Economic Update: Challenging How Capitalism Works

[00:00:00] Speaker 1: Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host Richard Wolff. Before we begin today, I want to share what is a really exciting new project of Democracy at Work. It's a new book that we have scheduled for release just in time for this year's holidays. It's entitled "Question Everything: Professor Richard D. Wolff on Becoming an American Marxist." Yup, it's about me and my relationship to what it is that I think has brought many of you to programs like this. It's a collection of conversations between me and a former student of mine who teaches economics at John Jay College of the City University of New York and it reveals some of the defining moments of my path from just another American kid to somebody interpreting, understanding, applying what Marx had to teach us. I'm very, very proud and excited to share it with you. As part of the release, we're going to feature individual chapters and sections of the book on a rolling basis leading up to the launch date on the Democracy at Work substack. So if you haven't already, sign up as a paid member at www.democracyatwork.substack.com. There you'll also find additional supporting material, discount offers, and advanced notifications of upcoming book launch events. And as always, I want to thank you for being a part of this community, for the support you so generously provide, because it is crucial to everything we do. Okay, let's turn then to the economic update for today and I'm going to begin by thanking Charlie Fabian, a part of our group who spends his time helping us uncover and present to you important moments in the labor movement in this country. And the story this time that he helped put together concerns California and the nurses in California. Now, just to give you an idea of how important this is, there are 200 facilities employing nurses in California and there are 100,000 members of the nurses associations in that state. So we're talking about a very important part of the labor movement. And the struggle they've been engaged in, which I want to talk briefly to you about, is one that will affect you whether you live in California or anywhere else. Here's the issue. The facilities, owned and operated in most cases by people trying to make money, have been making use of artificial intelligence in a way that the nurses are fighting. They're using it to come up with clever new ways to save money on nurses, to save money on nursing, to come up with ways to speed up what nurses are required to do. And the nurses finally had enough and said, "No, we want to establish a principle here. The final decision for what treatment a person gets who comes because he/she/they have some problem, medical problem should not be made by a machine. It should be made by a human being, in many cases a doctor and a nurse. And it should not be replaced by some automatic mechanism which we know, and they do, is being used to figure out how to shortchange the patient, get a quicker diagnosis, get a quicker treatment program rather than having a human being intervene and make that final decision." Unfortunately, the nurses got together, had a bill written, and it was passed by sizable majorities in both the California Senate and the California House of Representatives. However, it was vetoed by Governor Newsom. And to override the veto, you need two-thirds of the vote, not just a solid majority. So yes, the nurses want it. Yes, the patients want it. Yes, a majority of elected officials want it. But the governor doing the bidding of the employers of the 200 facilities has meant they have to wait another year to submit another bill and make another effort to get this done. Think about it. Because this problem either is already where you go for your medical care, or if it isn't there already, it's on its way. My next update has to do with the exploding movement of young people, working people across Europe from Albania in the east to Britain in the west, and to key countries in between, such as Italy and France and Spain and Portugal, and yet others that haven't yet exploded. And they're all fighting the same battle. Capitalism is in trouble in Europe. It has been since they lost their colonies, which is what made Europe rich and the rest of the world poor. The rest of the world won't have it anymore. And after World War II, they all became independent. They quit those colonial situations, led by India leaving the British Empire. And the colonial wealth game was over for Europe, and they've been in decline ever since. They couldn't run the world as they had. They had to become junior partners of the United States. Now Mr. Trump has kicked them under the bus, they're in real trouble. And what they're doing is hoping that if they become militaristic, they can somehow hold on. So they're rearming. The United States had been taking their military protector. That's not happening anymore. And they're taking the money away from the schools and the hospitals and the social services, which in Europe had gone much further than anywhere else in the world. Now they're being retrenched. And guess what? The mass of people like you and me, working people, are not about to lose out their schooling. That was what blew it up in France. Schools with rats, schools without custodians, schools with too few teachers. Neglecting your children is a sign of desperation in a society and the children are fighting back. We will keep on top of this, I promise you. It is a fundamental movement for change which will not observe a boundary at neither the Pacific nor the Atlantic ocean. My next update has to do with the awarding of the 2026 Nobel Prize in Economics to Professor Robert Hall at Stanford University and Professor Michael Woodford at Columbia University. They've come up with a novel way of communicating between policymakers in Washington trying to manage the unstable capitalist system, and the people who make the big investment decisions. I find it remarkable, yet again, that here is a prize given for people who are manipulating the edges of how we try to manage the instability. What's left unspoken is why is the decision of how much money to invest, which drives our business cycle and our ups and downs, left in the hands of the 3% of our people that are employers. So all the 97% of the rest of us have to live in the ups and downs of an economy that's shaped by decisions of 3% of our people, and they're not focused on making the economy work, they're focused on making money in whatever particular business they're involved in. That's crazy. 3% making money shapes what 97% have to live through, and they're figuring out how the government can make it a little less unstable. Look, the capitalist system has a downturn every four to seven months everywhere that capitalism has settled in for centuries. Everything has been tried to get to the system without this instability. I make that joke and I'm going to do it again. If you live with a roommate as unstable as capitalism, you would have moved out long ago. Why don't we change the system so we don't have these instability? These lofty professors never worry about that question. They just worry about improving the management a little. So bankrupt is the establishment of the economics profession that that's the best they can think of to award. Not those that are looking what different system could work better. Not those looking at what basic changes could make the instability go away. No, here's a way for the managers, the Federal Reserve, of the U.S. Treasury, to do a better job. And how good a job have they been doing? Well, we had a crash in the spring of 2000. We had another crash in 2008 and 2009. We had another crash in 2020. They're not doing real well. And it's this mentality. But of course, the establishment likes it. And it's a prize is given by a Swedish bank. And what can you expect from that. Here's another quick update. Back in 2022, we were all scandalized when the price of eggs went crazy. You could go to a store and see a dozen eggs and the price tag would be 10 bucks. And there were a few of us who suspected that this was a ploy by the egg industry to hold back production and drive up the price and make a lot of money. Oh no, we were told by the economists. This is just supply and demand. There's a bird flu, you see, and so there are fewer chickens and they're not laying eggs and so it's a shortage. Well, the Yahoo Finance page, no bastion of radical ideas that, on the 18th of October carried an article by one Marsha Brown and Steve Volk. Guess what they found? Egg prices had been manipulated by egg producers to ratchet up their profits. You paid more so they could profit more. That's the capsule of the capitalist system anyway, so we shouldn't be surprised. My last update starts with a novelist. Her name is Sally Rooney. She's a very hot item in Ireland. She has produced a number of novels, the most famous of which are conversation with friends, that's one of them, and normal people with another. She really is extraordinarily popular. But she did something that captured the news and my attention. She announced an agreement with her publisher, Faber, F-A-B-E-R, that she would no longer have her book sold in Ireland, where she's very popular, and in Britain. Why? Because there's a law in Britain that doesn't allow the private owner of money that they got from writing and selling books to decide what to do with that money. Turns out Sally Rooney is a feminist Marxist. Her description. And she's contributed the money she made of the novels to the Palestinian cause. And so the British government risks, tells her they may arrest her because she's taking her money that she earned and helping the Palestinians. I won't go into what it means to call her abetting terrorism. Meanwhile, billions are flowing to Mr. Netanyahu and the Israelis who are doing in Gaza much more of terrorism than anybody else has managed. Just look at the numbers. We've come to the end of the first half of today's show. Stay with me. We'll be right back. Before we jump into the second half of today's show, I wanted to thank you for your very generous response to our fundraising efforts this year and in particular in the last couple of months. And in part responding to that, we are extending the availability of our limited edition linen covered hardcover version of Understanding Capitalism, the book I wrote and that we have been making available now for quite a while. If you are interested, I will be signing copies of that hardcover and they will be available to you as they have been over the last few weeks. Just simply send an email to us at info@democracyatwork.info and put in the subject line "limited edition." We will send you all the information to the information you need to order and receive your copy, signed copy, of Understanding Capitalism in its Hardback. And thank you again for your kind attention to the fundraising dimension of what we do. Welcome friends to the second half of today's Economic Update. I want to continue with the story about Sally Rooney and then go into a few more updates for today. The thing about the Sally Rooney case in Ireland and the British government's repression of her freedom to devote her funding anywhere she wants to is again that it had to do with defining an organization, in this case Palestine action, as quote unquote "terrorist" and then punishing anybody who supports that organization as if they were a terrorist too. All right, if you're going to punish a novelist who donates money to an organization she believes in for whatever reason, well then you would have to, if you had even this much of a commitment to equality before the law, you'd have to ask what about the people and institutions who fund the Israeli government? I can understand a reaction to what Hamas did as wanting somehow to forbid that kind of killing of innocent people. I am not unmindful of the history that lies behind that action. But we make limits on what you can do even when the situation you're dealing with is manifestly unjust, as the situation the Palestinians were put into by Israel was manifestly unjust for a long time and attested to by many, many organizations around the world. I can understand wanting to limit what we allow ourselves to do to one another as protests against against injustice. But after years of the massive indiscriminate slaughter of Palestinians in Gaza, something that around the world has been designated a genocide, and it's not a question of whether you agree with that particular usage of the term or not. But it's clear that whatever you attribute to Palestine action would have to be equally attributed to what the Israelis have done. And I'm not even going to go into what they're doing now in the West Bank. So where is the equivalent, either in Great Britain or the United States, which by the way in November of this year will hear an appeal against designating Palestine action as a terrorist organization inside the United States. And let's be clear. What is to prevent the Trump administration from designating God knows what other organizations as "terrorist organizations" and then throwing into jail anybody who supports them with a contribution? You know what the next step might be? Designate the Democratic Party as a terrorist organization, and then punish anybody who sends ten dollars in the mail to their favorite Democratic candidate. That's one way to win an election when you can't win it any other way. So we all have an interest in a much more even-handed handing out of justice than what the British and the Americans have done. And one last word, a particular shout out of shame on England. England was once a country that took in the refugees unjustly hounded by their governments around the world. They could go to England, which believed in free speech and would not punish people for expressing their views. So, Karl Marx was ejected from Germany, his nation of origin, because of what he said, what he wrote. And when he went to France, they exiled him too. And then he went to Belgium and they threw him out. And he ended up in London, where they accepted him and where he lived the rest of his life, producing all the great, and almost all, the great works of his adulthood, culminating in Capital, his three-volume masterpiece. All of that was done under the freedom of thought, freedom of speech regime of England. That it is shameful for the English to have abandoned it is true. But what is even sadder is that that abandonment of free speech is now being administered by a Labour Party government. A government that says it represents the working class. Wow. My next update is in a way about another election. This one in Brazil, where against all the publicity, all the money coming in from the Trump administration, official, unofficial, overt, covert, Mr. Lula, the left-wing representative of the Workers' Party, that's the name of his organization, in Brazil, won the election. But the government that might have been that of the Bolsonaro family has not yet, at the time that I'm doing this, accepted the results of their defeat. And given their closeness to Mr. Trump over and over again, and given Mr. Trump's predilection for contesting the results of elections he doesn't like the results of, the United States. We'll see whether Brazil becomes a very important new battleground for the United States' effort to keep hold of the Western Hemisphere, even as its controls in the rest of the world, the United States. And we had a bizarre experience the other day. The CEO of the Audi Corporation, the Audi, for those who don't know, is a German luxury automobile company. It's actually part of Volkswagen. And Volkswagen is the number one business in Germany. Key to its industrialization, key to its value of the United States. And the Chinese, with their superiority in electric vehicles, are stymieing Audi and VW in that business on a global scale. So where did the CEO of Audi show up? In Georgia. And what was he doing in Georgia? He was appearing at a rally by and for Donald Trump. No, I should be careful. It's pretending to be a rally for the midterm elections, where Mr. Trump is not a candidate. But Mr. Trump, being Mr. Trump, is trying to make himself the candidate. And the issue as he goes around, talking even in places where the local Republicans wish he wanted to make him to make himself the candidate. But he wouldn't say so. But there was the head of Audi, endorsing Mr. Trump. Again now, Audi's CEO. That means the CEO of a German company. The man has a German name. I would assume he's a German citizen. He is, how should we put it, interfering in an American election. I'm not aware that he's appeared with any other candidate than Mr. Trump. And I want the people of Georgia to understand. The VW company, through its subsidiary Audi, wants to build a factory in Georgia. And I know that in the American political mind, we are all supposed to think, right away, oh, jobs are coming. To Georgia. Jobs in the Audi factory. But now let's take a closer look. And we'll understand something that's going on in every state. It's just different companies around the world, romancing the governor of this one, the president, where that looks like it might happen, the mayor of this city, or somebody else. That's why we hear about jobs first. Because jobs is the one thing these companies bring. A little of. But not many. Automobile manufacture now is what we call highly capital intensive. It's overwhelmingly machines and robots that make automobiles now. The number of people who will have a job over the long run in a car factory in Georgia is very small. And now let's count what the costs are because that's what you don't hear about. It's just crude advertising. Tell you about the good news and hide the bad news, which is all advertising ever did. So number one, they want a subsidy to build that plan. They want the state of Georgia to take money and they want the federal government to kick in money and give it to that company to make it worth their while to build a factory in Georgia. That's money that the local state government, perhaps the local county or municipal government, will not have to spend on the schools and the health care and the quality of the air and the children's programs. And you name it, that money will go instead into the hands of what is already the largest corporation in Germany. Is that really desirable? But that's not the only beginning. Whatever profits are made by the Audi company in Georgia will be profits owned by a German company, which will have the freedom to take those profits and move them to Germany, which they're likely going to do. Oh, that's money made here by cars production here to serve the American market. But the profit, which is not a small item, is at the disposal of a foreigner who will take it. Even if we need that money to be spent here, it will be spent not where we need it, not by the people who made that profit, the auto workers, without whom there is no profit for Audi. The auto workers in Georgia will make it. We will have subsidized it as a country, but it will be the private property of a German capitalist who will use it any way he feels like. Those are the costs, friends, against a small number of jobs. A rational political system would present that fairly to the American people so we could decide whether the costs exceed the benefits, etc. We don't get that. We get a deal between a Trump who doesn't want Republicans to lose and a company that wants to snatch as much benefit as it can get. Why are we doing this? We've come to the end of today's show. I hope you found these updates interesting and relevant. And in any case, I look forward to speaking with you again next week.