Ask Prof. Wolff

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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.
 
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Did Marx take thermodynamics into account?

I recently saw this video about value and thermodynamics and it seemed pretty convincing. I would like to hear your thoughts as you are far more educated than I am. https://www.youtube.com/watch?v=f8KhlejNwyU

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Teaching WSDE's in High School Business Academy

I am a U.S. History teacher at a high school that has a business and finance academy. I got the idea that I would like to incorporate a unit on worker self-directed enterprises somehow in the business academy. Is there a curriculum I could use to teach this alternative business model in high school?

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Is the Property Tax a regressive wealth tax?

I just listen to your program on housing. One point I never heard discussed is about how regressive property taxes are. Essentially a property tax is a tax on the value of the property that you own, your property "wealth". Most home owners have a mortgage where the bank owns much of your home, so you are therefore paying a wealth tax on wealth that the bank actually owns. For most Americans, most of their wealth is tied up in their home, but for the wealthy their home (or homes) is usually a small percentage of their total wealth. Therefore a typical American that still owes 50% of his home's value on his mortgage and say pays 5% property tax is actually paying a 10% wealth tax. (You own a $200,000 home but owe $100,000 on the mortgage. You pay $10,000 for a 5% property tax. This is 10% of the actual property wealth you own.) A rich person who only has 10% of his wealth tied up in his home and the rest in financial assets is paying at a 0.5% wealth tax rate. The wealthiest Americans really pay the lowest rates of our only yearly wealth tax. Is this a correct deduction?

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Should there be a cap on total wealth possible for one individual?

Each day I get numerous requests to sign petitions and make contributions to worthy causes. The irony is that it for every problem that is solved, three or more others replace it: WHAT IS THE ROOT CAUSE OF THIS ABSURD SITUATION? The answer is that there are no limits on the total possible wealth one person can accumulate, resulting in the most ambitious wealth-owners being the owners of political power: A person with a billion dollars has 100,000 times more power to lobby and influence politics than a person with $10,000. Indeed, a person seriously dedicated to the 'prime directive' of maximizing his wealth MUST do everything he can to get away with to make that happen, including lying, stealing, cheating, killing, bribing in the form of paying off as many political leaders as they can and even getting them to make laws so as to make this legal, even perverting the whole political, economic, and social system. This leads to increasing destruction of any meaningful sort of democracy. It is the root cause of climate change, war, media control and most of the injustices that pervades this system. If that root cause is not eliminated, it will only become worse. So, if one wants to address the problem, he must work undoing its root cause, rather than a few of its 10,000 effects. A solution to most of the complex problems would come of itself if there were a limit to any individual’s total wealth. Although the minds of many people may at this time not be ready to consider this, the fact that many are now considering seriously a socialist approach as feasible is an indication that the mentality is changing. By educating people (including most economists, who seem to dogmatically accept that the system CANNOT be changed), that will set the wheels of change into motion. So, the question is: should there be a cap on total accumulated wealth? Would that have other effects that would be worse than those of the present system?

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Other Options

Hi, as a strong believer of a free and decent world for every one, I would like you to mention about other options like "JackesFresco's" ideas or the one I would like you to talk about, I hope very soon, which is happening since a while ago in the country of Mondragon's Coop. I am talking about Marinaleda's village and its very peculiar system. Here is a link to help you out on finding out what is going on that village. Thank you very much!

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A Global Currency

I would be interested in Professor Wolff's opinion on the establishment of a single global currency. Get rid of the US dollar, British pound, Japanese Yen sort of like they did in the European Union with the Euro but on a global scale. So a dollar in New York is the same as a dollar in Beijing or London. Thanks

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Soviet Union and North Korea

Why did the Soviet Union fall? Why in satellite photos are there no lights in North Korea, yet South Korea is full of lights?

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10 films that shook the world.

10 early Soviet films are being aired monthly at the L.A. worker's center. Radio spot was short and the best online resource for further information is: www.hollywoodprogressive.com With the 100 anniversary of the russian revolution these classic films are a inspiration and opportunity to meet other likeminded people.

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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?

posted an official response

Perhaps you are jumping over a rather obvious alternative to struggling among alternative ways to use tax structures to offset income inequality, to "redistribute." Such ways came into existence because of the socially explosive dangers that flow from unequal income (and wealth) distributions. Sufficient portions of the rich minority felt and feared those dangers to become persuaded that they needed to part with some of their high incomes/wealth in order better to secure the rest of their incomes/wealth. But such portions varied; sometimes the high income/wealth communities tilted back toward wanting and accepting unequal income/wealth distributions without redistribution or with less than their more generous fellow high income/wealth community members. Then too, the receivers of income/wealth redistribution periodically became angry or rebellious and targeted redistribution as their demands.

Of course, if you think about it for a moment, one obvious alternative to struggles over more versus less redistribution or over this or that tax structure to achieve whatever redistribution is politically agreed (or enforced) is to NOT NEED REDISTRIBUTION IN THE FIRST PLACE. If income and wealth were much more equally distributed, the need for and even the pertinence of redistribution would shrink or vanish and struggles over redistribution likewise. In capitalist systems, as we know, since ultimate power over the distribution of surpluses and profits lies in the hands of a minority (major shareholders and the boards of directors/top executives they select), they unsurprisingly give disproportionate shares of those surpluses and profits to themselves (as dividends, high CEO payscales, etc.). In short, as PIketty's 2014 book showed so nicely, capitalism tends toward ever more unequal distributions of income and wealth. If we go beyond capitalism - for example to an economic system based on worker coops - the distribution of income and wealth would be much, much less unequal since a democratic decision of all workers in each enterprise would make that distributional determination. The resulting far less unequal distribution would obviate the redistribution you are agonized about.

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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. 

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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. ;-)

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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.

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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.

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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.

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