Socialism or Capitalism? Arthur Brooks and Richard Wolff Debate

[Music] good afternoon and welcome to the great ideas debate co-hosted by the abigail adams institute and the intercollegiate studies institute my name is danilo petranovic and i work at the abigail adams institute today i will be your moderator abigail adams institute is an independent scholarly institute located in cambridge massachusetts our mission is to offer students at harvard and in the wider boston uh greater boston area access to some of the most important subjects themes and arguments that can be found in the book big books that define or perhaps used to define western tradition before we begin today i would like to express appreciation first of all to our friends at the intercollegiate studies institute for partnering with us to put on today's event thank you to diana davis spencer foundation for providing funds for this event i'd also like to thank mr james davenport of isi mr james caputsi of aei for their leadership in pulling this event together and finally we're deeply grateful to professors brooks and wolf for accepting our invitation sometime in the middle of the last decade we have begun to see consistent data indicating that a striking number of young americans and especially young democrats say that they are more in favor of socialism than capitalism what young people mean by socialism or for that matter capitalism seems to be unclear and inexact but it nevertheless indicates a dissatisfaction with the contemporary state of economic and social affairs our purpose today is to dig a little deeper and look behind these almost totemic terms in order to try to better understand the history and philosophy entailed by these isms our hope is that our two distinguished interlocutors will help us to get to a more constructive place after these next 90 or so minutes so to advance that mission we have framed the resolution and following terms resolved that socialism is preferable to capitalism as an economic system that promotes freedom equality and prosperity the format of the debate is as follows the first speaker will open for between 15 and 20 minutes after the second speaker does the same the first speaker will take no more than 10 minutes to respond and perhaps use this time to pose a direct question to the other speaker the second speaker will then do the same we will then go into the second stage of the debate where i will pose select audience questions to the debaters this will go on for about 30 minutes and the entire event should last somewhere between 90 and 100 minutes students can comment in the chat function that you will see on the right hand side of your screen and you can submit questions by clicking on the q a tab also there and i promise to do my best to get to the best questions before this is over i will now briefly introduce our debaters arthur c brooks is the william henry bloomberg professor of the practice of public leadership at harvard kennedy school and professor of management practice at harvard business school before joining the harvard faculty in july of 2019 he served for 10 years as president of the american enterprise institute a public policy think tank and wash think tank in washington brooks is the author of 11 books including the national bestsellers love your enemies the conservative heart and the road to freedom he's a columnist for the atlantic host of the podcast the art of happiness with arthur brooks and subject of the 2019 documentary film the pursuit in full disclosure professor brooks is a senior fellow at the abigail adams institute richard dewolfe is professor of economics emeritus at the university of massachusetts amherst he is a current he's currently a visiting professor at the graduate program in international affairs at the new school university in new york city his recent publications include contending economic theories neoclassical keynesian and marxian with s resnick and the sickness is the system when capitalism fails to save us from pandemics war itself that's most recent 2020. professor wolf has also taught economics at yale university the city college of the city university of new york and the sorbonne in paris professor wolf's weekly show economic update with richard dewolfe is syndicated over 70 radio stations nationwide nationwide and available for broadcast on free speech tv among other networks in full disclosure professor wolf is harvard college class of 1963. professor wolf uh will go first and we'll speak for about 15 to 20 minutes and professor it's all yours first of all uh thank you to all who worked on producing this event and inviting me to be part of it uh i am flattered and pleased that you are open to this kind of a conversation uh because we are all aware that for most of the last 75 years during that period rightly called the cold war this kind of conversation would have been if not impossible extremely rare i'll try to speak quickly i have a lot of material to cover and i hope that it will be comprehensive i've tried to organize my thoughts that way so let me introduce it there are three parts an introduction the socialist critique of capitalism and then what it is that the socialists in my judgment offer i obviously take the affirmative position on the resolution as it was read so here's first the introduction every economic system in the history of the world that i'm aware of displays the following form it is born it evolves over time and then it dies or passes away tribal economies feudalism slavery whatever you look at conforms more or less to that pattern although it sometimes can be repeated at different moments in history i see no reason whatsoever to imagine that capitalism will not share this basic form and since i know that capitalism was born and i know that it has evolved at least since the 17th century when it began in england in its modern form it would seem to me reasonable to assume that the next stage for capitalism is its passing away and that the logical inference is what we have to talk about is how close to that process we might now be all systems are also similar in having generated as far as we can tell both those who celebrated it and those who criticized it there's nothing unique or distinctive about capitalism in doing that from the very beginning of capitalism whenever you uh designate its origins there were the people who loved it and the people who criticized it and didn't like it people who thought it was the ultimate achievement of the human possibility and those who were convinced we can and we should do better socialism is the most developed critical tradition in relationship to capitalism it has constantly evolved and developed it keeps recurring despite horrendous repressions attacks dismissals of all kind it's clear to me that capitalism's flaws and failures are the basic stimulus to which socialism is the response it's as if socialism were capitalism's shadow nothing guarantees the future of socialism so well and so clearly as the per continuation if you like of capitalism to which it is a response capitalism spread from its 17th century origins in england to western europe and then eventually to the whole world so did socialism it exists now uh in every country on this planet in a variety of forms in every country on this planet in the last 150 years roughly that it has been a formal tradition uh it it demonstrates a spread that few other tendencies or traditions of human thought and practice have achieved it is in short stunning however it is also the case that having spread in historically a short amount of time to societies at such different levels of economic political and cultural development that the tradition is diverse and rich the different cultures have interpreted the ideas of socialism in their own unique ways reflecting where they were in their own development the result is that socialism is a complicated tradition of multiple theories and theoretical movements sometimes clashing sometimes together the most famous and most developed within the socialist tradition is that which takes the name of marx and marxism uh and it has a parallel history to socialism uh and that has to be understood as part of the richness and diversity the tendency to think of socialism in the singular as if it were some body of thought that can be reduced to one train of argument is wrong it's a kind of simple-mindedness that comes really in our country out of the cold war when the bad guys were over there in russia and we were the good guys they were uh bad in their five different dimensions and we were good in those same dimensions this kind of mentality is now fading um none too soon for most of us and i hope that's a view shared by others today having said all that let me turn then to number two what socialism's critique of capitalism uh are and here i'm trying to condense the very different arguments of different groups of people into a few basics so that we can talk in the singular only after i have made clear that it's not the case that socialism is a family if you like a tradition of diverse points of view so here we go with some of the basics the critique of capitalism carries the notion that capitalism in europe at least emerges out of feudalism making some promises that is the leaders of the transition out of feudalism out of the monarchies that were typical of feudalism particularly in its later centuries etc that those leaders whether they were robespierre in france or jefferson in the united states or anyone else you want to pick they made some promises that the transition from a feudal economic system to a capitalist system would bring and i'll use the french words liberte egalite and fraternity liberty equality and brotherhood and the americans might have been thought to have added democracy the french and american revolutions were full of affirmations that these wonderful benefits would come with would be delivered by a transition from a feudal economy lords and serfs to a capitalist economy and the argument of socialism has always been that capitalism failed to deliver on those promises it never has and there's no prospect that it will number two that capitalism has a built-in tendency to produce ever deepening inequality of income and wealth the book by thomas piketty a few years ago makes this point over and over again as do the flow of researchers coming from piketty and syez out of the university of california and berkeley and out of paris occasionally when this inequality goes too far there are popular revolts against it then temporarily it can be stopped or even sometimes reversed but it's only temporary once the capitalists regain their position say after the great depression of the 1930s the inequality resumes deepening and we have a wonderful example of that in the last 40 years here in the united states beyond inequality capitalism is also in the socialist view fundamentally unstable on the average every four to seven years as the national bureau of economic research has shown us it has a a downturn some of them are short and shallow others of them are long and deep every 47 years on average wherever capitalism has settled this is the pattern we have had three in the 21st century uh the one in 2000 so-called.com the one in 2008 so-called prime mortgage uh subprime mortgage excuse me and now this one each one gets a label to distract from the fact that it's built into capitalism so we call it by whatever happens together with it as in for example the covet crash but it is a feature of capitalism that they have tried the capitalists and their supporters to overcome to stop them to control them never has worked we continue to have them we're living in one right now and finally it's a very undemocratic system this is perhaps the most important for this audience and the lack of democracy is located in a particular place the place that distinguishes capitalism from other systems the arrangement in production of an employer and an employee the employer the owner the operator if it's corporate it's a board of directors 10 to 15 20 people they have the power they decide what will be produced how it will be produced where it will be produced and what is done with the profits that the work of everybody helped to produce they are not accountable to the vast majority of the people in an enterprise whom we call employees it is a fundamentally undemocratic way of organizing factories offices and stores it is the opposite of democracy the very accountability we take pride in politically has never been introduced into our economic system and that's capitalism's commitment to an undemocratic organization of its enterprises therefore what has socialism done well socialism has been busy over the last hundred years making experiments trying in different ways depending on which tradition within socialism uh is in a position to do so to establish what comes next what happens when capitalism blows itself up and those experiments are very similar to the experiments made in italian city-states in the low countries in the transition from feudalism to capitalism that transition also took a lot of experiments some of which didn't work out real well but they slowly taught people interested in that tradition what to do and what not to do until they finally got it right and capitalism could become the dominant system and so we have three traditions of socialism to summarize one the most moderate one often called democratic socialism a la bernie sanders or aoc or in europe social democracy here we have private capitalist enterprises but with heavy government controls taxes minimum wages health insurance free schooling it's called capitalism with a human face in europe where they can have some humor about these subjects it's western europe it's scandinavia the second kind of socialism happened when the socialism i just described split that was around the first world war in the russian revolution and a group of socialists went off changed their name called themselves communists and took all of this another step the government wouldn't just regulate private capitalists it would replace them government officials would own and operate enterprises not all of them almost never all of them but more or less important parts of them and then there were reactions of socialists to these first two experiments mainly russia mainly china and the reaction was to come up with another kind of socialism which focused not on the state arguing that the focus on the state was misplaced not the proper target not an important matter how much is private and how much is a state at least not as important as a different matter which is dealing with that undemocratic organization of capitalist enterprises this socialism focuses on the micro level not the macro level on the micro level the argument is simple democratize the enterprise make the enterprise a democratic location or site in society everybody who works in the enterprise one person one vote it's decided democratically by majority vote what will be produced what technology will be used what location for the production will be and what is done with the net revenue surplus or profit take your pick in this perspective the fundamental flaws of capitalism its inequality its instability are linked and derivative from its undemocratic internal organization if you have a tiny group of people at the top making all the key decisions then it isn't surprising that they give to themselves a disproportionate share of whatever the profits or net revenues happen to be and they become very wealthy relative to the employees as we certainly can see and they make their animal spirit decisions about whether to invest or not facing irreducible uncertainty and the need to guess about the future focused on profits and they make profits the bottom line because of course they're the ones who get them and that's what an enterprise should be doing if it's going to serve first and foremost those the minority who sit at the top so the socialism of the 21st century i would argue is not going to be what it was in the 20th but rather a new kind of socialism with a focus on the transformation of the enterprise as a learned lesson from what went well and what went not well in the earlier experiments and i believe that in this country the growing interest in socialism to which i will be glad to speak since i'm part of it uh is a remarkable testimony to the relevance and to the bright future that this perspective has i think it will become more and more popular because in the words of the resolution it's a better road forward and a way to transition from a declining capitalism to a response to the yearning all good people have to do better in the future than we have been able to do in the past thank you thank you professor wolf for the opening of remarks professor brooks thank you daniel and thank you professor wolf i've known professor wolf's work for a long time and i want to first start i want to take the first 30 seconds of my time to recommend his writings to all of you who are watching for those of you who are not familiar with his work and the reason is is basically um this a lot of people particularly those who are on the political right they're used to a a sharp and harsh discourse from the political left of late that is based in fear not in love professor wolf's work is based on love not in fear his objective is entirely to lift people up people who are vulnerable people at the margins of society people who do not have power i think that is incredibly important and in stark contrast to the way that we've undertaken political and economic discourse of late to build up not to tear down so for those of you who are watching uh who consider yourselves to be the political left uh please emulate the kinds of arguments and the way the philosophy of professor wolf and for those of you who are on the political right i'd like you to join me in admiring the way that he argues and in point of fact the way that his mind works around these topics my viewpoints are morally in line with professor wolf's but they're practically very different so the the tenor of my remarks will be based on on my answer to the resolution which is that capitalism is superior to socialism but it must be based in proper morals um i remember the first time that i saw the face of actual world poverty i was a child i grew up in seattle washington in a lower middle class family and i saw a picture in the national geographic magazine in the early 1970s when i was a child of a starving boy in ethiopia it was very common at the time the the national international press was starting to show the the images of a horrible famine in east africa the worst that anybody had ever imagined as a matter of fact although i'm sure that had been worse in history and the boy had a distended belly and flies on his face and he was starving and there was nothing i could do there was nothing that we thought any of us could do those images were haunting to an entire generation of americans that there and and people all over the world of good faith that there was not just inequality there was a grinding sense of injustice about what was going on and there was nothing we could do something was wrong with our economy something was wrong with our entire system well i grew up with that image and and occasionally i would wonder what happened to that boy as i you know went along my own merry way as an american through my 20s and and i was not an economist i was not paying attention to worldwide economic trends i was making my living through my 20s as a musician and if you'd asked me my political point of view was i closer to socialism or capitalism i would say most definitely socialism most definitely because it does have a human face now i didn't have the sophistication that richard just brought to this debate i mean i was a french horn player after all and you can't you hold me to very high economic standards under those circumstances but it gives you an idea of my ideology well in my late twenties i still a musician i happened across a statistic that i could hardly believe which is that from the time that i had seen that photograph of that boy in africa until i was about 30 years old the world population living on a dollar a day or less obviously adjusted for inflation had decreased by 80 percent four-fifths of starvation level poverty had been eliminated in my lifetime since when i was a little kid until i had grown up and i thought to myself i need to get to the bottom of this and i started studying economics i literally changed professions from classical music to economics from the dis from the sublime to the dismal because of this statistic what it was revealing to me meanwhile life expectancy had gone up by 15 infant mortality had gone down by 60 adult literacy had gone up by 23 in my in my lifetime what did that what and what what actually created the miracle that pulled two billion of my sisters and brothers around the world out of poverty and i didn't even know it by the way 70 of americans will tell you today that that poverty and hunger has gotten worse in our lifetime what did it i went for solutions and again my predilection was to find out that it was something like the united nations or the international monetary fund or the world bank or some set of institutions that had relieved world poverty on a massive scale and i looked at the work of economists at the world bank and economists that i deeply came to admire like the spanish economist javier sally martin development economists and they are of a mind that there were five forces that did this fine and this is the consensus opinion they are globalization property rights the rule of law free trade and a culture of free enterprise emanating from the united states and spreading around the world now you might ask yourself what is this actually done to the rich versus the poor what is it done about inequality and the answer is inequality has unambiguously improved over this period it's true that the rich have gotten richer in raw money income in the united states especially of late but in around the world global income inequality has decreased almost every year for 50 years and has plummeted over the past 25 years this is not a story that you get in the press but it is in point of fact true that notwithstanding what capitalism has done for the richest people in the world it has done much much more for the people at the bottom my first lesson was that global free enterprise has indisputably been beneficial for the world's poorest people but but it has also had costs let's not kid ourselves there's a town in kentucky in the in martin county in eastern kentucky called inez kentucky it's a famous place not because there's something going on there particularly but because that's where lyndon b johnson president johnson kicked off his famous war on poverty one day before i was born in 1964. he went to inez kentucky and he walked up on the he was he was the master of of pr i mean he put president obama and president trump to shame how how well he worked with the press he went up on the porch of a a man named tommy fletcher who lived in a tar paper shack and he said i have called for a national war on poverty our objective is total victory now this town is kentucky was one of the poorest places in the united states people were literally starving to death no running water no electricity he came back to washington dc he put a great american name sergeant shriver in in charge of the war on poverty who said we are investing in dignity not doles you would cheer if you heard this he was a great man a patriot well what ensued was the most frustrating war ever you think that there was a quagmire in vietnam or afghanistan this is the ultimate quagmire by the time the war on poverty in the united states which was a wholesale experiment in and greater redistribution of resources and and public programs the poverty rate was about 15 percent today it's about 14.5 percent we've bumped along between 12 and 15 poverty ever since the beginning of the war on poverty while spending 22 trillion dollars poverty is not under these circumstances of redistribution and collectivism at least at a limited scale getting easier to escape it might be easier to bear but we do not have dignity instead of doles we have doles instead of dignity and these are our brothers and sisters to which i object actually serving goals instead of dignity why did this happen why did this happen to aines kentucky why is zionist kentucky still one of the most desperate places in the united states go there today which i did in the filming of a documentary and you'll find that 31 of the adults there are in the workforce why because industries have moved to more economical locations and natural resources and or in cheaper markets and that is one of the side costs of capitalism that that professor wolf is rightly talking about and he's right to talk about it so what's the fair verdict so far i'm trying to create a balanced picture here let me quote president barack obama in a conversation that i had with him he said these words to me in 2015 at georgetown university quote we don't dispute that the free market is the greatest producer of wealth in history it has lifted billions of people out of poverty but there has always been trends in the market in which concentrations of wealth can lead some people being left behind now you may be tempted to say that there's only there's only three options out there option number one is starving children in ethiopia option number two is lifting people out of poverty in ethiopia but people who are desperate in inez kentucky those are the two scenarios we're presented with largely today or or then there's option number three which is socialism at a greater level replacing capitalism i say there's a fourth path and i want to present it to you in in my last few minutes a fourth path that that keeps our treasured free enterprise system that lifts people out of poverty but it changes philosophy it changes policy and it changes culture we need a philosophical shift not just if capitalism is going to survive but whether or not our culture as we currently know it will survive see the problem is since the beginning of the war on poverty where we've had kind of a corporate socialism semi-quasi capitalism in the united states is that that we've gone from needing everyone to helping everybody what i admire about richard's position is he's saying we need to need everybody because that's the basis of dignity read between the lines of what he said that's what he was saying dignity is what matters giving people a voice is what matters to give them dignity well we have gone through the welfare system in this country to one in which certain people are needed and other people are simply maintained managed like like liabilities that's how we treat poor people in this country can capitalism help make that possible government can't and government won't is my view or it would have can capitalism make a moral shift like this well if you look back to adam smith he certainly said so we always remember his wealth of nations from 1776 the invisible hand that wasn't his first or best book in 1759 17 years earlier he wrote the theory of moral sentiments where he talked about a population of people dignified to have have markets and what he basically said was you can't have markets without morals we need a system in which we are our brother's keeper is the bottom line and we're not doing that we've forgotten the fact that one of the greatest the greatest systems we've been able to create with the largesse of capitalism is finding a way to help our brothers and sisters we just haven't executed properly because we treat him like liabilities to manage second is policy and this is where i agree with richard wholeheartedly he talks about giving every worker a voice now in socialism that means less ownership by individuals and more by the state but in my capitalism it means more ownership it is absurd that every person in this country the including the person on the on the line at mcdonald's actually does not have ownership in these corporations we don't need to contract ownership to the state we need to expand ownership to all people everybody gets equity at all levels that's more capitalism spread more evenly the second policy is one of human capital i mean isn't it ironic that we're in a in a country that has the best universities in the world and at the same time we have a contraction we have an inequality of human capital and the access to human capital in this country the reason for this is basic classism i'm sure richard shares my view that we're a classist society we're an elitist society that talks about college for all when we should be talking about is developing people as assets and the way to do that is through skill and training expansion getting rid of college for all having a better better system of of vocational and technical education and apprenticeships and retraining for people at all levels that's how to spend public money and a k-12 system that's not strangled by institutions and and syndicalist mentality at the cost of what our kids can can learn and what they deserve and finally we need cultural changes we need a culture that that remembers that openness is what fertilizes a truly entrepreneurial economy that's what makes free enterprise great that that valorizes the entrepreneurial act of immigration that says please come to our country please join us one of self-improvement that says each of us can be the captain of our our startup enterprise which is to say our own lives getting back to the culture of openness immigration self-improvement happiness will dispel the three great myths of capitalism and this is where all end myth number one capitalism is good for the rich and bad for the poor that's wrong capitalism is the greatest improvement that has ever accrued to the global poor myth number two is that the free enterprise system is an unmitigated improvement for the world it's also a myth it's created winners and it's created losers but myth number three is there's nothing we can do to lower the cost of the free enterprise system and so we can only replace it scrap it get rid of it that's a myth there's a lot that we can do with courage and goodwill and unity and with love and if we start there we can solve this problem once and for all thank you thank you very much uh professor brooks and thank you both for staying within the suggested limits professor wolf you have 10 minutes to respond to to professor brooks and perhaps pose a question uh to him if you wish i'm going to take my time to to make some responses they imply questions and then i'll leave it to professor brooks to decide whether to pick up on that or not i appreciate the goodwill that he articulates it is important uh it certainly makes me more comfortable than i have been on occasion in debates like this and i want my responses to be understood where i have disagreements it's not a disagreement based on anything other than appreciation for the tone uh of these inter interchanges so let me begin with this business about uh raising poverty let me offer several considerations before you jump quite to the conclusion that professor brooks articulated first of all by far the most dramatic experience of the last 40 years in terms of overcoming poverty is the experience of the people's republic of china a society that was slow to welcome free enterprise and hedges it about with all manner of limits controls uh etc etc including keeping a large part of the industrial sector of that country as state enterprises but it is remarkable to me and so remarkable to the statistics that are kept about world poverty that if you take china out of the statistical story it doesn't look anywhere near as successful as it does when you include them and this is a society that is not committed morally politically or ideologically to free and private enterprise number one number two they achieved an a level of economic growth uh not only without without a commitment to free capitalism or anything like that it's also that they grew faster than anybody else even though they were not on the receiving end of a foreign aid from the united states which was withheld from them for political and ideological cold war reasons they have demonstrated the ability to grow their economy in a very dramatic way that is an object of envy uh on many other parts of the world number two many of the gains that poor people have made they have had to make with bitter struggles where most of their enemies were capitalists whether it's the minimum wage or a national health service or anywhere else you look that poor people in the past and the present try to improve their situations on the other side is almost always an array of capitalist money and capitalist political power uh so much of the gain has really been despite the capitalist system uh and not quite before it over the last 30 years the average rate of growth of the real wage the average real wage in china has been about four times and over the same period of time the real wage in the united states was stagnant that is a very dramatic difference and if you're concerned about the growth of welfare for the mass of people it would have to affect you in some in some sort of way um let me talk also about this question of the maintaining of poor people giving them money to survive rather than the dignity of a job and an income that pays them for that job this is very very important to me but it seems to me a wonderful example of the socialist critique a rational society socialists have always said is one in which having a decent job at a decent income is a priority for the society a bigger priority than private profitability for capitalists you should identify as any society could all the things it needs and then put everybody to work everybody to work who's an adult and who's healthy and in good mental shape etc producing what it is we have decided democratically is what we need full employment is the logical thing to do we want the output we want people to have a job and decent income let's put them together we don't do that because capitalism holds that rational logical objective hostage we only put people to work if it's privately profitable and if it isn't we don't and they sit there and because they might get really upset about being marginalized and excluded we throw some welfare at them i agree with professor brooks that's an awful failure of a solution people don't need or want that and the rest of the society doesn't need and want it either and it is a stunning critique of capitalism that what nobody wants keeps happening just like those every four to seven year downturns and nobody wants it but our system imposes it on us i used to say to my students at this point in a lecture when you look at the instability of capitalism these crazy downturns like the one in 2008 not the one we're living through now over and over and over again i say to my students looking across the podium if you lived with a roommate as unstable as capitalism you would have moved out long ago and think about why are you staying with an economic system that works this way and finally college for all i love the idea i'm a college professor it kind of makes sense but in our society as we know we don't do that and for an enormous number of young people we require them now to incur debts they cannot reasonably be expected to ever repay as most of them will tell you struggle as they do postpone marriage postpone children postpone the life they would have chosen the career that they would have excelled in because they've got to deal with this burden and then you go to germany a country whose leader angela merkel is only the leader because of the support of the yup socialist party in germany for years and they're not the only country in europe all tuition and all college fees are gone zero all you have to do to get a college degree or an advanced degree is pay for your room and board which you would have had to do anyway but the schooling is free and to drive home what the commitment there was of the socialists who by the way pushed for this and got it over the objection of the capitalists in the country by and large they make it available to anyone on this earth you don't have to be a german citizen to qualify for a free college or graduate education let me conclude with yet another example of what socialists won in this case i'm going to use the example of france just to go different from germany in france once you enter the labor force after high school or college the law the law passed and pushed by socialists requires that every employer give every employee right from the beginning five weeks of paid vacation to recoup themselves you know sort of like a college sabbatical these are commitments to a balance between work and life to a quality of life to a dignity of the person that americans cannot imagine under their system let alone even yet demand socialism is coming here because the difference between what we are doing and what is already available has been demonstrated by socialists and it's even more applicable to this notion of democratizing the enterprise as the number one focus of socialism in the coming years thank you thank you very much uh professor book works on to you uh thank you professor wolf for that really eloquent response to a lot of my remarks and what i'll do is i'll structure my comments partly with reference to your opening statement and partly just answering some of the some of the criticisms that you just leveled um which i think are good criticisms and they're important and and um and i hope i can be compelling my response to begin with um you talked about capitalism as an and a almost a monolithic economic system and a variety of socialisms that's an important construction because it's true that there isn't one socialism and it's true that we're unsophisticated in the way that we understand socialism in this country you presented three models the you know the failed soviet model the at least somewhat successful social democratic model judged as such by the citizens of social democratic countries and then a new model which is largely theoretical um that you described with with largely it's an ownership or or you know worker based more democratic workforce oriented model um but i would like to suggest that capitalism is not monolithic that there are multiple capitalisms as well and the reason is because socialism and capitalism exist on a spectrum and so for example i can give you three different capitalisms there's managed capitalism which is another way of talking about social democracy uh labor markets are much freer in denmark than they are in the united states denmark has always held up as the scenic one on of of social democratic excellence and yet people can be hired and fired much more easily in copenhagen than they can in california they're just guaranteed a 26 an hour minimum wage last time i checked this results in a whole and lots of nice things if and as they say is ira gershwin once wrote nice work if you can get it but it also leads to a number of problems in markets for example that immigrants to denmark for example arabic arabic-speaking immigrants who are not fluent in danish given the fact that almost all labor markets are conducted in danish have something like a 73 percent unemployment rate because they simply cannot earn enough to merit a 26 minimum wage in which case they are on the welfare benefits that you quite appropriately decried as that that which which strips people of their dignity so social democracies aka managed capitalism don't do so well on that count another kind of capitalism is authoritarian capitalism which is what we see in the people's republic of china you're quite correct that this is not the same kind of communist nor or capitalist economic system and yet is responsible for polling not the majority but a minority plurality of the souls out of poverty since 1970s specifically since 1982 with the opening of southern china the people's republic of china have polled approximately 700 million people out of dollar a day poverty adjusted for inflation obviously starvation level poverty here's the problem with that here i mean let's let's celebrate that to begin with that's a wonderful thing i think we all agree that that's great but you and i professor wolf we also agree that there are significant problems with the chinese system repression um oppression the idea of you know slave labor which still exists i mean it's just that the treatment of tibet the threatening of taiwan the way that people are treated who disagree with the government why is that and the answer is because when i talked about the five forces that have pulled people out of poverty i mentioned globalization free trade property rights the rule of law and the culture of entrepreneurship the people's republic of china has tried to make this shift without property rights and rule of law without the institutions of democracy they got as far as they could with a desperately poor population once desperately poor population and a growing middle class but they're stuck in a middle income trap precisely because they haven't taken on the other parts this is not an indictment of the five institutions it's an incomplete case then of course there's corporate capitalism or cronyistic capitalism which we see in argentina places all over south america and many places in the world which stains the idea of free enterprise systems stains the idea that free enterprise system can be a cultural instantiation of the freedom of the human spirit of an entrepreneurial culture because it really is the privilege taking away from the from the people at the margins high genie coefficients of extreme inequality it exists precisely because of the lack of true merit of true freedom of institutions that actually treat people in the same are we perfect in the united states absolutely not i believe we're moving more and more toward the argentine crony capitalist system that's the reason i talked about the philosophical changes the cultural changes and the policy changes that could improve our capitalist system now for your criticisms about capitalism number one about inequality i'll remind us again inequality has fallen worldwide for 35 years and consumption inequality in the united states has stayed flat and consumption inequality is as important as income inequality i dare say the inequality case that that is to be made that leveled against capitalism i think that is more complicated than that and i think the data don't support the the full-on attack of capitalism i think that we uh on the people who believe in free enterprise have made an inadequate case along these lines but i'm trying to make it now second is the instability of capitalism when i look at the social democratic regimes and of late i see the same kind of business cycle and stability i see social democracies suffered in recessions arguably the worst case was iceland in the financial crisis you could say because they fell victim to the vicissitudes of capitalism from the west but you have to admit i think that we all have to admit that the scandinavian economies the best exemplars of social democracy suffered a lot certainly as much as the united states and before that there were recessions and depressions and famines all across the socialist or communist systems which i realize you don't support particularly but it's worth pointing out that the the the 50 million people who've died in the people's republic of china is largely because under communism under maoism there were famines that came from the business cycle or the agricultural cycle and finally authority i want more authority pushed down i agree with you but i don't think socialism is the way to do that i agree that it's not always fair it's it's it's it feels unjust the authority that certain citizens have over other citizens in a in a private sector context but i'm a lot more worried about the arbitrary exercise of authority of governments over individuals that you know when it when when jamie dimon doesn't like a particular employee he can fire that employee from from jpmorgan chase when the means of production are owned by the government that's a person who who crosses the government can be put in jail can be put to death that's a kind of authority a kind of power with which i'm even less comfortable and certainly that is not a hyperbolic case looking back at what happened in the soviet union when unemployment was literally illegal people went to jail because they were unemployed that's a true exercise in raw power and i think that we could probably all agree to regret that power over our human brothers and sisters can we democratize the system can we get the things that you want i believe that we actually can but once again my bottom line is that we need to expand ownership we need to expand free enterprise we need to expand entrepreneurship not contracted thank you well thank you very much professor brooks and and thank you both for some of the back and forth as well in the next 35 minutes or so i i recommend we go to the questions because there are many questions and more are coming uh initially at least we're coming to professor wolf so i'll start there and then i will ask some uh to professor wolfe and there are some that both uh can address i should also say use your judgment and feel free to address uh any question that i pose okay so first uh to professor wolf and a lot of these had to do with workplace democracy i guess your third uh third point uh there a question given the myriad decisions that must be made to run an enterprise particularly as enterprise scale increases professor wolf how can you effectively run a business by employee plebiscite okay let me respond on two levels because i can answer this question as well as comment if it's okay on on one point that professor brooks made this is in no way a purely theoretical proposal working working places enterprises have been democratized in the past they are in the present and they are increasingly doing so as time moves on i could give you and i will in a minute many many examples and perhaps i'll start that way the way you organize that is the same way that you organize the political process you can either do it with a direct democracy as some political processes will work or you can have a representative democracy or a variety of others the same arguments about gee it's a little unwieldy and wow it'll take a long time and not everybody is equally prepared all of those apply to political democracy too yet we've gone ahead and done it and i doubt too many of us are regretful of that i'm certainly not i want to extend the democracy to include the workplace because i believe it should never have been excluded from it i find it bizarre in a country that makes such a big deal of its commitment to democracy that it never applied that so-called value to the workplace you know the workplace is where most adults spend most of their time nine to five five out of seven days of the week in most parts of the world the best hours of the day you're working many more hours you're either recuperating from it or getting ready for it this is a very crucial part of your life and a democratic society really doesn't deserve the label if it excludes the workplace from the democratic commitments that it articulates so yeah i think there would be some difficulties i'm reminded of winston churchill's famous remark that the democratic government is a very sloppy inefficient way it's just better than all the others and for me the same applies i think a democratically run enterprise would never distribute income and wealth the way capitalist enterprises have always done i agree with professor brooks about the morality that ought to govern but i think it's capitalism that is the obstacle to that morality ever being able to trump the profit motive and the collection of more and more property in the hands of fewer and fewer people which is the reality as piketty syez and the others uh have documented next question to professor brooks follows very nicely on that last statement professor wolf [Music] professor brooks capitalism has been around for more than 300 years why has your vision on the moral capitalism never materialized materialize could you please clarify why it is preferable for all people to have equity instead of decision-making power i wouldn't rule out the idea that people should have decision-making power there's true there are workplaces that have this i belong to one i'm a i'm a faculty member at harvard university i vote on things all the time now i don't vote on my own salary um because that would have all kinds of practical inefficiencies and problems and that you know it would be hard as professor wolf quite clearly points out um so there are cases in which this you know the idea of democratizing workplaces can canada should work why is it that you know moral capitalism hasn't taken over well because people are fallen and people are imperfect it's the same reason that good socialism hasn't taken over socialism has been tried again and again and again i mean and it's it's it's not even it's an obvious statement that the soviet union failed that the people's republic of china is ultimately going to you know it's failing the human rights of people and stripping people their human dignity that that cuba is a is an economic joke i mean these are truisms now maybe the the social democratic model aka the managed capitalism model is the middle way that will work for a lot of places under different cultural circumstances but the truth is that we're looking for something better and we have to we have to strive for it the the progress that we're trying to make has to keep in mind that that neither richard's vision nor mine is ever really going to come to pass in an unmitigated way without problems these are projects that we're all working on such that we can create a better life for more people what do i want i want a society that actually does better and gets closer to this goal i realize that sometimes it's going to succeed and sometimes it's not going to succeed and if richard is correct and gets his way sometimes it's going to work and sometimes it isn't we have to get away from this manichaean thinking about our goal-making process in the economic systems or democratic or social systems or or or theologies for that matter i mean manichaeanism was an actual religion that said that it's going to be all black and all white is going to be all good or all bad on the contrary let's set our sails in a particular direction and do the best that we can and we're going to have setbacks and let's keep fighting for this better future together because by the way that journey that progress per se is a great moral good professor well if i saw you had your uh mica music did you want to get into that question or i can can i go to the next one i think it'd probably be better let more of the people their questions sure here's one uh address uh addressed to both of you and and uh uh it's about a question question that i think uh i think correctly uh argues that there's a lot of agreement in at least in these uh in the following area you both mentioned openness helping the poor in the world improving the globe what is the place for nations and local communities in each system which system offers a sense of belonging and community for people can capitalism help us improve the lives of the poor not in ethiopia and not in ethiopia the questioner asks provocatively but within our own community richard would you like to start sure i used to be asked the question you know what in the end what on the most basic level you can think of uh defines socialism across all of its variations and and incompletenesses and the answer that i've come to in my life is that socialism is the yearning for something better and in this case it's the yearning of people caught up in capitalism who say to themselves my god life could be better than what it is here we don't have to have the homeless around us we don't have to have the racial uh dilemmas that dog this country from the beginning right to this minute as we all know we don't have to have the inequality the in we don't have to accept what we we can do better the same yearning that was in the heart of a slave or the heart of a serf that yearning is in the heart of an employee and an enlightened employer too who understands that we all might be better off if the system that we were trapped in here was opened up and could change so for me that leads me to respond to this question by saying that socialism in the first place is the commitment to do that to not make it subject to profit profit is not the bottom line profit is not the necessary objective to which everything else is subordinated profit is just one of the many dimensions of any enterprise the feeling of belonging the feeling of solidarity the levels of friendship among people in an enterprise all of those like day care for the young parents for you can go on and make the list of the things we care about a socialist system of the sort i'm in favor of would be the democratic determination of what the whole set of objectives are and in that set profit could be listed but it would never have the dominant and in my judgment destructive role that it has in capitalism uh here and in other countries uh richard's making a lot of sense here um the whole idea that that capitalism would be the only thing that we care about that's insane and that's because that doesn't actually even describe the the the the goals the objectives of human beings i mean the idea that what i care about most is is personally making profit or making money the kind of rank materialism that's you know my specialization as a social scientist is the science of happiness that's what i teach here at harvard and let me tell you you want to become unhappy be a materialist it's the single fastest way that you can be miserable about your life so the key is what how do we set up a system such that people can express these tendencies with the greatest freedom and not and enjoy their work and to have a sense of fraternity inside their work to enjoy the relationships they get in their work and the answer is a relatively free and unfettered labor market existing in a capitalist system and in which people have opportunities to lift themselves up and which there are pathways in which they can earn their success and so my answer to how can we make things better inside the united states and not just better in the than the developing world is that we actually need to return to these ideas of self-improvement in the opportunity society to create more human capital to make people more valuable look 70 percent of people say right now that their best friends or people they know it work 70 of americans say that amer the united states has a higher rate of job satisfaction than virtually any of the european countries including the social democracies now that doesn't mean that we're not deluded and there might be some sort of false consciousness but i don't think so the problem is that not enough people have access to this kind of opportunity not enough people have access to this and when you ask people as i've done with my friends at the gallup polling organization why is it that you enjoy your job the answer is never because i make money richard's right it's because i actually have my friendships there because it makes me happy to be around these people because i'm able to in essence serve others and earn my success and that's what we need to be going for that's how we can solve this problem and that actually is no small part of how we can create more community richard and i are not that far apart well if i could push back just a bit i think when you divide people into employer and employee which is what labor market refers to you are already on the slippery slope to the to the wrong end of this game you are in fact creating a subgroup in the community the employer who has an interest in maximizing profit because the employer is the one who gets it and whatever the employee may want in the way of friendship or all the other values we might have as a community the lack of democracy means that the desires of the workers does not play anything like the role of the desires of the employer that's the only reason we maximize profits the economics profession is designed and i'm part of it to teach people that by making the profit maximum somehow the best for everybody will be achieved that's that's a crazy rationalization of a fundamentally unjust arrangement but capitalism is the problem when we make employers and employees we create the basis for making the profit which is what the employers get the thing that has to be maximized and that subordinates what everybody else needs you can struggle to have a friend in the workplace but you're struggling against a system rather than having the system facilitate what it should have facilitated in the first place which is a democratic arrangement for what all the objectives are that the enterprise experience ought to achieve professor wolf question for you is socialism compatible with charity as a free non-coerced personal gift to the less fortunate if so how and under what conditions contexts and policy i think it's fair to say it's an interesting question i think it's fair to say that socialists have always been look to scance let me say at charity because of the the the history of charity being a way for people with wealth to feel less guilty about their fellow citizens lack of wealth by throwing a coin at the beggar uh it's not too cl it's not clear who's the bigger winner of this game the beggar with the coin or you with the relieved guilt that we wouldn't we should react to charity by saying it should never be necessary in other words people should be given the dignity of having a job having a contribution to make being rewarded reasonably for doing so then if there will be free will gifts among people fine but they will not have the aroma or maybe i should better say the odor of the inequality that usually is the way that charity is arranged i'll add that attitudes about economic redistribution and collectivism are the one of the greatest predictors of charitable private charitable giving people who say they want the government to do more to redistribute income that they want a more socialist system in the united states than the least likely to give charitably to give their time charitably to give their money charitably to give their blood charitably these are just facts that we actually see in the data now part of that can be because of the odor but i dare say that you know there shouldn't be too much odor about blood donations there shouldn't be that much odor about you know volunteering to to clean up a park um to volunteer inside of society and yet the idea of collectivism it tends to do something it seems and you know from my point of view as a behavioralist i would say that it does something to motivation it does something to the human spirit it takes away the sense of of agency from people as problem solvers one of the studies that i've done i've done a lot of work on as as a researcher over the years is the happiness that actually comes from charitable behavior which i find is the best single thing that you can do is my column in the atlantic this very morning was this is how you can buy happiness is by helping somebody else with your money give away your money the trouble is that if you reduce the idea of transfers of money only to the sort of the desiccated technocratic machine of government redressing differences that people have in their lives you make people into cogs in that machine and this is of course one of the long-standing criticisms that people have had of socialism and its inability to describe the human experience it it tends to strip people of this humanity of voluntary help that they have of each other of the agency that comes from from indeed being your brother's keeper i think that that we don't have to make that decision i don't think that necessarily that perhaps richard's uh suggestions for a new socialist system would not create that that that that set of incentives but to date the more socialism we have the less charity that we have and i think much much to the detriment of this of the human soul i'm going to fuse a couple of questions here to professor wolf again but professor brooks can of course jump in in the capitalist system professor wolf the enterprise has a responsibility to generate revenue and profits jobs are created in the process how is socialism going to create those jobs if there are no profits and no incentive profit is just a number profit is a number in which you subtract a set of costs by no means all the costs that are involved a subset of the costs and you subtract them from the revenues and you're left with a result it's called the profit it is not necessarily connected to anything nobody in seriously now no one should imagine that having profit is a requirement for producing anything there have been most of the history of the human race there wasn't profit it wasn't conceptualized it wasn't calculated uh it is a big issue of dispute what in fact the profit ever is since people don't agree on what subset of costs you should subtract from revenues to get it it is a mythology of american economics and of neoclassical economics to give this some central place as if it had a universality of what it meant and what it was for human beings can very rationally sit down and decide how much of our time do we want to spend working and how do we want that work to be divided what other goods and services our work should produce for us collectively to consume families do that all the time they allocate labor who's going to clean up what part of the yard saturday afternoon nobody has to earn a profit no calculation has to be made all kinds of decisions have been made by human society all through history when capitalism is gone we will remember with a kind of amazement that people deformed themselves in order to maximize this one thing it's as as if we were looking at an ancient society which never made any decision without first having an in-depth conversation with the god of the tree we look back and we kind of wonder about that we see a certain artistic flair but to take it seriously is an amazement and we will look back on profit in the same way socialist societies have and will be able to solve the problem of what to produce and how to produce it and how to allocate labor uh without any need to calculate one of the peccadillos of neoclassical economic theory question question for uh both of you now i wonder whether this whether the speakers might address the issue of how i.t information technology is transforming the socialism capitalism debate and in particular how it allows china and china's socialism quote now socialism with chinese characteristics to become in effect capitalist and then uh the uh questioner emphasized remember deng o deng always emphasized market elements deng xiaoping is the is the reason for the alleviation of poverty of between 600 and 800 million chinese with the openness that actually came starting in southern china in 1982. so that's the reference that that's that's that's that we're seeing there um the it revolution of course is fundamentally democratizing and flattening the entire planet the that their manufacturing of you know hard goods and localized services makes it a lot harder to be a truly globalized economy but that in which we can connect to anybody any place in the world relatively costlessly and we have services that that that are not geographically bounded and are really hard to define means that anybody can participate in the new entrepreneurial economy in a very big way and so what that's doing of course is lifting up whole parts of the world it's not just china it's also india which is relieved which is responsible for 350 million of the people who've been pulled out of starvation level poverty um since the late 1970s in that case since the worst grips of neruvian socialism under the circumstances which was really a predation um what we find is that people all over the world and by the way probably one of the great next great revolutions which i cheer on is going to be the growing prosperity of of communities all over africa which will be participating in this part of the economy so i think that the it revolution which has a lot of problems to it that's a technocratic revolution that's creating all sorts of of cultural problems around the world we don't have to rehearse that that's a different debate and i i strongly suspect richard and i see that in just the same way but we do have to recognize that it's also an incredibly democratizing economic phenomenon that's going to reward ingenuity in a world that does not require natural resources in a world that does not require transportation and a world does not require physical capital like plants and equipment and i think that that's going to speed up the democrat the development process in places all over the world to the great benefit of the poor i would respond somewhat differently uh coming out of the socialist tradition and the marxist tradition uh we all owe a lot to a german philosopher named hegel who cautioned us to remember that all things are contradictory uh and the i.t revolution will do some things along the lines that professor brooks talks about but it will also enable levels of surveillance levels of control of production level of control of the labor force that capitalists will capitalize on it is not an accident that some of the grossest examples of inequality in the world today uh among billionaires for example the new ones are coming directly out of i.t dominated industries that they are acting like traditional monopolists using i.t to establish and protect their monopolies and so forth and so on i would like to also if i may a comment on a recurring theme here where i think we do disagree and i think it may be important uh to say something about this i don't think these are truisms uh professor brooks and i i guess we we disagree i think there were things that happened in the soviet union that were terrible and that we have to learn never to do again and there were other things in the soviet union that were spectacular and that we could and should learn from and exactly the same in china and exactly the same for any other place the notion that in one case it's all a disaster uh strikes me as a leftover of the cold war that we need uh somehow to get beyond and i think the same thing applies to what professor brooks said that i agree with earlier that there are different kinds of capitalism i would take it further there are different concepts of really what capitalism is for me as an economist capitalism is unique and distinctive because of the employer employee way of organizing the production of goods and services it's distinguished from feudalism because they had something called lord and surf or from slavery that had something called master and slave or from self-employment where one person in a sense played both roles these are the distinctive things not enterprises that are free or state-run because all of those systems had that and not markets because again all of those systems displayed markets all over the place this distinctive thing about capitalism is that division of the people within production not into a democratic collective to make decisions that way but into a dichotomized employer minority totally dominating the employee majority you know we got rid of kings and subjects centuries ago but we didn't really they just slipped by and entered the enterprise where little fiefdoms and kingdoms of ceos etc perpetuated themselves so we still have to confront them now and shake our heads when we realize that having left the undemocratic enterprise to itself it's terribly difficult to get a real democracy going even in the political sphere where we at least got the forms which is why the socialism of the future focuses on democratizing that neglected part which is the enterprise i i i make a comment about the um the idea that there's a nuanced cost-benefit analysis about the soviet union in china my i i have a lot stronger opinion about that um china in in china during the communist times is a direct result of economic and and and authoritarian government policies 50 million of their own citizens perished in the soviet union 30 million of their own citizens perished largely having to do with repression starvation uh labor camp deaths gulags the complete suppression of human rights i think it's something that we can all agree to unilaterally regret now let's get into the you know the what we would think of today as you know the things that we're worried about we we're we we're quite quite correctly worried about environmental degradation and the policies that we have in the united states there is no example of environmental degradation that comes even close to what happened during soviet times in the ussr or to china today where there are a million dead pigs floating down the yellow river uh where you actually will see entire an entire mountain disappear under central planning policy these are things that are unthinkable to us even by modern standards so i would say that it's not a nuanced cost benefit analysis i it would be of course inaccurate because anybody who tells you that anything is all benefits and no costs or all costs and no benefits is lying to you but the costs of these systems are just the human cost the environmental costs the cost in human rights the cost and dignity are so vast that i think we should all regret them in a very big way second both of those regimes the ussr and and the prc started on the arguments that were pretty close to richard's arguments about trying to run countries and companies like families the idea that the profit motive is is not necessarily the is something that we have to look out for that that we can get beyond the idea that we can run things like a community and and as a commune and that we can be we can count on people not being selfish i think that that i wish it were true i mean i certainly ran a socialist organization called my family um where it was from each according to his ability except for my teenage kids who did not perform up to their their abilities and to each according to his needs but the truth is it doesn't scale that's the problem i wish it did i really wish it did it doesn't scale up and the result is that we keep promising this we keep being promised this and it doesn't work and it doesn't work and it doesn't work again and so what we we're left with is basic market systems where we shave off the worst parts the things that we don't like or we try to solve the market failures and it's not perfect but it's better and i think that we can continue to do better if i could respond because i i guess we are somehow coming perhaps in a way a bit full circle and and because we've been nice to each other maybe a little disagreement will be a good balancer i've always been amazed at this counting the dead mechanism of social criticism uh i really i find it strange if i were to engage in that kind of activity i don't but if i were i would start by talking about four or 500 years or at least 350 of capitalist imperialism in every corner of the world the first book i ever wrote was a history of of colonialism in kenya in east africa the british arrived there in 1895 set up a colony and proceeded to do a census they had about 4 million people in 1930 they did another one and they had about two and a half million people my guess is and i'm one of the few authorities on it that they they literally extinguished the lives one way or another of millions of people and that's in one small country lord knows what a calculation would do in india or any of the other places where the british or the germans or the french or the portuguese did their thing as they were moving from feudalism to capitalism then i would add world wars one which had nothing to do with any socialist society and world war ii which didn't have much to do with the soviet union other than being the victim of the nazi invasion and i would add up all those millions of people and talk about them as the responsibility or the costs of capitalism and then i would go on and i would get other numbers i don't know uh opioid victims in the united states uh the fact that this country has four percent of the world's population and 20 percent of the world's deaths from kovid i would go on and on and i would talk about all of this as somehow arguing that we therefore don't have to pay attention to what the achievements of the united states were that would be outrageous i don't want to deny all those other things and i'm sure no one does but i think their use as some kind of a basis for a wholesale dismissal is a mistake the most rapidly growing gdp in the 20th century was that of the soviet union and the most rapidly growing gdp in this century is that of the people's republic of china that doesn't excuse bad things that happened in the past or that are happening now but it is a peculiar kind of calculus the chinese seem to be doing something awful to muslims in the uighur section but to hear the criticism from the united states which has just waged a 20-year war on two muslim countries iraq and afghanistan is a bizarre mode of debate or discussion these are complicated situations no one is asking anyone to absolve anyone but the counting of the dead is a strange thing to use as a basis for anything other than looking at one dimension but it can't be used as the kind of wholesale denigration of what this was and i won't even go into the earlier historical examples but they are the same sort mr wolfe i'm just going to try to get one more question in at the time we have it maybe we'll go a few minutes over technically three minutes left but maybe we can go a little bit over so sure another area of agreement that i think we we saw here today was i think arthur put it once this way both of you put it in such this way both of you want to see authority you want to push it down go to the sort of lowest lowest level or more basic basic uh basic level here interestingly so capitalism and socialism are terms that both gain currency in the early 19th century as both of you know later in that century as well another uh term uh gained currency and this is sometimes been thought of as the third way and this is sometimes called uh corporatism this this uh this other syste this other way of seeing the corporatist solutions to various social economic crises what do you think what is your position towards corporatism uh uh professor wolf and professor brooks maybe we can we can get that question in as well well my my usual reaction is to do something we don't have time to do which is to ask people what in the world they mean by corporatism uh it can be inflected towards fascism if you like on one hand it can be inflected uh in altogether different non-right-wing directions as well we don't have the time my instinct is it's a distraction for me as i tried to suggest a few moments ago what is distinctive about capitalism is the use of the division of the workplace into a dominant minority the employer and his her designates and the vast majority the employees whether you set that up as a purely contractual uh interaction as in neoclassical theory and and basic defenses like that or you think of it as a family a corporate in the sense of body all of which is unified in some way when you hold on to that employer employee relationship you are not letting go of a distinctive capitalist nature that's why professor brooks and i agree in some ways about china because in their state enterprises like in their private enterprises the employer employee dichotomy is maintained as it was in the soviet union and that is why the new directions of socialism are critical of these state-focused adjustments because they want to go after that relationship so introducing variations like corporatism is unhelpful because it distracts from that which folks like me want to focus attention on which is the undemocratic nature of capitalist enterprises and the goal of socialism to go somewhere new and different and bring democracy finally to the workplace i i you know i agree with the framing of the problem that richard brings to it i mean it's like i almost i was going to say if he had stopped after the first 90 seconds i would have said what he said but um but but of course the follow-on is what i disagree with corporatism as far as i'm concerned is a is a complete negation of the opportunity society giving power to entrenched existing organizations and and their and their proxies of course you define it how you want is it argentina is it you know fascist italy is it something else in between the bottom line is that when you have a most of the time when you talk about corporatism you have you have a situation like you often have in france today where the government and the representatives of unions and the representatives of the empresarios get together and kind of decide who's going to do what that is completely antithetical as far as i'm concerned to competition to an opportunity society to a meritocracy to excellence to striving to everything else in between because who is locked out it's the immigrant who doesn't belong to a union who's locked out it's a small business person who's trying to get in and and can't because there's no space left by the major you know expansive corpulent organizations corporations the people that are being under the boot of the of the of the bureaucratic society and its and its adjuncts in unions and large corporations so i i couldn't be a whole lot less complementary of corporatism and as as it has been instantiated or as most people would describe it thank you professor brooks as well let me maybe invite you to uh wrap it up as it were if you wanted to have any closing statement sounds awfully formal but if you want to encapsulate or reflect on this debate i would like to give you each an opportunity to do this now professor brooks do you want to start first sure i'd be i'd be delighted to start again you know where i'm going to finish where i began which is thanking richard for coming to our community here um the the abigail adams institute which does really fine work and people here in the harvard community who are probably the majority of those who are watching us today thank you richard for your generosity and your openness and and furthermore for your deep thinking and intellect on these matters um i find your arguments really very actually quite persuasive and and we disagree on most but we just we also agree on certain things and i appreciate that very much the main point that i want to make from any economic system the main thing that i want is not money power fame these are idols these are materialistic idols i want what joseph schumpeter talked about he was the godfather of you know economic godfather of of entrepreneurship understood he was an economics professor here at harvard university and for for years he talked about the dignity the imagination the adventure that actually comes from economic activity but only when people have true opportunity when people can earn their success when people can find a pathway to their accomplishment i believe that capitalism provides the best possible opportunity for that and so ultimately while it's not perfect we can make it better and my argument is never that it should be an almost religious fervor for profit per se on the contrary it's something much more sacred than that is the human striving for dignity that comes from not learning helplessness not being helpless to the whims of either corporations or governments but to earn one's own success and to the extent that we can continue to live up to the promise the capitalist promise of an entrepreneurial society an opportunity society for all of us all of us watching here all of us ambitious riffraff can do that then dignity becomes a little bit closer my striving is going to be to continue to improve capitalism so it lives up to its ultimate promise all right let me let me start by picking up on a theme but taking it in a different direction a theme raised by professor brooks i have often taught economics courses where i gave my students readings from joseph schumpeter he was a very very important intellect and indeed his famous book on the history of economic thought is one of the greatest compendiums of our discipline ever produced he often in private conversation by the way referred to himself as a socialist just for the footnote one of his best students uh closest to him was a another graduate of harvard named paul sweezey who also taught at harvard in the economics department but when mccarthyism came in the 1950s harvard with a lack of courage that is a shame to it to this day fired him uh he went on to do very important work in the development of marxian economics schumpeter understood and his student paul sweezey that's s-w-e-e-z-y if you want to look up his books they understood as i tried to say earlier that the fundamental driver of the transition from capitalism to socialism within which we are already engaged is the unacceptability to a growing mass of the employee class in capitalism of this system for too long it has struggled to overcome poverty and it's less able to do that now here in the united states you can play with the statistics on a global level but inside most capitalist countries as the statistics will show you inequality is growing and the difference between what could have been done for the poor of this world over the last 150 years versus what has been done is really what ought to get your ire up millions upon millions of american workers students are laboring under conditions that make capitalism unappealing to them that's why the polling is going uh where it is going when professor brooks rightly said earlier that the difference in consumption hasn't been as big as the difference in income well we all know why because the working class in this country became a pioneer over the last 40 years not in crossing the the prairie with wagons but taking on more personal debt than any working class in the history of the world had ever undertaken drowning in mortgage debt car debt credit card debt and now school debt it's extraordinary to keep people on a level of consumption only at the price of crippling debt the so-called american dream is fading out of reach that will produce the interest in socialism that folks like me are eager to feed to inform and to work with and let me conclude with this i don't take a lot of pleasure in being on the downside of capitalism's history in the united states most of our history as a nation we were in the ascendant period of capitalism and that is a heady experience and that led to mistaken notions of american exceptionalism we're on the way down now and that's either going to be difficult and painful or difficult painful and catastrophic the british are the model detroit is the model regionally for what is happening to us and for me the discussion of socialism is in part an attempt to open the conversation so we have a peaceful and better transition to a new and better system rather than the horrific struggle of those wedded to the old one who can't see beyond it and who are desperate to hold on and i appreciate your invitation and this conversation as a step hopefully in that direction thank you very much for the closing statements thank you for joining us uh this afternoon i would also like to thank now our participants uh who submitted excellent questions i regret not being able to ask more of them there was also a lively chat which i uh have caught up a little bit now towards the end and again there were more questions there perhaps we will find a way to continue this conversation in some other format professors brooks and wolfe thank you very much isi thank you diana davis spencer foundation many thanks and have a good afternoon

Channel: Intercollegiate Studies Institute

Views: 422,099

Keywords: Arthur Brooks, Harvard, Richard Wolff, Socialism, capitalism

Id: 6FwT6qMLjeg

Length: 99min 23sec (5963 seconds)

Published: Tue Jun 01 2021