Capitalism vs. Socialism: A Soho Forum Debate

[0:00] Capitalism is unstable, capitalism is unequal, and capitalism is fundamentally undemocratic. [0:09] I want people to make their own choices about how they live their lives, the professions [0:14] they lead, where they want to work, and what they do, and capitalism offers that potential. [0:19] Slavery did it with masters and slaves, feudalism did it with lords and serfs, capitalism does [0:25] it with employers and employees. Capitalism, private property, is necessary, although [0:32] not sufficient, to a free and open society. [0:42] Please come up to the stage, debaters, two young men in the prime of their lives, Richard [0:47] Wolf, who will be defending the proposition, socialism is preferable to capitalism as an [0:58] economic system that promotes freedom, equality, and prosperity. Gene Epstein will be taking [1:05] the negative on that. Each candidate, the way this will work is that each debater will have [1:10] 17 and a half minutes in that last 30 seconds. When it comes, you'll understand why it's there, [1:17] but each of them will have 17 minutes and 30 seconds to lay out an initial case. They'll [1:22] do five minutes each of rebuttal. I'm going to beat them up a little bit with a moderator's [1:27] prerogative on some questions, and we're going to open it up to 30 minutes or more of audience [1:32] Q&A, five minutes each of closing statements, seven and a half, and again, those 30 seconds. [1:39] This is where the world changes, in those 30 seconds, and then we will take another vote [1:45] and we'll see who is the big winner. Jane, could you please, and if you haven't voted yet, [1:51] you've got about five seconds to go. Please make a vote. Either vote for the proposition [1:57] against it or undecided. You need to vote now in order to vote later. And without further [2:03] ado, let's have Richard Wolff come up and explain to us why socialism is preferable to capitalism [2:10] as an economic system that promotes freedom, equality, and prosperity. Richard Wolff, you [2:15] have the stage. [2:25] Thank you all for coming. I assume that socialism is the reason that you came, either for it [2:35] or against it. And I hope that the things I have to say will make some sense of it for [2:44] you. I did want to comment on the notion that Reason Magazine is free and that the Understanding [2:53] Marxism book costs money. And I want to urge you not to invert from the price what the values [3:02] of these things are. That would be a mistake. It would be confusing the price with the value. [3:09] And for those of you that know something about socialist theory, that's something you want [3:13] to avoid. Okay. Socialism preferable to capitalism. My basic argument is that's a very low bar. [3:27] That's not asking much. And I want to make that case as strongly as I know how. But I have [3:34] a problem in the very beginning, as I always do, traveling around this country, talking about [3:41] this. And that is, we are like bears in this country, coming out of a hibernation, about [3:48] 70 years of it, since 1945, when everything changed. I'm in a society in which socialists, [3:57] communists, Marxists occupied all the normal positions in society as teachers and workers [4:05] and bureaucrats and unionists, when we had a new deal that celebrated many of the objectives [4:13] socialists have always supported. It is across the United States, had a big picture over the [4:19] war, the clerk's office where you bought stamps. And there was Uncle Sam with his hat, arm in [4:27] arm with Uncle Joe, which stood for Joseph Stalin. After that, there was, not so surprisingly, a terrible [4:39] reaction. The business community and the right-wing in America was horrified that for the 1930s, [4:50] we had had a program of raising taxes on corporations and the rich in order to fund the creation, for [4:57] the first time in American history, of Social Security, unemployment compensation, the first [5:03] minimum wage, and a public employment project that hired 15 million people. The rich had to [5:10] pay, and the mass of the Americans got the benefits. This was so horrific, it freaked out the forerunners [5:19] of the Koch brothers. And then an alliance with the Soviet Union finished off, whoever wasn't freaked [5:26] out already. And so in 1945, everything had to be undone. The New Deal Coalition, for those of you who [5:37] remember your history, socialists, communists, the CIO unions representing tens of millions of American [5:45] workers, they're the ones that made all that happen. They're the ones that made Roosevelt do all those [5:51] things. And they had to be defeated, and they were. And the way you break up a coalition is you find the [5:59] weakest link, or what you can make out to be the weakest link, and suddenly communists and socialists, [6:05] who had been the militants making the 1930s the greatest unionization period in American history. [6:13] We never had anything like it before, we've never had anything like it since. Communists had to be [6:20] transformed, and likewise socialists. From the great allies in the war, from the great vanguard of social [6:27] programs in the 30s, they became agents of a foreign power likely to be interested in strangling your cat. [6:37] And they had to be driven out of the unions, the 1947 Taft-Hartley, driven out of their teaching jobs, [6:46] driven out of the consciousness of the American people, who were terrorized about being interested [6:53] in those things, as they have mostly been in the last 40, 50, 60, 70 years. A personal note, when I [7:02] went to college as a young person, I was interested in learning about Marxism, and I asked my teachers in [7:08] the university, what course can I take to learn about Marxism? Half my teachers explained to me, [7:15] there isn't any, nobody here knows anything about it. The other half said, oh yeah, we know about it, [7:20] but we're way too scared, we're not going to teach you anything about it. In my undergraduate and my graduate [7:28] years, and I majored in economics, I'm an economics professor, here's a fact, no one ever in any economics [7:40] course, assigned me one word of Karl Marx. Is that because he had nothing to teach us? Don't be silly. [7:51] They were just afraid. 75 years of fear. There's nothing smart and nothing excusable in any of that. [8:01] Oh, and let me mention, since it might be of some interest to you, the three schools I attended were [8:09] Harvard, Stanford, and Yale, and if they don't have the courage, what can you expect from Eastern [8:18] Kentucky? So I have a problem to talk to you about socialism, because unless you're a very unusual [8:26] American, and there are some, or a foreigner, because the situation's different abroad, you don't [8:32] know much about socialism, or what you do know is 75 years out of date, because it's changed a lot, [8:41] as I'm going to point out to you as I go through the argument. Okay, let's do it. Socialists disagree. [8:51] They always have, from the beginning. Socialism is a product of capitalism. It always was. There was no [8:57] socialism before capitalism came into being. Why? Because capitalism in the French and American [9:05] revolutions made a big fat promise when it asked people to leave the feudalism that existed before [9:12] and shift over to capitalism. It made the promise, as in the French Revolution, that capitalism would [9:18] bring with it liberty, equality, fraternity, and let's add democracy and prosperity. Socialism is the [9:29] movement that recognizes that what capitalism promised, liberty, equality, fraternity, and democracy, [9:40] wasn't delivered, and never was. And the socialism is a movement, which, if it has anything in common [9:49] among its different tendencies, is a notion that we can do better than capitalism. It's a yearning to do [9:56] better. It's the kind of yearning slaves had to go beyond slavery, or serfs to go beyond feudalism. Employees and [10:05] the people who empathize with them figure we can go better and do better than capitalism. That's what [10:12] socialism is. Beyond that, socialists agree about three flaws, failures of capitalism. And again, briefly, [10:22] to go through them. But there are three. Capitalism is unstable. Capitalism is unequal. And capitalism is [10:31] fundamentally undemocratic. Let me briefly explain. Unstable. Every 47 years, in every capitalist country, [10:42] on average, there's an economic downturn. Not due to nature and not due to war. Just built into the [10:48] system. It's called the business cycle because it always comes back. Millions of people lose work. [10:55] Businesses go out of business. A crazy crash. You know what it's like if you pick up the financial [11:01] press. You know we're waiting for the next one to hit this year or next. Mr. Trump's biggest worry [11:08] about being re-elected is that it'll happen too soon. He worries, as we all do. It's an unstable system. [11:18] That's crazy to live in an unstable system. If you lived with a roommate as unstable as capitalism, [11:26] you would have moved out long ago. What an amazing thing to accept a system that every four to seven years [11:36] threatens, threatens millions of people with unemployment, lost income, interrupted vacation, [11:43] interrupted education, lost mortgage, you name it. Then let's do the next one. Inequality. Oxfam in [11:53] England keeps track of these things. And the latest number from them summarizes it all. The 80 or 90 [12:01] richest people in the United States together, excuse me, in the world, have more wealth than the bottom half [12:08] of the population, three and a half billion people. That's the achievement of capitalism, that kind of [12:18] distribution. If you took away half the wealth of those 80 to 100 people, guess what? They'd still be the [12:28] richest people in the world, only you'd now have a vast amount of money to deal with the sickness, the lack of [12:34] education, the absence of water, the insufficiency of food of the vast majority of people. What an achievement, [12:44] such inequality. And now finally, the lack of democracy. The part of it you probably know and [12:52] thought about is the buying of our political process on display every day, everywhere. You all see it, [13:01] you all know it. But here's a part of the lack of democracy you might not have thought about. Long ago, [13:09] we got rid of kings, queens. We decided we didn't need somebody sitting at the top of society telling [13:17] us all what to do so that we would all be all, let's call it, subjects. That's what they called us. [13:24] So we got rid of the kings and queens and we said, no, you know, we can run this in a different way, [13:30] this political system. We can all get together. We can periodically vote and take steps and collectively [13:38] make the decisions that used to be in the hands of the kings and the queens. How interesting. [13:46] We democratized, at least a little, the politics. What we didn't do was to democratize the economics. [13:55] So what do we have inside each enterprise? A little king, an owner, a manager, a board of directors, [14:05] a king in his court who run everything, who make all the key decisions, what to produce, [14:10] how to produce, where to produce, and what to do with the profits everybody in the enterprise helps [14:16] to produce. If it's too difficult for you to hear me out, then it's a sign that I'm getting to you. [14:24] Thanks. We're good. Please keep going. [14:28] Please, please hear out Professor Wolff. Please respect Professor Wolff. [14:38] We don't have democracy in our workplaces. We never did. The commitment to democracy is verbal [14:45] in this society, limited to that voting activity where we live, but not where we work. And as adults, [14:54] that's where we spend most of our time, going to work, being at work, and recuperating from work. [15:01] In the workplace, no democracy at all. We do what we're told. What we produce belongs to somebody else, [15:12] and we have no say over what they do with it, how this is organized, what the technology is. [15:21] And socialists, therefore, have said, my God, we can do better than capitalism. And that's what they [15:26] want. And that's what they agree on. But here's where the disagreements. How do you go about it? What do [15:32] you do? And we have a benefit. Socialists do today. We have some experiments that were made in the 20th [15:39] century. Russia, China, Cuba, and so on. And we learned from those experiments what works and what [15:48] doesn't. What should be pursued and what should be set aside. And so the new socialism, and if you're not [15:56] aware of it, that has to go back to what I said at the beginning. You haven't been keeping up, which is [16:01] hard to do in a society which makes socialism a taboo. What has happened to socialism is a refocusing [16:10] of itself. It's not interested so much in the state doing things that achieved rapid rates of economic [16:17] growth. True enough. But it also left too much power in the hands of too few people. And that has to be [16:24] addressed and dealt with, which socialists have been doing. And the new focus, the new focus of socialism [16:32] is to do something at the workplace that was never done. To go beyond capitalism in the organization [16:40] of the workplace. To democratize the workplace. To make where we spend most of our adult lives at work, [16:49] a place where democracy reigns. Where all the people who work in an enterprise participate in making the [16:56] decisions of what to produce, how to produce, where to produce, and what to do with the profits. [17:02] Because if they all together made those decisions, we wouldn't give some people 150 billion dollars and other [17:09] people have to borrow money to get their kid through college. We wouldn't have the inequality. [17:16] We certainly wouldn't allow the irrationality of every four to seven year instability. [17:21] Everybody, everybody together would choose a technology that isn't dangerous to the health of [17:27] all of us at the workplace. We could go beyond capitalism, but we have to have the courage to [17:35] do what was not yet done. Not in Roosevelt's New Deal and not in Russia or China either. The transformation [17:44] at the base of society into a democratized workplace. That's the new direction of socialism. That's where [17:53] socialism will be in the 21st century that we are now entering. It's a new and a different socialism. [18:02] It has learned from its own earlier experiences and experiments. Two little footnotes. Capitalism did [18:13] not emerge out of feudalism all finished in one swell foop, did it? If you know the history, you'll know [18:23] that capitalism started in this town, in that town, in that village, in that area. Often it didn't last more [18:28] than a few weeks or a few months. Sometimes a few years. And then it was crushed by feudalism. And they [18:33] had to figure out how to survive. And they had to get together. It took centuries. Socialism isn't born [18:40] all at once either. It makes its early experiments. It had one in the Paris Commune in 1870. And then it [18:47] had some other experiments in the 20th century that I've mentioned. And just like with capitalism, you learn [18:54] from your experiments, how to make it better next time, how to correct the mistakes you made in the [19:00] project that has animated socialists from the beginning. We can do better than capitalism. And [19:09] there is no reason that the human progress that took us beyond ancient villages and tribes and slavery [19:18] and feudalism should imagine itself to have stopped at this point. Every other system was born, evolved, [19:28] and died. Capitalism, we know, was born and evolved. I'll leave it to your inference as to what it is [19:37] doing now. Thank you. All right. Thank you, Richard Wolff. Follow him. Follow him on Twitter at [19:53] Richard D. Wolff with two Fs. And now taking the opposite side is Gene Epstein. Follow him at Gene [20:02] Soho Forum. Gene Epstein, ladies and gentlemen. By the way, there are seats up front for people who are [20:13] in the back. And I want to apologize to Professor Wolff for that outburst. That was very rude. [20:19] We don't run the Soho Forum that way. And thank you, Professor Wolff, for being gracious about that. [20:25] Well, let me start. It is a pleasure to share a stage with Richard Wolff, who I consider my alter ego [20:34] in a parallel universe. We both came of age as socialists. In my case, from age one, since my [20:42] mother was a card-carrying member of the Communist Party, and I have her FBI file to prove it. [20:50] You could always tell who the FBI agents were in the party because they were the only ones who paid [20:56] their dues on time. Richard paid his dues by getting an economics Ph.D. at Yale, followed by a career [21:04] advocating socialism. I paid my dues by evolving into a different kind of radical, a bleeding heart, [21:12] freedom-loving advocate of capitalism. I believe that even the deeply flawed capitalism we have now, [21:19] heavily distorted by government interference on behalf of the powerful, is preferable, by far, [21:27] to Richard's socialism in promoting freedom, prosperity, and equality. Richard bears a very heavy [21:35] burden of proof because his socialism has never existed. He repudiates my mother's Soviet Union, [21:44] my mother's favorite Cuba. He has indeed called these systems state capitalists. I'm glad he's learned [21:51] from their mistakes, since their mistakes has in fact, of course, cost the blood of tens of millions of [21:57] innocent people. He wants the economy, as he explains in his book, democracy at work, a cure for capitalism. [22:06] He wants the economy reorganized around workers' self-directed enterprises in which employees own [22:13] and democratically run companies and keep the broadly defined profits or surplus that normally go to the [22:21] employers. I fully support what Richard calls employees becoming their own employers, so long as people [22:30] freely choose that arrangement. Richard thinks such firms are a substitute for capitalism, but they're actually [22:38] just another option that capitalism offers. Nothing about the system of practicing of protecting property [22:47] rights of firms in a free market dictates how these firms must be structured. Richard himself has written about [22:55] the quote, varying kinds and degrees of democracy in the workplace, which already exist. Based on these cases, [23:02] he observes, quote, workplace democracy responds to deep needs and desires, unquote. But these deep needs and [23:12] desires seem to run only skin deep. Richard has written that in today's worker owned enterprises, quote, [23:20] it might be legally possible for worker owners to transform the enterprise so that they become not only owners, [23:27] but also collectively directors. However, he concedes that has very rarely happened. Well, no doubt it very rarely happens [23:38] because workers very rarely want it to happen. But the move to workers' self-directed enterprises can happen in the [23:46] capitalist system if workers do want it to happen. Start with the fact that the bottom half of the population accounts for [23:53] one-third of all consumer spending, the bottom four-fifths for nearly two-thirds, adding up to trillions of dollars per year. [24:01] On the investment side, there's over a trillion dollars in labor union pension funds domestically and an estimated [24:08] 40 trillion worldwide held by labor union pension funds. All this financial firepower could be [24:17] marshaled to make workers' self-directed enterprises the dominant mode of production. And it would be true [24:25] to the 1960s view that radical change must be implemented by the same people who seek to be the embodiment of that [24:34] radical change. But the unwillingness of workers to follow the Marxist playbook is as old as Marxism itself. [24:43] Around 1980, democratic socialists like Michael Harrington and Tom Hayden advocated a bottom-up socialism [24:50] similar to Richard's. But they acknowledged that without the coercive power of government, worker-owned enterprises, [24:57] quote, are almost impossible to get off the ground, as two of them wrote. Richard might argue that it's okay [25:06] to use government power to try to jumpstart workers' self-directed firms since government often rigs the game [25:13] anyway. But a Marxist like Richard should be deeply troubled by the old contradiction of radical change from [25:22] below being implemented by the force of government from above. And beyond that, he would use government to [25:30] socialize finance and the allocation of labor. That's why he and I are taking opposite sides in this debate. [25:38] He advocates a full-blown form of socialism that will put freedom, prosperity, and equality under siege, [25:46] just like the old socialisms did. But let's go all the way with Richard and assume that a socialist political [25:53] party wins at the ballot box with two-thirds of the electorate voting for its candidates. Since two-thirds [26:00] is normally interpreted in politics as a mandate, the government makes Richard's socialism a reality. But voting [26:08] for a radical idea in a voting booth is very different from a full and active commitment to that idea. [26:17] So let's not assume that the two-thirds have anticipated the real consequences of what they voted for. [26:25] Richard writes that apart from doing our assigned jobs, workers would each be, quote, [26:30] democratically and collectively given fully equal participation in decision-making over their own [26:37] enterprise and over the broad economy, unquote. He adds, somewhat ominously, quote, [26:44] no one could work without engaging in both roles. There will be a need for financing under Richard's [26:51] socialism, both to create new worker-owned companies and to provide funds for enterprises that want to [26:57] expand. The, quote, obvious alternative, writes Richard, to the existing sources of finance is, quote, [27:05] socialized banking consisting of, quote, workers, self-workers, self-directed enterprises where workers [27:12] and communities affected by bank policies together direct and operate banks. So Richard would shut down [27:20] the nearly 50 billion raised annually through crowdfunding and the several hundred billion raised through [27:26] various forms of venture capital. And finance is not the only function he would relegate to the power of [27:33] politics. He also proposes a, quote, specialized agency that would, quote, always know from constant [27:41] monitoring, monitoring which existing enterprises need more laborers, which have registered the wish to [27:48] commence new production, all the relevant skill and experience requirements, and where effective laborers [27:54] and enterprises are located, unquote. He adds that the agency's reports would be submitted to all workers to [28:03] aid them in making their decisions. Notice that he's talking about knowledge of the relevant skill and [28:09] experience of 160 million workers in the U.S. across hundreds of thousands of firms. That's information [28:16] the specialized agency will, quote, always know from constant monitoring. From my work experience, I can tell [28:23] Richard that those constant monitors who keep coming around will be the butt of jokes and the information they [28:29] come away with will be superficial when it isn't totally misleading. So in Richard's world, we'll be [28:36] required to do our assigned jobs, attend meetings about company matters, and vote on the outcomes. We'll also [28:42] have to pore over the reports of the labor allocation financial agencies and then discuss their recommendations [28:48] with many others and vote on those outcomes. I submit that only in a dystopian nightmare could most of us [28:56] imagine ourselves spending our waking hours in this way, especially since the vote of any of us, any one of us can [29:04] hardly determine the outcome anyway. Richard approvingly uses the 1960s term participatory democracy, in which we [29:13] each get to participate actively in democratic decision making. In a 1970 book called After the Revolution, [29:20] Sociologist Robert Dowell explained the arithmetical unworkability of this idea. If each attendee at a [29:28] meeting were given just 10 minutes to address the issue being voted on, it would take 10 hours to move [29:36] on to the next issue, provided there were only 60 people at the meeting. But let's take this leap and assume [29:44] the participatory democracy would be functional. Many firms seeking to expand their operations will have to [29:50] borrow funds from the democratically run financial agencies while also applying to the democratically [29:56] run labor allocation agency for more workers. And these democratically run agencies will be ruled by the [30:02] vote of the majority. But to pick up on an objection raised by Atlantic magazine journalist Connor Friedersdorf, [30:10] we might ask, how easy will it be to get the democratically run finance and labor allocation agencies [30:17] to support the expansion plans of firms that produce Muslim prayer rugs and Korans and the building of new [30:25] mosques? Friedersdorf goes on to ask, would you prefer a socialist society in which birth control is available [30:33] if and only if a majority of workers exercising their democratic control, a sense? Or would you prefer a society [30:41] in which private businesses can produce birth control in part because individuals possess economic rights [30:49] as producers and consumers, the preferences of a majority of people around them be damned? Unquote. [30:56] Friedersdorf's question applies to the related issue of freedom of speech and press. Would you prefer [31:04] a socialist society in which dissenting journalism is available if and only if a majority of workers [31:11] exercising their democratic control agrees? Or would you prefer a society in which private enterprises [31:19] can produce dissenting journalism, the preferences of a majority of people around them be damned? So at best, [31:27] our freedoms would be circumscribed by the tyranny of the majority. But we don't have to press this [31:34] decisive objection since the overwhelming likelihood is that elected representatives and their appointees will [31:41] have most of the real power. There won't be enough hours in the day for us to even be aware of the [31:47] thousands of decisions being made each day on our behalf. Special interests will form around these [31:53] centers of power. And as Friedrich Hayek accurately predicted about conventional socialism, the worst [32:00] will get on top because power hungry people are mainly the ones who end up on top. Our most beloved [32:08] living ex-president Barack Obama was called by the by New York Times journalist James Risen, quote, [32:16] the greatest enemy of press freedom in a generation, unquote. As left-wing journalist Glenn Greenwald has [32:24] pointed out, Obama used the archaic 1917 Espionage Act to prosecute more journalists, including James Risen, [32:32] than all previous presidents combined. So freedom of speech and press is a fragile thing, constantly being [32:41] assaulted on all sides, and especially by government. If you magnify the reach and power of government [32:49] under Richard's plan, politicians in power can stifle dissent by stealthily denying funds and labor to [32:58] enterprises that put out information that government doesn't want published. Now take the issue of [33:04] prosperity. Take the force that brings prosperity, innovation, or what economist Joseph Schumpeter [33:10] called creative destruction. Richard thinks that as long as people can be offered another job, they'll [33:17] agree to giving up their current job to allow creative destruction to happen. But since people naturally [33:24] resist change, efforts at major or even minor change would likely be thwarted by special interests [33:30] reluctant to give up their established positions. Imagine the response if Steve Jobs sought funding for [33:39] a smartphone that would also replace a flashlight, a watch, a camera, a compass, a calculator, a recorder, [33:46] CD player, and GPS navigator, threatening the industries that turn out those products. The pattern of [33:55] obstruction will be emboldened by the knowledge that most new ideas fail and few succeed in a big way anyway. [34:04] Policies toward imports could make Donald Trump look like a free trader. When consumers voted with their [34:10] dollars to buy Japanese cars because the cars were better made and lasted longer, there was a market in [34:17] place that made it hard to stop the imports. But in a politicized environment, the threatened [34:22] industries would find it easy to prevent the foreigners from selling us the cars. The planners [34:28] will have a perfect excuse for rejecting any projects or proposals they don't like. The economic [34:33] reality of scarcity. By scarcity, I mean the fact that what everybody wants always adds up to more than [34:40] there is. So they can reject proposals they don't like on the reasonable grounds that the resources are [34:46] simply not available. So freedom and prosperity would both be under siege in Richard's system of [34:54] socialism. On inequality, as Noam Chomsky has pointed out, you can find income equality in a prison where power [35:02] is quite unequal. And political power will be more unequal than even under a flawed system of capitalism. The flawed [35:11] system we have is preferable by far to what Richard proposes in terms of freedom, prosperity, and equality. [35:18] Because we have so many avenues of private funding, dissident publications like The Intercept, Jacobin Magazine, [35:26] Reason Magazine, books like by Richard Wolff, and a debate series like the Soho Forum can persist. Because we have [35:34] private funding and reasonably functioning consumer and capital markets, innovation that brings prosperity [35:41] can persist and even flourish. And on income inequality, the turn toward capitalism in countries like China [35:48] and India has lifted hundreds of millions out of grinding poverty and has therefore meant a narrowing of [35:54] income inequality globally. But I began by saying this is a flawed system, riddled with crony capitalism. [36:05] Richard mentioned the instability of the U.S. economy. Indeed, it is unstable. I read Richard's analysis, [36:13] and as far as I can understand, he believes that the Great Recession was triggered by the fact that the [36:20] consumer was tapped out, the consumers could no longer afford what they were buying. Well, [36:25] if he looks at the data, he'll find that just before the Great Recession happened, consumer spending [36:31] continued to rise. That was in the fourth quarter of 2007. What he ignores, what he ignores was the crony [36:39] capitalist policy of government through the Federal Reserve that brought that awful event. So, [36:48] I'm Gene Epstein and I'm here to recruit you. Yes, we have a flawed capitalism, but in order to make it a better [36:59] capitalism, we have to do a lot of radical things, including reigning in the power of the Federal Reserve [37:08] that does indeed cause a banking cartel and brings instability in this economy. Maybe we can talk more about [37:16] those things later on. Thank you very much. All right. Thank you, Gene. I've seen the debate is [37:32] joined. Now we're going to have five minutes of rebuttal each. Gentlemen, I'll suggest that you [37:37] say seated and use hand microphones. You want to go to the podium. Okay, we cannot keep these guys down, [37:45] so we won't try. Richard, you have your option. I just want to remind people of a couple things. One is, [37:51] remember that the proposition, the resolution under debate is, socialism is preferable to capitalism as [37:58] an economic system that promotes freedom, equality, and prosperity. Follow Richard Wolfe at Richard D. [38:05] Wolfe with two Fs. Follow Gene Epstein, Gene Soho Forum. Follow me at Nick Gillespie. Follow the [38:12] Soho Forum at the Soho Forum. Follow Reason Magazine at Reason. Richard Wolfe, please. You have five minutes to rebut. [38:28] Listening to Gene makes me realize that a book that you write is a little bit like a child that you [38:35] have. You think it's yours and then you watch as it becomes its own thing and is understood by other [38:42] people in ways you never imagined. I cannot recognize three quarters of what he said. It sounded to me like [38:49] quotes of somebody I didn't even want to meet. I'm not proposing a kind of socialism. I don't believe in [38:56] looking into the future and telling you what the society ought to be. People who tell you the future [39:02] are usually found in carnivals. You pay them a little bit of money. They tell you who you'll be [39:06] sleeping with in two weeks and you giggle. If you actually take seriously what they've proposed, [39:12] you need help. I'm not proposing what a socialism would look like, number one. I'm talking about how [39:20] you get beyond what we have. Because like in all societies, you're either satisfied with the way [39:28] things are or you're looking for how to make them better. If there's a genius in the United States, [39:36] it's been that we've been willing in many areas to do better. But there's a taboo when it comes to [39:44] economics, represented by what Gene said, that you really shouldn't look at that because it's only [39:50] going to get worse. Those nasty politicians will do all the terrible things that should make you stay [39:57] with what you have. Oh yes, tinker with the Federal Reserve or here, but don't change the fundamentals. [40:06] Where did that come from? Where did the economic system get a pass? We debate about family life, [40:11] we debate education, we debate our transportation system, but debate the fundamental structure of [40:17] capitalism, which is not about markets and not about the government, but how you organize the [40:23] production and distribution of the goods and services without which you cannot live. Slavery did [40:29] it with masters and slaves. Feudalism did it with lords and serfs. Capitalism does it with employers and [40:36] employees. And the whole purpose of my book and the work that we do and the new directions of socialism [40:43] is to question and transform that. No more group of employers telling us all what to do and employees [40:51] living in that undemocratic workplace. And the whole notion of controlling the government so it doesn't [40:58] oppress you in all the ways that Gene likes to enumerate, is to create a social force at the base of [41:05] society that could possibly prevent that. And making the mass of people in the workplace have the final [41:16] say and power over what that workplace does means you don't have a small group of people in a government [41:22] cutting a deal with a small group of people called employers at the expense of a large group of people [41:29] called employees. That's the transformation at the base of society that will mark the 21st century's [41:38] socialism. So that all the old arguments against the socialisms of the past, arguments predicated on [41:46] what's wrong with the government and the over-wielding power of the government, they're not relevant [41:52] anymore because the thrust of socialism is at the base of society, not at the level of government. [42:01] There's a reason Karl Marx wrote no books about the state and endlessly studied the production and [42:08] distribution of goods and services because that's the core of the economy he wanted to take us beyond. [42:16] And that's the problem we have. We have let that go as if there's something necessary, [42:22] or holy or sacrosanct about that way of organizing production. So we all take it for granted. We [42:30] shouldn't. We never should have. The impulse to democracy ought to have been applied in the workplace. [42:38] And as for the arguments, gee, you wouldn't want to go to all those meetings. Those were the arguments [42:44] of the kings. We don't need democracy. The mass of people haven't the time or the interest or the [42:50] intellect or the education or the training or the – come on. We ought to recognize those kinds of [42:58] arguments against change for what they are. They're fearful. So we're going to stay with what we have, [43:05] the capitalism that we have, producing the very humorous takes on Mr. Trump or Mr. Johnson in England [43:16] as the expressions of a system spinning out of control, in part because we don't face that the basic [43:23] organization of production has been given a free pass and is what's holding us back. Thank you. [43:30] Thank you, Richard. Gene, please, you've got five minutes. [43:37] Well, Richard wrote a book called Democracy at Work, A Cure for Capitalism. It was published seven years ago. [43:50] I read it quite recently. Richard probably hasn't read it very recently. That's where at least commendably, [43:59] commendably. He's written a whole book, a book, by the way, that Karl Marx never did write, [44:05] about the socialism that he wants. And I quoted copiously from that book in my initial talk. [44:14] If Richard is now going to say, oh, well, you know, that book, it's a – forget that book. [44:20] Uh, just, you know, try to recognize that, uh, socialism is preferable to some of the crap that [44:27] goes on now. Then we'd have to say, Richard, we've been hearing that for over a century, you know, [44:33] from socialists. Then we had the Soviet Union, there's Stalin, then we had Mao, and then we had, [44:38] uh, we've had a lot of mess from your socialism. You've got to be a little bit more specific [44:44] before we get the least bit interested in something that has been so disastrous for humankind. [44:52] So I want to get Richard back on the straight and narrow and take him seriously that he's proposing [44:57] something with a nuts and bolts definition – workers' self-directed enterprises. And the embarrassing [45:04] thing for Richard, as it was for Marxists right back to the time of Marx, is that they're selling [45:11] something that workers don't seem to want. We – we had socialism in Israel. We had five percent of [45:17] the – of the – of the – of the country really was socialist. I trust that Richard would agree that [45:22] the Kibbutzim of Israel, where five percent of them really were socialist in a true sense, the bottom-up [45:28] sense. And that's what I'm proposing. Now, of course, what also happened to Israel, as Richard probably [45:34] knows, as you probably know, is that those Kibbutzim just fell apart. They don't exist anymore. People lose [45:40] interest in it. But again, what we are saying, we libertarians are saying, go for it. Workers, [45:47] self-directed enterprises. You do have co-ops. Richard – Richard, in another mood, say, hey, [45:52] look, you've got co-ops. It speaks to – to – to needs and desires. And indeed, maybe it does. Then go for [45:58] it. But then let's build it from the ground up, just like I'm proposing. And then we have a system of [46:06] capitalism. Do I want to keep the flawed system of capitalism, the system that fights – the [46:11] political system that protects the powerful? No. Capitalism is a system of profit and loss. [46:17] Profits encourage risk-taking. Losses encourage prudence. That's the system. Now, we abrogate that [46:24] for the crony capitalist system. That's what brought about the housing bubble that caused the Great [46:29] Recession. The – we – I'm – I'm quoting Noam Chomsky, a guy I also like, by the way, even though [46:35] he's a socialist. We – we – to – to a too great extent, we privatize profits and we socialize losses. [46:43] That's what the Federal Reserve does. That's what it's all about. Do I want to sit back and like [46:49] this system? By God, no. We have a crony capitalist system, by the way, that shafts people of limited [46:56] means most of all, that defends the rich and powerful. And there have been victories against [47:03] it. We – we used to have an airline cartel protected by the Civil Aeronautics Board. Then [47:10] somebody noticed that where the CAB didn't dominate, a flight between L.A. and San Francisco within the [47:16] same state cost half what it cost to fly from Washington to Boston – or Washington, D.C. rather, [47:23] to Boston, same distance, twice as expensive because of government. So then they abolished the CAB – the CAB [47:30] and there – and there was competition in the airlines. And that was a huge victory for middle [47:35] income people. So victories can be won. Richard, I want to recruit you to change this system of [47:43] crapitalism, if you'll excuse the expression that my socialist Uncle Abe used to use as a – but I use it [47:50] as a contraction for crony capitalism. We need more capitalism, yet not less. We need to change things. [47:56] Richard could join us or he could focus on building his workers' self-directed enterprises [48:03] from the ground up, building on top of the co-op movement, the employee ownership movement – which, [48:09] by the way, already gets tax breaks that I don't necessarily object to – that already gets those breaks. [48:15] Go for it. Turn everybody on to worker self-directed enterprises, and they're perfectly compatible. [48:21] It's just like being in business for yourself. That's all it is. It's a great idea. It hasn't [48:28] really caught on, but maybe it has potential. I welcome it. Thanks very much. [48:33] All right. Thank you, Gene Epstein and Richard Wolff. We're now ready to do the audience Q&A. [48:46] We have a couple of microphones set up. Please walk up to them. I am going to be – I realize [48:54] that each of you probably, on some level, view the other as a Nazi. I am going to be – which is wrong [49:01] on both counts – but I'm going to be a Nazi. I'm going to ask you to state a question. We don't want [49:07] to hear a lot of speeches. We want to hear questions. Direct them to either or both people – debaters. [49:14] So let's go, and we're going to start right now. Go. First question. [49:19] Hello. My name is Nicholas Jacoby. I'm from Germany, native German, and it took me 35 years [49:26] and winning the green card lottery for learning what libertarianism is. I studied social science [49:32] and Germany taught it. Okay. Thank you. What's the question? [49:34] And I would like to know from Mr. Wolff why he thinks that it was not possible for me to learn [49:43] about libertarianism and tyranny of the majority, even though I studied social science and taught it [49:50] for seven years at high school. Yeah. I'm now 38 years old, and it took me moving here. But you [49:58] learned it obviously before you – you learned about Marxism before you even left high school, [50:06] because if you – if you know about the term when you start studying, I would say it was much easier [50:13] for you to find out about the other side than me. Okay. That studied social science and – [50:21] Thank you. – taught it. Okay. Thank you. Richard, please use a microphone. Hold one up. And I guess [50:30] the – it should be on. Could you – Can you hear me? Yes. Okay. Okay. So the question was [50:36] basically – What was that question? He was calling BS on the idea that you couldn't learn [50:41] about Marxism. And the question was that I really could or that you want to know why I couldn't? [50:50] I – Okay. So – He took a long time and you took a very short time. Why is that? He's saying [50:58] libertarianism is harder to learn about than Marxism in today's society. I never indicated the number of [51:03] years it took me to learn Marxism. Okay. Richard, can I – can I – I am sorry it took you a long time, [51:13] if that helps. Do you – do you feel like there is not a free flow of information in contemporary America? [51:22] I mean that – it blows my mind that you could even say that. Okay. All right. Thanks. Okay. [51:30] Let me explain. Economics departments, which is what I know around the United States, is where you [51:35] might learn Marxian economics. You have to go – first of all, the vast majority of economics departments [51:42] in the United States have no person in them who knows of or teaches a course in Marxian economics. [51:49] Number one. They don't have them at all. Number two, the vast majority subscribe to a basic kind of [51:56] mainstream economics that's called neoclassical economics, which is the dominant tradition. There [52:02] is a small dissenting group that are called Keynesian economics because of something that happened in the [52:09] Great Depression and the new development of a critical perspective that has nothing to do with socialism. [52:15] The – there's tremendous fights between the neoclassicals, who are the majority, and the [52:20] Keynesians, who are minority. One of the very few things the two groups can get together on is excluding Marxists. [52:28] That's the way the American economic system works. And since it's the economic – economics [52:33] departments of our universities that train the politicians who deal with economics, the journalists [52:39] who do economics, and the people in the top reaches of business, you have a solid kind of mask, if you [52:48] like, of uniformity in which the kinds of things that a Marxist economist talks about are bizarre for them, [52:56] not because of their complexity or their newness, but because they have no experience whatsoever in [53:03] dealing with these things. And that has been true for the entirety of my experience in the [53:09] American academic environment where I've been a professor all my life. It is a – it is a systematic [53:17] exclusion of the kinds of ideas that I represent that make students to this day not encounter it, [53:25] or, if they have a lot of fortitude, to have little study groups on the side at their own expense, [53:32] to learn this kind of material, because this country remains afraid of dealing with that kind of [53:39] thinking and that kind of tradition, even though the literature for it is massive. [53:44] Okay, thank you, Richard. And – and wait, Gene, I'm sorry, hold on. Can I – Richard, can I ask, [53:49] does it complicate that scenario at all, that we have at least one major candidate for [53:55] president, Bernie Sanders, who identifies as socialist and has a large turnout? I mean, [54:02] the idea that socialism is somehow suppressed seems like a reach, to be quite honest. [54:08] Bernie Sanders is the first candidate in 75 years not to disown that title as part of the requirement [54:17] not to commit political suicide. And you want me, the first time in 2016, that he dared do it, [54:25] breaking that taboo. I'm supposed to pretend that the one person so far done it in 75 years, [54:32] undoes what I just said? You got to be kidding. Okay. Hey, and Richard, I'll look forward to the [54:40] first time a major party candidate actually explicitly is libertarian. Gene, do you have a comment? [54:45] I completely agree with Richard. Is this on? Yes, it's on. It's on. Yes, it's on. Thanks. Yeah, [54:54] I completely agree with Richard that there's a lot of mind rot in the academic departments on economics. [55:03] Most of them, most of these economists basically want to run the world. They want to pretend that [55:08] economics is a branch of mathematics. It's, uh, it's a waste of time for the most part. Uh, in the age [55:15] of the internet, don't let school get in the way of your education. There's no excuse not to inform [55:21] yourself about a whole range of things, including Austrian economics with which I identify or Marxist [55:28] economics with which Richard identifies. The internet offers just an incredible amount lectures from [55:33] Richard Wolff himself on the internet. Uh, I appear regularly on part of the problem, Dave Smith's [55:39] show. So you want to catch that to, to learn economics, the, the, the intelligent way that [55:45] whatever you really learn, you teach yourself anyway. Don't let school get in the way. Thank you. And [55:49] there's, it might, uh, it might be interesting. We're going to go to the next question to think [55:54] there's, by my count, uh, I think there's two Marxist economics departments in the country. There's one [55:59] at Notre Dame and one at UMass Amherst. There's about two Austrian programs of note, maybe three. [56:05] So we're, as Dave Smith pointed out, we're all losers in this room. We have that in common. We're [56:10] in the same club. Okay. Let me just briefly correct. There was at Notre Dame, a department that program [56:18] was destroyed about eight or nine years ago and doesn't exist. And the program at University of [56:24] Massachusetts where I taught, uh, has ejected most of the Marxists that were there. There were half a [56:31] dozen. And so it is now really better described as a Keynesian or left-wing Keynesian program. [56:37] Thank you. There is no Marxist department in the United States. There are only scattered [56:41] Marxists here and there. You gotta build one. You get those workers building up from the ground. Let's go. [56:45] Okay. Question. Sir, no preamble. No, we don't care where you're from. We're all strangers here. [56:51] It's the French Foreign Legion. Just ask the question. Uh, this question is for Richard. [56:56] Uh, in a 100% capitalist society, laissez-faire capitalist society, when there's, there's no [57:01] Federal Reserve, uh, you would be well within your rights to be a socialist. All you need to do is band [57:06] together with other socialists and form your own community. Whereas, uh, if I want to be a capitalist in [57:12] a social society, I would be forbidden from doing so. Uh, why, why do you want to force everyone to be a [57:18] socialist? Why not let the capitalist be capitalist? Let the socialists be socialist. Everyone's happy. [57:22] Thank you. First of all, in whatever socialist societies you're referring to, and the major one [57:33] in the world today is the People's Republic of China that uses that name, they are busily encouraging [57:39] people to form and develop capitalist enterprises. So the premise of your question is, is wrong. [57:45] Number one. Number two, I never said and would not argue that in a society that is in transition, [57:51] as I believe capitalism is, there aren't all kinds of spaces for there to be enterprises organized in [57:57] the old traditional capitalist way and enterprises organized as worker cooperatives in the new direction. [58:04] I would expect that kind of coexistence to continue, to be filled with tensions and difficulties, [58:10] much as capitalist enterprises began in feudalism and existed in a tense relationship until the [58:17] transition happened further. So my presumption is, there will be coexisting different structures [58:23] in whatever name you give to these societies in transition. Okay, look, in line with the gentleman's [58:31] question again, under capitalism, property rights of firms are protected. So if there's a worker co-op [58:38] owned democratically by the workers and they're all directing it, their property rights will be protected. [58:43] If it catches on and the entire economy is worker co-ops, I say, that's great. That sounds terrific. [58:50] Run your own enterprise. Some of the other things Richard proposes, which would be the iron fist [58:55] of the state having to do with finance, that I object to. However, there was an article in the National [59:01] Review under William F. Buckley, the right winger, welcoming worker ownership. I know that article well, [59:08] because I wrote it. And so, again, we're not arguing about that. What Richard doesn't really want to do, [59:15] I know, for example, he likes Jeremy Corbyn's idea, another kind of top-down plan where you can sneak [59:23] this kind of thing through the back door. Go for it. There are co-ops. They already exist. So in line [59:28] with what the gentleman said, we already have what you're talking about. We have worker co-ops, [59:32] we have a huge blend. And if it tilts toward more worker ownership, wonderful. [59:37] Okay. Next question, please, sir. Hi. My question is for Richard as well. So [59:44] one of the core tenets of libertarianism and capitalism or true capitalism is the non-aggression [59:49] principle. So my question for you is, do you think that socialism intrinsically violates the [59:54] non-aggression principle? And if so, can you explain how committing aggression leads to greater freedom [1:00:00] and equality? Okay. Richard? Do you want to do a quick description of the definition of the [1:00:10] non-aggression principle? Okay. Or you want me to? Yeah. Sure. So the non-aggression principle is the [1:00:18] principle that you're essentially allowed to do whatever you want as long as you do not commit [1:00:22] violence, you do not initiate violence against another person. Okay. Thank you. Richard? Can I answer for [1:00:28] Richard? Well, uh, uh, you know that? Well, no, no. I believe Jean, let's let, let's let Richard, [1:00:34] okay. Richard, you're good with that? Richard wants me to answer. Okay. Jean, please. Thank you, Nick. [1:00:39] This is Jean Epstein of One Man Chef. Look, what's Richard's answer? Uh, Richard's answer is, uh, [1:00:50] well, you know, you're free to starve, you know, under, uh, capitalism, you know, if, uh, if you don't work, [1:00:55] you don't get a job, you're going to starve, you know? I mean, that's, so that's aggression, you know? So, uh, again, [1:01:00] you know, forgive me, but you know, you're coming out at Richard left from left field, [1:01:04] because he's going to say that, that clearly the capitalist system commits aggression because [1:01:08] you're going to starve unless you get a job. And, uh, and then of course we have a lot of answers [1:01:12] to that somehow or other, all the starvation tends to happen in socialist countries, not in this country. [1:01:18] But I think I got Richard fired up. He's going to answer you now. You're free to stop. I just jump [1:01:23] started. Yeah. Mission accomplished. Yes. The, this remarkable tendency in, in a frightened [1:01:30] society to assign starvation or deaths. I, it's the only place in American culture where counting [1:01:40] dead people seems to be a way to make an argument. Gene mentioned it before. Now it's starving people [1:01:48] before he mentioned, uh, the disasters of socialism where millions died. What an interesting argument. [1:01:56] We're going to count millions dead. Well, what is it that capitalism's history shows us? The worst two [1:02:05] wars in human history, world war one and two, these were products of competition among capitalist economies, [1:02:12] weren't they? 400 years of colonialism destroying two thirds of the world were products of capitalist [1:02:21] accumulation and competition. What kind of, what, what kind of, let me finish, what kind of mentality [1:02:30] picks a few examples of admittedly horrible things that deserve to be criticized, but a comparison of [1:02:38] death counts? The first book I ever wrote and published, Yale University Press, was called The Economics [1:02:44] of Colonialism. It studied what Britain did in Kenya. Britain arrived in Kenya in 19, in 1895 and set up [1:02:52] the East Africa Protectorate. And 30 years later, 1930, when the depression hit, I studied what [1:02:58] happened in Kenya at that time. When the British arrived, they did a census, four million people. [1:03:03] In 1930, they did another census, two and a half million people. British colonialism killed millions of [1:03:11] people in one small country. Multiply that. If you want to do the death count analysis, which I find bizarre, [1:03:21] you're in very shaky ground attacking socialism on the basis of capitalism. And the same kind of cherry [1:03:29] picking of your examples came with Jean and Kibbutzim in Israel. Do worker co-ops sometimes fail? Of course [1:03:38] they do. Do capitalist enterprises sometimes fail? You bet they do. All the time. This, what is this strange [1:03:45] kind of choosing your example? Let me give you a counter example. In 1956, a group of workers with a [1:03:52] Catholic priest in the north of Spain, in a little town called Mondragon, made a worker co-op. The priest [1:03:59] led them. Six workers, 1956. Today, something called the Mondragon Cooperative Corporation has over [1:04:06] 100,000 workers. It's the biggest worker co-op on the planet. It is a great success. It's the seventh largest [1:04:14] corporation in Spain. It is a successful worker co-op. Two American corporations pay the Mondragon [1:04:23] Corporation to have their scientists working alongside the scientists in this worker co-op. And the name of the [1:04:29] two American corporations is General Motors and Microsoft. They understand what those worker co-ops [1:04:36] can do, even if people here have to pick an example where it didn't work out. It's as if I said, [1:04:43] well, capitalism, just look at the Ford Edsel. Uh, Gene, uh, you're jumping out the bit. [1:04:49] Make two comments. Make two comments to Richard's comments. Again, again, I like what Richard just said. [1:04:57] Again, go for it. I only mentioned the Kibbutzim because obviously the Kibbutzim were a well-known [1:05:02] socialist phenomenon. It didn't work out. Uh, Mondragon did. I was a part, I was very interested [1:05:08] in the worker ownership movement in the 1980s, ironically, by the way, when I was senior economist [1:05:12] in the New York Stock Exchange, I was going to all the meetings. We were hearing about Mondragon all the [1:05:16] time in the 1980s. Thirty years have passed and we don't have a Mondragon in the U.S. So I encourage Richard [1:05:25] to go for it, build it. Capitalism will love it. Why not? So again, I'm not trying to discourage Richard [1:05:32] about going for it. I'm just saying that he has the means to do it. He can start that revolution [1:05:38] right away within the context of capitalism. With respect to the body count point, the only point [1:05:44] that's being made in this case, and again, I honestly apologize to Richard for backing him [1:05:49] in the sense that he seems to be now defending the state capitalism that he objects to. He wrote a [1:05:56] whole book, collaborated on a whole book, in which he condemned the Soviet Union as state capitalist. [1:06:01] So he doesn't really want to defend those old line socialisms. But the difference in terms of body [1:06:07] count is that this was what governments did to their own citizens. These famines, because they couldn't [1:06:15] run the agriculture right. The worst getting on top, lunatic sociopaths like Joe Stalin and Mao Zedong [1:06:24] and Pol Pot taking over and murdering their own people either through the sin of commission or omission. [1:06:31] That's the difference. Oh God, of course, the body count with respect to war. Two million people, [1:06:37] you know, killed in Iraq and Vietnam. Of course, our body count with respect to wars abroad, [1:06:42] horrible. Richard and I completely agree about that. We're talking about the body count of governments [1:06:48] against their own people under socialism. Okay. That's the bad record we're talking about. [1:06:53] Uh, question, sir. And by the way, if, if there are in fact any women in the room, it would be nice [1:07:00] to hear from you. Okay. Uh, scoot up to the front of the line. Uh, sir, you've got, you've got a man bun. [1:07:07] That's close enough. Okay. We're, we're transitioning here. I, uh, I do identify as male and I suspect I [1:07:14] will continue to do so. I hope that doesn't disappoint anybody. Okay. Ask your question. [1:07:18] Thank you very much to both of you. This has been very thought provoking. I have two short questions. [1:07:22] Um, primarily. Just ask one. Pick one. This is Sophie's choice time. Pick one of those questions, [1:07:27] because the other one's not going to make it. Is economic growth ever undesirable? IE, [1:07:32] does it ever lead to increased suffering either domestically or abroad? And what are we going to [1:07:36] do with AI when it happens in about 20 or 30 years and nobody has jobs? Very good. Very good, [1:07:41] sir. Okay. Either of you, Richard. Absolutely. We do not prioritize, or we ought not, [1:07:49] if that's your question, to prioritize economic growth as if it's a uni-dimensional plus. It can be, [1:07:55] as we learned from ecological sensitivities built up over the last 30 years, that it can be a very [1:08:01] dangerous and negative phenomenon. But in a society that allows the decision of what to produce and [1:08:08] what to invest in to be done on the basis of a private profit calculation, you are hardly in a [1:08:14] position to bring in all of those other issues that have to be dealt with. I remember in my education, [1:08:22] I was taught a bizarre language which gives it away, that there are, we should remember, [1:08:27] our teachers told us externalities. What a wonderful term, something that isn't central to what we're [1:08:34] dealing with. It's an externality, only slowly to discover that the externality can be more negative [1:08:41] than what's internal is positive. Capitalism sanctifies the profit motive. The socialism alternative has [1:08:50] always said profit is one among a whole range of objectives, and no decisions should be made based [1:08:57] on any one when all the others are equally important to the quality of life. Thank you. [1:09:06] Well, I guess then I won't answer the question about artificial intelligence, since that was the second [1:09:11] question. The, again, obviously, uh, excuse me? Well, I was, can I answer both questions? I don't know what, [1:09:19] Answer one. Okay, well, I got the moderator. We got to leave some people behind. We'll talk later, [1:09:24] sir, okay? It'd be fun to talk about AI. But with, look, with respect to economic growth, again, [1:09:31] first of all, no, there's, obviously, I am an individual. I'm a libertarian. I don't believe there's [1:09:37] anything the least bit sacred about economic growth. If people, if people, basically, by the way, [1:09:42] if we all decided that we would prefer to work 20 hours a week, then that labor leisure choice would [1:09:49] begin to prevail. Capitalists would only get us to work for them. We'd be willing to only work part-time, [1:09:55] and we'd say, well, we'll work for a little bit less so that it's advantageous to employ two of us for [1:10:00] 20 hours a week rather than one person for 40. So then we would have a diminution of resources. We [1:10:08] would have a shrinkage of the economy. Wonderful. Why not? If people only want to work 20 hours a week, [1:10:14] then we don't have, we can compete. We can compete. I perhaps want to explain to Richard because the [1:10:20] simple math is that if full-time workers get $20 an hour, then we'll just work for $18 part-time. [1:10:27] They'll get two of us for less. So therefore, we can opt for living less. We make those choices all [1:10:34] the time. You know, what's a Jewish lawyer? A kid who couldn't get into medical school. Well, [1:10:40] I'm Jewish. I didn't become a lawyer or a doctor. I chose to be a sloppy-ass journalist. I dropped that. [1:10:46] So therefore, we make those choices all the time. It's an individual choice. There is nothing sacred [1:10:50] about economic growth. With respect to this economy, externalities, we are individuals. We have [1:10:56] individual freedom. You can't throw garbage on your neighbor's lawn, however. My right to move my [1:11:02] fist stops at your chin. And if a capitalist is polluting your backyard and causing that harm, [1:11:08] you should sue him. So therefore, we do need a tort system in order to protect against any individual [1:11:15] choice, anything that a firm does, or indeed that an individual does in order to make sure that they [1:11:22] don't harm us in the process of pursuing their own goals. That's the best brief answer. [1:11:28] Okay. Thank you. Richard, quick rebuttal, rebuttal. [1:11:31] I really find it extraordinary, this sort of commentary, if we would like to work only shorter [1:11:38] hours. The history of capitalism is the history of the struggle of the mass of working people to reduce [1:11:44] the length of the working day from the 16 hours it was in early capitalism in England to 14 to 12 to 10 [1:11:52] to 8. It's been a struggle at every point. Capitalists driving people, children as well as adults, [1:12:00] to work incredible hours. Workers having to mobilize and fight. This is not a matter of the libertarian [1:12:07] notion, let's just choose. That's not the way the world worked. It hasn't worked that way in the past, [1:12:13] and it doesn't work now. That's a system that imposed those struggles and all the suffering that went [1:12:19] into it until people said, no more. We won't work that many hours. We won't let you have our children [1:12:25] when they're six. That's the history of capitalism, and we're not even counting all the injuries and all [1:12:31] the deaths in that game of counting human suffering from a system. I suggest that Richard read a book [1:12:39] by Stanley Lebregat, which is a whole history of the labor markets, of the capitalist markets, [1:12:46] and it's got a lot of good facts in it. Now, I believe that one of the things that Richard should [1:12:53] try to answer is, how was there a whole lot of progress? Why was there so much immense progress [1:12:59] by laborers from the, from 1870 to 1925? Or indeed, he says that wages were rising for decades, [1:13:07] uh, and the, the unions, uh, statistically were negligible. Government was on, [1:13:15] no, I want to run with one fact. There was a 49-hour work week, [1:13:20] capitalist said, 49-hour work week as of the 1920s, as labor, as labor got shows. The work week fell, [1:13:27] the work week fell, because in order to get workers to work for you, to bid for workers, [1:13:31] their labor law and leisure choice was such that they wanted. There is a Marxist myth that there is [1:13:37] an inequality, no equality between bargaining between laborers and workers. Well, that's belied [1:13:43] by about a hundred years of history, before unions became the least bit of a presence in this economy. [1:13:48] Thank you. Okay. Ma'am, please, question. We're currently in an opioid crisis, and the World Health [1:13:57] Organization ranks our health care system 37th in the world. Do you think it's still possible for [1:14:03] our current system to fix this? And how would you, uh, using socialism, fix this? Okay. Richard, [1:14:13] I guess, uh, take the first whack at that. Sure. Um, one of the charming features of the capitalist [1:14:20] system has been the endless effort on the part of virtually all capitalists to try to get more than [1:14:26] the normal surplus out of their workers, the difference between the value added by a worker [1:14:31] and what the employer pays the worker, that normal surplus, if you like. They've always tried to do [1:14:37] better by controlling the market, or what we used to call monopolization, becoming strong enough to [1:14:43] jack the price even higher to make more profits. And one of the ways you do that is to control a market. [1:14:50] In this country, one of the most successful examples is the medical industrial complex. Four industries [1:14:58] that work together. The insurers, the drug companies, the doctors, and the hospitals. And the producers of [1:15:05] medical devices are with the drugs. They've gotten together and they've produced this situation, A, [1:15:12] where we pay more for medical care than any other advanced industrial country. And the quality of our [1:15:18] health care is at best mediocre, as the young woman pointed out in our ranking number 37. The solution [1:15:25] to the problem in our medical care is not another law, another special federal program, another stop. [1:15:33] It is a problem in which you have taken something as important as human health, A, subjected it to the [1:15:40] capitalist profit motive, and B, allowed that monopoly to function, to coordinate its behavior, and to rip this [1:15:47] society off from A to Z, and laugh all the way to the bank. [1:15:56] First of all, the solo forum in a few months is going to have a debate, a solo forum debate, on the [1:16:03] opioid crisis. I invite Richard to come. Free ticket for you, Richard, and a free ticket for the young [1:16:09] lady who asked the question to that debate. Basically, Richard and I agree about 90 percent of the way [1:16:17] about the medical care system. It's a crony capitalist system. It has to be unraveled. [1:16:23] Gene, I would say your solution, though, is not to make it fully socialized, but rather to put more [1:16:29] market forces in. Yeah, through workers, self-directed enterprises, if indeed that's the way they want to [1:16:36] construct it. Because I'm all for those WSDEs, which is, by the way, what Richard calls it. [1:16:41] Okay, very quickly, Richard, 10 seconds. Yeah, one theoretical confusion. When I talk about [1:16:47] capitalism, I'm talking about arranging production with employers and employees as different people [1:16:52] in an endless struggle. I'm not talking about markets. The confusion between a capitalist organization [1:16:59] and a market is something we ought to get beyond. Slavery had markets. Remember, we bought and sold [1:17:05] slaves. Feudalism had markets. The market isn't what's unique about us. Capitalism is what's unique, [1:17:12] and that has to do with the organization of production, which is why that's what we go after, [1:17:18] and that's the focus of socialism, not some dead, old, stale debate about whether the government should [1:17:24] have more or less influence on the market. That's a different subject. Okay, we have a couple of minutes [1:17:32] left. I want to enforce brutally, quick question, quick answers. Let's get through two or three more [1:17:40] of these things. Sir, go ahead. Richard, can you be more specific about what you're advocating, [1:17:44] and can you unequivocally say that your vision of socialism will or will not be mandated by the state? [1:17:52] Absolutely. Socialism always understood, whatever its moments, whatever its aberrations, [1:17:59] if you really want to understand where the notion of the state being powerful came in, [1:18:05] a brief summary of the history. In the 19th century, socialism basically was born. [1:18:10] It was the shadow of capitalism. It's capitalism's self-criticism. Whenever there's capitalism, [1:18:17] it produces socialism. The notion that you're going to get out of capitalism by somehow eliminating [1:18:23] socialism reminds me of what Mark Twain said when he read his obituary in the newspaper. [1:18:29] The reports of my death are greatly exaggerated, he wrote. The reports of the death of socialism are absurd [1:18:35] because capitalism reproduces it. So here's my idea. We don't need the state because the whole [1:18:44] role is to transform the base of society. But just like every other emerging system, like capitalism and [1:18:53] feudalism, the state, it was thought, can help the process. So the focus of socialists became capture [1:19:00] the state, either with parliamentary or revolution, and then use it to make the transformation. What [1:19:06] happened in the Soviet Union, understandably, and in China too, was you focused on grabbing the state, [1:19:13] you managed it, you took the state, but then that next step, that got delayed and postponed, [1:19:20] and therein lies the problem whose solution is to transform the base of society, which is why there's [1:19:26] the focus on the workers becoming their own bosses in the workplace. Okay, thank you. Quick, let's do one, [1:19:34] maybe two more questions. Sir. Hi, this is a question for Mr. Epstein. I was just wondering, [1:19:40] are federal domestic taxes the only major way to fund federal spending? Repeat the question, I'm sorry? [1:19:47] Are federal domestic taxes the only major way to fund federal spending? Are federal domestic taxes [1:19:54] the only way to fund? Well, empirically, no. I mean, a lot of federal spending comes from printing money [1:20:02] from the Federal Reserve, and obviously a lot of federal spending comes from borrowing money. Okay, [1:20:09] we have time for one final question. We've got a couple of kibitzers over here. Okay, ask a quick [1:20:16] question. No, you're not paying for this microphone. Okay, no, I know. Well, you know, Reagan, uh, Reagan, [1:20:24] take a hike here. Can I get a chance to ask a question now? Yeah, please ask. Thank you. My question [1:20:29] is, if we're talking about economics, how can we have a debate about which system is better? And I've [1:20:35] been listening, and I hear from you gentlemen once, the word computers, and how that impacts on [1:20:41] everything. I felt like I was listening to a debate about the mechanical age, and I was looking at the [1:20:46] debate really was which platitudes are better, socialist platitudes or capitalist platitudes. [1:20:53] Could you discuss and incorporate a little bit about how the computers and the electronic age work on [1:21:01] the feelings that you have about socialism and the feelings that you have about capitalism? Okay, [1:21:06] let's end that. Thank you very much, sir. And we're going to boot into the computer age right before [1:21:13] we go to the rebuttal. We are done with questions, so thank you all for standing up. You may now sit [1:21:18] down. Richard, why don't you begin with that? Right. That's not the answer you probably want, but you're [1:21:24] going to get it anyway. You know, that sounds like both capitalism and socialism. One of the remarkable [1:21:32] things in this debate between capitalism and socialism is the easy way folks who are rendered uncomfortable [1:21:41] by it find another way, a tangential argument to focus on as if they can somehow thereby escape these [1:21:50] basic system questions. You can't. Every major technological change has led to people doing something [1:21:58] which if I were mean-spirited, I would call a platitude. It's everything is going to be changed [1:22:03] by the jet engine. Everything is going to be changed by electricity. Everything is going to be changed [1:22:08] by chemistry. Everything is going to be you finish the technological determinism. It used to be called [1:22:14] each new invention is going to radically. No, it doesn't. It changes things for sure, but it doesn't alter the [1:22:23] basic systemic questions that we're talking about. They're not platitudes. They're not evasions. The [1:22:30] focus on the new technology as if it is magically going to lift us out of these problems. It's a mirage. [1:22:38] It has been that through the last 200 years of technical breakthroughs and AI and computers [1:22:45] don't change that story. Thank you. May I comment that? That I don't know if there's a syllable of what [1:22:53] Richard said that I do not fully agree with just now. Indeed, look, we've had the computer age [1:23:01] for three decades. We have ATMs. We have automatic tellers. Wants are infinite. And as Richard is [1:23:09] indeed is absolutely correct in saying, the way we run our economy is the way we run our economy. [1:23:15] Richard and I, we agree. We have not been debating- You know what? We're going to stop this phase. [1:23:22] This was the audience Q&A. We now have the people, the two debaters, Richard Wolff and Gene Epstein, [1:23:31] going into their final statements. They each have seven and a half minutes. And again, remember that [1:23:36] the proposition, the resolution before us is, socialism is preferable to capitalism as an economic [1:23:44] system that promotes freedom, equality, and prosperity. Richard Wolff, you have seven and a half minutes to [1:23:50] seal the deal. The first sign that socialism is on its way is that we're having this debate, [1:24:08] that we have Bernie Sanders running and he has the name socialist, and he doesn't give it up. [1:24:15] He doesn't turn away. Elizabeth Warren, who has very similar programs, she still feels the need to [1:24:22] reassure everybody she likes capitalism. Bernie doesn't. The reality is, up until six years ago, [1:24:34] my presence on the American media scene was so tiny, none of you would ever have heard of me. [1:24:40] I've done more public speaking at the invitation of American audiences in the last four years than [1:24:46] I did in the previous 50. Yeah, the public awareness is to the right because of the last years of [1:24:57] neoliberalism and the orange clown. I understand that. But beneath that is a shift to the left in the United [1:25:08] States. Nothing illustrates it in my mind any better than the remarkable number of times Gene [1:25:16] Epstein told you how he agreed with me. I don't run away from the label socialist and I don't run away [1:25:29] from the label Marxist either. I'm proud of what I've learned from those traditions. But I'm also very [1:25:37] clear, and I really hope I've gotten that across, that the way the question for this evening was posed [1:25:43] is a problem. There is no singular socialism. There never was. Socialism is a large, complex tradition [1:25:54] of multiple different notions that are often at great odds with one another and have had long [1:26:00] and bitter disputes. What in the world do you mean by socialism? Is it the social democracy of [1:26:08] Scandinavia and German and Western European countries? Is it the socialism that China or Russia or Cuba [1:26:16] talk about? Is it the focus on transforming workplaces into worker co-ops instead of undemocratic hierarchical [1:26:25] workplace kingdoms? What do you mean when you talk about socialism? The very idea of using the singular [1:26:35] reflects what I tried to say at the beginning. We have to understand we are emerging from a 75-year period [1:26:46] in which we didn't learn about it, think about it, or discuss it. Or if we did, it was in dismissive, [1:26:53] cursory manner that didn't teach Meepo anything. It's always been an awkward moment when American tourists [1:27:02] go to Europe and discover that in every single European country, socialist parties are big, important [1:27:10] political institutions. I won't embarrass you by asking you how many of you know that the government [1:27:16] in Portugal today is a coalition of the Portuguese Socialist Party, the Portuguese Communist Party, [1:27:24] and the Portuguese Green Party, and that they've been the government for quite a few years now. [1:27:30] I won't embarrass you. The last thing I would say is because of this peculiar fetish Americans have [1:27:39] about the government as either being something that's going to save us all, which is crazy, [1:27:44] or which is going to crush us all, which is equally crazy. Governments do what they do in large part [1:27:51] because of the pressure from those who have the position to shape them. One of the problems with [1:27:57] the liberal in the old British sense, or the libertarian if you like, is that the argument [1:28:04] always starts with the government as if it were a deus ex machina that just has some qualities of [1:28:10] things it does without asking the obvious question, why does the government do this or that or the next [1:28:17] thing? We're supposed to believe it's built into the genes of the government that it does certain things. [1:28:25] The government does what the press pressure of the society and the way it's organized make it do. [1:28:33] Every bit as much as what the government does influences the rest of the society. [1:28:40] Let me conclude by correcting Gene about Jeremy Corbyn because he's the future in terms of what we're [1:28:48] talking about. The British Labour Party, the second party in England, by the way, a party most of whose [1:28:55] members identify as socialists. In the British Labour Party, there's a commitment they've made. [1:29:01] And the commitment goes like this. When we're elected, one of the first laws will pass is the [1:29:09] following. Any company organized in Great Britain can continue the way it is, as a capitalist enterprise. [1:29:17] But if it comes to the following decision, either to shut down, or to move out of Great Britain, [1:29:23] or to sell itself to another company, or to go public with a with an IPO, issuing shares. [1:29:30] Before it can do that, it must give its own workers the right of first refusal. That's the law. [1:29:40] That the workers can buy the company and convert it into a democratically run worker cooperative. [1:29:48] And when everyone says, well, where in the world will the workers get the money to do that? [1:29:55] Mr. McDonnell, the closest advisor Mr. Corbyn has, smiles and says, the government will lend it to them. [1:30:09] Why? Because for the British people to have freedom of choice between a capitalist undemocratic enterprise, [1:30:17] on the one hand, and a worker co-op democratic enterprise, on the other, they have to have some [1:30:24] experience of what they're like, both to buy from and to work in. And the only way they can have that [1:30:30] experience, so they can choose freely between them, or what mix they want of them, is if there's a sector [1:30:37] that they can buy from and work at. So we, as the leaders of Britain, have to create the sector, [1:30:43] so that the free choice of our people between systems can finally happen. That's the role of the [1:30:51] government expanding free choice, rather than being represented as imposing something in that fearful [1:30:59] imagery that we all have, as if the government is like those nasty people at the post office who make [1:31:06] us wait before they sell us the stamps. Thank you. Well, I agree with Richard that he and I agree [1:31:26] about a great deal. And I think that's wonderful. Why do we agree about a great deal? Because we're both [1:31:33] radicals. And radical people do see a lot of evil in our current society, even though I think Richard [1:31:43] basically wants to march in the wrong direction. And tonight, I've been a little bit troubled, [1:31:51] that he oftentimes abandons his own book written seven years ago, and occasionally lapses into [1:31:58] defending the old style socialisms, and falling back into the mode of saying, you know, well, socialism, [1:32:05] a lot of things, let's just do it. And again, ignoring the fact that we need to focus, focus, [1:32:13] I guess, again, on the old socialisms. Well, take a controlled experiment. Society, the world, [1:32:19] and history gives us very few. East Germany versus West Germany. West Germany, mainly capitalist, [1:32:26] East Germany, socialist. Impoverished in East Germany, under the foot of the Stasis. In West Germany, [1:32:34] capitalist, much more affluent, much more comfortable, the democratic society. North Korea [1:32:40] versus South Korea. I needn't elaborate on the differences there. Taiwan and Hong Kong, [1:32:48] versus most of China, until China began to go capitalist. So we have the record staring us in the [1:32:56] face of the awful failures of these societies. So we want to say goodbye to all that. They were [1:33:03] disasters. Then we have the social democracies of Europe. Maybe that's a waste of time to talk about, [1:33:10] because they are, for the most part, capitalist anyway. But then we cite the Scandinavian countries, [1:33:17] even though Norway is a country of five million people sitting on a huge oil well, basically selling [1:33:24] oil to the rest of the world, and by the way, apparently worsening global warming in the process. [1:33:29] But we want to defend Norway and Denmark. Well, let's not cherry pick. Let's look at the whole [1:33:35] range of economies and the experience in Europe, and let's include Portugal, Spain, Italy, Greece, [1:33:43] where it's gone very badly. The average is very, very unimpressive. They used to talk about [1:33:49] eurosclerosis. Very troubled economies, by and large. So we want to say goodbye to all that. So now, [1:33:57] again, I want to take Richard literally and talk about his workers' self-directed enterprises. Well, [1:34:03] I imagine when you hear him saying employees becoming their own bosses, well, you know, [1:34:09] there are millions of people who are their own bosses. No, I didn't make that up. Richard didn't make [1:34:16] that up. Form a co-op, a family-run business. All of those things are possible under socialism, [1:34:22] and the problem that Richard faces is that, by and large, it hasn't caught on. Maybe it has hope. So now, [1:34:30] Richard is resorting to cheering on out of desperation and out of, unfortunately, not taking [1:34:37] seriously the fact that you want to work. There are people, by the way, who still are fostering [1:34:42] worker democracy. I met a lot of those people. They want to start these firms. They want to run it that [1:34:48] way. They think it's better. People are happier doing it. Wonderful. Let's do it. So now he's, [1:34:54] now Richard is championing the plan of Jeremy Corbyn, where the government is going to start [1:35:00] lending money on advantageous terms to companies that want to go worker, self-directed enterprise. [1:35:07] How advantageous is that going to be? Jeremy Corbyn, a very ambitious politician, who, by the way, [1:35:12] is on record as admiring a lot of hard-fisted strongmen like Hugo Chavez and his successor, [1:35:20] Nicolas Maduro, he might just start giving it away. Capitalists might start selling these firms to [1:35:25] people. Again, Richard is looking for the top-down solution to a bottom-up revolution, and I implore [1:35:32] him to abandon all that and go the capitalist route with his plans. Now, then finally, I try to take [1:35:39] seriously what he wrote in his book. He wants to socialize finance. He wants to put it under a [1:35:45] political thumb. He wants to socialize labor allocation. He wants to tighten the government's [1:35:52] control over those two sources of enterprise expansion so that dissident publications would [1:36:00] suffer, but innovation would suffer. All of those things would set us back in terms of prosperity and [1:36:07] freedom. And again, I guess, you know, I mentioned equality. I might ask you the old, you know, [1:36:13] 10-20 question. Would you prefer a society in which the top 1% gets 20% richer and the other 99%, [1:36:21] the rest of us, get 10% richer? Or would you prefer, that's more inequality, or would you prefer a society [1:36:27] in which the top 20% get poorer and the bottom, no, excuse me, yeah, yeah, the top 20% get poorer and the 99% [1:36:35] get 10% poorer? We all get poorer, but then since the top 1% is getting 20% poorer, that narrows equality. [1:36:42] Well, we want actually, because extremes touch and Richard and I believe in individual rights, [1:36:49] I want people to make their own choices about how they live their lives, the professions they lead, [1:36:54] where they want to work, and what they do. And capitalism offers that potential, but it can indeed [1:37:00] evolve. We do need to free up the housing markets, which are under the thumb of the crony capitalists. [1:37:07] We do indeed, and that is hurting poor people, preventing them from moving to high wage cities [1:37:12] like New York and Los Angeles and San Francisco. We need to free up the guild systems that make it hard [1:37:19] for poor people to get other kinds of jobs. The licensing system that protects people, that prevents poor [1:37:26] people from moving into better jobs. There are a whole lot of radical things we need to do to change [1:37:32] our economy, but we need to keep, keep the fundamental freedoms under capitalism. Capitalism, [1:37:40] private property, is necessary, although not sufficient to a free and open society. It's not sufficient [1:37:48] because government can always come in and jail you the day after you publish something you don't like, [1:37:53] just like Obama tried. But it's necessary, it's necessary, because if you give somebody like Obama, [1:38:01] some political leader, control over your property, over the means of production, then you make it hard [1:38:08] even to function in the first place. You make it hard for Richard to sell his books, you make it hard for [1:38:13] the Seoul Forum to operate, you make it hard for Jacob and Magazine to operate, and that's why you have to vote [1:38:21] against Richard's resolution. But Richard does have an out. Workers, self-directed enterprises, [1:38:29] capitalism offers it to you. Richard, I say go for it. Thanks very much.