Richard Wolff is an economist and visiting professor at the Maxwell School of Citizenship and Public Affairs. Wolff gave an open lecture on September 27 on the “evils” of capitalism. An outspoken critic of our economic system, Wolff touched based on a wide range of topics, including the history of capitalism, capitalism in the United States today, and how we must go about reforming our economy.
According to Wolff, capitalism originally thrived due to a shortage of labor: we simply did not have enough people to work, or enough people willing to work. In the South, the problem was solved with the introduction of slavery. However, in the North, where slaves were not commonly held, businesses had to find other ways to attract workers. Between the 1820s and the 1970s, this was done by continuously raising wages. But by the 1970s, labor shortages were no longer an issue. With the advent of computers, more and more women entering the workforce, and the wave of immigration, corporations no longer had a pressing demand for American workers. Wolff stated that Americans now perform more hours of work than any other population around the world. They are literally “working themselves to death” to keep up with rising cost of living. To help meet these rising costs, it is also at this time that we started seeing the borrowing of massive quantities of money, burying families in debt.
“Capitalism is abandoning the areas in which it grew,” Wolff said. Corporations moved overseas to foreign markets. They employed non-American workers in areas where wages were extremely low. It was cheap, more “efficient,” more “economic” labor.
As with many economies, our’s clearly has its problems as Wolff pointed out all too eagerly. (A rather tender nerve was struck when someone haplessly mentioned WalMart, a corporation which for him evidently represents capitalism at its worst.) However, I did not necessarily agree with the reforms he subsequently proposed. Referring back to Roosevelt during the Great Depression of the 1930s, Wolff highlighted many key changes the president introduced to fix the economic crisis. After being lobbied by unions, socialists, and pro-communist groups, Roosevelt understood the need for social and economic justice. He wanted to close the economic gap that is still prevalent today. To do this, Roosevelt created an unemployment compensation program, which equates best to our current welfare system; a social security system to help the elderly; and proposed a plan to tax the rich and corporations. Roosevelt’s tax plan included a 100% tax on any income exceeding $25,000 year. This proposal was reduced to 94% after passing through Congress. When discussing Roosevelt’s reforms, Wolff became very passionate. He clearly agreed with many of these types of broad-reaching reforms. But not everyone agrees this approach is applicable in today’s economy. I am included in this group.
While I found myself disagreeing with Wolff on his ideas to democratize the economy and expand our welfare system, his lecture was stimulating. It is when listening to people that you disagree with most that your own opinions become more carefully defined.