources and encourages listeners to engage with Democracy at Work’s other platforms and publications for deeper dives into Marxist and socialist solutions.
Summary by Economic Update Podcast Summarizer.