Economy

Published on May 7th, 2015 | by Socialist Party Los Angeles Local

1

The Socialist Party Los Angeles Local Interviews Professor Richard D. Wolff

Professor Richard D. Wolff recently conducted a speaking tour over several major cities in the U.S., noting a consistent and remarkable growth in the number of attendees at his events — a phenomenon which he has linked to the mass of people’s growing frustration with capitalism and the crises it manufactures.  His uniquely engaging style and ability to translate the complexities of Marxian economics into the vernacular of working people has allowed him to expand his listenership internationally in recent months.  Members of the Socialist Party Los Angeles Local were able to connect with Professor Wolff at a recent talk in Los Angeles, where he cordially agreed to be interviewed.

Mimi: What motivates you to write and speak? For those who have yet to see you speak or hear or read your words, why do you think your message is important? Is there urgency to the message?

Professor Wolf: A crisis engulfed global capitalism in 2008. It continues its awful legacy of economic disruptions and declines. Given the Great Depression of the 1930s, this is the second major global crisis of capitalism in 75 years. We are, I believe, caught up in a major social change that profoundly affects our present and future.

Partly this involves the massive relocation of capitalist enterprises from their original territories (western Europe, north America and Japan) to the now more profitable regions of Asia, Latin America, and so on. This means long-term economic decline for the populations of those original territories — or, more accurately, decline for those who cannot cash in on the greater profits generated by the relocation. Those are, of course, the top 5-10% there. Thus social gaps widen that separate the shrinking rich from the growing poor and that spark tensions, angers, and social explosions.

Partly this involves the massive corruption of politics as the ever-smaller group of rich and richer secure their positions by buying parties and politicians to make sure that universal suffrage does not undo the economic advantages they have taken. And finally it involves the increasing constriction of many cultural opportunities (from schooling through engagement with the arts, etc.) to the shrinking numbers who can afford their costs.

After half a century when fundamental social criticism of our economic system — capitalism — was almost totally taboo in the US, a massive awakening is underway. Capitalism’s crisis is opening the space for a renewal of the debate over capitalism that should never have been choked off by Cold War hysteria and fears. Everywhere I go, people — from all walks of life and from most political and ideological perspectives — want to engage that debate now and appreciate my doing so. The welcome I get is hugely encouraging, shows the importance of renewing that debate, and provides evidence of the urgency people feel about what is happening to capitalist societies and about changing directions.

Lynn: You’ve said that only 1 out of every 8 Americans is able to live the “American Dream” under our current capitalist system. That doesn’t sound like a dream to me; it sounds like a nightmare! What would life under a Marxist economy look like for the “average” American? How long would that take, and what needs to happen to get us there?

Professor Wolff: The measurements that concluded that only 1 in 8 American families earns enough to enjoy the modest version of the American dream were not made by me but rather by the staff of the newspaper USA Today in the last half of 2014. I have often quoted it for its significance and because of who made the calculation.

If by “Marxist economy” is meant what a Marxist would prefer to see in place of the current capitalist economic system, then the answer must begin by reminding everyone that “Marxist” covers quite a range of differing views and analyses. That is hardly surprising, given that Marx’s writings have spread to many different countries, cultures, economies, political systems, and social institutions over the nearly century and a half since Marx died. The diversity of environments for Marx’s work produced a diversity of interpretations, emphases, etc. It was long ago inaccurate to refer to any one of the multiple strands within Marxism as the Marxist perspective, although insecure people and groups within the Marxian tradition have repeatedly tried to make their particular interpretation the right one and all others wrong headed or worse.

So to answer your question from the interpretation of Marx’s work that makes the most sense to me, I would say that the preferred economy would display some key differences from capitalism today. First, for me, would be radically re-organized workplaces: democratically run by all the workers inside each enterprise and co-determining economic and social policies with parallel democratically run residential communities that interact with and are interdependent with the workplaces. Ownership of the means of production would be socialized such that democratic decisions would govern how those means are used and distributed among workplaces. Finally, democratic plans would be developed that governed the distribution of produced goods and services. If, where, and when democratic decisions allowed or allocated some property to private owners, that would always be secondary and subordinate to social property and social decisions on the scope and duration of private property; the same would apply to where and when democratic decisions would allow or organize limited market mechanisms of exchange.

While I am confident such democratic decision-making in the workplace would in all likelihood go far in reducing the inequalities of wealth and income fostered by capitalism throughout its history (see Thomas Piketty’s Capital in the 21st Century and also the actual history of Spain’s Mondragon Cooperative Corporation over the last 50 years) and go far in reducing the installation of environmentally damaging methods of production, it would also be likely that binding national legislation would constrain income and wealth inequalities in various ways, mandate ecological sustainability across the society, allocate a major part of the surpluses produced to the support of leisure, education, the arts, physical recreation, health support and so on.

The combination of a reorganized workplace structure and a massive focus on social welfare with equal access for all citizens is a combination that is mutually reinforcing and thus far more secure than capitalism’s merely occasional, grudging, and mostly temporary commitment to social welfare when citizen revolt threatens capitalism.

A worker co-op based (micro-level) social welfare focused (macro-level) economy is what would replace the capitalism of today that features an undemocratic, hierarchical corporation based (micro-level) privately aggrandized and socially starved (macro-level) economy.

Jose: Would worker co-ops be able to challenge capitalism enough economically without having to exploit workers and remain competitive? How does worker control of production fit in with current overuse of resources and destruction of the planet by over-production of commodities? Do the co-ops begin to transcend capitalism, to move beyond it, or is it a more democratic form of capitalism?

Professor Wolff: Worker co-ops, by their existence, challenge capitalism because and to the extent that their internal organization as enterprises stands in stark contrast to capitalist enterprises. In the major kind of capitalist enterprise, relatively few individuals (major shareholders) own the enterprise, choose its boards of directors and the major shareholders plus board make all the key decisions. They decide what, how and where to produce and what to do with the net revenues (profits) of the enterprise. Capitalist enterprises exclude the mass of employees from participation in those decisions. In stark contrast, in the worker co-ops we stress (workers self-directed enterprises or WSDEs), workers democratically make those decisions. Because workers have formed coops (including WSDEs) before and ever since capitalism became the dominant economic system, capitalists have had to accommodate limited spaces for them. However, they have always limited them precisely because of their implicit and always latent challenge to the capitalist alternative.

In Marx’s definition, exploitation exists if and when the persons who produce what he called “surplus” (akin to profits) are not the same as the persons who obtain (Marx said “appropriate) that surplus. Masters exploit slaves, feudal lords exploit serfs, and capitalists exploit proletarians. But WSDEs, by definition, do not exploit precisely because in them the workers who produce the surpluses are identical with those who appropriate those surpluses.

WSDEs could compete — in or outside a market system — but would likely do so in ways very different from capitalist competition. In the latter, the winner of the competition grows while the loser dies, subjecting the loser’s workers to unemployment etc. In an economy of WSDEs, by contrast, there would likely be arrangements whereby losers in competition would have their employees automatically retrained and relocated precisely so no job losses occur as they are a capitalist irrationality from the standpoint of a WSDE-based economy. Because a WSDE-based economy is really committed to democracy, it would subject the decisions about technology, for example, to democratic decision by all affected workers and communities. Thus the toxic properties of technologies would be objects of information and discussion before installation. Profits would not guide technology decisions as is the case in capitalism. The positive effects of WSDE structures on the environment would be huge.

WSDEs function within capitalism much like capitalist enterprises formed and functioned within feudalism. They are kernels of the new maturing within the shell of the old. For long periods they can be contained and limited, but as the old economic system succumbs to its age and contradictions, people aware of the old system’s dysfunction look for alternatives that can form the basis of a new and different and better economic system. As that happened in feudalism, the capitalist alternative broke through its limits and became crucial to the revolutionary movements out of feudalism. As that happens in a crisis-ridden modern capitalism, people looking for alternative arrangements that would work better are looking with new interest at the long-limited worker coops in a parallel way.

Hana: How would you respond to public claims that collective bargaining accelerates outsourcing as business works to maintain competitive market advantage? What do you see is the short-term solution to labor impasses within the present-day framework of a capitalist labor market?

Professor Wolff: First of all, it is not collective bargaining that accelerates outsourcing. The argument might be that rising wages (something that may or may not be caused by collective bargaining) provoke outsourcing, but it would be easy to show that that is also often untrue. Many service jobs (food service, home health care, many government service providers, plumbers, etc.) really cannot be outsourced and so neither rising wages nor collective bargaining can lead to outsourcing. Also, if wages abroad are falling, that will invite outsourcing even if the absence of collective bargaining in the US keeps US wages flat or even has them falling but not as fast or far as foreign wages may be falling.

Second, even if we grant the premise that collective bargaining pushes up labor costs for employers and thus prompts them to look abroad to outsource, keep in mind the logic here. Employers presumably outsource to escape the rising cost of labor, but outsourcing is rarely the only possible strategy to counter rising wages. Here are some others: automation, speeding up production, reorganizing (including increasing the scale of production) workplace activities to achieve economies of all sorts, saving on input quantities and/or costs, reducing managerial salaries to offset rising workers wages, reducing profit rate targets to maintain total sales and revenues when wages rise by not correspondingly raising prices.

In societies where strong labor legislation blocks outsourcing, employers faced with rising wages (from collective bargaining or any other cause) cannot outsource to solve their problem of rising wages. They simply have to find alternative solutions. In other words, society has proscribed one employer solution as socially unacceptable. Examples of this abound in capitalism’s history. For example, in times past capitalists could respond to rising wages for adult workers by hiring lower-waged children or illegal immigrants or jail inmates or installing dangerous machines or unhealthy conditions etc. … until society outlawed such practices. Outlawing outsourcing would represent the same logic.

Such reforms within capitalism can and often do help workers’ conditions, but they do not solve the basic problem and capitalists always work to undo such reforms, often with success. That is why more basic social change — to the point where workers become their own bosses is the necessary solution.

Craig: You’ve suggested elsewhere that invoking the power of eminent domain can be used at the local level to save people’s homes from foreclosure or to transfer ownership of business property to its workers. If undertaken widely, I imagine these kinds of tactics would comprise definite steps towards undermining capitalism on a local scale. What would something like eminent domain look like on a national or global scale? How could disparate WSDEs organize to obtain a greater stake in global supply chains overwhelmingly owned by capitalists?

Professor Wolff: The basic idea of eminent domain is to abrogate certain private property rights when they conflict with the welfare and benefit of the entire community. Eminent domain recognizes that the right of private property is not absolute; it does not always and everywhere trump community needs. So when a city or state, for example, needs some land for a project benefitting an entire community, it can use eminent domain to force the owner of the land to sell whether or not that owner wishes to do so. The public purchaser is only obligated to pay “fair market value” for what it can seize by eminent domain. This is a quasi-social (or quasi-socialist?) moment in an otherwise capitalist environment in that it elevates social needs above individual needs.

Building from that basis, some communities have already applied and many more could apply eminent domain on a much wider scale. For example, if gross inequality of wealth and income were deemed contrary to community needs, eminent domain cold be claimed as a legal basis for re-dividing wealth and redistributing incomes in ways that all opinion polls show most Americans already want.

Workers — both employed and unemployed — could demand use of eminent domain to seize land, abandoned buildings, unutilized tools, equipment and raw materials that would then be made available for the establishment of WSDEs. Taxes levied on upper incomes and corporations could raise the revenues needed to purchase items seized through eminent domain. In this way, WSDEs would be established across the economy. That would enable useful competition between them and traditional capitalist enterprises (those with major shareholders and where all basic decisions are made by the boards of directors they elect); we could then compare these two alternative organizations of enterprises. Americans could then choose which organization they would rather work within and which they would rather buy from.

If the left and WSDEs saw a common goal in such uses of eminent domain, that shared perspective could motivate a powerful political alliance between them.

Tags: , , , , ,




One Response to The Socialist Party Los Angeles Local Interviews Professor Richard D. Wolff

  1. Michael Pugliese says:

    cf. http://www.thesocialist.us/minimum-wage-and-democracy/ , wherein Comrade Jonathan Chenjeri, made a few asides about the,”grip of impetuous consumption,” and consumerism. My comments on his piece,”There is a long standing tradition on the sectors of the Left critical of “marxist productivism,” such as found in the sixties counter-culture and certain sectors of the radical ecology movements, that “we,” just consume too much,” (some of “us,” do, not just upper-class, whites in the advanced capitalist core) , but, when Jonathan rightly notes that in certain cities or States $15 an hour would be too little to constitute a “living wage,” these asides to me, signified an implicit tension or contradiction in his thoughts and feelings, versus his policy proposals.In my last job, I made $15.55 an hour, and worked 25 hours a week. If I had made that , but, for 40 hours a week, would that extra 55 cents an hour, gone to “impetuous consumption,” on non-essential commodities like books 😉 You betcha. Cf. debates over “essential needs,” as determined by “post-materialist,” intellectuals guided by “One Dimensional Man,” by Marcuse, a quintessential 60’s radical text.” http://www.thesocialist.us/minimum-wage-and-democracy/#comment-4912 “Your comment is awaiting moderation. ” In the sessions of a recent eco-socialist study group on climate change, these tensions within the Left, between the “productivists,” and the “counter-culturalists,” who would advocate a radically reduced level and standard of consumption, by the middle class in the First World, esp. in the USA, were noted. One of our newest members, Gene Warren, in an extended exchange with his comrades in Solidarity, was called a “catastrophist,” by a dual member of the SPUSA and Solidarity, not only for his analysis of the ecological crisis, but, his solutions, as well. The planet simply cannot accomodate the consumption patterns of families of four pulling in $130K a year. I would add in an aside, quoting Susan Sontag, from the sixties, that ,”The white race is the cancer of human history,” and that as some say, in the deep ecology movement, that humans themselves are a cancer upon the earth. Not, that I would go so far as , Christopher Manes aka Miss Ann Thropy, in a Earth First provocation, http://rationalwiki.org/wiki/Earth_First!#Misanthropy_controversy , for reasons addressed by Murray Bookchin, in his interventions vs. anti-humanism within the deep ecology movement.

    From that USA Today article: “In an interview, co-author Thomas Hirschl, a professor at Cornell University, stressed that for the dozens of people they surveyed and interviewed, the American dream was not about becoming one of the 1%.

    “It’s not about getting rich and making a lot of money. It’s about security,” he said. It’s also as much about hope for the next generation as it is about the success of this one. “They want to feel that their children are going to have a better life than they do,” said Hirschl.

    In their book, the authors write that besides economic security, the American dream includes “finding and pursuing a rewarding career, leading a healthy and personally fulfilling life, and being able to retire in comfort.”

    With that in mind, USA TODAY added up the estimated costs of living the American dream:

    •Home ownership is central to the American dream. So, we took the median price of a new home ($275,000), subtracted a 10% down payment, then projected the annual cost of a 30-year mortgage at 4% interest. We also added annual maintenance costs of 1% of the purchase price. Total: $17,062 a year.

    •We used the U.S. Department of Agriculture’s April 2014 figure of $12,659 for a moderate-cost grocery plan for a family of four.

    •In May, AAA estimated it would cost $11,039 a year to own one four-wheel-drive sport-utility vehicle.

    •The Milliman Medical Index pegged annual health insurance premiums and out-of-pocket medical expenses at $9,144.•We used various estimates for the costs of restaurants and entertainment; one family summer vacation; clothing; utilities; cable or satellite; Internet and cellphone; and miscellaneous expenses (see table).

    •Total federal, state, and local taxes were pegged at 30% for households at this income level, based on a model developed for Citizens for Tax Justice.

    •USA TODAY calculated current educational expenses for two children at $4,000 a year and college savings (all of it pretax, we assumed) at $2,500 per year per child, based on various rules of thumb.

    •Finally, the maximum annual pretax contribution to a retirement plan for people under 50 is $17,500. That’s slightly less than 15% of this American dream household’s annual earnings, in line with financial planners’ recommendations.

    Total: $130,357.

    It sounds like a lot — and it is in a country where the median household income is about $51,000. Add one more child and another vehicle and you could easily reach $150,000.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top ↑