In this week’s episode of Economic Update, Professor Wolff discusses how US foreign aid serves the interests of corporations and their profits. We highlight how San Juan County in Washington state handled its fiscal crisis by cutting its employees' work week to 32 hours. We update you on workers of Wells Fargo Bank who are currently conducting a unionization drive, which could lead to other US banks doing the same. We provide a quick analysis of the history of settler colonialism in New Zealand and how this practice informs and influences the Israel and Palestinian crisis. Lastly, we interview Professors Michael Hillard and Richard McIntyre for a Marxian analysis of the exceptional nature of the US capitalist class and the US election.
Economic Update
Economic Update: The US Capitalist Class and the Election
Support from the production of Economic Update comes in part from Democracy at Work. A non-profit 501(c)(3) organization and publisher of books by Richard Wolff, who is a professor of economics emeritus at UMass Amherst and a visiting professor at the New School University, has authored numerous books on the subject of social economics, including Greek thinking Marxism, Understanding Capitalism, and Democracy at Work, a cure for capitalism. Further information is available at democracy@work.info and rdwolf.com. Welcome friends to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host, Richard Wolff. As usual, I want to begin by inviting you to contact Charles, Charlie, we call him our volunteer, who takes your suggestions and ideas and thoughts about future programming and shares them with our team, and we're grateful for your taking the time and energy to do that. You can reach Charlie@charlie.info438@gmail.com. charlie.info438@gmail.com. Today we're going to be talking about foreign aid, about a remarkable county in the state of Washington, about unionizing efforts at banks in the United States, big ones, like Wells Fargo, and finally about something going on far away in New Zealand that is quite similar to things happening close at hand and reveals something about them. So let's jump right in. Here is something that you may already have figured out on your own, but then again, it's interesting when researchers at Harvard and places like that come up with a report that shows us that our thoughts about that were right on target. These researchers studied foreign aid, the money that the United States distributes around the world to different countries. And it asks the questions, was that foreign aid promoted and prompted by wanting to help needy countries, which is what the proponents of foreign aid usually say and claim? Or was it really more about helping the United States in certain key economic areas, even when the money went to people who weren't needy relative to those who were and who weren't wealthy relative to those who were? And what the researchers discovered is, yep, the money went to where it was profitable to go. And here's what it suggests. When resources of importance, lithium, oil, metals, especially rare metals, when these things are found somewhere, somehow in a mechanism no one quite follows, foreign aid is given to that country too. In other words, foreign aid is part of neo-colonialism. It's a way for the United States to shape and control countries that a century ago were made into colonies literally under the control of a Britain or a France or a United States and into informal colonies held to be loyal by the foreign aid without which they might not have been able to survive. Wow. Americans have often wondered about foreign aid. And what it really is is it pays for corporations in this country to have a privileged access to those resources in third world countries because their governments need the foreign aid and they've learned it comes with strings attached just as you may have suspected. My second economic update has to do with San Juan County. It's a county composed particularly of islands right off the coast of the state of Washington in the United States. Why am I directing our attention there? Because they just celebrated the one year anniversary of something extraordinary they did with the 200 employees of that county, you know, the police and the fire and the clerks and all the others that a county in the United States employs. They went from a 40 hour week to a 32 hour week. And now it's one year later. And what they decided was it was a roaring success. And that's why I'm bringing it up. The people who run the county sat down with a union that represents 70% of the 200 workers there. It's local 1149 of the American Federation of State County and Municipal Employees, one of the major public employee unions in the United States. And here's what they discovered when everybody went on a four day a week rather than a five day a week schedule. Here's a list. They had a rise in applications of people who want that job. They had a fall in the number of people who quit that job. They had a fall in the number of people who took sick days. And they had an improvement in the productivity and the declarations of satisfaction given in by the workers. In other words, significant savings. You don't have to retrain people. You don't have to find substitutes on sick days, etc, etc. And you know what? They love it there because it meant that they didn't have to raise taxes on the people there the way they might have because they got such savings. The workers got time off. They worked out a division of how to pay for this between the employees, getting fewer hours and not suffering what it might otherwise have meant in reduced hours that were paid. And the county saved all that money on all those listed items that improved. And for me, it's even more interesting that a better way to run the fiscal affairs of our counties is not to have the politicians decide because they don't have the courage to tax corporations and the rich and we know it. They tend if they tax anyone to tax the rest of the people who therefore pay more than their fair share. It's a scandal that exists everywhere. And so here we see the county officials working with the union and coming up with a better solution for all those concerned. How interesting. Maybe working with the union is a better way to solve locals problems than to have the people who are elected doing it in ways that we can see are not representative at all. Next, I want to give a shout out to workers at the Wells Fargo Bank, particularly in the conduct management intake department. They are running a union drive in that department of the bank. And it also joins union efforts at 20 other branches right now of the Wells Fargo Bank. They're trying to organize a union. And why is that important? Well, because according to the US Labor Department, only 1.2% of workers in the banking and finance industry are unionized. 1.2% 98.8% are without a union. That's the way it was. That's not the way it is now. Workers branch by branch are mobilizing to organize unions. They're using the model that the Starbucks workers and the Amazon workers have been using to mobilize and win unions now having won at hundreds of Starbucks locations. They're working to do the same at bank branches all over the United States. Yeah, it's taken a long time. But the labor militancy we have seen in the last three years is alive and kicking and will not be slowed down by these elections or by anything else now on the horizon. The last item I have is a little unusual relative to what I normally offer you. It is a kind of shout out I want to make to New Zealand. And what is it about New Zealand that caught my attention? New Zealand is a country colonized by the British. The British decided to send British citizens to settle in New Zealand. They made that decision as if there weren't people already in New Zealand who might not want to have British settlers come there. Well, the British didn't care and put them there anywhere. And that was a bad event for the local indigenous people known as the Maori in that part of the world, the Maori. To this day, the Maori constitute roughly now 20% of the population, not a small part, a big part, one fifth. Well, recently in the legislature there that has, of course, been dominated by the settler colonialism British established there by the white settlers there. The Maori are browner as happened so often. Well, in the legislature, they wanted to change the arrangement, the treaties that were signed by the British and the leaders of the Maori at various points during the colonization of that part of the world. The legislature dominated by the white settlers has its own ideas of how to change the arrangement and to guess to whose advantage to theirs. And the Maori representatives in the parliament and publicly are saying, no, you cannot unilaterally one side change an agreement. Both sides have to agree or it can't be changed. And they're making it clear that the 20% of the population who are Maori don't agree and don't want the changes proposed by the white British settlers. And it's a standoff now. Something has to happen in the way of negotiations between the settler community and the Maori indigenous people who have loudly proclaimed the discrimination they've suffered, the poverty they've suffered, the lack of public services they've suffered, you know, the usual story. And I don't want to deny for a minute that I want to draw your attention to the difference between how that is being handled and how we see a very similar story handled in Gaza. Israel is the creation of the British government giving a part of its colonial territories in the Middle East to a bunch of white settlers, in this case, Zionists, linked together by a particular religious ideology. And the local people there, called Palestinians, the analog to the Maori in New Zealand, have been protesting and fighting ever since the colonial settlement began. The reaction of the white settlers in Israel is now well known, a program of extermination and expulsion directed to the minority there. How different from how it could be handled is shown by what New Zealand is doing. No bombs are falling, no children being decimated for a year and counting. We've come to the end of the first half of today's program. Please stay with us. We have an extraordinary interview with two professors doing a Marxian analysis of US capitalism with a book coming out early next year. I think you'll find it extraordinarily worthwhile. Thank you. Welcome back, friends, to the second half of today's economic update. I am very glad to bring back to our cameras and our microphones. Two of my friends and longtime associates, Rick MacIntyre, who's been on the program before, as some of you will remember. Michael Hillard is Professor of Economics Emeritus at the University of Southern Maine. He has published widely in the fields of US labor relations, labor and working class history, and the political economy of labor and capitalism. He is currently collaborating with Dr. Richard MacIntyre, our second guest, the University of Rhode Island, on a book entitled Burning Down Your House, Confronting America's Exceptional Capitalist Class. And also with us today is colleague Richard MacIntyre. He's a Professor of Economics and International Studies at the University of Rhode Island. He's author of Our Worker Rights, Human Rights, and co-authored co-editor of Knowledge, Class and Economics, Marxism Without Guarantees. He edits the new political economy book series with Routledge Press out of the United Kingdom. Okay, thank you both, first of all, for joining me and giving me some of your time. I want to jump right in. You are writing a book. It's a book on Marxist class theory and its application to the United States. So let me jump right in and ask you, what does your approach tell us about the election we have just endured? And let me start with you, Michael. What's your view? Thank you. Well, just first off, I just want to say what we're writing a book about is that most Americans don't really identify our capitalist class as a source of the real social problems that we face. And we argue that we have an exceptional caps class that is to say exceptionally mean, powerful, and distinct from the capitalist classes and other major nations. So we explore that. We explore how the capitalist classes change from recent decades in ways that are salient to working people. And the problems they face, and then we use this to set up a vision of future socialist strategies. To speak to the election, when people on the right succeed in politics, they use an old social Darwinian playbook to say that there is a class system. And the class system is do-gooders who tax hardworking middle class people and give it to a bunch of bums somewhere. And that if you just allied with the protectors of the American way, which is the rich elites, workers would do better off, but all kind of BS. So Trump's messaging was all over that, that the government, those liberals are taxing your money, giving it to illegal immigrants, especially asylum seekers, prisoners getting gender transition treatments, college students getting their student debt cancel, giving money to your crane. So Trump is saying, look, you're being exploited and I will stop you from being exploited, which sounds vaguely Marxian. So our argument is that the problem that I think Americans face now today is that they don't see the social system clearly that's exploiting them. Marx had this notion of commodity fetishism that people see the abundance around them, especially when they go to the store or go online to buy things, but they don't see the social system kindness. So what we want to do is reveal that in our book and to tell a very particular story that historians have been telling for a long time, which is just how people hear that phrase American exceptionalism all the time and they think it's about how America is greater than any other country. Actually we're worse off, and Rick will say a bit more about that in a second, and it has everything to do with this powerful force, which is a capitalist class that is on a scale, just bigger, more powerful than other capitalist classes, and more reactionary, and more powerful as a result. Well, let me jump to you, Rick, and ask you building on what Michael just said. What is it that the Democrats in your judgment in this same election we just had? What is it they could have done, shouldn't shouldn't have done, didn't do, that might explain why they suffered the defeat that they did? Well, and you know this, Rick, and your your your viewers know this also. There's a general sense amongst working and middle-class voters that the country is somehow headed in the wrong direction. This is amorphous, comes from many sources, trade deals at hollowed-out manufacturing, immigration that's changing the ethnic makeup of the country, COVID-related inflation. Trump provided an angry response to that, which many people know is wrong, but they like the anger. The Democrats provided nothing. Blue collar private sector workers earned more on average in 1972 than they do today, adjusted for inflation. Democrats lack a language to discuss their victories and to discuss our problems. They were reluctant to appear as social Democrats. They're scared of that word social. The Infrastructure Bill, the Inflation Reduction Act, Biden support for unions, the social welfare state built in response to COVID were all underplayed by the Harris campaign. The vision that the Harris campaign put forward was basically Republicanism without Trump. Trump emphasized that the U.S. has serious problems, even if the ones he harps on are largely fictional. We argue that the U.S. suffers from capitalism. We are a highly unequal, unhealthy, heavily armed, murderous, prison-building society, in which the state is expanding to deal with some of those problems, not contracting public voice and influence over the society is very weak. And many people believe they live in the greatest country in the world. Who was willing to talk about this? Well, no one, but it is what we are going to talk about. And what we mean by burning down your house is that the capitalist class, the organized capitalist class, is literally making it almost impossible for people to find good work, to house their families, to live meaningful lives. They're the last people that get blamed and they should be the first. All right. Back to you, Michael. Tell me what exactly you mean by the exceptional quality of the U.S. capitalist class. I want to tease that out a bit more. You mentioned it, Rick did also, but give us sort of the core idea of what makes it exceptional. So you were saying at the beginning correctly that we are doing a Marxian class analysis of the United States. But really what we're doing is a class history, kind of going back to, say, the 1870s. And from that period to now, what emerged in the United States was a capitalist class that was much bigger, right? We had large scale corporations with over 100,000 employees over a century ago that you don't see in other countries. This caps class was extremely reactionary and basically was able to suppress any efforts by the working class to try and prove life for itself for some 70 years until the Great Depression. There were some class victories for the working class in 30s and 50s, another round for another part of the working class in the 60s. But during that period where things were getting better, where we got the weekend, where we got middle-class wages, housing and things like that, at least for white people, the American capitalist class was doing something that was not happening in Europe, which was scheming to dislodge those class victories. And because it had immense resources to do so, was able to build a political and ideological movement that led to what a lot of people on the left call neoliberalism 40 years later. And overall, if you just look at similar countries in Europe, their capital was weakened by the experience of World War II, the American capitalist class was strengthened by it. And so we bring up till today, what you see then is that where working classes were able to make more permanent class breakthroughs on their behalf through struggle and left-wing politics in other countries. Here, we faced a much more powerful and marauding entity that dominates working class life in the workplace and dominates American politics. And then the other piece of this, which I think Rick is going to dig into a little bit, is that we've had different versions of big capital. We used to have an industrial version. Now, we have one based more on finance and merchant capital. But each evolution and increment of that has maintained that sort of sense of dominance and power. So much so that a lot of the problems we have now have to do with that history that people aren't so familiar with. And obviously, they're not necessarily seeing the forces that are affecting them negatively now. Rick, here comes the big question. What does all this tell us is the next step? Where do we go from here? Given this election, given the exceptional capitalist class that you have discussed and you work out in detail in your book, I want to ask you the kind of question that other programs rarely ask the people they interview. What would be in your mind knowing that different people understand the term socialism in very different ways? But how do you see a way forward for a working class that is now trapped, we might say, within this exceptional capitalism suffering in the way that they are and about to probably more so? Where do we go from here? How do you see a way forward? Well, I think we need to recognize that the capitalist class we have now is quite different from what we had 50 years ago. It's nominated by finance and merchant capitalists. There's also the tech capitalist, but we don't have time to get into them today. But finance and merchant capital, as Mark pointed out in Capital Volume 3, they see profits without production. They think that they make money by just sitting around and waiting for checks to come in. So there's a lack of recognition of the importance of production. And that's why I think the things that you have emphasized and others have emphasized in terms of changing the way the enterprise is organized. And this is a long game. This is not going to change things by 2028. But maybe by 2055, we will have a large sector of work around and worker managed and worker directed enterprises. So we can change the distribution of income, not by trying to capture the state, although that has to be part of the strategy also, but by capturing the corporation and the enterprise. And this is growing, as you know, and even some of the trade unions are now beginning to see that they need to get involved in this game also. My daughter is an owner worker in a co-op in Vermont. We've been studying the Jackson, Mississippi example. We just had a Christian Davenport speaker come to my university to talk about that. And so you have to play a long game while you're also playing the short game of trying to educate people as to how the system actually works and that their problems are not new to people who are coming over the border because the United States has destroyed their societies. And so they're going to come here. That's not the issue. The issue is the overwhelming dominance of the capitalist class, not just in the economy, but inside people's heads. That's what we need to work on. Michael, do you have anything to add in the little time we have left? Yes. Just don't want us to skip over at the end, how much Rick and I do in this book, to explain how capitalism is really working right now. And I'll just pick the example of finance. In industry after industry, Wall Street entities take over employers and squeeze a hell lot of workers and generate tens of billions of dollars in things like dividends and stock buybacks, $150 billion in five years in the railroad industry leading up to that recent almost strike on the backs of workers. And so whether it's as a renter, where private equity companies buy up your workplace or a nursing occupation person who's in a hospital, you're being squeezed by Wall Street. And most people don't see what that is and therefore have a hard time placing where there's suffering coming from. So we do a lot in our book to just teach people basic economics of capitalism in what we face right now. Very good gentlemen, thank you so very much again for your time. And let me urge all of our readers and viewers, get a hold of this book when it comes out. It is a study in how creative Marxist thinkers understand the capitalist crisis we're going through and offer towards the end ways forward for all of us. And as usual, I look forward to speaking with you again next week. Support from the production of economic update comes in part from Democracy at Work, a nonprofit 501(c)(3) organization and publisher of books by Richard Wolff, who is a professor of economics emeritus at UMass Amherst and a visiting professor at the New School University, has authored numerous books on the subject of social economics, including rethinking Marxism, understanding capitalism, and democracy at work, a cure for capitalism. Further information is available at democracy@work.info and rdwolf.com.