Richard Wolff: Marxism and Communism | Lex Fridman Podcast #295

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, 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.

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. The this is the Lex Friedman podcast. To support it, please check out our sponsors in the Description. And now, dear friends, here's Richard Wolff.

Let's start with a basic question, but maybe not so basic after all, what is Marxism? What are the defining characteristics of Marxism as an economic and political theory and ideology?

Well, the simplest way to begin a definition would be to say it's the traditional that takes its founding inspiration from the works of Karl Marx, but because these ideas that he put forward spread as fast as they did and as globally as they did literally. It's 140 years since Marx died, and in that time his ideas had have become major types of thinking in every country on the earth. If you know much about the great ideas of human history, 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 worlds, ways of coming to terms with it. For the first roughly 40, 50 years, 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, dis 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. The only qualification of what I just said was something that happened in Paris for a few weeks in 1871. There was a collapse of the French government, consequent upon losing a war to Bismarck's Germany. And in 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 in that Commune, in the leadership of the Commune. And Marx wasn't that far away. He was in London. 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? In other words, governing, organizing a society. But since it only lasted a few weeks, the French army regrouped, and under the leadership of people who were very opposed to Marx, they marched back into Paris, took over, killed a large number of the Communards, as they were called, and deported them to islands in the Pacific that were part of the French Empire at the time. The really big change happens in Russia in 1917. 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 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, 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, splits under the pressures of all of this 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. 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 comparable leader at that time of the Socialist Party here, as you know, there was no Communist Party at this point, that comes later. The head of the Socialist Party, a very important American figure named Eugene Victor Debs, makes exactly the same argument to the Americans should not fight in the war. He's independent. He has nothing to do with Lenin. I don't even know if they knew of each other. But he does it on his own. He gets arrested and put in jail. He. Here in the United States, by the way, he runs for president from jail and does very well. Really very well. Remarkable. And he's the inspiration for Bernie Sanders, if you. If you see the link, although he had much more courage politically than Bernie has.

That's really interesting. I'd love to return to that link. Maybe later. Yes, history rhymes.

Yes, the complicated story. Anyway, 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, 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, what are you going to 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, because 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 and Cuba and Vietnam and 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. 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. Its basic idea, if you had to have one, is that human society can do better than capitalism and it ought to try.

And then we can start to talk about what we mean by capitalism. Fine, so we'll look at the critique of capitalism on one side. But maybe stepping back, what do you think Marx would say if he just looked at the different implementations of the ideas of Marxism throughout the 20th century, where his ideas that were implicit were made explicit? Would he shake his head? Would he enjoy some of the parts of the implementations. Like what? How do you think he would analyze it?

Well, he had a great sense of humor. I don't know if he 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. There's a German word, I don't know if these. If you speak the other languages, there's a wonderful German word called fetzichte, and it's stronger than the word refuse. It's if. If you want to refuse something, but with real strong emphasis is a German way of saying, I don't want anything to do with that. And he would talk then in philosophical terms, because, 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 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.

And as you said, there's a particular way that this idea spread. The speed at which it spread throughout the world made it even less able to be sort of stabilized and connected back to the origins of where the idea came from.

The only people who ever really tried that with the Russians 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? 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 that there was a kind of presumption around the world. Their interpretation must be kind of the right one, because, look, 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 Marxism, there were these words that, where the adjective was meant to somehow say kind of, this is the canon. You can depart from it, but this is the canon. Before the Russian Revolution, there was no such thing. And by the 1960s it was already dispr. It was gone. But for a short time, 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. 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 may be, but I mean, it's not a mental problem. It's the taboo, 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.

Nevertheless, it's a serious attempt at making the implicit ideas explicit. The Russians, 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? And so in that sense, not at a high level, but at a detailed level, it's interesting to look at those particular schools, maybe.

Right. Because, for example, let me just take your point one step further. You would really cannot understand the Cuban revolution, the Chinese revolution, Vietnamese and the others, because each of them is a kind of response, let's call it, to the way the Soviets did it. Are you going to do it that way? Well, yes and no. Is the answer this we will do that way, but that we're not going to 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 to the originals. Yes, very much so.

Like maybe most of rock music is reacting to the Beatles and the Stones.

There's something like that.

Can you speak to the unique elements of the various schools of that Soviet Marxism? So we got Leninism, Trotskyism, Stalinism, maybe even let's expand out to Maoism. So maybe I could speak to sort of Leninism. And then please tell me if I'm saying dumb things. I think for Lenin there was an idea that there could be a small sort of vanguard party, like a small controlling entity that's wise and is able to do the central planning decisions. Then for Stalinism, one interesting. So Stalin's implementation of all of this, one interesting characteristic is to move away from the international aspect of the ideal of Marxism, to make it all about nation, nationalism, the strength of nation. And then so Maoism is different in that it's focused on agriculture, on rural. And then Trotskyism, I don't know, except that it's anti Stalin. I mean, I don't even know if there's unique sort of philosophical elements there anyway. Can you maybe from those or something else, speak to different unique elements that are interesting to think about, about implementation of Marxism in the real world.

Probably the best way to get into this is to describe something that happened in, in Marxism that then shapes the answer to your question. In the early days of Marx's writings, and you know, his life spans the 19th century, he's born in 1818, dies in 1883. So literally he lives the 19th century. And you might, I mean, to make things simple, you might look at the first half or the first 2/3 of his life as overwhelmingly gathering together the precursors to his own work. Marx was unusually scholarly in the sense that partly because he didn't work a regular job and partly because he was an exile in London most of his adult life, he worked in the library. I mean, he had a lot of time. He got subsidized a little bit by Engels, whose family were manufacturers. And you might say the first half to 2/3 of his life are about the critique of capitalism. And that was what, in a broad sense the audience for his work Western Europe more or less was interested in. That's what they wanted. And he gave that to them. He wasn't the only one, but he was very, very effective at it. By the last third of his life, he and the other producers of a anti capitalist movement, people like the Chartists in England, that's a whole nother movement, the anarchists of various kinds, like Proudhon in France or Kropotkin or Bakunin in Russia and so on. You pull all these together and there was a shift in what the audience, let's call it, a mixture of militant working class people on the one hand and critical or radical intelligentsia on the other. They now wanted a different question. They were persuaded by the analysis. They were agreeable that capitalism was a phase they would like to do better than. And the question became, how do we do this? Not anymore. Should we? Why should we? Could we maybe fix capitalism? No. They had gotten to the point the system has to be fundamentally changed. But they didn't go, you might imagine they didn't go and say, well, what will that new system looks like, they didn't go that way. What they did was ask the question, how could we get beyond capitalism? It seems so powerful. It seems to have captured people's minds, people's daily lives and so on. And the focus of the conversation became this was already by the last third of the 19th century, the question of the agency, the mechanism whereby we would get beyond. And again, make a long story short, the conversation focused on seizing the government. See, before that, it wasn't that the government was not a major interest. If you read Marx's Capital, the great work of his maturity, three volumes, there's almost nothing in there. The State, I mean, he mentions it, but he's interested in the details of how capitalism works. Factory by factory, store by store, office, what's the structure. The government's secondary for him.

But there's also humans within that capitalist system of there's the working class, right? It's about.

That's what he struggle, that's what he's. He's interested in each, in the work. Think of it almost mechanically, like the workplace. In the workplace, there some people who do this and other people who do that, and they accept this division of authority and they accept this division of what's going on here. Particularly because he believed that the core economic objective of capitalism was to maximize something called profit, which his analysis located right there in the workings of the enterprise, not in the government, was not the key factor here.

And he was looking at ideas of value. How much value does the labor of the individual workers provide? And that means how do we reward the workers in an ethical way? So those are the questions of. But the government was not part of that picture.

So it's very significant that towards the end of the 19th century, Marx is still alive when this begins, but it really gets going after he dies. Is this debate among Marxists about the role of the state. They all agree, nearly all of them agree, that you have to get the state, the working class has to get. Get the state, because they see the state as the ultimate guarantor of capitalism. When things get really out of hand, the capitalist calls the police or he calls the army or both of them. And so the government is in a sense, this key institution captured in Marxist language by the bourgeoisie, by the other side, the capitalists, and. And yet vulnerable because of suffrage, if suffrage is universal or nearly so, if everybody gets a vote, which in a way capitalism brings to bear. Part of its rejection of feudalism in the French American Revolution is to create a place where elected representatives, so the government being subject to suffrage creates the notion, aha, here's how we're going to. We have to seize the state, and then that gets agreed upon. But there's a big split as to how to do it. One side says you go with the election, you mobilize the voter. That gets to be called reformism within Marxism. And the other side is revolution. Don't do that. This system, if I may quote Bernie again, is rigged. You can't get there. They've long ago learned how to manipulate parliaments. They buy the politicians and all that, and therefore revolution is going to be the way to do it. Revolution gets a very big boost because the Russians, they did it that way. They didn't do. I mean, they fought in the Duma, in the parliament, but they didn't. And this focus on the state, I would argue, goes way beyond what the debaters at the time. And if you're interested in the great names, there was a great theorist of the role of the state in a reformist strategy to get power in Germany, named Edward Bernstein. Very important. His opponents in Germany were Carl Kautsky and Rosa Luxemburg, two other huge figures in Marxism at the time. And they wrote the articles that everybody reads. But it was a much broader debate. By the way, that debate still goes.

On reformism versus revolution.

And in terms not all that different. I mean, it's adjusted to history, but in terms that are different.

Can you comment on where you lean in terms of the mechanism of progress, reformation versus.

I'd rather tell you the historical story over and over and over again. In most cases, the reformists have always won, because revolution is frightening, is scary, is dangerous. And so most of the time, when you get to the point where it's even a relevant discussion, not an abstract thing for conferences, but a real strategic issue, the reformists have won. I mean, and I'll give you an example from the United States. In the Great depression of the 1930s, you had an extraordinary shift to the left in the United States. The greatest shift to the left in the country's history, before or since. Nothing like it. Suddenly you created a vast left wing composed of the labor movement, which went crazy in the 1930s. We organized more people into unions in the 1930s than at any time before or any time since. It is the explosion and at the same time, the explosion of two socialist parties and the Communist Party that became very powerful. And they all worked together, creating a very powerful leftist party presence in this country. They debated in a strategically real way, reform or revolution. The reformers were the union People, by and large. And the Communists were the revolutionaries, by and large, because they were affiliated with the Communist International, with Russia and all of that. And in between, you might say that the two socialist parties, one that was Trotskyist in inspiration and the other one more moderate, Western European kind of socialism, and they had this intense debate, and they ended up. The reformists won that debate. There was no revolution in the 1930s here, but there was a reform that achieved unspeakably great successes, which is why it was as strong and remains as strong as it does, because it achieved, in a few years in the 1930s, starting around 1932, 3. Social Security in this country. We had never had that before. It's the same one we have now. Unemployment insurance never existed before that. You have, till today, minimum wage for the first time. Still have that today. And a federal program of employment that hired 15 million people. I mean, these were unspeakable gifts, if you like, to the working class.

So that's the 30s and the 40s.

30S, not much in the 40s anymore, but in the 30s. And here's the best part. It was paid for by taxes on corporations and the rich. So when people today say, well, you can tax the corporate, the joke is, I have to teach American history to Americans because it has been erased from consciousness.

We'll return to that. But first, let's take a stroll back to the beginning of the 20th century with the Russians.

With the Russians. So their interpretation goes like this. Everybody was right. The state is crucial. We were right. We were the revolutionaries. We seized the state here in Russia. Now we have the state. And socialism is when the working class captures the state, either by reform or revolution, and then uses its power over the state to. To make the transition from capitalism to the better thing we're going toward. And again, make a long story short, in the interest of time, what happens which is not unusual in human history, is that the means becomes the end. In other words, Lenin, who's crystal clear before he dies, you know, he doesn't live very long. He dies in 23. So he's only in power from 17, say, to 22. By that time, he has his brain trouble.

1923, by the way. Not at age 23.

Yeah, yeah, yeah, 1923. Yeah. He's only there for four or five years. He's very clear, even says, and I've done work on, I've published, so, I mean, I know this stuff. He says in a famous speech, let's not fool ourselves. We have captured the state, but we don't have socialism. We have to create that. We have to move towards that. With Stalin. Lenin dies and there's a fight between Stalin and Trotsky. Trotsky loses the fight. He's exiled. He goes to Mexico. Stalin is now alone in power, does all the things he's famous or infamous for. And by the end of the 20s, Stalin makes a decision. I mean, it's not that he makes it alone, but things have evolved in Russia so that they do the following. They declare that they are socialism. In other words, socialism becomes when you capture the state, not when the state capture has enabled you to do xyz, other things. No, no. The state itself, once you have it, is socialism.

So when a socialist captures the state, that's socialism.

Exactly. And that's exactly right.

And I feel like that's definitionally confusing.

Well, it shouldn't be, because I give you an example. Yeah. If you go to many parts of the United States today and you ask people what socialism, they'll tell you. They look you right in the face and they'll say, the post office. And you, you know, when I first heard this as a young man, you know what the post office, it took me a while to understand the post office, Amtrak, the Tennessee, all the examples in the United States where the government runs something. This is socialism. See, capitalism is if the government doesn't run it. If a private individual who's not a government official runs it, well, then it's capitalism. If the government takes it, then it's socialism.

So what is wrong with that reasoning? So the idea, I think there's nothing wrong with.

It's a way of looking at the world. It's just got nothing to do with Marx.

Well, there's Marx, there's Marxism. Let's try to pull this apart. So what role does central planning have in Marxism? So Marxism is concerned with this class struggle, with respecting the working class.

Right.

What is the connection between that struggle and central planning? That is often. Central planning is often associated with Marxism.

Right.

So a centralized power doing Russia did that allocation. So that's a, that's, that has to do with a very specific set of implementations initiated by the Soviet Union.

Has nothing to do with.

How else can you do.

I don't think you can find anywhere in Marx's writing anything about central planning or any other kind of planning.

Again, fundamentally then, Marx's work has to do with factories, with workers, with the bourgeoisie, and the exploitation of the working class. But you still have to take that leap. What is beyond capitalism?

Right. So maybe we should turn to that.

Focus on that.

Okay.

Yes. What? Okay. We've already looked historically at several attempts to go beyond capitalism. How else can we go beyond capitalism?

Let me push it a little further. They didn't succeed, in my judgment, as a Marxist, and I'm now going to tell you why they didn't succeed because they didn't understand as well as they could have or should have what Marxist was trying to do. I think I would have been like them if I had lived at their time under their circumstances. This is not a critique of them, but it's a different way of understanding what's going on. All right, so give you an example. Most of my adult life, I have taught Marxian economics. I'm a professor of economics. I've been that all my life. I'm a graduate of American universities, as it happens. I'm a graduate of what in this country passes for its best universities. That's another conversation you and I can have. So I went to Harvard, then I went to Stanford, and I finished at Yale. I'm like a poster boy for elite education. They tried very hard, by the way. I spent 10 years of my life in the Ivy League. 20 semesters, one after the other, no break. In those 20 semesters. 19 of them never mentioned a word about Marxism. That is, no critique of capitalism was offered to me, ever, with one, except one professor in Stanford in the one semester I studied with him. He gave me plenty to read, but nobody else.

So that's really interesting. You've mentioned that in the past, and that's very true. Which makes you a very interesting figure to hold your ground intellectually through this idea space where just people don't really even talk about it. Perhaps we can discuss historically why that is. But nevertheless, that's the case. So Moxy and economics. Did Karl Marx come up in conversation.

As a kind of dismissal, the best example? Yeah, he came up only as an object of dismissal for giving an example. The major textbook in economics that I was taught with, and that was for many years the canonical book, it isn't quite anymore, was a book authored by a professor of economics at MIT named Paul Samuelson. And people kind of, you know, a whole generation or two were trained on his textbook. If you open the COVID of his textbook, he has a tree and, you know, and the tree is Adam Smith and David Ricardo at the root, and then the different branches of. He's trying to give you an idea as a student of how the thing developed. And it's a tree, and everybody on it is a bourgeois and then there's this one little branch that goes off like this and sort of starts heading back down. That's Karl Marx. In other words, he had to have it complete because he's not a complete faker. But beyond that, no, there was no. Nothing in the book. Gives you two paragraphs of an approach. But that's Cold War. I mean, that's really. That's really neither here. That. That's the craziness. Yeah, that's the Cold War in this country. My professors were afraid. Anyway, let me get to the. To the core of it, what I think will help. Marx was interested in the relationship of people in the process of production, that he's interested in the factory, the office, the store, what goes on. And by that he means what are the relationships among the people that come together in a workplace? And what he analyzes is that there is something going on there that has not been adequately understood and that has not been adequately addressed as an object needing transformation. What does he mean? The answer is exploitation, which he defines mathematically in the following way. Whenever in a society, any society, you organize people, adults, not the children, not the sick, but, you know, healthy adults, in the following way, a big block of them, a clear majority work, that is, they use their brains and their muscles to transform nature. A tree into a chair, a sheep into a woolen sweater, whatever. In every human community, Marx argues, there are the people who do that work, but they always produce more chairs, more sweaters, more hamburgers than they themselves consume, whatever. Their standard of living doesn't have to be low, could be medium, could be high, but they always produce more than they themselves consume that more. By the way, Marx, when he writes this, uses the German word mer m ehr, which is the English equivalent of of more. It's the more that more got badly translated into the word surplus shouldn't have been. But it was by. By the way, by German and English people doing the translations.

What's the difference between more and surplus? Is there a nuanced.

Yeah, because surplus has a notion of. It's discretionary. It's sort of extra. He's not taking a. He's not making a judgment that it's extra.

It's a simple math equation.

Yes, very simple.

One minus the other.

Yes. X minus Y versus X is the total output. Y is the consumption by the producer. Therefore, X minus Y equals S the surplus. Exactly, exactly. Now, Marx argues the minute you understand this, you will ask the following question. Who gets the surplus? Who gets this extra stuff that is made but not consumed? By those who made it. And Marx's answer is, therein lies one of the great shapers of any society. How is that organized, for example? Who gets it? What are they asked if anything to do with it in exchange for getting it? What's their social role, for example? Here we go. Now, if you get this and you get the core of it anyway, and I don't charge much, the workers themselves.

Could get it less than lawyers, right?

That's right. The workers themselves could get it. Yes. That's the closest Marx comes to a definition of communism. Communism would. Would be if the workers who produce the surplus together decide what to do with it.

So this has to do not just with who gets it, but more importantly, who gets to decide who gets it?

Well, who gets it and who gets to decide what to do with it? Right, because you can't decide it if you don't have disposition over it. So just the logic of the word sequence. It's produced. Marx uses the word appropriated. In other words, whose property? Who gets to decide, if you like, what happens? All that property ever meant is who gets to decide and who's excluded.

That's a clean definition of communism for.

Right, and that's the. By the way, it's not just clean, it's the only one.

So what's. Can we just linger on the definition of exploitation in that context?

Easy becomes very easy to. Exploitation exists if and when the surplus that's produced is taken and distributed by people other than those who produced it. 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, 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. I use a metaphor. Simple metaphorical story. You have two children, let's assume, and you take them to Central Park a few blocks from here. It's a nice day and the children are playing, and in comes one of those men with an ice cream truck comes by, ding a ling a ling a ling. Your children see the ice cream. Daddy, get me an ice cream. So you walk over, you take some money, and you get two ice cream cones and you give them to one of the children. The other one begins to scream and yell and howl, obviously, what's the issue? And you realize you've just made a terrible mistake, so you order the one you gave the two ice Cream cones to give one of those to your sister or your brother or whatever it is. And that, and that's how you solve the problem. Until a psychologist comes along and says, you know, you didn't fix it by what you just did. You should never have done that in the first place. My response, so you understand all of the efforts to deal with inequality in economic, political, cultural. These are all giving the ice cream cone back to the kid. You should never do this in the first place.

The reallocation of resources creates bitterness in the populace.

Look at Arva. This country is tearing itself apart now in a way that I have never seen in my life. And I've lived here all my life and I've worked here all my life. It's tearing itself apart. And it's tearing itself apart basically over the redivision, the redistribution of wealth, having so badly distributed it in the first. But that's all in Marx. And notice, as I explained to you, what is going on in this tension filled production scene in the office, the factory, the store. I don't have to say a word about the government. I'm not interested in the government. The government's really a, a very secondary matter to this core question. And here comes the big point. If you make a revolution and all you do is remove the private exploiter and substitute a government official without changing the relationship, you can call yourself a Marxist all day long, but you're not getting the point of the Marxism. The point was not who the exploiter is, but the exploitation per se. You got to change the organization of the workplace so there isn't a group that makes all the decisions and gets the surplus vis a vis another one that produces it. If you do that, you will destroy the whole project. You will, not only will you not achieve what you set out to get, but you'll so misunderstand it that you, the Germans again have a phrase. Es geit Schiff. It goes crooked, it doesn't go right. The project gets off the rails because it can't understand either what its objective should have been. And therefore it doesn't understand how and why it's missing its objective. It just knows that this is not what it had hoped for.

I mean, there's a lot of fascinating questions here. So one is to what degree? So there's human nature. To what degree does communism, 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 a thousand people. It seems that humans form hierarchies naturally. So the, the clever, the charismatic, the sexy, the. The muscular, the powerful, what, however you define that, starts. Start, you know, becoming a leader and start to do maybe exploitation in a non negative sense, a more 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. So the question is. Yes, okay. It would be nice, the idea, sort of of communism would be nice to.

Steal from theory, but it doesn't work in practice. Because of human nature.

Because of human nature. That's. Thank you. So what can we say about leveraging human nature to achieve some of these ends?

There's so many ways of responding. In no particular order here, here are some of them. 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 isn't really. Then is there a need or an instinct? Is there some human nature that makes people want to do this? Well, whatever that is, this has to be repressed or else we don't have a society. 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 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 is a way to hold on to it, to prevent it from going. 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 we can infer if what you're.

Saying, the burden is on the people who think it isn't going to.

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 this is going against human nature because we keep using that for basically everything, including toxic relationship, toxic systems, absolutely destructive systems. That said, well, let me just ask a million different questions. So one, what about the argument that sort of the employer, the capitalist, takes on risk versus the employee who's just there doing the labor? The capitalist is actually putting up a lot of risk. What's. 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?

So first of all, there's risk almost in everything you undertake. Any project that begins now and ends in the future takes a risk that between now and that future something's going to 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. I took a risk. The cab could have been in an accident. The lightning could have hit us. A bear could have eaten my left foot. Who the hell knows?

Shouldn't I reward you for the risk you took?

No, hold it a second. Let's do this step by step. 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. 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 going to yank him out of the 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 going to. You're a capitalist. You got a lot of money. Otherwise you wouldn't be in that position. You 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.

So you think it's possible to actually measure risk? Or is your basic argument is there's risk involved in a lot of both the working class and the bourgeoisie, the capitalists.

That's right.

And it's very.

The worker, the worker would never come and say because he's been taught, right, I want this payment, a wage for the work I do. And I want this page, this payment for the risk I take.

Well, there's some level of communication like that you have acknowledgement of dangerous jobs, but that's probably built into the salary. All those kinds of things you understand, but you're not incorporating, you don't full spectrum of risk.

But you don't believe that this country is now being literally transformed from below by an army of workers who work at Amazon fast food joints. You know what their complaint is? It's killing us. We get paid shit and it's killing us. There is no relationship, except in the minds of the defenders of capitalism, between the ugliness, the difficulty, the danger of labor on the one hand, and the wage. Let me give you just a couple of examples because this is my job, this is my life, what I do, right? The median income of a child care worker in the United States right now as we speak, is $11.22 an hour, median. So 50% make less, 50% make more. The median income for car park attendant is several dollars per hour higher than that. What does the car park attendant do? He stares at your car for many hours to make sure that nobody comes and grabs it. Maybe he parks it and moves it around to get it in and out. By any measure that I know of that makes any rational sense, being in charge of toddlers, two three, four year olds who are at the key moment of mental formation the first five years to do to give that a lower salary than you give the guy who watches your car. Come on. I know how to explain it. Gender explained all kinds of issues. The car park people are males and the child care people are females. And that that in our culture is a very big marker of what? But the one who said only the economics professor, nobody else says this stuff because in economic. I don't know if you were familiar with our profession, but we have something which we call marginal product. This is a fantasy. I was a mathematician before I became an economist. I loved mathematics. I specialized in mathematics, so I know mathematics pretty well. What economists do is silly, is childish, but they think it's mathematics very Sophisticated it isn't. But think for a minute what it means to suggest that you can identify the marginal product of a factor of production. Like a worker in the textbook when it's taught. I've taught this stuff. I hold my nose, but I teach it. Then I explain to students, what I've just taught you is horseshit. But I. First I teach it.

What is the marginal product?

If you.

It might be useful.

The notion is if you take away one worker right now from the pile, what will be the diminution of the output? That's the marginal product of that worker.

Measured by the amount of the output.

That diminishes output of the raw product of the product, usually in real terms. So physical, not. Not the value. You could do a value, but it's really more the physical you're at.

I mean, there is a transformation thing. I'd love to talk to you about value. It's so interesting.

Yes.

What is value?

I'd be glad to talk to you about value and price and all of that, but I just want to get to this. Hegel, who is Marx's teacher, has a famous line. You can't step in the same river twice. And the argument is you and the river have changed between the first and the second time. So it's a different you and it's a different. You can choose not to pay attention to that. Just. You can't claim you're not doing that. You can't claim that you can actually do that, because you can't. There is no way to do that.

So the meaning that you can't just remove a worker and have a clean mathematical calculation of the effect that it has on the outcome.

That's right. Because too many other things are going on, too many things are changing. And you cannot assume, much as you want to, that the outcome on the output side is uniquely determined by the change you made on the input side. Can't do that.

Even in the average. It's not going to work out.

You can take. Look, mathematics is full of abstractions. You can say, as we do in economics, ceteris paribus. You know, everything else held constant, but you have to know what you just did. You held everything. You know why you do that? Because you can't do that in the real world. That's not possible. You better account for that, otherwise you're mistaking the abstraction from the messy reality you abstracted from to get the abstraction.

As a quick tangent, if we somehow went through a thought experiment or an actual experiment of removing every single economist from the world, would we better off or worse off?

Much better off. Okay, economics. And I'm one, you know, I'm talking about myself. See, economics, we're going to ship, ship.

All the economists to Mars and see how well it works.

Off.

No, but the serious part of this is that economics, you know, it's really about capitalism. Economics as a discipline is born with capital. There was no such thing. When I teach, I teach courses at the university, for example, called History of Economic Thought, right? 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 made no sense to people to abstract something as central to daily life as economics, broadly defined. Made no sense. That's a creation much, much later. That's capitalism. That did that created the feel of. So when I give them Plato and Aristotle, I have to give them particular passages, by the way, footnote. Because 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 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, and prevent it from doing the destructive things it does so badly.

So the, the fundamentally the destructive thing of a market is it's the engine of capitalism. And so it creates exploitation of the worker.

It facilitates. I wouldn't say that's too facilitate. It facilitates it. And it is an institution that Plato and Aristotle feel is a terrible danger to community is there. Which, by the way, 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, and this was that God said, 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.

But would Jesus be crying when you try to scale that system? So that has to do with the intimate human interaction. The idea of Marcus is you're able to, to create a system that involves thousands, millions of humans and there'd be some level of safe self regulating fairness.

There might be, but it's hard to imagine that charging interest would be the way to do that.

I wonder what.

So I guess, suppose you were interested in having, Suppose you took as your problem, we have a set of funds that can be loaned out. People don't want to consume it, they're ready to lend it. Okay, to whom should they lend it? Well, we could say in our society we're going to run this the way professors in institutions like MIT work this. They write up a project, they send the project into some government office where it is looked at against other projects. And this office in the government decides we're going to fund this one and that one because they're more needed in our society. We are in greater need of solving this problem than that problem. And so we're going to lend money to people working on this problem more readily or more money than we lend over here because we're going to. But instead what we do is who can pay the highest interest rate. Whoa, what do you do? What ethics would justify you? It's like a market in general. Something is in shortage. All markets are about how to handle shortage. That's one basic way to understand it. And so if the demand is greater than the supply, which is all the word shortage means, has no other meaning. If the demand is greater than the supply, okay, now you got a problem. You can't satisfy all the demanders because you don't have enough supply. You have a shortage. Okay, now how are you going to do it? In a market, you allow people who have a lot of money to bid up the price of whatever's short. That solves your problem because as the price goes up, the poor people drop out. They can't buy the thing at the exalted price. So you've got a way of distributing the shortage. It goes to the people who with the most money. At this point, most human beings confronted with this explanation of a market would turn against it because it contradicts their Christian, Judaic, Islamic. All of them would say what? You know what that means? It means that a rich person can get the scarce milk and give it to their cat while the poor person has no milk for their five children. There it is. You want to market. Why?

The fundamental thing that seems unfair, there's the resulting inequality now or death. Or death. Well, that's the ultimate inequality.

Yes, it is.

What about and we're going to jump around from the philosophical, from the economics to the sort of debate type of thing. What about sort of the lifting ties raise all boats, meaning if we look at the 20th century.

A lot of.

People, maybe you disagree with this, but they attribute a lot of the innovation and the average improvement in the quality of life to capitalism, to inventions and innovation, to.