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Occupy Wall Street has changed the conversation about the distribution of wealth, and an economic framework which for decades, has been taken for granted. So what now? What policy changes and initiatives should the movement be pushing for?
On this edition, University of Massachusetts at Amherst emeritus economics professor Richard Wolff speaks about some of the roots of, and solutions to, the economic inequality thats finally being acknowledged.
Richard Wolff, University of Massachusetts economics professor emeritus; Deepa Varna, housing attorney
Prof. Wolff on European Economic Inequity, 8 minutes
Full length interview with economics professor Richard Wolff, conducted by Lisa Rudman in 3 parts:
Part 1 of unedited Wolff interview, 18 minutes
Part 2 of unedited Wolff interview, 24 minutes
Part 3 of unedited Wolff interview, 25 minutes
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Transcript Richard (Rick) Wolff interviewed by Lisa Rudman, Executive Director of Making Contact / National Radio ProjectLisa:The years 2010, 2011, and now 2012– I know it’s hard to look at a crystal ball, but give it a try.
Rick Wolff: Well, 2010 in my mind was an important year because it taught everyone who cares, which is almost everyone, that this is one of the worst economic crises the United States has every had; it’s on a scale with the Great Depression, it’s not going away real soon and people settled in 2010 to face that…didn’t know quite what to do about it, but to face it.
2011 is the great transition year in my opinion because in that year over the first two thirds of it people began to get more and more angry about what was going on, about this lasting crisis and the fact that little was being done for most people to do anything to limit the damage or to reverse the situation.
And then of course, the crucial thing which we’ll always look back to is the Occupy Wall Street movement that explodes starting in Sept. of 2011 and that really changes everything. It changes the way people feel about the economic crisis. Suddenly there’s a movement to do something. It isn’t coming from the top, it’s coming from down below. It has incredible staying power against clumsy efforts by incompetent governmental agencies to control it, which only makes it seem stronger and more durable and attracts many more people.
It’s clearly a very, very popular movement right from the beginning, thereby giving the lie to those had felt, and thought and said that there’s no left wing base in the United States, that that was all blow away. Millions of Americans who thought they were the only person who thought a certain way discovered they weren’t.
So I think 2012 will be the legacy year, the year in which a long lasting crisis and the beginning of a serious movement to do something about it that is not paid by the big corporations, not in league with the republican or democratic parties, begins to assert a new and independent political perspective. So I expect great things from 2012 that are going to build on the Occupy movement.
Whatever forms the organizations take, whether we see the revival of old radical organizations and development of new ones, a little bit of both, that will be very interesting to watch; even how old terms like capitalism and socialism, and whether they stay in circulation, what new meanings they take on, it’s gonna be a very exciting political year of change in which the major news will not be the political shenanigans around election. It’ll be around a new political constellation in this country that’s developing.
Lisa: You jumped right in to focusing on Occupy. So when you talk about Occupy, that it’s a movement to do something, what is that something?
Rick: Well, I think that the Occupy movement has been nothing short of genius in how it’s developed. I tell people that ask me that if they had ask me, they didn’t, but had they ask me early on what to do I would’ve given them awful advice, and nothing makes me happier than the fact they never asked me, so they never had to risk following my bad advice.
The first advice I would’ve given them would’ve been to be very clear about what they want. Wrong. What they needed to do was gather together all sorts of people with all sorts of agendas to teach them a fundamental lesson about politics.
If you’re going to make change you have to get people who disagree on all kinds of things to trust each other and to work together. That’s the hardest thing because that’s the way the left in the past has been splintered in this country. And to do what they did, to come up with a set of very general slogans, like 1% versus 99%, or being angry at the businesses, or questioning capitalism, or the basic themes that they developed was exactly the right thing.
It is a big tent, it allows all kind of people to get together, to work together, to get to know each other, to understand their differences, not be the threatened by them, see the differences as a very important glue that can hold them together. So I think this is a movement that has stunningly understood and incorporated fundamental political lessons about gathering people together under conditions that are very bad for that sort of thing, in a country that militates against that through its individualism, through its long history of single issue movements that have been very leery of mixing together with other people and so forth.
The second thing that Occupy does that’s a game changer and is brilliant, was its courage and determination against all kinds of advice, not just the kind I would’ve given them. To put the question of economic equality, of economic system of capitalism right out front, right at the beginning, no holds barred, we’re the 99%, our adversary is the 1%, they control the economy, they’ve bought the political system, they’re the problem, we’re gonna have to change all that…that has been something the vast majority of the left leaning movements in America have been terrified of for half a century.
Whether you call that the legacy of the Cold War or you call that the legacy of the anti-communism of the early parts of the Cold War, whatever you call it, it has immobilized and undermined left movements in this country for half a century.
And they dealt with that not beating around the bush, not hiding, not prevaricating, but putting it right out front. And instead of that being a problem of frightening people away, it had exactly the opposite effect, which is the only side of genius in politics there ever is — the proverbial you run that flag up that pole and you see who salutes.
Occupy gathered people around a whole network of vague issues, multiple issues, general principles, and it put the economic question forefront. Nobody would’ve suggested they do those two things. That’s not the way the left has in general behaved, and so they have to their credit as a movement achieved two major breakthroughs changing politics.
That’s why in such a short time everybody was talking about 1%, 99%. It wasn’t too radical to say. The president had to say it. Even some of those republican jerks had to say it. That’s a sign that you have really tapped into popular consciousness and for a left in this country to have done that so quickly, so successfully, stunning. The only answer is stunning. And a movement with that much to go for it in a few short months is a movement we’re gonna hear more about, whatever particular forms that may take.
Lisa: And when you talk about Occupy really touching a nerve, it seems like there’s some interesting variety, both in genesis and execution when you go from geographically across the country. I wonder, since you’ve visited a lot of Occupies, tell us what you’ve seen, just what you see as the variegations in this movement.
Well, it’s enormously dispersed, you’re absolutely right. The ones I’ve talked to for example range from a small city, Bangor, in Maine to San Rafael in Marin County, north of San Francisco, and a whole bunch in between. And actually the most often I visited and spoke was at Zuccotti Park in Wall Street, since I live and work in that area.
They’re both similar and different; similar in the sense of the Occupy thematic being very meaningful to all of them across the board. The 1% – 99% everywhere, uniformly adopted as a slogan, as a focus, very, very interesting.
The differences? Well, my first reaction is they have a bit more to do with geography and the specifics of each city and locality where it was done. The cities and towns are different.
Let me give you and example. In New York City the decision of the mayor there, a non-entity named Bloomberg, who by the way is the living incarnation of a famous Peter Sellers film called Being There. If you remember that film, there’s a man in there named Chancy Gardner who becomes president of the US because he’s the right man in the right place at the right time, even though he’s clearly retarded. I’m not saying that Bloomberg is exactly the same, but it sure is similar.
So Mr. Bloomberg decides to cope with Zuccotti Park by endlessly throwing police personnel, so that they ring the park, they stand there, they make noise with their sirens, that they forbid the use of voice microphones and things like that…endless harassment because that’s the only way that the 1% know how to cope. They can’t answer any of the criticisms, they can’t deal with any of the issues, so they repress. That’s what they know.
The spectacle for example, of Mrs. Clinton celebrating freedom fighting folks demanding democracy in every other country, while systematically conniving here to repress the pale image of what’s happening there here is as stunning to everybody as you can imagine.
So in New York City it’s all about resisting repression, resisting the police, and you have a spectacle, for example, in which the mayor, Bloomberg, destroys his own political career in one act, by emptying the park violently. Taking a violent action by forcing the people to leave, taking bulldozers for example and destroying the little public library that had been erected in Zuccotti Park. And no one missed it.
You destroy a free public library as the mayor of a city. You claim this is necessary. At the same time you as the mayor of the city are cutting back public library hours and the whole thing is justified, this is stunning, by the need to clean the park. This is the mayor who presides over the filthiest subway system on earth, who has done nothing whatsoever to clean the subway system for the millions of people who risk illness by the rats, and the garbage (I live there so I know) that is in that subway system.
Every New Yorker who looked at that mayor articulating the cleanliness argument knew that he had as stunning a liar in front of him as any you’ve ever heard. It’s the end for him. It’s the end of political career. Even is billions can’t fix the damage he did to himself.
Then compare that to Marin County, San Rafael. I gave a talk in the middle of the city plaza of San Rafael. 1250-150 people gathered there, very impressive, it’s a small city, San Rafael. Heaven knows in a fairly widely dispersed county, so it’s a bit of travel for people to come.
So you have 150 people come. They come for 2-3 hours. I speak for an hour and 40 minutes, stretching my credulity and my time. There’s not a single policeman in sight. There are no policemen in the neighborhood, there’s no repression. There’s not even the vain hint of one or two to keep the traffic flowing, nor was there the slightest need for it.
And when I asked about it because it was stunning, I learned again there’s no need for it here. They have a very good relationship with the local police. They have had these…it’s all taken care of. They are exercising their free rights. They are doing it effectively. And I think the thing that most struck me was in the next day’s newspaper, The Independent Journal I think it’s called, the daily paper up there, had all I can describe, and it’s a story I might have written myself about my own talk in the sense of being friendly, and understanding and capturing the basics.
Very different from New York, in which all the major newspapers sought from the beginning to crush this by saying nothing or saying snide, dismissive kinds of reports until it became so big they couldn’t anymore, and then they split. The New York Times began to talk about it by mixing — one day a story friendly, the next day a story despicably dismissive — whereas the Post and the News, which are you know, broad side papers and scandal mongering sheets, they basically attack it all the time, but seems they attack everything left of Atilla the Hun, no one takes it all terribly seriously.
So it varies by the specific conditions. What Quan did in Oakland is obviously very different from what the police did there from what you had in Bangor, Maine. There were no police, everybody went down to the center of Bangor, Maine to talk with the people in the tents. It had exactly the effect you would want, an issue that would otherwise only have been talked about in private became a public issue.
So I think the different experiences are powerfully important. They’re teaching local activists not only that they’re not alone, not only who their friends and allies are, not only how to build a movement with people who disagree with you on this or that and agree with you on that, but they’re also teaching people what the unique conditions of their social environment are and how to deal with those.
And so I think you’re accumulating very valuable experience that as this movement matures and grow will be communicated from one Occupy to another and build up that reservoir of experience that makes all successful social movements able to move forward over time, and that’s what’s happening here.
And because they’re not coming out of the old left, because they’re not coming out of fairly defined and often quite rigid hostilities amongst little groups, they’re not held back by all that. In a peculiar way, while there are costs to that, they don’t have the accumulative experience you might have if you were part of an ongoing political party that had been around for 50 years that handed down lots of stories about past experiences with a strike or a demonstration…those are valuable. Those teach you like anything else.
That is missing. And sometimes that hurts and these people make mistakes, but you have to blend that with the enormous advantage of not having baggage to carry, being open to see and feel your way without blinders that come from history, so it’s a mixed bag. We shouldn’t be afraid of facing what the costs are, but we shouldn’t miss the advantages of kind of starting anew.
If I could say a word about that too… I’m often asked the difference between the European fighting against the austerity programs there and the Americans. And the basic difference is what I just referred to — it’s organization. In the European context there are longstanding socialist parties, many of them, green parties, communist parties, anti-capitalist parties, trade unions, different trade unions, members of different national associations of trade. All of those are dense networks of people who know each other, who’ve worked together, who understand their differences.
When one group in a place say like France, and the same is true in Italy or Norway, Germany, so forth, one group makes a decision that something is so outrageous it needs a demonstration, 500 phone calls are made in the next two hours and 10,000 show up because they’re being called by someone they’ve worked with 40 years…someone they trust, someone they know, someone they understand will be there with 10 other people. Those networks are invaluable. They’re the glue that holds together.
The fact that in the United States those political parties have been destroyed or reduced to tiny little groups, and the fact that our labor union movement is at the end of a 50 year period of continuous decline means that we don’t have those networks, and we don’t have those capacities. That’s why it has taken so much longer to mount these kind of demonstrations. That’s why it has taken longer for there to be an Occupy. So those are costly weaknesses of the American left.
But the flip side is we don’t have to inherit the hostilities of these groups to one another. We don’t have to inherit their compromises, their compromised leaders, a whole lot of baggage that comes with them.
So I think the weakness has already shown up here and that it took longer for us to react. Now the strength is going to show up, that without the baggage we’re gonna build those networks of relationships, those dense combinations of people who know and trust each other that’s already happening, happening very quickly. And I think therefore, we will show some strength in the rate of growth even though it took us longer to get going.
Lisa: So when you reflect on the growing strength of the movements around Occupy, the Occupy movements, can you talk a little about what the solutions are that people are putting forward? Because I think a lot of our listeners know about the economic system, they identify a lot of the same problems in the system as you do, but as an economist what do you think some of the incremental and long term solutions are?
Rick: Well, I think first, the Occupy movement is aware of a lot of the things I’m about to say. They’ve discussed them, they have what they call their working groups that have taken these projects on in different cities, localities and different ways. And there’s a lot of debate about a whole host of things, but I’m very heartened by the willingness of question capitalism as a system. That’s stunning more for the United States than anywhere else on earth. So I want to underscore all of that before saying what I think is the direction it has to go.
Anyway, here is my sense of what I hope will happen and what I know some of the Occupy folks are already doing since I work with them, and provide information and analysis for them.
The first is what you yourself just called or words to this effect, short term, immediate demands, solutions that could be made, and there are several of those.
The single most important one has to do with unemployment. I mean that is the number one economic problem in the United States, no matter how rarely politicians are willing to talk about it since fundamentally they have nothing to say about it, so they don’t want to talk about it. Usually it’s what’s forced on them, usually by popular polling or other mechanisms that make them understand it.
Anyway, the problem is the following: We have had between 9-10% basically unemployment. And if you do the proper numbers you use the U6 number that the Bureau of Labor Statistics uses, we’re talking 15-16% unemployment in the United States — people who have no job, people who have given up looking and people who have part time jobs, but involuntarily because they want a full time job. You’re talking 1 out of 6 Americans. That’s a disaster for our economy.
It’s also the case that these people are unemployed for longer periods of time than we have any record of in the history of this country. And the longer a person is unemployed, the more devastating the effects. You use up your savings, you become a burden on your friends, and family and relatives and neighbors. You lose your skills, you lose your contacts, so the social costs of unemployment, which are enormous anyway, are made even worse when they last a long time.
And this unemployment has been in the 8, 9, 10% range for three years now. Nothing has been done. The Bush program when he was president was to stimulate and incentivize the private sector to hire people. Obama has said exactly the same thing, he said it as a campaigner, he said it as president, and the fact is that for the last three years unemployment has remained at the same level despite incentives and despite subsidies given to the private sector, would’ve lead any person not in the pocket of big business to have realized that that program doesn’t work and that another one would be necessary.
But because both parties are in the pockets of the business community who has no interest in solving this problem, that is, no interest in solving it at its expense or to allow any infringement on their freedoms, we don’t have an adequate solution.
So the first thing Occupy should do is point that out as strongly as possible. Make people aware not only is this unemployment the devastating burden on not just the people who are employed, the examples of the ramifications are countless. Unemployed people cannot maintain payments on their home. If they can’t maintain payments on their home then their homes deteriorate; they can’t paint the house and eventually they can’t stay in that house.
If you live next door to a person who can’t maintain his/her house or stay in it, the value of your house goes down too. So the social costs of unemployment on all kinds of people beyond the unemployed and their immediate families is staggering. And it exceeds the cost, here comes the punch line, of almost any program that could be conceived.
What Occupy ought to do therefore, is say the last time we had unemployment this bad, lasting this long, the 1930s, the president went on the radio, Roosevelt, and he said if the private sector cannot or will not hire the people, then the federal government is gonna do it. Between 1934 and 1941 Roosevelt created and filled 12 million jobs.
Today’s population of the United States it would be double that, and therefore that would be a major, a major solution to the unemployment problem. It’s not a solution that comes from Russia, or China, or Cuba or any of the Bugaboo places that people would like to dismiss. It’s our own history that the current crop of republican and democratic leaders chooses to forget, never bring up, never provide therefore the faintest excuse why not to do today what was the necessary thing to do the last time we had a crisis of this sort.
And the first thing Occupy ought to do is demand that. But that’s only the first. If I have time for the second, good.
The second is to learn from the mistakes that were made. The reason Roosevelt had to provide public jobs was because he had a mass movement there. He had what Occupy is now trying to build — a powerful CIO that organized more workers in the 1930s than any union wave in America had ever organized before, or ever organized since. Millions of people joined unions.
You had a powerful set of socialist parties with large memberships and a powerful communist party with large membership. And lots of overlap between the socialist party, and the unions, and the communist party and the unions, so they could work together a dense network of people. And they forced that, Roosevelt, to change.
But notwithstanding that, they made a colossal mistake and Occupy has to learn — this is the most crucial thing to get across — they have to learn from the mistake. What was the mistake? You imposed on the business community and on the rich regulations and taxes. Regulations to try and prevent another great crisis, and taxes to pay for hiring those millions of people. Someone had to pay for those workers to build the national parks, and highways and if I’m not mistaken, the Golden Gate Bridge among other things.
So when you did that, when you went after the wealthy and the businesses to tax them to pay for this solution, and to regulate the system, you made their boards of directors and their shareholders the enemy of all of this because you were hurting their profits. You were taxing their wealth, you were regulating their ability to make money, and so what they did as soon as they were able, which was usually before the ink was dry on the bills that raised the taxes and imposed the regulations, they went to work to undo the new deal that had been imposed on them.
And the mistakes of the movements then was to leave then in a position to do it. To let them gather into their hands the profits of our society, the wealth we create year in and year out, the difference between the value of what we as workers produce and what we get as wages and salary. That profit they used to undo the regulations, to reduce the taxes in order to recreate for themselves the situation they were angry at having been deprived of.
The great reform movements of the 1930s never touched the capacity of the business community to hold onto the wealth and to use it to undo the new deal. So what Occupy has to learn now, one lesson — reproduce the movements of the ’30s that won the reforms.
Second lesson: Don’t stop at reform because if you do you will simply set in motion the undoing of whatever it is we achieve this time just as the movements of the ’30s set in motion the conditions that make us now have taxes 1/3 of what they were in the 1940s, regulations that have completely disappeared. For example, the Banking Act, the Glass-Steagall Act imposed on banks in the ’30s, was undone by the late 1990s, signed by President Clinton in 1999. Eight years later the banking system collapses again. It’s like a joke.
And so Occupy has to take the bite, take the courage. You cannot leave in place the classic capitalist enterprise controlled by the major shareholders and the boards of directors because they will do what they have done — take the money they keep drawing into their hands, use the wealth of this society to undo every reform, every tax imposed on them until we’re back again in an economic system making a lot of money for them and crisis for everybody else. That’s where we were in 1929.
Lisa: So I’m gonna push you to take it a little further. If the idea is to have taxation, regulation and somehow prevent them from rolling those things back, what’s the recipe for preventing this rollback? What are the elements of that?
Rick: Okay, here’s how we would do it: First, we have to face what we’re seeing. And I want to be clear — no shying away, no drawing back, we’re gonna change. We need to change the organization of production, the way enterprises are organized. No more you and I come to work 9-5 Monday through Friday, and then we go home at the end of the week and we leave behind everything we produced. What we poured our mental and physical capabilities into producing belongs instantaneously to someone else. That’s gotta stop.
It’s gotta be the mass of people who dispose of the wealth they create so it cannot be used to create a 1% – 99% dichotomy, cannot be used to undo the reforms we worked so hard to put into place to protect ourselves. So it’s very clear we have to change the organization of production.
Lisa: People would say, oh, my God, you’re pie in the sky. You’re talking about collective workplaces, you’re talking about total transformation. Help people to bridge where we are now and this wonderful, it’s an attractive vision, but I’m just playing devil’s advocate here and saying how do you get there.
Rick: Here’s the way you institutionalize it. We now have depending on how you count, 20-25 million people without work or without the kind of work that they want. That’s one fifth of our total labor force in this country, so we’re talking about a major jump.
What we need and what I would hope Occupy demands is a federal employment program, but radically different from what was in the 1930s. Here’s the demand — the government will provide the capital and the technical assistance for these 25 million people to go back to work in enterprises that they themselves control.
And let me give you an example of how practical this is. And the best way I know how to do that is to give you the name of a law in a country which does it. In Italy right now there’s a law, I believe it’s called the Marcona law, but it may be a slightly different name, named after the legislator who pushed it through.
It’s been on the books for at least 20 years and here’s what it does. If you are unemployed in Italy you have a choice. You can either get on the dole the way we do here in this country. You get so much money per week depending on the job you had before for so many weeks to see you through the unemployment time. Or, in Italy you get a choice. The government will give you three years worth of your weekly unemployment payments upfront in a lump on the following condition:
You must get, I believe it’s at least 8 or more other workers, unemployed, to make this same choice you do. Each of them will get the upfront money on condition that you begin and operate a collective enterprise on your own. And the stick if you like together with the carrot is this — if the enterprise goes belly up you don’t get any unemployment. This is your unemployment.
So you’re gonna see a dozen workers, two dozen, 100, 200 getting together working as hard as they can because this is their own future. This is their long term and short term. This is their solution.
It has worked very well in Italy and I think here in the United States it would work because here’s what would happen. We would have for the first time in America a real choice for workers, between the top down old style capitalist enterprise, and these millions of people forming the other kind of enterprise with government support and government money up front as an alternative to the old unemployment system.
We would allow people to be able to go into a store and buy a product that had on its label, not just the country from which it came and maybe not just even the Fair Trade it might’ve come through, but for the first time the labels will be required to say this business was made in a capitalist enterprise, this business was made in an enterprise where the workers are their own bosses.
And I’ve news for you — every poll of the American people taken in the last 50 years says that the American people would love to be able to buy goods that were produced by workers that were their own bosses, since the overwhelming majority of American workers want to be their own bosses.
Lisa: But when you say there’s popular support for this and polls show people want to be their own bosses, there is the element of class consciousness, of understanding that it’s actually a little bit more than running your own business. It is this structural issues you were talking about earlier as far as the capitalist system, because if they just recreate the same profit model then it’s kind of another way to the same end that you find problematic.
So I guess my question is maybe you can break down the barriers to class consciousness in the US, if you think that’s a precursor to this new types of formation, made in the USA by armies of unemployed, right? Maybe there is some historical or international examples you can give, how movements have helped to stimulate, and highlight and develop this way of thinking because there’s a mental shift that happens, not just the pragmatism of I need a job, ..or I’m getting money to go setup a collective.
There’s a little bit more shift of consciousness and I think some people have identified the need for class consciousness as sort of part of this recipe. So let me rephrase it as a shorter question.
Rick: I was expressing that people would support this.
Lisa: Right, so since you’re saying polls show that people want to be their own bosses, what are the other mental shifts that people need to do around their understanding of these systems and class consciousness. How do you see that fitting in?
Rick: The way I answer that when it comes up in my talks is to be as practical and concrete as I know how in my answers. And rather than articulate an abstract principle, to give a concrete example, and here’s how it would go. And this would come, for example, easily out of the Occupy 1% – 99%. I would explain that if workers ran their own enterprises, here’s what they would never do:
They would never give managers, even the top managers in their enterprise, on average, 350 times the average wage of the worker. That would never happen if workers made these decisions collectively. And that’s the single most important decision that shapes the gap between the 99% and the 1%.
So if you’re concerned about inequality of income in this country as the polls show the majority of Americans are, then here is a concrete way to finally do something about it by changing the organization of the enterprise, you put the decision makers as the mass of people and they would never articulate, they would never support, they would never continue a level of inequality anything like what we have in the United States today.
We even have examples in places like Mondragon in Spain where there are workers who make these decisions; the average rate is between 8 and 10 times is the gap between the highest paid worker at the top of a hierarchy and everybody else. And even that is disputed, but nothing remotely like we have in the United States.
So if you want a movement toward equality this kind of transformation of the enterprise is a concrete step and I don’t know of any other movement in this country that articulates any other way halfway as practical as this one to get what they even claim they want in the way of greater equality.
But there’s more: If workers made the decisions collectively they wouldn’t move the factories to China. I hate to be blunt about this, but the whole exodus of enterprise out of the United States would come to a massive grinding halt. Now, that would incur all kinds of costs and problems, of course it would, just like what we do now which is allow them to leave (costs us massively as a society). And we would have to work on that, but if that’s a concern, the loss of jobs and the loss therefore, of the bargaining power of the working people because there aren’t jobs and therefore, there’s not the need for them, then one way to handle this is to stop the movement of jobs because workers are not going to eradicate their own employment.
And finally, another example: An awful lot of people are concerned about the destruction of the environment, whether it’s the air, the water, etc. Well, we have a situation in which the single most important pollution in our society has to do with how we organize production, whether it’s what comes out of the smoke stack of a factory, whether it’s what comes out of, what cleanser is used to keep the toilets clean, whatever it is…
Well, the problem is in most cases that the decision what to produce, how to produce, where to produce is made by a board of directors, 10 or 15 people selected by major shareholders, another 10 or 15 people who sit often thousands of miles away, and who make the decision what you’re gonna use in your enterprise. All that’s gone if the workers themselves are making these decisions because they and their husbands, and their wives and their children and their neighbors are gonna have to breathe what goes on in that factory, live with consequences.
If you want to make a major move in the direction of a green United States, a greening of our disastrous interaction with nature, then put the people who have to live with the consequences in the decision making position.
I mean democracy calls for no less anyway, but here are three practical ways — drastically reduce the inequality of income and therefore wealth, drastically stop the destruction of our unions and our working people by the exodus of jobs, and drastically reorganize the production process in the interest of a better relationship with nature. All of those could be given quantum steps forward by this change.
And I think because people support a narrowing in equality. People support keeping jobs here, and people support an environmentally successful program, we can teach the American people that this transformation beyond capitalism is the way to move forward in those areas where their support is already assured.
Lisa: It strikes me that in those three areas you’ve outlined there’s a scale issue. And again, devil’s advocate, naysayers would say that kind of decentralized and small scale localized solutions and localized worker control production, it’s not possible in the US. So how do you respond to that?
Rick: Every system that has every existed in the human race in the way of producing goods and service, in other words, any economic system, has always had this kind of problem to solve. Let me remind you, nothing is more central to the history of the United States and its capitalist system, to its successes and its failures, to its bloodbaths as well as to its achievements, than the continuing struggle from the beginning to this moment between big business and small business.
Little businesses are bitterly complaining all the time that big business destroys their ability to function, imposes on them absurd costs. In every community in America over the last 30 years the great anxiety of every storekeeper is the arrival of the Walmart store which is gonna wipe them out, destroy all their relationships, take away from local people the ability to have credit when they need it because they know the locals…
You know the story because it’s part of our folklore of American history. So when people say to me gee, it’s gonna be a problem of how little companies get, that’s always a problem. And you’re absolutely right. When workers run their own enterprises, if the enterprise has got 50 people in it it’s in a different social situation from an enterprise that has 5,000 people in it. An enterprise that is only existing in one locale will have a different set of problems than an enterprise that has units in 10 locales, especially if they’re far way and have different sizes.
Those problems have to be worked out and they will be worked out. The difference is the relationship among the enterprises on the one hand, and between them and the public that buys the output on the other, will be mediated by democratically run enterprises who are gonna have to work this out in ways that are consistent with democracy because that’s what they are.
The reason we don’t have a democratic solution to those problems now is that the agent at the center who makes the decisions is the modern capitalist corporation which is a fundamentally undemocratic system since the majority of people who depend on the corporation, its employees number one, and its customers number two, are not the decision makers. The decision makers are a tiny group of people who own the shares and who sit on the board of directors.
And that means they make decisions about how big business and small business interact, the scale of decisions, the scale of business. They make those decisions in order to reproduce their capitalist system. We would make it in order to reproduce a democratically organized workplace and that would be all the difference in the world.
Lisa: Here’s a four word question: military and our economy?
Rick: We have long accumulated vested interests in the United States economy. All economies have that. We have, for example, the military industrial complex that President Eisenhower warned us about so many years ago. We have long built up interdependencies between those states, for example, where military production is concentrated, California, the American south and so on.
We have likewise interdependencies of all kinds with what we might call the medical-pharmaceutical complex which in its way is just as important as the military complex. Government is involved with private enterprise and so forth.
Absolutely, we have to take into account as any reasonable, rational person would have to, that if we want to move away from dependence on these vested interests, that has to be done carefully, cautiously. The jobs of people who depend on them through no fault of their own have to be protected.
To same the same thing in plain English, if you want to get out of a dependency you don’t think is healthy, you need a lot of help and a lot of professional planning to get that job done. It’s just like having a person who becomes dependent in an unhealthy way on a substance they need to disconnect from, on another person, another community or whatever.
And the irony is the only way to get out of a dependence on the military, or the only way to get out dependence on a pharmaceutical industry that basically extorts higher prices from Americans to pay for medicine that any other people in any other country on earth have to pay (and that is the case), would be through what used to be called socialist planning.
You have to get together and say okay, we’re now gonna use these factories for something else. We’re gonna redesign the equipment. We’re gonna retrain the labor force. We’re gonna pay people so they don’t suffer during this transition. It’s worth it to us because to have millions of people dependent, for example, on an industry that gleans America is a much better kind of dependency than having them focus on making profits for pharmaceutical companies or weapons of mass destruction, which we have now.
So if we want that, it is a technical problem and a political problem that we can solve, but there has to be the political muscle, the movement, the support to get it done. And we can’t let the demand of the companies involved for their private profit to stand in the way.
You know the irony is if you talk to leaders of those companies that are involved in military production or the pharmaceutical health complex they’ll tell you in private the following: If the government, because they know like we do that no one else is in a position to do this, if the government could guarantee to us ironclad that after the transition from what we have now to the future we would be in the same economic position of profit then we would be in favor; we don’t care, we’re not in business to produce this thing or that thing. We’re in business to make money. And if you can guarantee we can make money under a different regime we’ll do it.
I’ve had conversations with people, for example, in the military who say if you can guarantee to me that making vehicles that are collective transport, buses and vans, will be as profitable for this company as is currently making luxury automobiles for a tiny pop–, we’ll do it. We don’t care what we produce, we care how profitable. We get rid of things that are unprofitable and move to others, not because it’s moral or noble, but because it’s more profit. You create for us profitability.
And let me tell you something, let me use the automobile example. The only reason the car companies make cars is because it’s profitable. And the only reason, and I’m really only exaggerating very slightly here, the only reason it’s profitable to make cars is that the car company does not have to produce the road upon which the car moves.
If the car company had to sell you a car that included not only the cost of making the car, but making and maintaining the road on which the car runs, the cost of the car would put it out of reach for everybody and we’d have a public transportation because none other is produced.
Suppose the government said we’re ending the subsidy for cars, but we’re gonna give you a big subsidy for producing vans that will carry 20 people at a time, guess what, we’d have this thing that everybody claims we can’t have and we’d have it overnight. But there has to be the political will. But that’s what Occupy’s job is — to build that will.
Lisa: So you’ve just touched upon something I want you to go deeper on. What’s in it for the one percent? You talked about the dreams, the aspirations, the possible new structures that the 99 percent could promote. What in it for the one percent?
Rick: The job of Occupy is to split the one percent. To appeal to those within that who understand in the long run that this is what’s best for the people of this world, of whom they are a part.
You know, the one percent too in the end depend on the other 99. You can’t make money if you do not have people to buy what you sell. You keep squeezing the mass of your own workers under the deluded idea that the less I pay them the more that’s left for me, you will come against the following limit — that if you pay your workers less and less, they have less and less to spend on what you’re trying to sell them.
[phone call interruption]
Lisa: 51:36 Just so there’s an edit point, so Rick you’ve talked a lot about the aspirations, the possible solutions that would help solve things for the 99 percent. What’s in it for the one percent, what about them?
Rick: I think the issue is to understand that it is both possible and necessary to split the one percent. And let me do it this way: In the 1930s when the CIO, the socialists and the communists put all that pressure on Roosevelt that I spoke about earlier, Roosevelt used that pressure to go to the rich and to the corporations from whom he came given who he was and his family.
And he said to them you better give me the money to provide the jobs for the unemployed, to create the Social Security system, which he did; to create the unemployment insurance system of America, which he did…you better give me the money to do it because if you don’t it won’t be me that you’re dealing with, it will be the unions and the socialists and communists, and they’re gonna make a much worse deal for you than I will.
He split them. That’s the only was the New Deal got passed. He split the business community; half of them went with him and bought his argument, the other were implacable enemies of his and went to work to undo the New Deal and those are the republicans then and those are the republicans today who undo everything as fast as they can because they’re serving the angry part of the business community that were never won over.
But the point is Roosevelt split them. We can split them again. We have to split them and say look, come across and make a deal with us as far as you can because it’s in the interest of equity, it’s in the interest of democracy, it’s in the interest of the long term viability of the United States, it’s in the interest of avoiding civil conflict on a scale that is scary to contemplate. And for all those reasons here’s a deal that we can work out and live with.
I don’t know how successful that’ll be. It worked for Roosevelt, which is enough of a reason for it to be tried again, but it may not work and then we’ll have to struggle the 99 against the one percent, but even that is a kind of an open question.
No one thought in the years before the collapse of the Soviet Union that it would collapse. No one thought that Mr. Mubarak in Egypt would be hounded out of office. I’ll finish the point…no one thinks it can happen in the United States. It’s the same mistake. You build up the contradictions of a system long enough and they blow up in your face.
For 50 years, for the last half century in the United States we have debated as a nation our transportation system, our education system, our health system. All the basic institutions of this society have been criticized, and debated and changed, as should happen in a healthy society.
One institution could not be criticized, could not be subject to national debate, could not be changed — that’s called capitalism. It’s our economic system and it was taboo in this country. And you know what, if you have an institution central to your society that cannot be criticized, cannot be debated, we’re all politicians struggle with one another to be the bigger cheerleader for the system, what you have is a system that behind that wall of protection rots, breaks down, becomes dysfunctional because it’s never had its warts and its blemishes identified. There’s been no change.
All of the Occupy is doing is correcting a sad 50 year history by forcing us finally to put our economic system where it should’ve been — upfront, personal, as an object to be criticized and debated. And if, as some of us believe, and I’m one of them, that this is a system whose historical justification is now over, then it’s time to move on. The United States can do better than capitalism.
Lisa: And you were just talking about politicians and cheerleaders. My one last question is: please talk a little about elections in broad strokes. I don’t know when this is going to air, but Please speak about elections and the discourse about the economy during the elections—-whether that’s focus on taxes or what have you, but you just mentioned how the politicians are key cornerstones of propping up capitalism at least mentally as well as materially.
Rick: Politics in the United States long ago stopped being about a serious conversation about the basic system because this basic system, capitalism, is a taboo subject. All we have is cheerleading.
If you go to the website of President Obama before he won the election last time, on the economics page, the first homepage quotation from President Obama, then candidate Obama had to do with the wonders of the private enterprise system in bringing us peace and prosperity, etc.
As long as that’s the governing ethos for both parties what we have are Tweedledum and Tweedledee. Two different parties that are two different ways of celebrating capitalism. Look for example, occasionally Obama, who has been unable to tax the rich at all so far in his first term makes noises about not extending the Bush tax cuts to the top few percent, those earning over $250,000 a year.
What people don’t understand is if he wins his way, Mr. Obama, he will raise the level of taxes for the richest Americans from the current rate 35% to the pre-Bush tax cut rate of, ready, 39 percent. That’s not a significant contribution of the rich, especially when you remember that in the 1950s and ’60s, the same top rate of the richest Americans was 91 percent. You’re playing silly games. Neither party is prepared to do it.
That’s why you need a new political movement. That’s why Occupy is not within the republican party or within the democratic party. That’s a crucial distinction between the Occupy movement for example, and the Tea Party movement.
The Tea Party movement is well-located inside the republican party. It doesn’t want to go outside, it doesn’t need to. It wants to capture a republican party for which it believes it is already the major base. That’s a crucial difference, that Occupy knows that the political system here has been derelict in its duty, both parties, by being part of rather than a critic of the cheerleading for a system that doesn’t work, that’s produced the 99 and 1 percent, and therefore, needs a complete overhaul if it is ever again gonna play the role of being a force for equality and democracy.
Lisa: Lets get this last part on mic.
Rick: The problem with our capitalist system is this: that when in the United States you’re successful as American capitalism has been since the 1970s in keeping wages basically flat and allowing the mass of Americans only to continue consuming since the 1970s, by borrowing the money to pay for these things, which you can no longer do because the level of debt being carried by the American people is not serviceable. That is, they can’t carry the debt already, as an idiot could tell you, if you keep increasing the level of debt on a basically flat or stagnant wage base there comes a time when you can’t pay for it.
That time is called 2007. And that’s why we’re in the enduring crisis now because the mass of Americans cannot continue to buy the way they have and that is hurting the American economy.
Well, the answer then comes back, American corporations don’t care; what they can’t sell in the United States they will go and sell someplace else. Now, that is partly true and that is indeed happening. Every major American corporation, almost without exception, will tell you that the growth it foresees over the next 5-15 years is in markets overseas that the United States is what they call “a mature economy.”
And what that word often means, if hides dead or dying, or uninteresting, or over the hill or so forth. That’s a very bad prognosis for the United States. It means the corporations, having rung the profits out of America that the last 100 years committed them, are now moving on to other pastures leaving the United States a place where little investment will be undertaken, where the quality of the housing stock, and the transportation and the infrastructure will be allowed to deteriorate, which you can see everywhere going on anyway. That’s a very bad thing.
But in the long run it doesn’t work because the same problem is reproduced elsewhere in the world. One of the things holding back the rest of the world from picking up what Americans can no longer buy is that the wages paid, for example, to the workers in China and India are so abysmally low that they are growing areas, but they cannot grow and will not in the foreseeable future on a scale to compensate for what was the world’s number one consuming market, the United States, which can’t play that role anymore. And that’s part of the reasons we have an enduring crisis.
I’ll give you one concrete example: economists estimate that the capacity to produce automobiles in the world is two to three times what can be afforded by the people of the world to buy cars…the Chinese, the Indians are building car producing factories while the ones we have here are sitting in Detroit and elsewhere dying, vacant, weeds growing in the parking lot.
Capitalism has overproduced the capacity for making cars now on a global scale, replicating what it did before on a national scale. That is a system that isn’t working very well. The world doesn’t need empty, unutilizable car factories that were expensive to build and should never have been built.
Lisa: Or the world may not need more cars, some people would say, so then it’s about reexamining…
Rick: Then if you add that dimension that the car itself is in question, then the overcapacity is even greater because we shouldn’t be doing that. We should be producing collective transportation mechanisms, etc.
Lisa: I know you go back and forth to France. You have family there, etc. There’s the example of Germany that is not behaving the way that economists would model it to be. I mean that’s the fun thing about economies is that people don’t always behave the way they think they will. A little bit more about Europe because I think sometimes in the US, and you speak a lot about the US economy, but I think you’ve got something to offer us about cars or anything else when it comes to some of the European economies.
Rick: Well, the Europeans are an amazing story to tell. It’s almost as though the Europeans haven’t learned the lessons of their own history, and it’s kind of sad and frightening to watch. Let me give you an example:
After much struggle over the last century, the Europeans understood that having slaughtered one another on a scale the world had never seen before in two consecutive world wars, WWI and WWII. And having seen that those wars were fought by intense nationalisms in which Germans slaughtered French, and the British slaughtered the Germans, and so on and so on, they decided to try and build a unity, a unified Europe.
And which now has to its credit a common European community and for a subset of those countries, a common currency called the euro. Those are steps towards a United States of Europe in a sense comparable to a United States of America.
They had to have understood that simply creating a unified geographic area, and even creating a unified currency, they still had to deal with the differences between the different parts of Europe in terms of their politics, but even more important, in terms of their economics.
What brought Europe to world war were economic conflicts. They now admit that. Whether they were around Colonialsim and Imperialism before WWI, or whether they were around the struggle against the Soviet Union, which had a lot to do with WWII, and also colonial struggles in those days.
The bottom line is you’re not gonna survive, you’re not gonna achieve your goal of avoiding slaughtering one another if you do not take the time to create the equality, roughly, and the democracy, without which people do not live in peace with one another.
It’s a sense being learned as a lesson here in the United States too. That’s why the issue of one percent versus 99 has come to the floor. Europe has the same issue, not only between rich and poor, but even more dangerously between developed, relatively well-off economies and those that aren’t.
In order to make European unity succeed therefore, the richest countries, those in the north of Europe (France and Germany), and the low countries, to be blunt, and those in the east and south of Europe (Spain, Portugal, Italy, Greece and Poland on down to Romania and Bulgaria), there had to be some equilibration here. You had to do a little extra for the poor ones so that they were raised, and that might have to cost a little bit, the rich ones, in the interest of unity.
It’s a little bit like in the United States. We require more taxes to be paid by the richer states than t hey get back in government money, and we deliver more money to the poorer states compared to what they pay in taxes — something that their politicians conveniently forget when they beat up on the federal government, the Mississippi politicians being the grossest example practically on the planet of this sort of behavior, republicans all over, but the democrats did the same before.
So anyway, in Europe you failed to do that. In the 10 years roughly since the euro became the common currency, a little more than 10 years, you’ve had two countries, Germany and France, do relatively well. Germany, by the way, much better than France. And a whole bunch of countries do disastrously in the South. And now you are punishing the ones who didn’t get the help they needed for being poor and having borrowed money which the rich countries lent them. And you’re getting this crazy conversation in Europe in which Germans refuse to help the Greeks, telling the Greeks they’re lazy and don’t work hard, whereas we Germans…this smells, tastes and sounds like what we used to call fascism or naziism.
It has terrible reverberations in the south of Europe. It makes Greeks and Italians hostile to the Germans in a way where you have to scratch your head to believe what’s going on there. And what does it all come from? Here’s the answer, and it’s the same situation in the United States…
In Europe you have allowed a capitalism to develop that polarizes rich and poor, within countries and across countries. This has now gone to a point where it’s intolerable, where you are undermining the living conditions of a mass of people who can sit and look down the street at the other extreme, the one percent, who are living the life of Riley, imagining that this situation is not all going to collapse around them.
This is the sign of decadence. It’s the sign of empires toward the end, the twilight of their existence. This is the time in Europe and the United States to which historians will look back as they do to the last years of every empire wondering how in the world the people couldn’t see the handwriting on the wall. You cannot have rich people and poor people living together in this way with the rich becoming richer and the poor becoming ever more desperate.
The only way to keep the lid on that situation is with a level of repression that makes life unbearable in the end for everybody. And that’s when these systems collapse. Then what’s left of those of us who see it is to say my God, before it all hits the fan can’t we reasonably sit down, not just those of us at the short end of the stick, but even those who think they’re living the life of Riley, and to discover it’s in your interest too to bring this system to a peaceful conclusion and setup a different one that works better.
You know, in the days of slavery the slave masters were very rich right until the end, and the slaves were in deep trouble. But eventually those communities, sometimes in bloody ways, sometimes not, were able to realize that system had to go. No more masters, no more slaves.
Likewise, in capitalism, eventually, no more serfs, no more lords. We are at a point in our history where we have to ask at least the question, is the difference between the employer class and the employee class about done? It’s not working well, there’s not a rising tide, it’s not lifting all the boats, time to move on.
We can thank capitalism for what it contributed — a rate of technical advance that is remarkable in human history, a whole set of progressive steps for a while. But the negatives, the costs have caught up. America can do better than capitalism.