Ask Prof. Wolff

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Have a question for Professor Wolff? Want to suggest a topic or article? UPVOTE your favorite questions or submit your own. Top suggestions will be given a video answer on YouTube.
 
Professor Wolff receives hundreds of questions per week covering a wide array of topics, from economics and politics, to historical movements and current events. While Professor Wolff does his best to reply to some questions on Economic Update with Richard D. Wolff, he's received more questions than can be answered individually. Prof. Wolff will now provide video answers to his favorite questions on this page.
 
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Why would a Chinese Steel and Bridge Concern want to buy a music school in suburban New Jersey?

To quote the summation of the link below, "Rider University is unironically announcing that a company that produced steel bridges from 1999-2017 in and around Shanghai has developed a sudden passion for classical singing and sacred music, and is excited to run a higher education conservatory in Princeton, New Jersey and keep them afloat as an angel investor." https://www.reddit.com/r/ChapoTrapHouse/comments/7zhjlk/peak_neoliberalism_private_university_fires_all/

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Can Venezuela revive economically under Marxist economics?

The oil-funded social programs have been devestaed by the downward spiral of oil prices. What can the government do?

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what is your definition of "working class"?

If the majority of people work, and the "middle class" has mostly disappeared, doesn't that make most people "working class"? How do you look at this distinction?

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What becomes of "struggle"?

Unions organized and planned and took concerted, sustained action against the powers that be in the struggle for workers' rights. It seems obvious that it would be a good thing if as many enterprises as possible were organized as co-ops. But you can't organize and agitate and demonstrate and demand that people form worker co-ops. So what organizing, agitating, demonstrating agenda takes the place of the one that used to be directed against owners and the State? What should people be doing who are not working in or forming a worker-owned enterprise?

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Public vs Private Debate

On your most recent economic update, you said that it would cost less to have our utilities become public rather than private. However, how will workers and the now government controlled utilities be as productive if they are not driven by a profit? would this in turn cost more money?

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And we wonder why insurance premiums are so high...

Professor Wolff, I happen to own some CVS stock, so recently I received a half-inch thick (thin paper, small type, dense language) Merger Proposal outlining CVS's purchase of Aetna. Buried in the middle of this document is a section, "Quantification of Potential Payments to Aetna Executive Officers in Connection with the Merger". It lists the compensation to be received by five top Aetna executives as severance. Between the five of them, they will walk away with over 80 million dollars in cash, equity, and benefits. Not for performing anything, or adding any value, but for walking away. It was a sobering experience to read it right there in the actual document, as opposed to in a news report. That's a lot of money to just leak out of the system like that. All the best, David Baldwin Cranston, RI

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Why is Georgism, or geoism, not the correct alternative to modern capitalism?

Hello Professor, I listened to your interview on Chapo Trap House and related to your experiences with university-taught economics. I am an economics major myself, about to graduate, and also dissatisfied with the limited scope of questions modern economics courses try to answer. My personal search for answers did not bring me to Marx, however. They brought me to Henry George and what I consider a better alternative to the status quo, geoism. To me, geoism lacks what I consider the inherent authoritarianism in Marxism. Those things not created by people, location and natural resources/forces, obviously belong to society as a whole. But the things that take individual motivation and effort to exist, "Capital", should belong to those that create it. Without the profit/wage motive, why should anyone put in the extra effort it takes to do the necessary but more skilled work of organizing production? The only other realistic mechanism I can think of to achieve this is a threat of violence by those who have monopolized power through other means than capitalism. This is why I feel that the only "successful" revolutionary socialist experiments have devolved into dictatorships that suppress political and individual rights. There are no other motivations for an individual to put in the extra effort of skilled labor/effort other than a sense of love and duty to society, which seems like a flimsy thing to hang a whole economic system on. The socialization of natural resources, natural forces, land, and location avoid this issue of motivation. They exist outside the effort of individuals and therefore should not be owned privately. Their value comes from society, and should therefore be returned to it. The private theft of socially created wealth that Henry George describes is a much more compelling theory of inequality and poverty than anything I have read from a Marxist perspective. I will admit I have not dived as deep into Marxism as I have Georgism, but I found it hard to explore Marx thoroughly without that question of authoritarianism constantly in the background of my mind. Do you have an explanation that could prove me wrong? Thank you

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Socialist Entrepreneurship

Hello Professor. I thoroughly enjoyed your recent interview on Chapo. I am a democratic socialist and happen to own a small business. It feels very tough to reconcile my left views with running a business in a society with little safety nets for my employees. I try to do the best I can for my employees while still turning a profit in order to keep my enterprise afloat. One example of the challenges I face is that If I pay my staff too much money "on the books" they will be kicked off medicaid. Yet there is no way they could buy private health insurance with the wages I can afford (myself and business partners can not even afford to purchase insurance, I'm lucky enough to have a wife who can put me on her student plan). More than a specific question do you have any advice, resources or suggested reading for an small level entrepreneur who is fed up with capitalism but relies on his business for a living (and enjoys entrepreneurship).

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Your detailed analysis, please.

"Violence In America" Revisited: Back when I was in school there was book called "Violence in America". It provided some interesting insights, but it stopped short of providing a sufficiently full enough economic explanation, within the Capitalist ideology, that could explain why so much violence, as documented in the boo, and subsequently, is so tolerated and why so little is actually done to eliminate the real problems at a root cause level. Why so much that is done actually causes more violence, as a further catalyst, as in the case of the Florida school shooter, rather than being more effective, as it could in theory be made to be. There is a very fundamental problem in that and here is my take on the reasons for it....... it is not what the mass media are getting right, but maybe they are not allowed to get it right. That too can be a factor of how governments serve their purpose, but realizing that their purpose is not always or inevitably what is seems to be. Government cannot do anything to reduce the violence in America because that would harm the profits of the health care industry. It would also harm the profits of other industries, such as those that provide security and surveillance services. Etc. Billions are being made on the basis of government supported violence. You cannot expect that to be put to a stop. Violence is far more than the instances of shootings that make the mass media news. There are literally armies of security guards, surveillance companies, security consultants, psychologists, therapists, trauma teams, health care suppliers, rehabilitation workers, and much more, largely and in some cases entirely dependent on the profitable growth of violence in America. It is big business in America. Without violence you might eliminate a big part of American GDP growth. In fact you could, in theory, throw America into a recession simply on that one factor of its dependence on violence.

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How do coops strike a good d ballance between deliberate voting and quick executive decision making?

A ballance must be reached between being democratic on all important decisions, and being agile when necessary. Its seems a more executive system is naturally quicker to make decisions

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What would a labor debt bailout look like?

This question is related to the logic behind Britain's Labor Parties platform regarding the nationalization of water and rails. Post 9/11 the bush administration advocated reckless credit card use to stimulate the economy. In 2007 they downplayed the economic crisis, attempting to manipulate consumer confidence to keep the bottom from falling out of the economy. In 2008 both parties unilaterally spent public funds on bailing out the banks and corporations responsible for our economic collapse, but completely ignoring the relevance of the deficit spending of labor(and the predatory practices of lending) in salvaging what little there was to salvage of the collapse. Since then labors share of debt has continued to increase as seen in your many points about the net assets of individuals and young families. How would things be different if we had instead used that money to bail out the debtors instead of the lenders? By extension wouldn't the lenders have still been bailed out by proxy without having the assets seized? What about student loans, credit cards, mortgages, etc? It seems that one of the largest issues wage stagnation has created is that individuals deficits are so massive that a pay increase is unlikely to stimulate additional spending. Instead it would be spent on paying down the debt. Additionally the rising interest rates(due to this wonderful tax cut) and the deliberate suppression of inflation has created a usurers paradise. So labor is falling even farther behind.

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21% corporate tax rate and 22 Trillion dollar Capitalist Debt

I want to know if you could expand your economic analysis to include the 22 Trillion dollar capitalist debt with the decrease tax rate to 21% true and immediate effect on our barely recovered economy? If we institute austerity measures today and aggressive payback plan put in place? If we let it go into the People's Republic of China refuse to loan us anymore more as our payback no-return limit of 24 Trillion will officially reached in December 2018. Also, I know you are not a one trick pony, what else to have for the American voter/worker up you sleeve in addition to co-ops? I am quickly becoming a fan. I, too, ran for President in 2016.

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Is crashing the stock market the way to obtain equality?

Dear Dr. Wolff If the stock market crashes SEVERELY is that good or bad? Would that not realistically be a way to de-pump the inflated values out of the insane wealth accumulated by the fraction of the 1%ers? Or would they just pass the bill on to others once again? What would actually and likely happen? Is it a naive question? Best Hank

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Foreign Policy for Sale: Greece’s Dangerous Alliance with Israel

https://www.counterpunch.org/2018/02/09/foreign-policy-for-sale-greeces-dangerous-alliance-with-israel/

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What does the marxian analysis of capitalism really tell us about why capitalism is problematic?

Hi, Dr. Wolff I have a question about your video series “Introduction to Marxian Theory.” I am a concerned leftist with some philosophical training, and I’m finally deciding to try to understand this Marx fellow everybody keeps talking about. Your series is great because it reduces the complexity of Marx’s arguments in Capital. I have some questions though. Let me recap some of the main points of the series. First, you note that Marx was critical of capitalism because its failure to achieve the spirit of the French Revolution mantra: “liberte, egalite, fraternite.” You don’t specify precisely what is meant by the spirit of this mantra, but we can assume it is the kind of society that leftists generally want: where everybody is taken care of because we all work together in solidarity against the urges of individualist greed, fascist violence, racism, sexism, and the rest of it. The Marxian analysis you present does not, in fact, tell us anything about (a) what a desirable or just society would look like or (b) how to achieve that desirable or just society. The Marxian analysis is solely supposed to be just that: an analysis of societies generally and capitalism more specifically to understand, from a certain perspective, how they function. Okay, so now we move on to the analysis. It goes like this. First, we note the empirically universal truth that in every society there are people who work, and there are people who do not. We could instantly raise the question of what counts as “work.” You suggest that some people do not work but instead might “sing for amusement” or they might “stand around with a big stick” to protect the group from violent outsiders. In other words, you seem to say that some kinds of activity should count as “work” and others shouldn’t. I’m not super worried about how to properly draw this distinction, but I do note that at the moment, it is vague without any further elaboration. (You at one point says that work produces the “basic goods and services” of society, but again, it would be controversial at best to say that singing and protecting a border don’t in some obvious sense count as “basic services”). Okay, so then you note the following almost tautological truth: if those who do not work consume, then they must consume surplus value produced by those who work. As an example, if a child does not work but does in fact consume, then the child must be consuming the products of other people’s labor. There does not appear to be any question that this is trivially true. Then, you claim that Marx argues that in every society we can see five different class structures, three of which Marx claims are “exploitative.” Now, this word exploitative does not, in Marx’s usage, imply anything normative. As we will see in a moment, it is merely a word used to designate a particular kind of arrangement. Five types of societies: (1) Communism. In a communist system (communist only in Marx’s usage), a bunch of people (not necessarily all people) work and they themselves distribute the fruits of their labor themselves. They are both the producers and the ones who choose how to distribute their produced things. They make these choices collectively. Now, just to remind my readers, just because Marx calls this arrangement “communism” does not necessarily mean it is good. There could be a communist arrangement in which those who produce and distribute simply ignore their obligations toward those who cannot, or fail, to produce; maybe, for example, they just neglect to take care of their kids! There would be, on Marx’s definition, no reason why this would not still count as a “communist” system. Thus, we must remember that “Communism” in this usage merely designates a system in which a group of people collectively produce and collectively distribute the fruits of their labor. (2) “Ancient” societies. This poorly chosen word designates those societies where each individual is self-sustaining. Each person produces their own goods and their own surplus which they distribute by themselves to whoever they wish. Note also that nothing about this kind of society implies that it is actually desirable or good. (3) Slavery. In slavery, there are slaves and masters. The slaves are themselves the property of the master. Everything the slave produces is “instantly and automatically” the property of the master, and the master may decide how much to give back of the produce, usually enough to keep their property alive. (4) Feudalism. In Feudalism, there are lords and serfs. The serfs are legally (by threat of violence) obliged to work half of their free days on the lord’s lands. Everything that they produce is “instantly and automatically” the property of the lord. The lord decides to whom to distribute the fruits of the serf’s labor. Most everybody except the fascists would probably think slavery and feudalism are unethical systems. We should keep that in mind because if we can identify why those systems are unethical, we can see if that reason would equally apply to the final exploitative system: capitalism (I am actually skeptical such a clean argument will present itself) (5) Capitalism. In capitalism, there is neither lord nor serf, master nor slave. There is instead “employer” and “employee.” The employee is a “free person” who hunts around for a job. Upon finding one, he signs a labor contract under which the employee will work a certain number of hours for a certain wage provided that the employee signs over all rights to decide what happens with the products of his labor. In other words, like Feudalism and Slavery, the what the employee produces is “instantly and automatically” the property of the employer in exchange for a wage. You point out that there is no way that the employer would be willing to pay you wage W unless the work that you do at wage W produces more value for the employer than it does for the employee. We can see that this is true, and thus that in every single labor contract, the value produces is higher than the wage paid. Thus, workers are “exploited.” The difference between the “value” of the labor’s work and their wage is called “surplus value.” Now, I agree thus far. However, you make the argument that the capitalist arrangement flies in the face of liberty and equality because the workers are getting “screwed over.” I do not think this is true simply by virtue of the fact that surplus labor exists. Let me explain. First, let us note that middle managers, upper-level managers, lawyers, accountants, and so on are not themselves directly involved in the production of things. What does the corporate lawyer “produce”? Well clearly, he produces something of value to the whole corporate racket. He produces memos and gives out advice using his expertise in the law. He is himself offered some wage W to do this intellectual work, even though his work does not, in the end, really produce the basic commodities sold by the corporation. Now you say that this lawyer must be paid by the surplus labor of the exploited workers. Well, of course he must be paid with that surplus labor. From where else should we expect the money to come? The corporation doesn’t do anything but sell some widget! Well if the lawyer must be paid by the surplus labor of the worker at the bottom, then he cannot tell merely by the fact that his wage is less than the value he produces that he is “exploited” in any meaningfully moral sense. He should thus not feel that he is not being treated in a way which is inconsistent with “liberte, egalite, fraternite.” Now, I do not see myself as offering a deeply nuanced or interesting objection. I just want to clarify that it is not the mere fact that surplus labor exists that proves that workers are “exploited” in any meaningful moral sense. This then raises the question I am eager to get answered: What does this Marxian analysis do for us, then, if not prove that workers are “exploited” in a meaningful sense? What does it tell us, if anything at all, about why capitalism cannot fulfill the promise of the French Revolution? Note that I agree with you that this whole system is in fact deeply fucked. I am as appalled as anybody that Jeff Bezos’ billions exist, and I have my own criticisms of capitalism from the perspective of property rights. I am right now trying to understand this marxian analysis better to see if it gives us genuine insight to what’s wrong with capitalism. - Jordan

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