BILL MOYERS: This week on Moyers & Company…

RICHARD WOLFF: Our system capitalism, which we finally have to debate now that it’s so dysfunctional. Our system isn’t working. It isn’t producing for the mass of people. And an economic system that is only as acceptable, or should be, as its performance.

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BILL MOYERS: Welcome. There’s hardly a sentient grown-up in this country who isn’t aware that our economy is no longer working for vast numbers of everyday people. The rich and powerful have more wealth and power than ever; everyone else keeps losing ground. Between 2009 and 2011 alone, income fell for the 99 percent, while it rose eleven percent for the top One Percent. Since the worst of the financial crisis, that top One Percent has captured the increases in income while the rest of the country has floundered. Stunning, isn’t it? The behavior of many of those One Percenters brought on the financial crisis in the first place. We turned around and rescued them, and now their wealth is skyrocketing once again. At the bottom, working people are practically flat on their back.

We talk a lot about what’s happening to the middle class, but the American Dream’s really become a nightmare for the poor. Just about everyone has an opinion about the trouble we’re in – the blame game is at fever pitch in Washington, where obstinate Republicans and hapless Democrats once again play kick-the-can with the problems we face. You wish they would just stop and listen to Richard Wolff.

An attentive and systematic observer of capitalism and democracy, he taught economics for 25 years at the University of Massachusetts and has published books and DVDs such as “Democracy at Work,” “Occupy the Economy,” and “Capitalism Hits the Fan: The Global Economic Meltdown and What to Do about It.” He’s now visiting professor at The New School University here in New York City where he’s teaching a special course on the financial crash. Welcome, Richard Wolff.

RICHARD WOLFF: Thank you, Bill.

BILL MOYERS: Last night, I watched for the second time the popular lecture that is on this DVD, “Capitalism Hits the Fan.” Tell us why you say capitalism has hit the fan?

RICHARD WOLFF: Well, the classic defense of capitalism as a system from much of its history has been, okay, it has this or that flaw. But it quote, unquote, "delivers the goods.'"

BILL MOYERS: Yeah, for most everybody.


BILL MOYERS: That was the argument.

RICHARD WOLFF: And so you may not get the most, but it'll trickle down to you, all the different ways—

BILL MOYERS: The yachts will rise.

RICHARD WOLFF: That's right. The ocean will lift all the boats. The reality is that for at least 30 years now, that isn't true. For the majority of people, capitalism is not delivering the goods. It is delivering, arguably, the bads. And so we have this disparity getting wider and wider between those for whom capitalism continues to deliver the goods by all means, but a growing majority in this society which isn't getting the benefit, is in fact, facing harder and harder times. And that's what provokes some of us to begin to say, "It's a systemic problem."

BILL MOYERS: So we put together some recent headlines. The merger of American and US Airlines, giving us only four major airlines and less competition. Comcast buying NBC Universal, also reducing competition. The very wealthy getting a trivial increase in taxes while the payroll tax of working people will go from 4.2 percent to 6.2 percent. Colossal salaries escalating again, many subsidized by tax payers. The postal service ending service on Saturday. What's the picture you get from that montage of headlines?

RICHARD WOLFF: Well, for me it is captured by the European word "austerity." We're basically saying that even though the widening gap between rich and poor built us up, many of the factors that plunged us into a crisis, instead of dealing with them and fixing that problem, we're actually allowing the crisis to make the inequality worse.

The latest research from the leading two economists, Saez from the University of California in Berkeley, and Piketty in France confirms that even over the last five years of the crisis, through 2012, the inequality of wealth and income has gotten worse, as though we are determined not to deal with it. All of those headlines you talked about are more of that.

I mean, the astonishing capacity to make it harder for people to have a delivery of their mail on Saturday, to save what is in a larger picture, a trivial amount of money, but that will really impact-- thousands of people will lose their jobs, everyone will lose a service that is important, particularly in smaller places around the United States that are not served by anything comparable to the Post Office.

And then as you pointed out, and I have to say a word about it, this amazing display in which we raise the top income tax on the richest people from 35 percent to 39.6 percent only for those over $450,000 a year, while for the 150 million Americans who get a weekly or a monthly check, their payroll tax went up a whopping 48 percent from 4.2 to-- this is so grotesque an inequality that you're watching a process that is sort of spinning out of control in which those at the top have no limits, don't recognize any constraint on how far they can take it.

BILL MOYERS: If workers at the bottom get the increase in the minimum wage that President Obama proposed in his State of the Union message, they will still be faring less well than their counterparts did 50 years ago.

RICHARD WOLFF: That's right.

BILL MOYERS: What does that say to you?

RICHARD WOLFF: The peak for the minimum wage in terms of its real purchasing power was 1968. It's been basically declining with a couple of ups and downs ever since. So that if you adjust for the current price, the minimum wage was about $10.50 roughly, back in 1968 in terms of what it could buy.

And it's $7.25 today in terms of what it can buy. So you've taken the folks at the bottom, the people who work hard, full-time jobs, and you've made their economic condition worse over a 50-year period, while wealth has accumulated at the top. What kind of a society does this? And then the arguments have come out, which are in my profession, a major staple for many careers, are arguments that, "Gee, if you raise the minimum wage, a few people who might've otherwise gotten a job won't get it because the employer doesn't want to pay the higher wage."

Well, if that logic is really going to play in your mind, then you should keep lowering the wage. Because if you only made it four dollars an hour, just think how many more people could get a job. But a job under conditions that make life impossible.

BILL MOYERS: Who decided that workers at the bottom should fall behind?

RICHARD WOLFF: Well, in the end, it's the society of the whole that tolerates it. But it was Congress's decision and Congress's power to raise the minimum wage, as has happened from time to time. But the combination of politics in both parties and in terms of the arrangements between the parties meant that they didn't do it.

Even this time, not to be too critical of our president, but when he was running for office, he proposed a $9.50 minimum wage. Here we are in the beginning of his second term, and something has happened to make him only propose a nine dollar minimum wage. So even he is scaling down, perhaps for political reasons, what he thinks he can accomplish. When, if we just wanted to get it back to what it was in 1968, it would have to be $10 or $11 an hour.

BILL MOYERS: Many economists say, "We just can't do that because it would be devastating."

RICHARD WOLFF: Well, the truth of the matter is that there's an immense economics literature, I'm a professional economics person, so I've read it. And the literature goes like this. On the one hand, there may be some jobs that are lost because an employer having to pay a higher minimum wage, will not hire people or will hire fewer. That will happen in some cases. But against that, you have to weigh something else. If the 15 million, that's the estimate of the White House, the 15 million American workers whose wages will go up if we raise the minimum wage, we have to count also, the question, those people will now have a higher income.

They will spend more money. And when they spend more money on goods and services, that will create jobs for people to produce those goods and services. In order to understand the effect of raising the minimum wage, you can't only look at what will be done by some employers in the face of a higher wage in lowering the employment. You have to look at all the other effects.

And when economists have done that, economist from a wide range of political perspectives, you know what they end up with? There's not much effect. In other words, the two things net each other out and so there isn't much of a change in the employment situation overall. To which my response is, "Okay, let's assume that's correct. At the very least though, we have transformed the lives of 15 million American working people and their families from one of impossible to get most of what America offers, to a situation where at least you're closer to a decent minimum life."

BILL MOYERS: Are you suggesting then that there is no economic reason why those at the bottom should not share in the gains of economic growth?

RICHARD WOLFF: Absolutely. There is no economic reason. And in fact, I would go further. We know, for example, that the lower the income of a family, the more likely it is to cut corners on the education of their children because they don't have the resources. So here's an unmeasurable question about the minimum wage.

How many young people who are born into a minimum wage family, that is it's so low as we have it today, will never get the kind of educational opportunities, the kinds of educational supports, to be able to realize their own capabilities and to contribute to our society? That alone is a reason, whether you think of it in terms of the long-term benefit of the country, or you just approach it as a moral question or an ethical question. By what right do you condemn a whole generation of young people to be born into families whose financial circumstances make so much of what they need to become real citizens impossible?

BILL MOYERS: You remind me of something that President Obama said in his second inaugural address.

PRESIDENT OBAMA: We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class. We know that America thrives when every person can find independence and pride in their work; when the wages of honest labor liberate families from the brink of hardship. We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else, because she is an American; she is free, and she is equal, not just in the eyes of God but also in our own.

BILL MOYERS: That's eloquent, but hardly true.

RICHARD WOLFF: That's right. And it's painful for some of us to hear that, because it is so obviously untrue. It is so obviously contradicted by the realities, not just of those who work at the minimum wage, but all of those who work at or even at 50 percent above what we call the poverty level. Because when you look at what families like that can actually afford, they have to deny huge parts of the American dream to their children and to themselves as a necessary consequence of where they are put.

And I don't need to be an economist to put it as starkly as I know how. We can read every day that in the major cities of the United States, apartments are changing hands for $10 million, $20 million, $30 million, $40 million. People have enormous yachts that they cruise -- we all see it. We all know it. We even celebrate it as a nation. How does that square with millions of people in a position where they can't provide even the most basic services and opportunities?

We don't have equality of opportunity. Because there is no shortcut. If you want equality of opportunity, you're going to have to create equality of income and wealth much closer to a genuine equality than anything-- we're going in the other direction. And so I agree with you. It's stark if our president talks about something so divergent from the reality.

BILL MOYERS: When study after study has exposed the myth that this is a land of opportunity, how does the myth keep getting perpetuated?

RICHARD WOLFF: Well, my wife is a psychotherapist. And so I ask her that question often. And here's what she says to me. Often, people cling all the harder to an idea precisely because the reality is so different and becoming more different. In other words, I would answer the myth of equal opportunity is more attractive, more beautiful, more something people want to hold on, the more they know it's slipping away. And they would like to believe that this president or any president who says it, might somehow bring it back.

BILL MOYERS: When you say that there's no economic argument that people should be kept at the-- should not share in the gains of economic growth, the response is, "Well, that's what the market bears.”

RICHARD WOLFF: Well, you know, in the history of economics, which is my profession, it's a standard play on words. Instead of talking about how the economy is shaped by the actions of consumers in one way, workers in another way, corporate executives in another way, we abstract from all of that and we create a myth or a mystique. It's called the market.

That way you're absolving everybody from responsibility. It isn't that you're doing this, making that decision in this way, it's rather this thing called the market that makes things happen. Well, every corporate executive I know, knows that half of his or her job is to tweak, manipulate, shift, and change the market.

No corporate executive takes the market as given. That may happen in the classroom, but not in the world of real business. That's what advertising is. You try to create the demand, if there isn't enough of it to make money without doing that. You change everything you can. So the reference to a market, I think, is an evasion.

It's an attempt to make abstract the real workings of the economy so nobody can question what this one or that one is doing. But let me take it another way. To say that it's the market is another way of saying, "It's our economic system that works that way." That is a very dangerous defense move to take.


RICHARD WOLFF: Because it plays into the hands of those like me who are critical of the system. If indeed it isn't this one or that one, it isn't this company's strategy or that product's maneuver, but it is the market, the totality of the system, that is producing unconscionable results, multi-million-dollar apartments next door to abject poverty, then you're saying that the system is at fault for these results.

I agree with that. But I'm not sure that those who push this notion of "the market makes it happen," have thought through where the logic of that defense makes them very vulnerable to a much more profound critique than they will be comfortable with.

BILL MOYERS: You graduated from Harvard.


BILL MOYERS: Then Stanford.




BILL MOYERS: Was this the economy you were taught at those three elite institutions to celebrate?

RICHARD WOLFF: No. No, this is the economy that I came to understand is the reality. For me, and I learn things at all those institutions, it's not that. I came to understand that in America, economics is a split, almost a schizophrenic kind of pursuit. And let me explain. On the one hand, there are the departments of economics in colleges and universities across America.

But side by side with them is an entire other establishment that also teaches economics. You don't have that in other disciplines. There aren't two history departments or two anthropology departments, or two philo-- so what is this? I looked into this. It's because there are two separate functions performed by the economics departments and then by the other ones.

And the other ones are called business schools and business departments. In fact, in most universities, in all those I've been at, the economics department is in one set of buildings, and across the campus in another is the business school. And there's actually tension in the university about who teaches the basic courses to students that they're required to take and so on.

Here's what I discovered. The job of economics, to be blunt but honest, is to rationalize, justify, and celebrate the system. To develop abstract theories of how economics works to make it all like it's a stable, equilibrium that meets people's needs in an optimal way. These kinds of words are used. But that's useless to people who want to learn how to run a business, because it's a fantasy.

So they are shunted someplace else. If you want to learn about marketing, or promotion, or advertising, or administration, or personnel, go over there. Those people teach you how the economy actually works and how you'll have to make decisions if you're going to run a business. Over there, you learn about how beautiful it all is when you think abstractly about its basic principles.

BILL MOYERS: The invisible hand.


BILL MOYERS: The Market.

RICHARD WOLFF: All of that. So for me, I began to realize, "Okay, I'm an economist. I'm in that one. But I want to understand how the real economy works." And then I discovered that I needed to reeducate myself. I had to go learn things that I was never assigned to read.

BILL MOYERS: After Harvard? After Stanford? And after Yale?

RICHARD WOLFF: It actually happened while I was there. I was already, there were a few people--

BILL MOYERS: --as heretics.

RICHARD WOLFF: Yes, they do.


RICHARD WOLFF: You know, but you know, capitalism-- I like to say to people, capitalism, like all systems, when it comes into being, is born a few hundred years ago in Europe and spreads around the world, like other systems before it. It has always produced those who admire and celebrate it and those who are critical of it.

I used to say to my students, "If you want to understand the family who lives down the street, suppose there's mama, papa, two children. And one of the children thinks it's the greatest family there ever was, and the other one is quite critical. If you want to understand the family, do you choose only one child to interview, or do you think it might be wise to interview both of them?"

For me, I began to interview the critics of capitalism, because I thought, "Let's see what they have to say." And that for me opened an immense door of critical insights that I found invaluable. And I've never forgiven my teachers for not having exposed me to that.

BILL MOYERS: But so few have done that. As you know, as you've written, as you have said, we've not had much of a debate in this country for, I don't know, since the Great Depression over the nature of the system, the endemic crisis of capitalism that is built into the system. We have simply not had that kind of debate. Why do you think that is?

RICHARD WOLFF: Well, I think we have had it from time to time. We have had some of the greatest economists in the tradition, for example, Thorstein Veblen, at the beginning of the 20th century, a great American economist, very critical of the system. Someone who taught me, Paul Sweezy, another Harvard graduate. These are people who have been around and at various times in our history, the beginning of the 20th century, during the 1930’s, again in the 1960’s, there was intense debate.

There has been that kind of thing in our history. I mean, we as Americans, after all, we take a certain pride, which I think is justified, we criticize our school system. We just spent two years criticizing our health delivery system in this country. We criticize our energy system, our transportation system.

And we want to believe, and I think it's true, that to criticize this system, to have an honest debate, exposes flaws, makes it possible to repair or improve them, and then our society benefits. But then how do you explain, and that's your question, that we don't do that for our economic system?

For 50 years, when capitalism is raised, you have two allowable responses: celebration, cheerleading. Okay, that's very nice. But that means you have freed that system from all criticism, from all real debate. It can indulge its worst tendencies without fear of exposure and attack. Because when you begin to criticize capitalism, you're either told that you're ignorant and don't understand things, or with more dark implications, you're somehow disloyal. You're somehow a person who doesn't like America or something.

BILL MOYERS: That emerged, as you know, in the Cold War. That emerged when to criticize the American system was to play into the hands of the enemies of America, the Communists. And so it became disreputable and treasonous to do what you're doing today.

RICHARD WOLFF: And for my colleagues, it became dangerous to your career. If you went in that direction, you would cut off your chances of getting a university position or being promoted and getting your works published in journals and books, the things that academics need to do for their jobs. So yes, it was shut down and shut off. And I think we're living the results. You know, if I were--

BILL MOYERS: Of the silence? Of--

RICHARD WOLFF: Yes. Of the lack of debate. We're living in an economic system that isn't working. So I guess I'm a little bit like one of those folks in the 12-step programs. Before you can solve a problem, you have to admit you got one. And before we're going to fix an economic system that's working this way, and producing such tensions and inequalities and strains on our community, we have to face the real scope of the problem we have. And that's with the system as a whole and at the very least, we have to open up a national debate about it. And at the most, I think we have to think long and hard about alternative systems that might work better for us.

BILL MOYERS: I was intrigued to hear you say elsewhere that this is not just about evil and greed. And yet you went on to say capitalists and the rich are determined not to bear the costs of the recent bailouts or the crisis itself. You even go so far as to suggest, as to question their patriotism, and that they may not have the country's interest at heart. If that's not greed, what is it?

RICHARD WOLFF: Oh, I think it isn't greed. It's-- and let me explain why. Yes, I'm critical of corporations and the rich because they do call the shots in our society, and so that brings on them a certain amount of criticism, even though they don't like it. So I will do that. But beyond that, let me absolve them in the following way. Bankers do what this system goads them to do.

If you talk to a banker, he or she will explain to you, "These are the things that will advance the interests of my bank. These are the problems I have to overcome. And that's what I try to do." And my understanding, and I've looked at this in great de-- is that-- that's correct. They're not telling a story. They're doing. They're following the rules. They do the things that advance their interests and they avoid the things that would damage their interests.

That's what they're hired to do as executives or as leaders of their institutions. And that's what they do to the best of their ability. So for example, I'm not enthused about arresting these people or punishing them in this or that way. And the reason is simple, if we get, I won't mention any names, but we get some banker and we haul him up in front of a court, and we find out he's done some things that are not good.

And we substitute the next one. He gets arrested though, he gets fined, he gets removed. The next one is subject to the same rewards and punishments. The same inducements. The same conditions. If we don't change the system, we're not going to change the behavior of the people in it. So in a sense, I do absolve them even when they are greedy, because they're doing what this system tells them to do. And if we don't change the system, substituting a new crop will not solve our problem.

BILL MOYERS: Our conversation will continue in a moment, but first, this is pledge time on public television and we’re taking a short break so you can show your support for the programming you see right here on this station.


BILL MOYERS: For those of you still with us... here’s a report from earlier this year. You go to a restaurant or diner for a square meal, but the people who take your order and clean up after you are looking for a square deal. So they marched on Capitol Hill in support of a fair wage for workers who barely survive on minimal salaries and customer tips.

Although those tips are often meager or non-existent, for the past 22 years, these workers have been stuck at a federal minimum wage of $2.13 an hour.

At the head of the march, Saru Jayaraman.


BILL MOYERS: The organization she co-founded, Restaurant Opportunities Centers United, is fighting to improve wages and working conditions for the people who cook and serve the food we eat at restaurants and then clean up when we’re done.

Saru Jayaraman’s new book “Behind the Kitchen Door” is an insider’s expose of what it’s really like to work at the lowest rungs of the restaurant industry.

SARU JAYARAMAN: There are actually now over 10 million restaurant workers in the United States. So seven of the ten lowest paying jobs in America are restaurant jobs, and the two absolute lowest paying jobs in America are restaurant: dishwashers and fast food preps and cooks are the two absolute lowest paying jobs in America. These workers earn poverty wages because the minimum wage for tipped workers at the federal level has been frozen for 22 years at $2.13 an hour, and it’s the reason that food servers use food stamps at double the rate of the rest of the U.S. workforce, and have a poverty rate of three times the rest of the U.S. workforce.

We got to this place because of the power of the National Restaurant Association; we call it the other NRA. They’ve been named the tenth most powerful lobbying group in Congress and back in 1996 when Herman Cain was the head of the National Restaurant Association, he struck a deal with Congress saying that, “We will not oppose the overall minimum wage continuing to rise as long as the minimum wage for tipped workers stays frozen forever,” and so it has for the last 22 years.

Imagine your average server in an IHOP in Texas earning $2.13 an hour, graveyard shift, no tips. The company’s supposed to make up the difference between $2.13 and $7.25 but time and time again that doesn’t happen.

And when slow night happens and you don’t earn anything or very little in tips you often can’t pay the rent. And I guarantee you in every restaurant in America there’s at least one person who’s on the verge of homelessness or being evicted or going through some kind of instability.

It’s an incredible irony that the people that who put food on our tables use food stamps at twice the rate of the rest of the US workforce. Meaning that the people who put food on our tables can’t afford to put food on their own family’s tables.

The other key issue that we find that workers face is the lack of paid sick days and healthcare benefits; two-thirds of all workers report cooking, preparing, and serving food when they’re ill, with the flu or other sicknesses. And with a wage as little as $2.13, so reliant on tips for their wages, these workers simply cannot afford to take a day off when sick, let alone risk losing their jobs.

The majority of workers are adults; many are parents and single parents, single mothers, using the restaurant job as their main source of income.

We partner with more than a hundred small business owners around the country who are doing the right thing, providing good, decent wages, better working conditions, paid sick days, benefits, opportunities for advancement. So I think that’s the first thing I would say to a small business owner is, “Look, there are tons of people who are already doing it. We’re here to help you, they’re here to help you try this new way of doing business.”

PROTESTERS: We’re workers united, we can’t be defeated. We’re workers united, we can’t be defeated…

BILL MOYERS: Acting on that democratic impulse, Saru Jayaraman and the protesting workers march from Capitol Hill to the Capital Grille steakhouse, owned by one of the biggest restaurant chains in America…

SARU JAYARAMAN: Eighty-six thousand customers of yours have signed a petition calling on you to pay a minimum of at least five dollars an hour to your workers cause $2.13 is just not enough to live on. So here you go.




NARRATOR: We now return to Moyers & Company…

BILL MOYERS: You're also not enthused about regulation, which is what so many liberals and others are calling for now. Is there some parallel reason for that?

RICHARD WOLFF: Yes. I find it astonishing to hear folks talk about regulation. We regulated after every one of our great panics in the 19th century. By the way, in those years, we were more honest. We didn't refer to a "Great Recession." We used much more colorful language, "The panic of 1857." I mean, that describes what people felt. Anyway, after every one of our panics, crises, recessions, depressions, we have regulated. And the regulations were always defended, first by lower-level officials and eventually by the president and the highest authorities, usually on two grounds. "With this regulation, not only will we get out of the crisis we're in, but," and there was a pregnant pause, "we will prevent a recurrence of this terrible economic dilemma." It never worked. The regulations never delivered on that promise. We're in a terrible crisis now. So all the previous promises about all the previous regulations didn't work. And they didn't work for two reasons.

BILL MOYERS: Yeah, why?

RICHARD WOLFF: Either the regulations that were passed were then undone, or they were evaded. And that's the history of every regulation. During the Great Depression, it was decided, as it has happened again now, that banks behaved in an unfortunate way that contributed to the crisis. And that in particular, they took the depositor’s money, businesses and individuals, and then made speculative investments and then the house of cards came tumbling down.

So in the Great Depression, a bill was passed, a regulation called the Glass-Steagall Act, 1933 Banking Act, which basically said, "There has to be two kinds of banks, the banks that takes deposits cannot make risky investments. For that we need something separate called an investment bank. The first thing will be a commercial bank, takes deposits, and we'll make a wall between them."

Okay. The bill was passed. For the banks, this was trouble. This was a problem. They didn't like this. So they spent the first 30 years, 20 to 30 years evading it in a hundred different stratagems. Meanwhile, they began to realize that with some work with politicians, they could weaken it.

And after a while, they decided that even better than evading and weakening, why don't we just get rid of it? And so in the 1990s, they mobilized, led by some of our biggest banks, whose names everybody knows, and they finally succeeded. The Congress repealed the Glass-Steagall Act, and President Bill Clinton signed the repeal.

BILL MOYERS: It was a bipartisan repeal.

RICHARD WOLFF: Right. It's a joke. That allowed the banks to make risky bets with their depositor’s money. Eight years later, our financial system collapsed. It's like a joke. Don't you learn over and over again that the regulations are simply another problem from the businesses you're regulating. This is a system that creates in the private enterprise a core mechanism and a logic that makes them do the very things that need regulation and then makes them evade or undo those regulations.

BILL MOYERS: You probably saw the recent story that Facebook, which made more than one billion dollars in profits last year, didn't pay taxes on that profit. And actually got a $429 million rebate from you and me and all those other taxpayers out there. GE, Verizon, Boeing, 27 other corporations made a combined $205 billion in profits between 2008 and 2011 and 26 paid no federal corporate income tax. What will ultimately happen, Richard if the big winners from capitalism opt out of participating in the strengthening, nurturing, and financial support of a fair and functioning society?

RICHARD WOLFF: Well, the worst example I just learned about a few days ago. And I got it actually from Senator Bernie Sanders from Vermont. That during the very years 2009, '10, '11, that the federal government was basically bailing out the biggest banks in the United States, they were busily establishing or operating subsidiaries in the Cayman Islands, in the Caribbean, in order to evade taxes.

And it's a wonderful vignette in which the very government pouring money to salvage these private capitalist institutions is discovering its own revenue from them being undone by their evasion of the regulations about income tax by moving to Cayman Islands where the corporate tax is zero instead of paying their corporate tax in New York or wherever they're based.

BILL MOYERS: Your assumption that runs through your books, through your teaching, through this very interesting DVD, is that democracy, theoretically if not practically, but you hope practically, acts as a brake, B-R-A-K-E, a brake on private power and greed. And it's clear that that brake doesn't work anymore. That it's not slowing down the growth of power to the capitalist class.

RICHARD WOLFF: Right. And I think it's very poetic here in the United States. In the 1930s, when we after all had a crisis even worse than the one we had now by most measures, higher unemployment, and greater incidents of poverty and so on, we did still have a political system that allowed pressure from below to be articulated politically.

We had the greatest unionizing drive in the history of the United States, the CIO. We had strong socialist and communist parties that work with the CIO, that mobilized tens of millions of people into unions who had never been in unions before. And they went to the power structure at the time, President Roosevelt as its emblem.

And they said, "You have to do something for us. You just have to. Because if you don't, then the system itself will become our problem. And you don't want that. And many of us in the union movement don't want it either." Although some of the Socialists and Communists might have been quite happy to go that direction. And I think Roosevelt was a genius politician at that time.

He understood the issue. He went to the rich and the corporations of America, the top, who had become very wealthy at that time, and he basically said to them, "You must give me, the president, the money to meet at least the basic demands of the massive people to be massively helped in an economic crisis. Because if you don't, then the goose that lays your golden egg will disappear."

And he split the corporations and the rich. Half of them were not persuaded. And I believe they represent the right wing of the Republican Party to this day. But the other half were. And they made the deal. And so we had this amazing thing. Politics, the threat of the mass of people from below to politically act to change the system led us to see something we've almost unimaginable today.

A president, who in the depths of the Depression, creates the Social Security System, giving every American who's worked a lifetime of 65 years a check for the rest of their life every month. He created unemployment compensation to give those millions of unemployed a check every week. And then to top it off, he created and filled 12.5 million federal jobs because he said, "The private sector either can't or won't do it."

So in the midst of a terrible depression, when every level of government says, "There's no money," Mr. Roosevelt proved there is the money. It's just a question of whether you have the political will and support to go get it. And when people listen to me explain this history, and it's always amazing to me how many Americans kind of never got that part--

BILL MOYERS: Don't know it.

RICHARD WOLFF: But when I do that, and they say, "Well, that's a very risky thing for a politician to do, support the mass of people by taxing the rich, unthinkable." And then I remind them, Roosevelt is the most popular and successful president in American history. Nobody had ever been elected four times in a row before that.

And it was so upsetting to the Republicans that after Mr. Roosevelt died, they pushed that law through that gives us a term limit of two presidential terms. So it wasn't the end of his political career, it made him the most powerful popular president we've ever had. There must be a lesson here somewhere.

BILL MOYERS: Well, it was one of the few times in history in which the political elite and a few financial elite formed an alliance for the people.


BILL MOYERS: And yet, Richard, it still took the war the create the spending that pulled us out of the depression, right?

RICHARD WOLFF: Right. Because they were always large groups of corporations and the rich who were angry at all of this, like they are today, who didn't want to pay higher taxes, much higher than corporations pay today, who didn't want to pay high personal income tax rates, much higher than they are today. But they had to. Right, people don't remember in 1943, President Roosevelt proposed a top income tax bracket of 100 percent.


RICHARD WOLFF: His bill that he sent to the Congress, a proposal, was that anyone who earns over $25,000, which would be roughly $350,000 a year now, in current dollars, would have to give every nickel of it, beyond the $25,000, to the government, 100 percent. That's maximum income. The President of the United States, with massive popular support. And when the Republicans said, "No, we can't do that." They fought. And the compromise was a 94 percent top rate.

RICHARD WOLFF: Compared to the 39 percent, and .6 percent that we have today. I mean, you can see there that that-- that was a lesson. That I believe the corporations and the rich in America have learned. They saw that they were forced between two choices. A real revolutionary possibility, or a compromise. They voted for the compromise. They gave the mass of people real support, far better than anything they're getting now.

And they did that because politics was a real possibility to undo their economic system. After the war, I think our history is the history of a destruction of the Communist and Socialist parties first and foremost, and of the labor movement shortly thereafter. So that we now have a crisis without the mechanism of pressure from below. And that may look to those on top as an advantage because they don't have that problem.

They don't have a C.I.O. They don't have Socialists and Communists, the way they do in Europe. But I think it's a Pyrrhic victory, because what you're teaching the mass of the American people is that politics, debate, and struggle, is a dead end. And if you think people are just going to sink into resignation, that's wishful thinking. They're going to find other ways to protest against the system like this, because the pressures are building in that direction. I think this is a capitalism that I would say has lost its sense of its social conditions, its social limits. It's killing the mass support without which it cannot survive.

It is creating tensions and hostilities that will take left wing, right wing, a variety of forms. But it's producing its own undoing and doesn't imagine it because it focuses so much on making more money in a normal way of business that it somehow occludes from itself. It doesn't see the larger social conditions and what its behavior is doing to them.

BILL MOYERS: For a moment, wasn't there kind of quirky or eccentric symbiosis between the Tea Party and Occupy Wall Street? That, 'cause in their own different ways, they were reacting to the colossus that was coming apart all around them. And upending their lives.

RICHARD WOLFF: Absolutely. I think in country after country going through this crisis, you're seeing more or less the same thing. A upsurge of right wing agony and hostility and opposition to what's happening in this capitalist system and a left wing one. But only difference from country to country is the balance between the two.

And I think the Tea Party comes first because being a right wing party in this country's much easier, much more socially acceptable to form, and there's the old roots of it, anyway, in the John Birch societies and all the rest in American history. So we have a Tea Party resurgence.

Then echoed a couple years later by the Occupy Wall Street, which is a left wing response to all of this. And I don't think we've seen the end of either of these. I think these were the first explosions of this process, the first reflections and signs of a society coming apart because capitalism can't deliver the kind of society and results that people want. And I think we're going to see more of it and there may be difficult forms of it. But it is part of a system that has come, I think, closer and closer to its historical if not end, then a severe crisis.

BILL MOYERS: But there is no agitation here. People seem not to know what to do here.

RICHARD WOLFF: I think Americans are a little bit like deer caught in the proverbial headlights. They thought that they were in a society that kind of guaranteed that each generation lives better than the one before.

That the American dream gets better and better and is available. They promised when they got married to one another to provide the American dream to each other. And then they promised their children to provide it to them, that the children would have a good education, that children would have the opportunity. They can't quite believe that it's not there anymore.

You know, for 30 years, as the wages in America stopped rising since the 1970s, Americans reacted by doing two things. Because they couldn't give up the idea that they were going to get the American dream. How do you buy the American dream, which becomes ever more expensive, if your wages don't go up, per worker, per hour? Which they haven't since the '70s.

The first thing you do is send more and more people out to work. The women went out in vast numbers. Older people came out of retirement. Teenagers did more and more work. Here's a statistic. The OECD, leading agency gathering data on the world's developed economy shows that the average number of hours worked per year by an American worker is larger than that of any other developed country on this planet.

We work ourselves like crazy. That's what you do if the wages per worker don't go up. You send out more people from the family in order to be able to get that American dream. But of course if you do that, everybody's physically exhausted.

The stresses in your family become more powerful. What's happened to American families is a well-known result over the last 30 years. But the other interesting thing, to hold onto the American dream that Americans did when their wages didn't go up anymore, was to borrow money like it's going out of style.

You cannot keep borrowing more and more if your underlying wage is not going up. Because in the end, it's the wage that enables you to pay off what you've borrowed. And it was only a matter of time, and 2007 happened to be that time, when you couldn't do it anymore. You couldn't borrow anymore because you couldn't pay it back.

And so you stopped your mortgage or you stopped your credit card payment or you couldn't make your car payments. And this is a situation that explodes the expectations of a good life. And I think Americans are stunned. And they haven't yet kind of gotten their heads and their arms around the reality they face. And so what-- we see people in shock, if you like. I mean, I'm stretching the metaphor, but--

BILL MOYERS: That's all right.

RICHARD WOLFF: The American dream that they thought they could access, that they were told they could access, if they just worked hard or went to school or both of the-- it's not there. A whole generation of young people is learning that in order to get the education, without which the American dream is not possible, you have to borrow so much money that your whole situation is put in a terrible vice.

Then you discover, at the end of your four years and you have your bachelor's degree, that the job you had thought you were then entitled to and the income you thought would go with it, they're not there. And yet you have the debt, the effects of this on our society, not just for the young people confronting it daily, but for the parents who helped them, who led them to expect something, that is producing a kind of stasis, immobility, shock.

But beware, if my psychiatrist wife is right, as she usually is, what happens after that period of stasis, of shock, is a boiling over of anger, as you kind of confront what has happened. And that you were deceived and betrayed in your expectations, your hopes. And then the question is, where does that go?

BILL MOYERS: I'm struck by the fact that you give a fairly dire-- not fairly, a dire analysis of what's happened to us in the last several years. But at the end of both your book and of your lecture, you don't wind up cynical or pessimistic. You--

RICHARD WOLFF: Not at all.

BILL MOYERS: You sound like you're saying, "Let's take to the barricades."

RICHARD WOLFF: Yeah. I think there's a wonderful tradition here in the United States of people feeling that they have a right, even if they don't exercise it a lot, to intervene, to control. There is that democratic impulse. And I put a lot of stock in the hope that if this is explained, if the conditions are presented, that the American people can and will find ways to push for the kinds of changes that can get us out of this dilemma. Even if the political leaders who've inherited this situation seem stymied and unable to do so.

BILL MOYERS: I know you have some alternatives, that you've given a lot of thought to the critique, but you've also given a lot of thought to the correcting of our system.

RICHARD WOLFF: One of the things that has happened to me in the last two years is as we've developed the criticism and people see the process of how we got here, the most insistent questions is, "What do we do? Where do we go? If regulation isn't the solution and if punishing this one-- if it is a systemic process, how can we conceive and talk about an alternative system?"

BILL MOYERS: Richard Wolff, I've really enjoyed this conversation. The DVD is "Capitalism Hits the Fan." And the book is "Democracy at Work: A Cure for Capitalism." Thank you for being with me.

RICHARD WOLFF: Thank you, Bill, for the opportunity.

BILL MOYERS: That's it for this week. I'm Bill Moyers. See you next time.


Watch By Segment

Encore: Taming Capitalism Run Wild

August 9, 2013

Modern American capitalism is a story of continued inequality and hardship. Even a modest increase in the minimum wage faces opposition from those who seem to show allegiance first and foremost to America’s wealthy and powerful. Yet some aren’t just wringing their hands about our economic crisis; they’re fighting back.

In an encore broadcast, Economist Richard Wolff joins Bill to shine light on the disaster left behind in capitalism’s wake, and to discuss the fight for economic justice, including a fair minimum wage. A Professor of Economics Emeritus at the University of Massachusetts, and currently Visiting Professor in the Graduate Program in International Affairs of the New School, Wolff has written many books on the effects of rampant capitalism, including Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It.

“We have this disparity getting wider and wider between those for whom capitalism continues to deliver the goods by all means, [and] a growing majority in this society facing harder and harder times,” Wolff tells Bill. “And that’s what provokes some of us to say it’s a systemic problem.”

Also on the broadcast, activist and author Saru Jayaraman marches on Washington with restaurant workers struggling to make ends meet, and talks about how we can best support their right to a fair wage. Jayaraman is the co-founder and co-director of the Restaurant Opportunities Centers United, which works to improve pay and working conditions for America’s 10 million-plus restaurant workers. She is also the author of Behind the Kitchen Door, an exposé of the restaurant industry.

Learn more about the production team behind Moyers & Company.

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  • Bradley Leech

    I am reminded of the quote by Black Elk upon his visit to New York:
    “I did not see anything [New York 1886] to help my people. I could see that the Wasichus [white man] did not care for each other the way our people did before the nation’s hoop was broken. They would take everything from each other if they could, and so there were some who had more of everything than they could use, while crowds of people had nothing at all and maybe were starving. This could not be better than the old ways of my people.”
    ― Black Elk, Black Elk Speaks: Being the Life Story of a Holy Man of the Oglala Sioux

  • Anonymous

    Viva la Revolucion!

  • Montaigne Lover

    With a citizenry this ignorant and scared, you ought not to be wishing for such foolishness. Educate the people and the revolution will happen without a bullet being fired- it will just take thirty or fifty years (and while that’s a long time, I can’t think of a better, quicker way to fix this crazy place. Got suggestions?)

  • Montaigne Lover

    I like Richard Woolfe. I think he’s a bright guy. But I think he is missing the root of the problem with the nature of ‘isms.’

    Capitalism isn’t the problem. Socialism or collectivism isn’t the answer. The answer is education. Give me a society of well educated citizens, and it won’t MATTER what ‘ism’ you use to organize your economy, you will have a decent, relatively just society.

    “The concentration of power and the subjection of individuals will increase among democratic nations…in the same proportion as their ignorance” -Alexis de Tocqueville (from his AMAZING and still incredibly relevant and edifying text: Democracy in America)

  • Anonymous

    Upon what assumptions and apparent miraculous insight into the thoughts of others do you base “such foolishness”?
    As for the revolucion, it already has begun. And there’s no stopping it.

  • CorruptionKilla

    For real change, the masses of workers of America need to unite and one day march and stop work in the major cities if necessary. Work stoppage is done all around the globe for change. Inconveniencing the super-wealthy for a day or two would only bring positive change.

  • auldenry

    If I could draw a political cartoon of the situation, it would look like this. The coach of the economy, at full tilt, is running down a ragged populous of working poor. The coach is filled with fat cat politicians and shareholders and is being driven by ceo’s whipping the horses of greed into a lather.

    Unfettered greed and the feeling of class entitlement by the wealthy are at the root of this failed economy. The situation will not change until the young get fed up with their impoverished state and lack of opportunity enough to overcome their complacency, get active with resolve and vote.

  • Anonymous

    The last thing politicians and the corporations that sponsor them want is an educated, voting citizenry which comes to realize they’ve been exploited by greedy billionaires for decades. Hence, in keeping with the ALEC agenda, they seek to privatize public education by replacing neighborhood schools with charters. (That also happens to be a very lucrative venture for them, involving robbing the public coffers.) The type of education they promote most is found in charter schools like KIPP, which implement a military style approach with drill sergeant type teachers. That results in compliant workers who won’t complain about low pay, etc.

    If you want a truly educated citizenry, fight the privatization of public education sponsored by ALEC et al.

  • Ron Shook

    Bill & Company,

    This is my second time watching this interview and Richard Wolff is a marvel. In combination with your highly prepared interviewing skills and his ability to present PHD concepts in passionate High School language with loads of empathy on both your parts, the communication is superb, common sense and almost painfully informative.

    Now the, “but…” There is a complement to yourself and Wolff that you’ve never addressed on your show that would be of tremendous benefit to your viewers, and would fill in the big picture much more comprehensively. This complementary perspective could be met with 2 or 3 more interviews:

    1) The big picture needs a peak resources perspective. Historically capitalism evolved over several centuries right along with the exponential growth of fossil fuel energy use and the extractive industries that they enabled. That growth, to put it simply,paid the interest on investment that capitalism requires. Now that peak everything is upon us and the ecological consequences of that exploitative extraction apparent, they meet in a nexus of the end of growth, even contraction in this century. The simple fact is that the interest on investment can no longer be paid. Wherefore capitalism in this very real and advancing scenario? There are many folks who can elucidate this, but perhaps none better than Richard Heinberg of the Post Carbon Institute. Get him on the show, please!

    2) Few economists world-wide including Wolff have taken the above into account in their thinking. Most economists are too enslaved to their discipline. Wolff has broken out of his discipline in a humanistic direction but not so much in a physical resources direction. One who has is the Canadian economist, Jeff Rubin. Rather than the academic that Wolff is, Rubin was formerly the Chief Economist of one of Canada’s largest banks where actual physical resources are of great importance, so he gets the real world implications of resource depletion. Get him on the show, please!

    3) After the above 2 interviews take place a perhaps 2 part interview/round table discussion with Wolff, Heinberg, Rubin and perhaps Bill McKibben would fly your show like anything seldom has, because your viewers would get a big picture look at the future that is sorely needed. Yes, getting America on the right track will demand sacrifice by each and every one of us, but coming out the other side is a sustainable, steady-state economy where democracy can thrive.

  • Callie

    After listening to Richard Wolff’s brilliant analysis of where we are, I was left in the dark of specifically what I can do to take part in changing things. Can we have him, in a follow-up interview, share his ideas on what we can do?

  • Mihaly Kummer

    Brilliant program. A downloadable transcript ? I am willing to pay for it.

  • Beckon

    It may be hard for Americans to face, but the system is the problem. One part of the solution is worker-owned co-ops, like Alvarado St. Bakery in California. Co-ops help eliminate the hierarchy and the disparity in wealth.
    Another solution is credit unions. Put your money there, people.
    It’s amazing to me that we celebrate democracy in almost every area of our lives but business. Let’s have the courage to create a truly democratic business system.

  • Anonymous

    After listening to Mr Wolff again criticize the capitalistic system & find his talk wanting of an alternative system. It is popular to find fault with an imperfect economic system but I would ask him which country on the globe has a better one.. He seems to hang his hat on a minimum wage..That has not had a history of success. He referred to the 12 step program in identifying the problem… Great but again he gives no solution..Tom Sowell, Milt Friedman; Adam Smith all believed in the market system.. Moyers has not had any other economist on other than Wolff with no answers only questions. He complained about the 50% increase in SS payments.. It ust went back to where they were… Corporations are evil no matter how many jobs they provide to american families. I put 25 yrs in a Corp that employed over 400,000 folks..If they had not paid me properly I would have gone else where.. Mobility in the job market is great… Moyers stated politicians should listen to Mr Wolff..I say only if he has some solutions which he again does not share with us. By the way the 12 step program turns the problem over to God (higher power)..The way this country is being run out of Wash.. that is its only hope.. PS.. I graduated from a major Univ with a business major & we were required to take allot of Econ courses.. I studied under an economic advisor to a US Pres. so to say they are no taught & unrelated makes for good criticisism but untrue

  • Robert Coss

    Listen to some of Wolff’s economic updates. You can find them on the web. He provides solutions that don’t do away with capitalism but fix it where it hurts us.

    For reigning in our government, check out Lawrence Lessig on TEDTalks. Moyer had him on a show a while back. Lessig offers a brilliant
    strategy that is working to undo what you rightly describe as a pay for play political system.

  • guzziferno

    America has offered one of the greatest systems but we cannot keep it working as Ben Franklin warned. Wolf is pointing this out to us. Greed is undoing the fabric of what the forfathers tried to establish. As for the solution, history has the answer since it does repeat itself. In a sociey of serfs and lords as in early 20th century italy and spain, Dictatorship by the people was the answer. Where a free society fails to govern itself justly because of run away minority greed, an equalizer will evenually emerge. Clean up your mess or someone will eventualy force you to clean it up for yourself and your society. I requested Wolfs appearance on this show a year ago. I would like to see more clear thinking honest intellectualls in the future like Norman Finkelstein. thank you

  • Steven Geisler

    Sometimes you have to have the ability to think for yourself. Most Americans won’t do anything. ie. Write their congressmen, sign a petition, etc.
    Therefore nothing will change. Wolff points out where the system is broken and that in itself is a guide to a solution. When the major economic crashes this country has experienced is because of Banks and Corporations gambling on their own greed. We’ll Don’t allow it!

    Just one is the way they fought for years to avert the Glass/Steagel act until they finally got their Patsys including Clinton to just abolish it altogether.
    Well, once they got their way it didn’t take long to crash it again.
    There should be criminal charges brought against numerous individuals for the frauds they have commited. But, no they get away scott free. therefore it will continue to happen.

    It’s the millions of working class that can maintain a strong economy and everyone makes money and everyone rich and poor prospers. when the wealth gets funneled to only the top few percent. Millions of citizens cannot afford to make purchases causing business and manufacturing to slow down. Starting once again the downward spiral where everyone, rich and poor receive less.
    The writings on the wall. READ IT!
    The majority of Politicians are self serving they lie constantly, They do not work for their constituents. The majority of people don’t have the time or will to dig up the truth while trying to eke out a living to support their family’s. No help from main stream media and the nightly news because their part of the upper crust that want the citizenry in the dark so they can continue with their own greedy policy’s. Why else do so many corrupt politicians keep getting reelected.
    Think about it, send e-mails, sign petitions and DO NOT! vote for an incumbent unless they can PROVE where they fought for, signed bills, etc. that will benefit the country.


  • Anonymous

    I agree with your comments.. The repeal of Glass/Seagal & striping Brooksley Borne of the commodities mkt regulating power left dirivitives & hedgefunds go unregulated.. Alan Greenspan’s buddy had a huge hedge fund that went unregulated. Bear Stearn went down because of their “gambling”

  • Anonymous

    Thank you for your suggestions.

  • Anonymous

    It’s frustrating listening to a great economics professor like Richard Wolff and not be able to stop him after every sentence he utters and ask him, “But what about this or that?” His conclusions and his support for them are incredibly shallow, misleading, and wanting. His little examples, such as “If raising the minimum wage is so bad, why not lower it to $4/hr,” is so incredibly ignorant as to make me want to shout at the television set. “Why not raise it to $100/hr?” I might ask. He makes strawman arguments.

  • Anonymous

    Has Bill read Tragedy and Hope? If so he should not act surprised at these revelations it seems disingenuous.Destruction of the middle class is going as planned.

  • Anonymous

    Kudos Bill for getting Richard Wolff on I have seen all his work and read his works for a couple of years but only on alternative media. Now get Richard Grove on and really push the envelope.

  • Two Lucky Boomers in WI

    Richard Wolff & Bill finally struck a nerve in ME. the time has come to act like a ruthless American Corporation by withholding my income taxes to the government.

    As a retiree with a six figure income from my investments why the hell should I not do what they do: (lie, transfer earnings off shore, fail top pay -not fail to file.

    I worked for the Fed for 25 years, they are not that dam smart. Hmmm…will have to see if this is a viable idea.

  • Efraín M. Martresa

    We seem to know so well how to explain things after they happen. So, is the day coming when we will explain the Un-Renaissance we are living right now at internet speed? Is there something being done to stop it? If we want democracy in business, don’t we see that we are giving power to the ignorants working there? Unfortunately, it is the phone that is smart now, people are going the other way.

    And then, if we want to really change for the better, let’s reengineer democracy. One idea: train our interested youngters in serving their country in civil matters, and let them take over the administration of the country step by step. We then vote for issues instead, and where our vote is worth what we really know about the matter in question, i.e., no more ignorance having any influence in our democracy. It will take three to four decades to design and implement a new system, but we do need to do it.

    There is a lot else we can do also. For instance, create a ledger for every citizen where all the expenses (education, health, etc) and income (income tax, licenses, sale tax, etc) are recorded. Those funds will be used for retirement (if funds are still there) and pay for everything we use, help in bad times, police and jail if we commit crimes, etc.

    Important part of capitalism is the consumer. If we let corporations do whatever they want then we will suffer the consequences. One way could be to legalize boycott, like a strike is legal. Different levels of them, of course.

    In a few words, and as Montaigne Lover says below, education is fundamental. The Unrenaissance has a dormant society that can hardly accomplish anything for reasons we can no longer ignore.

  • Marshal Merriam

    I suggest that very few people work a 40 hour week in 2013. Either they work a 27 hour week so as to avoid collecting health benefits, or they work a 60+ hour week as an “exempt” employee. The former often work multiple jobs so they can live on minimum wage.

    In other words we have returned to 1930 when a 6 day work week, 10 hours a day, was the norm.

    Consider the cost of working 60 hour weeks. There is no spare time for Boy Scouts and other youth organizations. Or basic parenting. Or home maintenance. Or fitness.

    One hypothesis is that the great depression was relieved not by WWII (the standard wisdom) but by the 40 hour week. This increased the number of jobs by 50% at a time when demand (military, then consumer) was high. Wealth distribution probably improved more than GDP.

    Perhaps we would see an improvement if we returned to the 40 hour week by severely limiting who can be exempt. On the other end of the scale, perhaps universal health care will lessen the incentive to hold everyone to a 27 hour job.

  • CASSE3

    What do you think it would take for popular sentiment to abandon economic growth as a policy objective and to accept an alternative such as a steady state economy?

  • rkb

    The conflict between economic growth and environmental protection has been thoroughly documented and demonstrated both theoretically and empirically. Why is this conflict not accepted as a core economic principle?

  • aftermidnight

    I think Professor Wolff had a lot of good things to say. But he did lose me when he conflated Tea Party with Occupy Wall Street movement aspirations. I’ve always seen the Tea Party more as a reactionary social movement trying to protect white privilege in this country and less concerned with economic opportunity and egalitarianism.

    I hope Wolff is correct that the banks are producing their own undoing. That can’t happen soon enough IMO.

  • JonThomas

    I’m sure that by your praise of the “Capitalistic System” you do not mean that it is impossible to engage a better one, or even improve upon what now exists.

    It is popular to find fault with the current system for very good reason, because the the current system is working as it is intended.

    If Capitalism is the exploitation of resources as a means of profit and growth for those who find ways of making use of such resources, then the politicians are just another resource.

    It is a dangerous assumption to place such praise upon a system that by following it’s own inevitable philosophy, consumes it’s own bulwarks.

    When you ask…”which country on the globe has a better one…” honesty should beg for a standard of measure.

    If it’s GNP, then you may get one answer, but if an egalitarian standard were used, where the economy of a nation benefits the greatest number of it’s citizens, you may get an answer that indeed frustrates those who enjoy praising Capitalism.

    While you make interesting points about reform, we shall together desire that all of us alike long for when those of even the least of means can be refreshed into having hope in the future.

    Oh, PS..(is how I believe you phrased it…) I went to a community college in the middle of nowhere, had the pleasure teachers that for the most part were honest, held their integrity, imparted everything they could, focused not on fame, but instead toward the benefit of their students. They were not famous for anything, yet left me profoundly grateful.

  • Anonymous

    Thank you for your comments. I did not mean to praise the capitalistic system but Wolff seem to always attack it with no viable alternative. Economics is the allocation of resources for the greats good.. That was the defination in Econ 101. Who allocates & who defines “good” is the big question. I’m a free market person not necessarily a capitalist. Like Teddy R. stated the “trouble with capitalism is capitalists” So true. They need a govt which sets the rules i.e. monopolies, banking regs etc.. We know capitalists are are the elite in a socialistic state.. We desperately need a govt calling balls & strikes but the empires have become filled with greed & power as well. I join you in finding fault with our system especially our “trusted elected officials ” I really appreciate your comments about your educators. A good educator is invaluable & are the some of our real heroes. I had a great teacher who stated “character is what you are when no one is watching.” I’ve never forgotten that or the man. Interesting.

  • Louise III

    … anyone sign the petition that would keep banks from regulating themselves ?, I did. Can’t remember who it was with though, sign quite a few. Seems all I do these days are sign petitions – sign one for something to stop, sign one for something to start. Oh, previous signer, you have that right, the tea party is LESS concerned with ‘our’ economic opportunities than their grandiose master plan of U.S. and then world domination. Bill, you’re so awesome, your show should be on everyday (:

  • Richard Sims

    What do you think about a steady state economy that neither grows nor shrinks within reasonable bounds as an alternative to economic growth ? (Richard Sims)

  • PlantinMoretus is his website, it gets into solutions

  • Earl Chrysler

    Wolff is an Economist? Apparently he
    forgot a fundamental concept.

    Regarding the minimum wage, Economics states that if an employee contributes labor that is determined to be creating 50% of the value of a product in an hour of work and the price of the product is $12 then the wage rate the person earned is 50% of the price or $6.00.

    If legislation sets the minimum that one can pay an employee at $7 per hour, the
    equation is now out of balance. Since the employee being paid $6 per hour has a Marginal Physical Product of 50%, only two things can change.

    One change is the price of the good or service can be raised to $14. If this happens, the quantity demanded of this good or service will fall and the employer will need fewer employees.

    The other change is the person with a Marginal Physical Product of 50% could be
    replaced by a person with a Marginal Physical Product of 58.3% to keep the price at $12. This means those with Marginal Physical Product values of 50% previously employed in this industry will be out of work.

    While politicians may say “everyone in this country deserves a living wage” they fail to be honest with the public and tell us the implications of such legislation. If our state and federal legislators really wanted to increase employment, they would repeal all minimum wage legislation. If that were done,
    those persons who have Marginal Physical Product values that would deserve an hourly wage of $4 could find work. Today they cannot.

    There are those who will say that they would not work for only $4 per hour; they are worth more. Apparently they are not. If they were, they would be earning more. Plus, the reason they would not work for only $4 per hour is they are paid more than that by the government for not working.


  • JonThomas

    Interesting comment. I’m not the OP, nor am I Mr. Wolfe, so please do not understand my comments to speak for either of those persons.

    Your comments show an interesting viewpoint for those of us who are not educated in business or economics beyond the basics.

    However, I have been wondering…

    Which is more important? The economic system, or the people who engage the system?

    I shall preempt your response with my own answer…THE PEOPLE!

    You use a pure free market concept to assert that there are people who would be worth only $4/hr. Would you continue to stand by such a claim if the CEO of a corporation paying such wages were making….say a pay package of around 14 million?

    You say that it’s fundamental concepts that matter? From what I understand, the fundamental concept that allows a person to be worth a certain amount, is predicated on their input into the economy. That would be whether it is the economy at large, or the financial economy of one business.

    Then we add in economies of scale and the people at the top who employ such profit maximizing methods. I suppose the fundamentals allow for such ingenuity.

    Well, if team work is among the accepted practices outlined in your ‘fundamental concepts,’ and the mental acuity for enlisting such approaches are rewarded, then it seems that I, nay WE, THE PEOPLE, the majority of citizens, who are ‘just’ workers, not businessmen, or company owners, the ganders shall we say, can also use team work.

    We have determined that if you, in your mind, feel(or think) that a system can determine the ‘worth’ of a human being in terms of monetary value, then WE have determined that your system is not valid! Your system is not valuable to us…It is NOT WORTH IT!

    WE as a team, have decided that if you, as a business owner, cannot, or will not pay a minimum wage (and hopefully soon, a living wage,) then you do not qualify as being worth employing as a business to serve our society. In other words…YOU’RE FIRED!

    Is that in the language which expresses the fundamentals?

    It’s just team work, no problem, right? I suppose that the predatory capitalists will continue to use the plutocrats and the media to divide and conquer. They will go on flooding the collective conscience with propaganda designed to disable unions and further isolate workers, making each person think they have to claw and scratch because it appears they are on their own.

    Those ones enjoy creating an atmosphere where a person thinks that it’s their own self-interests which matter…but, be aware… there are also many of us who recognize that it is in our own self-interest to band together to work against those who would see a human being a resource only to be measured in terms of monetary value!

  • Anonymous

    like Don answered I am surprised that some people can make $6170 in a few weeks on the internet. have you seen this web page w­w­w.K­E­P­2.c­o­m

  • Efraín M. Martresa

    Watch “College, Inc.” on PBS ( if you haven’t already. The question is: nobody is realizing what’s going on? That’s why I believe that we have to re-engineer democracy and let young people, trained and loyal to their country, to take over the administration of the country, likewise every other discipline does. So they concentrate in long term goals with the well being of the country as the first goal. To accomplish that, they cannot be concerned about the coming elections and how it will affect their job security.
    And for them to learn what we, the people think, we vote for issues.
    This, in a few words. The smart people of the country will gather ideas, surely enough using the internet, and we let the people decide if we start the implementation. Well, we may not see the outcome after some decades, but I am positive that we will see results well before that.

  • Earl Chrysler

    Thanks for your response.
    First and perhaps foremost, Economics is a behavioral field of study. That means that it attempts to describe the behaviors that result in certain outcomes.
    The ‘concepts’ of Economics, such as “As the price of a good or service increases (ceteris paribus) the quantity being demanded/purchased will decrease” is not some ‘law’ of Economics, but a description of the behavior that has been witnessed.
    Economists merely examine the description of what variables in a situation are taking on specific values and apply that information to how historically humans tend to behave in such a situation.
    There is no “system” that controls the outcome of a situation, humans determine the outcome.
    Indeed, if persons in control of important variables cause the values of those variables to change, they can predict the outcome by knowing what type of behavior humans have historically exhibited in similar situations.
    Therefore, if you, or anyone else, does not like the outcome of a situation, identify the person or organization that caused important variables to take on the values that led people to behave in a manner that offends you. The “system” did not cause the undesirable outcome. A person or organization is to blame.
    I submit that the majority of the time you will find your elected representatives are the offending parties.

  • Tyson R Garrett

    What a Joke this guest was! Capitalism doesn’t work? If you look at the simple fact that the poorest Americans live better than 90% of the rest of the world I cannot buy your premise. Even our homeless out pace the average quality of life when compared globally to much of the world’s people. Who cares if the Rich are Richer than you think they should be… That doesn’t stop people from success in this country. I am still looking for that super successful socialist country that has sustained its success. Liberal Garbage with no substance to back it up. _tyson

  • John C. Tripp

    All growth must ultimately be met by the laws of nature, biology and physics. Because of oil we have been deluded to think that our economy can grow forever. We are now facing the limits of that belief.

  • John C. Tripp

    So, what do billionaire hedge funders do to justify their income? What do they actually create?

  • John C. Tripp

    Actually there is no real science of economics, since it’s entirely man made. As is money.

  • Berry Muhl


    Corporatism, not capitalism. It’s not “unfettered” capitalism that’s causing the wealth gap; it’s REGULATED capitalism that does that.

  • Dick Burns

    42 comments? Are you kidding me? No wonder things don’t change.

  • Mona

    people don’t remember in 1943, President Roosevelt proposed a top income tax
    bracket of 100 percent – maybe we should propose that for today — no taking your money offshore – you do business in the US or set foot in America you pay 100 % taxes. why should the average citizen have to pay and the wealthy don’t and then our tax money goes to the wealthy not services.

  • justjen

    I agree with you, aftermidnight. I loved Professor Wolff and agreed totally with almost everything he stated. I have not seen the Tea Party through the same lens as Dr. Wolff, however. I see them more in the same manner as you see them.

  • justjen

    I loved this interview. I agree with Dr.Wolff on every topic except the Tea Party. Maybe I didn’t quite understand his comparison of the 99% and the Tea Party. But it seems to me that the Tea Party is in complete support of the “markets” while the 99% realize there are problems with our economic system.