Forum Post: Is There an Alternative for Capitalist Economics and Politics? Richard Wolff Says Yes By Mark Karlin,

"Imagine a country where the majority of the population reaps the majority of the benefits for their hard work, creative ingenuity and collaborative efforts. Imagine a country where corporate losses aren't socialized, while gains are captured by an exclusive minority. Imagine a country run as a democracy, from the bottom up, not a plutocracy from the top down. Richard Wolff not only imagines it, but in his compelling, captivating and stunningly reasoned new book, Democracy at Work, he details how we get there from here - and why we absolutely must." -- Nomi Prins, Author of It Takes a Pillage and Black Tuesday

Few are better equipped than economist Richard Wolff, professor emeritus at the University of Massachusetts, to address the massive failings and inequalities of capitalism as he does in his latest book, Democracy at Work: A Cure for Capitalism. He also describes Workers' Self-Directed Enterprises (WSDEs) as an alternative to the capitalism that broke the US economy and has resulted in massive economic redistribution to the ruling elites.

Mark Karlin: In your book, what is the distinction between capitalism and welfare state capitalism?

Richard Wolff: Capitalism, like all other economic systems, displays a variety of forms. There are, for example, largely private, laissez-faire kinds of capitalism that differ in many ways from forms of capitalism in which the state plays more significant roles, such as market regulator or social welfare guarantor (as in "state welfare capitalism"), or as a close partner of capitalists as in fascism. What remains the same across all such forms - why they all deserve the label "capitalist" - is the exclusion of the mass of workers that produces the output and generates the profits from receiving and distributing that profit, and from generally participating democratically in enterprise decisions. Capitalism excludes workers from deciding what is produced, how it is produced, where it is produced and how profits are to be used and distributed. Democracy at Work is a critique and alternative aimed at changing that exclusion shared by all these forms of capitalism. Mark Karlin: In that regard, what do you think about the contention that FDR was not at all an opponent of capitalism, but simply saw that some government intervention was necessary in the US economy in order to save capitalism during the depression of the '30s?

Richard Wolff: What FDR saw was the political might of the coalition of unionists (galvanized by the CIO in the middle 1930's), socialist and communist parties demanding that government not only bail out the banks and corporations, but also directly help the mass of people suffering the Great Depression. Elements within that coalition threatened that Washington's failure to respond to do so would turn many millions of US citizens against capitalism. FDR got the message and crafted a deal in response. The government would both tax and borrow from corporations and the rich to fund the new Social Security system, national unemployment insurance, and a vast program of federal hiring. In return, the coalition would downplay its anti-capitalism and celebrate instead the achievement of a welfare state type of capitalism. The coalition mostly accepted this New Deal. FDR went on to win four consecutive presidential elections making him the most popular president in US history. The New Deal saved the capitalist system by changing its form from a relatively more laissez-faire [form]to a welfare-type state.

Mark Karlin: Before the recent crash, what was the capitalist crisis from above and below that you describe in the book?

Richard Wolff: The crisis from above refers to the speculative mania indulged by the small minority of people (major holders of corporate securities, boards of directors, their professional staffs, etc.) who gathered increasing profits into their hands as wages stagnated after the mid-1970s. Financial enterprises competed for the funds accumulating in this minority's hands by taking ever-greater risks with old and new (e.g. asset-backed securities, credit default swaps, etc.) financial instruments. Another in the long history of capitalist speculative manias built a bubble on the back of the rising debt of the US working class. When the latter's debt burden could no longer be serviced, the bubble burst, adding the crisis from above to that built from below by the lethal mixture of stagnant wages and rising debts. Receive a copy from Truthout with a minimum contribution. Just click here.

Mark Karlin: How does the distribution of surpluses in revenue (profits) in business enterprises affect the economic structure of a society?

Richard Wolff: The surplus generated by enterprises - the excess of revenue from commodity sales over the direct costs of producing those commodities - is what capitalists receive and control in capitalist economies. They then distribute those surpluses as they see fit to reproduce the system in which they occupy such exalted positions. Thus, for example, they distribute some of the surplus to top corporate officials (shaping the distribution of income and wealth in capitalist societies), some to moving production abroad if, when and where that might generate larger surpluses (producing unemployment at home and growth abroad), some to donations to politicians and parties to shape and control political decisions to serve their needs, and so on. The distribution of the surplus is thus a major shaper of how our society works, how we all live.

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