Economic Update: Criticizing Capitalism

Welcome friends to another edition of economic update a weekly program devoted to the economic dimensions of our lives jobs incomes debts our own and our children's I'm your host Richard Wolff I've been a professor of economics all my adult life and I hope that that's prepared me to offer you these economic updates about what's in the news. I want to begin by a kind of shout out to the state of Colorado it turns out that Colorado is for worker coops what Delaware has been for capitalist corporations that is the laws in Colorado thanks to all kinds of folks in our state's history are very friendly to the formation and the growth and the development of the worker coop kind of enterprise and it reason it's interesting to me has to do with the fact that I recognize that the Republican and Democratic parties for 250 years have been busy pushing states around the country and above all Delaware to be especially friendly to capitalist enterprises you know the kind of enterprises with a few people who are their shareholders and a tiny number of people they elect to be the board of directors to run businesses that way those two parties were useful to set up the laws to make that happen if there were a political party in the United States committed to worker coops as a better democratic alternative they would be running around the country doing for the country as a whole what Colorado has taken the initiative to begin to do I want to recognize what the Colorado folks did but I also want to make us aware that a political party is needed to give worker coops a level playing field with what the capitalist enterprises have gotten done for them for centuries I also want to follow up in a separate update with the problem of worker suicide recently there have been several actually six suicides among cab drivers in the city of New York it has become impossible for them to be cab drivers the arrival of uber lyft and other services has put an incredible pressure on workers they don't get the money they once did they have to work unbelievable hours and here in New York where a taxi medallion the legal right to have a taxi was very expensive and purchased by cab drivers over recent decades they're now discovering that those medallions are virtually worthless as uber and lyft have destroyed their value and they're killing themselves you know it's the responsibility of a society not to have that happen we don't need to have a system in which competition among capitalists is something that kills workers you know we've had that in our history we didn't permit it there was a time when we allowed mines to be operated in a way that killed miners we are now allowed all kinds of enterprises to be run in a way that stunted or even killed small children that were working there and we had movements to protect miners to make child labor illegal we didn't permit corporations to say oh we need to compete we need to have cheap child labor or we need to save money I'm taking care of the miners we can do the same thing to prevent suicide and we ought to have done it long ago my attention was caught also by France it turns out in France there are laws that whole top executives accountable if below them in the corporation suicides are occurring one of the biggest corporations in France used to be called France télécom it's their basic phone company it's now called orange like the color telephone company well they're two top executives are on trial now held to be accountable for the harassment of workers leading to count them 19 sue besides among those workers in France you prosecute people who impose suicidal conditions here in the United States you pretend it doesn't count my hat's off also today to the people of California petitions were circulated among Californians and over four hundred and seven thousand of them signed and that was more than enough to get a ballot question put on the election for this coming November and here's what it says rents have gone up sky-high in California six of the 11 most rapidly rising rent areas in America are in that state alone California led by Los Angeles and particularly the bay area around San Francisco more than half of the income which is way more than you're supposed to spend for rent is the burden of 1.7 themm million families in California now of course the housing industry says if you limit how much we can squeeze out of renters and boy they have gone up spectacularly in the last few years well then we won't build houses if we can't make a lot of money off of them that's a threat that's a threat of one industry against the millions of people who depend on it we ought to respond to those threats with a counter threat you don't build the buildings fine the public sector will build and maintain decent quality public housing and then there won't be the ability for you to raise those rents at all will there be I want to talk to you about another story that's much in the news right now President Trump and the Republican Party are busy slapping tariffs and punishments of all kinds on our trading partners you know it's part of the assault on foreigners first of all we bash immigrants those are people who come from a foreign country in two hours and now we're also gonna bash foreigners who don't trade with us under conditions we would prefer because they're more profitable to us is this new here's my answer not at all the last time the United States tried to rearrange world trade to its own advantage was in the 1980s in those days Americans were reacting much as they are today to noticing that there were lots of Japanese cars on the road here in the United States and that Americans were preferring them over their American competitors you know Toyota's Dotson's and all of that rather than Ford's Chevy's and all of that mr. Trump's top trade negotiator negotiator scuse me Robert light Iser was actually involved in the deal that was made then the United States threatened Japan you have to limit the number of cars you sell here not by how many Americans want to buy but by a number will give you you have to agree not to send more cars here otherwise we will really close this country off to you the Japanese caved they agreed to the quotas and according to the PRCA excuse me PR no the PRC my apology a think-tank that's independent the cost to the Americans of having no cheaper Japanese cars worked out to about $1,200 a car we all paid more because the American company could charge more since the Japanese couldn't compete because they had been closed out the cost of a tariff war like the quotas will be higher prices for all of us to pay and that's something you ought to think about since you can be sure that the people pushing this leave that part of the story out my last two updates are important because they're the kinds of things you might not think about but you ought to the French government is threatening to find the American giant corporation General Electric why well it turned out that in 2014 the General Electric Company petitioned the French government to be able to buy a very large electric company in France called Alstom and a deal was arrived at in which the French government then led by a socialist president said ok you can buy the french company but you have to create 1,000 jobs in exchange for doing that the French government recognized that the coming together of these two companies would eliminate many jobs but at least some jobs would be created and General Electric committed to hire one thousand more people as part of this deal and it was to be done by the year 2018 well here it is 2018 and the French government says you've hired exactly three hundred and twenty three of the thousand jobs you promised the penalty that you signed the contract to commit you to pay it is fifty thousand euros per job not created that would come 234 million euros for the total jobs you didn't create for General Electric that's a tiny amount of money it's like change in your pocket so now there's a problem General Electric of course doesn't want to pay it hopes that what usually has happened in the past will happen again namely that no one will really follow up no one will keep away exact track and even if they do nobody will bother them about this it will all go away and believe me General Electric is right to have us that because this kind of thing happens in the United States literally every day I can't tell you the number of times I have sat in a public hearing listening to a corporation make wonderful promises about what its gonna be allowed to do if only it gets this tax break if only it gets this subsidy if only it gets the road reroute 'add so it's more convenient for them if only if only if only knowing full well that the politicians who will say okay then we'll do it because of these good things they won't be there in the four years when this is supposed to happen they will have long forgotten it the press will not pay attention it will disappear it's an empty promise that no one follows up on in France partly because of the power of the labor movement and the power of socialist communist and other parties you can't do that the way you do that in this country so the French government even though the Socialists are gone and a quite right-wing government sits in power now they have to at least look like they're doing something to keep track of all of this because it's do too dangerous for them politically to let this go France is different from the United States my last update has to do with the Ford Motor Company and the city of Detroit and the dilapidated broken-down old Michigan central railway station in the middle of that city the last train to leave that station left in 1988 that's right thirty years of decay of breaking down of broken windows and and heaves in the floor you get the picture why did that happen because the city of Detroit was destroyed what do I mean well back in 1988 the population wasn't that far off of two million the population today is under 700 thousand that's called urban collapse that's when everybody leaves that's when there are thousands tens of thousands of empty abandoned homes and stores and yes railway stations and why because three companies for General Motors and Chrysler decided it was more profitable to produce somewhere else in the American South where wages were lower in Canada and Mexico where they were still lower and now in India and China where they are still lower it's all about the profit for a tiny number of companies that destroyed that city destroyed the lives of hundreds of thousands of people and destroyed yeah the Michigan Central Station so imagine how happy I was and how happy Americans were expected to be when Ford corporation announced it was buying for next to nothing that building its decisions helped to destroy to make up a new tech center for themselves we were all supposed to celebrate the renewal of Detroit and conveniently forget that the renewer was the destroying monster not that long ago but I don't want anyone to forget well we've come to the end of the first part of the show before meeting my exciting guest professor David Harvey that many of you know I want to remind you to subscribe to our You Tube channel if you possibly can to follow us on Facebook Twitter and Instagram and to go to our website democracy at work dot info for more of what we do and how you can get involved as a special thank you to our patreon community I also want to say really thank you for the support you provide it is crucial stay tuned we'll be right back welcome back friends to the second half of economic update it is my pleasure and indeed an honor for all of us I think to have our guest today professor David Harvey a foremost Marxist thinker and critic and writer for many decades to be our guest and to talk with me for the next little while professor David Harvey is at the Graduate Center of the City University of New York perhaps best known for how he has been able to teach us a whole generation of students like myself what Marx's contribution is to understanding the capitalist system that we depend on and that we live in he has written many many books and articles and his most recent which I urge you to take a look at is called Marx capital and the madness of economic reason thank you very much David if I can call you that yeah joining us okay what is the major contribution of Marx what why is he the important thinker we should be reading and whose work we should be using right now if he came up through a critique of classical political economy with a way of understanding the dynamics of capitalism that is of understanding how capital accumulates how it circulates and how it produces crises periodically and I think those insights are still with us in exactly the same way that Marx saw it back in middle of the 19th century capital is still with us and capital is still creating crises and doing all those things that Marx said it was gonna do so that the argument which I hear so often that capitalism has changed from Marx's time in the middle of the nineteenth century to today is both obviously true and not really terribly relevant since the basic dynamic of the system which is what he tried to figure out absolutely I mean that's that that's why it so I think relevant today which is not to say that the the details are not very different because they have certainly changed and we should take those into account and we also have to remember the marks didn't complete all of his work so we have some work to do to complete it but nevertheless the basic laws of motion of capital as he defined them in the middle of the nineteenth century are still with us and they're still creating mayhem and creating contradictions and creating havoc wherever we look let me pick up on a couple of things you said and go after them a bit more instability the the fact that this is an economic system which if I have the numbers correctly every four to seven years has a downturn and that these downturns can sometimes be deep and long-lasting like in the 30s and really like the one after 2008 is this in a sense a sign that this is a systemic problem and I wanted your reaction to the validity of Marx's focusing on in instability on this bizarre quality I think one of the things that separates Marx from most economists is the most economists seem to like equilibrium and think there's something called equilibrium to which everything converges somewhere down the line Marx says no it diverges all of the time so he's looking at it from the other direction and saying it creates disequilibrium and the disequilibrium are the sorts of things we see in a crisis in which capital and labor sit side by side and nobody knows how to UM you know employ them in in productive ways because somehow rather the market has not cleared and will not clear and so that is there at the mark of a genuine crisis what about the other critique in a way of capitalism that besides being unstable it is prone to inequality and indeed extreme in quality of the sort we see around us today how does Marxism go after get at this inequality well Marx did an analysis which relied very much on the idea of perfect competition and pure competition and what he showed was that under conditions of pure competition the rich are going to get much richer and the poor are going to get much poorer now we've had historic periods under capitalism where there's been some intervention from outside for political reasons and state reasons so that we actually ended up with less inequality today of course the neoliberal period since the 1970s everybody's been saying let the market do the work and everything's going to be ok and of course the rich get richer hand-over-fist and it's getting even worse by the minute yeah so that would you agree for example with Thomas Piketty and others like him that there's some intrinsic logic to capital that produces inequality unless and until the very reaction to that inequality stops or reverses it for a while you know there's there's something inherent within the within the system and our best guess the best way to summarize it is that in a perfect market situation there is nothing more unequal than the equal treatment of unequals because everybody says the market is an egalitarian device and it is but if you start off much better endowed than me then bit by bit that gap between us goes higher higher and higher and so that is what Marx showed brilliantly I think in volume one of capital is that is an inevitable consequence of a free market capitalism so then you know departing a little bit but let me ask your opinion how is it possible that capitalism has had defenders past present and likely future who seem either unable or unwilling to contend with these two central flaws you might say instability and inequality what's the it how is it possible for a system with those flaws to present itself almost that's the opposite of them I think one of the things we should recognize though is that capitalism has not been all bad it's technologically very dynamic and and it's given us a lot of possibilities to organize life in a very very different kind of way and that's one of the big contradictions of the present situation the technologies around us are fantastic labor saving technologies time-saving technologies and of course people are fascinated by that and that's I think how a lot of people have a fetish belief almost in the beauties of a capitalist system because it does all of those things Marxist point is to say yes it does all those things but then what does it do it produces homelessness it produces less and less capacity to educate people it makes students go into debt in order to get an education does all of these things and and and Marx is therefore emphasizing the contradictions and I think that the trouble with conventional thinking is that it emphasizes the positives and it refuses refuses to pay any attention to the negatives or assumes they're external accidents they are not integral to the system yes it always bothered me from my earliest times as a student I used to make this comparison I wonder how you think about it that capitalism produces the problem of selling all the value that they that's come out of their assembly lines so they invent something called advertising to promote the purchase what an advertiser does is try to get you to part with your money for some object and so the advert the logic of advertising present all the positives and obliterate all the negatives and this which is a distortion of human communication for a profitable end then seeps into the rest of our consciousness so that we begin to think in terms of either/or rather than the unity of the positive and the negative it's a kind of capitalism coming back and obstructing its own analytical capabilities through this advertising imagery yes I don't think it's only advertising though I think to me one of the things is about capital is the production at once needs and desires in such a way as to define a whole way of life for example I think of suburbanization after world war 2 and the creation of the american suburb and I think of the way in which that was supported by all of these you know sitcoms I Love Lucy the Brady Bunch all this kind of stuff it was advertising in a sense not in a crass sense but in a real sense that's a whole whole style of life and then the whole style of life has political consequences if you are an affluent person living in the suburb you feel and and and you become a homeowner you will get concerned about the value of your home and you don't want people moving in who might depress the value of the home and so you get exclusionary and you start to get exclusions and segregations and gated communities and and and and it's a it's a destructive way of life which is actually created around the organization of wants needs and desires which are not necessarily the ones we would freely choose but are those which are necessary for the accumulation of capital to continue. The system is producing us rather than serving us. it's the almost the the the Frankenstein monster our creation comes back and dominate us. Right, but at the same time there are possibilities. We see this in the Internet. I mean the internet came as a great sort of have a tower of freedom and and and and communication and all the rest of it and now look what we've got net neutrality disappears all of a sudden we find we are being surveyed through Google and everything else so, everything which was just really positive about the internet suddenly he gets turned by commercialization and capital accumulation into something that's negative. Yes I remember growing up with these the inventions all of which were going to be labor saving, absolutely, and my students today give me descriptions of their 60 and 70 hour weeks as a kind of mockery on all those claims the same thing in the household. we have household technologies now which are time saving time saving time saving time saving and if you ask everybody anybody how do you feel these days do you have a lot of free time and the answer is known of course one of Marx's ideas about a really really good socialist society was one which was characterized by a massive amounts of free time where you could do what the hell you liked let me ask you a question that jumps forward but I know it's in the minds of viewers and listeners how do you view this Trump phenomena here in the United States is this a capitalism in trouble flailing around with an extreme reaction or is this a capitalism confident in some sense of its capability and therefore willing to indulge a naughty person in leadership how do you square your Marxist Analytics with what you see marx has a very good analytic concept which I like a lot and is not used enough and the concept is alienation people are alienated in their work for the most part it a lot of work is meaningless these days people are alienated in their daily lives because they're dealing with the telephone company and all of these other things and credit cards and all the rest of it people are alienated politically we have a mass alienation of populations right now an alienated populations generally act in ways which are violent and angry or they sulk and I think actually we're in a political situation where we have mass alienation right now and until we address the roots of that alienation which are the redefinition of labour processes by capital accumulation the redefinition of daily life through the processes of capital accumulation until we deal with all of those kinds of questions and of course the buying and selling of political power by capital until we deal with all those questions I think we're not going to go anywhere and I think I think Trump is the president of alienation well David as always thank you it's never enough time I want to thank you for staying with us well my pleasure good and I want to thank you all for partnering with us by participating in your way in this conversation I hope you will be willing and able to continue to do that and for me I look forward to meeting and speaking with you again next week

Channel: Democracy At Work

Views: 41,507

Keywords: Richard Wolff, democracy, work, labor, economy, economics, inequality, justice

Id: Pv1PNliOCBE

Length: 29min 35sec (1775 seconds)

Published: Mon Jul 02 2018