The New York Times magazine has described Richard Wolff as “probably America’s most prominent Marxist economist”. And that is probably not an exaggeration as a description of this emeritus Professor of Economics at the University of Massachusetts, Amherst and visiting professor at the New School University in New York.
Richard Wolff has been one of a handful of Marxist economists with full tenure at an American university. And he has worked tirelessly to bring home to students and all who would listen in the US, the Marxist alternative explanation of the nature of US capitalism and its current crisis. Wolff has written several important economics books, sometimes with his close collaborator, Stephen A. Resnick. In particular, their recent book, Contending Economic Theories, neoclassical, Keynesian and Marxian is a very useful and clear explanation of the main strands of economics for those who don’t know. Professor Wolff’s weekly show, Economic Update with Richard D. Wolff, is syndicated on over 70 radio stations nationwide and available for broadcast on Free Speech TV.
Now Wolff has published two short books designed to explain the ideas of Marxism and socialism in a straightforward way: Understanding Marxism and Understanding Socialism. The first analyses capitalism. He goes through the concepts of how competition develops between the capitalists (p.51); how labour power is commodified (p.41); and how capitalism is prone to crises and instability (p.60). Any individual, he says “exhibiting a personal instability comparable to the economic and social instability of capitalism would long ago have been required to seek professional help and to make basic changes” (p.61). But capitalism limps on and threatens to take us all down with it. Until workers get to decide democratically what to do about replacing it, so it will continue.
As Wolff has said: “If you want to understand an economy, not only from the point of view of people who love it, but also from the point of view of people who are critical and think we can do better, then you need to study Marxian economics as part of any serious attempt to understand what’s going on. Not to do it is to exclude yourself from the critical tradition.”
Wolff concentrates on Marx’s key discovery about capitalism, namely the surplus value, which is what employers appropriate above what they pay for wages. Wolff shows that productive workers are not compensated for the full amount and worth of their labour. And that constitutes exploitation. The expropriators constitute a tiny percentage of the population, and they control what happens with that surplus value. It is this relationship of production, Wolff insists, that has thwarted the democratic promises of the American, French, and other bourgeois revolutions. And this system of minority rule over ownership of assets and people’s labour power is also the cause of the staggering inequality that afflicts the world now.
The weakness in Wolff’s narrative, at least as expressed in his previous books is his explanation of why capitalism has crises in investment, production and employment that damages the lives of billions. Wolff adopts the classic underconsumption argument that capitalists pay “insufficient wages to enable workers to purchase growing capitalist output”. Regular readers of this blog will know that I consider this theory of capitalist crises as wrong. Marx rejected it; it does not stand up theoretically as part of Marx’s law of value or profitability; and empirical evidence is against it.
In the second book, Understanding Socialism, Wolff looks at various socialist experiments throughout history and suggests a new path to socialism based on workplace democracy. Socialism allows the many to control the fruits of their labour. And this would be done in a democratic way, with the workers voting on these concerns, as democracy is extended way beyond voting for politicians and even ballot initiatives, to the factory floor, the office, etc.
Wolff focuses on this democratization of the workplace as the basis of a socialist future. Wolff correctly emphasises that the economic base of socialism is the collective ownership of the means of production. But he is concerned not to adopt the central planning model of the failed Soviet Union, as he sees it. So he wants decentralised democracy through workers cooperatives. For him, the solution to recurrent crises and rising inequality lies in “changing the class structure of capitalist enterprises” and replacing them with “workers-directed enterprises.”
Wolff is concerned, rightly, to correct the view that the socialist alternative to capitalism is simply the public ownership of the major corporations and a national plan. Without democracy and workers control at company level there can be no real socialist development. Otherwise state officials merely replace a capitalist board of directors. This is “insufficient conceptually and strategically”.
But Wolff wants to include and emphasise the role of what he calls Workers Self-Directed Enterprises (WSDEs). To me, this seems to be bending the stick too far the other way, being close the utopian socialist ideas of Fourier and Robert Owen. Workers cooperatives without planning implies that markets will continue to rule between coops, opening the door to the forces of the law of value, rather than directing productive forces in the interest of society as a whole. It is one thing to achieve democracy at the workplace, but is it not jumping out of the frying pan into the fire, by leaving the wider economy to power of the market?