Richard D. Wolff - Is the Coronavirus the end of Capitalism & the Revival of Socialism?

[Music] thank you guys for tuning in and welcome to another episode of the source where we interview whistleblowers or investigative journalists or policy experts amir hossein raza and today we'll be talking to author economists and the co-founder of democracy at work Richard Wolffe Richard glad to have you back on and I will start with you in German just because I know you speak German we get is here comes good feeling danke offered us that's in percent list let us get back to English how are you holding up doing this crisis and what is the general atmosphere in New York well New York in the United States is what we call here the epicenter that is it's a it's the most intense place in the country partly because it is a highly condensed city it is concentrated in relatively little bit of land and so because the country was terribly unprepared for the crisis and because the government did not act until very late mid march by the time the american response to KO vyd got underway it was already too late for new york so for example I would guess maybe 10 to 20 percent of the city of New York the population left the city to be out of the city because it was too dangerous so the country is very frightened the unemployment because this country doesn't deal with the employment problem very well mostly people are fired they are lose their job they lose their income and so you have basically the the trauma of a viral pandemic and now on top of it a collapse of the economy the likes of which we never seen and the constant comparison is with the Great Depression of the 1930s so it is as extreme a crisis for the United States as we have had in many many years and that only underlines the fact that our government is more incompetent and crazy than it has been and so we are at a very difficult time with a very poor leadership what would be interesting for our Europeans Weir's to know is a state of the US healthcare system and whether it was ready to combat this crisis I mean you've already talked about it a little bit right now but could you provide us some context of the US healthcare system before you can talk about whether it will survive this crisis during this time now well the health system has been the best word we use here is it has been shrunken it has been made much smaller over recent years basically because it worked under a profit system in other words hospitals were increasingly purchased and operated as profit-making enterprises and therefore whether or not you built a hospital or whether or not you produced a bed or whether or not you stockpile medicine was all calculated in terms of the profit rate and so for example we closed many many hospitals in the United States both urban and rural over the last 30 years and we tightened the whole medical establishment you know we are the only country in the world advanced industrial country that does not have still does not have a national health insurance system we spend more money per person on health care than any other country in the world but you could see already the difficulties because in the three years before the virus the life expectancy in the United States for the first time in a century fell in other words people were living shorter lives because of the kinds of difficulty we also had major health crises before the virus that I also don't think having equal elsewhere in the world give you an example we have seen over half a million people kill themselves with overdose of opioid drugs above all oxycontin and drugs like that for the last five years we have seen an epidemic of overdose and the line between overdose and suicide is very difficult to pinpoint but it's clearly a health problem part physical part mental so I would say we've had a health system that has been in greater and greater difficulty and so that's part of why it was so badly unprepared for the coronavirus right-wing economists or I would say neoliberal economists would argue that the government intervention especially under Obama v Obamacare could a system of false incentives crowding out private investment in health care and thereby creating these conditions the example that they were usually Curtis look at Italy look at France and Spain who have a governmental health care system and yet we're unable to cope with the crisis what is your take on this perspective well I think it's a perfectly reasonable thing to point to the national health care systems if indeed they failed also I would suggest however that if you wanted to explain why the United States has now become the number one country for Korona deaths and the number one country for the number of cases and let me remind you we have not even tested 1/2 of 1% of the American people as I am speaking to you so because we have failed in the testing as well so we don't know and I think that the reason the United States is worse than most other countries is in part because we don't have even the kind of national health care that does exist in France or Germany or Italy or Spain and so on in other words a national health care system isn't the guarantee but it is a better way to approach this than the United States and I think that's now clear I could go further and argue that the degree to which the the public health is managed by the government as a social service with or without a national health that will determine how successful you are in being ready for a pandemic like this and I should remind you all we have viral pandemics all the time viruses are part of nature we have had them SARS MERS Ebola in recent years the Spanish flu in 1918 which killed huge numbers of people there is no excuse for not being prepared and the fundamental problem is that even in countries like Germany or France or England to the degree that you allow the production and stockpiling of medicine to be handled and controlled by profit driven companies you will be unprepared not only for the corona but for any of the future viruses that we know will periodically appear I want to talk about the role of billionaires just bill gates at the moment for example Bill Gates appeared on German television as an expert on primetime millions of people watched it and he's not the go-to guy to advise for example our main medical institution that is at the forefront called the Robert Koch Institute how do you view the expert opinion of people like Bill Gates he's had a youth sway by holding stocks on pharmaceutical companies and also developing vaccines and on the w-h-o the World Health Organization are these two people that we should be looking up to for expert advice and our billionaires in a position to now comment on this crisis well I'm not personally familiar with whatever credentials Bill Gates has to pee speaking on healthcare it is crystal clear to me that the only reason you and I speak about Bill Gates is because of the money he has not because of his insight into medical or any other topic the way to understand Bill Gates is to remember the wonderful movie by the British comedian Peter Sellers and the movie was called being there if you are the right person at the right time in the absurd irrationality of capitalism you get all the money even though thousands of people contributed this piece of information that piece of information even though your teachers prepared you for whatever you did somehow if you're the right person at the right time you get all the money and because he has money people listen to him it is no compliment to the German society that they pay so much attention to a person who has so much money he has decided as an act of charity to give some of his money to health and this has purchased for him a pristine Jesus position as a quote-unquote expert on health it's really a testimony that with the amount of money that he has you can buy pretty much whatever position in society you wish so we have one billionaire is President of the United States and the other billionaire is building rocket ships to take him to the moon and mr. gates is a billionaire who has decided to become a person on health but I think it's pathetic that we we have an army of highly qualified doctors and medical researchers they're the ones that ought to be advising us on what to do there is no need to add a billionaire who has read a few articles and put him in such a position it's it's a sign of the slavish nosov a capitalist system to those who have been in the right place at the right time to control the money you also mentioned something called the medical industrial complex just briefly could you talk about what that is and how it could be related to the coronavirus very simple the medical industrial complex here in the United States is a term we use borrowed from what was also called the military-industrial complex it's when a group of industries get together and rather than each one of them being a monopoly they create a monopoly as a collective effort so in the case of the medical industrial complex is for industries doctors that's one hospitals that's two drug and device makers that's three and medical insurance companies that's four those four have gotten together each one supports the other one in achieving a monopoly position so for example we do not train more than a certain number of doctors so that doctors are the supply of doctors is small relative to the demand which is why doctors get paid much more money in the United States than they do in most other countries the same is true of hospitals the same is true of drugs if you put it all together the statistics show that in the United States medical care costs fifty to a hundred percent more than in other industrial countries we spend about eighteen to nineteen percent of the GDP of the United States for medical care in most other advanced countries the number is half of that or less meanwhile we are not healthier than other people we are dying at an younger age we have serious diseases of all kinds that we have not eradicated alcoholism opioid addiction all kinds of drug addiction that our epidemics in the country so our medical outcomes are mediocre but the amount of money we spend on medical care is the highest in the world that is a sign of a monopoly and the medical industrial complex has accomplished that monopoly you talked about being in the right way at the right time in terms of Bill Gates and you just mentioned doctors as well I could imagine that the liberal or even new liberal argument would be well yes he was at the right moment in time but he has compared to other people who are in the right moment in time did the best of opportunities and usually when I talk to doctors they say hey I have a right to all of this wealth and to even accumulate more wealth like other billionaires and millionaires because I put eight years of my life going into the study sacrificing every day whereas other people were not doing an availing these best opportunities I suffered tremendously psychologically to be able to get this and if other people have done better than me they should become billionaires so how do you view this liberal even let's say neoliberal perspective well I'm not surprised that people who earn a lot of money have developed an ideology that suggests that the world is better off because they are unusually rich this is as old as the human race I don't find this very persuasive if you want people to do something that takes eight years of education then pay for the education because it's socially useful it had to have a doctor trained is a social decision it has nothing to do with the individual who decides to go into that field as opposed to spending four to eight years learning something else like how to play a beautiful musical instrument or how to become an effective teacher or a thousand other things you know I could list here 25 different things that take five or eight years of effort we produce it but we don't pay those people anything like that amount of money it takes eight years to be a great musician or to be a great actress or to be a great painter we give those people either a great deal of money or no money at all there is no relationship between the amount of money you have and the work that you do let me give you a starker example the richest person in the United States is Jeffrey B Zoe's he has somewhere in the neighborhood of a hundred and fifty billion dollars tens of thousands excuse me now hundreds of thousands of people work in the warehouses of Amazon earning ten dollars an hour they do the work but mr. Beezus disposes of an amount of money that no sane person would ever justified on the grounds that the work of mr. Beezus is that valued at a hundred and fifty billion and the work of the person sweating in the Amazon warehouse is worth $10 an hour that's crazy and the attempt to do to justify that means that you are so insecure in the income you earn and rightly so that you have to come up with the most far-fetched crazy ideas one here's another way to get at it in ancient Egypt Pharaoh had the amount of money that mr. Bies owes did but you know something the Pharaoh didn't think of the argument your doctor gave you the Pharaoh didn't think it would make sense to say he worked harder than other people since 1/10 on days observing of his life indicated it didn't work at all so he had to come up with a different explanation his explanation was that God had chosen him to be the Pharaoh and you know something there is a greater honesty in that craziness than in the effort in modern culture which is so focused on labor to try to tell the person working for you for $10 an hour that the reason that person can't have a decent life is in order that you have 150 billion dollars which is more money than many countries have capitalism produces extremes of inequality that is a terrible flaw in the system which no amount of justification could ever excuse the argument that I usually hear is oh well the person is more confident to make important decisions that not everybody else wants to make he or she has more expertise and therefore just like in a hierarchy of the animal kingdom the strongest gets the biggest piece of the pie it should be applied to the same way in our social system and now we are realizing I think we were talking about this off-camera the values of people that are working at Amazon or working as nurses and working in supermarkets so could you address this argument about whether expertise confidence and all of those things really merit so much value and why now the nurses and other people that are working as essential workers are being valued so much in our society and not before yeah I love the analogy with the animal kingdom and hierarchy in the animals if we're going to use the animals as a model then I think we should justify a cannibalism we should go and eat the poor or we should go and and do all the other things that animals do you know one kind of society prides itself that it has gotten beyond animals it tells you something about a society that is so destroyed so poor in its morality that it looks to the animals as a model for what they ought to do it's it's evolution in Reverse that's being suggested and I don't think that's that's really serious we also have demonstrations of people who have become billionaires who are clearly unqualified to do anything we are in the United States we're currently led by a president who is a billionaire and has proven to us over and over again that being smart has nothing to do with being a billionaire that billionaires are capable of doing some of the grossest stupidest ignorant you name it only now it's in the position that that's really very dangerous for us so no I think the argument that the that the people who are rich somehow do more has always been fake I could I could tell you my own experience because I'm a product of the elite schools in the United States where the children of the rich to school I went to Harvard then I went to Stanford in California and I ended up at Yale alright so those are arguably among the the ten fanciest ritziest school most of my classmates particularly at Harvard were the children of very wealthy people who were there because they were the children of very wealthy people they weren't the smartest people in the room they weren't the smartest people in their schools not at all the only ones who might have claimed that they were the smartest in the room were people like me who got there even though we didn't have any money even though our parents had no income because we performed well on the tests that were required to get in but most of my classmates who had gone to private schools that were also very expensive and very prestigious I don't know if you know these names but Exeter and Andover and all of the others there was a dizzay a system in this country which everybody should understand in which the wreck rich people take a lot of steps to ensure that their children get every advantage imaginable from the time they are born until they complete their university education they are given tutorials they are allowed to travel they are given help whenever they need it they are given psychological counseling if and when they need it they get the best medical care by the time they get to college it's already over they're already in the track to become the next generation of the wealthiest people there is no way for them to ever know that they are one whit smarter than anybody else because there's never been at any point in their life any kind of comparison any kind of test between them and those without the money to determine who is the better bet to go to the university who will make the better scientist or doctor or teacher or lawyer or whatever you want this is all done in a tracking system in which those who are the riches get the majority of positions are there a few people who are not rich who can climb in yes there always are a few but the argument that those who get the big money are in some sense more equipped more skilled more true it's just not true it's just a an attempt to make it reasonable because it is fundamentally so unreasonable that you have to come up with these kinds of Thinley quickly developed rationales I want to switch gear here and talk about the bigger picture in terms of economics the implications of qawaid 19 government's have responded with massive stimulus packages benefits and even laws have been implemented that have redirected in Westman and production into the health sector in Germany for example small and medium-sized businesses are being helped out and Spain the ubi universal basic income is being passed I've heard that in the u.s. a cheque of $1,200 for a couple of weeks have been given how do you assess the economic implications and do the response of governments go far enough to address this crisis the response of the governments is almost in every case too little and too late but I will call focus on the United States because that's what I know best the response here is somewhere between absurd and disgusting and let me explain the Federal Reserve is pumping trillions of dollars into the economy basically by making money available and the US Treasury is doing what we call fiscal policy by pumping two and a half trillion dollars of money that they will have to borrow in order to spend more than they take in and it may be more than that here's the fundamental problem this money is being given to overwhelmingly to employers a very important understand large employers small employers and medium employers most of that money is being given to them and they are being told please do what is socially useful whatever that means in a in a few cases they are being told you cannot do this with the money but you must do that with the money but it is very easy if you have ever been in the position of owning and operating a business to move the money around to accommodate for what the government gives you by using money you would have used for that for something else etc etc the problem with our economic collapse is the decisions made by employers is what got us into this mess in the first place it is bizarre bizarre to respond to the failure of the decision-making apparatus of capitalism by giving untold amounts of money to the same decision-making apparatus that means you have learned nothing and let me drive it home this way the current collapse of capitalism in the United States is the third crash of capitalism in the 21st century in the spring of 2000 we had what came to be called the dot-com crisis in 2008 and 9 we had what came to be called the subprime mortgage crisis and now we have the corona crisis well it's interesting that the people who want to defend capitalism always named the crisis for something that started it as if the capitalist system is a kind of pure victim of an external crash this is if you pardon my crude English what we call here it is nonsense let me explain the dot-com crisis happened because the stock prices of dot-com companies were crazy these were companies who had never made any profit but whose stock price was very high was this the first time that the stock market had stocks that were irrationally I know that's at least three centuries old the price of tulips in England in the 1720 was too high for the market same thing in two thousand eight and nine we have had periods of time where significant numbers of people borrowed money to buy homes mortgages which they then could not pay so the capitalism has had that problem many time and as I told you before this is not the first virus dangerous to human beings that we have had in 1918 we had what we call the Spanish flu here in the United States it killed 700,000 people which at that time that would be a disaster now but then when the country was much smaller it was a much bigger disaster so we know that in each case we either are ready and we can overcome it which we've done or we aren't ready and we can't overcome it but this crisis is at least as much a result of the vulnerability of capitalism of the failure of our economic system as it is the result of whatever this time triggered it's a difference between a trigger and the collapse a healthy body can handle the coronavirus if you look at who dies from the coronavirus you will very often discover people whose physical situation wasn't very good in the first place had it been better they would at least have had a better chance to survive that's true of our economic system as well so for me here's what I see after the.com crisis in the spring of 2000 the Federal Reserve pumped money into the economy and lowered interest rates as a result by 2008 vast numbers of people had taken the advantage of the extra money and the low interest rate to borrow to buy a home they could not afford and the system had built a whole structure of credit based on those mortgages but that meant that if the mortgages couldn't get paid the system would fall apart ok after 2008 and 9 here's what they did they threw a huge amount of money at the economy they did then pretty much what they are doing now then real only difference is they're doing more of it now it's a bigger financial package or once again they dropped interest rates too literally to zero in Europe below zero you even add and of course here's what happened over the last 10 years every business in the United States small large and medium have solved every economic problem that arose when they chose the wrong investment when they didn't buy the right technology when they hired incompetent people whatever the problem there was always the easiest cheapest way to solve the problem was to borrow limitless amounts of money at virtually no interest every court raishin did it so by the time the coronavirus hit us we had the most enormous level of corporate debt in the history of American capitalism so of course the minute you have a significant number of people who need to save their lives by not going to work then nobody can pay the enormous mountain of debt it's literally that in the United States the capitalist response to the dot-com crisis in 2000 center stage to produce the crisis in 2008 and the steps taken to do that set up the crisis of 2020 and the policies being imposed now learn nothing from those two sequences are continuing to do exactly the same thing putting huge amounts of money into the hands of the tiny minority of the population that are employers the vast majority are employees and that will lead to the same sequence the same disaster only bigger with each of these gets bigger it is irrationality on a stupefying scale one last points the give you the arithmetic the median income of an American household is about $60,000 that works out to about $1,200 a week okay the government which had shut down most workplaces for about a month now has decided to give workers who have not earned money for a month $1,200 that's the equivalent of one week we are now being told that most jobs will not open until at least May 15th okay so that would mean something on the order of eight weeks without income and they're giving everybody one week's worth of income the amount of money being given to average people is an insult and the amount of money being given to employers again is it is makes the insult even worse so I want to again pick up the new liberal argument here and I apologize if I do but I think it's for the sake of objectivity I think it's quite important the argument would be if you hand out money to just people it would increase the money supply whereas the production of goods and services that employers facilities and businesses produce is rolling back and if the money supply increases in the hands of people whereas the production of goods and services rolling back that could lead to inflation or hyperinflation and another argument that I usually hear is that giving money to they usually call this demand supply a demand side economy could you correct when this is called demand a supply and if you give it to local people it will go into unproductive hands so could you address these two arguments a whether hyperinflation is coming soon and B whether these policies are now going to increase not efficiency but at the contrary will diminish efficiency and productivity giving money to people who are already rich in the argument that this will eventually lead to production and jobs and incomes that has a name in the United States it's called trickle-down economics okay is it possible that that happens yes but of course it depends on what the people to whom you give the money do with it so let's give you an example we know the answer after 2008 huge amounts of money were given to businesses here's what they did with it they bought back shares of their own stock in the stock market that drove up the price of stocks which for the shareholders was wonderful and it was wonderful for the executives who did it - because their pay is tied to the value of the stocks this was not an increase of efficiency and this didn't create any jobs at all it just produced an inflation but in a very controlled part of the economy namely the stock market all of that extra money pumped into the economy by politicians who told us about the jobs it would create discovered that it didn't that what it did was to create an extraordinary stock market boom an inflation of the stock market starting in two thousand nine and ten which had the following effects inequality went crazy because the minority that owned shares was looking like wonderful and everybody else was suffering because the political class is coming from the same people who own the shares they were able to say see isn't the recovery wonderful mr. Trump goes around the country telling people it's a great economy it never was it was only that the inflation had been concentrated in the stock market which by the way collapsed over the last three weeks because it was sitting on nothing the alternative economic policy is not trickled down but trickle up the opposite that's when you give money to all the mass of people and we know what they do they immediately spend the money they buy more food they buy more clothing they use it for their transportation they use it for their amusements they go out and they spend the money the reason we know that is they don't have any savings anyway they didn't have any savings before they're not gonna have any savings now you're very very confident as an economist that given money to the bottom two-thirds of the income distribution will get you a surge of seiya of spending and what we hope that spending will do let me underscore the word hope we hope the spending will lead the storekeepers of the society the merchants to respond to all that extra money being spent by ordering more goods to be sold for that extra money thereby putting people to work producing those goods but in a free enterprise system capitalism the merchant is allowed to respond to the extra money in people's hands by raising the price rather than getting more goods and services in that case you'll have a general price inflation but the reason for that is not that the government prints money that's simply misunderstanding how an economy works the reason you have an inflation is how capitalists react to the extra money in people's hands if you control that which by the way desperate capitalist societies have done in the past that's called a price control we had that in 1971 here in the United States president at the time Richard Nixon said very important and you've had it in Europe and in Asia too as of tomorrow morning at 8 o'clock if you're a merchant and you raise your price we're going to arrest you and put you in jail you cannot do that well that's a way to do it because you know what that means that the merchant can only respond to the money coming in the front door I having more goods to sell and that's what he will do so the the answer is the government of the United States has simply done what it did before it didn't recognize the failure before it hopes for the same outcome now but it will be more difficult and more painful for the mass of people but the whole idea is to get the stock market booming again because that is the way these crazy people think you deal with this problem and because everyone's a politician for five years by the time this disaster unfolds mr. Trump will be an old man and out of office and a new set of politicians will come in and in all likelihood do the same thing you mentioned price controls and here is again I when I talk to people to say if we have controls whether it's price controls or any sort of control it can lead to a strong state and usually for example if Trump comes into power or we're just seeing now with Viktor Orban during this crisis from Hungary they pass sweeping powers which disempower the Parliament and so do you think it's actually a good suggestion to have these forms of controls and give government power when we know politics can change and lead to authoritarianism no but for me the way that I would rewrite your story a little bit in the history of capitalism the crises produced by that system tend to be resolved in a way that perpetuates the system and when they can't do that then they turn to the fascists and bring them into power there would have been no Hitler without the German business community bringing him into power in the in January of 1933 nobody else not to forget a harsh austerity that created the conditions after World War one in Germany absolutely and the inflation that wiped out the middle class in 1923 but capitalism has this wonderful ability to work its way into a crisis over and over again I told you about the three we've already add in the first 20 years of this century and then to say gee you can't have a different approach because if you do we'll get another Hitler you're bringing the Hitler the Socialists didn't bring this their Hitler the Socialists aren't bringing Viktor Orban or mr. Trump that those are the enemies of socialism my answer is you're not going to prevent the concentration of power in the hands of a dictator under the capitalist system because capitalism produces the crises that create the opportunities for that kind of dictatorial power if they were to do now a price control you're absolutely right that would be even more power for the government which we know will use it to reproduce capitalism because it's been doing that all along you have to have a program that changes things everywhere in society the response is to recognize that this isn't a pandemic from a virus this is a failure of an economic system and the solution is to change the system and one of the ways I would advocate you know this about me is that we recognize that what socialism should have had on the agenda but didn't was to transform the workplace to stop a system in which a tiny minority employers make all the key decisions about what happens in each enterprise and because they have that power because they dispense with the profits they decide what to do with them they're responsible for the system working the way it is to democratize the enterprise creates power in the mass of people at the base of society and that's the best chance we have to prevent the consolidation of fascistic power at the top so I could already imagine an argument on democracy at work that would be this crisis obviously we can talk about context and stuff like that to create good conditions but if we just take this crisis into account just imagine for a second and that in a hospital the chief in charge would have to go to all of his nurses and doctors and say hey let's now decide upon how to do it I mean when you have patients coming in at a rate of hundred and thousands a day how would that effectively work if we just try to put it in practical terms how would you counter that okay let me react honestly with you there's something fun and I know you don't mean this but there's something fundamentally insulting here a group of medical professionals nurses doctors you name it they are smart committed people they can figure out how to handle different moments in the practice of their skill and their profession if you are under the gun and people are flooding into your clinic who are desperately sick here's what you would do because you're not stupid you okay and under these circumstances decisions have to be made quickly by people who understand what's going on so we're going to institute this kind of hierarchy you who've had 20 years of experience are gonna have more power than you who arrived here last week and that's not because you're valuable and you aren't it's it's a rational way to deal with a situation by the same token when you are not under the gun when you are deciding what to order having your stockpile you need to know what the nurse and the orderly because they have a better sense of how often you use a napkin or a swab or a piece of wood and how easy it is to lose them or to have them lose their sterility you need everybody involved even the people who clean up so they can help you how would we clean up if we were suddenly flooded with people you know you need everybody you don't want the doctor at the top to be discussing toilet paper and you don't want the toilet paper specialist to be but the people who work there they know best who has what skill not just who has what credential but who has shown himself or herself to be very effective in a difficult situation who has a greater skill with bloody issues than with bone issues these are things that are known by the group and if you don't establish an artificial hierarchy it's insulting to think that we need some economist I'm one that's ridiculous I'm not competent to make that decision that the doctor should always be in charge that's stupid there are times when that doctors shouldn't be in charge when other people need to have a voice equal to or greater than his because they have the expertise the experience and a collective of people would understand that would do it would explain to the doctor if his if his feelings were hurt look you're a wonderful doctor in these in these in these circumstances but not in the other one and we now need the other one and the nurse over there is the person we're gonna give that job to Richard what most people don't understand is the decision-making power has not only transferred away from the chief of hospitals or doctors the people who are at the workplace but financially nation has had a huge influence shareholders or board of directors which have in most cases not even visited the hospital and are sitting somewhere in New York or Frankfurt and have huge hedge funds controlling the operations the way how much people are paid in hospitals can you talk about how financialization has affected the health care system yeah in a sense it's the peaking if you like of the capitalist system the small think of it this way the small capitalists in a village somewhere who has a dozen employees sure he is under the gun of the profit system he has to make his big Enterprise pay he has to bring in more revenue than he shells out in costs but we all know that he also lives in the same village where his workers do and he has to see them in the street and their children play with his children and maybe he is in the same church that they go to and so he will make decisions sometimes that are not profit maximizing because he has to live with the results of his decisions another way to say this in economics is that the profit is not in fact his bottom line it is only one of several bottom lines and that he as a decision maker is more or less swayed by one or the other of these bottom lines depending on the social context ok when you get to a hedge fund office in Frankfort or Paris or New York these people are no longer in the village and they are no longer small businesses they do nothing but maximize profits they really are the textbook example of capitalism conquer lately realized everything they look at is subjected to one underlying objective maximize profit make the REIT rate of return on invested capital maximum they get rewarded if they do that and they get punished or lose their job if they don't do it and so what it means is we've reached a point in capitalism where the more and more of the decisions are made by people who have only profit as their bottom line and fewer and fewer decisions are made by capitalists who have to include a variety of other objectives as part of their goals that's why I advocate worker coops because I want explicitly to have enterprises operated with multiple different bottom lines which means I am interested in an enterprise that consistently loses money that has higher cost and revenues because in the long run that's a problem but I am equally concerned with an enterprise that provides no security to its workers who can't have the life that says I am confident that I will have a job and an income six months from now a year from now so that I can buy our house or that I can work with my child to go to the University because I will be able to help pay for that for me a worker co-op will have explicitly you will be able to survive and grow if you can show that you provided a more secure job than the next one that will have to be weighed against you may have gotten the lower profit rate but you accomplished this other objective in other words we don't make you live or die on the one criterion of profit I would argue that that has produced the very weaknesses the very vulnerabilities of capitalism so that this alternative is a better response to the needs of the people in an economy than the crazy capitalism which has now reached the point of literally making one criterion and you know in popular culture this is understood here in the United States we have a phrase the almighty dollar when people are driven no longer by the complexity of life but simply by earning money we say they have been captured by the almighty dollar the word almighty being referenced to God or Allah or whoever you believe in the point being it's religious its fanatical its fundamentalist and people understand that just like a human being becomes distorted if all he or she cares about is making money if that's true for the individual it is also true for those collections of individuals we call enterprises I want to talk about globalization concepts such as Just In Time or all the supply chains that use this concept are now freezing a lot of organizations are realizing the value of local and regional production could you talk about globalization briefly just to introduce it to the concept to our viewers and also talk about whether you think that in the future capitalists will see this or even responsible business people will see this as a way of saying okay we cannot have supply chains going to China or Bangladesh and stuff like that well it's interesting that you have rained the sequence of questions this way I would use the immediately preceding conversation to explain this globalization was simply the decision of the profit crazed people to make the most profit and if you can buy something more cheaply from Shanghai then you can from Cincinnati that's what you do all of the other dimensions of this decision are of no interest to you because you are a profit crazed Maximizer you know who has understood this very well the ecological movement because basically what the environmentalists have been saying is what I'm saying but in a more narrow way you shouldn't just maximize profit you should minimize carbon footprint or you should minimize global warming or in other words they are without knowing it they are saying you should have an additional bottom line and sometimes you should go this way rather than maximize profit when you create a global supply chain you are not counting the effect on the environment if a PolitiFact part is produced in Cincinnati but it more expensive than one in China and you shift to the one in China you are now going to have to transport that thing produced in China ten thousand miles across the ocean in a ship that pollutes the water that pollutes the air that burns fossil fuel a bla bla bla bla bla that's gonna have consequences you might be concerned about those consequences and if you are for example pollution well then you can't make a decision to have a global chain simply calculating the profit because that excludes the other objectives but I would go further suppose there's a pandemic and a long-distance chain is no longer workable you're they're not gonna have the means to save the lives of your people then the irrationality becomes overwhelming and that's what we're seeing the swabs you know the long stem things that they put in your nose to determine whether you have the coronavirus most of those for the world were made in a factory in the north of Italy when the virus hit Italy and Italy has been very badly they stopped producing those swabs and we don't have them and that's a very serious problem often when people say to you we can't give you a corona test they have everything but the swab okay it was crazy for the Italians to have only one place it was crazy for the Europeans to rely on the one place in Italy and it was even crazier for the United States to rely on the one pill factory in Italy that decision though is not because people don't plan that's a misunderstanding that's a decision that is made as a direct consequence of the logic of capitalism you maximize profit and then you rely on the ideologue the neoliberal ideologues if you like to spend a mountain of paper a mountain of audio and video to persuade the world that optimising or maximizing profit by some magic maximizes everybody's well-being that's Adam Smith understood this problem when he made the metaphor of the invisible hand if every one of us pursues our own self-interest we don't have to worry that it blows the society up because it will we will all be led as if by an invisible and to the best outcome for everybody that is crazy that is the effort of somebody who's hit a problem in the logic of their thinking can't figure out a solution and so lapses into Jesus will take care of it or Allah will take care of it I understand people's frustration ending up in that kind of logic but if you want to practically solve the problems of life you have to put that away capitalism is a religious economic system instead of God and Allah it has profit maximizing it leads to the same dead end switching to u.s. domestic politics right now Bernie Sanders endorsed Joe Biden even figures on the left like Noam Chomsky have said that Joe Biden's presidency could potentially have more channels of democracy and public participation which could influence policy while are the other the NAFTA split which says we are done with the awarding of lesser two evils how do you see this perspective this reformist perspective i'm rephrasing here i think it's a reformist perspective do you see Chomsky's view as being a way that we can through Biden still influence policy and have more channels like trade unions and nurses unions available to influence policy or Diu are you completely avoiding this debate about and you see both Biden and Trump as part of the same coin no I wouldn't you know I don't phrase it quite that way let me respond I'm very disappointed that Bernie withdrew from the race and I'm even more disappointed that he endorsed by D Biden is better than Trump that seems clear to me but it's almost meaningless because that's such a low bar that the statement is sort of boring almost anybody would have been better than drunk certainly any one of the 20 people who at various times said they wanted to be President in the Democratic Party would have been better than trumpet the who cares yes it's better than Trump and when it comes to voting yeah I suppose we'll vote for Biden because no one's gonna vote for Trump for 20 different reasons but for the left mr. Biden is is a zero there's nothing there is what we call an empty suit this is a an old probably seen aisle representative of an old certainly senile establishment of the Democratic Party this is the Clintons this is Obama and this is all the old apparatus of the Democratic Party who are terrified by by Bernie who had taken money from the corporate elite who are you know the center-left in a in a game with the center-right so for me the job of the left is what it was before only I appreciated Bernie because he strengthened us he did two things number one he taught millions of Americans that they are not alone and that they are not isolated he taught them and he taught the whole world that there's an enormous constituency for anti capitalism and for socialism whatever the vague understanding of those terms and it is vague but he taught the world that the United States is not the place where there can't be socialism that is an enormous step forward for us he also made the daily conversation about socialism acceptable which speaking very personally has opened the door for people like me in a way that did not exist in the totality of my lifetime here in the United States so I feel an enormous debt to Bernie even though I disagree with it and disappointed by his decisions but he built a foundation that we ought to be building on now for the time being those of us who want to build our Bernie a kind of moderate socialism within the Democratic Party I say fine do it and for those of us who want to build outside the Democratic Party build an alternative Socialist Party that can be much more aggressive much more explicit much go much further I say do it my activity will be with the second group personally not the first one I'm not interested in building it inside the Democratic Party but I understand there are many people who are and I would advise those and those that I'm with the ones who want to build independently that people change over time and we need a movement that welcomes people who want to do it in the Democratic Party just like we should welcome people who don't and we should understand that the the problems that will be given by the old established Democrats to those like Bernie or Alexandria Ocasio Cortes or the others like that there will be movement of those people and if they get disappointed by the democratic party their commitment to socialism will bring them to us and we have to welcome that we have to make that as easy a process as possible and I would be I would remind Americans I don't need to do it with your audience to the delink apart is a merger of a wing of the SPD and of the old East Europe Eastern German and that kind of an alliance can also emerge in this country between the socialist wing of the Democratic Party and the independent socialism that is emerging to my last question and this will also be the title of this video is Kovac 19 the end of capitalism or the reviving of socialism there's a joke here in the United States that we Marxists are very proud that we predicted ten of the last four crises so I don't want to get into the business I don't know how where or when capitalism will crash I can tell you this and this is a perspective I share with economists in the middle and on the right this is the worst condition of capitalism in the United States in our lifetimes and we were saying that before the Cova crisis emerged and now we pat ourselves on the back we saw it coming we could see that the inequality being generated here in the united states by capitalism was unsustainable we could see that the ecological collapse I don't know if you saw it this morning was announced the worst drought in the west part of the United States in our history as a nation I mean we cannot continue we have ecological unsustainability we have inequality of sustainability and we now have instability on sustainability the third crash in 20 years is making it easier for me to explain to people that the problem isn't dot-com prices or unpaid mortgages or some virus it's the problem of a system that can't prepare it is the the punchline I'm gonna end with the only reason we didn't have in the United States a stockpile of tests vests gloves masks ventilators hospitals and beds was because it wasn't privately profitable to produce them and to stockpile them in warehouses across the country so they would be where the population centers were they would be ready and available they would be monitored every six months to make sure they weren't disintegrating that they were sterile and clean and all the rest the only reason we didn't have that is that private companies here in the United States who have all the tools equipment necessary to produce them who have all the workers necessary to produce it we have all the warehouses necessary to stock by Allah capitalism profit that's why we didn't produce it and because the government is a neoliberal government completely controlled by private capitalism they believe that the private profit motive is the royal road to prosperity and well-being so instead of coming in to compensate for the failure of the private capitalist system they became instead complicit with it so they didn't have the stockpiles either and so we have tens of thousands of people dead an entire economy flat on its feet because we and this is not a critique of mr. Trump he's the least important we didn't have what was it what should have been available and on top of it we had a government that could not ideologically compensate for this failure because it's in bed with cabinet the problem that's being exposed in this country is the problem of an economic system that doesn't work and in the long run we may well look back on this moment as when that became clear and in that one final point in the 14th century you had an exhausted feudalism and suddenly rats who had fleas brought with them a plague which came to be known as the Black Death or the bubonic plague it killed a third of all of Europe in that time the worst plague in human history that we know of here's the interesting thing it was deadly because feudalism had exhausted people but the but the impact back upon feudalism of the Black Death was the end of feudalism the system that can't handle a virus usually dies that's the lesson capitalism is not handling this and that's not good for the future of capitalism but in that I am NOT going to cry I am rather going to cheer we should both author economists and the co-founder of democracy at work thank you for your time thank you thank you thank you and please send us a link we will definitely post it and promote it and thank you guys for tuning in today don't forget to subscribe to our YouTube channel by clicking on the banner below and to donate so we can continue to produce independent and nonprofit news and analysis my name is Anne Rosa see you guys next time [Music] you you

Channel: acTVism Munich

Views: 193,870

Keywords: corona, coronavirus, corona virus, covid, covid19, covid-19, capitalism corona, corona capitalism, richard wolff corona, richard wolff covid19, bernie sanders, sanders, joe biden, biden, sanders covid19, sanders corona, Bernie Sanders, Joe Biden, richard wolff capitalism, richard wolff socialism, socialism, Socialism, marxism, richard wolff marxism, Richard Wolff capitalism, Richard Wolff socialism, economics, richard wolff economics, richard wolff economic update, richard wolff covid

Id: eVr9hH6aBg0

Length: 74min 56sec (4496 seconds)

Published: Sat Apr 18 2020