Ask Prof. Wolff

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How could resources be allocated to support risky innovations in a socialist society?

Hi Professor Wolff, I am a tech entrepreneur who is really interested in socialist ideals. I am thinking about incorporating co-operative governance in some form within my company but there are a couple of issues I can see at a macro level. 1) Innovation requires the space to experiment and try new things. Research and Development can consume a lot of natural resources and a high degree of risk. At the moment, when starting a company an entrepreneur takes a risk to try to convince people of their idea in order to get the resources to attempt the enterprise. Usually most people are not convinced of the idea and a small minority believes in the entrepreneur and invests. This risk / gamble is what allows new ideas to be attempted. How do you see the starting of new enterprises working in a socialist economy? 2) Socialism relies on the workers deciding together on how the collective should be run. In theory this sounds great but I can see potential problems around having slower decision making, bureaucracy and at times populist decisions being made rather than the right decision when expert knowledge is needed. Do you know of any systems or ideas that can help mitigate these problems? I have been looking into liquid democracy, what are you thoughts on it? Thank you very much Hiren

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Introduction to Marxian Economics

Hello, Professor Wolff, I've been interested in getting "into" Marxian economics for awhile, but have struggled due to a couple of reasons, primarily issues of time and frustration over the seemingly intentionally confusing wording of books on the subject. I.I. Rubin's Essays seems to be okay so far, but I still find myself finding issues in its presentation. I am really looking and hoping for a structured, systematic introduction to the ideas of Marx, the developments of Kalecki, Sweezy, Cockshott, etc who followed in his intellectual tradition, rebuttals of the accusations levied against Marxian economics, etc. Essentially, I am looking for a textbook. The closest I can seem to find actually comes from you, your Contending Economic Theories from a few years back *seems* to be what I'm looking for, however, it also came out before Shaikh's Capitalism and would seem to have been written too early to take into account much in the way of the post-recession developments in Marxism. So, what would you recommend? I quite like your writing style, so I probably will buy Contending Economic Theories, so what would you recommend then to read in order to "catch up" to more recent theory? I want to seriously thank you for your willingness to accept questions and for taking the time to answer them

posted an official response

Thanks for your kind words. I would strongly recommend the Contending Economic Theories book from MIT Press because its chapter on Marxian economics (as well as its comparative analysis of the 3 major paradigms in the field) is a summary overview that does, I think, get you into most of the essentials. I have since written two other books that try to use and apply Marxian economics (as presented in Contending....) to the 2008 crash and what has happened since: Democracy at Work:  Cure for Capitalism and Capitalism's Deepening Crisis, both published by Haymarket in 2012 and 2016 respectively. These books were written to do pretty much what you request, so that is why I recommend them.

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IMF and World Bank

In an upcoming show, please discuss the IMF and World Bank - background, functions, powers they have, who runs them, etc. These two entities are in the news constantly, but many of us don't really know enough about either of them. Thank you very much.

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Work Councils and VW

Dr. you have stated multiple times in the past regarding vw that the emissions scandal wouldn't have, or at least would have been far more unlikely to happen, if it were a cooperative, but VW, like many german companies, has a work council where labor has a seat at the boardroom table. I'd like your thoughts on this as it reflects on cooperatives as more socially and economically aware enterprises. (if you've covered this I'm sorry, I'm only just working thru the archives)

posted an official response

The problem with workers councils is that they are a minority part of those Boards and thus allow for all sorts of things to be done without the labor council members agreeing or even knowing. Then too, there are boards who have provided favors for workers council members to side with them against their own fellow-workers, etc. It was an important step to get the corporate boards to be required to include workers, etc., but it was just a step and well short of the kinds of changes that a fully-formed workers coop would entail.

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Recent Ford lay off.

Your recent episode of D@W you talked about Ford's decision to lay off 10,000 workers. According to research by the CAW, one job inside the plant will support 8 jobs outside the plant. so that 10,00 worker lay off represents a loss of 80,00 jobs for the community! Staggering numbers.

posted an official response

Indeed, those numbers are staggering and more auto layoffs are coming as the irrationality of mass buying (low interest rates, discounts to climb out of the 2008-2010 crash, and endless promises of "recovery") led to way too many auto purchases on long-term credit deals that are now too much for the US working class to cover. Another bubble - the auto/credit bubble bursts and threatens economic repercussions all over the place.

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What is your analysis of the Chavez/Maduro regime in Venezuela?

https://www.nytimes.com/2017/05/30/business/dealbook/venezuela-bonds-goldman-sachs.html?mcubz=0&_r=0 https://www.nytimes.com/2017/04/21/world/americas/venezuela-riots.html?mcubz=0

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What are the economic consequences of privatizing air traffic control?

http://thehill.com/homenews/administration/336315-trump-to-announce-plan-to-privatize-air-traffic-control-reports This article was written and released today 6/4/2017. When Republicans suggest privitazing something, they tell us it will "make it more efficient" but what are they really trying to acheive by this? Would be great to hear you discuss this on one of your programs. Seems that privatizing means hiring less workers and making them work longer hours for lower wages, which could result in an increase in errors made in sending off and landing planes. The airline CEOs are in on this, and with Trump, I think we can safely assume someone is getting rich off of this and it's none of us.

posted an official response

You have it right. The Republican Party has for many decades served its corporate and wealthy patrons by getting rid of government regulations that impede their profit-making ventures. The way they have done this is to mount and spread an immense propaganda operation suggesting that government economic activities are inherently and always less efficient and less socially productive than private ventures for everybody, for society as a whole. Under this ideological umbrella - for which there is no evidence at all - they get into office and then remove the regulations or other government economic activity that their patrons want removed. This is again what privatizing air traffic control is about. It is pushed by major airlines who believe they can get more profits that way than with government control.

Basically, for every instance of government enterprises messing up, there is one for private. The big debate between private and state is a political distraction from the real issue: democratic or non-democratic workplaces.

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Fiscal or monetary policy as proper US government response to current economic demands?

I understand that hawkish fiscal policy can function as a gap-filling mechanism for aggregate demand by increasing public debt in order to circulate much needed money in the economy. I also understand that hawkish monetary policy creates private debt via encouragement of private actors to borrow from banks in order to stimulate aggregate demand. Moreover, after the US central bank underwent QE, inflationary pressures affected only real estate and equity prices, and not other goods/services. To me, QE demonstrated its ineffectual nature since aggregate demand did not pick up due to lower borrowing costs. However, I have heard from intellectuals like Michael Hudson that if QE targeted private individuals (central bank deposits money into all its franchised depository institutions like BOA, Chase, etc. for the purpose of eliminating private debt/increasing private savings for the use of stimulating demand), then QE would be effective. At the same time, I've heard from intellectuals like Warren Mosler that fiscal policy is a better tool in affecting aggregate demand. Assuming that the central bank does not undergo Hudson's version of QE, if we rely on individuals to take on debt in order to stimulate the economy, it puts a heavier burden on an already debt-saddled private sector. In addition, those who can borrow understand that using such funds for real investments gives lower returns than the equity markets. If one is a corporation, the corporation will likely borrow to sit on the money or perform share buybacks instead of expanding employment or R&D (since corporation acknowledges the lack of demand). I was wondering whether you can comment on the difference between fiscal and monetary policy, and whether such difference affects your judgment in what the proper course of government action should be?

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Could a "Negative Income Tax" help to relieve Capitalism's chronic problem?

I first heard of NIT from William F Buckley on his show. As a liberal, I thought he must have gone off his trolley. Later on I think I heard Milton Friedman had proposed it. More recently, I read Theodore Herzl proposed something like NIT in his book,"The Jewish State". It struck me as a very perceptive idea.

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A NY Times article claims budget cuts are not the cause of high college expenses. Really?

I thought years of tax-cuts were the big reason. Am I wrong? Here's the url of article--------https://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html?_r=0

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On the cure for capitalism.

Dr. Wolff, first of all I applaud your effort to get the truth out about where capitalism has been, and what is has also done in the last 50 years (essentially socially strip mining and exploiting the labor markets over periods of decades in Europe, N. America, and Japan, to increase the wealth of the few, who hold sway over said capitalist systems) so as to inform the public, especially in those places that are rapidly watching their States and their economies tank, due to companies fleeing to more rapidly developing capitalist parts of the world. That this is a depressing fact, doesn't need to be said, but, the solution seems to be a democratization of the work place throughout the old capitalist centers of the West, which makes sense. However, and you mentioned in your May economic update (which I saw on YouTube) that all of this perilous history we're living through will eventually lead up to another "spark" which will most likely not be as gentle or kind as "Occupy" or "Bernie Sanders." My question is, do you have a match? How do we get this to happen sooner rather than later? What I see is a land filled with zombies, who only know THIS SYSTEM, and will die believing it works, to their very last...breathe. Or, that this is all there is, so we just have to...make due. I don't even think they know how to define what they think, or feel it's just all they know. It's like asking yourself, can a politician ever consistently not rely on subterfuge to make a living? Because, although there are some who can, there aren't many. Because again, they only know how to navigate *this* system. It would seem that, education, by people like yourself to those who are willing to listen, would be a first crucial step. Are there any other steps you'd recommend? Because I will help in any way I can. Thank you. Donald Bellunduno

posted an official response

The "step" that is needed is for those who can and do listen and learn must in turn be teachers. Remember that the same world you inhabit is the one "they" do and that if you offer a different interpretation from what they get from TV, radio, teachers, clerics, etc. it will affect them. Perhaps not the first few times, but if you and others persevere, you will find sympathies as a declining capitalism provokes people to wonder, to question, to challenge, and then to listen and think in ways they dared not do before.

That has been my experience for the last 8 years; I think it can and will be yours as well.

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deindustrialization and the financialization of the US economy

With deindustrialization and the financialization of the US economy, it means corporations makes greater profits. Does it also mean that the wealthiest persons in small devastated communities across America also benefit financially by allowing jobs to leave their communities? Would you please try to explain how, if it's the case, loss of jobs benefits local wealth holders.

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why do you use European countries to support your thinking of equality?

I think when you are looking at individual countries this is an error because the banking IBan system is united in the hole of Europe and has given birth to the biggest capital flight in the history of financial institutions.

posted an official response

On your title question, I use the European countries to show how even with capitalism, it is quite possible, over long periods of time, to have significantly less inequality than what the US now has. The subtext is to argue that a mobilized working class (in trade unions and in socialist and labor parties - even when their anti-capitalism is muted or altogether gone) can restrict and limit capitalist inequality (a point also that emerges from Piktetty's book on Capital in the 21st Century). And in its self consciousness, that ability can readily be extended to going beyond the restriction of capitalist inequality to the bigger issue of systemically "solving" inequality by going beyond capitalism (say toward an economy built on worker coops as the core enterprise organization).

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