Listen now (53 min) | This week on The Glenn Show, John McWhorter and I are joined by Richard Wolff, Professor Emeritus of Economics at the University of Massachusetts, Amherst and Visiting Professor of International Affairs at the the New School. Richard is Marxian in his orientation and I am not, so we do some debating here. And while we may not agree on much as far as economics goes, we do share some concerns about the direction of the left in this country.
Glenn and John, you are doing a great service bringing to your listeners a calm exchange of differing opinion, well informed by your divergent points of view. When politics first appeared on my radar Reagan was on the ticket. Anyone I knew said he would bumble us into a nuclear exchange with the Soviets, and my young life would be over in a flash, and I believed it. That scary story determined my vote in that first ever presidential election. With much reflection, I've come around to the view that the fact we didn't have to die was no accident. You see, while building the best country on the planet, capitalism helped raise the military stakes on the Marxists, and showed the bully if they started something, it'd cost them, plenty. Most liberals thought that arming for war would bring it about, and still do to this day. I believe the credible threat of nuclear annihilation was a nasty but effective deterrent to an expansionist Marxist juggernaut, bent on world domination, that claimed many more lives by democide, than a nuclear exchange would have. Estimates say about 100 million innocent civilians were killed by their own governments in the 20th century. And my question is, what have the Marxist revolutionaries got to show for it. You can find on maps where the killing fields are scattered across countries enslaved by Marxist tyrants. Lenin promised a worker's paradise, if we were willing to break a few eggs. After 100 years and 100 million innocent lives, where's the omelet?
I know some will question the estimates of 100 million lives, fine. These are estimates. The fact that there's a rough tally of tens of millions would constitute enough evidence to investigate more thoroughly what malignant force in human nature rose up and devoured that many innocents in a couple of successive generations, mostly during conditions having nothing to do with all out war.
With apologies, in advance, to my fellow TGS interlocutors, who came for a polite discussion on the Marxist theoretical critique of capitalism.
But all you are saying is that businesses should provide a civic purpose for a local population that is in conflict what shareholders and management think is best for the business. That brings me back to my original point. When a business decides to open in a location, employees trust that the business has made the right decision. So why don't they trust them to make the right decisions about relocating? Doesn't the business know best?
When someone sees capitalism as "bad for democracy," whatever that means, that looks like a big, bright, billowing red flag. What is more democratic that consumers wading through a variety of product and service options, deciding which one best suits their needs, and then voluntarily choosing to purchase from one of the providers? The marketplace is among the most democratic things ever devised - competition, consumer choice, the buyer's right to say no, and so forth. Surely, someone who has reached Wolff's place in life knows this and has likely profited from it himself.
I'm going to be honest with you, Glenn. I'm not keen on the closer relationship with the Manhattan Institute. I know you're conservative and not crazy-conservative; I don't agree with you on all things but I do like how center-right you appear to be (am I wrong?) I'm not that keen on the MI. I've only just begun to look into them because I'm aware of them as a right wing 'think tank' but so far, I don't like how they've been funded at some times by the Koch Brothers (that tells you a lot right there) and this is what Media Bias Fact Check has to say about them - "We also rate them Mixed for factual reporting due to a lack of transparency with funding, use of poor sources, and a failed fact check."
I have to think about this some more. I don't mind supporting *you*, I think you're doing great work, but it says something to me that you choose to align yourself more closely with them. It says something about *you*.
"First, I ask Richard to respond to Friedrich von Hayek’s claim that markets will always allocate information and resources more efficiently than centrally planned economies."
I think Hayek simplified too much. Markets are also tools to hide information. If I buy cloths, for example, all I know is the price. If I am knowledgable enough, I may be able to judge the quality to some extend. But there is a lot of information, important to me, that is hidden. For example, whether the workers making the clothes get a fair price for their work. Similarly, market prices typically hide important information about pollution. Or about negative externalities more generally.
I think Hayek underestimated the problem of negative externalities. In the presence of negative externalities, the invisible hand will reduce wealth instead of increasing it.
This question is now important in times where increasing carbon emissions, climate change, famines and droughts, biodiversity loss and the like all point towards the collapse of our civilization.
I think the key word in what you quoted above is “more”. The market isn’t perfect, but it allocates information and resources “more” efficiently than centrally planned economies.
On the whole, do you agree with that?
Are you a proponent of a centrally planned economy or are you just pointing out some weaknesses of a free market? I agree with you to some extent on negative externalities. There is a need for some regulation, but there is a fine line between effective and counterproductive.
Because I think this is one of the few instances where reality is in contradiction to the American dream and people have a hard time reaching the right conclusion as a result.
I'm glad that Wolff is no longer being repressed and I'm glad Glenn let him speak. We need to hear the bad ideas as well as the good so we can distinguish them.
Wolff may be right that the Soviet Union and People's Republic of China experienced the greatest economic growth in the 20th century. I wonder how much of that growth he'd attribute to the New Economic Policy, which was explicitly capitalist and free market. https://en.wikipedia.org/wiki/New_Economic_Policy Glenn referenced the fact that the PRC went a similar direction several decades later.
Would Chinese GDP have grown so exponentially if they paid their workers a living wage?
And regarding worker entitlement over businesses...one cannot allow minimum wage workers who may not be educated in how to run a business take over the company or the company will tank. A company needs a leader who understands business, economy, finances, etc. If your employees start making all the company's decisions, how successful is that company going to be?
Congrats on the excellent discussion. Too short, which is why I’m here for the first time after subscribing 7 months ago.
I finally see what is drawing so many people to this socialist thinking. A few surprising out-of-context facts like GDP on top of the guilt about over-publicized bad behavior by companies and voila.
Manufacturers didn’t leave Youngstown and Detroit because of too much capitalism. It was from too much socialism, in the form of unions.
I was a union member as a clerical worker in the 1990s. Unions make a thick wall between management and the workers and on the worker side, everyone must be paid by seniority only. This crushes innovation.
In the 70s, our great American manufacturers were losing share to cheaper better products from Japan, whose non-unionized employees were rewarded for proposing great new ideas — kaizen.
A friend of mine is a liberal Democrat who believes Elizabeth Warren on everything. The only thing we agree on is unions, because her family’s high end doll manufacturing company was crushed from the inside by a union. Can we somehow redraw the lines in this country with stories like hers?
He made my ears hurt and never said anything with substance. Interestingly Glenn Beck is doing a special on Marxism tonight. This is the Soros way.. dangerous stuff.
I'm very disappointed that Glenn did not push back harder on Wolff's mischaracterization of Hayek's knowledge problem. It's not that Hayek thought that capitalism would make not make mistakes and socialist planning would, it's that Hayek thought the knowledge problem made socialist planning IMPOSSIBLE.
Marxism is an evil ideology and pushing back on it as hard as possible is just as important as pushing back on fascists and racists.
Whether Marxism is evil depends on whether you're referring to Marx's ideas or those who tried to implement them after Marx's death. AFAICT, Marx was simply mistaken about a great many things. OTOH, the attempts to bring his utopian ideas into reality were evil when they resulted in mass murder on an unprecedented scale.
I don't think Wolff has any evil motives in his promotion of Marxism. However, I find it easier to give Marx a pass since he never saw the massive destruction his terrible ideas helped implement. Wolff should know better.
It's the ideas. Dialectical materialism, by reframing ideas, beliefs, and even morals as mere superstructure to material power relations removes the possibility of serious objection to revolutionary violence.
The whole Hegelian mindset where the individual only gains reality by participation in the universal is prone to this stuff. By flipping Hegel on his head and replacing geist with materialism, Marx still failed to remove the moral heteronomy inherent in the framework.
I should make it clear that I don't agree with Marx's world view at all. I believe that God made people and each person has inherent value, so I view a Marxian world view as amoral at best. OTOH, if such a view of humanity is inherently immoral, then maybe it would accurate to describe a Marxian world view as "evil." I tend to think of "evil" as implying intent to harm.
Under our current system there is nothing stopping a group of people getting together and creating an employee owned company (which is what Wolff) seems to be advocating for. In fact there are a number of them in existence. WinCo a large western grocery store comes to mind.
The key to the free markets is voluntary transactions. You don't want to work for that guy, then don't. You don't want to buy from that guy, then don't. It's a free(ish) country, do what you want. If you think employee owned companies are the best then do that.
Another option, if all the employees of a public company get together and put their 401k into company shares, pretty soon they could have a large or even controlling interest in the company.
But that's not good enough for people like Wolff. Some (most) people might not live the way he wants. So he's going to use the police power of the state. Which is backed up by men with guns to FORCE you to live the way HE wants.
Socialism/communism at it's core is force. Capitalism/free markets is about voluntary transactions and choice. We should never lose sight of that.
Regarding China, their economic miracle didn't come around due to communism. It came around when they started to allow free markets. And of course they were able to short circuit a lot of development because the advancements had already occurred.
See communism works great in a family, from each according to his ability, to each according to his needs. I love my family, and I will work my butt off to make sure they have a good life. But if I'm not going to keep the majority of the fruits of my labor, then I won't bother.
I won't start a business if my employees are going to be able to tell me how to run it. It won't be worth it. And quite likely I would never have bothered to get my MBA or CPA. Why bother, if I can't get ahead then just sit back and play video games.
As the old communist saying goes "they pretend to pay us, we pretend to work".
re: "Capitalism/free mkts is about voluntary transactions & choice"--sure, when everyone participating in those markets is independently wealthy. But to the extent that people don't get their basic means of survival met up-front, unconditionally, they're not free (except to starve, die of exposure, etc.)
It’s hard to study Chinese history since the late 1940s and come away thinking Marxist principles are what pulled hundreds of millions of Chinese out of poverty. The results of the programs under Mao were horrific. The incredible growth of the Chinese economy, during the period Wolff highlights, coincided with the introduction of private property, profit, foreign investment, and letting market forces go to work. When this growth started, China could not be described as a dynamic and innovative economy. Removing the profit incentive tends to stifle creativity and growth. To realize rapid growth, as China did, you need a dynamic and innovative economy. China was able to take a shortcut by becoming the cheap labor for the dynamic, innovative, and wealthy capitalist societies of the west. There were rich buyers, ready to pay to transform China into a giant manufacturing hub. And China was able to borrow and steal innovation while their private sector grew and developed.
There are definitely debates to be had about the cost/benefits of different levels of central planning in a capitalist society. Or about how much redistribution you can have before you start to stifle innovation and growth. But I do not see how one could seriously debate whether communism is better at creating wealth than capitalism.
My opinion has been formed through casual reading so I would love to hear from someone who has a different take on the growth of China since the 40s. One that puts Marxist ideas in a better light. Though I suspect this is the wrong forum for that.
What I don't understand is why Glenn didn't push back at Dr. Wolff's claims. The enormous improvement in standard of living in both Russia and China happened only after both countries introduced the capitalist and market economics that Dr. Wolff so abhors. Just look a photos of downtown Beijing under the socialists Dr. Wolff applauds - thousands of people in Mao suits riding bicycles, after the introduction of elements of a market economy - thousands of people driving their own cars. How could Prof. Loury have missed this?
I think there is a balance every podcaster has to find between pushing back and being a gracious host. Also, between number of topics to cover and how thoroughly to cover each topic. This is especially true with a hard time limit. There is no right answer and I think you have to just go by feel. I am frustrated at times when he doesn't dig in his heels and push back, but I have seen other hosts do that and the conversation gets bogged down for an hour. I guess the upside of less pushback is it gives us a lot more room to be original in the comments section.
We ( the West)are victims of our success in that our progeny don’t remember the atrocities of socialism and allow these charlatans to rise to positions of influence. Hayek was proven correct, yet we’re still having these discussions. Lord help us.
I agree about the problem of forgetting socialism's failures. I'd add that Wolff's complaint about being repressed until recently might have been part of the problem. When people only heard that Marxism was bad without learning any of Marx's ideas, they didn't learn why Marxism was bad. I've read some Hayek and I've read enough about Marxism that none of Wolff's ideas in this show were surprising to me. More people should know what Marx thought as well as how his followers failed.
Human nature, each generation needs to learn the lessons. However, we let our nations education system be taken over by leftists. Thus our kids reach adulthood without proper instructions in civics and economics.
Glenn and John, you are doing a great service bringing to your listeners a calm exchange of differing opinion, well informed by your divergent points of view. When politics first appeared on my radar Reagan was on the ticket. Anyone I knew said he would bumble us into a nuclear exchange with the Soviets, and my young life would be over in a flash, and I believed it. That scary story determined my vote in that first ever presidential election. With much reflection, I've come around to the view that the fact we didn't have to die was no accident. You see, while building the best country on the planet, capitalism helped raise the military stakes on the Marxists, and showed the bully if they started something, it'd cost them, plenty. Most liberals thought that arming for war would bring it about, and still do to this day. I believe the credible threat of nuclear annihilation was a nasty but effective deterrent to an expansionist Marxist juggernaut, bent on world domination, that claimed many more lives by democide, than a nuclear exchange would have. Estimates say about 100 million innocent civilians were killed by their own governments in the 20th century. And my question is, what have the Marxist revolutionaries got to show for it. You can find on maps where the killing fields are scattered across countries enslaved by Marxist tyrants. Lenin promised a worker's paradise, if we were willing to break a few eggs. After 100 years and 100 million innocent lives, where's the omelet?
I know some will question the estimates of 100 million lives, fine. These are estimates. The fact that there's a rough tally of tens of millions would constitute enough evidence to investigate more thoroughly what malignant force in human nature rose up and devoured that many innocents in a couple of successive generations, mostly during conditions having nothing to do with all out war.
With apologies, in advance, to my fellow TGS interlocutors, who came for a polite discussion on the Marxist theoretical critique of capitalism.
But all you are saying is that businesses should provide a civic purpose for a local population that is in conflict what shareholders and management think is best for the business. That brings me back to my original point. When a business decides to open in a location, employees trust that the business has made the right decision. So why don't they trust them to make the right decisions about relocating? Doesn't the business know best?
Richard Wolff is an intriguing scholar and interlocutor. He raised valid points.
When someone sees capitalism as "bad for democracy," whatever that means, that looks like a big, bright, billowing red flag. What is more democratic that consumers wading through a variety of product and service options, deciding which one best suits their needs, and then voluntarily choosing to purchase from one of the providers? The marketplace is among the most democratic things ever devised - competition, consumer choice, the buyer's right to say no, and so forth. Surely, someone who has reached Wolff's place in life knows this and has likely profited from it himself.
I'm going to be honest with you, Glenn. I'm not keen on the closer relationship with the Manhattan Institute. I know you're conservative and not crazy-conservative; I don't agree with you on all things but I do like how center-right you appear to be (am I wrong?) I'm not that keen on the MI. I've only just begun to look into them because I'm aware of them as a right wing 'think tank' but so far, I don't like how they've been funded at some times by the Koch Brothers (that tells you a lot right there) and this is what Media Bias Fact Check has to say about them - "We also rate them Mixed for factual reporting due to a lack of transparency with funding, use of poor sources, and a failed fact check."
I have to think about this some more. I don't mind supporting *you*, I think you're doing great work, but it says something to me that you choose to align yourself more closely with them. It says something about *you*.
I'll continue to research this.
Nicole,
Very thoughtful response. Heather McDonald is a fellow at MI you should look up.
D
"First, I ask Richard to respond to Friedrich von Hayek’s claim that markets will always allocate information and resources more efficiently than centrally planned economies."
I think Hayek simplified too much. Markets are also tools to hide information. If I buy cloths, for example, all I know is the price. If I am knowledgable enough, I may be able to judge the quality to some extend. But there is a lot of information, important to me, that is hidden. For example, whether the workers making the clothes get a fair price for their work. Similarly, market prices typically hide important information about pollution. Or about negative externalities more generally.
I think Hayek underestimated the problem of negative externalities. In the presence of negative externalities, the invisible hand will reduce wealth instead of increasing it.
This question is now important in times where increasing carbon emissions, climate change, famines and droughts, biodiversity loss and the like all point towards the collapse of our civilization.
I think the key word in what you quoted above is “more”. The market isn’t perfect, but it allocates information and resources “more” efficiently than centrally planned economies.
On the whole, do you agree with that?
Are you a proponent of a centrally planned economy or are you just pointing out some weaknesses of a free market? I agree with you to some extent on negative externalities. There is a need for some regulation, but there is a fine line between effective and counterproductive.
Because I think this is one of the few instances where reality is in contradiction to the American dream and people have a hard time reaching the right conclusion as a result.
I'm glad that Wolff is no longer being repressed and I'm glad Glenn let him speak. We need to hear the bad ideas as well as the good so we can distinguish them.
Wolff may be right that the Soviet Union and People's Republic of China experienced the greatest economic growth in the 20th century. I wonder how much of that growth he'd attribute to the New Economic Policy, which was explicitly capitalist and free market. https://en.wikipedia.org/wiki/New_Economic_Policy Glenn referenced the fact that the PRC went a similar direction several decades later.
Would Chinese GDP have grown so exponentially if they paid their workers a living wage?
And regarding worker entitlement over businesses...one cannot allow minimum wage workers who may not be educated in how to run a business take over the company or the company will tank. A company needs a leader who understands business, economy, finances, etc. If your employees start making all the company's decisions, how successful is that company going to be?
Congrats on the excellent discussion. Too short, which is why I’m here for the first time after subscribing 7 months ago.
I finally see what is drawing so many people to this socialist thinking. A few surprising out-of-context facts like GDP on top of the guilt about over-publicized bad behavior by companies and voila.
Manufacturers didn’t leave Youngstown and Detroit because of too much capitalism. It was from too much socialism, in the form of unions.
I was a union member as a clerical worker in the 1990s. Unions make a thick wall between management and the workers and on the worker side, everyone must be paid by seniority only. This crushes innovation.
In the 70s, our great American manufacturers were losing share to cheaper better products from Japan, whose non-unionized employees were rewarded for proposing great new ideas — kaizen.
A friend of mine is a liberal Democrat who believes Elizabeth Warren on everything. The only thing we agree on is unions, because her family’s high end doll manufacturing company was crushed from the inside by a union. Can we somehow redraw the lines in this country with stories like hers?
He made my ears hurt and never said anything with substance. Interestingly Glenn Beck is doing a special on Marxism tonight. This is the Soros way.. dangerous stuff.
I'm very disappointed that Glenn did not push back harder on Wolff's mischaracterization of Hayek's knowledge problem. It's not that Hayek thought that capitalism would make not make mistakes and socialist planning would, it's that Hayek thought the knowledge problem made socialist planning IMPOSSIBLE.
Marxism is an evil ideology and pushing back on it as hard as possible is just as important as pushing back on fascists and racists.
Whether Marxism is evil depends on whether you're referring to Marx's ideas or those who tried to implement them after Marx's death. AFAICT, Marx was simply mistaken about a great many things. OTOH, the attempts to bring his utopian ideas into reality were evil when they resulted in mass murder on an unprecedented scale.
I don't think Wolff has any evil motives in his promotion of Marxism. However, I find it easier to give Marx a pass since he never saw the massive destruction his terrible ideas helped implement. Wolff should know better.
It's the ideas. Dialectical materialism, by reframing ideas, beliefs, and even morals as mere superstructure to material power relations removes the possibility of serious objection to revolutionary violence.
The whole Hegelian mindset where the individual only gains reality by participation in the universal is prone to this stuff. By flipping Hegel on his head and replacing geist with materialism, Marx still failed to remove the moral heteronomy inherent in the framework.
I should make it clear that I don't agree with Marx's world view at all. I believe that God made people and each person has inherent value, so I view a Marxian world view as amoral at best. OTOH, if such a view of humanity is inherently immoral, then maybe it would accurate to describe a Marxian world view as "evil." I tend to think of "evil" as implying intent to harm.
It was hard to get a word in and sometimes it’s better to let someone talk their way towards obvious ignorance.
Under our current system there is nothing stopping a group of people getting together and creating an employee owned company (which is what Wolff) seems to be advocating for. In fact there are a number of them in existence. WinCo a large western grocery store comes to mind.
The key to the free markets is voluntary transactions. You don't want to work for that guy, then don't. You don't want to buy from that guy, then don't. It's a free(ish) country, do what you want. If you think employee owned companies are the best then do that.
Another option, if all the employees of a public company get together and put their 401k into company shares, pretty soon they could have a large or even controlling interest in the company.
But that's not good enough for people like Wolff. Some (most) people might not live the way he wants. So he's going to use the police power of the state. Which is backed up by men with guns to FORCE you to live the way HE wants.
Socialism/communism at it's core is force. Capitalism/free markets is about voluntary transactions and choice. We should never lose sight of that.
Regarding China, their economic miracle didn't come around due to communism. It came around when they started to allow free markets. And of course they were able to short circuit a lot of development because the advancements had already occurred.
See communism works great in a family, from each according to his ability, to each according to his needs. I love my family, and I will work my butt off to make sure they have a good life. But if I'm not going to keep the majority of the fruits of my labor, then I won't bother.
I won't start a business if my employees are going to be able to tell me how to run it. It won't be worth it. And quite likely I would never have bothered to get my MBA or CPA. Why bother, if I can't get ahead then just sit back and play video games.
As the old communist saying goes "they pretend to pay us, we pretend to work".
re: "Capitalism/free mkts is about voluntary transactions & choice"--sure, when everyone participating in those markets is independently wealthy. But to the extent that people don't get their basic means of survival met up-front, unconditionally, they're not free (except to starve, die of exposure, etc.)
It’s hard to study Chinese history since the late 1940s and come away thinking Marxist principles are what pulled hundreds of millions of Chinese out of poverty. The results of the programs under Mao were horrific. The incredible growth of the Chinese economy, during the period Wolff highlights, coincided with the introduction of private property, profit, foreign investment, and letting market forces go to work. When this growth started, China could not be described as a dynamic and innovative economy. Removing the profit incentive tends to stifle creativity and growth. To realize rapid growth, as China did, you need a dynamic and innovative economy. China was able to take a shortcut by becoming the cheap labor for the dynamic, innovative, and wealthy capitalist societies of the west. There were rich buyers, ready to pay to transform China into a giant manufacturing hub. And China was able to borrow and steal innovation while their private sector grew and developed.
There are definitely debates to be had about the cost/benefits of different levels of central planning in a capitalist society. Or about how much redistribution you can have before you start to stifle innovation and growth. But I do not see how one could seriously debate whether communism is better at creating wealth than capitalism.
My opinion has been formed through casual reading so I would love to hear from someone who has a different take on the growth of China since the 40s. One that puts Marxist ideas in a better light. Though I suspect this is the wrong forum for that.
What I don't understand is why Glenn didn't push back at Dr. Wolff's claims. The enormous improvement in standard of living in both Russia and China happened only after both countries introduced the capitalist and market economics that Dr. Wolff so abhors. Just look a photos of downtown Beijing under the socialists Dr. Wolff applauds - thousands of people in Mao suits riding bicycles, after the introduction of elements of a market economy - thousands of people driving their own cars. How could Prof. Loury have missed this?
I think there is a balance every podcaster has to find between pushing back and being a gracious host. Also, between number of topics to cover and how thoroughly to cover each topic. This is especially true with a hard time limit. There is no right answer and I think you have to just go by feel. I am frustrated at times when he doesn't dig in his heels and push back, but I have seen other hosts do that and the conversation gets bogged down for an hour. I guess the upside of less pushback is it gives us a lot more room to be original in the comments section.
We ( the West)are victims of our success in that our progeny don’t remember the atrocities of socialism and allow these charlatans to rise to positions of influence. Hayek was proven correct, yet we’re still having these discussions. Lord help us.
I agree about the problem of forgetting socialism's failures. I'd add that Wolff's complaint about being repressed until recently might have been part of the problem. When people only heard that Marxism was bad without learning any of Marx's ideas, they didn't learn why Marxism was bad. I've read some Hayek and I've read enough about Marxism that none of Wolff's ideas in this show were surprising to me. More people should know what Marx thought as well as how his followers failed.
Human nature, each generation needs to learn the lessons. However, we let our nations education system be taken over by leftists. Thus our kids reach adulthood without proper instructions in civics and economics.
Of course some like Wolff seem to be beyond help.