Welcome, friends, to another edition of
Economic Update: a weekly program devoted
to the economic dimensions of our lives,
our jobs, our incomes, our debts, those of
our children, those looming down the road
that we have to plan for now.
I'm your
host Richard Wolff; I've been a
professor of Economics all my adult life
and currently I teach at the New School
University in New York City.
Well, we have a packed program today of
economic updates and we always start
this programm with a collection of
shorter updates about important events
in the last week that you may have
missed whose significance
you may not have grasped right away and
about which we need to know more to
understand the economic system we're
living in and to cope with it as it goes
through what is that best describe as "difficult times."
One of the most dramatic
events of this last week had to do with
the Caterpillar corporation based in
Peoria, Illinois. One of the largest
producers of agricultural and
earthmoving and construction equipment in the world.
A reporter
led to an investigation - led to a series of investigations -
that the government has
done into the affairs of the Caterpillar
corporation. That culminated in two events
this last week: first, government agencies
raided three buildings on the
headquarters of Caterpillar in Peoria,
Illinois, looking for all kinds of
records which they apparently took.
And the second event was a report issued by
Professor Leslie Robinson of the
Tuck School of Business at Dartmouth College
about the tax behavior of the
Caterpillar corporation.
This is an evolving story so let me just
give you the bare bones of why this is important.
The government contends - and Prof. Robinson's
report issued this last week -
demonstrates in great detail that the
Caterpillar corporation has, for at least
12-15 years, cheated the United States
government out of billions (that's with a "B") in taxes.
And it has done this by
creating, in effect, a half-phony subsidiary in Switzerland.
It negotiated with the Swiss government a special tax
arrangement in which the
behavior and the profits earned by
Caterpillar in Switzerland would only be taxed at 4-6%.
Compare that with the tax rate here in the
United States that is officially 35% and
you can begin to see what tempted Caterpillar.
So it's set up a "company," let's call it - I'll be polite,
with about 500 employees in Switzerland.
This is a very small part of Caterpillars' business
since it employs a total of 118,000 people
around the world. So this office in Switzerland is
very small potatoes for this company.
But it's booked an enormous portion of the profits.
Turns out they don't even have a
warehouse, and yet they were handling the
parts business of Caterpillar: all the
parts made to replace those that we are
out of in Caterpillar machines, a big part
of their business is this parts
replacement and it's very profitable.
They arranged, in effect, for all the
paperwork about buying and selling these parts
(and making the money for Caterpillar)
they booked them all in
Switzerland and thereby got away with
paying only 4-6% rather
than booking them here in the United States
where the parts were made and
paying the appropriate tax. If this was
just about one corporation I wouldn't be
bothering you with it, but what it in fact is
is a kind of behavior that
many US corporations and indeed many
corporations in other parts of the world
do as well. It's basically a game in
which governments compete for where
businesses locate their profits.
For Switzerland, think of it this way: you get
Caterpillar to do the paperwork in
Switzerland to open a small office and
to keep all the records, and you get 4-6% of billions in profits.
That's nice for you in Switzerland,
basically cost you nothing. You get the
company to leave the United States for
this purpose, not to pay the taxes in the
United States. which would have been much higher.
For us here in the United States it's, of course, a deadweight loss.
We lose a few hundred jobs that should have been here,
that handle what was produced here.
But that's not the big thing.
We lose billions, by the way the estimate of the
United States government runs into the
$3-4 billion dollar estimate of
what was lost from this one company
alone just over 12-15 years of
watching it which the government has been doing.
Bottom line: when companies do
this, as they do it all the time, the
government United States losses billions in taxes.
That leaves it with 3 choices, and only 3.
1) That money not coming in? You can cut
government programs. Give less money to
poor people, get less money to unload the
students, get less money to maintain the
federal highway system; somewhere there's got to be give.
2) If you're not going to cut programs, then you have to make up the taxes you don't get from the companies,
that leave by taxing the rest of us working people in one way or another.
Raise the tax on alcohol, on cigarettes, on tires for your car, on the income-tax somewhere...
And the third option, if you're not going to cut
services, and you're not going to raise
taxes on the average person, is to 3) borrow
the money and put the United States even further into debt.
Every every one of those is bad for us,
but it's good for the companies that escaped taxes and that's why they do it.
And it is good to see one
of them getting into trouble, but it's
the tip of the tax evasion iceberg,
and many more companies should
be brought up before the court of public opinion and the legal system
because they have done a major damage to
this country and to all the rest of us.
The next big item over the last week was,
of course, the rollout by the Republican
Party of what they proposed to be an
alternative to Obamacare which they
intend to repeal any day now since the
Republicans control both houses of the
Congress. I don't have much to say that
you can see elsewhere and I want to
reserve my precious time on this program
to expose them to analyze things that
don't get the attention they deserve.
But there's one dimension that I notice
is not being covered about this repeal
and substitution of the Republican
program. And that has to do with how the
new version of Obamacare, the Republican
alternative, how it is going to be funded?
And there's two important things here to
understand. First, the amount of support
to people provided by Obamacare is
about to be reduced by the Republican alternative.
Poor people will get less
support than they got before,
the uninsured will not be required in the
same way to have insurance (and so
therefore they will not need or get the
kinds of subsidies that poor people got
to help them pay for the mandated insurance).
That kind of thing will mean
that the bill that the Republicans are
putting is going to cost less money.
And who will that help?
Well, here's the key item.
The money to pay for obamacare came on taxes
that hit only people earning over $200,00/year if they were an individual and $250,000 if you were a couple.
In other words, the payment for extending
insurance to the uninsured, for helping
people who needed it, came out of the richest.
And there is, of course, the
central objective of so many who voted
against and spoke against Obamacare.
Wasn't really about the care it provided.
It was about the taxes needed to pay for
i,t and since the taxes affected the
richest americans, it will benefit them
the most to have those taxes reduced or repealed.
Under the plan the Republicans announced,
the taxes will be repealed as
of the end of this year. That is, the
repeal will go into effect in 2018.
To give you an idea of the taxes to be
saved if you're in the top 1% who earn
more than $774 ,000 a year
(you heard me right: three-quarters of a
million dollars) the tax cut you will
enjoy by virtue of getting rid of
Obamacare will be $33,000.
More money in your pocket if you're a
person who earns three-quarters of a million a year.
If you're in the top 0.1%, the
really richest in America, your tax
saving will be a $197,000.
Well, for those people, this isn't much money,
but for all of us, of course, here's the bottom line:
Rich people will pay less taxes and
poor people will get less medical help
to be healthy. To not only stay healthy
for themselves, but to prevent all the
rest of us from contracting infectious
diseases because our fellow citizens
have a decent health insurance and will
keep themselves healthy in that way.
The next story is painful. Painful for me to
tell you about, painful for me to admit
that our country even does such things.
But i will. I will.
The US Immigration and Customs Enforcement Agency (ICE),
that's the people who grab
immigrants that have no papers,
undocumented immigrants off the streets
of the United States (by the millions in
recent years, and right now under the
Trump Administration's focus on that process...)
This US immigrations and Customs Enforcement service,
"ICE" - appropriately named: I-C-E - has been forcing detainees
- these are people who have been picked up
because they don't have adequate papers
who are now supposed to be given a legal
procedure to determine whether they can
or cannot stay in the United States -
they've been forced to work for $1/day
while being detained and, you'll love this, in private enterprise prisons
that have contracted with the
government to hold these people, and
they're the ones, GEO corporation in
particular, that has made them do this.
And the Federal courts have now
intervened and told the GEO group,
this private prison company, that they
can't do what they're doing.
They've allowed a class-action suit to go
forward on behalf of about 60,000
detained immigrants, making it harder for
their rights to be violated and made it
harder for them to be effectively put
into a system of slave labor.
To make an adult work up to 40 hours/week for $1/day often threatened with
solitary confinement if they refuse to "volunteer" for working at $1/day,
you can imagine what is going on.
The Federal courts have now
said this is a serious issue; there will be a trial about this.
I only want to read you from one brief conversation, and
by the way if you're interested,
Christine Phillips is the reporter for
The Washington Post, a major newspaper in
the United States, who on March 5th
carried this story under the headline
"Thousands of ICE detainees claimed they
were forced into labor: A violation of
anti-slavery laws."
Before the judges' chamber, the GEO group - that's the private prison company - argued:
"Even if we are forcing people to work under threat
of solitary confinement, that would be
allowed by applicable law," said the
lawyer for the GEO group.
The judge in response in the courtroom said: "No, it wouldn't be."
Slave labor for the detained immigrants gives you something to think about, doesn't it?
The next short update has to
do with Harvard University, the richest
University in the United States, nobody's
even close. Places like Yale and
Princeton and the University of Texas are far behind.
Recently the president of Harvard, Drew Faust, gave a speech.
And she herself is a historian of the Civil War in the American South
and she announced last year
that Harvard University should face
up to the fact that it had a long
relationship to slavery in the United States,
that much of the early money that
built up Harvard to the wealthy position
it has today, came from slave owners who
contributed the fruits of their slave
empires to building up that University.
To give you an idea of what it was
called a conference was held called
universities and slavery bound by
history
they have Harvard history professor spin
record doing a panel in the conference
said the following quote some of our
most esteemed educational institutions
are also the product of some of the most
horrific violence that has ever
descended upon any group of people so
Harvard is confronting the role of
slavery and building it up maybe some of
the other schools that have the same
history Princeton Yale others may follow
suit if they have that amount of courage
it is certainly long-overdue the
dependence of Harvard on money from
slave masters made that institution much
less critical of slavery than it might
otherwise have been and that for obvious
reasons and it made Harvard a place that
condone racism for decades in this
society because of the role that racism
played as a justification for slavery
it's good for anyone to confront their
history it's good for Harvard to
confront it's long overdue complicity
with slavery with the racism that flowed
from it and that still effects our
society but i have a comment to make
and before I do let me put forward on
grounds of transparency i went to
Harvard i'm a graduate of Harvard I'm an
alumnus of Harvard i went there without
the faintest idea about its history with
slavery which is what was the case for
most students because not only was it
not discussed or thought it was hidden
from us but was likewise hidden and also
needs some admissions and some
confronting with your history is the
fact that Harvard's wealth and that
harvard as an institution has always
been dependent on the richest powerful
sources of American life
corporations who made their money by
producing weapons of mass destruction
corporations that abused people around
the world not necessarily as slaves but
has exploited underpaid poorly treated
workers they gave money to Harvard
companies that have wildly polluted the
earth gave the prophets part of them to
Harvard partly because they got tax
advantages from doing so
and partly because they wanted good
expensive places to send their children
and maybe out of a sense of harvard as
an institution of higher education but
if they had that sense it was rather low
down on the list of what were priorities
for them and Harvard has been quiet
about many of these things has been very
hostile to criticisms of a capitalist
system upon which Harvard depended all
it couldn't admit it it had to talk
endlessly as it did in our classes about
objectivity and telling the truth and
you know it slogan is looks a very taut
if i remember correctly and that is
about truth I hope I'm not confusing
that with Yale unfortunately I went to
both those institutions and keeping
their slogans of self-congratulations
clear in my mind is not in my highest
priority in any case here's a suggestion
to my alma mater Harvard face up to the
fact that you have benefited from and
groan which on the fruits not only of
slavery in the American South but
capitalism everywhere else in the United
States and indeed globally and that that
has shaped what you teach how you think
of yourselves your relationship to the
rest of the educational establishment in
the United States and much else if it's
true that many of the leaders in the
united states have come from places like
Harvard then it means that many of the
leaders of this country have been
educated in places that
keep very quiet about their complicity
in a whole host of awful aspects of our
history of which slavery is just one
confronting our history
honestly is just as difficult as
confronting the reality of who and what
our institutions are making education a
private affair which by the way most
countries in the world do not do means
to put them at the service of the wealth
that sustains them rather than making
them part of a public service equally
available to everyone
private higher education is dependent on
the economic system and if it is not
adjust system than that education will
reflect that and it always has
before I continue with the updates we
still have time for I want to make sure
you all know that what we do on this
program is only a small part of what we
do
by we I mean the group democracy at work
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next update has to do with something
called the bloomberg billionaire index
if you've never heard about that
let me be the first to introduce you
Bloomberg News the largest single source
of financial news around the world owned
by the former mayor of New York City
Michael Bloomberg keeps an index
up-to-date of billionaires and so i
thought i would tell you about that part
of the world
I imagine some of you may be interested
in becoming a billionaire one day
yourself and so you might like to know
what their situation financially is and
for the rest of you
well let's make a comment but before I
do let's take a look
I just two of the top 20 billionaires in
the work in the world according to
bloomberg the first one and the richest
person on this planet
apparently is Bill Gates associated with
the enterprise microsoft and with the
development of the modern computer i'm
assuming most of you know who Bill Gates
is as a large third the most recent
publication by bloomberg of its
billionaire index much third of this
year Bill Gates was in possession of
eighty five point six billion dollars
85.6 billion i thought i'd break that
down for you by asking you simply or
telling you rather what this means in
terms of mr.
Gates's income i'm going to
assume that he gives the 85.6 billion of
assets he has to financial managers
that's what people like him virtually
always do they have needed the time nor
the expertise to manage money themselves
they hire people pay them very well to
do that and those people sometimes
called hedge funds they will give him at
least
five percent they will promise that they
know how to invest money and we'll make
him at least five percent often they do
much better than that
rarely do they do less well so i'm going
to use five percent as a benchmark if
you own 85.6 billion dollars as Bill
Gates does and that this money is
invested for you at five percent very
modest by a hedge fund you hire for that
purpose you will be earning 4.3 billion
dollars per year on what you have in
other words you have 85 points
experience but you invested and you earn
another 4.3 billion per year just by
investing it you don't have to do
anything mr.
Bill Gates does not do
anything to earn that 4.3 it's his money
that does that for him through be
intermediately work of the hedge fund
and now I broke it down once that
further so you could really understand
how much do you earn per week if you
earn 4.3 billion per year
the answer is 82 million dollars a week
is what mr.
Bill Gates earns every week
52 weeks of the year
now you know why Bill Gates does not
need to buy lottery tickets because he
gets 82 million a week without buy
lottery tickets
does that strike you as bizarre good
it ought to let me explain some of our
listeners and viewers right to me
occasionally and say well people like
Bill Gates have made a major
contribution they helped to develop the
modern computer they want to get a
reward for that I could not agree more
that's right any creative person who
does something particularly useful for
us as a community for the human race
should be recognized should be rewarded
should be celebrated
there should be a special day there
should be a special plaque there even
can be some money to help create a sense
of reward and need to provide an
incentive but that is light-years from
what I just described that for the rest
of this man's life even though he's not
working at computers at all anymore he
should be drawing down 82 million
dollars a week and deciding what he
would enjoy doing with it
who would help or not what he would buy
or not shaping the way our economy works
because when you have that kind of money
you are a big player in this game is
that appropriate is that consistent with
a democracy
this has nothing to do with rewarding
innovation it has to do with keeping the
reward in line with all the other values
of society has well I'm gonna bring this
first half of the program to an end by
promising you that in the second half
which I would hope you stay with us to
see and to hear we can begin with
discussing a second billionaire so stay
with us
this is the end only of the first half
of economic update after a short
interlude we will be
right
back 
come
back friends to the second half of
economic update here in march of 2017
before the break we were discussing the
bloomberg billionaire index and I finish
discussing with you briefly the issue of
Bill Gates and I promise to tell you
about a second billionaire in the top 20
actually I think he's in the top 10 and
tell you a little bit about what his
situation is the man's name is Carlos
sillim s.l.i.m I may not be pronouncing
that correctly he is a big businessman
in Mexico he doesn't have as much money
as Bill Gates
he has only 50 1.5 billion dollars to
his name so he appears lower in the
listing by bloomberg ok let's do the
same math what does that earn him well
per week he doesn't get the ad 2 million
a week that Bill Gates gets from
investing his asset usually at a nominal
five percent but investing his money at
five percent if that's all mr. slim gets
would get him 50 million dollars a week
like mr. gates no need to buy lottery
tickets you have a permanent lottery
every week of every year of your entire
lifetime
did mr. slim invent the computer or
anything like that in way of
contribution
not that I'm aware of and I did some
research is just a good businessman put
it all together and draws down 50
million dollars a week I asked you
simply to think with me whether it is
appropriate in the field of democracy in
the field of Christian charity in the
field of ethics and morals as most
people understand them to be living in a
society in which one citizen of Mexico
mr. slim gets 50 million of dollars per
week every week while millions of his
fellow citizens of mexico are detained
in American prisons forced back into
their country losing whatever wealthy
accumulated back in the United States
entering a society that has no jobs for
them and very little public support is
this a reasonable way to organize an
economic system it is something to think
about when you understand what it is
that billionaire
do financially right now and
disconnected from what contributions
they may or may not have made in the
past the last short update before we
turn to what we usually do in the second
half of this program which is looking
depth at some economic issues have to do
with two countries and a far apart two
economies that are far apart
geographically Puerto Rico on one end
and the country of Greece in Europe on
the other but we're going to look at
them together because they are both
suffering the same basic experience both
better we call and Greece were led by
politicians over the last 20 30 years
who had a very cozy relationship with
big bankers most of whom were American
what a good number of whom were also
European and Latin American the big
bankers made huge fees off of lending
money to the politicians the politicians
were happy to pay these fees because
they got their hands on these big loans
and could cement their political power
by using the loans to provide services
of all kinds to poor we can agree
companies to Puerto Rican or Greek
citizens of various sorts it made the
politicians popular it gotta be elected
it made money for the bankers everybody
was happy so long as the game lasted
however there was no supervision here
and both greece in Europe and wherever
we go here as a part of the United
States which it is borrowed way too much
money for what their economies could
sustain it was good for the bankers it
was good for the politicians it was not
good for the mass of people why not
because eventually the the borrowing got
so enormous that the only way
greece could pay back its creditors
or Puerto Rico could pay back its
creditors was by making their own people
go without saying to their own people
we're going to tax you like you've never
seen to raise money to pay back the
creditors or we're going to cut public
services to you like you've never seen
in order to free up the money we used to
spend to provide services to you to use
instead to pay off our creditors and
interestingly the creditors of Greece
are not mostly Greeks and the creditors
of Puerto Rico are not mostly puerto
ricans they're nice foreign banks and
institutions that are dictating to those
two parts of the world what to do and
the answer is the same in Europe it's
the European Central Bank in the
european community and the IMF that are
dictating to Greece that they must cut
their government programs they must stop
supporting their people's needs and use
the money instead to pay off
no longer the private banks who lent
initially the grease but the
governmental institutions that took over
those debts very nice service paying off
the bank so they wouldn't be at risk
with grease anymore
the end result well there's no way to
describe it other than to say for
example that last week the cologne
institute for economic research in
Germany said that poverty in Greece had
jumped forty percent between 2008 and
2015 far exceeding the growth of poverty
anywhere else in Europe there are
literally tens of thousands of people
leading Greece every day particularly
young people because the unemployment
rate among young people in Greece is
over fifty percent the unemployment rate
for Greece's all twenty-three percent we
are savaging and I say we because we are
the people of the world watching this go
on
we r savaging this
the country in one corner of Europe
because of crimes committed committed
excuse me by their leaders and by
bankers who knew very well that this
country couldn't sustain such that who
could not care less
being confident that the fees they were
getting was more than enough and then in
the end the politicians would figure out
a way to screw the mass of people to
cover over what their own mistakes were
and in the case of Puerto Rico the same
according to Nobel prize-winning
economist Joseph Stiglitz quote the
control board that was established by
the Republican Congress to oversee the
collapsed economy of Puerto Rico the
Control board's plan quote says
Professor Stiglitz would and I like load
turn the islands recession into a
depression of a magnitude seldom seen
around the world the current demand of
the board an American mainland American
entity of the Congress that now controls
the Puerto Rican economy they had told
the Puerto Rican government to cut about
seven point six billion in government
spending over the next two fiscal years
that includes 1 billion in health care
services 300 million from the public
university and 350 million in municipal
aid this will plunge that the gross
product of the island down by sixteen
percent in the next fiscal year where we
go is the poorest part of the United
States and we are savaging the poorest
part of this country we have driven a
hundred thousand people to leave Puerto
Rico and come to the mainland to look
for work because they're desperate
interesting when we are pushing mexican
nationals out we are bringing puerto
rican nationals in the Puerto Ricans are
of course citizens of the United States
the mexicans are not but it is a
strangely contradictory policy
nothing is solved by this
unless you think paying off the
creditors is worth salvaging two parts
of the world and believe me if they get
away with it there
what's to stop them from doing it
everywhere else we are subordinating the
needs of millions for the interest and
profits of a handful of banks and
institutions this is not acceptable
behavior in a decent society is it so
much for the short economic updates for
this week there are plenty more but we
don't have time and I don't want to lose
the opportunity to talk to you in depth
about some of the issues you've written
to me about and so let me remind you our
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that you have been sending me and indeed
i chose to respond to this one because a
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help us reach people who might be
fascinated or interested in the
perspective we offer on what's going on
in the economic systems around us so in
that spirit let me jump right into it
one of the great debate of economics for
a long time is in my judgment this place
to let me tell you what it is
it's the argument that the big issue in
economics is how much interference
how much intervention into the private
economy should be allowed to the
government in other words it's the old
fight should we have what's called a
less a fair economic system
let's say fare from the French let it be
let the government keep out of our
business
let the government have a minimal role
that the best economy is the one that's
private
the old statement in American history
that government is best which governs
least all of that and there's a bit of
debate is that a good idea is that a bad
idea and this has been a debate that has
often been presented a different kind of
were the only big issue for our economic
system as if we've exhausted the
question of economics in our lives by
having a discussion about whether there
should be more or less government
intervention you can see that in the
debate over the healthcare program
Obamacare where the Republican say there
should be less government intervention
and the Democrats tend to say more etc
etc well here's by quarrel the big issue
for our economic system i would argue
isn't about more or less government and
I'll explain why in a moment the really
big issue and it's becoming more and
more the big issue is whether we have a
capitalist system or some other system
since the capitalist system is as almost
everyone would now admit in a great deal
of difficulty so let's begin this issue
of government intervention or not it's
partly a little bit crazy
why because the government has always
been part of economic systems not just
our capitalist system but slave system
that existed in many parts of the world
for a long period of time the fuel
economic system the capitalist system in
no way unique in having the governor
and play a role of government in ancient
Rome was a powerful government the
government of France in the 15th century
it was a very powerful government and so
on all societies all economic systems
have seen a certain amount of government
intervention and we all know what the
government intervention usually is about
for example we call upon government to
defend us militarily we call on
government to have a certain police
function to make sure we live up to the
commitments we entered into the
contracts we have the relationships we
maintain we often ask for the government
to have particular activities that
haven't worked out well when we left
them in private hands like for example
printing money or making sure that the
scales that merchants used the way the
food we buy are properly measuring what
it is we're actually paying for we have
Commission's to watch for things here in
the United States we have the food and
drug administration and the Interstate
Commerce Commission all of these
governmental regulatory bodies were
brought in because the American people
understood that leaving it to the
private sector was not in the public
interest so the government has always
had a role sure we will debate how big
that role should be and that's fine
let's debate it to make an argument
it could be larger could be smaller the
early part of our country's history we
did not give the government the job for
example of public education but by the
middle of the 19th century we became
clear as a nation we want our people
educated we don't want to limit our
economic and political growth by not
educating our people everybody should
learn to read to write to do it
Alyssa thick and so on and guess what we
didn't think that private education was
up to the task we didn't want to make it
necessary for people that have money to
pay for a private school
we didn't want to limit education to
people who put afforded we didn't even
want to limit education to people who
wanted it
we didn't want to leave out all the
people who might not want it because the
quality of all of our lives depends on
how well-educated all of us are so guess
what we mandated public education that's
right we did for public education what
the current debate over obamacare is
arguing about meant namely should we
mandate that you have medical care
insurance
well we're all better off if we live
among healthy people just like we're all
better off if we live among educated
people so we mandated public education
and that of course meant that we gave it
to the public to do it the government
educates us that's where the vast
majority of people get educated from
kindergarten through the university the
vast bulk of our people educated at all
levels are educated by the government
ok can there be a debate about this
of course there can most European
countries don't have private education
of any god it's all public and the
argument is that's the only way to keep
it equal and democratic we don't accept
that argument in the United States at
least some of us don't
so we don't do it that way although that
may change
who knows but let's go back to the basic
question is that all there is to argue
about
no that's not even the most important
thing in our economy
here's what is how do we organize
productions before we get into the
question of what role the government has
how do we organize literally the
production of goods and services in our
economy in the stores in the factories
in the offices
well the answer is we've done in a
particular way which is called
capitalism it can be what the word
capitalism means we organized it such
that are very small
number of people the owner of the
business maybe the owner and the top
managers if it's a big corporation then
it's the major shareholders the entities
the individuals that owned the big
blocks of shares and the board of
directors that they elect because that's
how you get to be on the board of
directors of a corporation the
shareholders vote for you they don't
vote one person one shareholder one vote
they'll they both won share one vote so
if you're a big bank and you old two
billion shares well you get 2 million
votes so you get the picture
the major shareholders elect 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
prophets we may all work in an
enterprise helping to produce those
profits but what's done with them is
decided by a tiny minority of people at
the top we call them employers and we
call the rest of us employees capitalism
organizes production in a system of
employer and employee and you know
that's what distinguishes us from
feudalism slavery and other systems in
slavery the organization is master-slave
the person who makes all the decisions
also own the person who works in
feudalism it's the Lord and the surf the
surf is not the property of the Lord but
the surf lives and kind of have to stay
on the land that the Lord oversees the
Lord has all the power and tells the
surf what to do in capitalism we have
the employer and the employee the
employee is not a slave told by the
employer and he's also not stuck in a
particular job having to stay there is
not a surf either in capitalism the
employee is free in the sense that he
enters or she enters into a contract
with the employer
and that's how work gets done a contract
in which the employer signs a commitment
i'm gonna pay you the employee such and
such an amount of money and you're going
to come and work for me and whatever you
produce while working for me is mine
you're taking care of by me paying you
if you produce a lot more for me than I
pay you
that's my good fortune that's how
capitalism works and that is how
capitalism works whether you have a lot
of government intervention or a little
so the question isn't only should be
debate more or less government
intervention
the real question is for thee is this
the way we want to organize production
you know after all
slavery in the end was overthrown by
people who didn't want it anymore
above all the slaves but even a good
number of the Masters didn't like it
anymore and the same is true of
feudalism it was eventually overthrown
it was eventually allowed or pushed to
die when the surface wouldn't tolerate
it anymore and many of the Lord's agreed
to let it go that it wasn't working as a
social arrangement so here we are with
capitalism the system that in a sense
has come after slavery that had a good
bit to do with overthrowing slavery it
had a good bit to do with overthrowing
feudalism like it had a good bit to do
with overthrowing kings and queens
remember the American Revolution we
didn't want to be governed by a king in
England the French Revolution the French
people didn't want to be governed by
feudalism or feudal lords so they
created a capitalism as an alternative
they hoped that capitalism with
employers and employees would work
differently would work better than the
master-slave relationship that defined
slavery and the Lord surf relationship
that defined feudalism well we've come
to a point i think here in the United
States and around the world that this
capitalist system
I'm of organizing production with
employers and employees is long overdue
to be questioned to be challenged
is this the only way to do this is this
enough of an improvement over slavery
and feudalism for us to be satisfied or
can we should we might we do it in a
different way I don't want that question
which i think is fundamental to be lost
in an endless and very repetitive debate
about more or less government because
you know that debate leaves unquestioned
the capitalist way of organizing
production
well then is there an alternative and
the answer is kind of obvious of course
there is there always has been
just like there was always an
alternative to slavery feudalism has
always been an alternative to capitalism
what's the alternative to end the
employer-employee way of organizing
production and what would that be
again kind of simple because it's very
old it would be making production into a
community affair
what does that mean all the workers all
the workers the one who sweeps the one
who works the Machine the one who keeps
the records in the office the one who
you fill in the blank all the workers
together collectively democratically
decide what happens in the workplace
whether it's a factory restore or an
office that would be the end of
capitalism because it isn't got
employer-employee or another way of
saying the same thing the employers and
the employees are the same people it
becomes a community of fair not the
affair of a tiny number making the
decisions that are large number have to
live with but they have no control
that's why capitalism is not a
democratic system at the workplace
whatever it does in the community at the
workplace a tiny group of people give
orders
and a large number of people take them
and the order takers don't get to vote
over who's giving them the orders
that's not how it works
conclusion friends don't be taken in by
the notion that more or less government
is what economics is about or what
economic debates should be could be
must be about that's simply not the case
just as important and in my judgment and
now historically much more important is
the question have we come to a point in
the capitalist system where the
employer-employee relationship is itself
in play is itself to be debated and
discussed is it to be questioned the way
we questioned and ended the slavemaster
relationship as a way of producing for
the Lord surf have we come to that point
also with capitalism that's the central
question in my judgment of this time and
I don't want it to be lost in the
shuffle of a rehash of old debates about
more or less government intervening in a
capitalist system which we don't know
how to question or criticize we've come
to the end of economic update for this
week I want to thank you all for
participating I want to thank you for
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presented to you and I look forward to
speaking with you again next week
