Who's Afraid of Socialism?
with Richard Wolff and LaJuan Loury
The word “socialism” gets thrown around a lot these days, and often inaccurately. That’s partially a result of its most extreme and disastrous iterations in the twentieth and twenty-first centuries, like Stalin’s Soviet Union and North Korea under the Kims. The specter of these regimes haunts the American political imagination, conjuring up images of work camps, famine, and purges. But there are plenty of functional social democracies in Europe, where markets and strong social safety nets coexist more or less in harmony within stable, prosperous societies. It’s possible that the US could even learn a thing or two from these nations, at least when it comes to protections for our most vulnerable citizens.
Still, given the choice between socialism and capitalism, I’ll take capitalism any day. That conflict is the topic of my latest debate with the economist Richard Wolff. Rick is a proud and committed Marxist, and as you’ll see, he’s bothered by what he takes as the purposeful exclusion of Marx from the mainstream of economics pedagogy, research, and publishing. For Rick, this exclusion reflects a fear of Marxism and socialism on the part of the economics profession.
But I beg to differ. There is no capitalist conspiracy to keep the Marxists out of economics. Rather, there are few Marxist economists whose work employs the advanced techniques of modern economics. Methodologically speaking, most of them aren’t up to snuff. If they want to have their ideas taken seriously, they’ll have to do what every other leadings economist does: gather the data, calculate, and try to advance the discipline. Until that happens, the only people keeping Marxists out of the economic mainstream will be the Marxists themselves.
You’ll notice that this conversation is moderated by my lovely wife, LaJuan. You’ve all heard me talk about her, those of you who listen to the podcast have heard her voice introducing the show every week, and now she’s taking center stage, literally. I’m looking forward to having LaJuan on the show more regularly—I can’t wait for you to get to know her.
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LAJUAN LOURY: I'll start with you, Glenn. Why does socialism strike fear in us?
GLENN LOURY: Ah, in us? You too? This is news to me. We've been having this conversation, my wife and I, for some time now. I think socialism is wrongly seen by many Americans as somehow a stalking horse for [a] Marxist, totalitarian, overpowering state that'll take our freedoms away.
I mean, it needn't be so. There are socialist countries that have veered in that direction, but it needn't be so. I would not lay that at the feet of socialism. I think vested interest, I don't have a problem saying this. The people who are on top, who are wealthy, who do control the economic engines of production don't wanna lose their influence and their power. I don't blame them for that. So I think, ideologically, the evolution of the Cold War, the characterization of the Soviet Union as an evil empire, the nuclear standoff, the proxy fighting in one venue in Latin America or in Southern Europe or whatever it might be, ever since the end of the Second World War, has created an environment where, and I regret this, an objective consideration of the relative merits of alternative ways of organizing the economy has been difficult to sustain because of the political interest and concerns that I've called attention to.
But I think even though that's the case, when we do open the discussion, as we're doing right now, and we try to lay the case for and against capitalism and socialism on the table, there are plenty of reasons—and I'll have the opportunity later to say what I think—as to why one should opt for the capitalist side of that equation.
LAJUAN LOURY: Thank you. Rick?
RICHARD WOLFF: Yeah. Well, I'm very glad that we agree [on] a lot of the things you began your comments with. I think we do agree on that, and I'm gratified by that. And I'm gratified because it means you have not been as affected by the last 75 years of stifling hostility to socialism that so many other people have been.
But I would like to comment a little bit on that in terms of me. I have never had, in my experience in the Ivy Leagues that I was educated in or in the basic intellectual life of the United States, I have never ever experienced what I would call a reasonably balanced conversation of the sort that you deserve my appreciation for doing right now. But it's very, very rare. I have not experienced it hardly ever. I can assure you that the courses I was taught at at Harvard, Stanford, and Yale—the only institutions I ever attended—were all either ignorant of the whole tradition of Marxism or hostile, and very often both.
But the notion that there would've been a professor who could have said, “I'm here. I'm gonna talk to you about economics or history”—the fields I was interested in—“and I'm gonna present you with the Marxian perspective and the non-Marxian perspective. And then we're gonna have a conversation about the virtues and strengths and weaknesses of both,” I never had that experience. My professors were afraid. When I would raise my hand as I became interested, I could see in their eyes fear. And the few who were honest with me in their offices afterwards explained to me, “I can't talk to you about that, because that'll get represented by some other student in the class, and next I'll be get a reputation as the young man or woman”—well, in those days it was all men—“the young man who was interested in Marxism. And I don't need that for my career. I don't want that for my career. Do you see any senior professors around here who are Marxist and at Harvard? Not one.” And at Yale? Not one. At Stanford, for a very short time, one.
Out of the twenty semesters I had, twenty semesters in which I got my undergraduate degree, three masters degrees, and a PhD, which is what I have from those universities, most of them in economics. With the exception of the one professor, one semester out of twenty, no one ever gave me one word of Karl Marx's critique to read. It was as if it wasn't there. It was that magical way in which somebody obviously in the room is magically determined not to be in the room. And for me, I then went with other students like me, and we learned it on our own because that was the only way to learn it. And I'm just describing a little academic corner of the universe. If you make it larger, we have a 75 year history we have to climb out from under in this country to catch up. I won't bore your audience, but Marxism has changed dramatically in the last 40 years. Most Americans don't know it.
LAJUAN LOURY: Time. Thank you. Do you care to rebut?
Well, not so much as rebut. I mean, we don't have to necessarily disagree about everything. And the statement of fact that you don't see Marx taught in graduate economics courses in the top universities in the United States is absolutely true. You don't see Marxism taught. Undergraduates, I'd be surprised if there weren't courses on Marx's thought in undergraduate curriculum at departments, but I don't have any data on that.
I want to say a couple things. One is, economics is specialized, technical, at the high level, at the frontier of the academy, what's in the journals, what kind of research programs are being undertaken, what's getting funded by the National Science Foundation, what's being published in Econometrica, et cetera, what the brightest young men and women are being attracted to, the kinds of problems they work on. It's a specialized technical enterprise. It's not a philosophical enterprise. I mean, you don't see right wing economics being taught in these places either, Austrian economics or whatever it is. That's quirky, kind of weird stuff for the mainstream economics profession.
These men and women, they have their green eye shades on. They're doing their sums. It's become very mathematical. On the empirical side, it's become very statistical. The observation that Marxism isn't taught to mainstream economics students is simply a statement about the nature of economics, not about the nature of Marxism. Economics as it is now being practiced in the elite academy.
LAJUAN LOURY: I'll allow one response.
RICHARD WOLFF: If I had time, I would explain that Marxian economics is an alternative way of constructing a series of propositions about how economies work. Those can be formulated in technocratic ways, in mathematical ways. I could give you the literature to do all of that. None of that is brought in. It is excluded because it is, at its base, a critique of capitalism. And this system is so fragile it can't allow that kind of thing.
At the level of the people at the top who are going to go on to do … what? My classmates work at Brookings Institute, work for the government, work for the large corporations, or become teachers in turn at the same level of the same material. It's almost a kind of incestuous process from which certain folks are excluded. The ironies become clear with people like me, since we have the same training they do. My classmate at Yale in my class was Janet Yellen, and I know what she learned. She learned from the same professors I did in the same classroom I did, took the same exams I did. I know what we both were taught. And we were taught something that systematically excluded even those Marxists who had been similarly trained, used the same materials, but reached diametrically different conclusions. A system like ours, That could not and would not allow alternatives, with all the credentials you could imagine, is a system that must be very, very fragile beneath its veneer of self-assuredness,
There is no conspiracy to keep your Marxist papers out of the American Economic Review. All you have to do is persuade a set of referees that it is advancing the frontiers of knowledge as they understand it. That's not a political agreement. That's an intellectual and a disciplinary agreement. Much of what I think one would take to be the Marxist intellectual inheritance is found in the humanities and in other social sciences, which are not specialized quite in the way that economics has become.
Maybe we're asking the wrong questions in economics. Questions, for example, about what drives the dynamism of technological innovation in the information age, what's going on in Silicon Valley, questions like what are the implications of globalization and of opening of markets and goods flowing back and forth for the processes of economic development in various countries? I'm not saying Marxists don't address these questions. I know that they do. What I'm saying is that mainstream economics gatekeepers are persuaded that the neoclassical approach—that is, the assumption that firms maximize profit, that consumers seek to maximize their utility subject to their budget constraints, that prices get determined by supply and demand in a set of markets being balanced one against the other, that investment is attracted by the anticipated rate of return that expectations drive, what's gonna be inflation, et cetera—those kinds of questions are most adequately illuminated by a set of techniques.
It's techniques, not ideology, that's at play here. And as I say, Marxism is alive and well in the academy. It's just not in the economics department.
RICHARD WOLFF: Yes. And for me, that's a reflection of the economics department. You'd have to make the argument [that it's] purely coincidental that this fascination with mathematics or technology happens just by some magic to exclude all the Marxists who do technical mathematical work alongside all the Marxists who do. It's fear in the economics department that keeps them exclusive the way they are.
Paul Samuelson was not afraid of anybody or anything when he wrote The Foundations of Economic Analysis. Neither is John Roemer, the Marxist economist, and I'm sure a friend of yours. “No bullshit Marxist,” he tells me. Not somebody who a person like myself wouldn't appreciate and read his books and understand what he's trying to do. He's a serious technical economist, that is John Roemer, and he's a Marxist. There are not nearly enough of him. But he's speaking the language of modern economics, and most, if I may, Marxist don't.
Finance houses knowingly sold unsecured debt. Pension funds were used by front companies to raise capital which then then disappeared leaving pensioners destitute. It was a criminal exercise. Finance capitalism is semi-criminal.
Vulgar pride evinced herein of a blinkered intelligentsia, cosseted in their blood soaked echo chamber