Economist Richard Wolff takes on the factual and the fake at BCC lecture on Trump’s economy
“Do you feel as though you’ve been ripped off?”
Professor of Economics Richard D. Wolff asked that question at Berkeley City College on Feb. 22. “You have,” he confirmed, “by our very own economic system.” He followed with a sweeping condemnation of capitalism, a reality check on the Trump administration, and a plea for a collective intervention to change the current system.
Wolff, a Professor Emeritus at University of Massachusetts, Amherst and the New School University, is described by New York Times Magazine as “America’s most prominent Marxist economist.” He is also an author, radio host and speaker.
A System Breakdown
Stating calmly that we are living in an “economic system that is dissolving,” Wolff went on to say that no one can prepare for it and the future is very bleak for most of us, if we cannot find a way to change it.
“It’s going to shape every aspect of your life from now on, it already has,” he said.
Capitalism is a system organized around the production and sale of goods and services, where the company is king and profit is the driving force.
Most companies in this system are not democratic. They are managed and owned by a few people, with many more workers performing the necessary labor.
Wolff said that 40 years ago companies discovered three ways to reduce the cost of labor, and the race to the bottom began.
Outsourcing labor to poor, underdeveloped countries, bringing undocumented workers into the country, and introducing automation promised larger profits at lower production cost.
The system hurt the workers, but helped the bosses.
Wolff said that companies, afraid of being outcompeted, were soon trapped in a dangerous game, where jobs were sacrificed, wages were reduced and standards were lowered.
The gap between the rich and the other 99 percent of the population grew more vast.
Are you shocked at what the Trump administration is doing?
“If you lived with a person as unstable as capitalism, you would have moved out long ago,” Wolff offered up as a joke he often tells.
Few laughs were heard around the room.
In times of crisis, the politicians need to distract people from the instability of capitalism.
They work very hard to uphold the system, fearing the alternatives. They often try shocking people away from the reality.
Don’t be fooled by the distractions and shocking things Trump and his administration have attempted in the days since his election, Wolff warned.
He isn’t doing anything that hasn’t been done before, and he won’t change anything in the basic system.
Wolff’s warning wasn’t meant to soothe worried minds, but to clarify the reality of our political system.
The people in power are afraid. The system has concentrated large wealth within a small group. Political problems and unrest are inevitable, because the masses are not participating in all the wealth.
In the Revenue Act of 1935, voters succeeded in higher income taxation on the wealthy, but Wolff said that no one fought to keep this and the rich people were able to literally buy politicians and political parties, to prevent this from continuing.
He claimed our politics are corrupted by a vicious cycle “because capitalism has the profit motive that drives the people to do the things that concentrates the wealth that make them have to buy the politics.
In 2008, with a massive financial meltdown revealing the emptiness of our economic system, something more massive took place to distract from the carnage.
The first African American president stepped on stage, filling the American people with hope, averting their eyes from the real truth of the situation, Wolff explained, stating, “a politician in this country is like an advertiser.”
Trump is another diversion away from the crumbling system, and Trump advertises the dangers of immigration.
An easy target
Blaming or “scapegoating” immigrants is commonly used to distract people from the real issues.
Hoping to convince people that all our problems are caused by the immigrant, and will all be solved if they go away has been tried many times long before Trump.
“Whether they stay or go doesn’t solve the problem,” he stated.
Wolff gave the example of where he lives, New York City, which is home to large immigrant populations. Studies now show a reduction in crime in immigrant neighborhoods.
He went on to explain that 300 years of capitalism have not exactly developed a very equal world, and in fact greatly increased immigration. The rich countries are few, the poor countries many. People from poor countries wanted to come to where the money was. And who can blame them?
The immigrant, Wolff explained, is a subsidy from their country of origin. The societal cost to raise a person from birth to working age is significant, whereas the immigrant often arrives in society ready to work.
According to Wolff, we don’t have to support them through infancy and childhood, and our economic system still benefits from their labor when they get here.
This is the perversion of capitalism, Wolff said.
Elephant in the Room
“The elephant in the room is the billionaire,” he stated, describing President Donald Trump. To a billionaire, labor is a hobby.
To articulate what it really means to be a billionaire, Wolff calculated their estimated weekly earnings.
A billionaire can expect to earn, “using ‘earn’ loosely,” he noted, about one million dollars a week, provided by their trusty hedge fund manager, who guarantees five percent returns on investments.
To make money, he continued, “they don’t do anything, they just own something. That’s the big difference between me and you…they earn the money whether they labor or not.”
According to Wolff, this troubling fact represents our capitalist system.
Trump has recently “declared war on huge participants of capitalism,” Wolff stated by threatening to punish companies who outsource labor, or end the practice of hiring immigrants and undocumented individuals, and the companies are not happy.
In exchange, Trump has proposed to cut their taxes, rules, and regulations, basically offering them the deal of a lifetime.
Wolff described how non-billionaires’ lives will change if this deal is struck.
Federal programs will be cut, workers will be taxed, the planet will become more unlivable. Living a decent life in the time you have will be harder to obtain. Is it even possible today?
The only way, he said, to secure a decent life, is to change the system. President Obama made few changes and President Trump will make even less. Until the power is taken away from the capitalists, nothing will improve.
Solutions in Socialism
Wolff didn’t propose a clear solution to the many problems presented in his talk, possibly due to a lack of time.
He took questions from the audience ranging from extreme experiments with Communism, proportional representation in other countries, and more balance in the workplace.
He also spoke about his non profit organization Democracy at Work, based on Wolff’s own book “Democracy at Work: A Cure for Capitalism,” which states on the website that it “advocates for worker cooperatives and democratic workplaces as a key path to a stronger, democratic economic system.”
He went on to say that creating a more cooperative production process may not solve all issues, but is a step towards creating more balance in world.
Wolff was invited to speak by BCC’s Students for Socialism club, and was introduced by club member Fares Alharazy. Fares says that the club “hopes to raise awareness and destroy the misconception of socialism.”
He thinks that the reason young people are attracted to socialism “is because they are aware of the inherent inequalities perpetuated by capitalism.”
Another member named Jolene defines socialism as a system “where the people who do the work make the decisions on what is done, and how. It’s purpose is to provide for human needs rather than generate profits.”
She is also motivated by the fear that millennials such as herself are the first generation “in the history of humanity and of this planet to face an uninhabitable planet within our lifetime.”
Whether it be socialism or something else, Professor Wolff was very clear on one thing. “The world can do better than capitalism,” he pressed on. “It must.”