Lex Fridman PodcastRichard Wolff: Marxism and Communism | Lex Fridman Podcast #295
EVERY SPOKEN WORD
150 min read · 30,033 words- 0:00 – 1:52
Introduction
- RWRichard Wolff
Slaves produce a surplus which the master gets. Serfs produce a surplus which the lord gets. Employees produce a surplus which the employer gets. It's very simple. These are exploitative class structures because one class produces a surplus appropriated, distributed by another group of people, n- not the ones who produced it, which creates hostility, enmity, envy, anger, resentment, and all of the problems you can lump under the heading class struggle.
- LFLex Fridman
The following is a conversation with Richard Wolff, one of the top Marxist economists and philosophers in the world. This is a heavy topic, in general, and for me personally, given my family history in the Soviet Union, in Russia, and in Ukraine. Today the words Marxism, socialism, and communism are used to attack and to divide much more than to understand and to learn. With this podcast I seek the latter. I believe we need to study the ideas of Karl Marx, as well as their various implementations throughout the 20th and the 21st centuries. And in general, we need to both steel man and to consider seriously the ideas we demonize, and to challenge the ideas we dogmatically accept as true, even when doing so is unpleasant and at times dangerous. This is the Lex Fridman Podcast. To support it please check out our sponsors in the description. And now, dear friends, here's Richard Wolff.
- 1:52 – 10:21
Marxism
- LFLex Fridman
Let's start with a basic question but maybe not so basic after all. What is Marxism? What are the defining characteristics of, uh, Marxism as an economic and political theory and ideology?
- RWRichard Wolff
Well, the simplest way to begin a definition would be to say it's the tradition that takes its founding inspiration from the works of, uh, Karl Marx. Um, but because these ideas that he put forward spread as fast as they did and as globally as they did, literally it's, uh, 140 y- years since Marx died, and in that time his ideas have become major types of thinking in every country on the Earth. Um, if you know much about the great ideas of human history, um, that's an extraordinary spread in an extraordinarily short period of historical time. And what that has meant, that speed of spread and that geographic diversity, is that the Marxian ideas interacted with very different cultural histories, religious histories, and economic conditions. So the end result was that the ideas were interpreted differently in different places at different times. And therefore Marxism, as a kind of first flush definition, is the totality of all of these very different ways of coming to terms, uh, with it. For the first roughly 40, 50 years, um, Marxism was a tradition of thinking critically about capitalism. Marx himself, that's all he really did. He never wrote a book about communism. He never wrote a book really about socialism either. His comments were occasional, fragmentary, dispersed. What he was really interested in was a critical analysis of capitalism, and that's what Marxism was more or less in its first 40 or 50 years. Um, the only qualification of what I just said was something that happened in Paris for a few weeks. Uh, in 1871 there was a collapse of the French government, uh, consequent upon losing a war to Bismarck's Germany, and then the result was something called the Paris Commune. The working class of Paris rose up, basically took over the function of running the Parisian economy and the Parisian society. And Marx's people, people influenced by Marx, were very active, uh, in that commune, in the leadership of the commune, and Marx wasn't that far away. He was in, uh, London, uh, and these things were happening in Paris. You know, that's an easy transport even then. And for a short time, very short, Marxism had a different quality. In addition to being a critique of capitalism, it became a theory of how to organize societally differently. Before, that had only been implicit. Now it became explicit. What is the leadership of the Paris Commune going to do, and why, and in what order? And in other words, governing, organizing a society. But since it only lasted a few weeks, the French Army regrouped, uh, and under the leadership of people who were very opposed to M- Marx, they marched back into Paris, took over, killed a large number of the, of the Communards as they were called, and deported them to islands in the Pacific that the, that were part of the French Empire at the time. The really big change happens in Russia in 1917. Uh, now you have a group of Marxists, Lenin, Trotsky, all the rest, who...... are in this bizarre position to seize a moment. Once again, a war, like in France, uh, disorganizes the government, throws the government into a very bad reputation because it is the government that loses World War I, has to withdraw, as you know, uh, Brest-Litovsk and all of that, and the government collapses and the army revolts. And in that situation, a very small political party, Russian Social Democratic Workers Party, um, splits under the pressures of all of this, uh, into the Bolshevik and Menshevik divisions. Lenin, Trotsky, and the others are in the Bolshevik division. And to make a long story short, he's in exile. Uh, his position, uh, Lenin's position makes him, gets him deported because he says Russian workers should not be killing German workers. I mean, this is a war of capitalists who are dividing the world up into colonies and Russian working people have no... should not kill and should not die for such a thing. As you can expect, they arrest him and they throw him out. Interestingly, in the United States, the, the comparable leader at that time of the Socialist Party here, as you know, there was no Communist Party at this point, that comes later, um, the head of the Socialist Party, a very important American figure named Eugene Victor Debs, makes exactly the same argument to the... that Americans should not fight in the war. Uh, he's in the pa- he has nothing to do with Lenin. I don't even know if they knew each other. But, uh, he does it on his own. He gets arrested and put in jail here in the United States. By the way, he runs for president from jail and does very well. Really, very well. It's remarkable. Um, and he's the inspiration for Bernie Sanders, if you-
- LFLex Fridman
(laughs)
- RWRichard Wolff
... if you see the, the link. Um, although he had much more courage politically than, than Bernie has.
- LFLex Fridman
That's really interesting. I'd, I'd love to return to that link maybe later.
- RWRichard Wolff
Yes.
- LFLex Fridman
(laughs) History rhymes.
- RWRichard Wolff
Yes. A complicated story. Anyway, what the importance in terms of Marxism is that now this seizure of power by a group of Marxists, that is a group of people inspired by Marx, developing what you might call a Russian, uh, even though there were differences among the Russians too, but a Russian interpretation, this now has to be transformed from a critique of capitalism into a plan at least of what are you gonna do in the Soviet Union. And a lot of this was then trial and error. Marx never laid any of this out. Probably wouldn't have been all that relevant if he had, 'cause it was 50 years earlier, in another country, et cetera. So what begins to happen, and you can see how this happens then more later in China, in Cuba, in Vietnam, in Korea, and so on, is that you have kind of a bifurcation. Much of Marxism remains chiefly the critique of capitalism, but another part of it becomes a set, and they differ from one to the other, a set of notions of what an alternative post-capitalist society ought to look like, how it ought to work. And there's lots of disagreement about it, lots of confusion. Um, and I would say that that's still where it is, that you have a tradition now that has these two major wings, critique of capitalism, notion of the alternative, and then a variety of each of those, and that would be the framework in which I would answer that's what Marxism is about. It's basic idea, if you had to have one, is that human society can do better than capitalism-
- LFLex Fridman
(laughs)
- RWRichard Wolff
... and it ought to try.
- LFLex Fridman
And then we can start to talk
- 10:21 – 45:27
Communism
- LFLex Fridman
about what we mean by capitalism.
- RWRichard Wolff
Fine.
- LFLex Fridman
So we'll look at the critique of capitalism on one side, but maybe stepping back, wh- what do you think Marx would say if you just looked at the different implementations of the ideas of Marxism throughout the 20th century? Were his ideas that were implicit, were made explicit? Um, would, uh, would he shake his head? Would he enjoy some of the parts of the implementations? Like what do you... how do you think he would analyze it?
- RWRichard Wolff
Well, he had a great sense of humor. I don't know if you-
- LFLex Fridman
(laughs)
- RWRichard Wolff
... had a chance to take a look at his writing, but he had an extraordinary sense of humor. So my guess is he would deploy his humor in answering this question too. He would say some of them are inspiring, some of his interpretations of his work, and he's very pleased with those. Others are horrifying, and he wishes somehow he could erase the connection between those things and the lineage they claim from him, which he would, uh... There's a German word, I, I don't know if these lang- if you speak the other languages.
- LFLex Fridman
Nope.
- RWRichard Wolff
There's a wonderful German word called Verzichte, and it's stronger than the word refuse. It's if, if you wanna refuse something, but with real strong emphasis. Ich verzichte darauf, is a German way of saying, "I, I, (laughs) I don't want anything to do with that." And he would talk then, you know, in philosophical terms, 'cause remember, he was a student of philosophy, he wrote his doctoral thesis on ancient Greek philosophy and all the rest, he would wax philosophical and say, you know, that, that the ideas you put out are a little bit like having a child. You have a lot of influence, but the child is his own or her own person and will find his or her own way. And these ideas, once they're out there-... go their own way.
- LFLex Fridman
And as you said, there's a particular way that this idea spread. The speed at which it spread-
- RWRichard Wolff
Yeah.
- LFLex Fridman
... throughout the world made it even less able to be sort of stabilized-
- RWRichard Wolff
Right.
- LFLex Fridman
... and connect it back to the origins of where the idea came from.
- RWRichard Wolff
The only people who ever really tried that were the Russians, uh, after the revolution, because they occupied a position for a while, not very long. But they occupied a position for a while in which, I mean it was exalted, right? They, there had been all these people criticizing capitalism for a long time, even the Marxists ever since mid-century, and these were the first guys who pulled it off. They made it, and so then there was a kind of presumption around the world their interpretation must be kinda the right one, because look-
- LFLex Fridman
Right.
- RWRichard Wolff
... they, they did it. And so for a while, they could enunciate their interpretation, and it came to be widely grasped as something which, by the way gets called in the literature, official Marxism. The very idea that you would put that adjective in front of Marxism, or Soviet Marxism, or Russian Mar- There were these words that w- where the adjective was meant to somehow say, kind of, "This is the canon."
- LFLex Fridman
Right.
- RWRichard Wolff
You can depart from it, but this is the canon.
- LFLex Fridman
Right.
- RWRichard Wolff
Before the Russian Revolution, there was no such thing, and by the 1960s it was already dispar- it, it was gone. But for a short time, you know, 30, 40 years, it was a kind of ... And the irony is, particularly here in the United States where the taboo against Marxism kicks in right after World War II, is so total in this country that I, for example, through most of my adult life have had to spend a ridiculous amount of my time simply explaining to American audiences that the Marxism they take as canonical is that old Soviet Marxism which wasn't the canon before 1917, and hasn't been since at least the 1960s, but they don't know. It's not that they're stupid and it's not that they're ignorant, it's that ... Well, the ignorance maybe, but I mean it's not a mental problem. It, it's the taboos shut it down, and so all of the reopening, that in a way recaptures what went before and develops it in new direction, they just don't know. They just don't know.
- LFLex Fridman
Nevertheless, it's a serious attempt at making the implicit ideas explicit. The, the, the Russians, the, the Soviets at the beginning of the 20th century made a serious attempt at saying, "Okay, beyond the critique of capitalism, how do we actually build a system like this?"
- RWRichard Wolff
Right.
- LFLex Fridman
And so in that sense, not at a high level but at a detailed level, it's interesting to look at those particular, uh, schools. Maybe-
- RWRichard Wolff
Right, because, for example, I mean just to take your point one step further, you really cannot understand the Cuban Revolution, the Chinese Revolution, uh, Vietnamese, and, and the others, because each of them is a kind of response, let's call it, to the way the Soviets did it.
- LFLex Fridman
Yeah.
- RWRichard Wolff
Are you gonna do it that way? Well, yes and no is the answer. This we will do that way, but that we're not gonna do. And the differences are huge, but you could find a thread, I can do that for you if you want, in which all of them are in a way reacting.
- LFLex Fridman
(laughs)
- RWRichard Wolff
They are-
- LFLex Fridman
To the originals.
- RWRichard Wolff
Yes.
- 45:27 – 57:43
Human nature
- LFLex Fridman
of fascinating questions here, so one, one is, (sighs) to what degree... So there's human nature. To what degree does communism, uh, a lack of exploitation of the working class naturally emerge? If you leave two people together in a room and come back a year later, if you leave five people together in a room, if you leave 100 people and 1,000 people, it seems that humans form hierarchies, uh, naturally. So the, the clever, the charismatic, uh, the sexy, the p- the muscular, the powerful, what- however you define that, uh, starts, start, you know, becoming a leader and start to do, um, maybe exploitation in a non-negative sense, a more ge- generic sense, starts to become an employer, not in a capitalist sense but just as a human. "Here, you go do this and in exchange I will give you this," just becomes the leadership role, right? Uh, so the question is yes, okay, it would be nice, the idea sort of of communism would be nice to, to, uh-
- RWRichard Wolff
It's nice in, nice in theory.
- LFLex Fridman
... not steal from the world. It's nice in theory.
- RWRichard Wolff
But it doesn't work in practice 'cause of human nature.
- LFLex Fridman
Because of human nature. That's... Thank you. (laughs) So what c- what can we say about leveraging human nature to achieve some of these ends?
- RWRichard Wolff
There's so many ways of responding. Uh, in no particular order, here, here are some of them. Um, the history of the human race, as best I can tell, is a history in which a succession of social forms, forms of society, arise. And as they do, they rule out some kinds of human behavior on the grounds that they are socially disruptive and unacceptable. The argument i- isn't really then is there a need or an instinct? Is there some human nature (laughs) that makes people want to do this? Well, whatever that is, this has to be repressed or else we don't have a society. You know? And Freud helps us to understand that that repression is going on all the time and it has consequences. It's not a finished project. You repress it, it's gone. It doesn't work like that. So for example, when you get a bunch of people together at some point, they may develop animosities towards n- one another that lead them to want the other person or persons to disappear, to be dead, to be gone. But we don't permit you to do that. We just don't. Every economic system that has ever existed has included people who defend it on the grounds that it is the only system consistent with human nature, and that every effort to go beyond it has to fail because it contradicts human nature.I can show you endless documents of every tribal society I've ever studied, every anthropological community that has ever been studied, slavery, wherever it's existed. I can show you endless documents in which the defenders of those systems, not all of them, of course, but many defenders used that argument to naturalize a system as a way to hold onto it, to prevent it from going, to, to counter the argument that every system is born, every system evolves, and then every system dies. And therefore, capitalism, since it was born and since it's been developing, we all know what the next stage of capitalism is.
- LFLex Fridman
We can infer. You're-
- RWRichard Wolff
It's gonna-
- LFLex Fridman
If what you're saying-
- RWRichard Wolff
The burden is on the people who think it isn't gonna die.
- LFLex Fridman
Okay, so it doesn't mean they're wrong, but what you're saying is if we look at history, you're deeply suspicious of the argument-
- RWRichard Wolff
Oh.
- LFLex Fridman
... this is going against human nature because we keep using that for basically everything, including toxic relationship, toxic systems-
- RWRichard Wolff
Absolutely.
- LFLex Fridman
... destructive systems. That said, uh, well, let me just ask a million different questions.
- RWRichard Wolff
Sure.
- LFLex Fridman
So, so one, what about the, the argument that sort of the employer, uh, the capitalist takes on risk? So, the... Yeah. Versus the employee who's just there doing the labor. The, the capitalist is actually putting up a lot of risk. What's, uh, are they not, in sort of aggregating this organization and taking this giant effort, hiring a lot of people, aren't they taking on risk that this is going to be a giant failure?
- RWRichard Wolff
So, first of all, there's risk almost in everything you undertake. Any project that begins now and ends in the future, that takes a risk that between now and that future, something's gonna happen that makes it not work out. I mean, I got into a cab before I came here today in order to do this with you.
- LFLex Fridman
Yes.
- RWRichard Wolff
I took a risk. I could... The cab could have been in an accident. The lightning could have hit us. A, a bear could have eaten my left foot. Who the hell knows?
- LFLex Fridman
But shouldn't I reward you for the risk you took?
- RWRichard Wolff
No, hold it a second. Let's, let's do this step-
- LFLex Fridman
Okay.
- RWRichard Wolff
... by step.
- LFLex Fridman
Sure.
- RWRichard Wolff
So, everybody's taking a risk. I always found it wonderful. You talk about risk and then you imagine it's only some of us who take a risk. Let's go with the worker in the, with the capitalist.
- LFLex Fridman
Mm-hmm.
- RWRichard Wolff
That worker, he moved his family from Michigan to Pennsylvania to take that job. He had... He made a decision to have children. They are teenagers. They're now in school at a time when their friendships are crucial to their development. You're gonna yank him out of his school because his job is gone? He took an enormous risk to do that job every day, to forestall all the other things he could have done. He was taking a risk that this job would be here tomorrow, next month, next year. He bought a house, which Americans only do with mortgages, which means he's now stuck. He has to make a monthly payment. If you make a mistake, you capitalist, he's the one who's gonna... You're a capitalist. You got a lot of money, otherwise you wouldn't be in that position. You've got, you've got a cushion. He doesn't. If you investigate, you'll see that in every business I've ever been, and I've been involved in a lot of them.
- LFLex Fridman
So, you think it's possible to actually measure risk, or is your basic-
- RWRichard Wolff
No.
- 57:43 – 1:04:34
Economics
- LFLex Fridman
if we somehow went through a thought experiment or an actual experiment of removing every single economist from the world-
- RWRichard Wolff
Right.
- LFLex Fridman
... would we be better off or worse off?
- RWRichard Wolff
Much better off.
- LFLex Fridman
Okay. (laughs)
- RWRichard Wolff
Economics is... And I'm one. You know, I'm, I'm talking about myself. See, economics got w-
- LFLex Fridman
We're gonna ship, uh, ship all the economists to Mars and-
- RWRichard Wolff
No, no, no.
- LFLex Fridman
... see, see how well it works off.
- RWRichard Wolff
It's just... No, but the serious part of this is that economics, you know, it's, uh, it's really about capitalism. Economics as a discipline is born with cap- There was no such thing. When I teach, I teach courses at the university, for example, called History of Economic Thought, right?
- LFLex Fridman
Mm-hmm.
- RWRichard Wolff
And I begin the students with Aristotle and Plato. And I say, "You know, they talked about really interesting things, but they never called it economics." There was no... It meant, it made no sense to people to abstract something as central to daily life as economics broadly defined. It ma- made no sen- that's a creation much, much later. That's capitalism that did that, created the field of... So when I give them Plato and Aristotle, I have to give them particular passages. By the way, footnote, 'cause your audience will like it, Plato and Aristotle talked about markets because they lived at a time in ancient Greece when market relations were beginning to intrude upon these societies. So they were both interested in this phenomena, that we're not just w- producing goods and then distributing among us. We're doing it in a quid pro quo. "You know, I'll give you three oranges. You give me two shirts." A market exchange. And both Aristotle and Plato hated markets, denounced them and for the same reason. They destroy social cohesion. They destroy community. They make some people rich and other people poor, and they set us against each other, and it's terrible. And here's what... That's, they agreed on that. Here's what they disagreed on. One of them said, "Okay, there can be no markets." That was Plato. Aristotle comes back and says, "No, no, no, no, no, no. Too late for that. The disruption caused in society by getting rid of this institution that has crawled in amongst us would be too devastating. So we can't do that, but what we can do is control it, regulate it, get from the market what it does reasonably well and prevent it from doing the destructive things it does so badly."
- LFLex Fridman
So the, uh, the fundamentally, the destructive thing of a market is it's the engine of capitalism, and so it creates exploitation of the worker.
- RWRichard Wolff
It facil- I wouldn't create.
- LFLex Fridman
Fa-
- RWRichard Wolff
That's too strong.
- LFLex Fridman
Facilitates.
- RWRichard Wolff
It facilitates it, and it is an institution that Plato and Aristotle feel is a terrible danger to community.
- LFLex Fridman
Is there...
- RWRichard Wolff
Which, by the way-
- LFLex Fridman
Yeah.
- RWRichard Wolff
... is a way of thinking about it that exists right now all over the world. Look, the medieval Catholic Church had a doctrine, the prohibition of usury.... you know, i- and this was that God said-
- LFLex Fridman
Mm-hmm.
- RWRichard Wolff
... if there's a person who needs to borrow from you, then that's a person in need, and the good Christian thing to do is to help him. To demand an interest payment rather than to help your fellow man is - God hates you for that. That's a sin. Jesus is crying all the way to wherever it is he goes.
- LFLex Fridman
But would Jesus be crying when you try to scale that system? So that has to do with, mm, intimate human interaction. The idea of markets is you're able, uh, to create a system that involves thousands, millions of humans, and there'd be some level of, um, safe self-regulating fairness.
- RWRichard Wolff
There might be, but it's hard to imagine- (laughs)
- LFLex Fridman
(laughs)
- RWRichard Wolff
... that charging interest would be the way to do that.
- LFLex Fridman
I wonder what ... so I, I guess-
- RWRichard Wolff
Suppose, suppose you were interested in having, uh ... suppose you s- took as your problem we have a set of funds that can be loaned out. Now, people don't wanna consume it. They- they're ready to lend it. Okay. To whom should they lend it? Well, we could say in our society, um, we're gonna run this the way professors in institutions like MIT work this.
- 1:04:34 – 1:36:58
Capitalism
- LFLex Fridman
jump around from the philosophical, from the economics, to the sort of, uh, debate type of thing. (sighs) What about sort of the lifting ties raise all boats, meaning if we look at the 20th century-
- RWRichard Wolff
Right.
- LFLex Fridman
... uh, a lot of people, maybe you disagree with this, but they attribute a lot of the innovation and the average i- improvement in the quality of life, uh, to capitalism-
- RWRichard Wolff
Right.
- LFLex Fridman
... to inventions and innovation, to engineering and science developments th- um, that's resulted from competition and all those kinds of forces. Um, so j- not looking at the individual unfairness of exploitation as it's specifically defined, but just observing historically, looking at 20th century, we came up with a lot of cool stuff that seemed to have made life easier, uh, and better on average. What do you say to that?
- RWRichard Wolff
I have several responses to that, um, but, uh, I do disagree, uh, pretty f- uh, fundamentally (laughs) with what's going on there. But, but let me give you the arguments so you, that you can hear them and then you can evaluate them, uh, as can anybody who's listening or watching. Um ... Marx was a student of Hegel, and one of Hegel's central arguments was that everything that exists, exists, quote, "In contradiction." Uh, in simple English, there's a good and bad side, if you like, to everything, and you won't understand it unless you accept that proposition and start looking for the b- good things that are the other side of the bad ones and the bad things that are the other side of the good ones, et cetera. So-
- LFLex Fridman
It's the dialectic.
- RWRichard Wolff
Yes, exactly. And Marx, very attentive to that, explicitly agrees with this on many occasions, and applies it, of course, to the central object of his research, capitalism. So this is not a simple-minded (laughs) fellow who's telling you all the bad things about capitalism as if there were nothing that this system achieved or accomplished, and one of the things he celebrates a lot is the technological dynamism of the system.... uh, which Marx takes to be, uh, profound because, you know, he lived at the time when major breakthroughs in, in textile technology, in mining, uh, in chemistry, and so on were achieved. Um, but as to the notion that, that capitalism is therefore responsible for the improvement in, in the quality or the standard of living of the mass of people, Marx now comes back and says, "Oh, wait, wait a minute here. Number one, capitalism as a system has been mostly represented by capitalists," which makes a certain sense. "And those capitalists, with very few exceptions, some but very few, have fought against every effort to improve the lives of the mass of people. The goal of a capitalist is to minimize labor costs. What that means is replace a worker with a machine, move the production from expensive US to cheap China, uh, bring in desperate immigrants from other parts of the world because they will work for less money than the folks that you have here at home. Uh, every measure to help the standard of living of American workers had to be fought for, for decades over the opposition of capitalists from the beginning to right now. The reason we haven't..." Minimum wage, which was passed 19- middle of the 1930s. When it was proposed, it was blocked by capitalists. They got together. They don't want ... And today, uh, uh, just a factoid for you, the last time the minimum wage wa- was raised in the United States, federal minimum wage, was in 2009 when it was set at the lofty sum of $7.25 an hour, which you cannot live on. Over the last 12 years or so, whatever it is now, 11, 12, 13 years since then, we have had an increase in the price level in this country every year, and in the last year, 8.5%. During that time that the prices went up, the minimum wage was never raised. What? This is a time of stock market boom, of growing inequa- This is a soc- You know, the nerve of the defender of capitalists who wants now to get credit for the improvement in the standard of life of the workers that was fought by every generation. You know, it takes your breath away. Jase: (laughs) It's an argument. Whoa. Uh, but I take my hat off if I had one because that is one'the only ways to justify this system. Long ago ... Now let me get at the heart of it. Long ago, capitalism could have overcome hunger-
- LFLex Fridman
Yeah.
- RWRichard Wolff
... could have overcome disease, could ha- I mean, way beyond what we have now. But it didn't.
- LFLex Fridman
Yeah.
- RWRichard Wolff
And that's the worst moral condemnation imaginable. How do you justify that when you could, you didn't? Look, I ... Let, let me get at it another way 'cause this may, may interest you anyway. The issue is not that capitalism isn't technologically dynamic. It is, and along the way, it has developed things that have helped people's lives get better. No question. But the notion that the, the mass enjoyment of a rising standard of living is somehow built into capitalism is factually nuts and is such an outrageous ... And I can give you a ... 'Cause you do math, you know, you'll understand it. Think of it this way. Imagine a production process in which you have, um, $100 that the capitalist has to lay out for tools, equipment, and raw materials and $100 that he has to lay out for workers, hire the workers. And he puts them all together, and he has an output. And let's say he, uh, the output is 100 units of something and whatever the price is, and that's his revenue. And when he, when he s- takes his product and sells it and gets the revenue, let's say the revenue is ... It doesn't really matter. It's 120, for lack of a better word, and he ta- uh, 220. Sorry. And he takes 100 of it and replaces the tools, equipment, and raw materials he used up, another 100 to hire the workers for the next shift, and the other 20 is his profit, and he puts that aside. Now along comes a technological breakthrough, a machine, a new machine. And the new machine is so effective, you can get the same out- the same number of units of output with half the workers.
- LFLex Fridman
Mm-hmm.
- RWRichard Wolff
So you don't need to spend 100 on workers. You only need to spend 50. You can do it with half the workers. And so the capitalist goes to the workers. By the way, this happens every day. And he says to half of them, "You're fired. Don't come back Monday morning. I don't need you." It's nothing personal. He says, "I got a machine. I don't need 'em." Why does he do that? Because the 50 he now no longer has to spend on labor 'cause he doesn't need half of them, he keeps. Everything else is the same. The machine, everything else is the s- just to make the math easy. So he, he keeps as his own profit the 50 that before he paid for those workers.
- LFLex Fridman
Yeah.
- RWRichard Wolff
Right? 'Cause when he sells it for 220, that 50 he doesn't have to give to the next gen- because he has a new machine.So that's what he does. The technology leads, he's happy. He's become more profitable. He's got an extra 50, which is why he buys the machine. The workers are screwed. Half of them just lost their job, have to go home to their husband and wife, tell them, "I don't have a job anymore. I didn't do anything wrong." Th- the guy was nice enough to say there was nothing wrong with me, but he doesn't need it. I mean, well... (blows raspberry) "So I'm, I'm completely screwed here. I don't know what I'm gonna do about the debts we have, the house on mortgage, my children's education," or whatever else he's got going for himself. All right now, now the point. There was of course an alternative path. The alternative path would've been to keep all the workers, pay them exactly the same that you did before for half a day's work. You would've got the same output, same revenue, same profit as before. But the gain of the technology would've been a half a day of freedom every day of the lives of these workers. The majority of workers would've been really helped by this technology, but instead they were screwed so that one guy, the employer, could make a big bundle of more money. You wanna support a system like this?
- LFLex Fridman
Well, uh...
- RWRichard Wolff
(laughs) I'm sorry.
- LFLex Fridman
To go back to Hegel-
- RWRichard Wolff
Yes.
- LFLex Fridman
... the good and the bad.
- RWRichard Wolff
Yes.
- LFLex Fridman
So you just listed the bad and you also first listed the good, the technological innovation of this kind of system. The question is the alternative, uh, whatever, as we try to sneak up to ideas of what the alternative might look like-
- RWRichard Wolff
Right.
- LFLex Fridman
... what are the good and the bad of the alternative? So you just kind of, as a opposite in the contra- by contrast showed that, well, a nice alternative is you work less, get paid the same, you have more leisure time-
- RWRichard Wolff
Right.
- LFLex Fridman
... o- opportunity to, to pursue other...
- RWRichard Wolff
Interests.
- LFLex Fridman
... other interests, the creative interests-
- RWRichard Wolff
Yeah.
Episode duration: 2:53:51
Install uListen for AI-powered chat & search across the full episode — Get Full Transcript
Transcript of episode o0Bi-q89j5Y
Get more out of YouTube videos.
High quality summaries for YouTube videos. Accurate transcripts to search & find moments. Powered by ChatGPT & Claude AI.
Add to Chrome