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"Most People Have No Idea What's About To Happen" | Richard Wolff's Last WARNING | FREENVESTING | YouTubeToText
YouTube Transcript: "Most People Have No Idea What's About To Happen" | Richard Wolff's Last WARNING
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My job today is to talk to you about the
momentous changes going on in the world
economy. We are expecting a crash and
there is no end in sight. I am a
professional economist by training and
by the work I've done all my life. But I
had never expected to see in my lifetime
the kinds of changes now underway. When
they first began to surface a few years
ago, I was struck. I hadn't expected
this process to start, but I'm even more
amazed at the fact that it not only
started, but that it keeps accelerating
the rate of change. If some of what I'm
about to tell you is distressing or
disturbing, as it probably will be,
please be aware I am just the messenger.
I did not cause any of the things I'm
about to describe and analyze for you.
So, let me begin by telling you how the
global economy has changed. The changes
are momentous.
The two most focal points of the change
are about the country we live in, the
United States. and they're about the
United States because of the central
global role this country has played over
the last 75 years or if you like you can
make it a 100red years at least since
the second world war ended and arguably
since the great depression began the
role of the United States has been to be
the absolutely number one dominant
economic system in the world. Nobody
came close. World War II eliminated
those who might might have come to be
competitors. They never got there. And
before they might have, the war
eliminated them. What were those
countries? Germany, Japan, Britain,
Russia. Period. The war eliminated them.
In 1945,
the United States was king of the hill.
Other than Pearl Harbor, none of that
war damaged the United States. On the
contrary, the war put the unemployed,
the tens of millions of Americans
unemployed during the 1930s to work.
Half of them were put in the army and
the other half were given jobs producing
the uniforms, the guns, the ships and
the planes used by the military. The
American economy recovered by virtue of
war. For the rest of the world, the war
added to the destruction that the Great
Depression had already wreaked upon
them. So the United States was dominant.
Nobody was close. So the first thing
that has changed is the following. The
United States alone and the United
States with its major allies is no
longer the dominant economic system of
the world. This has to be understood.
Even though the culture and the
consciousness of the United States
cannot admit it, cannot face it, and is
engaged in an exercise of denial that
will become the great example of such
denial for many years to come. Let me
explain. First, the United States
inherited over this last 75 to 100 years
the colonial position that used to be
occupied by Britain, France, Holland,
Spain, Russia, Italy and the other
excolonial countries. Literally, the
British Empire in the 19th century faded
out and turned over the role of empire
to the Americans who grasped it, who
wanted it, and who pushed the British
aside in managing to take it all over.
And they are still doing that to this
day, even with the few scattered
remnants of the British Empire that
still exist. But now, as has happened to
every empire in the history of the human
race, the rise of the empire is followed
by the peaking and the decline of the
empire. And we are now well underway on
the ride down. What are the signs? Well,
I don't have enough time to give you a
full catalog, but let me go through a
few of them. Recent wars were extensions
that failed. The Korean War at best a
stalemate. The Vietnam War, the US lost.
The Afghanistani war, the US lost. The
Iraq war, the US loss. The Ukraine war,
the loss is coming. If it isn't already
here, and most of the information that I
get, it's already here. That's a big
sign. But there's another and easier way
to give you the sign of the decline of
the empire. And here I will just give
you a simple economic statistic. The
United States economically speaking is
the center, the core, the power within
an alliance which goes these days by the
name G7,
the group of seven. That's the United
States plus Britain, France, Germany,
Italy, Canada, and Japan. That's the G7.
Before the year 2020, the total output
of goods and services, a statistics we
call GDP, gross domestic product, the
gross domestic product of the G7
altogether before 2020 was larger than
the GDP of the new emerging dominant
economic block and they have a name
called BRICS BRRI. I CS the core power
there is the People's Republic of China
bricks stands for China plus its allies
Brazil, Russia, India, China and South
Africa. They recently added six more
countries and dozens have applied to
join them. In 2020, the total output GDP
of the bricks, China and its allies, was
the same as that of the United States
and its allies, the G7. But so rapid has
the G7 fallen and the bricks risen that
right now the share of global output
accounted for by the United States and
its allies G7 is about 29%
of global production whereas the share
of total output accounted for by China
and its bricks allies is 33%.
It's over the dominance economically
speaking of the United States which was
the foundation of the political,
cultural and military dominance is over
and the gap is widening quickly. This
year the expected growth of the GDP of
the United States will be in the
neighborhood of 2.5%.
The estimated GDP growth of the People's
Republic of China will be 5 12%.
You cannot sustain the position of the
United States with gaps like that which
have been the norm for 30 years. The
global economy is changing. Now the
second big momentous change that is the
decline of American capitalism
internally not the empire now the
economic system. Now of course the
declining empire undermines American
capitalism which like in every example
in history became dependent on the
enormous wealth its empire brought home.
A decline in the empire will undermine
American capitalism is already doing
that. But I want to show you some of the
indices. And that brings me right up
against the denial I spoke to you about
a moment ago. The president needs to
have his spokespersons
telling us all the time how great the
economy is. leading CEOs, commentators,
and others as usual chime in with
whatever the dominant argument is. But
when you want to assess an economy, it's
complicated. It's a little bit like
going to a doctor if you're not feeling
well. If the doctor only looks at one or
two statistics about your body, your
best advice would be to go find another
doctor. Because of course, a proper
assessment of your health, like a proper
assessment of an economy's well-being,
requires looking at lots of statistics.
To pick up with my medical metaphor,
urine analysis and blood analysis and
X-rays and cat scans and all the
apparatus we've become used to. And the
medical doctor will expect to find signs
that you are in good health intermingled
with signs that you aren't. And the job
of the doctor is to weigh the
complexity. We don't have that. We live
in a culture shaped by advertising above
all else. And in advertising, you only
talk about the good aspects of what
you're trying to sell, real or imagined.
and you spend a lot of energy hiding or denying
denying
whatever contradicts. So the government
points to low unemployment, correct? And
declining rates of inflation, also
correct. Two interesting statistics. But
to think that the economy is good
because those indicators are positive
would be the equivalent of you're having
a serious cancer but your doctor telling
you to go home because your temperature
and your platelet count are adequate.
So, let me just give you an idea of why
you might want to rethink the notion
that the American economy is anything
other than in deep trouble. We are
expecting a crash. Some people think it
will be difficult. The language for
that, a hard landing. Some think it
won't be so difficult. That's called a
soft landing. We await this because our
system is unstable. It has an economic
downturn on average every 4 to seven
years. And that has been true for centuries.
centuries.
It's an instability we have tried but
failed as a capitalist economy to
overcome. There's even an entire
economics called Keynesian economics
designed to overcome and it has not
worked. For example, in this new
century, the 21st century, we've had a
crash in the year 2000, so-called dotcom
crash, we've had a crash in 2008 and 9,
the so-called subprime mortgage crash.
And we've had a crash in 2020 and 2021
called the COVID 19 crash. Three crashes
roughly 20 years once on average every
seven years right on schedule. This is a
very bad quality of this economy and it
has failed to overcome them. Indeed, the
last two, 2008 and 2020, were
respectively the second and third worst
crashes in capitalism's history.
Number two, the level of inequality in
this country is beyond words. From the
$250 billion dollar of Elon Musk to the
following statistics, one in six
children is what we nowadays call food
insecure. We used to be more honest
before denial set in and called it what
it is, hungry. The level of debt
incurred by government, corporations,
and households is the highest in the
history of this country with no end in
sight. I could go on. We have a record
level of homelessness in the United
States right now. We have social
problems extraordinary and there are no
solutions. And we're experiencing what
often happens when an economy
experiences the end of its empire, the
growing number of problems it cannot
solve. We're beginning to see people
freak out, look for scapegoats to
explain the collapse of everything that
seemed to have been secure and now
isn't. And so we scapegoat immigrants.
Somehow those poor people trying to
cross the border are the root of all
evil. We live in an extraordinary time
of change. And I will come back to that.
The second big point about all this is
that at the same time that all of this
is going on, there is now a genuine
global capitalism. Here's what I mean.
Because this notion of capitalism is
elusive. The denial enters here too. By
capitalism I mean organizing the
production of goods and services so that
a small group of people sit at the top
called employers
and a mass of people sit at the bottom.
They're called employees.
The employers buy the labor capacity of
the employees. The employees come to
work 9 to5 5 days a week more or less
and they do what they are told. Sit
there, work with this machine over there
in this relationship to other people and
to and then at 5:00 get up, leave behind
whatever you poured your brains and
muscles into doing. go home, have pizza,
a beer, and come back tomorrow and do
all that again. You have no control
whatsoever. The people inside that job
where you work tell you what to do. They
are not accountable to you. We have
never had democracy inside the
workplace, which is where most adults
spend most of their waking hours. We are
busy electing mayors of our towns where
we reside. But we do not understand what
it means that we do not elect the people
who run the factories, offices, and
stores where we spend our working lives.
Why not? If democracy is a great idea,
where is it written that it belongs
where you sleep, but not where you work?
Think about it. The world now from the
United States to the G7, from China to
the bricks is a world in which
production of goods and services is
organized in the employer employee
model. The only difference is that the
employer can be a private citizen or it
can be a government official. And we are
very taken with that debate. I would
urge you to open yourself to the thought
that that debate is stale, minor, and
these days largely irrelevant. For the
mass of people, the difference is
marginal. Whether the people telling you
what to do are state officials or
private citizens, what big difference
does it make?
Okay, now with a world a wash in the
employer employee relationship and yet
at its throat a conflict between two
huge blocks, one declining the US, the
G7, one rising, China and the bricks.
What is to be done? Where are we going?
What are the implications of this? World
leaders, unsurprisingly,
are all caught up in the changing world
economy. They're all caught up in huge macrolevel
macrolevel
entities, governments, nations, all of
that. They're wondering, understandably,
what the implications are of a declining
American empire. And we're all watching
those implications cuz they are grabbing
our attention. Just to give you a few
quick examples, the calculation that the
United States could wage a proxy war on
the border of Russia in Ukraine and
provide the relatively small country of
Ukraine with weapons on a scale never
seen before to fight against a powerful
Russia was a calculation undertaken by
people who told us when that war began
that it would Russia that Russia
would soon be on its knees that the
Russian ruble would collapse and that
Ukraine would win. What was the mistake
made since none of those predictions has
come true and in almost every case the
opposite has happened. What was the
mistake? The mistake was to not
understand that Russia is part of the
bricks and that the bricks together can
sustain Russia as well or better than
the United States and the G7 can sustain
Ukraine. There it is. terrible miscalculation
miscalculation
costing unspeakable numbers of people,
their lives, their futures, their
wealth, their hopes, their dreams.
Similar mistake is being made by the
United States and Israel in Palestine.
Different story, different details, but
similar miscalculations.
The votes in the UN are very indicative.
On the ceasefire in Gaza, 153 countries
on one side, the side of bricks, 10
countries on the side of the United
States, and 20some abstain. The
isolation of Russia has not happened.
The isolation of the United States did
happen and it's happening more and more.
Here's the problem and it's if you like
the moment of the bad news before I give
you what I believe is good news. The bad
news is that the world is on a collision
process that we have seen before. We may
be watching living through the decline
of the American empire and the rise of
the next one. that just as the US Empire
literally grew out of a very subordinate
unit within the British Empire. So the
Chinese were a very poor backward
subordinate part of the world economy in 1949
1949
when the communist revolution in China
achieved victory. But they have come an unbelievable
unbelievable
distance. They've come as far as the
United States came out of its colonial
status. The difference is the Chinese
did it in 1/3 the time, making it an
achievement beyond anything the world
has seen. to give you a sense of the
scale. Every third world country, what
we used to call the third world, the
developing world, the less developed
world, whatever phrase you want, Asia,
Africa, Latin America, and so on, every
one of those countries used to have to
go to New York or London or Paris to get
help, to build a railroad, to build a
harbor, to uh invest in schools, to have
a decent health program, to be able to
find market for its goods. Every one of
those countries now has an option it did
not have before. It can go to China and
a huge number of them are doing it and
have been doing it for a dozen years or
more. China's importance in Asia and
Africa is off the chart relative to what
it was 10 years ago or 20 years ago.
With these economic connections come
political alliances, ideological shifts,
and military reorganizations.
The United States cannot stop the
process any more than the British were
able to stop the process. And let's
remember because it's crucial. The
British tried in 1776.
They tried to squash the independent
development of the North American
colony. They lost that war in 1812. They
tried again and they lost again. Only
after two defeats militarily did the
British give up. They even toyed in the
1860s with siding with the slave South
against the North. They didn't do it,
but they thought about it. They debated
it. There were forces who wanted it.
Only in the second half of the 19th and
the first half of the 20th did the
British collapse. The British Empire was
over. Oh, they held on desperately, but
it was over. And World War I signaled
it. Before World War I, the United
States was a dter nation. Britain was a
creditor after the World War I roll
reverse over. So, one outcome of what
we're watching could be the United
States Empire finishing its decline,
certainly furthering it, and the further
rise of China. That's certainly part of
what is now going on, and there is no
end in sight. We've had a trade war with
China. Remember that was a signal
activity of the Trump administration.
We've had a tariff war with China. That
was a basic part of the Trump
administration and the Biden
administration has continued that. Did
it stop the growth of China relative to
the United States? A big fat resounding
no. It didn't. And it's not going to.
The effort to destroy the computer chip
industry of China is a failure. The
company singled out for that purpose.
Huawei just announced it has its own
better chip. The signs are everywhere.
So here's the issue. Will the United
States repeat the effort of Britain to
use military means to hold back? Is that
what the noise around Taiwan and the
American fleet in the South China Sea,
is that what that's about? Are you going
to try to do what the British failed to
do with us to the Chinese, a country
with four times the population and its
own nuclear weapons? Really? Well, if
so, well, then, you know, there's not
much more to say. Or are you going to
recognize what happened between the
United States and Britain and sit down
with the People's Republic of China or
the bricks and work out a live and let
live arrangement in the world economy
the way the United States and Britain
did in the second half of the 19th and
the first half more or less of the 20th
century. And then we have the
fascinating side issue which deserves
much more attention than a denialobsessed
denialobsessed
America gives it. Are the Chinese going
to be another empire like the US was
like the British were like the Dutch
before them and so on? Or are the
Chinese with the BRICS alliance as a
hint going to be a collective
international empire from the beginning?
More interested in inclusion than
exclusive dominance. What are the forces
that might take them in that direction?
and what might the rest of the world do
to foster that direction for the story
that we are living through. Now,
finally, I want to go back to something
that unites the world in a positive way
given everything I've said. And that
takes me back to Cherishk's novel, to
Vera Pavlova's life, to Lennin's
pamphlet, and to worker cooperatives.
Because one thing that is happening now
is something that socialists have been
dreaming about for two centuries. The
two centuries that there's been
socialism. And what they've been
dreaming about is captured in the slogan
workers of the world unite. You have
nothing to lose but your chains. Beyond
a slogan that has not been effective.
But now workers around the world have
something fundamentally
in common. Whether they're in the United
States or China or Nigeria or Finland,
the overwhelming majority are organized
into factories, offices, and stores, organized
organized undemocratically
undemocratically
by a small group of people who make all
the basic decisions. what to produce,
how to produce, where to produce, and
what to do with the output that
everybody's labor together generates.
All of those key business decisions are
made by an unaccountable
small minority, the owner of the
business. The board of directors, if
it's organized as a corporation, boards
of directors usually have 10 or 20
people on them. Employees can number in
the hundreds of thousands or even
millions. Now, there is no mechanism
through which the employees have a
democratic control over the employer
that all these workers have in common.
Whether the employer is a private
citizen or group or a public official,
they have that in common. And I am
confident that sooner or later that commonality
commonality
will finally become the issue that has
to be dealt with in one way in the
capital so-called capitalist west. in
another way in the so-called socialist
east. Because the fact of the matter is
with all of the changes that distinguish
existing socialism from capitalism,
those changes do not include a break
away from the employer employee
organization of the workplace.
Let me conclude then we have a long
history of what Marx called class
divided societies. We have the society
where a master class controls the class
of slaves, master and slave. We have
feudalism where a class of lords
controls a class of surfs. And we have
capitalism which promised liberty,
equality, fraternity and democracy as
part of its revolt against slavery
against feudalism in the French and the
American revolutions and so on. But what
capitalism promised liberty, equality,
fraternity, what it promised it could
not ever deliver. And the reason is at
its core in the production of the goods
and services without which no society
can survive. It installed and did not
question a fundamentally undemocratic
undemocratic
arrangement, a class divided structure.
Challenging that, saying that where we
want to go is to a society that democratizes
democratizes
the workplace, whether it's public or
private, is a call for fundamental
change that all workers everywhere can
understand and get behind. It would be a
way to reorganize
the global economy on the basis of cooperation,
cooperation, collaboration,
collaboration, non-hierarchical,
non-hierarchical, non-clashing
non-clashing
empire frameworks to work out our
problems. I think that the 21st
century's socialism will be one that foregrounds
foregrounds
the transformation
of the workplace. Not instead of what
socialists did in the 19th and 20th
century, not at all. but as the
recognition that the socialist movements
of the 19th and 20th century did not go
far enough. They changed much of the
macro part of society but too little
transformation of the micro level. what
goes on in the workplace. And lest I
been misunderstood,
the workplace includes the household,
the relationship between the people in a
household, in a family, as well as the
relationship of people in a workplace
situation. the democratization of all of
that, the demand for gender equality,
for workplace equality. These are the
directions in which a socialism of the
21st century will complete the amazing
beginning that socialism achieved in the
19th and the 20th century. But in
addition and finally to all of that, we
better face these issues of a changing
global economy, of a changing American
capitalism, because the alternative, and
here I borrow from a very important
group at the end of World War II, it's
this new socialism that I'm talking
about based on a transition of the
economy from hierarchical capitalist to
ealitarian worker cooperatives. It's
either socialism or it will be barbarism
of the sort shown to us already in
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