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“If you make a tiny group of people, say five percent, very very wealthy, and you plunge the mass of people into a declining, frightening situation, you will have a political explosion.” The shift of employment to low-wage countries and the dismantling of the New Deal and the welfare state have created a structural crisis of capitalism and, at the same time, a political crisis. The working class is “agitated and worried”. “The rich, knowing that the mass of people are angry, have decided to manage the situation by buying the political system, by literally taking it away from any democratic foundation.” The anger of the working class has contributed decisively to the shift to the right in Germany, the ascent of the Front National in France, the election of Donald Trump, and Brexit.


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: More and more social scientists are speaking of the structural crisis of capitalism and some even about its possible end in the near future. What is your take on this? Is there a structural or even terminal crisis of capitalism, and if so, why?

Richard Wolff: I am never one to be very interested in predictions, so the truth of it is that I don’t know whether capitalism is at its end and I don’t think anybody else does, either. Usually the ending is something we become very clear about years after it happens. So I don’t know about the end of capitalism. But I will say that this is the worst condition of global capitalism in my lifetime, and I’ve been here a long time. And I will tell you a story. Because I went to the elite universities of the United States I know many of the leading economists in the United States. Right-wing, left-wing, and in the middle. And we get together sometimes for coffee or to talk. And we do not agree on how the United States got into this current situation and we do not agree on what to do about it. But the interesting thing is, we agree on the following sentence: This is the worst condition of capitalism in our lifetimes. And I think that’s a very significant comment. Well, what are the conditions that people point to? I think there are three. One is the explosive importance of the end of the Soviet Union, of the changes in the People’s Republic of China, and in this following way: that it opened to Western capitalism, the capitalism of Western Europe, North America, and Japan, an immense new working class. An immense new hundreds of millions of people able and willing and eager to work as employees of capitalist companies. In a simple way it changed the balance between the employer class, concentrated industrial power, in Western Europe, North America, and Japan on the one hand, and an increased mass of well-trained, low-paid workers. And all that we have seen, at least in the last half-century, has been the working out of this radical different situation as the capitalists have made an enormous amount of money, basically by figuring out how to take advantage of this enormous new mass of poor, but capable workers. Some capitalists did it by bringing in immigrants – low-wage, desperate immigrants – to their own countries. Other capitalists did in the reverse way: Move their production out of the old centers of capitalism into China, India, Brazil, etc. And this is a major change. And the reason it plunges capitalism into a structural crisis is that while it makes a very small number of people very, very wealthy, because basically they’re substituting low-wage workers for higher-wage workers, it also presents itself as a fundamental crisis for the mass of the working class in Western Europe, North America, and Japan, because they are being told, “You are going down to the level that the Third World was, because we’re moving production into the hands of these Third World workers.” This has not been planned; this has not been explained to the mass of workers, so they are constantly confronted by a deterioration of the social welfare system, social democracy in Europe, of the old New Deal arrangements in the United States that came out of the 1930s, and so you’ll have a working class very much more agitated, very anxious, very worried. And I think you see that in the movement to the right, politically, in Germany, the support for Le Pen in France, the anger of the French working class against the socialist party because it hasn’t helped them, the vote for Mr. Trump here in the United States, the vote for Bernie Sanders – for the first time in fifty years an American politician can take the name socialist and millions of people vote for him. All of these are signs of the failure of the system to manage the transition to extraordinary wealth of the top 5%. The second cultural, structural problem is: no way to handle the political impact. In other words, if you make a tiny group of people, relatively speaking, 5% or whatever the number is, very, very wealthy, and you plunge the mass of people into a declining, frightening situation, you are going to have a political explosion. You have to manage that or else it will defeat you. This is the same problem as going back into the 19th century, when you made the transition from agrarian feudalism into industrial capitalism, you’re going to destroy many institutions, you’re going to create all kinds of upheaval, and capitalism was almost overthrown, whether you look at the revolutions of 1848 or 1870, or the Paris Commune, or the revolutions after World War I. This was a mass of workers disturbed by what was going on, who almost got rid of capitalism. You’re now facing the other side of that problem. The rich, knowing that the mass of people are angry, have decided to manage the situation by buying the political system, by literally taking it away from any democratic foundation, because it’s too dangerous for them, but what that does is it makes the mass of people not only have economic problems getting worse, but cannot look to the political system for any kind of solution. So they try wild things, they vote Brexit, or they vote Trump, or they vote Pepe Grillo, or whatever it is that is maybe something, even if it’s strange and odd, that maybe gets them out of a dead end. Last thing: In the places to which capitalism moved – that’s China, India, Brazil – there you have again the problems of 19th century European capitalism. It’s a new capitalism, it’s transforming the society, it is moving hundreds of millions of people off of the land, into the cities and industry, and it is driving these people crazy, and they have their own tensions and it’s not clear that the people running those societies can manage that. So whether you are in the areas to which capitalism has gone and is growing or whether you are in the areas that capitalism is abandoning, you have a level of tension between the controllers and the controlled that makes it impossible to know whether this is going to be a phase or whether it might be a system that can’t handle the contradictions it has itself brought into being.