Interview with noted economist, Richard D. Wolff: Part Two

In 1970, the U.S. was less unequal in terms of rich and poor when compared to most of our competitors in Europe. In 2013, we are number one in this dubious race. We have greater inequality between rich and poor than do any countries in Europe. That’s a testimony to where the wealth went that got produced with rising productivity in the last 30 years.

Why have people in Europe been more ready to protest and fight back against austerity and inequality on a much larger scale as opposed to those of us here in North America? Where did that culture of protest vanish to here in North America, and did we ever actually have it?

Yes we had it and it didn’t so much as vanish as it was crushed. If you recall, what I mentioned before about how different the 1930’s were with Roosevelt compared to the present, I will start the story there.

What Roosevelt did in the 1930’s in the middle of a terrible depression was the exact opposite of the austerity programs that were imposed [at that time] in Europe and in parts of the United States. In the midst of the depression with unemployment at least three times what it is today, every level of government was hamstrung, because they were not receiving much income, because they couldn’t levy taxes on people who had no job. Every government was pleading poverty. So what did Roosevelt do? He created a social security system. This was an enormous outlay of money helping out average Americans in the midst of a depression. We have nothing remotely like that now.

[Secondly], he created the Employment Compensation System at a time when millions and millions of people were unemployed, [this was] a great deal of money helping those at the bottom of the barrel. We have nothing remotely like that now.

Finally, as I mentioned before, a federal jobs program more expensive than the other two. So how was that possible? The answer is a powerful movement from below. Exactly like what you are seeing in Europe today. If you go [back to the archives] or the internet, you can look at photographs of demonstrations in the 1930s across the United States [Konstantine’s note: In Canada too!] Major cities [and] everything in between were sites of constant strikes and demonstrations, the exact picture of Europe. That was the time of a mass movement in this country.

For example: the Congress of Industrial Organizations (CIO) mobilized to enlist American workers in unions. In the midst of a depression, millions of men and women who had never been in a union in their lives joined one. At the same time, powerful Socialist and Communist parties here in the United States worked together with the CIO on these organizing drives, [and so]a revolution [began] brewing in this country.

Roosevelt understood that he was dealing with a mass movement that had real power. So he went to his friends among the rich and the corporate leaders and said, ‘you better give me the money to take care of the people at the bottom, because if you don’t the system that makes you rich and powerful is in danger of disappearing. So he convinced roughly half of the rich and corporate leaders of America and that was all he needed [to] cut a deal. He taxed the rich and the corporations very high and they went along with it. He then used the money to help [the] people. [He gave them] social security, unemployment compensation and jobs, but in exchange [the people] had to get rid of all that socialism and communism talk; no overthrow of the system.’ The three groups agreed to that deal too and that’s why we have social security and unemployment compensation to this day and how we got through the depression without turning fascist the way they did in Germany, Italy and Japan.