Democracy at work in academia
May 22, 2017
Dear Professor Wolff, I very much enjoy your regular economic update and other work. As you open your broadcast, you have worked in academia most of your life. Given the recent hunger strike at the Yale University, could you address in one of the following Economic updates the question of democratic running of academic affairs (departments, schools)? The current model, promoted worldwide, is at best meritocratic, but more commonly managerial and business-derived. It produces the results you described for Yale. How should an academic department or an institution conduct itself in a democratic manner, without compromising quality of teaching and research? I am aware that the Mondragon Cooperation has founded its own university. If you are familiar with it, could you perhaps talk about how it is organized and run, and if it is different from other institutions at all?
Richard Wolff posted an official response
Thanks for the suggestion. I shall do that in a forthcoming Economic Update program.
Update on Australia's new banks tax
May 22, 2017
Hi Professor, and greetings from a listener in Australia.
Several episodes ago you spoke about a new tax being levied by our Government on big banks.
It may interest you to know that Australia's unique (and terrible) tax arrangements mean the taxpayer will likely pick up the entirety of this new levy, rather than the banks themselves.
(Ref: http://www.theaustralian.com.au/business/financial-services/tax-deduction-rules-mean-bank-levy-wont-raise-62bn/news-story/20d484723266cf0db48fe7d382404808)
Many wealthy Australians take advantage of a system called 'negative gearing', which allows property owners to lose money on their property and then claim the loss on their taxes, vastly slashing their taxable income.
(Ref: http://theconversation.com/why-we-should-topple-the-sacred-cow-of-negative-gearing-1565).
This system is one of the (many) reasons why property ownership for the lower classes in Australia, particularly young people, has become an unattainable dream that the majority have given up on.
Our Governing Liberal Party (who are actually conservative, despite the name!) are staunchly in favour of negative gearing as a policy because their supporters benefit from it (and indeed the electorates with the most negatively geared properties are those of major Liberal politicians and ministers!).
Thanks again for your show. I'm a trade union officer here in Australia, but when America sneezes Australia catches a cold as they say, so I'm always keen to hear sharp, accurate analysis of what's happening over there.
Tim
Richard Wolff posted an official response
Dear Tim,
Much obliged for your enlightening clarification of Australia's bank tax incidence. I will more carefully check such implications of reports in the future. Sadly, the tax structure of Australia as you explain it replicates closely the comparable class structures in most capitalist economies. And the logic is clear: as wealth and income inequality deepen, so too do the incentives of the rich to protect themselves from the people and from governments subject to universal suffrage by buying politicians, political parties, and government agencies so as to nullify what little democracy might be left. We live in a capitalist system spinning out of control in the supreme confidence that it needs to observe no limits. This has often been the recipe for system self-destruction. POssibly this time too.
Warren Buffet
May 22, 2017
Hi Richard, You had an economic update on youtube recently whereby you poked at Warren Buffet for his over-forgiving attitude toward one of the big banks, I think it was Wells-Fargo. He gives a good interview on how he thinks the super rich are actually under taxed here- his opinion is evident within the first few minutes. Could you comment? You're doing great work by the way! Thank you, Stephen (Ireland) https://www.youtube.com/watch?v=WQc0KiAXynY Youtube- Warren Buffet- How to get Wealthy in 2017
Richard Wolff posted an official response
Warren Buffett has indeed repeatedly made clear that he believes wealth individuals like himself are undertaxed and that the growing US income and wealth inequalities are dangerous for social stability - inequalities worsened by the existing tax structure. Buffett's stance has endeared him to US liberals, etc. That is fine as far as it goes. There have always been members of elites who call upon their fellow elites to slow down their rapacious self-aggrandizements lest they provoke social revolution and thereby kill the proverbial golden goose. The question is always whether Buffett-type elites do or do not win support from their fellow elite members. In the case of the US these days, the answer is a fully unambiguous NO from fellow elites who keep rushing headlong toward ever greater economic, political and cultural inequalities. Trump (see his new budget proposals) has the enthusiasm of the military, big banks, major corporations and their top ranks - the 1% - because he promises them what they want and expect...no matter mass dissaffection for his regime....at least so far. I poked at Buffett only because I wanted my audiences to see how much solidarity he has always felt with the very fellow elite members whose capital accumulation he wants to slow down so as to keep their elite status in tact.
Books on Dialectics?
May 21, 2017
Dr. Wolff, I have read several of Resnick's books such as "New Departures in Marxian Theory" as well as attended his (recorded) class in Marxian Economics at Umass-Amherst but, I feel that the concept of dialectics is a potential weakness in my knowledge. Specifically, one of the difficulties I have in "New Departures in Marxian Theory" is the concept of negation when applying overdetermination for practical use. I follow that an overdetermined totality's negation is to find a set of essentialist causes then relate this back to the overdetermined totality and repeat the sequence in order to find contradictions or insights for the development of the relative truth/thought-concrete/theory. What would you recommend as books for understanding dialectical concepts as negation? Considering the radical nature of Marxian epistemology, would I find any use in taking an undergraduate philosophy course over Hegel and Marx?
Richard Wolff posted an official response
On the matter of the course, everything depends (as is often the case) on the teacher and his/her background and approach. The literature on dialectics is vast. Some key works are Marx's own musings especially in his Grundrisse, but also see Theodor Adorno's Negative Dialectics, Richard Norman's work on Hegel, David Guest's on dialectics, Kojeve and Hyppolite and Althusser have all done crucial work on Hegel's dialectics; in the US Fred Jameson had done so although in ways different from how Resnick and I worked on the topic in our 1987 Knowledge and Class, especially Chapters 1 and 2. For us, overdetermination worked better as a way to see the relatedness between thoughts and other (epistemological dialectics) realities and among all realities (ontological dialectics). Besides, the term dialectics had become devalued and abused awfully so we wanted to use new language that could get passed all that.
Protugal vs Spain/ no-austerity vs austerity
May 20, 2017
What do you think about the situation of Portugal right now? A left government, no austerity, growth through the last 13 quarters, low unemployment rate and yet their bonds are being rated as being garbage by the big rating companies. http://www.economist.com/news/21719753-socialists-say-their-keynesian-policies-are-working-others-fret-about-portugals
Richard Wolff posted an official response
Partly the progressive (Keynesian) tilt of fiscal policy by the left coalition government (socialists, communists and greens), partly good luck enables the Portuguese to avoid the downward spiral of, say, Greece, or even the ongoing difficulties of Spain and Italy. The bg rating companies' judgements should always be taken with an extra-large grain of salt since they need to curry favor with the big governments whose debt they rate, and those governments (especially Germany and France) have worked extra hard for years to demonize Greece and any other govt leaning left much as the major private banks have.
Here is my RD Wolff-inspired Blog post about worker exploitation
May 18, 2017
Here is the link to my blog post about the relevance of the song, "Sixteen Tons" to exploited workers, both in the past, and in today's world: http://thesuspicionist.blogspot.com/2017/05/is-this-classic-song-real-national.html
Richard Wolff posted an official response
First of all, I am flattered by your inclusion of my explanation of the theory of surplus to Abby Martin in your fine work on Merle Travis's "Sixteen Toms." Second, it might interest you to know that I was enormously taken by the Tennessee Ernie Ford rendition that I heard on the radio as a teenager years ago. I was not yet politically interested so perhaps that son played a role in my own development.
Are there any studies of the average 'rate of exploitation' of the American worker?
May 17, 2017
You've pointed out that employees always produce more value for their employer than they receive in wages for that labor; that's how capitalism works. But has there ever been a systematic attempt to gauge exactly how much these numbers differ? I'm sure the rate must vary a great deal from industry to industry, business to business, job to job, but I'd be very interested to know if there are any examples of studies where researchers have attempted to put a numerical value on average exploitation of labor.
Richard Wolff posted an official response
The short answer is yes, there have been many such empirical studies wherever Marxist economists have decided to "apply" the theory of surplus value to a set of concrete conditions. Such work continues to be produced.
Could you please discuss Modern Monetary Theory? Thanks.
May 16, 2017
Why do you hold your monthly economic updates at a church?
May 16, 2017
Even Upton Sinclair in The Jungle did not go easy on the church, the church has always been an accomplice to the few in bringing malice upon the masses. It is a conflict of interest, the people are evolving as they pursue new ideas to gain more equality, and those new ideas have led them to you as you provide alternative economic systems. The church will always be on the side of the elites and it will always be that way. Even Pope Frances attempts to separate himself from his predecessors, but when it comes to humane issues like gay rights, he won't cross that bridge and support their case. The masses want equality in all facets of life, and its time you step away from the institution that has a long history of oppression. Doug Eaker
Richard Wolff posted an official response
Churches, like all other institutions, reflect, embody and affect the larger societies in which they exist. That means they include the contradictions, disagreements, differences of opinion and political perspectives of those larger societies. Churches, clerics, etc thus display the whole range of all those differences. All churches are not the same, not even close. In most cases, church members share some but not all the values of their particular institution, their particular cleric, etc. Church members likewise have all sorts of disagreements among themselves. Basically because of some basic shared values, our arrangement with the Judson Memorial Church has been very successful in reaching out to (by now) thousands of attendees at our monthly evening presentations and sharing with them our economic analyses. I believe that this has been mutually beneficial to the church, to us, and to our shared values.
Guardian article links rise of right-wing extremism with farm debt & home foreclosures
May 16, 2017
Article that might interest Professor Wolff: Guardian UK, J Oliver Conroy, MAY 15 2017, "They hate the US government and they're multiplying: the terrifying rise of 'sovereign citizens' " -- makes direct links between the increase in right-wing extremism and the economic conditions in the farm belt (debt, foreclosures).
Neo-Feudalism/"Class-Colonialism";Capitalism - an instrument for social change
May 16, 2017
I would like to hear your thoughts on the idea, that Capitalism is merly an instrument to solidify a kind of world wide Neo-Feudalism with a new ruling class or, as it is called more often, "Elite", hiding behind institutions like countries and governments. Along these lines i have been thinking whether what we see all around the world is a form of ,as i would call it, "Class Colonialism". Moving the idea of colonialism into a new context. There are still territories, or as they would be called countries, but for the top class, these "bounderies" are merey suggestions that can be overcome easily. Not so for the rest of the population, the majority, which has to adhere to rules and controlls at said borders. The idea of exploitation still works in a world wide class context. As we have seen in the aftermath of the 2008 world wide crash banks have been basically exhonerated from any "wrong-doing" on a world wide scale by bailing them out through the tax dollars of the exploited lower classes and their future generations (the crazy thing here, i would like to point out, is the fact, that for instance US tax dollars went to bakns all over the globe, helping the "elites" across borders, suggesting that there is an actual world wide class at the top). Your thoughts? kind regards, Swen Gerards
Venezuela's economic crisis
May 16, 2017
It's hard to believe you haven't touched on Venezuela in any of your weekly updates. My question is if you could address why Venezuela is in such terrible economic conditions. All the major sources just keep saying socialism has failed etc. So I wanted to to hear a more honest perspective from you
A short but important and controversial question .
Alright My name is Wael Taleb from lebanon , and eventhough i'm not american , i watch your economic almost all your economic updates , and have read the contending economic theories book . My question is , you always mention how the European Union's countries deals with the economy better than the United States, why then is the Combination of the economic indicators (GDP , Economic growth , export of products etc ) are way better in the united states eventhough they have a lower population and less land . Is it just about winning the world war and later the cold war . What about investing in the best people from outside the country , isn't this a successful policy .
Richard Wolff posted an official response
Comparing the US and EU is a complex project and depends heavily on what indicators or measures you choose to use. If you use GDP, exports, growth rates, then what matters is the period of time over which you compare their respective records. Sometimes Europe grew fast, sometime the US grew faster, etc. If instead you use standards like average standard of living, or standard of living during times of economic crisis, etc. then you get different comparative results. For the last several decades, BOTH the US and western Europe grew much less quickly than China especially but also India and some other countries. What lessons do you wish to draw from that? The drawing of trained workers away from the country that paid to train them so they can instead contribute to other countries who thus save o training costs is a very bad way to do economic development because it exaggerates the income/wealth gap between rich and poor countries. And that threatens global economic growth profoundly.
Maggie Wilderotter, "US has the highest corporate tax rate!"
May 15, 2017
What' Wilderotter talking about. Is there ANY truth in her assertion? I know she's ignoring the effective tax rate and is only talking about the nominative rate. Still, is our nominative rate the worst in the world? The Commonwealth Club of California posted "Sustaining Capitalism: Bipartisan Solutions to Restore Trust and Prosperity," May 15, 2015 on their youtube channel, an interview of top executives from the Commission for Economic Development, Lenny Mendonca and Joseph Minarik with Maggi Wilderotter of the Commonwealth Club moderating. Wilderotter’s statement is at minute 23:51. Corporate tax discussion roughly begins at minute 21:56 https://www.youtube.com/watch?v=YcubnqhA-aU Thanks!
Richard Wolff posted an official response
Any economist interested genuinely in understanding and comparing national corporate tax rates knows that what matters is the effective rate not the nominal rate. Repeated references to the latter are thus usually ideologically motivated rhetoric rather than analysis. Even comparing nominal rates has its pitfalls that make glib usages of the numbers highly likely to be misleading. In short, the US does NOT have unusually high effective corporate tax rates. The US does have a highly evolved PR industry serving corporate clients by "creative" abuse of statistics in the interest of reducing taxes in every way it can.
What will happen to the one-percenters infrastructure in the post capitalist world?
May 15, 2017
In a post-capitalist world with distribution of wealth and income much less unequal than it is now, what will happen to the vast wealth infrastructure that the wealthiest people now enjoy?The wealth infrastructure I'm referring to includes everything you can imagine that can only be sustained by excessive accumulations of wealth. The multiple lavish homes, the vast private property holdings, the yachts, the private jets, the country clubs, etc. etc. The wealth infrastructure also includes the many people whom the wealthy hire to satisfy their every desire. What happens to all of it when inequality is greatly reduced?
Richard Wolff posted an official response
That is among the transitions/transformations that should be determined democratically. Because any social movement strong enough to move beyond capitalism and its grotesquely unequal distributions of wealth and income will also be strong enough to guarantee personally meaningful, socially useful work to all able-bodied adults, I suspect there will be a massive reorganization of our societies. Many kinds of personal services now provided to the rich will be reoriented to become social services provided to all or else ended with the providers retrained for other jobs. Facilities that once served the rich will be restructured to be public assets. Just as factories, churches, malls, etc that could no longer survive as their populations abandoned them were eventually refashioned to become schools, art centers, community centers, clinics, and so on, a parallel refashioning would likely attend the end of contemporary capitalism's extremes of inequality.