Ask Prof. Wolff

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Daer prof. Wolff

I would really like to hear your opinion on my ideas on how to build better and more stable socio-economic system:šo-tomažič

I am also writing a book on this subject, so your opinion would be very helpful.

Best regards

Sašo Tomažič

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Jill Stein and Student Debt

I'm wondering if you could speak to the viability of Jill Stein's plan for the cancellation of student debt and comment on the accuracy of her statements regarding this plan ( In particular: To what extent is her claim that Wall Street debt was canceled through the use of quantitative easing a valid statement? How likely is it that, if she were elected president, she'd be able to make Federal Reserve appointments in such a way as to ensure her plan gets put into practice, and what kind of time frame would this involve? Would each individual's forgiven debt inevitably be taxed as income? Any insight you could offer into these questions would be welcome. Thanks.

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Economic Calculation Problem

Forgive me if this has already been covered, but I'm wondering if Dr. Wolff is familiar with the economic calculation problem put forward by Mises (et. al.) that allegedly undermines the soundness of any other economic system besides capitalism.

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Commentary on MMT (modern monetary theory)?

Could you please offer your opinions and/or commentary on MMT (modern monetary theory), Hyman Minsky, Warren Mosler, Stephanie Kelton, Randall Wray, Bill Mitchell, etc. and how this explanation of monetary systems might relate to economic democracy and socialism.

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MMT Modern Money Theory, its pros and cons. Why and/or why not? For when you can, these videos are lengthy but fortunately not visually artistically, so you can enjoy listening to them while doing something else, if needed. Am I being too skeptical of this concept? Why is the left (as in the real left) falling in love with this, and why is even Trump himself toying with this concept (or perhaps a version of his own)? I feel, though it sounds good to a certain extent even in practice,(I really would rather be living in an economy using this theory than the one we're in); I feel that it seems to me it'd be like a very large Band-Aid, but still a Band-Aid nonetheless to the economy as it stands. I feel that while we are still in a system where surpluses are still having to be generated for the efficiency of profits, MMT or no MMT, collapse after collapse we will see. Is it too utopian to imagine an MMT transition into a Time Banking/Service Exchange Cooperative Economy? Thank you!

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The Marginal Productivity of Labor and Capital under Capitalism.

Hello Prof. Wolff, you have often referred to capitalism as exploitative to the workers, because the capitalists take the fruits of the workers labor through profit. What do you say to the neoclassical Marginal Revenue Productivity Theory of Wages, which states that wages are equal to a worker's marginal product? Labor is the source of value I suppose, but what about machinery? Doesn't it create value too? If it creates value, wouldn't the capitalist be able to profit off of their machine's value in the long term?

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Is it true that the only way to create money is through debt?

Please review the attached documentary. Is it true that the only way to create money is through debt. Did the producer have an agenda? I feel like this is not the whole story.

posted an official response
Thank you for your question, Joseph. I apologize in advance I do not have the time to watch the entire video, but I will do my best to answer: Debt is the major way that money is created now chiefly by banks (when an individual or enterprise obtains a loan from a bank, the bank simply credits that person or firm's bank checking account with the amount of the loan thereby "creating" money). When governments create money they do the same thing by giving banks loans via crediting their accounts with the government with an additional sum equal to the loan. However, governments can also simply print and distribute money and/or deposit sums of new government-created money into the accounts of persons or firms. Banks have wanted to tightly control the government's money-creating powers lest governments choose ways of increasing or decreasing the money supply in an economy that do not profit banks or, worse still, hurt banks' profits. Limiting money to debt is one way of exerting such control. It is not the only or the necessary way to do it.
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Can there be a sustainable banking sector?

Dear Prof. Wolff: I'm a Swiss Banking student and have been following your content for quite a while now. I'm grateful for your weekly Marxian/progressive content as this important perspective is not represented in conventional media. Here's my question: Could you dedicate one episode of Economic Update towards the financial sector, especially it's banks and how we can make the banking industry work for broad societal goals again? I'm especially interested in what needs to be changed, which business fields are compatible with broad societal interests, what business models of banks would have to adapt and how the banking sector could collaborate with a real economy consisting of more and more worker co-ops. Also I would be glad if my personal data remains anonymous. Yours sincerely.

posted an official response

Thank you for your suggestion. I try to touch on this topic throughout some episodes but will keep this in mind for a more focused episode in the future. Thank you for being a listener.

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Could you please respond to this Michael Parenti lecture?

It's "Reflection On the Overthrow of Communism." It goes from 12.23-20.19 in the audio, although I agree with your logic, Dr. Wolff, what you argue validates what I also have advocated for years. creating and new economic system from the ground up by democratizing the enterprise , "co-ops etc. but Dr. Parenti argues, as do many on the left that a "pure socialism" cannot exist without a strong state etc. Top Down hierarchical centralize state power . maybe you could respond before I die which may be very soon since I have bile duct cancer "incurable" thank you

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Experiments with associated labour in former Yugoslavia

Hello, I worked my whole working life under capitalism and I only needed my first(out of many) days of unpaid overtime to figure out it may not be the best system in the world, but since I was born in a former communist country and spent my early childhood years under communism you can imagine I have a natural suspicion of alternatives to this system. Since you seem to talk a lot about worker cooperatives on your program as a kind of alternative to both systems I wondered what your thoughts were on experiments with cooperatives and so-called associated labour bodies in former Yugoslavia.

posted an official response

The Yugoslav experiments under Tito are among the many efforts at a cooperative economy (others are Mondragon today, Emilia-Romana in Italy today,  kibbutzim in Israel's past, communes in China's past, and so on). We have much to learn from them all. One of the big problems, which played an important role in Yugoslavia too was the tension between the collective/cooperative workplace and the needs of a powerful central state that was so strategically important in the transition from capitalism to socialism as that transition was understood and pursued from 1880 through the end of the 20th century. When state demands were too strong, the worker coop could keep its form but its content became a kind of state capitalism with the role of capitalist being played not be boards of directors (private capitalism) but rather by state officials (state capitalism) dictating to rank and file workers. This argument about the state capitalism's of eastern Europe can be found in detail in the following book: Stephen Resnick and Richard Wolff, Class Theory and History: Capitalism and Communism in the USSR. New York and London: Routledge Publishers, 2002.

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The Economics of the Green Party's Platform

Jill Stein, the presidential nominee of the Green Party, proposes using quantitative easing to erase student debt in a similar fashion to what was done during the bail out for banks in 2008/2009. She also proposes a Green New Deal that will create millions of jobs while addressing the issue of climate change. I'm very curious to hear Richard Wolff's insights into the feasibility of these ideas and their potential outcomes.

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Investment Opportunities to support Worker Owned Enterprises

I'm interested in a couple potential possibilities to support the expanding sector of the economy one might call, "people-powered". Are there investment opportunities that would provide a reasonable return on investment that would support Worker Owned Enterprises/Co-Ops? Thanks, Bill

posted an official response

The simplest answer is yes. Over and over again, worker coops have delivered profits as good or better than conventional capitalist enterprises. Of course, any enterprise entails risks - worker coops as well as capitalist enterprises - but there is no warrant for thinking that the latter are worthwhile investments while the former are not. Here in the US, what an investor needs is some reliable guidance in locating and collaborating with worker coops seeking outside investments. 

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Would like to hear about automation?

Automation is displacing more jobs each day. This tendency will increase as we approach singularity. Some people, such as Ray Kurzweil, think this will happen as early as 2035. My personal fear is a disruption in the circular flow of economy : households provide labour, and corporations provide goods and services. Profesor Ha Joon Chang believes such a quandary can be solved through a social arrangement and that in the long run such thing will be solved ( see link ) , I have my qualms. Even if a social arrangement can be made, but then the problem becomes how to force the government into enact such changes, for it is not uncommon to see the government act on its own benefit while leaving a large sector of the society marginalized.

Reference Ha-Joon Chang: "Economics: The User's Guide" | Talks at Google (44:30 to 47:45)

posted an official response

The only reason thinkers work hard to show that social problems can be solved is because defenders of the status quo - that has failed to solve the problem - insist that the failure is because the problem cannot be solved. Automation is an easily and readily "solved" problem. Throughout history, societies have achieved and incorporated technical change that replaced human labor with various kinds of tools and machines. Capitalism is noteworthy because it has achieved a high rate of technical change if and when it was profitable to do so; it has failed to achieve technical progress when and where profits were not high enough to induce them.

Think of it this way. Imagine a technical change that enables 50 workers to do in a day what before required 100 workers. For simplicity assume further that all wages and non-labor costs were the same and that the output quantity and price were likewise the same (i.e. unchanged). Two alternative possibilities present themselves in this example. For profit, the employer will typically fire 50 workers and install the technical change; his profit rises because he has cut his labor costs in half. The alternative that serves the workers instead of profit would be for all 100 workers to keep their jobs but work exactly half the hours per day that they did before. Their wages would not change, nor would the employer's profit. The technical change would have delivered leisure to the workers without reducing their incomes. If automation were managed for the workers - ie. a socialist approach one might say - it would be welcomed (not resisted) by them and would benefit more and more needy people than what raised profits do. But capitalism controls, directs, and limits technical change/automation to serve its needs while claiming that the resulting unemployment, suffering, etc is somehow intrinsic to technology/automation per se rather than how it is installed and for whose benefit.

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Guaranteed Income for All Americans

Professor Wolff: You have often cited the significant role that automation (robotization) and computerization play in the elimination of good-paying jobs in the United States. Capitalists enthusiastically employ technology that removes workers from production, because machines do not get paid wages, demand profit-eating health insurance, pensions, or benefits, or go on strike. Marx himself noted this phenomenon. I recently had dinner with a neighbor who works for a prominent U.S. manufacturer of industrial robots. He said that according to inside information to which he is privy that within the near future 50% of jobs in the U.S.will be performed by robots. One can imagine that technological advances might even increase this number. My question is what do we do? U.S jobs are disappearing fast, either because of automation or from off-shoring. Is a guaranteed income for all Americans the only answer? Thank you.

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Server Wages and Tip Ethics?

I was wondering what your opinion is of tipping in restaurants. Many servers make as little as $2.13 an hour and consider patrons that do not tip extremely rude. How has capitalism contributed to this phenomenon? I've read that restaurant owners claim that it allows them to charge less for food on the menu, etc. It seems to me that the restaurant industry has managed to exploit a social norm (adding gratuity to a check) to absolve from themselves any complaints concerning wage by their employees. What do you think?

posted an official response

In my view, workers should be paid for the work they do and not be made dependent on a buyer of the restaurant meal who can choose, for whatever reason including reasons unconnected with the waiter's service, to not tip and thereby not pay for the service. If the waiter goes an extra distance to provide services beyond the norm and if the recipient of such extra service wishes to recognize that extra via a tip, fine. But the extra service and the tip strike me as a separate transaction from the basic service and its payment. By the way, the buyer of the basic service of waiting is the restaurant employer who then sells the entire meal experience to the dining client. That should be paid and no tip involved. The tip refers to a payment for something exchanged directly between diner and waiter, a separate transaction covered by a separate payment (tip).

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