Richard Wolff has become something of a leading voice on the political left today — and for good reasons. Wolff, a retired professor, devoted much of his academic career to the study of Marxist economics. He has published several texts developing this heterodox approach, and explaining how it differs from the neoclassical and Keynesian traditions. His work is situated within a larger, collective effort emerging from the economics department at the University of Massachusetts, Amherst — where he spent the bulk of his teaching years — to re-introduce Marxist thought to the field of economics. In fact, the Amherst Economics department’s output has since been recognized as its own branch of Marxism, often referred to as the ‘Amherst School’.
Not only has Wolff been a profound anti-capitalist in the academic world, he has published a number of successful trade books on the problems endemic to a capitalist economy (Capitalism Hits The Fan, Capitalism’s Crisis Deepens, Democracy At Work: A Cure for Capitalism, among others). His current notoriety has been further propelled by his online presence: he hosts a popular weekly podcast and radio program, Economic Update, and is a frequent commentator on alternative media outlets like Democracy Now! and RT. Needless to say, Wolff is an excellent spokesperson for those wishing to understand the workings of a capitalist order and want to do away with the injustices it reproduces.
An article published by Wolff at CounterPunch.org (an excellent resource for left-wing reading) has rekindled within me a sense of insecurity, by illuminating that my political worldview may exist in a state disequilibrium. The contradiction I harbor is borne of the following conditions: on the one hand, I am an admirer of Wolff and persuaded by his analysis regarding the futility of social democracy, but, on the other hand, I generally gravitate towards endorsing a social-democracy agenda over socialism or communism (because I am unconvinced that we should do away with private property and markets). The trouble appears to be that I cannot both agree with Wolff and continue to support a social-democratic orientation.
Wolff draws out attention to the trajectory of U.S. history to argue that social-democratic reforms are insufficient in generating a society defined by equality and democracy, two values deeply cherished by the left. According to Wolff, American history makes clear that social-democratic reforms are, at best, temporary. Given enough time they will be dismantled by the power of capital, just as the neoliberal project has done with striking success. The story told by Wolff is a simple one, but the truths it embodies are powerful and seemingly undeniable.
It starts with the the bold and progressive policy changes following the widespread economic insecurity that marred the early decades in the 20th century and were exacerbated by stock market crash of 1929. Wolff writes,
“The New Deal, forced on the FDR regime from below by a coalition of unionists (CIO) and the political left (two socialist parties and one communist party), reversed the traditional direction (to greater inequality) of income and wealth distributions in the US. They shifted toward greater equality. US history thus illustrates Thomas Piketty’s argument in his 2014 Capital in the 21st Century about long-term deepening of inequality that can be punctuated by interruptions.”
The sweeping New Deal legislation passed by FDR ushered in greater equality, employment security, social insurance, and inclusive economic growth. In fact, the inter- and post-war periods have been dubbed the ‘Golden Age of Capitalism’ to reflect just how uniquely prosperous this era was for the mass of people. This Golden Age all too quickly came to an end, however, and the story takes a dark turn. Wolff continues:
“Yet, after World War Two the resumption of capitalist accumulation undid the New Deal and has since returned modern global capitalism to new depths of inequality. What Piketty proposes now again as a remedy proved then to be merely temporary. The reversal was itself reversed. After 1945, corporations and the rich devoted their profits and their high incomes/wealth to buy even further control of the two major political parties. That extra control enabled them to undo the New Deal and to keep it undone.”
While I might take issue with Wolff’s claim that this resumption of capital started in 1945 (David Harvey and other neoliberal scholars usually point to the 1970s), the overarching narrative is undoubtedly true: a political project, sometime after the War, was commenced to restore the power of capital and weaken the standing of labour. This abandonment of the New Deal/social-democratic/Keynesian agenda for a radically different politics aligned with the interests of the capitalist class marked the onset of the ‘neoliberal’ era.
In short, neoliberalism is policy regime defined by the overarching aim to subject all aspects of life to market principles. Naturally, this has involved reducing or ‘re-focusing’ state intervention in the economy through an array of policy mechanisms: deregulation, privatization, globalization, financialization, and austerity. The result, as we know it today, has been a return to social conditions similar to the early 20th century with inequality skyrocketing to 1929 levels.
Wolff suggests that we can draw a very important lesson from the American experience over the last century. U.S. history he claims,
“exemplifies more than capitalism’s tendency to deepening inequality and the use of taxation to reverse that inequality. It also teaches us how and why that reversal was unable to be more than temporary. That lesson implies skepticism about whether tax-based — or indeed, any — reversals can be more than temporary given capitalism’s proven success in undoing them.”
This is a devastating point. Yes, the inequality produced by capitalism can be mitigated with redistributive policies. However, the historical record suggests that such efforts can, with relative ease, be overturned. In other words, not only is capitalism an inequality producing machine, it will bull doze any bulwarks designed to prevent the inequality it produces. As Wolff clearly states, attempts to constrain inequality in a capitalist system will only be temporary.
What conclusion does Wolff believe we are to draw from US history on the matter of inequality?
“The conclusion to be drawn from the US story is not that efforts to reverse deepening inequality are foredoomed to failure. It is to face the fact that mere reforms such as tax law changes are inadequate to the task. To make reforms stick — to overcome temporariness across so many histories — requires going further to basic system change. Because capitalism tends toward deepening inequality and can defeat reversals by keeping them temporary, it is capitalism that must be overcome to solve its inherent inequality problem.”
It is evident now, I hope, why Wolff’s argument introduces incoherency to my own worldview. Social democratic measures might work, but they are too easily undone and circumvented. Capital can marshal its resources to strip away any measures implemented to reduce inequality and provide economic and social security to the less well-off. In light of Wolff’s claims, does it make sense to continue advocating for social-democracy? It’s hard to confidently say yes.