Professor Richard Wolff: Capitalism in Decline and Workers Cooperatives

 Richard Wolff is an accomplished Marxian economist who teaches at the New School University in New York. He’s also the author of outstanding books like Democracy at Work: A Cure for Capitalism and Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It. Despite being very busy with his work, he was kind enough to sit down and talk to us. For articles, classes, and much more from Richard Wolff go to: www.RDWolff.com or www.DemocracyAtWork.info  Audio of this interview can be found here: http://youtu.be/g49Fy8LYJYk

Rise: To get started we wanted to know who, besides Marx, some of your influences have been.

 Wolff: Oh goodness, more than you can imagine. If I had had my way as a student in college I would’ve majored in philosophy. I was always taken with Plato and Aristotle, the great philosophers thereafter, I was then completely, the German word is begeistert -and I’ll come back to why I use German words- by Hegel, and in fact Hegel has been as important to me as Marx has been in this philosophic tradition. But my parents, even though they were Europeans and had come to the United States as political refugees, and I was born in the United States, my father was French and my mother was German and as a result in the first five years of my life here in the United States I only spoke French and German, I only learned English when they dropped me in the kindergarten and I had no choice. But they also became Americans and they told me that studying philosophy was a guarantee of never getting a job. So, when I entered college, I was studying biology and chemistry because my parents thought scientists were safe. They would get a job and they wouldn’t be harassed by the police.

 The thing is, I couldn’t stand it, so I wanted to do philosophy, but they couldn’t stand that. So we hit on this compromise that I would study history and economics, particularly economics, because in their mind this had some of the patina of “science” and so it was sort of a compromise within the family. So my influences have been very broad. I always found literature fascinating and anthropology fascinating. I majored in history as an undergraduate, I only did the economics later in graduate school. So my influences are very very broad. When it comes to the economics, like most Americans I have had to learn conventional mainstream economics: microeconomics, macroeconomics, what is called neoclassical and Keynesian, and all of that traditional, mainstream, conventional economics. The Marxian stuff I had to learn on my own. I didn’t have teachers who did it. I don’t think all but a tiny number could have done it because they didn’t know it themselves, and those who might have done it because they knew it were afraid to do it because of the Cold War.

 So it ended up, the only way for a young person who knew about Marx, and remember because my parents were European they came out of a culture in which reading Marx was something that every educated person did. The United States is a place where the majority of people that get an education think it’s a virtue not to have read Marx. So it’s a very different situation. Anyway I came to the conclusion that this was so important I had to learn it on my own, and I found other students to do it with me, but basically this was done as an extracurricular activity. I’m very grateful that I did it. I think Marxian economics is a wonderful and rich source of understanding, so I’m very glad I made up for it, and I find it, frankly, pathetic, that’s the word I’d use, that American education, ever since basically the 1950‘s has cultivated a stunning level of indifference, ignorance, and simply blindness to all that this other intellectual tradition has achieved.

 Rise: When you talk about worker’s self directed enterprises you often say that the community that is affected by production needs to have a role in the decision making process behind production, what do you think the relationship between the community and the enterprise would look like?

 Wolff: Let me use a historical example to give you an idea, because if I just answered your question straight out it might appear that I was advocating something new, something untried, something radically different, and it isn’t. It has its antecedents and it’s important to know that. I’m going to pick one, there’s several, but I’ll pick one. After the end of World War I in Germany the old regime was dissolved. The Kaiser, which had been in charge of German society, abdicated. Not that he had any choice, he was thrown out basically by the mass of the people. Germany as a nation became a republic, and it had it’s headquarters in a relatively small German city called Weimar and this was known as the period of the Weimar Republic, roughly the 1920‘s. One of the interesting thing they did is set up a bicameral legislature, like in the United States and many other countries.

 Here we call it the Senate and the House of Representatives, in France they call it the Sιnat and the Assemblιe Nationale. Well in Germany they made a really new break, they created two centers of parliament, but they were radically differently defined. In one parliament you elected representatives from the locales where people resided. That’s the way we do politics in the United States, for example today (Nov. 4) in the United States there will be voting and where you vote depends on where you live. And who you vote for is based on a group of residents in a certain place, a city, a state or whatever it is. So Germany had one house set up like that. But the second house was set up, the German word is Bundesrat. It was set up according to where you worked. You elected representative from your factory, from your office, from your store. And so you had a legislature that reflected people’s identity as workers, and alongside of it you had a legislature that represented their identity as residents. As members of residential communities. And in order for laws to get passed, typically, you needed the assent, the majority of both the residential community and the workplace. All I’m saying is that’s a very good idea.

 The decisions that are made that govern workplaces have to have an input of the communities around them because those communities are affected. If a workplace enlarges, that’s gonna impact the traffic, the air quality, the housing patterns, whatever it is that makes up life for the whole community will be shaped by a decision in the workplace and vice-versa as well. So if -it’s the old rule of democracy- if a decision is made by a group of people that impacts another group of people then there has to be, if you’re gonna have democracy, there has to be participation in the decisions by everybody that’s affected. That means the community has to participate in the decisions of the workplace and the workplace has to participate in the decisions of the community. And I think the way that I would set that up now is to say, look, in a peculiar way, we have gone half the distance to democracy where we reside. We have elections, we have some procedure. It’s been corrupted beyond words, but mostly because we don’t have any democracy in the workplace. We have the ability for a tiny group of people to make decisions that everybody has to live with, with no effective power over them, and so, this absence of democracy in the workplace has undermined the project of bringing democracy to the residential place. So the way I would solve it is to say, let us have codetermination -that was the word that emerged in Europe- codetermination by a workplace democracy -that’s the worker’s self directed enterprise- and by a residential political democracy that have veto power over one another, that participate in each other’s decisions, and by bringing democracy to the workplace you establish it, or at least make it possible, for the first time in the residential place. And that’s how I would see bringing democracy forward from the more formalistic way it has been put into effect up until now and to make it really more genuine.

 Rise: A lot of people, when you mention worker’s self directed enterprises, they don’t understand how such a setup could work on a national, international, or global scale. Could you explain how a WSDE could operate on a larger scale?

 Wolff: Sure, but again let me preface, before I go into the full answer, with a little history. What I’ve learned in my life is that history is an enormously powerful teacher if you permit it to speak to you. And it undermines nine tenths of what you try to puzzle out if you don’t pay attention to it, so it’s a complicated relationship, so let me give you an answer. Capitalism when it emerges in Europe in the 17th century it begins always in very small enterprises. A family with one or two employees, a small business with three or four hired men or women, and so on. It takes centuries for the capitalist enterprise that began always as very small to figure out how to become larger. In the process of going from smaller to larger many companies collapsed, they couldn’t navigate that transition.

 Big changes had to be made by those who manage. For example, they had to stop being enterprises owned and operated by a family. It had to make a very difficult transition to an enterprise that’s owned by thousands, or maybe even millions, of people. Each of whom had bought shares, on the stock market, of a company. This allowed the company to collect large amounts of money and thereby to become big, but in the process the growth to something big really transformed the enterprise from the small family capitalist enterprise to the modern corporation that we take for granted now. Why do I tell you this? Because the worker’s self directed enterprise, the worker co-ops, have had exactly the same kind of parallel evolution. They generally start small.

 A group of doctors begin to set themselves up as a co-op. A group of software engineers. A group of workers at a coffee shop restaurant. Whatever it is, they usually start small. Five, ten, twenty, thirty, that kind of thing. And if they’re successful then they grow, and when they grow the have problems of growth. How to handle it. How to preserve the collective, democratic, decision making that was their raison d’κtre to begin with. In the days of the daunting demands of growth to large size. But fortunately in answering the question as I see it, I again have a concrete history to point to that answers three quarters of the question. The history is of the most successful and best known WSDE in the world today.

It’s called the Mondragon cooperative corporation. It’s located in the Basque area of Northern Spain. It is in the city of Mondragon, just in the foothills in the Pyrenees mountains that separates Spain from France. This co-op started small with six workers and a Catholic priest in 1956 in the same town of Mondragon. Today it is the seventh largest corporation in all of Spain. It has 100,00 employees that work in it. It is actually a corporation the encompasses 250 specific worker co-ops. In agriculture, in industry, in services. A whole complex, you might call it a community, of cooperatives under one corporate umbrella. Okay, they had to change. They had to learn that there were problems of governance. They had to coordinate among the co-ops. They found that the best way for each co-op to survive was to have a complicated relationship with other co-ops. So that, for example, if co-op #1 had a special problem that were either it’s own fault or had it imposed on it from the larger economy, they could draw upon help from other allied co-ops and then of course they would be expected to do the same in reverse when someone else had a problem and they could help. Well, they decided to formalize this by themselves becoming a corporation of cooperatives. They had difficulty, but they have had stunning success. That’s why they are the model in the world today. So they have a complicate parental coordinating entity called the corporation. To give you an idea, the corporation is separate from all of the co-ops that comprise it. One of the things that the parent, if you like, the larger overarching corporation, here are some of the things they do: they maintain a university. It’s called the Mondragon University. It has four campuses in the area of Mondragon. It teaches people how to operate a co-op. It takes them through all the governance problems, all the incentive problems, all of the -how you make decisions who gets paid what kind of salary, how you handle the problems of growth. They also offer courses to people around the world who want to replicate the experience in Spain and use it as a model.

 Well, no one co-op could do this, but the co-ops together within a larger corporation could solve the problem of having a constant adult educational training institution helping all the people that come in to learn what has been understood over years of practice. So it becomes crucial for each corporation’s, each co-op’s, survival to have this university. To give you a second example, quickly, the maintain their own bank called the Laboral Kutxa, and this provides a way for every co-op to deposit it’s money in the collective bank, and then draw credits. In other words, they’re not dependent on an outside banking system, They’ve become big enough to provide internal financing for growth, and for anything else that’s needed, without having to go to an external world that is not organized as a co-op, and might corrupt what they’re trying to do. Number three, they have a pension system. When a worker gets old and retires they go into pension housing and have a medical care program that is provided by Mondragon for them. It makes having a job at Mondragon, people in Spain, work for years to get a chance to do it. Spain for example today has an unemployment rate of roughly 27%, but the Mondragon area has an unemployment rate of 11%, being way, way, way less because they take care of their people. They basically have a commitment, you have a job and it’s yours for life unless you don’t want it. Last example, in order to survive in a capitalist world, they understood early on that they would have to keep their technological edge. They would have to study ways of being more efficient in their production. They would have to look into new kinds of goods so workers would have jobs producing new goods as interest and demand for old goods faded out of the picture. Well, in order to do that you have to have laboratories. No co-op can afford to have a laboratory. It’s too expensive, it’s too un-immediately productive. So they set up their own laboratory, so the Mondragon parent has it’s own laboratories. They’re very advanced. I’ve toured them, I’ve been there, I’ve gone through them. And you might like to know that two American corporations are so taken by the research being done in Mondragon’s labs that these two corporations pay the Mondragon corporation a hefty fee to permit their American scientists to work in the labs in Mondragon alongside their scientists, because they want to get first dibs, if you like, on the technology. And I’ll give you the names of the two American corporations: General Motors and Microsoft. Not bad, for a little co-op, to have achieved the status that those entities, who already have huge labs, want to place their scientists over there.

 Well, the bank, the pension system, the laboratories, these are all ways that the Mondragon corporation found it could achieve bigness, take care of more and more people, by a kind of community of relationships which the encompassed under their corporate umbrella. And the proof of the pudding is they’re the seventh largest corporation in all of Spain. They have managed the transition while all of their member co-ops continue to be run as worker’s self directed enterprises. So, for example, a rule -and by the way this is a rule across all of the 250 co-ops that are a part of Mondragon- the rule is that the highest paid worker in any co-op cannot get more than eight times what the lowest paid worker does. In the United States the comparable measure is 275 to 1. In Mondragon it’s 8 to 1. So, this is a rule that is enforced by the totality, but it is voted on inside each co-op, but it would have to be within that range, because that’s the rule of the larger community of which each co-op is a part. This doesn’t mean that every co-op will solve the problem of becoming bigger in the same way, but it provides us with a very clear example of one way to make that transition from smaller to larger. And my guess is that other co-ops around the world, as this movement develops, will develop variations on the Spanish who took it the furthest early on.

 Rise: You talk about this evolution on the microeconomic level, what would you say to, for example, hard-line Leninists who say that socialism can only be achieved through revolutionary change? Do you believe that there’s this kind of dichotomy between revolution and reform?

 Wolff: No, I don’t believe there’s any big dichotomy, but even before we get to the dichotomy or not, it’s a question of what these words mean. You know, you can have a notion of revolution that’s full of romance and drama. In which the king loses his head, the people from the street overwhelm the bastille, or whatever other image you want. That’s one aspect. One dimension. But to use the word revolution for that strikes me as highly problematic. Let me use a current example. Over the last two or three years we have had events in the Middle East. In Tunisia, in Egypt, in a variety of other places, that were given the name by the media “revolutions.” Well what has changed in the basic economic structure of Tunisia? Well, to give you a summary judgment, my answer would be: nothing. And what has changed in the basic layout of the Egyptian economy? My answer would be, amazingly, nothing.

 So, for me, if you want to use the word revolution, use whatever word you want, but you should be honestly aware that you’re now using this word for a multiplicity of quite different things. Coming from the Marxian tradition, the word revolution applies to a fundamental transformation of an economic system. Whatever happens to politics and culture, which are assumed to also undergo major changes, but the focal point is, to use practical examples, have you had a revolution that overthrows feudalism and establishes capitalism? Have you had a revolution that has overthrown a slave economic system and established a system of small property owners cultivating their land and their crafts individually? Or have you overthrown capitalism and established a fundamentally different system? For me, revolution is about that. Whatever else you do, for me, if that isn’t -if you can’t show me a fundamental shift of the economic organization. How we as a community go about producing the goods and services without which our lives cannot continue. If you can’t show me that transformation, then I don’t wanna use the word revolution. Or I would wanna use the word transformation, rebellion, big change, lots of words. I don’t want to deny the importance of political and cultural things, but I would like to reserve the notion of revolution to something fundamental about the production system.

 Alright, having said that, I may push it and you can then react. I don’t think you’ve made a revolution if what you do is change the personnel  who occupy the different positions. So let me give you an example, in what we call private capitalism, like that which exists in most of the world today, a tiny group of people, the major shareholders in an enterprise, -that’s usually ten or twenty people- get together and vote in the election every year for the board of directors for the company. And those votes, as I assume you know, you get one vote for every share you own. If you own no shares, you get no votes. If your grandmother left you twelve shares, you get twelve votes. And if you’re the banking manager at Citibank in New York, and you have a trust department, you are the voter for millions of shares. So, obviously since share-holding is highly concentrated -in the United State approximately 2/3 of the shares are owned by 1% of the shareholders- clearly that 1% elects the board of directors, and they make all the decisions. What to produce, how to produce, where to produce, and what to do with the profits. Everybody in the workplace participates in making those profits, everyone has to live with the results of the decision of what to produce, how to produce, and where to produce, but only a tiny group at the top have the power. For me, a revolution would be if you changed that. But it’s not a revolution if you get rid of the individuals elected by the major shareholders and substitute state officials.

 If the government say “We’re gonna put fifteen officials in that job, and we’re gonna eject the people put there by the major shareholders.” I think that’s an interesting change, that’s an important change, but for me that’s not a revolution. A revolution would be, for example, if you transformed the hierarchical, undemocratic, top-down structure of a typical capitalist corporation into a worker’s self directed enterprise. That’s a revolution in the organization of production. That’s comparable to getting rid of a lord and a serf and substituting an employer and an employee. That’s an order of magnitude, that for me, is what I wanna reserve the notion of revolution for. So, long answer, I think that when a group of workers, in a perfectly peaceful way, decide to quit working for Starbucks and to go two doors down and open a self directed coffee shop, where the workers collectively run it, for me that’s a revolutionary step. Is it all that’s needed? Of course not. Could they survive without lots of other changes happening? I don’t think they likely would. So I understand more needs to be done, but in that shift is the beginning of the revolution. Just like when the early capitalist enterprises took shape in cities in Europe where runaway serfs who had left a feudal manor hooked up with one another and found the local merchant who could maybe give them a job making something the merchant could then sell. You had the early coming together of a new relationship. The relationship of employer to employee.

 Radically different that the relationship of feudal lord to serf. In that early shift comes a revolution. Much later, when many capitalists have developed, and they begin to clash with the leftover lords and serfs, then you have the drama and the romance. then you have the French revolution, then you have the spectacular, -and that’s very important, without that you don’t make the change- but the word revolution really should be a nuanced term for these fundamental reorganizations that typically begin within the shell of the old. Marx had several wonderful lines where he said “The future, socialism and communism, those are taking places if we know where to look. Right in the middle of capitalism.” And for me, as I travel around the United States, visiting worker’s self directed enterprises -and there are more of them today in the United States than ever before- I can see the process unfolding even though it’s at a level now that has none of the drama of the Arab Spring, but in my view, the changes here are much more profound so far, than what we have seen over there. This doesn’t mean that over there they won’t begin to make shifts, and I notice that particularly in Spain, and that’s no surprise, the upsurge, which is now called Podemos, -”we can” in Spanish- they are beginning to look, and thery’re very strong, at models like their own Mondragon as something to incorporate in their demand for a more democratic system. There is a revolutionary evolution.

 Rise: A lot of people look at Nordic countries like Sweden and Norway and they say “Okay, social democracy. Everyone there has a nice wage and a nice pension.” What would you say to those people? Why do we need to go beyond the social democratic model?

 Wolff:I think the answer lies in the fact that Sweden, Norway, Denmark, all of them, remain very much capitalist countries. They have a highly unequal distribution of wealth and income, thy have the same undemocratic control of their enterprise, their factories, offices, and stores. And the proof of why it’s not a solution is that when you leave your economy in that situation, which the Nordic countries have done, then you are always at risk that the social benefits that they provided to their people, like the ones you listed, quite correctly. Job guarantees, pensions, free higher education, housing subsidies, all the things that they get, and that by the way are given to people in Germany and France and Italy and so on also, but what the capitalists give you when you put a lot of pressure on them from below -which were how all of these things were achieved- they can also take away from you. Which in the last ten years is exactly what they’ve been doing. If you got to Sweden you’ll see that the level of support is being reduced compare to what it was five, ten, and fifteen years ago. The same is true in Germany. The same is true in France. And on and on and on. When you compare the condition of workers there to that in the United States, they’re much better off in those countries, but you have to be careful not to forget that they are fighting, albeit at a better level than we are here in this country, they’re fighting a losing battle to hold on to their social democracy. And why?

 Because they left the capitalists in the ultimate deciding position. And those capitalists now feel that with the competition now coming from China, India, and Brazil, and all the places that capitalism is moving, they can, to use their language, “We can not,” the royal we “We can no longer afford the social welfare benefits, the social democracy, that we would love to be able to give to our workers, but, you see, the money isn’t there for it.” Same argument here. If you want an economic system to serve the people, you’ve got to put the people in charge. The problem of capitalism is it wants to present itself as the economic system that serves the people, it just doesn’t wanna put the people in charge. It wants to keep a tiny group in charge. And I got a really hot tip for you, if a tiny group of people are in charge, they’ll make the economy work for them. And the mass of people will hear lots of speeches about how it’s good for them, even if they’re deprived of one safely net, one social benefit, after another. Here in the United States, at the end of World War II, we passed something called the GI bill. We said that every returning soldier from World War II who elected to go to college, the federal government would pay all the cost of doing that. That’s a wonderful benefit. What is the generation now, fifty years later, what are they being told? The government will not only not pay for your education, but we will make it necessary for you to get a poorer education than you could’e got twenty-five years ago and come out of the college with tens of thousands of dollars of debt, facing a job market that sucks. Wow! What happened?

 Well, the capitalists don’t want to pay the costs of those benefits. They don’t wanna pay the workers the salary that would allow the workers to buy them, and they don’t wanna pay the taxes to the government to provide them. They are taking away, and they’ve been doing it for forty years in this country, what they gave before. Because they’re in a position to be able to do that. That position that they’re in is called capitalism. And if you don’t want capitalism to take it away, you can’t leave capitalism as it is. You are actually facing the need for revolution. And here’s the irony, it is the way that capitalism is managing it’s current situation that is creating, in the millions of its people, a revolutionary consciousness. Which is Marx’s point. Revolution doesn’t come from outside. It doesn’t come from agitators. It doesn’t come from a Lenin or a Castro or somebody else who’s dropped in like a deus ex machina from some mysterious place. Revolution is the internal working out of a contradiction that can’t resolve itself any other way. And who creates the revolution? It’s the system itself.

 The reason the French Revolution cut off the head of Louis XVI was not because of somebody else, it was because of what Louis XVI was and what he represented, and what tradition he came out of, that produced the reaction. And we’re doing that in Western capitalism. In North America, in Western Europe, and Japan now. Capitalism has moved. Capitalism has made the profit driven decision to leave the areas of high wages and go to the areas of low wages. That’s why the clothes we wear, the appliances we use, and the cars we drive, are all coming from India, China, Brazil, and all those other places. To the working classes of North America, Western Europe and Japan: the party is over. Capitalism has left, and it doesn’t give a damn about you. It’s future is over there. That’s where the growth is, that’s where the rising profits promise. The only thing that’s left for the west is to be a consumer. And since you can’t consume if you’re not working, a long term trend in the West is decline.

 So the real questions of the working classes of Western Europe and North America is this: in the first 250 years of capitalism you had it benefits. True, you were wrenched out of your peasant existence and made into workers. True, you were savagely exploited. True, you were really made to work so hard that you exhausted yourself. But, you got some compensation. You got a rising standard of living. you got a rising wage. You could go to the mall. What capitalism offers the workers of North America, Western Europe and Japan today is all the same exploitation, all the same stress, but no more rising standard of living. A declining standard of living. That risks producing a revolution against capitalism, and it is only the failure of the leadership of capitalism today to understand this dialectic -a dialectic laid out beautifully by Marx- that makes them unable to conceive of anything other than doing more and more of the same. It’s a little bit like watching a train on a track, hurdling towards a stone wall, and wanting to say to the conductor “For God’s sake! Slow down! Stop!” But the conductor says “I’ve been running this train all my life, I know exactly how it works, you don’t need to worry, I’ve been here many times before.”

 For someone with your first name (Mikhail) I’ll give you another example. It’s like watching, in the 1970‘s and ‘80‘s, in the Soviet Union, as the thing cannot continue, but the leaders keep insisting, “yes it can” and the it’s over. But the over is really the last act of a drama that had been building for decades, and nobody foresaw it, but they should have. And there are few who foresee it now, but they should! And some of us, who have, by luck, the benefit of thinking in a critical traditional way, that is, alongside Keynes and Adam Smith, and everybody else, we also read Marx. That gives us a chance to apply a different set of intellectual questions to our glancing at the world we live in, and it enables us to arrive at a different answer. That’s really all that’s going on. The irony is, the United States would be better off today if it had let it’s young people learn about Marxism, revolution, and contradiction -from Hegel too- because they could apply it to the situation today, and they might be able to come up with some interesting ways of dealing with this situation that even I don’t understand. They could teach me. But they won’t be able to do it because they’re so proud of their ignorance of all of that.

 When I ask people, or I make a joke in a conference in reference to some basic idea of Hegel’s philosophy it is damn right funny the blank looks on the audience’s faces. They’ve all heard the name Hegel, they all know there was somebody, but they haven’t a clue, and it’s basically the same with Marx. The only difference is they think they know what Marx said. Although their idea is a silly caricature. And so they really don’t have any of that apparatus to use, and like a real child, they think that having that apparatus unavailable is a virtue! At which point you really want to pat them on the head and suggest they go out and eat some hot dogs, because they’re usefulness in this conversation is virtually zero.

 Rise: Talking about capitalism in crisis, do you think it’s possible for capitalism to evolve and save itself or do you think this is inevitably the end of capitalism? Also, tacked onto the end of that, what do you have to say about this often repeated “industrial renaissance” that is going to happen in the United States?

 Wolff: Well, I’m not a big fan of inevitable. The word “inevitable” seems to imply that whoever uses it knows what’s going to happen in the future. I don’t know what’s going to happen in the future, I don’t think anybody does. I think if you really want to talk to somebody who believes that you go to an amusement park and you speak to the gypsy lady who tells you who you’ll be sleeping with in a couple of weeks. You giggle because you know it’s an amusement, you don’t organize your life with the expectation that in two weeks, this event that she told you about, is actually going to happen. So I have no idea what’s going to happen in the future any more than anybody else.

 So I have to answer the question, could capitalism save itself with, yes it could. Since I don’t know what the outcomes are, that has to be one of them and I leave open that option. I even make it a self critical joke which is common amongst Marxist economists. We say something like the following, “we are proud to have predicted ten of the last four recessions.” You understand? There’s a tendencies among Marxists, like all other people, to substitute the wish for the fall. We might wish capitalism had no way out but that’s no substitute for the analytic. You know, one of the greatest Marxists theorists was the Italian Antonio Gramsci, who when asked  to describe how he looked at the world he said, “pessimism of the intellect, optimism of the will.” In other words, you want something but you have to keep your hard-nose, analytical mind, able to see the reality for what it is and not for what you would wish it to be.

 Capitalism has proven itself resourceful, it has been in a real big jam before. After all the Great Depression of the 1930’s was much worse than at least -so far- this one has been. We are currently in the second worst, but it’s the second worst not the first one and capitalism saved itself. True, it had to go through Hitler. It had to go through unbelievable suffering of world war in the process and so on. The price paid for it was staggering but capitalism survived. So could it survive again? Could it find a way out of its’ current dilemmas? Sure it could. But I must say, and let me put it this way. Being an American economist and having gone all my life to elite American schools. Just so you know, I went Harvard, then I went to Stanford, and I finished my education at Yale; it’s like a joke. I’m the product of elite American education. Here’s an interesting fact. When I sit down with my fellow economists, most of whom are either conservatives, liberals, middle-of-the-road, whatever, we don’t agree on how the American capitalism got into the crisis it is now and we don’t agree on how it should get out. But the one thing we all agree on, and we all marvel with each other about it, what we agree on is that the current situation, 2014, is the worst condition of American capitalism any of us have seen in our lifetimes and is way worse than anything we expected to see and that’s true of me too. So we’re talking about capitalism having some major problems and I mean major particularly in Western Europe, North America, and Japan. The prognosis for capitalism is actually much better in India, China, Brazil, places like that; than it is here. Something which the publics of this part of the world have not yet faced up to at all.

 So finally, renaissance, well that’s the most absurd wishful thinking I could imagine. Our problem isn’t renaissance our problem is stopping a wholesale collapse. Let me give you a concrete example. In 1960 or ‘65 when foreign dignitaries came to the United States, who ever was president took them to Detroit, Michigan to show them this fantastic monument to a successful capitalism. Detroit in those years had a population of 2 million people. It was the center of the American automobile industry which was a model of capitalism. High profits, goods that were admired around the world, so successful that African Americans had been brought by the hundred of thousands out of the south to come settle in Detroit where they got jobs in the auto factories, where they became members of the united auto-workers, where they had a middle class living, could send their children to college. Everybody just thought, “This is capitalism! The great success!” The African Americans who came developed an entire new music, the Motown sound, that changed music around the world. Without which there’s no such thing as the Beatles or the Rolling Stones, or a hundred other groups that we all know. Where is this great capitalist center today? Let’s go through it.

 The population of Detroit today is 700,000 people. That is 1.3 million people, a vast majority of people in Detroit were driven out of the city because the conditions there are so horrible. I don’t know if you’ve been to Detroit but I would advise you-I really mean this- to make a trip if you can and let someone drive you through the streets of Detroit. Half the houses are abandoned, half of the abandoned houses are burnt down. It looks like a city that has been bombed, the way Dresden was at the end of the war or the way Beirut was a few years ago. It is a catastrophe, it is an unbelievable story of decline and decay. Huge automobile factories sit empty, weeds are growing out of the parking lot because there’s nothing to do there. One of the biggest problems in Detroit today is the fact that with all those people who left, nobody is paying taxes. So the city of Detroit is currently bankrupt, it is the largest urban bankruptcy in the history of the United States. One of their major problems, and I couldn’t make this up, is wild dogs. Because they have no money they had to laid off the people who are in charge of picking up stray dogs from the street. Not only that, as people leave town because they have no job and no money, they can’t afford their dog. So they leave the dog behind but there’s no one in the city to take care of it. Currently in Detroit there are estimates of 50,000 wild dogs living in the abandoned houses and who are becoming dangerous to young children. The centerpiece of capitalist success is now a bankrupt city, terrified of wild dogs. This is like a biblical story, this is a story of a capitalism whose problem isn’t renaissance, their problem is to stop the collapse. Detroit is the future of America; you can see it if you go to Cleveland, you can see it if you go to Camden New Jersey, you can see it in my hometown where I was born in Youngstown Ohio, and a dozen other places. A hundred other places. That’s our problem. We have no way right now, no policy. The Republicans don’t have it and the Democrats don’t have it either, to arrest this decline. We say to the students, “Terrible that you have all of these debts. Have a nice day.” What? Every other industrial economy in the world subsidizes higher education for its’ people, we don’t. Every other industrial country provides paid leave for new parents having a child, we don’t. We’re not a society that should talk about renaissance, that is the height of self delusion. We’re not at renaissance, we’re not at a new birth. We’re trying to hold on so that we don’t die. That’s our problem.

 Rise: It’s not just going to take the capitalism taking itself out of the crisis but should we as Marxists and communists also help with the revitalization of capitalism in order to progress on into socialism, because currently as it stands, I feel that- and I want to know if you feel the same way- if America is economically viable for making a transition from capitalism to a stable form of socialism.

 Wolff: That’s a very good question, I guess my answer is that capitalism will try and the people who are running will try to survive. They’ll try to find a solution, that’s what they’ve done in the past. Doesn’t mean they’ll be able to, but they will try and that I understand is their job that’s how they define themselves. For those of us who are critics of capitalism, our job it seems to me is to run around this society, wherever we are; in the university, the in the office, in the store, in a social club, in a sports team, wherever we are and provide an alternative way for people to understand what’s going on. We live in a very homogenized society and we need some heterogeneity, we need people to say to folks, “here’s another way to understand what’s happening.”  And if you have this other way, it also implies a different way of running your politics, a different way of organizing social institutions and so on. The best contribution we can make to a society in the kinds of turmoil and decline we’re in is to give people the hope they don’t now have, which is that there is an alternative that there is an option.

 Margaret Thatcher was famous for a remark she made that came to be called by the acronym T.I.N.A., it stands for, There Is No Alternative. She liked to tell the British people (and she was quite successful at it) that they had to live with a declining capitalism. And England is further along than it is here, you have to live with it. There is no alternative. I think our chances as critics, our chances to become politically important is precisely to confront that and say, “Oh, yes there is.” But, it involves big changes, Americans are afraid of big changes, very afraid of big changes. They hope- and today is such a wonderful day for me to say this- they hope they can do something that isn’t scary at all. They can go into a voting booth, spend 30 seconds, pull a lever or fill out a form, and go home and things will get better. They vote for the candidates who promise that things will get better because that’s a cheap and easy, relatively costless act. You don’t take any risks, you don’t put anything that’s really valuable on the line. I think they’re being disappointed and they’re bitter, that’s why every president we’ve had in the last 20 years comes in with exploding notion of possibility and goes out nobody gives a damn about him anymore. Look at Obama, look at them all. Because you can’t keep telling people the same silly story without them beginning to realize that that’s what it is, a silly story.

If the workers ran an enterprise and then they were told, “You know the wages are much cheaper in China why don’t you close this factory and go over there?” they would look at you as if you were crazy. That would mean we as the workers decide to deprive ourselves of jobs in order to give the jobs to people far away. We’re not going to do that, we’re going to solve the problems in this enterprise some other way. And you know, that’s exactly what capitalists do. I’ve advised capitalist companies all my life. You sit with a capitalist company who is having a problem and they’re saying “you know, we’re going to have to move to China” and I being who I am, I say “wait a minute, this is what you’re paying your top managers. This is is what you’re distributing as dividends to your top shareholders. If you cut the price of your goods 20% the money you don’t get is the money you don’t pay your share holders and you don’t pay your top executives.” That solves your problem, you’ll now be competitive without having to move. And the capitalists say, “that won’t work, that takes away what I’m here for and my shareholders will be angry.” I love this, I say, “then you move, what will happen to those workers? They will be angry.” But they can’t see it, they just can’t see it. If the workers ran the enterprise they wouldn’t have any shareholders and they wouldn’t have any executives earning  10, 20, 30 million dollars a year and that would be money they would have available for something else; for a new technology, producing a new product, or god knows what. Any good capitalist businessman will tell you for every problem there are thirty solutions and I’ve got to find a good one and stick with it. But the notion that there’s only one thing I can do to solve a problem, I’ve never heard a capitalist say such a thing. It’s stupid, there are always many solutions. Some you know, some you’ll have to be shown. Often you bring in a consultant because he can give you insight into something you don’t see, so you’re paying big bucks to have him come in and show you there’s a solution you hadn’t figured out.

 So for me, the answer is, what our job is to talk about is alternatives. How do you get out of this situation? And the one I find to be A: the most interesting for me intellectually, the one that is consistent with what I learned from Marx and finally the one that works the best with the American audiences I talk to. And that is about these worker self-directed enterprises, this revolutionary idea that you don’t have to have bosses telling you what to do, you can be your own boss, something Americans love as an idea. They’re angry at their bosses. They just thought there’s nothing you could do about it. And the idea that we could run this as a collective enterprise, once they get over the shock of it, it comes as excitement for them. I mean, I started talking about his on a radio station in New York in March of 2011 and here we are three years later, my radio program which has continued on that same station all that time has now been expanded. I’m on 37 radio stations around the United States and now a couple in Canada too. I didn’t do anything to find those stations, they all came to me. What’s going on?

 Up until 2008, I would do a radio or television program once every month or two. And I would be brought on the program by a host who would say to his or her audience, “Today, ladies and gentlemen I have one of ‘those’ ” with the word ‘those’ carrying every implication of ‘weirdo’. And then they would identify I’m a Marxist or whatever they would say and the second thing the host or hostess would say is “aren’t I wonderfully open-minded-”, patting themselves on the back, “-to be so courageous as to bring one of ‘those’ on the radio.” By the time I even started talking this host had effectively inoculated the audience against the ‘disease’ they might have caught by actually listening to me. All of that is gone. Now I’m on radio and television every day, you are the first, I have three today before we’re done that I have to do. The host is telling the audience, “This here is Professor Wolff, he has interesting things to say, I don’t know if I agree but we ought to listen to him.” What a different story. They all came to me because they’re hungry for something else. I travel around the country now, I give talks everywhere and the audiences are now 300, 500, 900, huge! Often paying money to buy a ticket to listen to me. This is catastrophically different. I’ve done more public speaking in the last three years than the previous forty. That’s not me, I’m singing the same basic song. So it can’t be me and it can’t be my song. What it is, is the audience is changing and a song they found scary, or weird, or odd, is now something they want to hear about. And when I’m done, they stand up and kind of cheer because they know that the world is turning into excrement and they want a way out and they’re kind of excited that maybe I’ve got something that they can benefit from.

 That’s a very different situation for me to be in and I accept these invitations because I say to myself, I don’t know how long this window of opportunity will stay open. I don’t know how long the American people will be in a position where they want to hear this. So my answer to you is, go out. Whatever your degree of understanding, whatever you read, learned; go out there and show that there are other ways of thinking about these problems than what they get on radio, television, and the magazines they look at.

Rise: Why do you feel that there’s only a  limited window of opportunity for us to speak out?

 Wolff: It’s not that I know it, I don’t know it. It may be that this window will be open for a very long time, I sure hope so. But my anxiety is that it will close down, that either we’ll have a right-wing lurch, look at the Republicans do very well today if they retake the Senate here in the United States. If the more crazy among them, the Lindsey Graham the Ted Cruz, these sort of folks with the money from the Koch Brothers, etc., etc. Look, capitalism in difficulty has found it’s way to fascism more than once in highly cultivated societies like Germany, Italy, and Japan. I have no reason to doubt that that’s possible here and then it will become illegal for me to say the things I’m saying. And then it will become personally dangerous. It isn’t illegal now and it isn’t dangerous. I’m having the time of my life running around the United States, I don’t deny it for a minute, I love this. I never expected to see this. I was hopeful that your generation might see what I would never have a chance to deal with and I lucked out, the wind changed, and I run around. I’ve been on Charlie Rose’s television program, I’ve been on Chris Hayes television program, I was twice interviewed by Bill Moyers on his television program, and last July I did the opening nine minutes with Bill Maher on a Friday night television show in front of umpteen million Americans where Bill Maher discusses with me, Marxism! Never has it happened in the United States in fifty years. Bill Maher and me discuss Marxism like it’s another interesting topic alongside the others. That is a sea change in this country. I was very happy with that conversation, not because we covered very many topics; nine minutes, Bill Maher is a comedian, we’re not going to do really well in covering topics but we were able to have a perfectly reasonable conversation about Marxism. That hasn’t been possible in the United States for half a century.

 That’s an enormous open window. Now the question is, people my age have opened the window, you have to go jumping through it to make sure we get the maximum mileage of that open window for however long it’s there. And I mean that, I’m not being rhetorical. It’s your business, you’ve got to do this. Don’t worry about it, I’m here to tell you- let me give you an example. Over the last four months I have spoken to huge audiences in Columbus, Baltimore, Santa Fe, Omaha, St. Louis, and I can go on. I’m talking on into the five-hundred to a thousand in every one of those things. So I got news for you, the audience, the people interested in this is enormous in the United States. You have a pent up demand of fifty years where these ideas were not possible. People are excited, this is new, they want this. That’s why Occupy Wall Street took off like a rocket. It starts in the middle, a bunch of people put up tents in the park, what a coo-coo idea. But it took off like crazy, they were right. I tell people, if they had come to me and ask me -they didn’t- but if they had come to ask me, “what do you think about our plan to put up tents?” I would have told them they were nuts. I’m so glad they never came and I glad they would not have listened to me anyway, they were right. But they’re right because between you and me, it’s still a coo-coo idea, but it doesn’t  matter because the idea of protesting, that lit a fire. Three-hundred and fifty cities did that within the next two months, that tells you something.

 Don’t let this system tell you there’s only a few of us, everybody’s against us, nobody will listen to us. That’s part of how they keep the lid on. But it’s bullshit, it’s not true. Everywhere I go, I don’t have fights, my talks are half lectures and half prep rallies. I can feel it, halfway through my talk people get into. After about half of what I say, they don’t want to hear anymore analysis, they want to jump up and down and shout. They want to do what you do on the Friday before the high-school football game when you gather everybody in the gym and everybody jumps up and down and yells for the team. That’s a moment of a kind of collective euphoria, that’s what they want my talks to end up with because they want to see something change in America. That’s our troops, that’s our constituents, that’s our mass. We have the mass. Here’s a secret I’ll tell you, the Left in America has these masses of the people it needs and it’s larger in numbers than anything the Tea Party can tap. But the difference is, the Tea Party is organized inside the Republican party and can function in an organized way. We have no place in the Democratic party which wants to part of us. So we have no organization, we have to start from scratch. The old ones, the trade unions? They’re in their final gasps of dissolution. The communist and socialist parties? They’re a joke. They exist but they have no influence at all. So we have no organizations, that’s the difference. We have the people, we don’t have the organization. We have more people than the Right, but  they have more organization so they’re in the newspaper everyday and we’re not. That’s not a tribute to their size, it’s a tribute to their organizational connections.

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5 responses to “Professor Richard Wolff: Capitalism in Decline and Workers Cooperatives

  1. I admire your work and think very deeply of the challenges we are facing in this hypercapitalist system that is killing humanity and the planet. What my hope is, is that educated, people such as yourself, group together with like-minded individuals such as Prof. Stephen Keen, Nicole Foss, Naomi Klein etc., in the same manner that the elites unite, but to achieve the opposite affect than to figure out how to financially rob and destroy the 99%. The siphoning up has been going on for far too long, while we are all told it’s “trickle-down” economics.

    Liked by 1 person

  2. Pingback: Economic Update - Profit, Austerity and Criticizing the System - Richard D.Wolff - Feb. 22, 2013 - Clermont Country Internship·

  3. Pingback: Seattle’s minimum wage experiment and the long-term health of labor | The Handsome Camel·

  4. Pingback: When the Bough Breaks the Economy Will Fall - Trouble to Come in the New Year·

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