Ask Prof. Wolff

rdw_speaking.png
 
Have a question for Professor Wolff? Want to suggest a topic or article? Post it here! Professor Wolff receives hundreds of questions per week covering a wide array of topics, from economics and socialism, to historical movements and current events. While Professor Wolff does his best to reply to some questions on Economic Updatewe receive more questions than we can handle! Ask Prof. Wolff allows his fans to ask questions publicly and also vote and respond to others questions.
 
Select "Most Recent" to view recently submitted questions. You must be logged in to submit your own.
Please check your e-mail for a link to activate your account.

Taxation as a method of redistribution

There are many partisan ideas behind what causes and how to solve income inequality. The tax structure in the USA has been the preferred method of doing so, although there are and have always been alternatives. Conservatives and Liberals have both come up with intriguing methods of manipulating this system in order to fulfill there agendas and to transform the system into something they are more comfortable with. Most liberals seem to tend towards a progressive tax system while conservatives are in favor of a flat tax system. Even as a self identified socialist I find myself in an odd spot in supporting or at least considering the flat tax system albeit with high taxation. A progressive tax system seems to exacerbate social and financial inequality and focuses on treating the symptoms of the problem rather than dealing with the root cause. In fact I have been considering a flat tax as a means of implementing UBI. Another way conservatives have attempted to manipulate the tax system is through credits/vouchers for healthcare and schools. Once again, these ideas have a basis in treating symptoms rather than actually dealing with the problem. Is there an economic dimension to this that I am missing?

1 comment Share

Re: Labor

Dr. Wolff, in reading your books so far I've come to understand how Marx looked at any community or work force as one group that is actually producing the surplus, and one that isn't. This is very clear, what is not clear to me is how most of us these days fit into this picture. I am an Engineer in the Electronics sector, and as you may know this type of work does require you to actually "produce" the goods that eventually generate the surplus, in fact Engineers layout the "blueprints" of how electronic products are designed, used, manufactured, and so on, but we don't work on the assembly lines that physically produce these products. So, in your assessment where do Engineers fit into Marx's view of labor, surplus producing vs. non-surplus producing?

posted an official response

Marx's value categories are ways of thinking about the economy; they do not map one on one with existing entities in an economy. An engineer - a category developed outside of Marxian value theory - is examined through the lens of Marxian value theory. To do that entails, for example, asking and answering such questions as: (1) does this engineer engage in labor that produces a commodity (good or service); (2) does this engineer produce a surplus, i.e. engage in "surplus" as well as "necessary" labor as Marx defines these terms in Capital; (3) does this engineer receive an income that is a distributed share of the surplus appropriated from other workers. Depending on the answers to such and further, derivative questions, a Marxian "analysis" of the concept "engineer" emerges. Likely this analysis would make distinctions among "engineers" who are producers of surplus and those who are not, among those who received a distributed share of other workers' surpluses and those who do not, and so on.

It is unlikely that you would find a one-to-one mapping/correlation between Marxian value categories and the job description categories that have grown up within and for a capitalist economic system.

 

Such a Marxian value analysis of engineers might have practical political value by identifying which engineers occupy class positions akin to other surplus-producing workers and which do not; this could and should inform union and party organizing approaches to such engineers. And so forth. In short, Marxian analysis seeks to connect any object of its analyses (e.g. "engineers") to issues of class, exploitation, class differences and class conflicts. Value theory does that, whereas alternative theoretical approaches do not. The latter have other political and theoretical goals and thus generate different analytical outcomes. 

2 comments Share

Professor, re: Carlos Slim

Interesting story from a Canadian who had a company in Mexico for 6 years. The PRI party passed the presidency around between the top 18 Mexican 0.1% families for 70+ years. The only way to 'break in' was to either marry in, or kow-tow your way into the 0.1%. Carlos Slim (a descendant of the Lebanese who emigrated to Mexico in the 1920-30's) did very well buying Mexican businesses during downturns and selling them during upswings, but he also courted many politicians and in the 1990's had the chance to buy Telmex (controlling 90% of all phone lines) and Telcel (80% of mobile lines) at a bargain price and then raise the rates to bilk the average citizen. Most of his astounding wealth came from Telmex and Telcel profits. Interestingly, like so many others of the ultrarich money-hoarders, Carlos cannot stop obsessing about making MORE money every day. He is still working daily in his 70's. He cannot help himself as he is an OCD/ADHD, hyper-conservative personality type. They all are, and probably he's a narcissistic psychopath as most of these individuals (see: Donald Trump) are. The 99% need to insist on laws to control these personality types as they cannot help themselves from doing what they do -- NOT because they need the cash, but because they are hard wired from birth to be power/money hoarders. They are addicts and need to be treated as such. ;-)

2 comments Share

Is social democratic reform a worthwhile goal?

If we had a society that had: strong unions to make sure that wages tracked with increasing productivity; high, mid-century-style marginal tax rates for the rich; universal and high-quality free public services; and intervention to minimise the severity of crashes, is that a society that needs to be radically changed by eliminating private property? I suppose my question is, for a young person, do you think it's worthwhile to think about ways that those sort of reforms could be implemented again, and made more resilient? Or, even if those reforms could be revived and made sustainable, would that society still be unlivable because most people are still subject to hierarchical control at work? (Or, is it impossible to make those reforms sustainable and resilient?) I ask because I'm a supporter of a social democratic labour party, and am agonising about moving to a more radical position. Thanks for all the great work that you do.

posted an official response

I think that train has left the station. In capitalism's greatest global meltdown, 1929-1941, critics and victims struggled over the question of reform vs revolution (much as you are doing now). They decided, with some exceptions, on reform. Many reforms were instituted after massive struggles: reforms quite like those you list. But because the capitalist organization of production (shareholders electing boards of directors that make all key enterprise decisions from which employees are 99% excluded) was preserved, the reforms that mass struggles won were weakened, evaded, or eventually repealed by the capitalists who retained the positions, hence socially dominant wealth and power.. That is the history of the half century since most of those reforms were instituted. It turns out that however helpful reforms were and can be, they are fundamentally insecure and temporary so long as not accompanied by a transition beyond the capitalist system. So now we know - deep in the second worst global capitalist meltdown - that only revolutionary change of economic system can secure reforms.

2 comments Share

A meme suggests a badly poured beer is socialism, but I would like to know your take on this...

I suggested that if it were poured by a socialist model business than there are more people who could suggest a change of product, and in a capitalist model only those with owner authority can do so, and if it was their policy to begin with, then it is to the detriment of everyone if they choose not to change it. What is your take on this meme?

posted an official response

The meme is hard to figure out other than ridicule. So let me offer this response: (1) before capitalism, bartenders were known to "water" the beer they sold to make more money, but (2) capitalism made the dilution universal requiring the government to set up and enforce standards on profit-driven capitalists, then (3) capitalists determined to profit from watered beer invented a combination of watered beer and advertising that claimed it was actually diet-focused "light" beer to enable humungous profit from watered beer. Socialism does not require any of that sad and pathetic history of beer.

2 comments Share

What would you recommend to read on the history of the Russian Revolution?

I'll pick up your personal (w/ Resnick) book on the Soviet Union for sure, but what other books should I read? Thank you, Prof Wolff.

1 comment Share

Can mutual aid societies / cooperative medicine work in today's economy?

Good Day, Professor Wolff, I am writing from Tampa, FL. The future of our healthcare situation in the US is of great concern. I have heard you often mention cooperative businesses. The mutual aid societies of Tampa during the earlier part of the 20th century helped many receive "cradle to grave" care. These were pretty much medical cooperatives. I am wondering if this is possibly a future solution to our healthcare economic crisis. Please watch this short video by the Honorable E.J. Salcines. I'd be very interested in hearing your thoughts on this. These societies took care of many of my ancestors in Tampa and I'm thinking if it worked then, could it work now? Thank you. Maria R., Tampa, FL https://youtu.be/ZjKawQ8DGTo

1 comment Share

60 Minutes segment on H-1B visas

Hello again Professor Wolff. I think you'll find this segment from tonight's 60 Minutes interesting: http://www.cbsnews.com/news/are-u-s-jobs-vulnerable-to-workers-with-h-1b-visas/?ftag=CNM-00-10aab7d&linkId=35629150

1 comment Share

Distribution of wealth?

When you are talking about distribution of wealth and surplus in a society what is the border of that society?

posted an official response

I usually (not always) rely on official government statistics or statistics of international organizations that in turn rely on national statistics. Thus the effective borders of the "societies" I discuss and analyze are usually their current national borders (those used by their national statistical agencies).

2 comments Share

Are increased insurance premiums due to insurers greed?

Dear Professor Wolff...All this talk about the horrific "replacement" of ACA and how it is OBVIOUSLY going to AGAIN leave many people unable to afford healthcare, WHY does nobody mention that the insurance companies boast profits only rivaled by oil companies and it is the insurance companies that are raising the premiums and not the ACA???

posted an official response

In the US, insurers (like most other capitalists) always justify increasing their prices (i.e. raising their premiums) by all manner of reasons other than that they want more profits. Even in their financial documents for the investment community, their reports speak about rising profits as results of their "cost-cutting" or "effective marketing" or "penetrating new markets" and so forth. It is simply understood that it is impolitic and even dangerous in terms of a company's public reputation to boast of raising prices to obtain more profits. In fact, that is done all the time, whenever a company thinks it can get more revenues by doing so. A few capitalists, disgusted at the fakery of this pattern, will sometimes shock audiences by saying it outright. But that remains rare.

On the other hand, whenever profits fall, the same companies invariably blame anything and everyone other than themselves. Thus it is unproductive labor or government regulation or changing currency values or rising costs of inputs....whatever seems plausible to hide mistaken decisions made by boards of directors and major shareholders or overpayments of shares of the profit to themselves as shareholders and/or top executives.

So yes, the desire to please shareholders, reward top executives, etc., prices/premiums are raised when they can get away with it (i.e. when market conditions - and/or big advertising campaigns - permit them to raise the prices and even if units sold drop, total sales still yield higher revenues). In short, capitalists greed is usually a part of rising premiums.

2 comments Share

Re-distribution of wealth, what is it, and why it matters

First, thanks for everything, please keep up the good work! I would be interested to see your explanation of tax, what is is for and why it is needed. There is a lot of talk about not taxing corporations, and about a flat tax rate for everyone else. There has also been a lot of talk about removing inheritance taxes. I'd like to see a clear reasoning of why re-distribution of wealth is important, why the U.S. in particular has lost it's way, who taxes are for and why. I think people in the the U.S. especially have no clear vision of why tax matters and why re-distribution of wealth is important for society.

posted an official response

Redistribution of wealth, especially via the tax system, is widely practiced and has been for a long time. Its cause is located in the social consequences of great inequality of wealth distribution: these include social tensions and conflicts between haves and have-nots over the divergent qualities of their lives (and those of their families) depending on where they fit into the distribution of wealth. So basically to keep these tensions and conflicts from exploding into civil war - very dangerous for the wealthy since they are always a small minority where wealth is very unequally distributed - redistribution is demanded by the non-wealthy and accepted by the wealthy as a lesser evil than risking losing their wealth in civil conflict. But redistribution, even after being accepted, is grudgingly accepted, resented, evaded, and eventually undone by the wealthy until, once again, the rest of society rebels and demands redistribution.

Because capitalism as a system has always generated ever wider gaps between the wealthy and everybody else (see work by Thomas Piketty and his fellow economists over recent years), capitalism has been beset by demands for wealth redistribution in virtually every country. The results vary from country to country depending on the relative strengths of political forces, cultural traditions and so on. Tension over redistribution infests every capitalist country. Over time it becomes difficult for people living in them to see the basic absurdity of capitalism plus redistribution. It breeds social tension, conflicts, struggle and eventually violent upheavals.

Far more rational that endless redistribution struggles would be to not distribute unequally in the first place. Then redistribution and all its unwanted social consequences would become unnecessary. But to do that rationally preferable social arrangement requires ending or going beyond capitalism to a system that has built in mechanisms to distribute income and wealth much less unequally than capitalism fro the outset. An economy based on worker coops, where the distribution of net income in each enterprise is decided democratically by all the workers there, would never distribute net incomes chiefly to a few (top executives and major shareholders0 at the expense of the many....and thereby avoid the social need for conflict-ridden struggles over taxes and their redistributive effects.

2 comments Share

How does Postmodernism relate to Marxism?

posted an official response

POstmodernism has been an important movement of thought sweeping through the social sciences and humanities for several decades now. Marxism has been affected by it much as Marxism has been affected by other such movements of thought before postmodernism (such as modernism, existentialism, Darwinian thought, psychology a la Freud, and so on). Likewise Marxism has impacted postmodernism. The results have ranged across the board as postmodernists vary from those who use it to reject and denounce Marxism on over to those who work/think with a kind of synthesis of Marxism and postmodernism. Likewise, among Marxists there are those who use it to reject and denounce postmodernism all the way over to those who find in parts of postmodernism means for a renewal and extension of Marxism. There is no one Marxist attitude/position toward postmodernism, just as there is no one postnmodernist attitude/position toward Marxism.

3 comments Share

Basic information about different kinds of WSDEs and how they handle common situations?

I often mention WSDEs in conversations around the internet in an attempt to try to spread awareness. Not unexpectedly, I often get responses from people who are skeptical that WSDEs can exist, can be competitive, or can handle basic issues like dealing with initial investment, handling different levels of skill or experience between workers, resolve conflicts, or effectively make decisions. In your various programs you often mention papers, studies, websites, and such that speak to these issues. Would you be willing to provide some links that discuss these and go into examples of how WSDEs might handle them, in a manner accessible to a layperson? I'd love to be able to use them to continue discussions, alleviate people's concerns about WSDEs, and demonstrate that there really are alternatives to capitalistic enterprises that people have thought through and that exist in the real world. Thanks in advance!

posted an official response

Many, many studies exist of the Mondragon Cooperative Corporation in Spain that has handled and often solved many of these questions about worker coops. Likewise such studies exist around the huge worker coop sector of the Italian province of Emilia-Romagna. A contemporary business school professor (At Leeds University in the UK) named Virgie Perotin published excellent research on the problems and performances of contemporary worker coops. In the US, the US Federation of Worker Coops provides materials as well. These are starting points for interested folks to learn a great deal in the way of answers to such questions as you raise.

2 comments Share

Adjunct Professors

Professor Wolff, Thank you for keeping listeners apprised of the economic realities of adjunct professors. As an adjunct, I appreciate the facts as well as the public discourse on the issue. Recently, I presented the below paper at a conference to frame adjuncting in a larger historical and economic context. I would appreciate feedback on this perspective: https://www.academia.edu/31616200/Adjuncting_The_Epicenter_of_an_American_Culture_War I'm grateful for all that you do-- thank you!

1 comment Share

American standard of living

Hi Professor Wolff, In your most Economic Update, Housing Crisis US, you mention that the standard of living for the bottom half of Americans has stagnated or dropped over the past 40 years. Do you mind providing a few links that reflect this data? Thanks a ton.

posted an official response

Rather than provide the "few links" that you request, let me go one better and provide you with the link to which most researchers go to get the best facts and figures on income and wealth inequality. The economists Thomas Piketty, Emanuel Saez, and Gabriel Zucman operate a growing research team - much of it based at the University of California - Berkeley - that you can follow via this link: https://eml.berkeley.edu/~saez/ACPSZ2017AEAPP.pdf  All their work is available free to everyone interested.

4 comments Share

connect

get updates