Richard Wolff: "Democracy at Work: A Cure for Capitalism" | Talks at Google

Please welcome Richard Wolf to Google. Okay, thank you all for spending a little time with me. Let me tell you exactly what I'm going to do and then try to do it. I want to tell you about the economic system that you live in and like any object of people trying to figure things out, there have been differences in how to understand economic systems from the beginning. I don't want to bore you by taking you back to whatever economics class you remember taking in college if your experience was like mine, this is a memory you'd generally prefer not to remember for good reason, but if you still have some of it in mind, you may remember that people like Adam Smith, David Ricardo, Karl Marx, John Stuart Mill, John Keynes, and many other people whose names you've probably heard tried to analyze economics, but ended up doing it in radically different, and I mean really different, ways. , they didn't see the same thing when they looked at the economy. economy, they did not understand the mechanisms that make it

work

, they did not understand in the same way where it was going, that is, it has been a field characterized by fundamental differences, a difference as big as whether you believe that the Sun revolves around the Earth or the other way around and many other examples that I could give and that have never changed economics has been what philosophers call an agonistic field in which different ways of understanding economics compete with each other: I come out, some win, others lose and those losers sometimes come back and win later, let me give you an example you may know because during the Great Depression of the 1930s, confidence that the capitalist system could solve its problems as they arose collapsed between 1929 and 1941, the United States had floating unemployment rates. about 20 to 25 percent, five or six times the unemployment we have now and what we had now was a problem.

Try to imagine that those were the years of the 1930s when the total production of goods and services was shrinking each year from what it was the year before. It's not surprising that people who lived in a capitalist system

work

ed like this, they raised a lot of questions and then there were those who believed oh no, it's okay, it's a temporary thing, there's nothing to worry about, the system is wonderfully set up in such a way that it can solve it. your problems and you'll just wait six months a year, another year and so on, but there were too many people suffering too much to wait and a brilliant guy in England named John Maynard Keynes basically had the courage to stand up and say this.

The system is not working and if we continue to keep our faith in it even though it is working in obvious ways that we can see every day, he mentioned by the way people sleep on the doorsteps of London, where he was British. he works in large numbers people whose wages were going down, not up, etc., he said that if we don't face it, there will be a revolution when you could have any

capitalism

. He liked

capitalism

, but felt that letting things be run by the private sector was self-destructive folly, and he developed an analysis we now call Keynesian economics, but he saw economics as radically different from what preceded it and that Keynesian economics was became the dominant economy in the world for most of the period roughly between the 1940s and 1970s.

And then everything was eliminated and we had a return to what existed before the 1930s, it was almost as if the memory of the Great Depression and all the problems there were, and by the way, if you're interested, you know that John Steinbeck is well disposed. Reading gives you a feeling of the Great Depression if you've never read that or seen the Grapes of Wrath or The Mice movies and then in the 1970s everything went the other way, the Keynesians got warped and we started looking the economy again. In a different way, that's the Reagan era, the private economy that had been criticized for failing in the Great Depression was suddenly rehabilitated and became the be all and end all that would solve everything. 70s, 80s, 90s, it would have continued except in 2008. this capitalist system we live in collapsed again for the second time in 75 years.

We're talking about a major collapse for those of you who don't follow these things in the fall of 2008, from September to December, here in New York we were so close to an economy. that would have stopped working by stopping working, I mean the kind of thing you don't think can happen, but we came so close without milk or bread or buses or anything terrible we're still in the aftermath of that here we are almost A decade later, like the Great Depression, has once again raised the question: what is wrong with this economic system? Only now we have to approach it in a different way and that's really what I want to talk to you about because we can't go back and repeat the same thing.

Now we can't tell our own history, well, let's get the government back to the way Keynes believed it was necessary to fix this capitalist system, manage this capitalist system because if you leave it alone, you leave it to the business community, look what what happened in 1929. and what happened in 2008 again and these are cataclysms that are read every few weeks about elections like those a couple of weeks ago in France, in which the entire society is being shaken by the consequences of an economic system that is not really working. Well, and it's producing new types of political characters, even here in the United States we have what at least most of us consider a pretty strange political scene these days, don't we?

And that's not just because a particular guy came in, but because of all the conditions that allowed him to come in and do what he's doing well so let's talk about this capitalist system remembering that people have always disagreed the debates were not just between those who loved capitalism and felt it should be run by the private business community can make it famous deregulate let the economy work versus Keynesians who love the system but said that for it to work the government has to come in and make things happen because if left to itself the system collapses like in 29 and 2008 it turns out that those who are not the only two perspectives there is also a perspective that says that the problems of capitalism are much deeper than if there is more or less government intervention for those people.

This whole issue is secondary. What is your point of view? is the one I want to present to you a little bit: his point of view is that if you look at the capitalist system with or without government intervention, all the key levers of power are in the hands of the people who run that institution that is now the place where the most of the production of goods and services and that institution is called a corporation, the capitalist corporation, we are discussing this in one of them, aren't we? It's a powerful institution, as you all know, and so this approach says, let's take a look. how it works and see what consequences follow from it before doing it, I need to tell you honestly and clearly where this approach comes from by looking at the organization of production as it is carried out in a corporation, which is the dominant form of modern capitalism.

The origin of this way of thinking is in the hands of critics of capitalism. This point of view comes from people from a couple of hundred years ago, when capitalism has been the dominant system in the world. It is not very old like any other system. slavery feudalism any of the others, capitalism has always had people who love it and people who hate it, like everything else, critics, admirers, celebrants, skeptics and one about to tell you that it is a tradition that some of you, I am Surely, they know about the criticism of capitalism and that it has many contributors. but the name that has come to dominate is Karl Marx and this is often called Marxist economics in the sense that it is influenced more or less from one individual to another by the critical way in which Karl Marx developed his analysis of capitalism.

I'm not sure if I should take the moment to remind you who was called Marx, but maybe it's worth it that Karl Marx was born in 1818, that's very important because that's the first generation after the French Revolution and Marx was a tremendous admirer. of the French Revolution, the slogans on the banners of the French fraternity of freedom and equality, those were the three words of that revolution of 1789, they were absolutely the love of the entire generation that Marx was part of and they understood the French Revolution practically in the same way that what the French did was get rid of feudalism, the old system, and introduce capitalism, the new system, and that in doing so they would bring liberty, equality and fraternity or, to use modern language, a democratic system.

Much Marx came a little Later, Marx was able, when he became a young man, to see about 50 years of development of capitalism in Europe, starting in England, moving to France and the Netherlands and then eventually spreading to the entire world. world. Marx had been fifty years old and looked around West Germany, France was born there, where he lived for a bit and then in England. Whelan spent most of his adult life looking around him and, by the way, this is Dickens's England, so if you don't understand what he was seeing, remember Oliver. Turn the England of his time, certainly capitalist feudalism had disappeared, as did Paris, so it was very bare and Marx recognized that capitalism was a dynamic system in development, but where was the freedom, equality and fraternity nowhere?

There was no time again if you want to see what I mean, Dickens we will describe to you the absence of liberty, equality and fraternity in 25 ways or, if you want, the French versions of Balzac, poor Zola or any of the others who wrote about these periods of Marx, such a young radical who was from an upper middle class. college-educated class family, meaning he's one of three or four percent of people who had that education at the time. He concluded that the French Revolution was wonderful for bringing capitalism, but it turned out that capitalism was not the vehicle or means to give people freedom, equality or fraternity, so his life's work was to respond to the question of why not, what is it about capitalism in the 19th century, when he lived, that prevented it from providing freedom, equality, fraternity,

democracy

, all those wonderful things?

I'm going to tell you his conclusions. I'm going to go back and look at how it got to that and why it got to that. His conclusion was that not only was capitalism incapable of achieving this, but capitalism was a fundamental obstacle to achieving it. and that therefore the human race wanted freedom, equality, fraternity and

democracy

, we have to devise a different and different system from capitalism or spend our entire lives crashing against the limits of a system that cannot allow, has never allowed, freedom, equality, fraternity or democracy does not. is really fine, so how does Marx arrive at this and why?

I am going to present you with an analysis. Well, let's go back to the corporation, that instrument, that institution through which goods and services are produced, everything that Google does. It is the product of Google Corporation that the Google corporation makes sure we know about it like all other corporations do the same. It is the institutional form in which the work is done, the more materials or tools there are, the equipment to produce the result that is then marketed around the world. how it is done and in the image of Marx in Marx's head there is the problem how that is organized, let's look at this closely he said and then he did it and again I am going to save us a lot of time by summarizing what he found and in a broad and relevant way his analysis is kind of like the workplace corporation but because of the way it is applied if it is unincorporated if it is an unincorporated business or a partnership or a family equipped the analysis applies there too but since most of production in the United States The United States is organized into corporations and increasingly throughout the world; that is the appropriate institution I should focus on.

Something very interesting happens in the corporation every day. The key decision makers are two groups of people. One group is the shareholders. The people who literally. In the way capitalism works, owning the corporation by owning shares of it are literally shares of ownership; however, they are only owned by rich people or a few institutions, to give you just a statistic here from the United States, one percent of shareholders own about two-thirds of the shares, if you ever wonder who the The 1% that people talk about, is as good a group as any, they are the major shareholders, as we call them in economics, they are literally a handful of people in most corporations. i.e. your grandmother may have left you and died eleven shares of something but you are not a major shareholder it may be a shock and I don't want to upset you but you are not a major stock a major shareholder owns millions of shares it can be a bank and be a person rich can be a foundation is a variety ofholders of these main shares, let's be a small group of 20 to 50 people, wow, the institutions own all the shares except a handful and granny's permission as a parting gift and the way a corporation works again for those Of you who are not familiar, once a year there is an election and the shares vote for something called the Board of Directors which is usually a group of 12 to 20 people, they are on the board of directors, if any of you ever wondered.

You may have had a career goal of becoming a member of a Board of Directors, you probably realize that that's a good place to be, so I'm not going to tell you how to do it, you have to be elected by the shareholders, that's how everyone They got there once a year the shareholders have one vote and this is how the vote works: you get one vote for each share you own, so if your grandmother left you 11 chairs, you get 11 votes if you are Chase Manhattan Bank and you own for your various accounts 27 billion shares, then the vice president who sends to the annual shareholders meeting votes 20 million shares, you might think you are like him, but you understand that you are not if the 1 percent of the people owned the most part of the shares, that is the 1% that decides all these elections, that is how it normally works, so the 12 or 15 people who are on the board of directors make the decisions sometimes with more influence from the main shareholders if they get confused . sometimes there is less, but it doesn't really matter because even if you add the 15 to 20 people that are on the board of directors with the 10 or 20 or 30 people or main shareholders, those people that 50 people or so make everything The key decisions for every corporation that operates like this, which is 99 percent of them, let me be clear with you so that we are all on the same page.

This board of directors decides what the company produces, what objects are manufactured, what services and goods are produced. two, how they will be produced, for the technology, they will be used, three, where the production will take place and finally, what to do with the profits that all this work generates. This Board of Directors and the main shells make all those decisions, those are the key decisions. any company does meanwhile there are a large number of people five hundred thousand ten thousand one hundred thousand hundreds of billions who are employees of the corporation and of course they all have to live with the decisions made by the board of directors and the main shareholders do it Well, let's give you an example, we're going to close this factory or office here in New York and we're going to move it to China, have a nice day, or we're going to replace these machines with these workers and put Have a nice day , we're going to take the profits that all the employees' work contributed to and we're going to decide to use them for an advertising budget or nice new bushes outside the main office or whatever. we want because that's who we are we make the decision who we are the board of directors of 15 to 20 people and the main shareholders another 20 30 people Marx finds this intriguing and so do I.

This is an interesting way to make the fundamental economic decisions of a society because what you are essentially doing and saying, whether you face it or not as a culture, is going to be a small group of people who are making all the key decisions that everyone To begin with, I want to make it clear that the mass of people, the employees, but the larger community in which each corporation lives and operates, all have to live with the consequences, but They are excluded from participating in decision making. Let me say it again to make it real.

Surely it is with us that the mass of people in our economic system are forced to live with the consequences of the decisions made by corporate leaders, decisions from which they are legally and practically excluded, de jure and de facto, however to call this system. not democratic in the communities where we live we insist on having votes we say that the mayor or the governor or the senator or the president makes decisions that we all have to live with and therefore we who have to live with the decisions must be able to participate in their manufacturing, but when we go to work in the capitalist system we cross the threshold of the office, the store or the factory and we leave all that aside, we do not praise it, we do not require it and we do not demand it.

Now let's go back to Marx here in that situation that I just briefly described for you. Marx told lies, the reason why capitalism, despite the hopes and dreams of the people who brought us capitalism that it would usher in freedom, equality, fraternity, has proven incapable of doing so. That's because it turns out that Marx argues that if you put the power to direct what happens in an economy in the hands of a small number of people, you won't be surprised if they make the decisions that keep them in that enchanted place. So why are we surprised to learn, as I'm sure many of you know, that over the last 40 years, for example here in the United States, just to take an example, the boards of directors of corporations and major shareholders have decided to keep the profits that everyone helped produce by the way, do you know how we know that everyone helps produce the profits?

You know how that thing happens that happens every year. The proof of it at the Christmas party is when the CEO, a little wobbly from too much knocking, stands up in a chair and thanks everyone for the contribution that each person in this company made. to our successful year and then, after thanking you, the president and the other members of the board of directors go away and decide what to do with what you kindly helped produce so that it should not It would not be a surprise if in the last 40 years it turns out What has happened is that those corporations, their boards of directors and their main shareholders decided to take a large part of the profits obtained and give them to themselves in the form of dividends. to shareholders, which is what they are, and specify particular pay packages for CEOs who are on boards, this should surprise no one, but let's take some other examples that are notable.

Corporations have decided, and Google is a major player in this, to do what we call automation of the economy over the last 3040 years we have actually replaced a lot of jobs that people have with computers and robots. It's very interesting that it's profit driven. The boards of directors calculate that they bring in an economist like me and calculate what we would do. paying workers and all that compared to what it would cost to buy and maintain these computers, these robots, whatever the form of automation is, and they make the decision based on what's best for their profits, that's how corporations work. , that's what they do and then they make an interesting decision if the machinery is more profitable they buy it they install it and they go to the workers and tell them you're fired have a good day and those workers leave and maybe they have a good day they probably won't get fired we're unemployed it's okay we have no idea how I back out we know what happens with that, in surprising numbers they get depressed, they get sick, they start desperately looking for work, if they don't find them very soon they start be willing to accept jobs. who are overtrained for jobs they are underpaid for, etc., they can get angry, they can do violent things, the social costs of all this are staggering and always have been, but that is not the problem the corporation bears in a new capitalist system. responsibility for that at all if there are costs of laying off all those people those are the problems of those people none of their friends and relatives the neighbors and the communities in which they live to fight with the best they can mark says this is really interesting because in many situations it is easier to demonstrate that it is not necessary to be a Marxist for the social costs of the unemployed to be much greater than the profits obtained by the private corporations that made the decision to fire these people, but because the private corporations obtained making profits without having to pay the cost was profitable for them even though socially it was not a profitable measure to make the system work well now, let's put it all together Marx argues that leaving things in the hands of the capitalist corporation and you can see Now Well, why is a little more government intervention or a little less irrelevant?

Because more or less government intervention does not change the basic way the capitalist enterprise is organized, with a small group of people making all the key decisions and doing so in a way that understandably replicates their situation and unfortunately replicates it as well. that of everyone else along the way, in fact, let's push this even further as Marxists should if the government not only regulates, but suppose the government goes one step further and fires all the private boards. The board of directors takes ownership away from the shareholders and says that it is now a government company and then does not put on the board of directors people elected by the shareholders, they are no longer there, but rather officials appointed by the state apparatus.

You, twenty people, will now run this factory. that's a bit like what happened in the Soviet Union in 1970. It didn't work very well either and why because it didn't change the internal structure of that company, yes, instead of privately chosen people, as in private capitalism, they had state. The officials made an interesting change that does not change the fundamental problem and Marx told him that, as an issue, the way this is organized is fundamentally antagonistic to the possibility of obtaining freedom, equality, fraternity or democracy, if that is what you Interesting now, this is a very powerful way to look at things, but Marx was a very sophisticated thinker and he wanted to make it clear in the most intimate way possible by looking very calmly primarily at the employer-employee relationship and again, this is an elaborate work.

That took some time. It's time to work and I'll give you a brief heroic summary, but I think you'll understand it very well. Let's start with the employee who is looking for a job. He could be me. It could be you. You go and meet an employer. who has a job and you sit down and discuss it and the employer explains to you that you come, you know, Monday to Friday at 8:30 and you stay until 4:30 or whatever, you sit there, you work with this machine on that piece of paper, whatever it is and then you get to the delicate point of how much they are going to pay you and to make my example very simple, let's use the number twenty dollars an hour, they are going to pay you twenty dollars an hour for what Whatever it is, you just got to work at that point Mark says, let's stop the movie, let's stop everything and let's be clear about what's going on here because everyone knows it and yet they haven't faced it and I suspect That's still true, having Being an economics professor for 50 years helps you get a sense of whether it's true or not.

You know Marx makes it very clear, but you know what I'm going to say: the only reason any employer will give. you $20 for an hour of your work is that if we add it to whatever payroll is already hiring you for, in that hour you are going to make more goods or services for that company to sell than they would have otherwise. they would have hired him. you know that's why they're hiring you, or you're going to make a better quantity or a better quality of whatever they produce and the company's calculation is that you're worth hiring for $20 if and only if the overtime of his work will mean more than $20 of additional production for the employer so that I can sell it, if not, I will not hire him because it would be absurd, I would give him $20 for which he would work. an hour would sell the results of your extra work for $19 and lose $1.

I got an MBA. I know it's not good. I'm not going to do that, but this has huge implications. First of all, this is it. tough on Americans means that if you have spent your life telling yourself that you will never work for anyone who doesn't pay you what you are worth, I have some bad news for you that never happened and that kind of statement to yourself is never your way to avoid dealing with the system you live in and I feel like you need help, but not the kind I provide. You live in a system in which the basis of the corporation is that. difference or to use Marxist language the worker produces a surplus over what he receives and that is the name of the system is to obtain it and accumulate it Wow, so what do we have in capitalism?

We have a system that has led us to extraordinary achievements. Qualities has brought us astonishing instability. I always use the same joke at this point in what I present. If you lived with a person as unstable as this economic system, you would have abandoned gold in 1929. It crashes. Crashes less. 11 years in 2008. crashes were still there for those of you who don't know there is an agency in the United States called the National Bureau of Economic Research that tracks business cycles, polite reminder of terms for instability between the end of the Great Depression of 1941 and At the beginning of what we are now in2008 there were 11 more economic crises, every president of the United States had been president during a crisis, that's how unstable the system is and every president has promised during the crisis that if we do whatever we do, the things he thinks we should do we will overcome that crisis we will overcome that recession and we will never have another every president promised it no president has kept his promise that's why we are in one now everyone promised they can't do it the system instability has been present from the beginning, in capitalism for 300 years We average an economic recession every four to seven years, no matter where capitalism has come, that's what it brings with it.

Keynes in economics was an attempt to deal with it, he didn't do it. solve it we are still trying we are still debating we live with a system that periodically leaves millions of people out of work breaks up their family life undermines their education 'has been transformed it is incredible what we expect and what we accept and the Another thing that capitalism has surprisingly fact is to produce an inequality that is mind-boggling, of course it is easy to see why if boards of directors and major shareholders decide what to do with the profits and give a huge amount to themselves, bingo, we have Inequality explained is not There is no mystery here, we do not need to do many studies that have answered that question, but the problem is that it is the system that produces inequality, not this or that law, this or that rule, or this or that political candidate, this is a systemic problem like ours. instability the agency that tracks inequality in the world the best is Oxfam in England some of you may know should report on our global inequality every year, the famous number last year was that something on the order of 86 of the most The world's richest people together have more wealth than the bottom half of the planet's population, or about three and a half billion people per person right now.

It is a level of inequality that takes us back to the pyramids the achievements of capitalism It is a level of inequality and instability that a long time ago should have made people wonder what we are doing by continuing to live especially uncritically accepting a system that works like this but now is personal. Please note that if any of this seems extraordinary or new to you, maybe even interesting I am a product of the American economic system and I am a product of the American educational system. I have been poor. I was born in the United States.

I lived here all the time. my life this economic analysis that I just presented to you in summary in 40 minutes I had to learn on my own why because the institutions like to call it higher education they always used to ask me what lower education would be then and then placed within the institutions of higher education I was not taught any of this, let me emphasize none of this, so let me tell you about my education because it helped me get the point across when I was a student. I went to Harvard, I graduated magna laude from Harvard, that's supposed to mean something, so I went to Stanford in Palo Alto and got a master's degree in economics and then I should move on to my professor who I loved there, he died and I ended up at Yale, where I got another master's degree in economics, a master's degree in history and a PhD in Economics or time, listen to this.

Never in my education at those three institutions in an economics course was I assigned a word from Karl Marx. There is no excuse, there is no method of justification. Do you know what is it about? My teachers were afraid to assign her to read. is to think about it to discuss or debate it was the Cold War when I went to school and we Americans were aligned against the Russians as some are today and others clearly not so well, it is very difficult to keep this clear. to know what color who has what shirt, otherwise I get confused as to who friends and allies are or it's very confusing my teachers weren't confused it was very clear so they didn't teach us anything about any of this, they taught us neoclassical economics, that is capitalism. as wonderful solutions in themselves love to worry about watching television again and Keynesian is an order something to worry about letting the government in, but the notion that there was a critical alternative to this way of thinking that emerged with a different analysis and a different way of thinking and a different set of ideas of what we have to do next oh no, none of my teachers ever said a word about it try to understand this is like a taboo, some of you couldn't discuss it I've been asking why we have economic problems here in the United States.

We seem so clumsy when it comes to solving them. We have had to pretend in economics that we don't have any problems. That we don't have a fundamentally problematic system. anything that worries you, which means you are not good at fixing it when it breaks, so you would have to face that it has many defects, you have to look at how it broke before and see what that is. It may be that we don't do it in this, so you live in an economic system that is now run by people who have no idea about everything.

I just told you this is painful. I have had to teach conventional neoclassical Keynesian all my life, but I was also taught this other thing. I know what my classmates do but they don't understand what I do. I'm not the only one. I'm not suggesting that but I'm a critic of the system because it makes sense to me. that a system that works the way I described deserves some criticism and I even dare to suggest that smart people like you could thrive by listening to the criticism and thinking about it, accepting it all, of course not, but think about it, participate, come if you want.

To understand the family that had two parents and two children, would you decide to interview one of the two children? No, especially if you knew that one of the kids next is the best family in the world. The other children of a boy thought. this was a lost case of psychological dysfunction probably most of you would understand that you have to talk to the two children, son, you make your own decisions, listen to what the people who think capitalism is the best thing since the world have to say here sliced ​​bread, but maybe also listen to people who think it's critical, who think it's a system that could never do what it promised and, finally, and I'll conclude with this, a system that is in no way necessary, what are we?

We accept that it is not inevitable, it never was. Oh, right, people who like capitalism love to say it's the end of history, it's the final stage, but the people who articulated slavery said add the people who articulated feudalism, they said that So, of course, the people who run it. capitalism says that, but the burdens on them, all the systems that we know in the history of humanity have been born, they have evolved over time and they have died, we know that capitalism was born, we know that it has evolved, you know what the next one is stage, well, I won't go into that, you can find out what would be an alternative in a way everything I have said gives you the answer if we have a system that is unstable if we have a system that produces indescribable inequality a system that makes it profitable to fire a large number of people even if the social costs of their unemployment exceed the gains achieved by automation all the things I have told you and many more those are all the result of how decisions are made within the productive units of our economy the factories, the shops and the offices by a small group of people who are not responsible to the people who employ the people who employ the majority of the people who are not responsible or the minority, that is why it is not democracy, it is the antithesis, well, then the solution is obvious. democratize the company make decisions something that is made by only one person one vote everyone who works in a company has the same voice in deciding what to produce how to produce where to produce and what to do with the profits that everyone helped produce What a wonderful and interesting idea : democracy in the workplace.

Think of a society in which there is not only democracy in the place where you live but also democracy in the place where you work. If it was good for one, it's good for the other, maybe getting rid of the Kings who told us what to do where we live is like getting rid of the board of directors who tells us what to do where we work because you know what kind of business being at work is. what you do for most of your adult life is the only job If democracy is a value that means anything to you, it should have been instituted a long time ago where you work because that's where you spend most of your time.

Instead you accept what it's like to live in a society that you like to call democratic even though the place where you spend most of your time is the antithesis of your workplace, the alternative is very old, democratize the place of work, it's not a new idea, that's old today, it's called worker cooperatives, as good a name as any, what does it mean a group of people who get together and do? a decision we are going to produce something a software program hamburgers haircuts it doesn't matter and this is how we are going to do it we are going to be a collective we are going to decide together how to produce produce when to produce all that and we are going to debate it and then we are going to make a decision by majority vote, that's what we're going to do, we're going to execute it, human beings have been trying to I've done it for a long time, but maybe you don't know it, it's just that human beings have done it often .

You may not know that humans are doing it right now everywhere, even in the United States, and one of the reasons it is a perennial effort is because the systems that have existed slavery feudalism capitalism caused people to be critical and sooner or later you will find your way to this alternative. I will give you just two examples to close this, the most famous example is that of a corporation in Spain. Some of you may have heard of it. It's called the Mondragón Cooperative Corporation. Here is the history of this company in 1956, Spain, which is where this company exists and is based.

Spain was a very poor country, it had gone through a horrible civil war and then it was over. To begin with, Spain was a poor country and was devastated by the civil war and then by World War II, so in 1956 it was a very poor country and in the Basque region, which is the northern part of Spain on the southern side From the Pyrenees mountains that separate Spain from France, the Basques, who are their own type of ethnicity, if you will, have their own language and culture, very, very poor, are Roman Catholics, as are most of the people in Spain, and they had a local priest and he made a One day in church, in a famous joke, he said that if we wait for some capitalists or some employer to come to have jobs, we will all die of old age, so what I suggest What he said is that we become our own employer, in other words, that we establish a workers' cooperative that made six workers and one priest until today Mondragón Corporation Mondragón cooperative corporation is the seventh largest corporation in Spain it has one hundred thousand workers it is the largest success story of the Spanish economy in the last half since it is a collection of 150 to 200, depending on how you count the worker cooperatives in each of its companies, it is a conglomerate of manufacturing services, etc., in each one of their companies, the workers collectively decide all these questions what to produce, how to produce, where to produce a surprising success surpassed dozens of capitalist companies that couldn't make it work in competition with them, they are so successful now that they have their own university, the Mondragón University, which will provide courses to anyone interested in how to organize a cooperative. how to finance a cooperative have a cooperative manager how to deal with personnel problems of cooperatives, etc. very well developed program very successful two interesting rules that might excite you rule number one workers together hire, fire and evaluate managers I know I have to digest that, in other words, it's the opposite of what you have: workers decide whether Managers were successful and if they weren't, they leave.

They also have another rule: the highest paid person cannot get more. more than eight times the income of the lowest paid person, this is how they solve the problem of inequality. My God, it's not a problem, there is some inequality. 8 to 1 is still a considerable ratio, but I assume you know that the ratio of corporate CEOs to low-wage workers in corporate America is around 350 to 1, which is why we have the inequality we do and there are many more examples that a worker cooperative would solve its problems in a different way in a different economic system. Here's something interesting, imagine the corporation you're up against.

With the Gini notion, do you know why you hire Americans whom you have to pay a lot of money? Why don't you move to India? We don't pay the capitalist corporations much less, since you know, they've beendoing a lot to that worker. workers are unlikely to vote to destroy their jobs, their business, the benefits to the community of having the jobs they are holding, you wouldn't have seen the exodus of jobs from this country over the last 30 to 40 years, it's really different much less inequality much worse demand everything would change everything if we could have a rational debate here in the United States about a capitalist economic system versus a worker cooperative system maybe we would even be able to imagine an economic system that began It is considered capitalist, but It leaves room for a large sector of worker cooperatives in many industries, and you know what the reason for that would be: freedom of choice.

Let the Americans have the choice. If you want to work in a top-down hierarchical corporation, would you prefer? working in a democratic workplace would you like to buy from someone who would like Americans to have that option? There has to be a sector where we would have to spend some money and make room for worker cooperatives and there is a country that is just doing it right now committed to doing it anyway and that will be my final point just to leave Of course the reality of this is not a fantasy in the future utopian dream the second largest political party in Britain is called the Labor Party the leader of the Labor Party, a man called Jeremy Corbyn, he that his party has committed, is They are running a national election right now, their party has compromised it and they have won governments before, they like the Democratic Party here, the Republicans here are the Conservatives in England. so they have committed that, if the Labor party wins, they will pass this law part 1.

Any existing company in England can continue as it is, but if it decides to call or if it decides to sell itself to another company or if it decides to go public of shares, before doing any of those things, you must give your own workers the right of first refusal. It's a legal term that means you have to offer to sell yourself to your own workers as a cooperative before you can do anything else. part 2 of the bill answers the question of where workers would get the money to buy their own company answer the government will lend it to them the british are committed to building a worker cooperative sector precisely because of the problems limits failures of a capitalist system, but the most important thing is not the particular arguments for this, the most important thing is for you to face the fact that you live in an economic system that is not the beginning or the end of anything, that it is part of an evolving story that It has very serious flaws and flaws and that it is a huge literature that includes real concrete experiences that people have. was all about doing something better than capitalism to insist that you don't have to think about it you'll have to debate it you don't have to listen to the people who tell you about it you don't have to read the books that are out there it's a kind of censorship self-imposed that does no one any good unless you really want the current system to continue no matter the cost and no matter where it takes us, and I don't think most of you in this room feel that way thank you very much for your attention on right now yes, we only have a couple of minutes for questions I think so, go to the microphones, go ahead I thank you for your talk, I really enjoyed it, I was just wondering If you could talk maybe briefly about you offer democracy as a kind of solution , some wonder if its effectiveness can be spoken of specifically in relation to addressing the problems of capitalism, such as why democracy as a system of government has not been addressed. with this problem and why you won't have similar efficiencies in the workplace.

I try to be as brief as possible. Marx tried to address exactly that question and basically he and the many who have come since and tried to work with it make the argument that in the practical life of a capitalist corporation it is a systemic negation, a rejection of democracy. and that within the way the corporation works, it disproportionately rewards people at the top, etc., creates conditions that undermine the political democracy that exists and the best way to look at that in this country and, again, I'm sure What most of you know is that in the United States and many other countries we see our elections bought and sold, they can buy the advertising they need or not. you can't, your effort to run politically is basically espionage from the start, it's no coincidence that most candidates are millionaires or depend on millionaires to donate to them and the likelihood of millionaires donating to a critic of Capitalism is rare in a country like this, unless and until a movement develops that, of course, can change all that, and in some ways, Bernie Sanders' ability to raise large amounts of money from small donations is the beginning of signs in this country that, in the future, I feel that the template is raised, but the system itself is undemocratic and undermines it because it has to let me express it in the most dramatic way possible if a society produces inequality every time older, everyone understands what that means, a small group of people. of things and many other people who barely make ends meet, people who have a lot, they are not stupid, they understand the danger of democracy and universal suffrage because sooner or later a small group of people has all the wealth and everyone does it and everything the world will think, but one thing we have is the vote, one thing we have is political democracy and we can use our numerical majority in politics to undo what capitalism has achieved in economics, we can do it through taxes, we can do it through expropriate there are many ways to do it so that the rich understand that they have to neutralize the political system, they cannot let it function properly because it is too dangerous for them and so they buy it, that is has been the solution and I think that problem will never has been resolved, neither with this law nor with that, because if a way could be found for these wealth inequalities to be represented in the political system, the notion of a worker cooperative is not a notion that there will be pure efficiency, whatever Whatever exactly, economists do not agree on what efficiency is, what it means or how to measure it, but leave that aside, there will be efficiencies in a worker cooperative, they will be different from the inefficiencies that capitalist companies have.

They had as well as the inefficiencies of capitalism were different from those that feudalism had and those that slavery had. Inefficiency is part of every economic system, it has always been and is now, it is not efficient to have millions of people who want a job and do not have one. If you want an introduction to the inefficiency of capitalism, but I can present to you the fact that every capitalist system suffers from millions and millions of unemployed people or, proportionally, that is not an efficiency, it is a waste of people, a waste of potential and a waste. of resources, other systems have different efficiencies, but weighing them is not a basis on which you are going to decide between systems and it never was.

Thank you very much for an interesting and provocative talk, in your opinion on the email of Knox's analysis of capitalism. You'll listen to what I believe, you'll believe in the theory of value, so that's an idea I've had. The person comes, comes for a lot of criticism because yes maybe I'm oversimplifying here, but you like the idea, those are good risks. The company values ​​its workers less to make profits from the difference between value and paper. The workers, this idea allowed me to take into account the surprises of the cases, the workers are willing to pay for the products, so I was not of much help.

Yes, good. Don't take this person, your question speaks to the very absence of teaching this material that I was referring to before if you actually read Marx and by the way it's not that difficult, I guarantee that if you read Marx you will know that he makes a distinction between values ​​and prices

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about prices and what causes them

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about values ​​that for him or for something else he is not the only important economist who did that Smith and Ricardo also did the same so he tried to use his analysis of value to let's say that anything else in a commodity is something produced in capitalism, it contains a frozen amount of labor, every society has to make a decision, whether it is aware of it or not, how much labor will we allocate to produce food, how much will we earn to clothe how much because you only have a certain amount of labor and you have a set of desires and therefore the empty society allocates labor in one way or another for Marx the value of a commodity simply meant the amount of the total labor that a society had that was allocated to the production of that good, that is a definition logic that you then used to explain why prices are what they are but there was no price to value equation, let me go back to the first part of your question, has there been a lot of criticism There has been a lot of criticism of virtually everything Marx wrote because of what happened in the years since, but that is true of all theories of value, for example, the main theory taught in the The United States has a different name.

I don't know if you've heard of it, it's called the utility theory of value. Things are valuable because of the amount of utility they provide to the consumer. Try to measure that please, come on, you are all smart people. They think it's an easier concept. To specify the utility theory of value, exactly how much joy does that ice cream give you? How much money are you willing to spend? that will vary with the outside temperature it will vary with the number of calories you are counting what each Economic theory begins with the set of basic hypotheses upon which you build your system.

The brand started with the work because for him that was the key variable to focus on the neoclassical economics that developed in the 1870s. For those of you who know, it was in itself a reaction against Marx that they hated. the labor theory of value because it was associated with Marx they forgot to let me make sure everyone knows that Marx did not invent the labor theory of value Marx took the labor theory of value this may surprise some of you but just do the work you will learn Adam Smith and David Ricardo, defenders of capitalism, that's where the labor theory of value comes from.

Marx thanks them profusely for it and then uses it to do things they never wanted done. This happens very often in science. The people who develop a concept get very upset with the direction their students take. Marx was a student of Smith in Ricardo took the labor theory of value in a way that was critical of capitalism, they had used it to celebrate capitalism, but if you see a lot of criticisms of the labor theory of value be careful what they are criticisms of. because Marx's labor theory of value is not the same as Ricardo's or Smith's and has more to do with this notion of how labor is allocated in a society. that anything was not Marx they expressed it another way when I teach in the American university system we begin by assuming that all students want to understand the great mystery of economics: why is the price of something?

Why is the price of a hamburger five? dollars and the price of a Mercedes much more than that and we surpass that that is very good perfectly good to do an economics based on that question now I am going to exaggerate but to make my point clear Marx was not interested in that and I am I also do not have many other things interesting things that I want to understand about this economy, then why the prices of things are what they are. I understand that if you are a capitalist you are very concerned about prices, but if you are someone else, you may have them all.

They may be interested, but they may have higher priority topics than they otherwise would. Marx comes with a different agenda, so he starts in a different place and takes it in a different way, by the way, just a footnote for some of you academics. In 2012, a colleague of mine, Steven Resnick, and I, working a lot together, published a book called Competing Economic Theories. It was an attempt to create a larger reading public in English. A book that systematically compares Keynesian and Marxist neoclassical economics so that a generation of students would have something to find if they are interested, that is a title that claims they can do so.

Tomic, Keynesian, and neoclassical Marxist theories and the publisher is MIT Press in Cambridge, Massachusetts. Why MIT because it is the home of the most prestigious tradition in economics called Samuel. symbol Robert Solow, there were all kinds of people there and we really wanted to present the profession through an editor that everyone respected to address an argument that most of them don't understand. Hey, thanks, so we raise a point like that. die and we'll probably be better off if we kill you before many times now you said thatthat's my interpretation of your culture and now you also said that we don't teach the problems to the generation and I'm curious. about you is that do you think there is potential to get to a better solution faster if we taught things to the younger generation properly and made them clearer?

And when I say education I'm not talking about education, okay, so it's about the beginning father and talking about education to the YouTube intramurals and relax absolutely then I couldn't. I couldn't say it as loud as I want to say it. Yes, that's why I'm here. That's what I do now. I try to teach critically. thinking in the realm of economics, look, let me be as frank as I know this country has been like a hibernating bear for half a century, it's very serious for half a century since the 1950s and World War II, basically this country has He's been so frightened by his Cold War struggles with socialism, communism, and everything else that he adopted the pathetic position of a three-year-old, you know, a three-year-old sees something scary and puts his hands in front of himself. eyes and believe that the scary thing is already gone and it takes a little more maturity to recognize it you can put your hand there two things are still up in the air and when you move your hand completely we are in a society that has not seriously faced criticism of capitalism in 50 years.

I once had a graduate student. I told him to go read the Congressional Record, the verbatim record of every House debate in the Senate, and find a debate about the pros and cons of capitalism. We could find it. We have not made it. allowed a political leader, we have not allowed economics as a profession, which is my profession, to have people like me, the only real thing would be to be really personal and honest. I am a teacher. I have been a teacher all my life in the United States despite my criticism and that is because unlike a player, when I am in trouble and need help, I give up my pedigrees, everyone knows what I mean.

I went to the right schools, so I'm in the club even though I say weird things. I am critical and sad, and our country and our society are weaker because we do not have a tradition of critical thinking that we sorely need in a system that functions as poorly as the current one and that will likely continue, those of you who remember what I said. He said that the average in the history of capitalism is four to seven years since the last recession, our main recession was in 2008 and 2009, now add the four to seven years that corresponds to us, which on Wall Street weighs one that you think have.

I have problems in America with Trump, now let's make Trump more of a recession in the next 12 months and try to ask the question again, this is a system whose instability shakes it and yes, I think education would open people up to the enormous , productive and sophisticated literature. exploring these critical perspectives would be an enormous contribution to solving the problem. I thank you for honking. I find it very comforting because I am from China and six years ago when I came to the United States, I really hated my country's system now that Looking back at the great achievement that my country has made, I find that there is probably some problem in the United States or in the west of the Western world in general, and those capitalist countries have great economic systems, but the political system is really backward. oThe sky has not been updated regularly and can be seen by the amount of debt the United States has.

I think it's like nine trillion US dollars, in China we have four trillion US dollars. People's savings dollars are ending now, so the economy is really booming, but what I find in your talk is that you know your perspective is too extreme, it's definitely uh. I think what my country did well was find a really good balance. point between efficiency and equality actually those two are two different forces, so if you have better efficiency it is very difficult to achieve equality, so my question is how would you suggest the current, you know, in the current state, you have this government, you have this system political in your hand, how would you suggest the people making those decisions move towards a more appropriate point where equality meets efficiently?

If any of you, if you haven't been to China, please go there, it's an amazing world. I wonder if you have ever been to China, it's still not right, I think it's the right time to visit China. Okay, let me right now, let me answer some facts and then an interpretation of what's happening in your country, facts to underline what you've said, for example, The real wage in the United States has been stagnant for 35 years, let me Explain to them what that is so that everyone understands that the real salary in economics is a very simple measure: you take the amount of money that a person receives on average and adjust it according to the prices that the person has to pay because, obviously, if you receive 10% more salary but all prices rise by 10 percent, you will not be better off, you will not be able to buy more with your extra 10% of money than you could before because prices have risen the term real salary takes this into account, so it measures what you can really buy with whatever wages you get when you do, that the real American wage for the last 35 years is the same, well, it's going to start with you real wages in the America is the same today as it was in the late 1970s, the only reason Americans have been able to consume an increasing amount over the last 70 years is because of two things they did and for those of you who don't I don't know , this is your Life.

I'm talking about number one: a huge social change happened and it's about particularly white women in our country, white women who had left millions of lives as housewives, wives, mothers, etc., and became members of the workforce. remunerated to such an extent that I guess their generation just assumes it, but that's new, that's how the family had enough money to maintain the illusion that they were participating in the American dream because in every home, every married couple, now had a second important. source of income, but it turned out that it was not enough, it was not enough because when the mother or the wife went out to work in large quantities she needed her own equipment for that she needed a second car because we do not use public transportation in her country, it goes against our religion, etc., that was an attempt at humor, which I did well, so the second thing working class Americans did to maintain the illusion was: you will be debt-free, we borrow for our house, we borrow for our car . we take out credit card loans and, in a stunning inhalation of American capitalism over the last 25 years, we take out loans to send our children to college, producing a level of debt that is explosive and which partly explains why we collapsed in 2008 and why is that so.

Taking so long to recover, we cannot manage our economic system. By contrast, real wages in China have increased many times over the past 20 years. There is no comparison. The standard of living of the working class in China is looming compared to here. China's GDP is growing in the neighborhood of six to nine, depending on how you count the annual percentage, we're lucky if we get two to three percent year after year, which is why the two economies are getting closer and closer because we are slow and they are fast and you can attend all you want and Americans are good at that, but that is a reality and somewhere you have to deal with that number two point in response.

China is understandably taking advantage of something much bigger than China. There is a decision made in the centers of capitalism. that the places in the world where capitalism was born and grew to its modern power and those places are Western Europe, North America and Japan, those places as capitalism grew in these areas where it first started and became big, That's where he put his industry, that's where he put his warehouses, that's where he put his offices and his stores, that's what everyone knows, they are living in New York, but along the way he had to reach an agreement with the working class and What it did was offer them higher wages and So wages here didn't rise as fast as profits, but they rose to keep the system going because inequality, if left to grow too much, blows up the system, so it came to to a point around the 1970s where something happened that changed everything American capitalists saw. to their working class by paying them the kind of wages that allow the American working class to have the standard of living that they enjoy, but they also discovered in the 1970s the jet engine and modern telecommunications and suddenly something was possible that had never been possible before.

It has been possible for capitalist corporations to say to themselves: why the hell are we in the United States, Great Britain, France or Japan? We can now monitor production in a factory in China, India or Brazil with modern telecommunications as easily as we could previously monitor the factory around the world. the street and we can fly anywhere in the world in a matter of hours so our managers can do it. We don't need the American working class we overpay and get out of here. We are leaving capitalism for the last 40 years. he left the countries in which he was born and reached maturity and where he went to the countries of the world that gave him the greatest reason to bring you China number one a disciplined working class a fairly well educated working class a politically controlled working class and a cheap working class compared to the West and of course the capitalists who maximize profits because that's how this system works, they left and continue to leave in massive numbers.

China is where capitalism is succeeding and here in the United States we are facing a very, very traumatic problem. our capitalism is declining, there are areas that are probably not wonderful for Google, but the larger society that Google also has to survive in is a society that is experiencing cuts in job opportunities, cuts in income, cuts in government services everywhere of Western Europe, North America and Japan, politics. implications that we are only beginning to understand, but will traumatize and worry us all for the rest of our lives. China is where capitalism is new, where it is going, where it is growing, we live in a part of the world of capitalism where it is not and for that we are not prepared because no one has prepared the American people or the people of Western Europe or Japan , which is why the trauma of politics is becoming so violent as people slowly realize this and look to blame someone, one of the favorites of course are immigrants, let's pretend they are all of them who in some way barter, but we simply throw them out, we will not solve anything other than expelling the old politicians and bringing in mr.

Trump doesn't solve anything either, no sir. Trump will not sell out, it will be because you are not dealing with the underlying realities that caused this whole situation, but I do believe that China is primarily the beneficiary of the transformation of capitalism and will suffer what it is already suffering. but it will suffer as capitalism moves its center to those parts of the world, it brings with it the whole history of turbulent class struggles that we know from what happened in Western Europe, North America and Japan, so I would be a little more cautious about the future. of Japan, but without denying that it is where capitalism is one billion, where capitalism is growing, us, right?

We have only maintained the illusion for the last 40 years by making women go to work and borrowing as if there were no tomorrow, but you do not need an advanced degree in economics to understand if salaries are fixed, the real salary that the working class has As the American borrows more and more, the day will come when you won't have enough wealth to repay the debt and when that happens, it will collapse. and that's for 200 2008, what if capitalism was what was coming to China, as I think it is both Chinese and foreign? The instabilities and inequalities of capitalism everywhere will descend on China;

Just a footnote, there were more new millionaires in China last year than there were. in the United States is in a country that is much poorer than the United States. I wonder where that's going, but that's a typical story of capitalists with a regrettable relocation. Thanks for coming. Thank you very much to all. However, let's say that we have given them democracy.