Ask Prof. Wolff

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I haven't heard you talk about the "Cleveland Model"

Dear Dr Wolff, I just read this article from the Smithsonian Magazine on the working poor/poverty in the US. It mentions the "Cleveland Model" that it says is being adopted in 8 other cities. It looks to be a way of starting and maintaining worker owned coops. I don't have a particular question except that I'd like to hear your thoughts on this particular development that seems to be right in line with your proposed solutions to our economic and social difficulties. http://www.smithsonianmag.com/history/photographic-chronicle-america-working-poor-180961147/ Thank you! Thomas Dickinson, Minneapolis, MN

posted an official response

The "Cleveland Model" is an important step toward building a worker coop enterprise sector of the US economy as a long overdue alternative to the capitalist, top-down hierarchical model of enterprise organization. The Cleveland Model builds worker coops around anchor institutions (e.g. universities, hospitals, etc.) that can be approached to sponsor such a sector (sometimes even with financial help) and, more crucially, to provide worker coops with a significant and secure demand for their outputs. In short, such anchor institutions can be a great help to inaugurating and sustaining worker coops within an economy - such as the US - in which capitalistically organized enterprises dominate and might otherwise block or undermine emerging worker coop competitors. I would only add that there are other, different ways to help and sustain worker coops that deserve attention and implementation alongside the Cleveland Model. I am especially concerned that government subsidies and support be sought and fought for politically so that the worker coop sector of modern economies gets the same systematic supports that capitalist businesses have for centuries sought and received from government.

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What is basically wrong with Keynesian economic systems?

Dear prof. Wolf, I have watched many of your lectures online, and really moved by your insights. Today, we see many Scandinavian countries that do well with regards to public welfare and people are happy with them. Keynesianism seems to compensate the weak points of Capitalism. So one may ask why are you a Marxist rather than a Keynesianist? What do you think is wrong with that system?

posted an official response

Keynsian economics - as its originator, JM Keynes himself understood and said - represents an effort to save the capitalist system from those of its defenders and champions who believe in laissez-faire, namely the idea that minimal government interference is what makes capitalism work best. Keynesians point to the Great Depression of the 1930s, to the Great Recession since 2008, and to the countless cyclical downturns of capitalism over the last 200-300 years as evidence that left to itself, private capitalism undermines itself (a point Marx made). So Keynesians believe that appropriate government interventions (especially what has come to be called monetary and fiscal policies) are necessary to (a) save capitalism from its conservative laissez-faire advocates, and (b) to deliver what they see as capitalism's benefits while minimizing its flaws, faults and failures. My problem with Keynesians follows: capitalism is not the absolute be all and end all, the ultimate achievement of human society, the end of history. Quite the contrary, I see economic history as a sequence of economic systems (e.g. slavery, feudalism, capitalism and so on) that are born, arise, evolve and eventually die to be replaced by others. I see no reason to think that capitalism somehow escapes this pattern. Thus I am always open to the question: can we do better than capitalism, is capitalism dying, what might emerge from it and so on. Moreover, since I see capitalism as having inherent tendencies toward endless cyclical wastes and inefficiencies and deepening inequality (see Piketty's work) - tendencies which Keynesianism has never overcome in any settled, permanent way - I see the need as well as possibility for moving beyond capitalism. Hence Marx's critical approach and analytics are useful since he wanted to go beyond capitalism rather than save it as Keynes wanted. Lastly, Marx sees exploitation of labor as an inherent definition of capitalism and as morally reprehensible as well as socially unnecessary and deeply anti-democratic. That perspective fuels his economics, Keynes is oblivious to the analysis of exploitation and thus his work misses that entire dimension. For these basic reasons, Keynesian economics is inadequate from my perspective and building on Marx's work is the better way to proceed. For a much fuller discussion of these questions, let me recommend the following book: R.D. Wolff and S. Resnick, Contending Economic Theories: Neoclassical, Keynesian and Marxian, Cambridge and London: MIT Press, 2012.

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What are your views on Universal Basic Income?

Finland, Canada, The Netherlands and Scotland are all seriously making strides towards the introduction of a Universal Basic Income (the idea that everyone gets an income from the state as a basis upon which to build their lives earning, learning or stating a business). Europe's biggest political party, the Labour Party, their Chancellor has indicated that UBI will form part of their next election manifesto, along with laws to bring about worker co-ops. Could this be another way to organise our economies away from Capitalism?

posted an official response

To answer your question directly: it could be. But that depends on how UBI is understood and then used. As other commentators have pointed out, in capitalism there are basically two sources of income: labor and property. Labor incomes include wages, salaries, fees for services rendered etc. Property incomes include rentals, profits, dividends, interest, capital gains and so on. The key point here is that capitalism already dispenses income to people unconnected with their work. So UBI would NOT be a new ideas in the sense of disconnecting income from work. What UBI does is make that disconnect universal, for everyone rather than just for owners of income-earning property (usually a small minority of the population). If we do not believe that providing income without requiring work to property owners has not dampened their incentives to be socially productive, I see little reason to worry about that in regard to universalizing such a basic income distribution so everyone gets it. The way to do this is also simple: tax property income and distribute it equally to all persons. Framed in that way, yes, UBI could be a step toward the next system, toward doing better than capitalism.

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New School Spring '17 Course

Prof. Wolff, If at all possible, please do get someone to record your lectures (as you've done in the past for the Marxian Econ classes) for the Contending Theories class you're teaching in Spring 2017! We would all love to have that resource preserved. Let us know what you need from us.

posted an official response

Please get in touch with me via email to pursue this plan/idea. Most important at this point is that enough GPIA students at The New School enroll officially to be surfe the course is formally offered. I am ready to teach it as I have done before.

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Do you believe in government by the free will of the people

Do you believe in government by the free will of the people The future hinges on humanity's ability to make choices, it is time, we must crowd source government! I would like you to Open your mind and leave any preconceived notions of what post representative democracy may look like. I hope that you would agree that in the natural process, when a small group of people are trying to find consensus, suggestions and ideas are put forward by any one or more individuals in the group. Informal voting takes place. Based on that information, more suggestions may emerge. This process is repeated until the highest level of satisfaction is achieved. Only then is the vote official. The free flow of unofficial voting is essential. We would like to add that various voting reforms are attempts to supplement for our inability to provide, the free flow of unofficial voting. we can recreate this on the worldwide scale. WHY US, WHY NOW? The opinion market. There are three main forms of the growing opinion market. Growing because the average Internet user age is passing approximately 40 these markets are: (1) polling for news organizations. (2) The commercial product & entertainment market. (3) And then we have the political upheaval pushing for change. This is the one that is forcing Twitter to act as a petition. This is also the market that thousands of organizations are competing for at this very moment. Within the next 2 to 5 years, someone will fill this void. It is easily predictable that there will be several entities that will emerge victorious, each in slightly different ways. The voice of humanity will be louder, but it will not be speaking with one voice. Right now there is an opportunity to monopolize all of these markets, and expand on it by accepting all opinions of every conceivable type. Everything in life can be political, and everyone in the world has an opinion on something. We are here because no one else is aware of this opportunity, and we cannot just sit here and watch it go by. Here is our plan, http://www.yourupinion.com/ We are asking if you could take a moment to give us your perspective, and let us know if you would like to be involved. Thank you from our 68 members, and myself, Brian Charlebois.

posted an official response

Our short answer is definitely yes, we believe in democratic decision-making. Our focus is on the democratization of the workplace as it strikes us that the flaws and limits of political democracy have a great deal to do with the absence of an economic democracy upon which to ground and with which to ally political democracy.

We should keep in touch via our respective websites and allied activities.

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Are you concerned that the "Alt-Right" has included you on it's "Professor Watch List"?

http://www.professorwatchlist.org/index.php/watch-list-directory/search-by-name/181-richard-d-wolff

posted an official response

The Trump phenomenon brings out of the woodwork all sorts of characters newly emboldened to vent their frustrations and hostilities. This list is another in a long history of such ventings. The information on me is factually in error. I have not discerned any effect of being on the list; I do regret that The New York Times saw fit to give huge publicity to such an obscure, inaccurate list. Indeed, I find that more important than the list itself.

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Venezuelan Co-ops and what can we learn from their economic revolution?

Professor Wolff, I would like to know your thoughts on the Venezuelan socialist movement and in particular the cooperatives and communes. It appears the cooperatives are struggling to replace the entrenched capitalist system. There are many critiques from outside influence (US clandestine ops), to lack of diversified industries, trade deficits, black markets, hoarding by the elites and chronic inflation. I would like to know, why are cooperatives struggling to replace capitalist enterprise in Venezuela? I ask this because I believe the situation in Venezuela may give us some useful insight into our own efforts to replace the capitalist enterprise here at home in the United States. http://www.counterpunch.org/2016/12/30/venezuelas-communal-movement/

posted an official response

The situation in Venezuela has a number of special circumstances that make it hard to judge worker coops without reference to them. Such special circumstances include internal political turmoil, the depressed global oil price that hurst an oil-dependent exporter like Venezuela, unremitting hostility from the US, economic problems in Europe hampering its ability to interact with Venezuela in mutually beneficial ways. If you want good scholarly attention to worker coops in Latin America, here is a place to start: Peter Ranis, Cooperatives Confront Capitalism: Challenging Liberal Capitalism, London: Zed Books, 2016.

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Worker Co-op

I had a 5 paragraph 3 page question but I am not posting it dues to its length. It all boiled down to this: Being what I call an Empirical Capitalist I keep an open mind to potential alternative systems but I need data if I am to change my ideals. Can you refer me to some materials detailing how a worker co-op might be established and how it will work in a free market society, and any case studies that show how well worker co-ops perform. I have done some research already but more is better when it comes to information.

posted an official response

Besides directing you to the various materials on worker coops at democracyatwork.info, let me urge you to follow the work ands references used by University of Leeds Business School professor, Virginie Perotin. She has done great, recent work empiricially on the superiority of worker coop over traditional capitalist enterprise organizations.

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Federal and Fractional Reserve Banking

It seems to me that the current fractional reserve banking system facilitates transfers from poor to rich. Is this right? Do you believe there are preferable alternatives? Thanks.

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no democracy in government employment, then what?

As a government employee I don't have the ability to change my employment into a democratically ran place, what does that say about government itself as a non democratic establishment of employment and what can government line staff employees do to improve such conditions? Line staff (direct public servants) are the ones doing the brunt of the labor and our benefits and pay are slashed in the same manner as employees in private sector.

posted an official response

No rule, law, or precedent dictates where the transition from top-down, hierarchical workplace organizations to democratic, cooperative organizations will occur or prevail historically. In some places, the private sector will be where transition occurs most or most quickly; in other places it will be the public sector. Public employees - e.g. in schools, welfare offices, firefighters, hospitals, etc. - can change and sometimes have changed the organization of their work to democratic cooperation. They encounter opposition from higher level officials, sometimes from the public, etc. In much the same way, private sector workers seeking such transitions encounter oppositions from boards of directors, investors, shareholders etc. Specific of time and place and strength of impulse to transition will determine how, when and where transitions occur. But there is no reason to believe that public transitions are less achievable than private transitions.

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thoughts on australian capitalism

http://www.nytimes.com/2016/12/29/opinion/help-for-australias-coal-workers.html

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Transformation to a worker coop from an existing establishment

I live and work in Sweden for the largest car company in the country. I am under the assumption that the workers unions are stronger and larger in Sweden than in the US because of their strong presence and because most of my colleagues are members, including myself. Do you think it is possible to transform a large corporation from a capitalist to a communist enterprise, or a workers coop? What would you say is the best way to achieve this goal? Our company is owned by a larger, foreign company; how can this affect the situation?

posted an official response

I have no doubt that it is possible to transform a large capitalist corporation into a large worker coop. Moreover, the chief means to do that is an organized and mobilized workforce allied to a working class social movement. The issue of enterprise size - whether coops can manage to be big as well as small and medium sized enterprises - has been settled by the effective transition from small to huge achieved over the last 50 years by the Mondragon Cooperative Corporation in Spain. It now has 100,000 employees while it started in 1956 with 6. Being owned by a foreign company can actually be helpful to a program of transition to worker coop. That is because such a transition can be intertwined with an assertion of independence from foreign control, a blending of nationalistic aspirations with democratic workplace aspirations.

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Thoughts on Housing Cooperatives?

Professor Wolff, I thought you'd be interested to hear about or read this NPR story about a Mobile Home Community which, in order to prevent their land from being sold off, created a cooperative and bought ownership of the land. By running the community democratically, the residents have improved their standard of living. Part One is about the poor management and conditions faced by many Mobile Home Communities. http://www.npr.org/2016/12/26/502590161/mobile-home-park-owners-can-spoil-an-affordable-american-dream Part Two is about the community in Minnesota which created the co-op discussed earlier. http://www.npr.org/2016/12/27/503052538/when-residents-take-ownership-a-mobile-home-community-thrives

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RBE | Technological Unemployment and Worker Co-cops

Dear Professor Wolff, I very much appreciate your videos. I have watched many hours of your presentations since The Zeitgeist Movement shared your October 2016 Update via Facebook. Forgive me if this question has been asked before. How can Worker Co-ops mitigate the problems arising from the growing trend of Technological Unemployment? What are your thoughts on a Resource-based Economy (RBE)? Description of RBE linked here: https://youtu.be/K9FDIne7M9o?t=1h11m < This link will take you to the 1hr 11min mark of an almost three-hour-long presentation by Peter Joseph. This is the part of the presentation where Peter describes the economic calculation of an RBE. To elaborate on the second question, do you agree with the logic presented in the video? Happy new year! Andrew

posted an official response

For hundreds of years, capitalism has been a system that rapidly transforms technology in the interest of higher profits. Across that time, almost every technological change has been celebrated and justified on the grounds that it freed human beings from difficult, dirty, arduous labor. Yet the reality today is that most capitalist employees work harder - and often longer - than they ever did. The problem is not that the technology was bad; technology is not the problem, Rather, the problem is the subordination of technical change to capitalist profitability. An example can show this: imagine a technical innovation that enables workers to produce the same output with the same inputs in half the time. A capitalist enterprise takes advantage of the innovation to fire half its employees and use the savings in wages to boost profits. A worker coop takes advantage quite differently: it cuts all employees' labor time in half thereby producing the same output with the same inputs (hence the same profits assuming stable prices). Workers wages remain the same but for half the work time freeing half worker's time for leisure activities. The technology in one case serves profits; in the other it serves labor reduction. The former helps those dependent on profit (always a small minority in capitalist societies); the latter helps workers (the majority). The economic problem lies not with technical change but with the economic system into which technical changes are installed.

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Defining Socialism

Hi Prof. Wolff, I hear, quite often, how socialism embodies a state ownership of business and appropriation of surplus, with Cuba and the USSR as poster children for this line of reasoning. But with an understanding, after reading your work of course, that state capitalism is not synonymous with socialism, how do we reconcile this fact with the popular belief that dictatorships or other governmental problems are associated with socialism? Please see this 2-minute clip with Thomas Sowell explaining what socialism is (it’s frustrating to say the least). https://www.youtube.com/watch?v=VnJEUR0gkZo

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