A column by Rick Wolff, emeritus professor of economics, examines the financial crisis in Greece. He concludes that government officials there and in international financial circles have misdiagnosed the economic problems and are blaming ordinary working people for something caused by the underlying capitalist system. (SocialistWorker.org, 6/4/10)
Economic Crisis, Greek Theater, Our Drama
April 6, 2010
by Rick Wolff
This Greek economic theater is nothing new. It replicates an old, recurring pattern of capitalism everywhere. Greek capitalist enterprises and their top shareholders and managers (the rich) evade or avoid most taxes. Meanwhile the problems and contradictions of Greek capitalism drive employers and employees to demand ever more from the government to support their activities. Eventually, the government can no longer finance its expanding services by raising more taxes from the masses. The masses resist and social movement to tax enterprises and the rich accelerates. Then, Greek capitalists and the rich quickly offer to lend the government more of the money they have saved from taxes. The government then borrows from them (and often also from capitalists and rich citizens of other countries) to finance some more years of expanding services. It runs increasing budget deficits and so pays increasing interest to the capitalist enterprises and rich individuals that are the government’s creditors. Eventually, those creditors respond to the accumulated government debt that they helped to create and that they have profited from by saying that further lending has become too risky.
Richard Wolff, UMass Amherst economics professor emeritus, comments in a story about 2010 graduates entering the job market, noting that anxiety amongst students about finding a job is very high. Ultimately, he recommends that students pursue a field they are really passionate about because they are more likely to become really good at what they do. According to Wolff, in this volitile market, they will be just as likely to make a career out of a subject they enjoy as one they choose for job security. (Gazettenet.com, 5/15/10)
According to Richard Wolff, UMass Amherst economics professor emeritus, what is happening in Greece will parellel financial crises to come in other capitalist economies like Ireland, Spain and Portugal.
Greece, Again: Demystifying “National Debt”
by Rick Wolff
With too few taxes flowing to the state from employers and workers to finance its programs for both of them, the state must borrow the difference between tax revenues and programs’ costs. By borrowing, the state escapes, at least temporarily, the dilemmas of its position within capitalism’s class struggles. It postpones the day of reckoning until it can no longer borrow its way out of those dilemmas. Now, the global crisis of capitalism has brought Greece that day of reckoning, just a little sooner than everywhere else.
In an article for MR Zine, Rick Wolff, UMass Amherst economics professor emeritus, argues that the current economic recovery plan, using public money to refinance failed banks, has not worked. Wolff offers an alternative plan; the federal government could finance rehiring of the unemployed with two qualifications: at least half of goods and services produced would have to be green and, second, the enterprises created to re-employ people would differ from traditional capitalist corporations by establishing genuine economic democracy at the workplace. (MR Zine, 4/18/10)
In an editorial for International Relations, Rick Wolff, UMass Amherst economics professor emeritus, discusses the significance of nation state in capitalism’s cycle. Capitalsit commentators initially rejected the notion of nation state, favoring globalization as a means to greater prosperity and wealth. However, because of the nature of capitalism’s instability, the nation state has become overwhelmingly important as a means to transfer debt.
Capitalism and the Useful Nation State
March 9, 2010
In the US, the nation state undertook to move toxic debts off private balance sheets and onto the national balance sheet. Across much of the world, there have been similar nationalizations of unsustainable debt and of private losses from financial speculations and other corporate failures.
Undertaking state debt to pay for nationalizing private debt and undertaking still more state debt to bailout failed capitalists in other ways has demonstrated again the usefulness of the nation state. More than that, by drastically deepening nation states’ budget deficits, it becomes clear who is being positioned to bear most of the costs of today’s capitalist meltdown. The masses of tax-payers and the same masses as beneficiaries of state-provided services and payments are everywhere being told to “tighten their belts.”
Rick Wolff, UMass Amherst Economics Professor Emeritus
In an article for Monthly Review, UMass Amherst economics professor emeritus, Rick Wolff, outlines Greece’s role in the global capitalist crisis. According to Wolff, although Greece’s role is minor in relation to the central causes of the crisis, Greece faced an economic downturn as a result of the crisis and, like so many other nations, borrowed a lot. Now, lenders are requiring them to pay much higher interest rates on their current debt obligations and are also threatening to stop lending unless poorer countries, like Greece, lower the ratio between their debt and their GDP.
The Stakes in “Punishing” Greece
by Rick Wolff
February 11, 2010
The global capitalist crisis first brought an economic downturn to Greece, and now the “recovery” seeks to impose on the Greek people an indefinite period of economic suffering as global lenders provide funds to the richer, larger capitalist economies elsewhere so that they can avoid what is demanded of the Greeks. The same leaders of business and government who produced the crisis are managing the “recovery” in just this way.
Richard Wolff, UMass Amherst Economics Professor Emeritus
Richard Wolff, UMass Amherst economics professor emeritus, commented recently in a story published in Elefterotypia, Athens, Greece’s daily paper. The English translation, published on Wolff’s website, is below:
2010 marks year #3 of this crisis in global capitalism. This is a systemic crisis with extreme symptoms in different places at different times: now Icelandic banks, then US homeowners being foreclosed, now Mexico losing emigrants’ remittances, then Greece’s government bonds, and so on. Capitalist hegemony cannot admit or deal with the disease of capitalism as a system. Instead, the focus shifts from symptom to symptom to press local institutions to shift the costs of crisis onto workers.
Capitalism’s systemic crisis is no mystery. For 30 years, wages were restrained (by incorporating vast new supplies of labor power) relative to enhanced productivity (via computerization and telecommunications). Exploding surplus and profits produced another capitalist speculation frenzy built on excessive risk. Workers in Europe and especially the US reacted to stagnant real wages by borrowing too much. By 2007, the crisis emerged from: a financially overextended working class, employers with excess productive capacity, wealthy individuals with too many risky investments, and an international economy with severe trade and capital flow imbalances among nations.
Instead of moving beyond a capitalist system that endlessly reproduces such crises, servants of the status quo prefer to blame and squeeze some local workers: this time Greeks.
UMass Economics Prof. Emeritus Rick Wolff
Professor Emeritus Rick Wolff publishes an article titled “Economic Crisis Savages Public Education” in the online newsletter Dissident Voice. In the article Wolff discusses how the current economic crisis is affecting public education.
Economic Crisis Savages Public Education
by Rick Wolff
December 22nd, 2009
The economic crisis sharply worsens these public school inequalities in New York. The middle and poorer school districts display higher rates of unemployment and home foreclosures, more rapidly declining real estate values, and more tightly constricted family budgets than the rich school districts. The resulting pressures to lower property taxes will be greater in the middle and poorer districts than in the rich districts. School funding will suffer accordingly. Inequality inside public education will grow alongside that between public and private education. Deepening educational inequality will reinforce the subsequent inequality of qualifications, jobs, and incomes that this generation of young people will suffer.
UMass Professor Emeritus Rick Wolff has electrified audiences nationally with a lecture based on his new book, Capitalism Hits the Fan: The Global Economic Meltdown and What to do About It. He recently spoke at UMass.