Welcome friends to another edition of Economic Update weekly program devoted
to the economic dimensions of our lives, incomes, jobs, debts, ours, our children's.
I'm your host Richard Wolff. I've been a Professor of Economics all my adult life
preparing me to offer you updates every week. Before we begin today a couple of
announcements I think will interest you I'm happy to mention to those of you in
the Los Angeles area or who might be there next weekend that from the 3rd to
the 5th of November at the Los Angeles Trade Technical College 400 West
Washington Street there will be the left coast forum a replica of the left forum
that happens every spring in New York City but its own West Coast variation I
will be talking the evening of November 3rd but I urge you if you are interested
if you are in the area this will be a chance to see what academics what
activists are doing in the United States to make the kinds of changes that ever
more of you are interested in you can find out more by going either to left
coast forum or to left forum org and that will give you all the information
about the speakers and the panels and all the activities the other
announcement is a response to what many of you have asked for you wanted to know
how has a Marxian economics an approach to economics that is critical of
capitalism how has that evolved in recent decades what's going on in the
field of Marxian economics how have criticisms and proposals to go beyond
capitalism how are they evolved in that tradition it's an important question and
there are plenty of answers but many of them are gathered together in a new book
that I thought you might be interested in
published by the very large international publisher known as route
ledge international or route ledge publishers based in the United Kingdom
but globally distributed the book is called a handbook of Marxian economics
published this year 2017 so it's right up to date it's got a group of editors
who have assembled a whole raft of different articles on different subjects
so you can kind of sample the field the lead editor is David Brennan BRE and na
n so I recommend if you're interested in what Marxian economics has to say this
handbook of Marx in economics edited by David Brennan and others is a useful way
to get into this material let's turn then to the economic updates for this
week the first one captured my attention not just because it's a horrible story
and it is but also because it tells us something about what's going on in the
American economy from an angle that you don't often hear about here's the way
this story goes across the country towns and counties are having more and more
difficulty performing their basic functions why the answer is not far to
search for corporations in America have dozens literally of ways of evading
their share of taxes wealthy people like wise either have the laws in place to
allow them to escape taxation or they by the political influence that gets them
those laws we know the story and the end result is that cities and towns across
the country are not able to raise the money.the tax revenue that in the past
funded basic functions and here's an example one of the things that cities
and towns and counties and states have to do is the handle probation if people
violate the law anything from a speeding ticket
to more serious offenses they can be found guilty in the judicial system
and be required for example to pay a fine and or to undergo probation you
don't go to prison but you are kind of in a limbo place you have to really
behave yourself and do nothing wrong for a while and then you're done with your
probation but of course to handle this system you have to have probation
officers probation offices all of that to save money cities and counties and
states are beginning to privatize probation and recently in Craighead
County Arkansas it kind of blew up on them and attention finally was turned
here's what it turns out happened in Craighead County Arkansas but it happens
everywhere this system becomes corrupted here's how it works
the public institution the city to town the county says we can't afford the
probation system anymore and instead of shutting it down which would raise other
kinds of problems they privatized it they turn it over to a private probation
company so here's what happens you violate the law a speeding ticket the
judge says you must paid X dollars of fine and you must be on probation for a
year 18 months whatever the private company now administers this if you
don't pay the exact amount of money on the right day the private probation
company has the right to assign fees and penalties and then to jack it up say you
now owe not just the original fine but all on top of that fees and penalties
why is this different from any other kind of situation because if you don't
pay the probation company explains to you you're going to go to
now normally in a Western law for centuries we don't put people with jail
who haven't paid fines other ways are found to deal with this problem
otherwise you're putting poor people those who miss a payment they all into
jail and that's what we used to call poorhouse we don't do that anymore but
it turns out when a system begins to break down that the things we didn't do
anymore turn up getting done anyway moving right
along to the second one I found another statistic this last week that
illustrates that if there's an economic recovery going on it doesn't include
large numbers of people in this case it has to do with people having their
electricity shut off because they haven't paid or paid in full their
electric bills let me give you some of the numbers I think they will stun you
the way they stunned me last summer nine hundred thousand homes in Texas went
dark because of unpaid bills that's triple the number ten years ago in the
state of Texas number two California 714 thousand homes the most on record for
the state of California across the United States as a whole millions of
people are being disconnected from electricity and let me remind everyone
that doesn't just mean that your toaster isn't working and you can't watch TV it
means that if you have a child in school who had an assignment to work with a
computer to do something he or she can't do it the ramifications of being cut off
of electricity have long-term social consequences that ought to make a
society stop and pay some attention but the story actually gets worse the Trump
administration released its 2018 budget and in the
budget they got rid of the lih EAP program case you don't know what that is
let me tell you low income Home Energy Assistance Program it's a program of the
federal government that helps poor people if they qualify to pay at least
part of their electricity bills last year 2.9 million households Wow
turned and got some help so why is it being canceled by the Trump
administration well according to Mick Mulvaney the
director of the US Office of Management and Budget he cited the figure of eleven
thousand people who didn't qualify but who got help now let's see 2.9 million
people disconnected and needed help eleven thousand which is 0.0001 percent
of this cheated in some way weren't qualified or even dead in some cases is
there corruption in government programs usually some but to use a tiny fraction
of corruption to cancel out what millions of people need there's no
justification for that there never was I want to give you some good news and it's
about the country called New Zealand halfway around the world they just have
a new government led by a 37 year old woman Jacinda Edurne and she the head of
the Labour Party there is quite an interesting candidate she is in charge
of a coalition government there are two other parties together with her that
have formed the government and taken it away from the last ten years of a
Conservative government the Conservative government in when the global capitalist
crash happened in 2008 and stayed in power to administer an austerity program
afterwards the people of New Zealand have had enough and they abandoned the
Conservatives and turned the government over to
Jacinda Aherne and her coalition partners here are some of the things she
ran her election on the election happened last month in September and so
we know exactly what she's committed to her biggest issue was that that was
shameful in her mind that New Zealand one of the world's industrialized
economies has the worst problem of homelessness of any of them and for her
she called this a quote unquote failure of capitalism her words she said you
judge a system among other things by whether it provides the most basic needs
of a population housing is a basic need to be the number one country for
homelessness in the world is a failure of that system in New Zealand she's on
top to raise the minimum wage to the equivalent of $11.50 per hour we don't
have anything remotely like that we still have a federal minimum wage at
$7.25 and her coalition partners are pushing to raise it from 1150 to around
15 or 16 dollars so there the government is doing what we still have to have
millions of people demonstrating out in front of McDonald's or Walmart's to
maybe get in a few years a remarkable turnaround in New Zealand and it's not
the only country where this is happening
I want to talk to you also about an update that has to do with this
lingering struggle over the Affordable Care Act otherwise known as Obamacare
I'm going to assume you are familiar with what President Trump decided to do
after he and the Republicans failed to override that bill in the Congress that
didn't get enough votes so what President Trump did was announce
something that he can do just as president he will not allow the
government to give to the insurance company the promised subsidies for
low-income people to get health insurance so here's how this works the
law mandates that the insurance companies must give lower rates to
people who qualify who have little or no income so that's continuing the
president cannot stop that what the president can do is not give to the
insurance companies the subsidies that they got to help them pay for the cost
of giving insurance at a low discounted rate to poor people
so here's it's interesting what is the insurance industry going to do and
they've made no secret of their plans if they don't get the subsidies that the
federal government promised them in the Affordable Care Act and if they are
required by law to give a low rate to poor people then the only way they can
pull that off they say is one of two things raise the rates of everybody else
to compensate them for what they have to give in a discounted rate to the poor in
other words set that health insurance needs of the poor against those of
everybody else to create the maximum anger resentment hostility and the
second option for the insurance companies quit the whole business
just cancel everybody out and stop providing
some companies are expected to go one way and some the other the losers the
mass of the American people it is an extraordinary exercise in bad government
not serving the people who elected it to go in there before turning to the next
economic update let me remind you to make use of the two websites that we
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they're there for your purpose they're updated many times a day share what you
find there with others that's why we put it there Rd wolf with two FS calm and
democracy at work dot info the next update has to do as much with who said
something as with what this person said person is nageire woods the Dean at
Oxford University in England one of the most establishment places you could find
in the world of economics and here's what Dean Woods said in the middle of
October publicly neoliberalism the form that capitalism has taken in the last
two or three decades is on trial said Dean woods in the United Kingdom
in woods is located Labour Party leader Jeremy Corbyn accuses neoliberalism of
increasing homelessness rather like the new prime minister of New Zealand
throwing children into poverty and causing wages to fall in many cases
below subsistence a quarter of a century ago it was said that if the government
intervenes in the economy it makes matters worse now we see says Dean Woods
that if you remove the government it can have the same effect and that therefore
we have to rethink this and then Dean woods has the courage to say what so few
of the people in this kind of a position dare to say that the fastest-growing
economic units in the world over the last ten years have been overwhelmingly
state managed state interventionist types of capitalism exactly the opposite
of what used to be argued China is the fastest growing but so is India so are
many other countries and not only are they growing faster than the neoliberal
that government gets out of the picture countries but the government gets out of
the picture countries like Britain and the United States are having more and
more troubles their inequality is getting worse while that in those other
countries isn't their child poverty rates in those hands off from the
government are getting worse while those in the government intervention are
getting better in other words the wind is changing and where before it was
popular to say private capitalism is solution government is the problem it's
now reversing it's the private capitalism that's the problem and the
government intervention that's the solution this has happened before this
oscillation between more and less government intervention
and it is hugely justified either way with the same arguments in the 1970s
Reagan and Thatcher said the government's too much involved
everything will get better if we get the government out and people believed it
now it's going the other way and people increasingly are believing it I
understand the anguish about the bad performance of neoliberal capitalism
getting the government out of all kinds of things is part of what brought us to
the crash of 2008 so I understand wanting to push in the other direction
but I would like to add an analytical understanding from the history of
economics maybe the problem isn't more or less government intervention yes
that's what the profession loves to debate but it's an old debate
and it's a very stale debate because maybe the problem isn't which form of
capitalism we got maybe the problem is that we don't look beyond these two
forms that we don't seem to be able to manage to think of an economy as either
organized into corporations that do whatever they want or organized into
corporations that do pretty much what they want but the government Li limits
them and controls them and regulates them maybe we go back and forth between
the two forms of capitalism because the problem isn't a form of
capitalism the problem is capitalism itself the problem is a system in which
a tiny group of people the heads of the big corporation the boards of directors
the major shareholders pretty much have the cards in their hands and all we're
debating is whether the government limits them a little a little more a
little less but maybe the problem isn't the limits
more or less maybe the problem is we shouldn't allow a small group of people
in an economic system to make all the decisions that everybody else has to
live with maybe the problem is we don't have a democratic economic system and we
never did and we're now facing the music that pretending that all we have to
discuss is a little more government intervention a little less misses the
boat misses the issue keeps our debate very narrowly limited instead of open to
asking the more fundamental questions the next economic update has to do with
the way that the United States is exceptional is unique we are the only
country among the advanced industrial countries in the world that does not
have a federally mandated paid vacation time in other words there's no law in
the United States the way there is in Britain France and Germany and Italy and
Scandinavia and on and on and on we don't have the this law which says that
a working man or woman who goes to work every week 9:00 to 5:00 Monday to Friday
all that must be given X number of weeks of paid vacation a time to relax
a time to be away from the job a time to recoup your relationships with your
children and with your spouse and with your community to recharge your
batteries in France it's five weeks I know the French economy pretty well and
I know that the French working class will not give that up without a
catastrophic struggle it means too much to them they've built their lives around
this why is the United States unable unwilling the working people in other
countries fought bitterly to get this time off the American working class
didn't or at least it didn't yet and the question is why but there's a bigger
question which the Europeans now have to face - because you fought for in the
past doesn't mean you'll keep it the new leadership in places like France with
mr. McRoy are interested in reducing it maybe even eliminating it it turns out
that in a modern capitalist system whatever the working class achieves in
benefits in job security and wages is always tentative is mostly temporary why
because the ultimate decision is not in their hands they fight for it if they're
lucky they get it but they're always facing an employer class who is as
interested today as it was last month last year last century in getting it
back taking these benefits away reducing them
all across Europe these benefits like paid vacation time are being eroded are
being picked to death it turns out that if a union or a whole working class
fights for something with an adversary employer even when it wins it discovers
usually not very long later that the winning is temporary you're always in
this struggle and the other side is always looking to take it away that's
why people get interested in things like worker coops because then the workers
are on both sides of the discussion they are the workers who do the work but they
are also together their own employer then there isn't the adversary situation
and then you don't have to worry that the other will take it away from you
after you struggle the last economic update we'll have time for has to do
with an entity you've probably never heard of families for excellent schools
Fe si who are these people well they pretend and they do a lot of
publicity and push this that they represent a certain point of view among
parents of schoolchildren and concerned citizens and so they battle to get
certain goals particularly recently in Massachusetts and other states New York
among them they have been fighting to expand the freedom of charter school
to do end runs around the old rules of what can and cannot happen in a public
school to employ people who haven't the qualifications to take shortcuts to
impose all kinds of quasi ethical behaviors on teachers and students in
terms of what public teachers have gotten but why I am telling you this is
that it turns out that a new law and a new research by the Boston Globe in
Massachusetts found out that a tiny number of very wealthy people bankroll
the ready families for excellent schools and they've been fighting because they
have interests business interests in running charter schools in servicing
charter schools they want privatization of Education because it's a realm of
much profit and in America they can parade themselves as a popular
organization because they have the money well their efforts were defeated in
Massachusetts by a groundswell of organization from below which raised
lots of little bits of money from Union teachers and so on but often the the
victories go the other way and when that happens we face a society which allows
money to trump a democratic decision-making process that's why
change is the order of the day we've come to the end of the first half of
economic update thank you very much for being with us stay with us after a short
intermission we will be right back
you
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