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.

What would the effect on the economy be if the US adopted an "open door" immigration policy?

President Trump's attempts to curtail immigration to this country seem likely to have a negative impact on the economy because of the elimination of the potential economic activity these immigrants would have had. His motivations aside, it seems like the general idea behind controlling immigration is to cherry pick from the available worldwide pool of workers to fill perceived needs in the economy and limit the socioeconomic burden surplus labor might place on the country. I have heard advocates for immigrant rights argue that immigrants (including refugees) have in fact a net positive impact on the economy. In the face of these renewed attacks on immigrants, there is a need to develop and articulate new visions for how the US should behave towards people who want to contribute to this country. Could your radio show use an episode to address the economic impacts of immigration to the USA, explore what guided the pre-Trump policy consensus on this issue, and discuss the potential economic effects of adopting an "open door" policy towards immigration to America?

posted an official response

Will do, but a word on the current immigration debate. In fact, immigration, like all such major events/processes has both good and bad effects on both the countries left and the countries arrived at. The debate over the pluses and minuses never ends because they are infinite in number and take many years to play out. The debate is by nature chiefly a distraction from the actual problem upsetting so many, namely the dysfunction of our economic system. However, left-over Cold War taboos make that too difficult for usual politicians, journalists and academics to confront, so debating immigration is the displacement.

2 comments Share

A Progressive, Veto-Proof Congress in 2018?

Dr. Wolff, I think we are in terrible trouble unless Trump sees a large, cohesive opposition group rise up soon and help to elect a Veto-Proof Congress. The Democratic Party seems like a clueless, corrupt bunch. A relative of mine lives in affluent Newport Beach, California and last week a large, spontaneous meeting took place in my relative's home, with people expressing outrage and a desire to do something concrete about the threat we face. What about a national umbrella group composed of and representing people who meet like this and who are focused on a small number of gun versus butter issues that affect huge numbers of people, like Social Security, defense spending, and progressive taxation? Such a group could coordinate nationally over the Internet and by phone, and its membership figures could show politicians that large numbers of people are of like mind. Call it "The House Party."

posted an official response

Many such initiatives are being taken by all sorts of people these days. Time will tell which get support. For me what is key, however, is whether a program for basic change will emerge to galvanize people and focus their energies. Without that, people will wonder whether another massive effort is worthwhile when even if it succeeds against Trump will then face how many more Trumps emerging from the same system in which inequality breeds the billionaires who must buy/corrupt the govt to protect their billions and then the whole sad story of the last few years would repeat itself. Only if that problem is addressed will the sustained effort of oppositional people be tapped and the long sought progress be achieved.

2 comments Share

What do you think of this predicted crash in 2018 due to diminishing energy roi ?

https://medium.com/insurge-intelligence/how-global-economic-growth-will-drown-in-the-oil-glut-after-2018-5c96dec3f13b#.vv7walji0

1 comment Share

Why are you of the few who recognize these issues?

I do not understand why it is that you are of the few who recognize these issues and offer socialism as an answer. I have been listening to you for years now, and much more often since I have become a college student. It cannot be that all of the other economists are corporatists or capitalists; why is it that you are the most popular of marxian economists?

posted an official response

After 1945, the US entered into a Cold War that was waged overwhelmingly by an ideological kind of battle. Any criticism of capitalism was portrayed as treason. Students could not find teachers willing to teach Marx's ideas or other critical traditions. Over time, knowledge of critical economic theories simply vanished within the general population and among academics, journalists, and politicians. Until 2008, as capitalism seemed to be healthy and growing, this cultivated ignorance bothered only a very few people. But since 2008, as capitalism's failings and injustices strike more and more people's lives, an interest in critical approaches revives. For particular reasons, I found graduate school in economics to be a time when the arguments for the superiority of capitalism struck me as seriously inadequate. Once launched in that direction, I followed my interests, encountered and read critical theories and theorists, and so arrived at a critical perspective. The 2008 crash brought me then the audience I had unknowingly been preparing to address for most of my life before that.

3 comments Share

Could you make an economic update segment on the anti-corruption protests in Romania?

These are the biggest protests in Romania since the anti-communist revolution which it mirrors in many ways. The people spontaneously rose up against a government which tried to weaken anti-corruption despite the fact that the government adopted a series of populist measures. Protests happened across the country and were entirely peaceful, with the exception of a single group of hooligans attacking police forces in Bucharest in the first evening of protests, hooligans which many people consider to be instigators, a method used by the same party years ago to break other protests https://www.nytimes.com/2017/02/04/world/europe/romania-protests-corruption.html

posted an official response

That masses of people demand and act on their democratic rights to protest and change their government is an enormous positive not only for Romania but for all the world to see (since it is badly needed in many other countries). While the effort to stop corruption - so obviously exposed in this Romania situation - is important and valuable, for it to succeed it needs to answer a key question: why is governmental corruption so widespread and endemic a problem in modern societies? If that question is not raised and answered, we will endlessly repeat our suffering from corruption and simply explode into mass actions such as those now in Romania again and again. Here, then, is my answer to that question: the capitalist economic system generates such ongoing inequality that it drives the minority of the rich to seek to buy and thereby control the political system to protect their wealth. There lies the core of why corruption is so endemic.

2 comments Share

What do you think about this?

https://www.oxfam.org/en/pressroom/pressreleases/2017-01-16/just-8-men-own-same-wealth-half-world

posted an official response

While there are some technical problems with this specific number, most of the other numbers about global inequality point clearly to the huge and growing inequality that, with a few, very temporary exceptions, has been capitalism's product now for centuries. In 2014 Thomas Piketty published a volume that explained why as well as reviewed the key statistics which he (and his colleague Emanuel Saez at UC-Berkeley) have been developing for decades. For me all this points to and supports one basic line of criticism of capitalism. I would present it this way. The French revolution that ushered capitalism into modern European history had three slogans: liberte, egalite and fraternite. That is, the transition from feudalism to capitalism was to bring the world those three basic values. One reason Marxbecame a critic of capitalism was because he saw that while capitalism had indeed replaced feudalism as the dominant economic sysatem in mid-nineteenth century Europe, it had NOT brought with it equality. Inequality, fostered and worsened by capitalism as a long-term structural tendency, is a profound critique of capitalism; It was and it is today, perhaps more than ever now. And Oxfam keeps producing the data and analysis to prove it.

4 comments Share

Why didn't the top 20 companies make any profit in 2016?

In your monthly update released in november (https://youtu.be/sPDd9cibY9A?t=59m18s), it was excellent how you brought up the fact that the top 20 trading companies were not bringing in any profit due to a lack of trade. But I was hoping you could elaborate a little more on this. What factors do you think are causing this enormous lack of trade and leading to a massive decline of profits in the top 20 trading companies? I know it may not be possible to produce an insight on this matter due to secretive factors that only the trading companies know about. This is like what happened during the 2008 mortgage crisis. Economist knew that banks were lending out huge amounts to corporations to create leverage, but nobody knew that they were relying on mortgages to lend out huge amounts of money - it was a secret. And in that case, it may only be possible to create a post-crisis analysis on why the trading crisis will occur, when it finally blows up. But if there are known factors that you know about, i take a keen interest in learning more about this.

posted an official response

My point there was to highlight that international trade (what carries/profits those companies) had taken a tremendous hit since 2008....as further evidence that the so-called "recovery" was an ideologically and politically promoted misreading of an economic crisis that has cut far more deeply into contemporary global capitalism and lasted far longer (thereby worsening the damage) than anyone foresaw. The decline of mass purchasing power in the advanced countries of western Europe, north America and Japan has badly affected not just those areas but also the newly emerging capitalist industrial powers of China, India, Brazil and so on. The way to see it is in the shipping/trading companies who bear a big part of these "bad effects." There is nothing secret about all this. The problem is the denial or desire of mass media and political leaders to distract the public from what this means by focusing instead on whatever "good economic news" there is. In almost all circumstances, the economy displays both good and bad economic data. the uneven development of economies guarantees that. So the question is how to interpret an always complex or mixed bag of news. But the advertising mentality fixes instead on what sells and so media and political leaders fix our attention on what makes them look best.

3 comments Share

Conflicts between employed and unemployed in worker coop economy

A common criticism of unions is that they work to increase pay and benefits for their members who are established employees at the expense of those who are looking for work. It seems to me that there is the same conflict between the employed and unemployed in the co-op economy, where established worker co-op members have powerful incentives to prevent new entrants to their field from driving down their profits and bargaining power. As a career changer myself, I am interested in knowing how one would balance the needs of the unemployed or underemployed against the interests of co-op members with established careers and undoubtedly much power over hiring decisions.

posted an official response

Unemployment is a basic irrationality that is and always has been intrinsic to capitalism. Neither slavery nor feudalism nor other systems exhibited it. Unemployment exists because employment depends on capitalists' ability to profit from it; if profit opportunities dictate unemployment it happens. In a worker coop economy, the blatant irrationality of unemployment would likely be more widely grasped. Unemployed people continue to eat, dress, inhabit dwellings, etc.; in short they consume while not also producing. The society is unambiguously better off if such folk were kept employed to share their output with the output of others that they consume. The likely ways to achieve no unemployment would be (1) to reduce the work hours of the employed and thereby absorb the unemployed, (2) poll the population to see what needs to be done and employ the unemployed to do that, and so on. Since profits need not and would not be the bottom line, the basic driver of a worker coop-based economic system, profits would not dictate behavior and thus the result of unemployment. In direct response to your question, if unemployed who already consume are employed, there is a net addition to output so that the employed need not and would not suffer any loss of benefits or wages from ending unemployment as indicated.

2 comments Share

First german hospital organized as a worker coop

Dear Richard Wolff, I just stumbled upon an article by Deutschlandradio. This article is about the first german hospital that is organized as a worker coop. It was voted for being the "most popular hospital of eastern germany" and the head of the hospital speaks of the workers as "her bosses". Even though workers are paid a little less than average wages, they are more satisfied than others because they have a feeling of meaning and participation. Unfortunately the article is in german only, I did not find an english source. If you like, I can translate the article for you. Thank you for your work, I am a long-time follower of your economic updates. Greetings from Munich, Germany Benjamin Helgert http://www.deutschlandradiokultur.de/modell-fuer-die-zukunft-beschaeftigte-uebernehmen-ein.1001.de.html?dram:article_id=377833

posted an official response

To Benjamin Helgert: I would be very grateful if you could send us a translation as you suggest. Not only would that help to educate me, but I would then prepare a segment for my weekly radio and TV program, 'Economic Update," that now is broadcast on 75 radio stations and TV stations in New York and san Francisco areas reaching 1.5 million people weekly. Let me thank you in advance.

9 comments Share

Does this article's explanation make sense?

I'm interested in knowing if the economic explanation of this article makes sense http://www.counterpunch.org/2017/02/02/how-we-the-people-were-screwed-by-obamas-bogus-recovery/ Thanks you.

posted an official response

The article's argument that Obama's "recovery" was largely a matter of hyping a poor, slow, limping economy after 2008 is mostly correct. The logic of the article overemphasizes the problem of inflation. Simply put, an inflation can, under certain circumstances, work as well to deepen inequality as the absence of inflation. The willingness of the rest of the world's rich to lend to the US government played an important role here too, as did other factors. The fuller story of how and why the US and world economies have taken so long to recover so little is more complex than the article admits, but the critique of Obama and "recovery" is good.

4 comments Share

How could we transform professional sports leagues into worker co-ops?

With all the recent news about professional sports teams leaving their communities for more profitable venues, I've been thinking about how all these leagues (MLB, NFL, NHL, NBA) are structured (that is, in a capitalistic, top-down fashion). How could we go about reorganizing these leagues in a more democratic way that prioritizes players, fans, and their surrounding communities over profit?

2 comments Share

How would you recommend to read Capital, Volume I?

I'm thinking of reading it with a couple friends. Should we get David Harvey's companion? How about starting at Part 8, then reading from the beginning? etc. Thank you.

posted an official response

Capital - and indeed, all three volumes - is an important book to read because (1) it remains a foundational work in how and why to criticize the capitalist system, (2) it is thus a good balancing companion to the works of Adam Smith and David Ricardo whose foundational works in economics were both highly celebratory of the capitalist system, (3) it can enable you to pursue the vast accumulated literature of Marxian economics. There are several books that can help you work through Marx's Capital and David Harvey's is certainly one of those. Please excuse my immodesty but let me also recommend the chapter devoted to Marx's economics in the following book: R.D. Wolff and S. A. Resnick, Contending Economic Theories: Neoclassical, Keynesian and Marxian (Cambridge: MIT Press 2012). This book also clarifies systematically how Marxian economics differs from the mainstream neoclassical economics and also from Keynesian economics.

Preview the text online or order your examination copy at http://mitpress.mit.edu/CET

2 comments Share

It is looking likely that Donald Trump will roll back financial regulations on banks

you probably caught whiff of this by now, but i would love to hear your take on what will happen in your weekly and/or monthly economic update if trump takes things in this direction, or even took it to it's extremes. How do you think getting rid of the dodd-frank (and possibly many other regulations) could affect both the American and global economy? Do you think this could result in banks exploding in a similar mortgage crisis like what happened in 2008? Sources:

https://www.bloomberg.com/politics/articles/2017-02-03/trump-to-halt-obama-fiduciary-rule-order-review-of-dodd-frank

http://www.reuters.com/article/us-usa-trump-wealth-fiduciary-idUSKBN15I199

1 comment Share

Is a sizeable middle class (50-60-% of population), a natural product of a Capitalist society?

Is a middle class bigger than a relatively few percent of the population, an artificial creation? It seems that in every country ruled by Capitalist elites that never had a "New Deal"-type installation of social programs, poverty dominates and there is a small middle class. Is America's large middle class an artificlal creation via the Democratic-Socialist policies from the New Deal? Does unfettered Capitalism naturally create anything but a SMALL middle class?

1 comment Share

Why have two organizations with basically the same name?

Your organization, Democracy at Work, and the US Federation of Worker Cooperatives's sister Democracy at Work Institute.

posted an official response

Just coincidence; the two organizations have no relationship, never did, and just reflect that the worker coop idea is basically about bringing democracy into the workplace and is an idea whose time has come.

3 comments Share

connect

get updates