Welcome friends to another edition of
economic update a weekly program devoted
to the economic dimensions of our lives
jobs incomes debts our own and our
children's I'm your host Richard Wolff
I've been a professor of economics all
my adult life and I hope that that's
prepared me to offer you these economic
updates about what's in the news. I want
to begin by a kind of shout out to the
state of Colorado it turns out that
Colorado is for worker coops what
Delaware has been for capitalist
corporations that is the laws in
Colorado
thanks to all kinds of folks in our
state's history are very friendly to the
formation and the growth and the
development of the worker coop kind of
enterprise and it reason it's
interesting to me has to do with the
fact that I recognize that the
Republican and Democratic parties for
250 years have been busy pushing states
around the country and above all
Delaware to be especially friendly to
capitalist enterprises you know the kind
of enterprises with a few people who are
their shareholders and a tiny number of
people they elect to be the board of
directors to run businesses that way
those two parties were useful to set up
the laws to make that happen
if there were a political party in the
United States committed to worker coops
as a better democratic alternative they
would be running around the country
doing for the country as a whole
what Colorado has taken the initiative
to begin to do I want to recognize what
the Colorado folks did but I also want
to make us aware that a political party
is needed to give worker coops a level
playing field with what the capitalist
enterprises have gotten done for them
for centuries I also want to follow up
in a separate update with the problem of
worker suicide
recently there have been several
actually six suicides among cab drivers
in the city of New York it has become
impossible for them to be cab drivers
the arrival of uber lyft and other
services has put an incredible pressure
on workers they don't get the money they
once did they have to work unbelievable
hours and here in New York where a taxi
medallion the legal right to have a taxi
was very expensive and purchased by cab
drivers over recent decades they're now
discovering that those medallions are
virtually worthless as uber and lyft
have destroyed their value and they're
killing themselves you know it's the
responsibility of a society not to have
that happen we don't need to have a
system in which competition among
capitalists is something that kills
workers you know we've had that in our
history we didn't permit it there was a
time when we allowed mines to be
operated in a way that killed miners we
are now allowed all kinds of enterprises
to be run in a way that stunted or even
killed small children that were working
there and we had movements to protect
miners to make child labor illegal we
didn't permit corporations to say oh we
need to compete we need to have cheap
child labor or we need to save money I'm
taking care of the miners we can do the
same thing to prevent suicide and we
ought to have done it long ago my
attention was caught also by France it
turns out in France there are laws that
whole top executives accountable if
below them in the corporation suicides
are occurring one of the biggest
corporations in France used to be called
France télécom it's their basic phone
company it's now called orange like the
color telephone company well they're two
top executives are on trial now held to
be accountable for the harassment of
workers leading to count them 19 sue
besides among those workers in France
you prosecute people who impose suicidal
conditions here in the United States you
pretend it doesn't count my hat's off
also today to the people of California
petitions were circulated among
Californians and over four hundred and
seven thousand of them signed and that
was more than enough to get a ballot
question put on the election for this
coming November and here's what it says
rents have gone up sky-high in
California six of the 11 most rapidly
rising rent areas in America are in that
state alone California led by Los
Angeles and particularly the bay area
around San Francisco more than half of
the income which is way more than you're
supposed to spend for rent is the burden
of 1.7 themm million families in
California now of course the housing
industry says if you limit how much we
can squeeze out of renters and boy they
have gone up spectacularly in the last
few years well then we won't build
houses if we can't make a lot of money
off of them that's a threat that's a
threat of one industry against the
millions of people who depend on it we
ought to respond to those threats with a
counter threat you don't build the
buildings fine the public sector will
build and maintain decent quality public
housing and then there won't be the
ability for you to raise those rents at
all will there be I want to talk to you
about another story that's much in the
news right now President Trump and the
Republican Party are busy slapping
tariffs and punishments of all kinds on
our trading partners you know it's part
of the assault on foreigners
first of all we bash immigrants those
are people who come from a foreign
country in two hours and now we're also
gonna bash foreigners who don't trade
with us under conditions we would prefer
because they're more profitable to us is
this new here's my answer
not at all the last time the United
States tried to rearrange world trade to
its own advantage was in the 1980s in
those days Americans were reacting much
as they are today to noticing that there
were lots of Japanese cars on the road
here in the United States and that
Americans were preferring them over
their American competitors you know
Toyota's Dotson's and all of that
rather than Ford's Chevy's and all of
that mr. Trump's top trade negotiator
negotiator scuse me Robert light Iser
was actually involved in the deal that
was made then the United States
threatened Japan you have to limit the
number of cars you sell here not by how
many Americans want to buy but by a
number will give you you have to agree
not to send more cars here otherwise we
will really close this country off to
you the Japanese caved they agreed to
the quotas and according to the PRCA
excuse me PR no the PRC my apology a
think-tank that's independent the cost
to the Americans of having no cheaper
Japanese cars worked out to about $1,200
a car we all paid more because the
American company could charge more since
the Japanese couldn't compete because
they had been closed out the cost of a
tariff war like the quotas will be
higher prices for all of us to pay and
that's something you ought to think
about since you can be sure that the
people pushing this leave that part of
the story out
my last two updates are important
because they're the kinds of things you
might not think about but you ought to
the French government is threatening to
find the American giant corporation
General Electric why well it turned out
that in 2014 the General Electric
Company petitioned the French government
to be able to buy a very large electric
company in France called Alstom and a
deal was arrived at in which the French
government then led by a socialist
president said ok you can buy the french
company but you have to create 1,000
jobs in exchange for doing that the
French government recognized that the
coming together of these two companies
would eliminate many jobs but at least
some jobs would be created and General
Electric committed to hire one thousand
more people as part of this deal and it
was to be done by the year 2018 well
here it is 2018 and the French
government says you've hired exactly
three hundred and twenty three of the
thousand jobs you promised the penalty
that you signed the contract to commit
you to pay it is fifty thousand euros
per job not created that would come 234
million euros for the total jobs you
didn't create for General Electric
that's a tiny amount of money
it's like change in your pocket so now
there's a problem
General Electric of course doesn't want
to pay it hopes that what usually has
happened in the past will happen again
namely that no one will really follow up
no one will keep away exact track and
even if they do nobody will bother them
about this it will all go away
and believe me General Electric is right
to have us
that because this kind of thing happens
in the United States literally every day
I can't tell you the number of times I
have sat in a public hearing listening
to a corporation make wonderful promises
about what its gonna be allowed to do if
only it gets this tax break if only it
gets this subsidy if only it gets the
road reroute 'add so it's more
convenient for them if only if only if
only knowing full well that the
politicians who will say okay then we'll
do it because of these good things they
won't be there in the four years when
this is supposed to happen they will
have long forgotten it the press will
not pay attention it will disappear it's
an empty promise that no one follows up
on in France partly because of the power
of the labor movement and the power of
socialist communist and other parties
you can't do that the way you do that in
this country so the French government
even though the Socialists are gone and
a quite right-wing government sits in
power now they have to at least look
like they're doing something to keep
track of all of this because it's do too
dangerous for them politically to let
this go
France is different from the United
States my last update has to do with the
Ford Motor Company and the city of
Detroit and the dilapidated broken-down
old Michigan central railway station in
the middle of that city the last train
to leave that station left in 1988
that's right thirty years of decay of
breaking down of broken windows and and
heaves in the floor you get the picture
why did that happen because the city of
Detroit was destroyed what do I mean
well back in 1988 the population wasn't
that far off of two million the
population today is under 700
thousand that's called urban collapse
that's when everybody leaves that's when
there are thousands tens of thousands of
empty abandoned homes and stores and yes
railway stations and why because three
companies for General Motors and
Chrysler decided it was more profitable
to produce somewhere else in the
American South where wages were lower in
Canada and Mexico where they were still
lower and now in India and China where
they are still lower it's all about the
profit for a tiny number of companies
that destroyed that city destroyed the
lives of hundreds of thousands of people
and destroyed yeah
the Michigan Central Station so imagine
how happy I was and how happy Americans
were expected to be when Ford
corporation announced it was buying for
next to nothing
that building its decisions helped to
destroy to make up a new tech center for
themselves we were all supposed to
celebrate the renewal of Detroit and
conveniently forget that the renewer was
the destroying monster not that long ago
but I don't want anyone to forget well
we've come to the end of the first part
of the show before meeting my exciting
guest professor David Harvey that many
of you know I want to remind you to
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be right back
welcome back friends to the second half
of economic update it is my pleasure and
indeed an honor for all of us I think to
have our guest today professor David
Harvey a foremost Marxist thinker and
critic and writer for many decades to be
our guest and to talk with me for the
next little while
professor David Harvey is at the
Graduate Center of the City University
of New York perhaps best known for how
he has been able to teach us a whole
generation of students like myself what
Marx's contribution is to understanding
the capitalist system that we depend on
and that we live in he has written many
many books and articles and his most
recent which I urge you to take a look
at is called Marx capital and the
madness of economic reason thank you
very much David if I can call you that
yeah joining us okay what is the major
contribution of Marx what why is he the
important thinker we should be reading
and whose work we should be using right
now if he came up through a critique of
classical political economy with a way
of understanding the dynamics of
capitalism that is of understanding how
capital accumulates how it circulates
and how it produces crises periodically
and I think those insights are still
with us in exactly the same way that
Marx saw it back in middle of the 19th
century capital is still with us and
capital is still creating crises and
doing all those things that Marx said it
was gonna do so that the argument which
I hear so often that capitalism has
changed from Marx's time in the middle
of the nineteenth century to today is
both obviously true and not really
terribly relevant since the basic
dynamic of the system which is what he
tried to figure out absolutely I mean
that's that that's why it so I think
relevant today which is not to say that
the the details are not very different
because they have certainly changed and
we should take those into account and we
also have to remember the marks didn't
complete all of his work so we have some
work to do to complete it but
nevertheless the basic laws of motion of
capital as he defined them in the middle
of the nineteenth century are still with
us and they're still creating mayhem and
creating contradictions and creating
havoc wherever we look let me pick up on
a couple of things you said and go after
them a bit more instability the the fact
that this is an economic system which if
I have the numbers correctly every four
to seven years has a downturn and that
these downturns can sometimes be deep
and long-lasting like in the 30s and
really like the one after 2008 is this
in a sense a sign that this is a
systemic problem and I wanted your
reaction to the validity of Marx's
focusing on in instability on this
bizarre quality I think one of the
things that separates Marx from most
economists is the most economists seem
to like equilibrium and think there's
something called equilibrium to which
everything converges somewhere down the
line Marx says no it diverges all of the
time so he's looking at it from the
other direction and saying it creates
disequilibrium and the disequilibrium
are the sorts of things we see in a
crisis in which capital and labor sit
side by side and nobody knows how to UM
you know employ them in in productive
ways because somehow rather the market
has not cleared and will not clear and
so that is there at the mark of a
genuine crisis what about the other
critique in a way of capitalism that
besides being unstable it is prone to
inequality and indeed extreme in
quality of the sort we see around us
today
how does Marxism go after get at this
inequality
well Marx did an analysis which relied
very much on the idea of perfect
competition and pure competition and
what he showed was that under conditions
of pure competition the rich are going
to get much richer and the poor are
going to get much poorer now we've had
historic periods under capitalism where
there's been some intervention from
outside for political reasons and state
reasons so that we actually ended up
with less inequality today of course the
neoliberal period since the 1970s
everybody's been saying let the market
do the work and everything's going to be
ok and of course the rich get richer
hand-over-fist
and it's getting even worse by the
minute yeah so that would you agree for
example with Thomas Piketty and others
like him that there's some intrinsic
logic to capital that produces
inequality unless and until the very
reaction to that inequality stops or
reverses it for a while
you know there's there's something
inherent within the within the system
and our best guess the best way to
summarize it is that in a perfect market
situation there is nothing more unequal
than the equal treatment of unequals
because everybody says the market is an
egalitarian device and it is but if you
start off much better endowed than me
then bit by bit that gap between us goes
higher higher and higher and so that is
what Marx showed brilliantly I think in
volume one of capital is that is an
inevitable consequence of a free market
capitalism so then you know departing a
little bit but let me ask your opinion
how is it possible that capitalism has
had defenders past present and likely
future who seem either unable or
unwilling to contend with these two
central flaws you might say instability
and inequality
what's the it how is it possible for a
system with those flaws to present
itself almost that's the opposite of
them I think one of the things we should
recognize though is that capitalism has
not been all bad it's technologically
very dynamic and and it's given us a lot
of possibilities to organize life in a
very very different kind of way and
that's one of the big contradictions of
the present situation the technologies
around us are fantastic labor saving
technologies time-saving technologies
and of course people are fascinated by
that and that's I think how a lot of
people have a fetish belief almost in
the beauties of a capitalist system
because it does all of those things
Marxist point is to say yes it does all
those things but then what does it do it
produces homelessness it produces less
and less capacity to educate people it
makes students go into debt in order to
get an education does all of these
things and and and Marx is therefore
emphasizing the contradictions and I
think that the trouble with conventional
thinking is that it emphasizes the
positives and it refuses refuses to pay
any attention to the negatives or
assumes they're external accidents they
are not integral to the system yes it
always bothered me from my earliest
times as a student I used to make this
comparison I wonder how you think about
it that capitalism produces the problem
of selling all the value that they
that's come out of their assembly lines
so they invent something called
advertising to promote the purchase what
an advertiser does is try to get you to
part with your money for some object and
so the advert the logic of advertising
present all the positives and obliterate
all the negatives and this which is a
distortion of human communication for a
profitable end then seeps into the rest
of our consciousness so that we begin to
think in terms of either/or rather than
the unity of the positive and the
negative it's a kind of
capitalism coming back and obstructing
its own analytical capabilities through
this advertising imagery yes I don't
think it's only advertising though I
think to me one of the things is about
capital is the production at once needs
and desires in such a way as to define a
whole way of life for example I think of
suburbanization after world war 2 and
the creation of the american suburb and
I think of the way in which that was
supported by all of these you know
sitcoms I Love Lucy the Brady Bunch all
this kind of stuff it was advertising in
a sense not in a crass sense but in a
real sense that's a whole whole style of
life and then the whole style of life
has political consequences if you are an
affluent person living in the suburb you
feel and and and you become a homeowner
you will get concerned about the value
of your home and you don't want people
moving in who might depress the value of
the home and so you get exclusionary and
you start to get exclusions and
segregations and gated communities and
and and and it's a it's a destructive
way of life which is actually created
around the organization of wants needs
and desires which are not necessarily
the ones we would freely choose but are
those which are necessary for the
accumulation of capital to continue. The
system is producing us rather than
serving us.
it's the almost the the the Frankenstein
monster our creation comes back and
dominate us. Right, but at the same time there are
possibilities. We see this in the
Internet. I mean the internet came as a
great sort of have a tower of freedom
and and and and communication and all
the rest of it and now look what we've
got
net neutrality disappears all of a
sudden we find we are being surveyed
through Google and everything else so,
everything which was just really
positive about the internet suddenly he
gets turned by commercialization and
capital accumulation into something
that's negative. Yes I remember growing
up with these the inventions all of
which were going to be labor saving,
absolutely, and my students today give me
descriptions of their 60 and 70 hour
weeks as a kind of mockery on all those
claims the same thing in the household.
we have household technologies now which
are time saving time saving time saving
time saving and if you ask everybody
anybody how do you feel these days do
you have a lot of free time and the
answer is known of course one of Marx's
ideas about a really really good
socialist society was one which was
characterized by a massive amounts of
free time where you could do what the
hell you liked let me ask you a question
that jumps forward but I know it's in
the minds of viewers and listeners how
do you view this Trump phenomena here in
the United States is this a capitalism
in trouble flailing around with an
extreme reaction or is this a capitalism
confident in some sense of its
capability and therefore willing to
indulge a naughty person in leadership
how do you square your Marxist Analytics
with what you see marx has a very good
analytic concept which I like a lot and
is not used enough and the concept is
alienation people are alienated in their
work for the most part it a lot of work
is meaningless these days people are
alienated in their daily lives because
they're dealing with the telephone
company and all of these other things
and credit cards and all the rest of it
people are alienated politically we have
a mass alienation of populations right
now an alienated populations generally
act in ways which are violent and angry
or they sulk and I think actually we're
in a political situation where we have
mass alienation right now and until we
address the roots of that alienation
which are the redefinition of labour
processes by capital accumulation the
redefinition of daily life through the
processes of capital accumulation until
we deal with all of those kinds of
questions and of course the buying and
selling of political power by capital
until we deal with all those questions I
think we're not going to go anywhere and
I think I think Trump is the president
of alienation
well David as always thank you it's
never enough time I want to thank you
for staying with us well my pleasure
good and I want to thank you all for
partnering with us by participating in
your way in this conversation I hope you
will be willing and able to continue to
do that and for me I look forward to
meeting and speaking with you again next
week
