Ask Prof. Wolff

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is capital flight worth being concerned about?

We're taught that "capital flight" is the real fear of raising tax on rich people but I was recently told that so long as you've got a closed currency border (as in, here in Australia we're the only ones who use Australian dollars) that if a billionaire were to send all of their money overseas, what they have to do first is send the money to a bank in exchange for the foreign currency and ultimately the money doesn't go that far, it just ends up in the bank and it's not a big problem for the economy. Do you see truth to that claim? What do you think of capital flight overall? I use the old top marginal tax rate of 92% in the US as a debating point a lot of the time but I feel like I could use more ammo on this.

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Could capitalism ever be possible without the the reintroduction of slavery?

Slavery was on is way out by the time it was reintroduced with a racist twist by the various West India co.

posted an official response

Looking carefully at history, we see no necessary or linear sequence of economic systems. We do see the birth, evolution and death of all systems, but in their deaths, each system can give way to any or all of the other systems (and possibly new ones). Slavery, feudalism, capitalism etc have arisen and passed away giving rise to one another (and still other systems). Capitalism may endure a while longer (even as it is failing growing numbers who turn against it) or it may dissolve into slavery and/or other systems or shore itself up a while longer by partnering with such systems. No fatalistic inherent dynamic dictates any order; it depends on how human beings experience, think through and act upon the systems in which they find themselves.

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Transnational Co-Ops?

A big part of my education is actually talking to latino day laborers ( and getting into a fight with three bicyclists who jumped a guatamalan under the freeway separating our two communities) and my apartment complex nieghbors from India working at a nearby pharmaceutical company. We talk about Co-Ops and the possibility of international associations or collaboraations came up. You've spoken about the Spanish group offering training. Are there other links forming?

posted an official response

Yes, there is no problem in considering transnational coops. As with their capitalist counterparts, worker coops spanning countries would need to accommodate the different nations with which they interact and interdepend. Spain's Mondragon Cooperative Corporation - whose Mondragon University offers courses to people on how to start, finance, manage, etc worker coops - offers its experience and courses to people across the world and is itself a transational corporation. Thus it is in a fine position to advise and train others to move in the same directions.

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you write about WSDE,s are they different from a collective worker cooperative, and if so how?

you write about WSDE,s are they different from a collective worker cooperative, and if so how? Also your book does not advocate for traditional worker cooperatives, (Example; board of directors that may or may not be members of the worker coop it serves) yet the democracy at work website does advocate for all types of worker cooperatives, democratic work places and/or collective cooperatives. Is that a correct assumption?

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I am not familiar with the term "collective worker cooperative." If it is meant to cover a worker coop that runs democratically - where the key decisions about the enterprise like what, how and where to produce and what to do with the profits are made on the principle of one employee, one vote and majority rules - then it is pretty much the same as a WSDE. However, the WSDE we advocate would not have people on the board of directors who were not also employees just as it would not have employees who were not part of the democratic governance of the enterprise. Yes our website is friendly and solidaristic with all cooperatives (consumer, owner, sales coops and so on) but that is because we see them as steps in the right direction, but not as substitutes for what is most important to us, namely the transition from tom-down, hierarchical capitalist enterprises to worker coops as the basis for a democratized economy.

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H1B Visa abuse

Professor Wolff, please weigh in on the problem of H1B Visa abuse which harms American workers while exploiting non-immigrants to boot! Will you incorporate commentary into one of your lectures please? For example here is some background info: https://medium.com/@seeminglyquiet/modern-day-slavery-in-america-the-h1b-visa-800be3a3df54#.affsv9pde

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Overgrowth

Dear David, You dedicate a lot of the time in your weekly broadcast and a lot of space is your websites to the issue of cooperative enterprises as opposed to capitalist, top down corporations that dominate the present economy. I completely agree with the fundamental importance of this issue and with your point of view. There's another issue, however, that I rarely see discussed explicitly, and that is the dogma of the need for unlimited economic growth, that seems to dominate present economics. I understand that individual democratically controlled enterprises may (and probably will) consider the issue of growth carefully, but I think that this must be treated as a systemic issue, concomitantly with the democratization of the workplace. I would like to ask you what is your take on the role of growth in the present economy: is it really needed for the well being of the whole population or is it an ideologically imposed drive that only benefits the top players in the present global economy? Do you think something should be done to actively curb economic growth? Do you think that an economy less obsessed with growth would be easier to democratize? Finally, would you recommend good resources for learning on "growthless" economies? Thanks!

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On collective ownership and voting the founder out of the company

This has been troubling me about. Would like to know what is your solution. So let's say we have an economy that has collectively owned and managed enterprises (democratic socialism). I'm starting on my own a new company, and so start working hard, do hundreds of hours of unpaid work just to get things starting. Let's then assume I start to finally see some results and the product/sercice I'm producing is getting so popular that I alone cannot keep up with the demand. I need more workers to do the necessary labor. Now in socialism if I want to have more people working in the company, I would have to give up equal share of profit and ownership over to the other workers. So if I need 19 more workers I would only own 1/20th of the company. Even though I was the one who set up everything. But what's worse, I only have 1 vote, out of 20 and the rest of the workers can just decide to vote me out, fire me, from my own company! It seems so wrong. But maybe I'm just missing something or didn't understood this whole democracy at workplace idea. Please Dr. Wolff, can you offer a solution/explanation how this situation would be solved under the system your advocating? Thank you.

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On Thomas Picketty and "Capital in the Twenty-First Century"

I know he is more of a Keynesian economist, but what do you think of the book? Is it worth reading? etc. Thank you Doctor Wolff.

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"B" Corporations

What do you think about "B" corporations. It seems they are trying to address some of the downsides of capitalism. Do you think they're effective?

posted an official response

"B" corporations are a way to protect mildly progressive corporate boards to pursue some social betterment goals without thereby becoming vulnerable to suits from shareholders claiming such boards have violated their fiduciary duties to maximize profits, etc.

As such they are a small step in the right direction, but given capitalism's massive production of inequality, environmental degradation, and social instability they are far too little and too late. Production should never have been subordinated to profit for the few (major shareholders and the boards of directors they select) when the well-being of the many is at stake. That violated the most elementary principles of democracy and risked the social destructiveness that capitalism has imposed on the world for many decades. A transition to a democratic enterprise structure - worker coops or worker self-directed enterprises - is a far more appropriate and adequate response to the dead end of modern capitalism than the "b" corporation.

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Do you envision a movement growing around your message like the Nader Raiders?

If I won the lottery or was otherwise in a position to do so, I would fund and promote the delivery of your message to an ever greater audience. This reverie of mine makes me think of Ralph Nader and his rallies which "culminated" at Madison Square Gardens. I believe that as the blatantly pro-1% policies of the current administration begin to affect more and more people in a negative way, your audience will grow dramatically. Be ready.

posted an official response

If I won the lottery, I would do the same with my winnings. Even without a lottery win or an angel (at least so far) we have grown incredibly over the last 5 years. I did my 1-hour radio show, "Economic Update," that was broadcast on one station (WBAI, 99.5 FM, New York City) when we began in March 2011. Today the program is broadcast on 75 radio stations across the US plus two TV stations. When I began my public monthly economic lecture in New York City 7 years ago, we had 20-25 attendees; now, the monthly talks occur in the historic Judson Memorial Church on Washington Square and draw 150 are videotaped and viewed on You Tube by over 100,000 each month. The mass interest in and response to what we are saying and advocating is a proven reality. With more funds, our social impact could and would be immense. So I think we are ready. And thanks for your vote of confidence as well.

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Do you agree with the SEVEN DEADLY INNOCENT FRAUDS OF ECONOMIC POLICY by Warren Mosler?

Mr. Mosler does a brilliant job of flipping our "common sense" about how major monetary theories and policies are perceived by the public versus the reality. I'm curious of whether you agree with his explanations. http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

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Professor Wolff, thank you for all your exceptional work ...

Professor Wolff, thank you for all your exceptional work which I have been following for what seems about 10 years now. I just enjoyed reading James Kwak's new book "Economism," a 190 page discussion the way capital put Milton Friedman and Econ 101 front and center of almost all discussions in politics and economics over the past 50 years. If you haven't read it, I want to suggest it. --Brandon.

posted an official response

Thanks, I will read it. Once small comment: there were big historical shifts in the aftermath of capitalism's Great Depression of the 19309s followed by perhaps the most destructive war in history and characterized by both left-wing and right-wing surges of anti-capitalism. The post 1946 reaction only tolerated the left-over Keynesianism as long as it had no political choice. But while it waited for better political conditions, it actively promoted redirecting the discourses of politics and economics especially. In politics it was all about anti-communism, anti-socialism, anti-Marxism; and in economics it was all about burying Marx and Keynes in favor of a revival of neoclassical economics. Milton Friedman offered himself as a leader for that revival. He was very well funded.

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Paying with Equity and frozen yogurt at Tesla ?

Dear Dr Wolff, I think you would love this story about Tesla employee complaints about salary and work condition and Unionizing. the whole debate: Sources: https://medium.com/@moran2017j/time-for-tesla-to-listen-ab5c6259fc88#.qd59nto36 http://fortune.com/2017/02/10/tesla-elon-musk-factory-union/ https://www.yahoo.com/news/tesla-employee-disappointed-elon-musks-144353746.html Great Reference - and i believe the "right" one: https://www.youtube.com/watch?v=i8fLSFqGxzU What are your thoughts?

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I would like your opinion on economist Kevin Hassett's theory that inequality is not rising.

I read this article https://qz.com/921204/trumps-chief-economist-kevin-hassett-doesnt-think-economic-inequality-is-an-issue/ Have you read his work? Can you explain it further? It doesn't make sense to me.

posted an official response

I have encountered his work. Its like many other such researchers who build reputations by arguing against a broad consensus. On the one hand, analyses of inequality - like anything else- depend on the theories and measuring rods used to conduct the analyses. Different theories and measurement tools will yield different results/conclusions. By the way, that is the reason honest economics departments would always include neoclassical, Keynesian and Marxian economists (the three major different theories now in economics) so students could learn to understand and use the available alternative theories and modes of measurement. Columbia University and Prof Hassett do not criticize the absence of such an environment in Columbia University.

So Hassett quarrels with the measurements that underpin the consensus view - which I share - that inequality has been rising. Members of the consensus have, in their turn, criticized the alternative measures Hassett favors and on that basis rejected his claims.

There are almost always such competing theories, measurements and claims based upon them. But often the individuals who quarrel with the consensus cannot get the attention to become widely known; often they and their work are ignored or repressed. The deepening crisis of global capitalism has disrupted the dominance of a middle of the road consensus in politics and economics so that non-consensus or non-mainstream or heterodox perspectives can get a hearing. Hassett achieves that now by associating himself with Trump; before he got less attention but still some as a professor in a prestigious university.

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starvation

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Did you have a question or comment about this?

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