Dr. Richard Wolff Debates Labor Theory of Value Marxist vs. Libertarian Debate

Dr. Richard Wolff Debates Labor Theory of Value Marxist vs. Libertarian Debate

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00:01
welcome to the lines of Liberty podcast here's your cutlet your guide your shining beacon of Liberty mark Claire [Music] low liens welcome and we've got something a little bit different today we're gonna be diving not into a libertarian theory but rather a theory of Karl Marx known as the Labour theory of value and we'll be debating the specific resolution that capitalists
00:32
exploit workers in a free market by expropriating their surplus value from them my first guest he is taking the affirmative on this resolution he is professor of economics emeritus at the University of Massachusetts Amherst he taught economics from 1973 to 2008 he is currently a visiting professor in the graduate program in international affairs of the new school University in New York City he's also the host of the weekly television and radio show called economic update with Richard D wolf that
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can be found on over 70 radio stations nationwide and it's also available at youtube.com slash democracy at work he's been a very outspoken in his criticism of capitalism and many aspects of the capitalist system and most importantly as you can tell by the fact that he's appearing on this program today and by the fact that he'll be debating our good friend Jean Epstein at the sohe Fordham forum later this year he is very open to debate and the discussion of ideas that is of course something I value very highly as well so I am very pleased to welcome dr. Richard Wolff thank you very
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much I'm very flattered that you're interested and that we can add this conversation I am very flattered that you were happy to come on this program and join us today as well and we'll get more into it in a minute but first I want to bring in my next guest he is taking the negative in the proposition he is a passionate voice both for the ideas of Liberty as well as in the personal development space he's authored several books including universal basic income for and against and his latest was quite a fun read I have to say called how to make small talk he co-hosts the Scottish Liberty podcast as
02:05
well as the be yourself and love it podcast he is making his third appearance on this program and pleased to welcome back mr. Anthony stammer off Anthony how are you thank you great and very glad to be here with you and professor wolf excellent excellent and you guys I was gonna say you guys have something in common that part is a little bit up in the air right now but you were both scheduled to appear at the Soho forum later on this year mr. a dr. wolf should say is still scheduled to appear with GFC but Anthony something happened
02:35
with your debate your opponent you were scheduled to do a debate with Andrew yang over the subject of automation I don't know what happened there but he seems to have backed out of the debate you're still scheduled for it so we're not exactly sure what's gonna go on there but uh what what exactly happened there as far as you know well we picked Andrew yang and January and he seems to have got a lot more famous since then so I don't so his people weren't sure that as Turing has scheduled with a low for it or perhaps he doesn't have much to
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gain from a debate with me but he'd certainly have a lot to lose MF me are relatively unknown paracin and showed him up when he's about to appear for president so that looks like that debate is going to be rescheduled for January and someone else will be taking the other the opposing possession and it was a little bit of a disappointment because gene had started selling tickets and what-have-you but I'm sure we'll get a fantastic debate in the end wherever
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that takes place and if not at the Soho forum in January then certainly tonight on the lines of Liberty podcast there you go one way or another we're getting a good conversation out of this thing all right well gentlemen I've got you both here I'm very excited to get into this before we do there's one thing I have to be sure of before we get started gentlemen are you ready to roar sorry red shirt I think Ken will snarl rather than roar oh I don't even think we'll
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need to do that I think this is a this is a topic that should have been debated much more than it has been and so we're in the in the mice position of inaugurating something that hopefully will continue after we're done thank you I agree I think this is a topic that hasn't got enough attention and I'm very pleased to have you here because I know that you can give a very solid account of the the Marxist possession and no one
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will be a using me of the basing and easy opponent because you've been you've been at this most economics for a long time yes I have and whether or not that makes me good at it I guess we'll see time will tell now Richard before we get into the meat of the debate since it is your first time on the show I did tee you up with a little bit of the bio there but I was wondering if you could just give the audience out there a little more of your your personal story may be that the elevator speech version
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of how you first became interested in economic ideas and you know how you kind of came down this path where now you spend most your time to sort of passionately advocating for you know from the things that you hold dear okay very briefly when I was growing up I had either the good luck or the bad luck depending on your perspective to live in a suburb outside of New York City town called New Rochelle about a half an hour outside in the city my father like so many in that town worked in the big city
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and so commuted in and out every day on the railroad and what he did that he occasionally took me along as his son I was the first of two children that he had and the railroad that leaves Newark New Rochelle and goes to New York City passes through a section of Manhattan called Harlem and in Harlem at that time it was a 100% african-american community and you could see from the train cars
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that the people there were poor that the streets were not very clean the poverty was obvious and as a young child I asked my father what was that about because it wasn't like New Rochelle which is a not an upscale but a comfortable suburb yeah and very white and he explained to me that there are two Americas one that lives in one way that were used to in
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New Rochelle and another one that lives in other ways one of which is exemplified by Harlem and if I had to guess where my initial interest came it came there it came in the form of wanting to understand why that was why are things organized that way why did that story then lead to other stories of other similar dichotomies and I got the idea of doing that and it
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stayed with me and when I went to college the first thing I wanted to do was to study economics my parents were against it they thought it was better for me to become a scientist so I studied biochemistry until I couldn't stand it anymore and switched over and I took a course in economics I wanted to understand basically the same question Adam Smith did you know why are some nations rich and other nations poor what
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what explains the wealth or not wealth of nations instead my teacher at Harvard University which is where I went to school through an awful lot of graphs up on the board and a lot of equations I had studied mathematics so they know math was never a problem but the relationship between this simple-minded math and the big questions I was interested was not only not evident it was absent and I asked questions and I was told that's not what economics is
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about I took that seriously and I went over and studied history instead at the end of my college years it was clear to me that the understand history I had to learn that economics that I had not studied because it's so important to understand what happens in history so I decided to go to graduate school in economics rather than stay with history and so I completed an education in economics most of which was devoted I understood this later not so much to an analysis of capitalism
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as it was to a celebration of it my teachers thought it was the greatest thing since my friend had been sliced and explained to me over and over again how wonderful it was and why we should all join in the cheerleading that they were lists at I kept asking questions about inequality and unequal development and all those kinds of questions and basically it's not so much that I got bad answers I didn't get any answers it
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wasn't what they were interested in they didn't understand economics that way and so I became frustrated and began to look is there something other that I can study in the way of economics and so I began looking for other voices I found them and eventually I found my way to Marxism particularly to the work of Karl Marx found it wonderfully attentive to the very things I was interested in by the way it was through Marx that I ended
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up reading Adam Smith and David Ricardo and people like that because I assume many of you know Marx was deeply respectful and appreciative of what he got from those people as I have always been they were also important teachers of mine but I ended up being a critic of capitalism and inviting my professors all the way through you know Chris waved me otherwise I'm open to it I have no precondition here they made an honest effort some of them
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were good at it some of them weren't but the bottom line is they didn't persuade me and I became a critic and I've stayed a critic if anything more so now than I was back then because the intervening years have made me feel even more strongly that this is a system that the human race can do better than so that's my position I all you might have had some professors give a go at it but you have not encountered Anthony stammer off yet so we will see what kind of dents we can make it and Anthony you know as much
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as I'd love to hear your story stands the show I've heard it before so I'm just gonna link to your first appearance on this podcast I'll link to both your appearances in the show notes today if they want to do it more of a deep dive on how Anthony Sam Roffe became a libertarian but I think it's time now to move on to the meat of the debate again the resolution is that capitalists exploit workers in a free market by expropriating their surplus value from them professor wolf I'm gonna start with you since this is sort of your your May wheelhouse here would you please take the time now to give your opening
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statement you know and like I said you guys before the debate I'm not timing these things I'm not gonna have a stopwatch we're both adults we can both sort of judge on our own what is a reasonable about a amount of time but I'd ask you to just sort of keep this in the three to five minute range your opening statement backing up this idea of the resolution that capitalists exploit workers in a free market by expropriating their surplus value from them take it away dr. Wolfe sure I think the best way I could get into it in a summary fashion in three to five minutes would be to say that both Marx's labor
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theory of value and his theory of surplus value that's based on it were attempts of him to work out an explanation of capitalism from a critical standpoint he did not as many people apparently believe invent the labor theory of value he didn't do that because he didn't need to Adam Smith had a labor theory of value Ricardo took Adam Smith's and did some work on it and Marx took what both of them had done and done some more work on it but the labor theory of value is not
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the invention of Karl Marx nor is it unique to him but he did make use of it thanking both Smith and Ricardo for having made it available to him in order to understand what it was about the capitalist system that in his mind prevented it as an economic system from realizing the objectives and the goals that had led early capitalists to promise that the revolution against
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feudalism whether it took place in France of 1789 or the United States in 1774 or elsewhere which had made such glorious promises of bringing liberty equality fraternity democracy why the capitalist system which sincerely thought it could and would do that failed to do that by the time Marx comes along roughly fifty years after all of that he looks around and capitalism is everywhere but liberty equality
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fraternity and democracy not at all and so he set himself the goal of understanding what it was about capitalism as a system that could explain why the promises it made that brought many people to support the revolution into capitalism had not been realized and the the theory of surplus-value is his answer and it goes roughly like this and rather than
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recapitulate his language let me use a modern formulation and then stop ok it goes like this imagine a worker coming to an employer and sitting down and going over with that employer the conditions of a job that this worker would like to have and they go over what work you'll do and what time you have to come in the morning and where you'll sit and what tools you'll use etc and then they get to that very important question how much am I going to get pay and let's make it
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simple the employer and the employee agree on $20 per hour the worker will come do his/her work get paid 20 hours let's say for 40 hours a week and that is what the worker gets Marx's answer to this situation or his analysis is runs like this the reason the employer is able and willing to give the worker $20 an hour is because during that hour each hour
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the worker will add to the value of what that capitalist sells a quantity of value larger than $20 in other words the value added by the workers labor is greater than the value paid to the worker for doing that and in that difference lies the profit of the employer the last thing I'll say is one of the virtues of this way of
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understanding capitalism is that it shows you the parallel that capitalism has to slavery and to feudalism in slavery the slave produces output a part of which is returned to him so he can continue slaving the banister gets the other part in feudalism the serf does a lot of work and keeps part of what he produces and delivers the other as a rental payment to the Lord in
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capitalism you get the same thing but it's more obscure hence the need for analysis and the value-added versus value paid allows you to understand how and why not only capitalism could not break from the dualism and the dichotomy of master slave and serf and Lord but it also answers the question why liberty equality fraternity and democracy weren't brought because you didn't make
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the break from those earlier class divided systems that you thought capitalism might achieve because capitalism brought us a new dichotomy instead of master slave and serf Lord we get employer and employee and therein lies the answer to why capitalism could not deliver on the promise of its origination if you like at least in the
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European scenario of the 18th and 19th centuries so let me stop with that all right dr. Wolfe thank you very much Anthony feel free to give your opening statement slash rebuttal to dr. Wolfe statement whoever you'd like to take the frame and take it away thank you okay first of all like dr. Wolfe I'm particularly interested and relieving poverty and my and a lot of people say will know that my the
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emphasis of my libertarian advocacy as on policies that I what I believe though they are more free-market than the situation we have now would put an emphasis on helping the people at the bottom of the economic ladder now in this statement I'm gonna have to put my positioner at length because it's quite it's harder to debunk an idea then is to state that and I thank em Richard for putting it so clearly and but for
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the remainder of this I probably would like to hear more from dr. Wolfe so I'm gonna try and be as brief as possible first of all the term exploitation is quite a slippery L defined term and that's worth looking at because it's quite commonly used now we can use exploitation to simply mean employ to one's greatest possible advantage so I can exploit my talents Richard exploits his talents as an orator and as an economic thinker or it can mean to
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advertise and promote for example a band can use their new album to exploit their back catalogue now obviously no one has a problem with those definitions of exploitation it's the third one that people worry about which so far as I can tell means to make use of a situation and are unselfish selfish or unfair weak right and that's that's the that's the date so and but even with endless usage
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of the word which i think is the one that Marx does have a problem with it and dr. Wolfe gave a more clear and account of why it's still slippery because in the context of economic relations I hear the word exploit used in three ways the first is to take something from someone else against their well and we could just say theft instead but we don't always the second
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as to enter someone in turn agreement on false pretences and then to hold them accountable to the terms of that agreement even what's to their own detriment now we can call that fraud what we don't the third is to give someone the less beneficial end of a transaction which they still benefit from but not to the same degree that you do and they may enter into that voluntarily so for example and Richards example
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they're getting paid $20 but the capitalist is profiting indeed if he does profit because his idea has cat his business might fail he might not get a profit but if he does he's going to profit more than he paid them now it's in the third case where anti-capitalists usually have a problem with exploitation but they benefit from the fact that the word has also tied to other usages which means theft and fraud in a rhetorical way now I would never accuse dr. wolf of
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doing that because he's been very clear on what he means from exploitation but I just want to say that even so even though it's true that workers don't get paid the total value of what they produce doesn't mean that anything untoward is going on or that they're being exploited and and the way that we've described and I'll explain why and as briefly as I can there's many reasons the first is that other resources are involved factories and resources have to be bought overheads
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have to be paid and the that the capitalist needs to market the product and link it to potential buyers so what they're doing is they're adding something to the labor of their employees and if the product doesn't sell everyone else has already been paid but the capitalist walks away with the loss now I don't like when libertarians say Oh bah the capitalist scarce a profit because he's taking the risk because what's a risk worth it's a completely arbitrary evaluation to risk
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but it is true that instead of buying a factory they could buy a yacht or a summer house they're putting the property on the line and it's the fact that their property is being used to create goods and services that gives them an entitlement to profit ever profit is made now when Marxist ruled that capitalists simply scan profit off the top and that by doing so they're extracting surplus value and this is
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that Marxist the old mart believe so far as I'm aware that eliminating the dead weight of capitalists who are just skimming off the top would allow societies to be incredibly prosperous because you get rid of the dead weight of the catalyst that's obviously not proven to be true in economic systems where it's been tried so the the capitalist must be providing something some competence and something that they're adding so and I would say that that is that the catalyst
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has to actually guess what people want he laser a vision of what he thinks that people are going to buy rather than anything else it's not an easy thing to do some of them succeed some of them fail as we well know so I think they're contributing a labor contribution and their vision and the organized production linking several suppliers to consumers who can get who combine their labor together they find factory staff sales staff receptionist
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managers IT staff they they have to have the vision to see who might who might be able to do this so all of these people their labor would be worth less if not for someone to come along and organize them Richard is is grabs maybe he will accuse me of being a bit left to authoritarianism looking for is this response I'm sorry it takes so long but that says and this is check part of
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developing my overall argument so just a couple more points if you don't mind and okay so another thing that the capitalist is being paid for is the time value of money when given the choice we'd all rather have something now than later on so he has to forego consumption in the short term whereas his staff get consumption and the short term and as I repeat and he might not even get the
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payoff in the end if his vision isn't clear if he doesn't can't actually guess what consumers her also to a large degree workers one then he will fail so he's also ultimately responsible in the case of litigation against the company of or at least he should be maybe in this mmm messed up economy where the government's in bed with big business he's not always responsible but at least on a free market he should be held responsible he's the shield
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so finally far from making workers worse off the capitalists actually increases their value because if a man decides to go out into the field and do these motions no one's gonna pay him for it but coming into the factory and doing these motions he may be worth more money and also as I mentioned combining with the labor of others and the other factors of production so and what a final point if I employ a plumber I
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exploit his labor because I want as much from the plumber he can fix as many pipes as he can but he's also exploiting my needs for a plumber and he will want to get paid as much as his skills are worth likewise and employers have a need for employees which and employees have will gain as much money as their skills are worth as what they're likely to go to the employer who can pay them the best or offer them the past concessions
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so for all these reasons that I've stated I would conclude that capitalists don't exploit workers on a free market at least but the answer with workers and some mutually beneficial exchange thank you all right thank you Anna and doctor both there's a lot of different kind of points that Anthony went through there so you can take any direction you want I think it might be a good idea to sort of start by honing in on the term exploit excuse me on the term exploitation because as Anthony
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pointed out there there are sort of several ways that you can use that word some of which a lot of us wouldn't object to it when we actually break down the act and others we might so do you won't care to sort of dive into that a little bit deeper sure let's do that the word exploitation Anthony is absolutely right is used in a variety of ways has been for a long time but from the Marxian theory if that's what people are interested in talking about then there's one definition and it is really crystal clear it's contained in the early chapters of Volume one of capital march
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lays it out and it is what I summarized before it is very simple it's the difference between and you can make it arithmetic if you like maths gives arithmetic examples it's a difference between the value added by a workers labor and the value paid to that worker in the wage or salary he or she gets if the value added is larger than what is paid then then exploitation exists that's a definition you are not agree
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with it of course but it's the definition that Marx uses and uses systematically and so for him for example whether the market is free or unfree whatever exactly that means or whether there's no market at all whether other systems of distributing resources and products are in play that's a separate question from whether or not more value has been added in the production process by workers then they
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are paid for producing and on that basis exploitation either exists or it doesn't exist number one number two let me borrow Anthony's comment about slippery or slippery definitions the the capitalist wants us to believe an empty is quite right this is an old story that they really add something very important and essential that they are not to be
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understood as ripping off the worker through exploitation or rather to be understood as providing a vital service of some sort this is interesting masters thought that they were contributing something really important to slavery they would they resisted the notion that they were ripping off the slaves they prefer to think of it that the slaves were you know kind of like children and they needed a parent and
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the master was in loco parentis taking care of these only half human beings who couldn't kind of manage all of this on their own and would have been lost were it not for the master who understood the complexities of the larger system it took a long period of revolutions to disabuse the world of the notion that the master was actually doing a service to the slave rather than the other way around I won't bore you by repeating the
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same story from feudalism but it would be easy to do for me to hear about the capital is performing some vital function reminds me of the master and the Lord in feudalism I don't think it's true I don't I don't find it to be the case and let me give you a concrete example in the old days when capitalists were a family or an individual who did work with or alongside the workers you could understand some of that because there was productive work being done by
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the capitalists but in a modern corporation that's wrong over with the Board of Directors that appropriates the surplus doesn't do any work in most cases don't even know what the corporation is doing it hires people to do all of that that's what a CEO and the other officials at the top are therefore think the board which gathers into its ends the net revenue or if you like the surplus value is precisely there to do
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nothing else right namely to literally sit there by the way big corporations are the tens or hundreds of thousands of employees the board of directors is usually 15 to 20 individuals who gather the surplus which is theirs legally as well as organizationally and structurally and they then decide what to do with it in whatever way they like they typically get together four or five times a year for a relatively short amount of time they are not paid as salary they are paid a director's fee
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their job is to become what Marxist theory foresaw the pure capitalist who appropriates the surplus of other people last thing Anthony and I mean there were other things Anthony said I would like to respond to but I don't want to take more time than is reasonable he referred in passing to something about workers taking over without a capitalist or not needing a capitalist and he mentioned I believe his word was
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that has been tried elsewhere and it hasn't worked out uh I don't I don't understand exactly what that means but I think I'm pretty sure I don't agree with it if what he means is the Soviet Union or the People's Republic of China or things like that then I would dispute that exploitation was removed in that society if you replace private individuals elected by shareholders who comprise a board of a board of directors
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of a corporation with instead of that state officials or political party officials you have changed who the exploiter is but you haven't gotten rid of the exploitation at least if you use the Marxist definition if you want to see an example of where capitalists have been done without then the place to look at is worker coops it's to go to Mondragon in Spain or to Emilia Romagna in Italy where you can see an active
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organized production system in which the workers who produce the value are simultaneously part of a cooperative that appropriates their own surplus and in that situation they have worked wondered on what was a cooperative of six workers on a Catholic priest in 1956 in a little city in northern Spain it is today the seventh largest corporation in Spain it is a straw Denari story of
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success that would make most capitalist enterprises green with envy and Emilia Romagna is a province of Italy in which 40 the economy is organized as worker coops who pride themselves on having done away with capitalists as an alternative body within their framework so if you're going to judge the fuel empirical examples that we actually have to look at this you have to be fair enough to
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look where it actually has been done and not to look where the in the name of Marxism something quite different was it was arranged with had its strengths and weaknesses too but is really not relevant to the question of trying to organize a system where the redundancy of the capitalist is put into practice I think libertarians can somewhat relate to this idea that you hear something's been tried and people point to an example that you will then say well that
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that's not what I mean at all for you it might be the Soviet Union or the People's Republic of China for libertarians it might be Somalia but I think we can all relate to the idea of being told that this is the this is what you want when it's not really what we want so do you want to start there Anthony just addressing since that was a comment that you had made that this has been tried before do you want to just kind of dealt but I did mean I'd specifically meant that more wealth would be created if we talk to the capitalists and I did mean in places like the Soviet Union or Cuba I don't want to equivocate if that's not what
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you meant and I think that you know libertarians can relate more than that because we here well capitalist has been tried not just in Somalia here and our nations but it's not the kind of capitalism that we would like to see we won probably like em air dr. wolf at least the government out of bed with big business I think we can all agree on that no I'm very absolute ly weekend I'm excited by a lot of voice air richard
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has said because there's so many things we're really getting into the issue here so I think that cooperatives are completely congruent with the free market there's nothing in a free market that bans cooperatives the fact that they haven't been adopted more widely may be product of our education system which is very authoritarian and a structured like a pyramid say after 1132 13 years of being
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bossed around in school most people are I'm doing very individual work most people aren't quite ready to go out into the world and start a workplace that's cooperative maybe either they're used to taking orders so they take a job as a worker or they want to be the one giving orders so they take a job as as a boss I don't know fnaf on a free market perhaps more cooperatives would exist however there's
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many I I would say that if it was so easy for workers to organize workplaces I don't see why they're not going to the banks on masses as grips and purchasing their workplaces getting rid of the capitalist who's just scamming 8 to 12 percent and profits off the top and making a fortune because they've they've cut the dead weight and I think that um you're really underestimated saying what goes into it selling a successful
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product because if it was that easy more people would do it you have to you you do need some I I agree that there are um that there are that there are complexities I disagree with you that there aren't complexities I think it as a skill and we might have reached an impasse on that point but I want to pick up on two more points you made one is the idea of the Board of Directors only extracting surplus value because they're not working in the company they've just
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put up the capital no not itself as meant to serve as a vetting process for ideas those people are putting their money on the line and people are coming to them their angel investors and saying I've got this idea for a business I've got that idea for a business and they're gonna say well you know I'll give you twenty million to fund that business in exchange for a 40 percent or then someone else is to say for 38 percent now this is really part of the market
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process for stopping resources getting wasted by putting large sums of money and two businesses that go in nowhere these people have accumulated their wealth by pecking out good ideas for businesses and investing into them know the Marxian fallacy and my view and this is obviously articulated by the Austrian economist Summa fan of is that you don't have to own the means of production to benefit from the means of production when these investors invest and machines
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and factories that are innovative and push the price of goods and services down all those workers who can get those goods and services for cheaper benefit - even though they don't own the means of production so that means that's why the the workweek has fallen from 62 hours to 37 hours because we can make so much more stuff because we've got all the technology there so I think that the Board of Directors I know it's easy to look at the investors is just em
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profiting without labor but they're actually serving a very important function and the market which is herding money towards good ideas which are ideas that people want to buy and em and they show their qualification by doing so repeatedly if they fail to do so they lose all their money the machines and factories get bought up by doing by someone who does a better job now I know you want to respond to that but I just want to respond to you analogizing and
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employment which is a voluntary contract in my view they're to slavery or feudalism and you know because actually I want to know why you think that giving someone a job which they can voluntarily take they can we can look around for what is the best given their skills and if they get more skills they can probably get a better job right why is that exploitative when it's a voluntary contract but having to be
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forced at gunpoint to pay taxes 40% of your income let's say or once you include v8 sales tax and all the taxes for many people that's not exploitative I think the analogy is not between a slaver and a capitalist but a slaver in a government we just used to have monarchs as governments and if you if the monarch owns a hundred percent of your labor then you're a slave so if the
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government is entitled to forty percent of your labor then you're 40 percent of slaves dr. wolf there's a few directions you can go so I'll let you take that wherever you want okay one thing is just just for the historical record the reason that workers only work 40 hours a week instead of 80 is because they struggled unbelievably against normals odds for many decades to get that that was never an offer the capitalists made it is
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something they resisted from day one tomorrow is May Day that is a celebration started in the United States when workers in Chicago back in the 1870s were fighting for the eight-hour day and got caught up in a demonstration some police people got killed some anarchists were arrested and executed and it became a national holiday but it's part of a long struggle that really is not about the mechanisms of
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capitalism which have everywhere fought shortening the workday ruthlessly the history of England is the history of the twelve hours struggle and the 10 hours struggle in the ADA I mean its relentless and it was always the capitalists on the long side of that struggle having to be defeated to get it down to that any here in the United States we now have a struggle over what's called compulsory overtime which is in effect another way of strengthening and lengthening the working day and Marx by the way at a wonderful chapter early in Volume one of
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capital about the struggle over the length of the working-day where he where he works all of that out do you care to adjust that one point Anthony just so we don't get bogged down and you have four or five things they want to respond to about the point of you know you kind of laid it out as workers gained shorter work weeks based on sort of the I guess you might take the economic improvements that capitalism brought whereas Richard would take another stance that it was really just them organizing and fighting for those hours not so much the improvements of capitalism yeah I'll just dispute that point as quickly as I can if that were true then we could have had our
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thirty seven hour work week oral or when we were an agrarian and economy no you can because you need to farm more than that to grow food similarly without the technology you could vote you could protest all you want for a 35-hour workweek and 1800's but without the machines to create that much wealth there's no way you could have gotta a forklift allows one person to do the labor that for me before see people would have taken to do without the forklift so it's only whether that
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machinery in place that we can then go out and process and things like that and get the work week gradually short and I think when we actually look at history what we find is most of the things like and most of the most children weren't working by the time we got laws to ban child labor only a small percentage where most the EM deaths at work had fallen to a large degree before we go OSHA and the work week had already begun to fall and just because of just because
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people then have a choice how they want to spend their time now that I just think that the government is just slightly behind and slightly behind and then can mandate those improvements once the economy is wealthy enough to allow for those movements but people can't go out to Bangladesh no and campaign for our four-day workweek because they just don't have the productive capacity and when they tried
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to ban child labor for example in Bangladesh sadly tons of children went into prostitution and and theft or starvation because they're staged unfortunately their families couldn't make enough money with a all-hands-on-deck all hands on deck were on day when we were an agrarian society I'm glad that we've got to the point where we do work 37 hours a week rather than and I want to say I want to stay
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friends with you so yeah polite as I know how this I find this extraordinary kind of reasoning really it doesn't work with the way capitalism works and let me explain it to you in the hopes that you get the idea for a capitalist it's always best to take a new invention one that say makes workers twice as productive as they were before let's take a simple example a factory work 100
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workers producing output we have a new technology that allows workers to be twice as productive as they were before what does the capitalists do he fires half of the workers and buys the machine because with half the workers he can produce just as much as he did before sell it at the same price get the same revenue but his profit will go up because half of the revenue that he used to need to pay the workers he doesn't need because he fired half of them so that's what he does for the
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workers who if they ran the factory they would never do that why because for them there's another solution that would lead to the same revenue and the same product everybody works half a day then they get the same output because working half the hours with a machine makes you twice as productive so they would decide if they were in charge to take the benefit of the techno ecology in the form of major increases
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in leisure okay we don't have a capitalist system that allows the second option to become operative because capitalists don't permit that and and therefore to have less work the workers have to fight for it because there is no incentive in capitalism for the capitalists to ever give it to them which is why they've always fought against it and never acted in the way you just described as though they were
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the beneficiaries of doing of doing such a thing number one number two but let me make a couple of more points because they're important here the capitalists you know I love this argument they take risks everybody takes risks if a business collapses it's not just the capitalist who loses his money it's the workers who lose their job those workers have decided to have children assuming they would have a job they
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don't have one they made investments in a home assuming they would have a job they don't have one it's a peculiar arrangement in which the capitalists risks an amount of money he presumably can afford to risk but the worker is also involved in the risk but is excluded from the decisions about what risk to take because we allow the risk-taking to be monopolized by a small minority the capitalists even though the consequences of a mistake are nicely
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socialized to all the employees if we were to have any remote notion of justice we would never allow that if all the people suffer the results of a bad risk then all of them have to participate in making the decision that is risky we don't have that in capitalism which is why it is so fundamentally contradictory to democracy and tell it yet take that wherever you want okay well there's a lot there so
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and okay let's go with the automation thing yes it's true that the capitalist will like to automate away workers but that's only looking at one side of the equation the the the automation will bring down the price of goods and services and has throughout history that's why you can get a flat-screen TV for eighty seven dollars rather than a thousand dollars and so which it costs when it came out so that me that is how the market
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actually socializes to use your words the benefit of automation that pushes the prices of goods and services down and that means that people have to work less to afford those goods and services no professor wolf says and the Animax agree you do know that for every example you can give me of where a technical innovation has brought prices down I can give you an example of where a technological innovation has been
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systematically kept from doing that because it's profitable for those who in their to do so you know that did you like your example for with patents and intellectual property which you know I think they're granted by government I would be very happy to see those limited or abolished for example I don't think they're a feature of the free market I think they're a government intervention but we may have slightly different definitions of capitalism nor if I agree
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with you but I mean it has been the normal regular performance of capitalism to give precisely those protections to Cattleman's which have meant the inventions haven't had the effect you just mentioned right okay well yes but I as an a heavily a statist system and we can both define capitalism and as the free market and at the same time as interventions end to the free market by the stay I know most people do
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and we could probably have a whole conversation on how capitalism should be like but I fear that we would stray from the point I have another two-hour debate that week it's good I had I had another point which is you to be putting forward the notion which i think and you know mark said which is that and the capitalist is going to drive the wages to the bottom it's a race to the bottom the iron law of wages and workers will get paid as little as
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they can commonly afford know that economist George Riesman has a counter-argument for this if I moved to New York where you live and I have a nice car but I just don't want the car I want to get rid of the car okay I'm willing to give that car away but the thing is the value of that car is still four or five thousand dollars so I can lucky me so I I just because I'm willing to give the car away because I it doesn't mean I have to the the wages aren't an arbitrary figure there are
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reflection of how much value someone's scale someone's labour are so it doesn't stand to reason and that em they're going that workers just because they are willing to pay sit to work 60 hours a week hasn't got no choice well have to f the f automation is spreading these benefits making everything cheaper and so forth just because they if they you know when push comes dissolve they've been willing to they don't have to anymore there are plenty of workplaces
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that will give them 40-hour work weeks and so that is how I see the growth and wealth in society translating to workers getting more rights better conditions yes they might the government might mandate them based on process but only once a capitalism has created enough wealth to the to allow the government to make those mandates and if I could just respond and I know we're running out of time but respond just with a little
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piece of empirical example on this since the 1970s in the United States the productivity of our workers has gone up somewhere around one and a half to two and a half percent per year pretty much for 40 50 years meanwhile the real wage that is the amount of money wage adjusted for the prices of worker has to pay that's what real wage means has basically been flat the real wage of an American worker today is
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roughly what it was in the late 1970s so for the last 40 years the rising productivity has translated into nothing in the terms of an increase in the wage of the worker and the reason for that has been that capitalists have found a way which they are always looking for to avoid having to share any of the increase in productivity with the working class and the way that was accomplished was by moving a large part of production out of the United States
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to China and India and Brazil and places like that as well as to make the adjustments that I talked about before in terms of technology and firing people and bringing in immigrants and all the rest of that wonderful collection of activities that capitalism gives us but here's a concrete example in this country which is shaping our politics today in ways that oughta frighten everybody you have created a monster here you have had a capitalism promising the working class a rising
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standard of living having done so for most of the 19th and 20th century having stopped doing it in the 1970s and now producing a fantastic destruction of American culture and politics because of capitalism's inability to share in the mechanism you just described rising productivity in the form of a rising standard of living the only way the American working class hasn't had the collapse of the standard of living on a
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scale even greater than what you've suffered in England in Britain since the 2008 crash is because Americans have become pioneers in a new way instead of going across the Prairie in a wagon they borrowed more money than any working class on earth had ever done before which is not a solution that anyone ought to celebrate and which is now causing even more troubles for American capitalism than it already had that's a point that auntie may actually
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agree with you on rich doctor will face when I how hard is your out time but they do want to make sure you guys are able to get a good you know close I have to go because I have another interview that I've committed to doing but if you were interested in continuing this conversation and I say this to Anthony as much as to you I would be glad to do so early absolutely and rule it I think it would be I hope it would be of interest to your your audience but I for one I'm more than willing to do it great so why don't we let you just give a
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brief closing statement right now and then I'll let Anthony kind of give his and if you need to get off it sort of in the middle of it you know we'll do that but I definitely open to a continuing this I think in many ways we have sort of scratched the surface and there's a lot definitely a lot more we could dig into here yeah what I like about this and let me end with it within a positive note I think Anthony at one point said something interesting which is that there was he can see areas of agreement or between us between him and me I think so too and I think that it has always struck me
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that the association of libertarians so often with the extreme right wing when it comes to capitalism is is not necessary I don't think it's built into the logic and I think though there are many of us on the Left who are more than willing to talk about meeting each other halfway we won't agree on everything of course not but we can both live with that and there ought to be a more
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balanced discussion between libertarians and those of us on the left then there has been and that doesn't need to be the assumption that so many Americans have that if you're a libertarian you're some extreme right Weiner as if there were some sort of uncomplicated continuum I absolutely agree with that I think based on our nodding heads Anthony would agree as well dr. wolf if you need a vitally understand and now you have other obligations but Anthony I'll let you know give it give you a little response and sum up your views on this and I definitely wouldn't love to love to I
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continue this at some point yes I think and the left are certainly very aligned with libertarian positions on foreign policy and on civil liberties traditionally and we both agree that the government shouldn't be giving massive handouts to big business or bailing out banks or giving special advantages to corporate corporations so I think there is some common ground there I found the conversation thrilling I would love to
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pick up the threads including your last thread I urge people I would probably put down wage stagnation two different factors than you things like the Federal Reserve and your country the Bank of England here printing shared loads of money and in that period which devalues the currency but I see that as a stay action because they are mandated to do that by the state I don't see that as part of the natural function of the
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market and so that might be something that we can talk about you know when you use the term capitalism do you mean what we have now which you know we often do it but and I think that it's important to tease out the cause and effect of things and not just simply say oh well that's capitalism that's socialism so I would love to M get into the reeds more and I'm delighted that you offered to continue this conversation because I think we're hanging on the true
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points of the day and I think that we understand we communicate and understand well enough one another to actually talk on each other's points rather than strawman one another agree absolutely and I you know once we get off here of this call I'll reach out to both you and maybe we'll try to schedule part two because I think we like I said we only really scratched the surface here dr. Wolfe I know you got a go but again I really want to thank you for coming on and doing this I think one thing we all three of us agree on is this is the kind
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of conversation that we could all use more oven by we I just mean everyone engaged in the political conversation more conversation where we're trying to understand each other as opposed to just trying to blow v-eight about you know our views and throw them at each other and run away so again I really do appreciate both of you coming on here today and very plainly discussing this subject thank you guys so much keep up the great work both of you keep on roaring and your own ways of course all right thank you again for the opportunity absolutely take care [Music]
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you

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