Richard Wolff, Economist and Professor at the New School in New York City, speaks to Paul Jay about the reform needed to pull the United States out of crisis.

Story Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to the next part of our interview with Richard Wolff. He’s an economist. He teaches at the New School. And we are in New York City, and we’re talking about the American auto industry. Thanks for joining me.

RICHARD WOLFF, ECONOMIST, THE NEW SCHOOL: Thank you for having me.

JAY: So we ended the last segment of the interview, and you talked about if there was a comprehensive plan and a broader vision. So start to flesh out what you think that might look like.

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WOLFF: Well, I think it begins with a recognition that every worksite has two aspects that need to be brought together. The automobile industry is a perfect example. On the one hand, there’s the question of how much you pay this working man and woman to do their job and make the car. On the other hand, how much income does this family of this worker get so they can afford to buy the things that we all, as workers in America, make? In other words, the worker and the consumer are two hands of the same person. But the way our corporations work, all the decisions are made by boards of directors and major shareholders whose interest in that worker is much more focused on how much you have to pay him and much less focused on how much you need him to buy or her to buy what you finally produce. So, for example, if our automobile companies become much smaller, which is the plan, then it’s clear that they’re going to be aiming to produce cars for whoever has the money to buy them, which is going to be, increasingly, exports from the United States to where the money is, because by cutting wages, such as, for example, autoworkers from $28 to $14 an hour, which is part of this plan, we’re not going to be able to sell cars to Americans very much anymore. And that’s going to make the American working class stop being the envy of workers everywhere else in the world. But it’s a decision that’s going to hurt the automobile companies as well as the workers in the long run, because it focuses too much on the role of the worker as a wage earner and too little as a consumer. So my proposal is as simple as it is unusual in the American discourse: the workers themselves should be brought in, in a systematic way, to be part of the decision-making apparatus of these corporations.

JAY: But isn’t that sort of what’s happening? The UAW’s going to own Chrysler, they’re going to own a controlling interest in General Motors, or vice versa, but they’re going to own a big piece of both of them.

WOLFF: Yes. But the problem is you’re bringing them in under the worst possible circumstances, when the company is on the edge of collapse, when its competition is way ahead of it and more advanced. They are going to have all they can do [sic] to find a way to keep this entity afloat. And instead of making the space and the resources to make a big change in how we run corporations, my guess is we’re going to see this new group of board of directors named by the union basically give the control over to the people who can save it on the immediate level.

JAY: But does that mean that part of–sort of take some steps in the vision that you’re articulating is that there’s maybe perhaps going to need to be a big fight within the union, because the union actually will be in a position to do something?

WOLFF: That’s right.

JAY: The current leadership of the union perhaps is ready just to, you know, try to get back to something the way it used to be. But this is a very interesting opportunity here, too.

WOLFF: Absolutely. I think you’re going to see a big struggle. It’s already evident in some of the unions, a big struggle. Do you stay with the old model, in which you leave management decisions to the management, an accommodation the American labor movement largely made?

JAY: Sort of like what they’ve done with their pension funds. They’re enormous investors, but they allow their management to carry on in the old way.

WOLFF: Exactly. And even the past examples—United Airlines, FedEx, and so on—where you’ve had workers’ pension funds buying big blocks of shares, they’ve always had the attitude, well, we must leave the direction of the company, the big decisions, to the usual boards of directors etc., and our role as sort of the silent partner, the partner who’s not really there, except with his money. No, I’m arguing for something radically different, and I think there will be voices inside American unions that are going to be arguing this too, namely, let’s convert our position as owners into an active participation in making the basic decisions. It’s sort of the difference between an attitude towards democracy which says once a year I’ll go into a booth and vote, versus a notion of democracy that says I want to be in on and know about and participate in all the basic decisions, since I’m going to have to live with the consequences of those decisions. I think that’s a new, radical way of thinking about how we organize enterprises. But now, in this crisis, is the long overdue time for that debate and that discussion to be begun seriously in the United States.

JAY: So what would you suggest autoworkers should be asking or recommending or demanding from the Obama administration at this point?

WOLFF: I think they should say that if they’re going to put the health—literally the lives—of the overwhelming majority of autoworkers in the hands of what happens to the stocks of this company, ’cause that’s the deal that’s been made: instead of funding the health program, they are giving them stocks. If you’re going to do what the UAW did, to accept that instead of getting the money needed to take care of the health needs of their people, they’re going to accept stocks in a company this far from bankruptcy, they have, for their own reasons, to be involved at every step in all the decisions that have to be made, because their lives literally depend on it. And the luxury of allowing distant shareholders and a handful of people on a board of directors driven by profit dreams and high bonuses to make decisions that in the past haven’t worked out, that’s a luxury the workers can’t afford. And I expect there’ll be a struggle between those who want to do business as usual in the old way and leave management to the managers, and a new group of workers who understand their own self-interest to require a change [in] how we organize the enterprises in this country.

JAY: Well, in the next segment of our interview, let’s talk about what might be the implications of the Obama health-care plan on this whole issue, because if they actually are successful in this next year of having some kind of real health-care reform, then it changes the whole economics of the auto industry.

WOLFF: Yes, it does.

JAY: Please join us for that discussion in the next segment of our interview with Richard Wolff.

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