Economic Update with Richard D. Wolff

Episode Summary: What "Capitalism's Decline" Means

Date: November 19, 2020
Host: Richard D. Wolff (Democracy at Work)

Episode Overview

In this episode, Richard D. Wolff delivers a critical analysis of what he terms the "decline of US capitalism." He traces the historical rise of American capitalism, highlights contemporary signs of decline, and argues for the need to recognize this turning point to enable humane and effective management of change. Wolff draws parallels to historical declines of other economic systems, notes the current sense of loss among the American public, and calls for progressive solutions reminiscent of the transformative policies of the New Deal era.

Key Discussion Points & Insights

1. Symptoms and Evidence of Decline

• Ineffective Leadership in Crisis

  • Wolff frames the recent presidential election (Trump vs. Biden) as indicative of the limited options within the current capitalist system during times of crisis.

  “We were finished just now choosing between Donald Trump and Joe Biden, as if those were the best this system could do at a moment of crisis, which would be a stretch.” — Richard D. Wolff [00:22]

• Public Health Failures & Socioeconomic Indicators

  • Highlights the dismal handling of the COVID-19 pandemic and the resultant high death toll.
  • Notes that over a million fewer people are working in public services during a period of heightened need.

  “For one of the richest countries in the world to have made such a mess at its own peril and at the cost now of almost a quarter of a million people dying, that's a sign...” — Richard D. Wolff [00:45]

• Stagnating or Declining Living Standards

  • The “American Dream” is increasingly out of reach, and the notion that each generation will fare better than the last is now “dead.”
  • Rising bitterness and anger among the populace—fuel for reactionary politics.

2. Decline vs. Power: Historical Patterns

• Peak Power as a Prelude to Decline

  • Wolff notes that systems are often most powerful just before they decline, drawing parallels with European feudalism.

  “At the end of feudalism, just before it died, was its time of greatest power… So seeing a powerful America… doesn't really refute anything about a notion of decline.” — Richard D. Wolff [01:30]

• Lost Wars & Rising Competitors

  • America’s inability to “win” in Afghanistan or Iraq, and the steep competition from a rising China, signal a loss of global dominance.
  • Economic and technological competition with China is likened to America’s earlier rivalry with Britain.

3. The Historical Development of U.S. Capitalism

• Origins and Expansion

  • Capitalism was brought to the US by Europeans and initially relied heavily on government intervention.
  • Land acquisition was achieved by dispossessing Native Americans, and labor shortages were solved by incentivizing/forcing European immigration and, most infamously, African slavery.

  “You can't have capitalism with an employer and an employee if you don't have an employee. And the Native Americans weren't about to be employees...” — Richard D. Wolff [05:56]

• International Position and Power Shifts

  • The US leveraged its role as a supplier to the British Empire, especially via the cotton industry, to amass wealth.
  • Post-independence, US capitalism outgrew its British parent, paralleling the rise of Germany in the late 19th and early 20th centuries.

• Post-WWII Dominance

  • After World Wars I and II, the US emerged as the world's preeminent capitalist power, paralleling feudal highs before decline.

4. Causes and Manifestations of Decline (Post-1945)

• Rebuilding of World Competitors

  • By the 1970s, Germany, Japan, and China had rebuilt, and China in particular emerged as a global manufacturing powerhouse.

  “…by the 1970s, the defeated countries, particularly Germany and Japan, had indeed rebuilt and become capitalist powerhouses. In China…they became the powerhouse relative to the United States that Russia never managed.” — Richard D. Wolff [23:31]

• Globalization and Capital Flight

  • American capitalists increasingly invested overseas, draining domestic resources, eroding public education, and weakening local/state government tax bases.

• Failure to Prepare for Crisis

  • The US failed to prepare for predictable crises (both economic downturns and pandemics), exposing deeper weaknesses.

  “Capitalism has a business cycle downturn every four to seven years. We knew…we were due for one… What did we do to prepare for it? Nothing.” — Richard D. Wolff [25:19]

• Erosion of Empire

  • The US can no longer swiftly intervene in Latin America and elsewhere as it did during its postwar zenith.
  • The US share of global trade and the supremacy of the US dollar are in ongoing decline.

• Societal Impact

  • Economic decline breeds bitterness, angry populism, and scapegoating—a dynamic exploited by "sleazoid politician[s]" like Trump.

5. Historical Parallels: Germany Between the Wars

• Wolff compares the current US predicament to Germany’s post-WWI disaster (defeat, hyperinflation, then depression), which led to desperate political swings and ultimately Nazism.

  "Economic decline…is a social trauma and we're living through it now. That's why there was a Trump." — Richard D. Wolff [31:07]

6. Contemporary Denial and the Fork Ahead

• Both right-wing (Trump: "Make America Great Again") and centrist (Biden: "Build Back Better") platforms implicitly admit decline, but offer no true solution.
• Wolff argues that the US is still mostly “in denial” about the nature and magnitude of the problem.

7. Progressive Solutions and Hope

• The New Deal as Precedent

  • In the 1930s, America responded to crisis by creating Social Security, unemployment insurance, federal jobs programs, and a minimum wage. This left turn improved conditions more than denial or right-wing appeals.

  “The last time the United States faced decline… the American people rose up and they went left creating Social Security, unemployment compensation, a federal jobs program, a minimum wage. And that got us out of the depression pretty well.” — Richard D. Wolff [35:28]

• Path Forward

  • Wolff urges facing decline directly and humanely, rather than succumbing to chaos or scapegoating.

  “It's a little bit like AA. You have to admit you have a problem as your first step in solving it. We are a declining economic power, and that either gets faced and managed in a humane way, or it drives us crazy...” — Richard D. Wolff [36:50]

Notable Quotes & Memorable Moments

• “There are too many signs, and I think they point to something that we can and should call the decline of American capitalism.” — Richard D. Wolff [01:24]
• “As it grows, it outgrew its own parent, as children often do. We became bigger and richer than the British.” — Richard D. Wolff [09:44]
• “The notion that the United States was a place where every generation lives better than the one before, that notion is dead.” — Richard D. Wolff [28:49]
• “Trump denies in one way, but Biden denies in another… One is going to make America great again… Biden says, oh, no, no, build back better. Well, there's the admission again, buried in the words, yeah, something's wrong.” — Richard D. Wolff [33:19]
• “What we haven't tried in the United States is to go to the left, to be progressive, to do things that, that we have done that have worked in the past.” — Richard D. Wolff [35:14]

Timestamps for Key Segments

| Timestamp | Topic / Segment | |-------------|---------------------------------------------------------| | 00:10-01:24 | Introduction & symptoms of decline | | 01:24-05:30 | Historical cycles: power before decline | | 05:31-12:00 | Origins and evolution of US capitalism | | 12:01-16:30 | International rivalry and postwar dominance | | 16:31-22:50 | Decline’s first signs: post-WWII to 1970s | | 23:00-27:59 | Globalization, public sphere erosion, COVID-19 failures | | 28:00-31:00 | Societal impact: bitterness, scapegoating, Trump | | 31:01-33:45 | Germany parallel: trauma, radicalization, and denial | | 33:46-35:13 | Denial in US politics: MAGA and Build Back Better | | 35:14-36:50 | Progressive historical alternatives, path forward |

Conclusion

Richard D. Wolff, in his characteristically incisive style, argues that symptoms across American politics, public health, and the economy point not just to temporary crisis, but to “the decline of US capitalism” itself. By examining historical cycles and systemic change, Wolff underscores the necessity—and possibility—of progressive transformation, provided Americans honestly confront the reality of decline. The episode ultimately encourages listeners to seek new solutions based on progressive precedent rather than reactionary or centrist denial, warning that how society manages decline will shape its future just as surely as its past.