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Nationalism and protectionism in the US will hardly succeed, according to Wolff. It will only worsen the crisis of the world economy. There are parallels to the history of Germany in the 1930s. Trumps policies could lead from a trade war to a military war. Ironically, the left has opportunities in this situation if it is able to come up with a convincing concept for a new economic order. The flaws of socialism in the 20th century ought to be considered. Worker co-ops would play a major role in such a new, democratic system, overcoming the distinction between employers and employees. As everybody is dependent on financial relations like cash, bank accounts and debt, a private, for-profit financial system is “irrational” and “crazy”. Banks and insurance companies should be controlled by both the employees and the public.


Richard D. Wolff, Prof. em. for Economics at the University of Massachusetts, Amherst. His latest book is: "Capitalism's Crisis Deepens: Essays on the Global Economic Meltdown".


Fabian Scheidler: What are the options for the future? Can we return to a golden age, some people refer to the postwar period of Keynesianism in the West or in the East as a golden era of regulated capitalism, can we return to such a state or do we need a systemic alternative? And if so, how could it look like? You refer to socialism, for example, but what can it mean in the 21st century, given all of the historic experience and disasters of the 20th century?

Richard Wolff: Well, a few minutes ago I said I wouldn’t predict and now I’m going to make a little prediction. I have not been a person who thinks that capitalism is collapsing. I haven’t been part of that, because I don’t believe in this sort of prediction business. But I will tell you that I don’t see a way out. I don’t see a return to capitalism concentrated in its old centers. I believe Mr. Trump, who has a desire to do that here in the United States, will not succeed in this process. He has too many enemies, which include the business community, which is not going to let him do that, I would guess. Or to put it another way: If he succeeds, the destabilization of Europe and Japan will be staggering. If he succeeds, it will be at the expense of the rest of the world. And in that way it has parallels with German history in the 1930s and 40s also. You cannot solve these problems inside, it has effects everywhere else and it mobilizes the whole world against you. And that’s the same risk that the United States faces and it hasn’t learned anything from German history at all, doesn’t even know what that history is. I am closer to believing than ever in my life that the system has now produced a network of problems that it cannot solve, or at least that I don’t see solutions emerging that can begin to manage this level of difficulty. If again to use our example in America: If Trump succeeds to for example threaten the export economies of India, China, and Brazil, we will be in a situation which in the past in human history has gone from a trade war to a military war, and then all calculations make no difference anyway. So in that sense I guess I am pessimistic. On the other hand, I do think there is emerging a new direction for those of us who think that the solution is not this or that law or regulation or international agreement, but that we are at a point of systemic crisis and that therefore the only rational solution is to think about what alternative system could be established that would have a different set of problems that are more manageable than the problems of capitalism, which I don’t think are manageable. And here the Left, of which I’m a part, has to be able to be not only critical of capitalism and its dead end, but also of the socialist history out of which we come. And here I would say as simply as I can: The socialism that comes out of the 19th century and that dominated in the 20th century was in its way very successful, but insufficiently profound. That is, it was a socialism that said, the problem with capitalism is private ownership of the means of production and markets, so that what we will have is a new system with public ownership of the means of production and government planning. Public ownership and planning versus private ownership and markets. What that ignored was the organization of the workplace, where each of us goes five or six days of the week from 8 in the morning to 5 in the afternoon. That’s where we spend most of our adult lives, at work. If you do not transform the workplace, your efforts to transform the rest of society won’t work, because they will be held back, they will be undone by the unchanged nature of the workplace. And to be simple about it, I don’t think in the Soviet Union and I don’t think in the People’s Republic of China you made that transformation. What would that transformation be? But before I tell you, the answer, which I’ll give you in a minute, is the new direction, is the new system, which I think is where we’re going and which can, perhaps, solve our problem. The answer is, you have to revolutionize the workplace, because it wasn’t done before. Whatever you think about government ownership or state enterprises or planning has to be rethought in terms of what it would look like if it were built on the basis of a radically transformed work organization. So here’s what it would look like. And here in the United States we use the term because it’s more comfortable in people’s minds, of worker coop. And what it simply means is, every workplace changes. The decisions of the workplace are now to be made democratically. One worker, one vote. And in each enterprise, in a factory, in a store, in an office, the workers collectively decide what to produce, how to produce, where to produce, and what to do with the profits. This is the democratization of the workplace. It is a radical change in how all workplaces will be organized. It gives every worker the role not only of employee, but also of employer. It destroys the foundation of capitalism, which divides people into a small number of employers and a huge number of employees. It is the end of capitalism in the same way that liberating the slave was the end of the slave economy, of liberating the serf was the end of the feudal economy. Liberating the employee, in this case by transforming him or her into an employer at the same time, is the end of capitalism and will produce another system. And I think if we bring that to the mass of people suffering under capitalism, they will see this as a revolution that is about them. It’s not about giving some distant government all kinds of authority. It’s about transforming their own lives and making the government dependent, for the first time, on a system of democratic control at the base, so that they can have some hope of making it work in their interest rather than the interest of the employer. So for me, I would summarize by saying, socialism in the 21st century will be more focused at the micro-level of the enterprise than at the macro-level of ownership and planning, and that that’s a necessary rebalancing of the micro and the macro, and therefore corrects what was the limitation of socialism in the 19th and 20th century.

Fabian Scheidler: Which role could financial institutions play in such a change? I mean, we will have probably another banking crisis. In Italy it’s already beginning. What should people do and what should people demand in order to have a different financial system that works for such a change, call it socialism or call it whatever, that works for the people? Financial institutions and a money system that works for the people and not for the few. How could such a system look like and how could it be brought about? For example in the situation of a new financial crisis.

Richard Wolff: Well, I think that my first answer would be to remind everybody that in Western capitalist societies, almost all of them have developed by allowing private capitalist enterprises to dominate the financial landscape. That is private banks, private insurance companies, private all of that. And the minute you do that you are subordinating the monetary system, the financial system, to the profit motive, to the profit imperative that governs all capitalist enterprises, and that is a fundamentally irrational step, because what you’re doing is you have a society every one of whom are dependent on financial relationships: debts, cash, bank accounts, savings, all of the things that make up the financial system we all depend on every day. To allow something we all depend on to be managed by people who have a different objective – They are not representatives of all of us, they are people trying to make money out of manipulating. This is a system that was crazy from the first step. So for me, it would be an argument for the mass of people to say, banking and insurance are much too important social activities to be left in private hands. The banks, the insurance companies, these should be governmental functions, but with “governmental” meaning that it has two decision makers: the collective of people who work in that activity, in that bank, in that insurance office, and the public they are to serve. And each of these two has to have a structured relationship to share the responsibility and the power to decide what happens. But no private profit motive, no subgroup of investors who have the right to manipulate all of this to make money – That’s out. It is democratically selected representatives of the workers in the institution and the public served by the institution that should codetermine how the system works. And I know from the United States that there’s already a majority of Americans who support this.