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Truthout Contributor Richard Wolff on Challenging Capitalism in His New Book, "Occupy the Economy"

Thursday, 17 May 2012 15:45 By Matt Renner, Truthout | Interview

Truthout combats corporatization by bringing you trustworthy news: click here to join the effort.

We Occupy(Photo: david_shankbone / Flickr)

Can we challenge capitalism and prevail, considering that the top one percent control 50% of the available capital and the top five percent some 70% of the nation's private funds?  Richard Wolff is a closely followed Truthout contributor on economics.  Currently, you can obtain his just-released "Occupy the Economy: Challenging Capitalism" directly from Truthout.  If you want to know about alternatives to the current destructive course of our economy and how we, as a nation, got to this point, get your copy of "Occupy the Economy" by clicking here.

The following is an interview with Richard Wolff by Truthout staff member Matt Renner.

Matt Renner: In your introduction to the book, you discuss New York City Mayor Michael Bloomberg's "cleanliness" excuse for clearing the original Occupy Wall Street encampment at Liberty Square. Why do you think so many public officials and right-wing pundits describe the occupiers as "unclean"?

Richard D. Wolff: Their problem has been, and continues to be, that they have no response to Occupy's basic attack on the inequity and antidemocratic social conditions summarized in the confrontation of, "1 percent against 99 percent." They know that the vast majority of Americans feel the truth of Occupy's social criticism, experience it in their lives, and sympathize with protest against and efforts to change a system with such unjust outcomes. So, they can refute little and need instead to distract public opinion from what Occupy focuses on.

One way to do that is to assert the existence of and then condemn some other quality or dimension of Occupy. In Bloomberg's pathetic example, the best he and his advisers could come up with was a reference to Zuccotti Park as being "unclean" so as to then position the mayor and the police as militant janitors. Everyone who knows even a little about New York City knows that the mayor and the police preside over many filthy subway tunnels, highways, streets, empty lots and abandoned buildings without doing anything to clean them. So, suddenly asserting the importance of cleanliness simply exposed them to the ridicule such a position deserved. I suspect something similar is underway when others, perhaps taking their cue from Bloomberg in New York, decided to follow the cleanliness ploy.

MR: In the first interview in the book, which took place in November 2011, you make the case for a national jobs program to begin putting people back to work. This idea has been floating around since the employment rate fell off a cliff at the end of the Bush administration. But the politicians in Washington DC, especially the Republicans in Congress, have blocked any progress on this front. What does this indicate to you?

RW: That the current crop of politicians, Republican and Democratic alike, don't yet feel enough political pressure to act on unemployment the way FDR did in the 1930s - with a massive federal jobs program that created and filled over 12.5 million jobs from 1934 to 1941. FDR then had the Congress of Industrial Organizations (CIO), fresh off the greatest union organizing drives of US history before or since, allied with socialist and communist parties with mass militant memberships. They demanded government help for the millions suffering a Depression they had not caused; they also threatened that absent such help, their anticapitalism would take them in the direction of basic system change toward socialism.

To avoid the latter, FDR got corporations and the rich to pay huge taxes and make huge loans to provide the government with funds to, one, create Social Security; two, create the unemployment compensation system; and three, hire those 12.5 million unemployed. So much for the fake claims of politicians that there is no money for expansive government programs. FDR found the money back then in an economic crisis three times as bad as the current one is now. The money is available now from exactly the same sources as provided it back then, but what is missing now is the unionization and political organizations of the 1930s. Having let those decline or disappear under relentless government and business pressures, we now reap the political results. Occupy is the rebuilding of the movement which is the only way out of crisis and decline - now, again, as was the case the last time US capitalism collapsed in the 1930s.

MR: In the second chapter of the book, you discuss the European debt crisis, the shifting narrative of capitalism as a result of the Occupy movement, worker solidarity, the attack on Social Security, bank bailouts, the military-industrial complex, love and many other topics. You call this chapter, "World Endgame?" but from my study of your work, I'd say this is an essential chapter to understanding and contextualizing your critique of our current system and how it affects the lives of every human on a daily basis - though that might be a bit too long for a chapter title. When you're out talking to people on the street, what is your favorite way of connecting the macroeconomy to the micro-, personal economy?

RW: What I stress most is a tableau that I find speaks directly and personally to everyone. I point out the basic numbers for now, May, 2012: 13 million Americans unemployed, with another 10 million either no longer looking - these people are often called"discouraged workers" - or else stuck in part-time jobs although they need and want full-time work. Side by side with that colossal and cruel waste of labor and lives, I point to the Federal Reserve's "capacity utilization rate," which measures what portion of the nation's tools, equipment, factory, office and store space is being used in production and what stands there idle, gathering rust and dust. For May 2012, the Federal Reserve reports that 22 percent of our capacity is unused.

Then I make a simple point: if we had an economic system that could do the obvious - provide people wanting jobs with the available, unused tools, equipment, raw materials, etcetera - it could generate a vast additional output to rebuild our cities, schools, infrastructure, relationship to our environment, etcetera. Then the punchline: capitalism as a system cannot and does not perform what is obviously needed. It is a system that allows corporations in the United States today to hoard $2 trillion and not use it to hire anyone because it is not profitable for them - a tiny minority of the US population - to do so. That is absurd and diminishes everyone's life in countless ways. My audiences nod in recognition. They see the point. They see how it touches them, their families, relatives, friends and futures. They make the macro-micro connection.

MR: One stunning point you touch on in the book is the attempt to erase Marx and his work from the American consciousness. Do you see this as a conspiracy or more as a result of the incentives in academia and business, or both?

RW: I think the Great Depression frightened the devotees of capitalism, and the rise of a powerful left frightened them even more. They were never prepared to question, let alone fundamentally to change the capitalist system. So, they focused instead on eradicating the labor movement and the left. It was easier to start with the left, to isolate it as somehow un-American and, thus, a threat. They strove to split labor and the left on that basis - which largely succeeded - and then, once the left had been dispersed, they went to work on labor by isolating it as a "special interest". Some did this intentionally, others fell into it as the "common sense" of cold war times.

Yet there is a stunning irony involved. It was because the unions and the left were strong in the 1930s that we got a respite from the Great Depression by means of massive government social welfare spending. I would argue it saved the United States from a much worse economic depression and much more extreme political developments, as happened elsewhere in the world in response to the same Great Depression. This time around, US capitalism has no union- and left- based movement, and, thus, allows austerity to make worse the suffering and inequality of the crisis and the bailouts. With no social welfare response possible as capitalist interests control the political system, the extremes of suffering and politics avoided in the 1930s may not be avoided this time.

MR: The book is an engaging read because it's written directly from a series of interviews between you and the outstanding reporter David Barsamian. What's the difference for you between academic writing and answering questions in a conversation?

RW: This book is a conversation, and it is accessible the way anyone might drop in on an interesting conversation. There is no need to prove erudition and make lots of footnotes with references and to write for the usual academic audience. David and I strove to welcome every possible reader with every possible set of interests to join in and engage in a conversation about something urgently affecting us all.

MR: Some of the proposed future tactics of the Occupy movement have been a sort of aikido or jiu-jitsu move - using the power of your opponent against him and turning your weakness into a strength. I'm thinking primarily of the effort to organize a debt strike, where a group of indebted people would collectively refuse to pay back debts owed, bringing on another financial crisis. Is there any historical precedent for this kind of action?

RW: Yes, debt strikes - like rent strikes, consumer boycotts and so on - have been weapons of people against vested economic interests of rich minorities for centuries. They often serve to inform and mobilize people, and will likely do so more and more as this capitalist breakdown deepens and spreads. And yes, such actions can sometimes combine with the internal contradictions of the existing system to provoke or worsen its own crises. For example, the decisive votes of the Greek and French people in elections on May 6 were a kind of plebiscite against paying off the debts of governments who borrowed too much to bail out too few of the biggest banks - the very institutions most responsible for the crisis in the first place. You could call those votes a form of debt strike, and they could interact with the other economic and political whirlwinds sweeping across Europe to deepen its crisis and its potential for change and for aggravating the crises in the United States and elsewhere.

MR: The Occupy movement has been working and organizing in opposition to capitalism's inherent crises, the costs of which inevitably fall on the poor and the politically powerless, but the movement has also been looking for new systems to build and embrace. At the end of your book, you've attached an economic manifesto for a new way forward, built upon the knowledge gleaned from the failures of both state-sponsored socialism and our current state-sponsored capitalism, or whatever this mess should be called these days. Can you give us a taste of your prescription for building a new economy that could work for the 100 percent?

RW: Yes, briefly, although a fuller statement will be forthcoming this September in another book I have written to be entitled "Democracy at Work." The idea is to reorganize our production units - enterprises - in a democratic way altogether different from how they are organized now in capitalism. Instead of a few major shareholders selecting the 10 to 15 members of corporate boards of directors, who then together make all the enterprise's decisions - what, how and where to produce, and what to do with the enterprise's profits - this new organization will involved the workers in each enterprise together, collectively and democratically making all those decisions. The workers will become their own board of directors, their own ultimate bosses. From Monday to Thursday, they will each do their particular tasks; Fridays they will together make all the enterprise decisions in a democratic collaboration with the residential communities that interact with the enterprise.

Just think: would enterprises organized that way allow massive unemployment in the United States? Would they close their businesses and move to China? Would they pay some of themselves millions while many others have barely enough for modest lives? Would they undermine government programs like the New Deal, whose beneficiaries they are? You get the picture. That is a democratic vision of a better economic system built from the ground up and placing economic power in the hands of the people, the majority. We can, I believe, do better than capitalism, and a system like the one sketched here offers us one possible way forward.

MR: Last week, we saw another tremor in the house of cards that we all call the American Financial System when JPMorgan Chase disclosed a multibillion-dollar loss, from what was essentially a gamble gone wrong. What is your outlook for American-style capitalism and its biggest winners, the massive banks?

RW: JPMorgan's $2 billion loss just illustrates yet again that so long as we leave tiny groups - boards of directors and major shareholders - in a position to evade, weaken and overturn people's efforts to regulate and control them, they will do just that, and they will take risks whose consequences we all have to suffer. For banks like JPMorgan, government regulations born of people's suffering are so many obstacles to overcome to rebuild their profitability. They use their profits to overcome those obstacles. That's how and why, after the Great Depression ushered in the New Deal, US businesses went to work to undo the New Deal, to evade, weaken and eventually overturn laws like the Glass-Steagall banking regulation, high taxes on business and the rich, etcetera. If all we do now is pass another set of rules and regulations, but leave in place the existing corporate structure of enterprises, we will have ourselves to blame for the fact that another set of rules and regulations will fare no better than the last, and it will land us yet again in a crushing economic crisis that is now dragging us through its fifth year.

This article may not be republished without permission from Truthout.

Matt Renner

Matt Renner is Director of Development and Communications at Truthout.


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Truthout Contributor Richard Wolff on Challenging Capitalism in His New Book, "Occupy the Economy"

Thursday, 17 May 2012 15:45 By Matt Renner, Truthout | Interview

Truthout combats corporatization by bringing you trustworthy news: click here to join the effort.

We Occupy(Photo: david_shankbone / Flickr)

Can we challenge capitalism and prevail, considering that the top one percent control 50% of the available capital and the top five percent some 70% of the nation's private funds?  Richard Wolff is a closely followed Truthout contributor on economics.  Currently, you can obtain his just-released "Occupy the Economy: Challenging Capitalism" directly from Truthout.  If you want to know about alternatives to the current destructive course of our economy and how we, as a nation, got to this point, get your copy of "Occupy the Economy" by clicking here.

The following is an interview with Richard Wolff by Truthout staff member Matt Renner.

Matt Renner: In your introduction to the book, you discuss New York City Mayor Michael Bloomberg's "cleanliness" excuse for clearing the original Occupy Wall Street encampment at Liberty Square. Why do you think so many public officials and right-wing pundits describe the occupiers as "unclean"?

Richard D. Wolff: Their problem has been, and continues to be, that they have no response to Occupy's basic attack on the inequity and antidemocratic social conditions summarized in the confrontation of, "1 percent against 99 percent." They know that the vast majority of Americans feel the truth of Occupy's social criticism, experience it in their lives, and sympathize with protest against and efforts to change a system with such unjust outcomes. So, they can refute little and need instead to distract public opinion from what Occupy focuses on.

One way to do that is to assert the existence of and then condemn some other quality or dimension of Occupy. In Bloomberg's pathetic example, the best he and his advisers could come up with was a reference to Zuccotti Park as being "unclean" so as to then position the mayor and the police as militant janitors. Everyone who knows even a little about New York City knows that the mayor and the police preside over many filthy subway tunnels, highways, streets, empty lots and abandoned buildings without doing anything to clean them. So, suddenly asserting the importance of cleanliness simply exposed them to the ridicule such a position deserved. I suspect something similar is underway when others, perhaps taking their cue from Bloomberg in New York, decided to follow the cleanliness ploy.

MR: In the first interview in the book, which took place in November 2011, you make the case for a national jobs program to begin putting people back to work. This idea has been floating around since the employment rate fell off a cliff at the end of the Bush administration. But the politicians in Washington DC, especially the Republicans in Congress, have blocked any progress on this front. What does this indicate to you?

RW: That the current crop of politicians, Republican and Democratic alike, don't yet feel enough political pressure to act on unemployment the way FDR did in the 1930s - with a massive federal jobs program that created and filled over 12.5 million jobs from 1934 to 1941. FDR then had the Congress of Industrial Organizations (CIO), fresh off the greatest union organizing drives of US history before or since, allied with socialist and communist parties with mass militant memberships. They demanded government help for the millions suffering a Depression they had not caused; they also threatened that absent such help, their anticapitalism would take them in the direction of basic system change toward socialism.

To avoid the latter, FDR got corporations and the rich to pay huge taxes and make huge loans to provide the government with funds to, one, create Social Security; two, create the unemployment compensation system; and three, hire those 12.5 million unemployed. So much for the fake claims of politicians that there is no money for expansive government programs. FDR found the money back then in an economic crisis three times as bad as the current one is now. The money is available now from exactly the same sources as provided it back then, but what is missing now is the unionization and political organizations of the 1930s. Having let those decline or disappear under relentless government and business pressures, we now reap the political results. Occupy is the rebuilding of the movement which is the only way out of crisis and decline - now, again, as was the case the last time US capitalism collapsed in the 1930s.

MR: In the second chapter of the book, you discuss the European debt crisis, the shifting narrative of capitalism as a result of the Occupy movement, worker solidarity, the attack on Social Security, bank bailouts, the military-industrial complex, love and many other topics. You call this chapter, "World Endgame?" but from my study of your work, I'd say this is an essential chapter to understanding and contextualizing your critique of our current system and how it affects the lives of every human on a daily basis - though that might be a bit too long for a chapter title. When you're out talking to people on the street, what is your favorite way of connecting the macroeconomy to the micro-, personal economy?

RW: What I stress most is a tableau that I find speaks directly and personally to everyone. I point out the basic numbers for now, May, 2012: 13 million Americans unemployed, with another 10 million either no longer looking - these people are often called"discouraged workers" - or else stuck in part-time jobs although they need and want full-time work. Side by side with that colossal and cruel waste of labor and lives, I point to the Federal Reserve's "capacity utilization rate," which measures what portion of the nation's tools, equipment, factory, office and store space is being used in production and what stands there idle, gathering rust and dust. For May 2012, the Federal Reserve reports that 22 percent of our capacity is unused.

Then I make a simple point: if we had an economic system that could do the obvious - provide people wanting jobs with the available, unused tools, equipment, raw materials, etcetera - it could generate a vast additional output to rebuild our cities, schools, infrastructure, relationship to our environment, etcetera. Then the punchline: capitalism as a system cannot and does not perform what is obviously needed. It is a system that allows corporations in the United States today to hoard $2 trillion and not use it to hire anyone because it is not profitable for them - a tiny minority of the US population - to do so. That is absurd and diminishes everyone's life in countless ways. My audiences nod in recognition. They see the point. They see how it touches them, their families, relatives, friends and futures. They make the macro-micro connection.

MR: One stunning point you touch on in the book is the attempt to erase Marx and his work from the American consciousness. Do you see this as a conspiracy or more as a result of the incentives in academia and business, or both?

RW: I think the Great Depression frightened the devotees of capitalism, and the rise of a powerful left frightened them even more. They were never prepared to question, let alone fundamentally to change the capitalist system. So, they focused instead on eradicating the labor movement and the left. It was easier to start with the left, to isolate it as somehow un-American and, thus, a threat. They strove to split labor and the left on that basis - which largely succeeded - and then, once the left had been dispersed, they went to work on labor by isolating it as a "special interest". Some did this intentionally, others fell into it as the "common sense" of cold war times.

Yet there is a stunning irony involved. It was because the unions and the left were strong in the 1930s that we got a respite from the Great Depression by means of massive government social welfare spending. I would argue it saved the United States from a much worse economic depression and much more extreme political developments, as happened elsewhere in the world in response to the same Great Depression. This time around, US capitalism has no union- and left- based movement, and, thus, allows austerity to make worse the suffering and inequality of the crisis and the bailouts. With no social welfare response possible as capitalist interests control the political system, the extremes of suffering and politics avoided in the 1930s may not be avoided this time.

MR: The book is an engaging read because it's written directly from a series of interviews between you and the outstanding reporter David Barsamian. What's the difference for you between academic writing and answering questions in a conversation?

RW: This book is a conversation, and it is accessible the way anyone might drop in on an interesting conversation. There is no need to prove erudition and make lots of footnotes with references and to write for the usual academic audience. David and I strove to welcome every possible reader with every possible set of interests to join in and engage in a conversation about something urgently affecting us all.

MR: Some of the proposed future tactics of the Occupy movement have been a sort of aikido or jiu-jitsu move - using the power of your opponent against him and turning your weakness into a strength. I'm thinking primarily of the effort to organize a debt strike, where a group of indebted people would collectively refuse to pay back debts owed, bringing on another financial crisis. Is there any historical precedent for this kind of action?

RW: Yes, debt strikes - like rent strikes, consumer boycotts and so on - have been weapons of people against vested economic interests of rich minorities for centuries. They often serve to inform and mobilize people, and will likely do so more and more as this capitalist breakdown deepens and spreads. And yes, such actions can sometimes combine with the internal contradictions of the existing system to provoke or worsen its own crises. For example, the decisive votes of the Greek and French people in elections on May 6 were a kind of plebiscite against paying off the debts of governments who borrowed too much to bail out too few of the biggest banks - the very institutions most responsible for the crisis in the first place. You could call those votes a form of debt strike, and they could interact with the other economic and political whirlwinds sweeping across Europe to deepen its crisis and its potential for change and for aggravating the crises in the United States and elsewhere.

MR: The Occupy movement has been working and organizing in opposition to capitalism's inherent crises, the costs of which inevitably fall on the poor and the politically powerless, but the movement has also been looking for new systems to build and embrace. At the end of your book, you've attached an economic manifesto for a new way forward, built upon the knowledge gleaned from the failures of both state-sponsored socialism and our current state-sponsored capitalism, or whatever this mess should be called these days. Can you give us a taste of your prescription for building a new economy that could work for the 100 percent?

RW: Yes, briefly, although a fuller statement will be forthcoming this September in another book I have written to be entitled "Democracy at Work." The idea is to reorganize our production units - enterprises - in a democratic way altogether different from how they are organized now in capitalism. Instead of a few major shareholders selecting the 10 to 15 members of corporate boards of directors, who then together make all the enterprise's decisions - what, how and where to produce, and what to do with the enterprise's profits - this new organization will involved the workers in each enterprise together, collectively and democratically making all those decisions. The workers will become their own board of directors, their own ultimate bosses. From Monday to Thursday, they will each do their particular tasks; Fridays they will together make all the enterprise decisions in a democratic collaboration with the residential communities that interact with the enterprise.

Just think: would enterprises organized that way allow massive unemployment in the United States? Would they close their businesses and move to China? Would they pay some of themselves millions while many others have barely enough for modest lives? Would they undermine government programs like the New Deal, whose beneficiaries they are? You get the picture. That is a democratic vision of a better economic system built from the ground up and placing economic power in the hands of the people, the majority. We can, I believe, do better than capitalism, and a system like the one sketched here offers us one possible way forward.

MR: Last week, we saw another tremor in the house of cards that we all call the American Financial System when JPMorgan Chase disclosed a multibillion-dollar loss, from what was essentially a gamble gone wrong. What is your outlook for American-style capitalism and its biggest winners, the massive banks?

RW: JPMorgan's $2 billion loss just illustrates yet again that so long as we leave tiny groups - boards of directors and major shareholders - in a position to evade, weaken and overturn people's efforts to regulate and control them, they will do just that, and they will take risks whose consequences we all have to suffer. For banks like JPMorgan, government regulations born of people's suffering are so many obstacles to overcome to rebuild their profitability. They use their profits to overcome those obstacles. That's how and why, after the Great Depression ushered in the New Deal, US businesses went to work to undo the New Deal, to evade, weaken and eventually overturn laws like the Glass-Steagall banking regulation, high taxes on business and the rich, etcetera. If all we do now is pass another set of rules and regulations, but leave in place the existing corporate structure of enterprises, we will have ourselves to blame for the fact that another set of rules and regulations will fare no better than the last, and it will land us yet again in a crushing economic crisis that is now dragging us through its fifth year.

This article may not be republished without permission from Truthout.

Matt Renner

Matt Renner is Director of Development and Communications at Truthout.


Hide Comments

blog comments powered by Disqus