When capitalism stops serving the needs of the people, what can we do to create a fairer more equitable society? What can we learn from China's success and economic growth? Are we witnessing the decline of the American Empire and what comes next?
Richard D. Wolff is the co-founder of Democracy at Work and host of their nationally syndicated show Economic Update. He was formerly professor of economics at the University of Massachusetts Amherst, Yale University, the City College of the City University of New York, and the University of Paris Sorbonne. Currently, Wolfe is a visiting professor in the Graduate Program in International Affairs of the New School University in New York City.
THE CREATIVE PROCESS
It’s hard to make forecasts looking down the barrel of a 2nd Trump Presidency, a man who prides himself on saying two things at once and meaning neither of them, but taking account of things as they stand, we can see the cracks in the American empire.
There are certain FACTS: The world’s richest 1% have already used up their fair share of their global carbon budget for 2025. BRICS nations have expanded and are now 50% of the world's population, compared to US's 4.2% and G7’s 10%. And BRICS is growing. America owes Japan $1.1 trillion and owes China $859 billion. The wars in Ukraine & Gaza have cost lives, money, and the credibility of the US around the world.
Trump had 77 million people vote him into office, and he says climate change is a hoax. His fast new friend Elon Musk of X platform has 210 million followers, and Mark Zuckerberg of Meta has 1.4 billion daily users and has now removed fact-checkers from its platforms. These three men have influence over 1.7 billion people and thats a lot of unchecked power to sway over the world. 2024 was hottest year on record. So how do you choose which one to turn your attention to when all these problems are clearly out of control?
RICHARD WOLFF
What unifies, in a sense, what lies behind all of these is the profit imperative: the prioritization of profit over everything else. Because it is profitable to build housing in unsafe areas, we do it. We pay the price, if you like, because it is profitable. We turn against our allies around the world. It appears to a politician to be a profitable gambler to pay. Where others would be eager to sustain an alliance, our political leader currently thinks it is fun and profitable to him as a vote collector to enact a theater of Mr. Tough Guy. It is all theater.
The position of the United States in the world, economically and politically, is the weakest it has been in my lifetime. I was born in the middle of the 20th century, so I have watched the rise of the American empire and the success of American capitalism in the second half of the 20th century. However, over the last 20 years, I have watched that turn into its opposite—a decline. The decline is visible everywhere. Unless you live in the United States and consume mainstream media, there is a level of denial that will be recorded historically as one of the great examples, not just of a declining empire, which typically has people who cannot face it and who refuse to see it. You can go to Great Britain today and find quite a few people who think we still have the British Empire, even though everyone who isn't crazy knows that is silly. But we are earlier in the decline phase than the British are; they have had to endure it for a century while we have just had to do it for a couple of decades. It is fresh.
We still have political leaders, as was evident in the presidential election just behind us, in which neither Mr. Trump nor the Democrats, either of whom ran against him, ever said a word about a declining empire. They outdid each other in pretending otherwise. It is extraordinary. You do not solve problems by denying them. Your doctor makes that point to you every time you visit. Your psychiatrist, your therapist, your boyfriend, your girlfriend—they all emphasize the need to face the issues that shape your life. They will not go away all by themselves; yet, that is the way this society is dealing with the fire in Los Angeles and other problems.
THE CREATIVE PROCESS
As you say, scapegoating immigrants is a sign of economic weakness rather than economic strength. If you have a thriving economy as the United States had in the 20th century, we wanted immigration. They needed workers to supply goods. We could welcome and absorb them.
WOLFF
We have to really ask questions about our economy, which is weak in this way, but we do not do it. Instead, we fight a war in Ukraine, thousands of miles away from us, with no threat to us at all in any foreseeable future. We are complicit in levels of horror in Gaza that make you wonder what happened to all the so-called commitments to solving problems in a reasonable way. The justification of killing huge numbers of innocent people is something we should reject. The end does not justify the means. These are the slogans of the Cold War used by the United States against the Soviet Union, and now they apply to us. Still, we do not ask the question as a nation: What is happening here?
THE CREATIVE PROCESS
So, we have to diagnose it like a patient. What is the underlying problem of this system based on exploitation? What is capitalism, and why is it not serving the average worker, the 99%?
WOLFF
Well, then we have a society that is organized around a handful of people at the top, a tiny percentage of people making the basic economic and, therefore, political decisions. That is what we have. Mr. Musk can decide with the stroke of a pen where billions of dollars that he controls will go. Will they be used to produce another spaceship, or will they be used to provide basic education to people who cannot afford it? That is a fundamentally political question. Yet, we allow it to be made into reality by that individual. That is crazy. It is not sustainable, by the way—not sustainable anywhere in the world. The proof is it never has been sustained.
It can last a long time, but what we also see is that it accumulates levels of opposition that will eventually blow it up, and I think we are living through exactly that situation right now.
THE CREATIVE PROCESS
So, what can we learn from China's success and its economic model? What they've done in 70 years, with four times the population of the U.S., the kind of economic growth, it just dwarfs ours continually for at least the last 20 years. With their socialist-capitalist model, two systems, they learned from the failures of the U. S. and Soviet systems, so what can we learn from their successes?
WOLFF
We have had, over the last century, a direct, concrete experience with governmentally controlled capitalism. I say capitalism because of the model of a few people at the top making decisions for the mass of people. In the Soviet Union, a relatively small number of people in the government, in the apparatus of the state, with the Communist Party, made decisions for a mass of the working class. So, it is capitalist. In that way, it is like the United States. The difference is that you give the state the dominant position in the Soviet Union and private capitalists the dominant position in the United States, the United Kingdom, and so on.
Now, what is China? China is a refusal to do either of these two. It does not want to be a Soviet state system, which is remarkable because they began as a project of the Soviet Union and an ally of the Soviet Union. They broke from the Soviet Union in the 1960s, a very dramatic part of Chinese history, and developed their own plan. It is not to be a Soviet state system, and it is not to be a US or UK private system. It is to be a carefully curated amalgam—a hybrid, if you like—a combination of roughly 50 percent private capitalists, both Chinese and non-Chinese, and 50 percent state, all supervised by a very powerful Communist Party.
Those are three alternative models. I would like to remind my pragmatic friends, in the philosophical sense, that it is rare in history to be in a moment where we have three roughly contemporaneous experiments in different ways of developing a capitalist system. One of them developed faster in the worst possible conditions than the other two. China, as you rightly point out, in the last 40 years—not even 70—has done more to develop itself out of poverty than the United States and the United Kingdom could do in centuries. The result is clear. Any humility, not governed by either anti-Soviet or anti-communist or old Cold War mentality, would lead a reasonably open-minded person to acknowledge we have a lot to learn from what the Chinese did. It does not mean you have to copy it. It does not mean you cannot make criticisms and reject this or that aspect of China.
This is not a silly argument. This is about what they can pragmatically achieve. Over the last 20 years, automobile companies around the country have been competing on who could develop the electric car and truck the furthest and the quickest. Mr. Musk was the first, but he has turned out not to be the best, which is not unusual. The Chinese have outdone him.
We learn from that, and what you learn is not to demonize what they achieved but to learn from it. Despite all the anti-Chinese noise being fomented, I know this, and everybody who pays attention does—American companies, European companies, and politicians are, in fact, looking at the Chinese for a model. That is why you are seeing a bigger and bigger role for the state, both in Europe and in North America. They are grudgingly pretending otherwise, giving lip service to private enterprise, while in fact, they are going where they know the future now lies. We are going to have a great moment—pardon my French—a great denouement, as the French would call it, when it is finally understood and can be spoken that we are copying much of what the Chinese have achieved because it is the rational thing to do.
THE CREATIVE PROCESS
It's not just what China has done for China. Their approach to diplomacy around the world and having this long view of understanding that they would need mineral rights for all these new technologies and investing in Africa and elsewhere. People don't want to be bombed into obeisance. They like their roads to be built. They want access to water. They want hospitals. And if the Chinese are doing it for them, they don't care who's doing it. But that's a much better way than having military bases all around the world, in my opinion.
WOLFF
I am hopeful—hopeful that the new generation is finding the old people leading the Western countries more and more out of touch and behaving in ways that do not inspire confidence. There is a reason Mr. Starmer in England is already at low levels of popularity, copying Mr. Macron in France or the recently ousted Scholz in Germany. People should remember that one of the reasons the Trump administration has to keep talking about the mandate he got in the election is that he did not get a mandate in the election. The difference between the popular vote for him and the popular vote for Kamala Harris was one and a half percent.
Roughly half the people do not want him. This will make his government difficult. The kinds of people he has brought into top positions, half of them are committed to destroying the departments they have been put in charge of. This is a bizarre dynamic. Most of all, I would urge people to consider that what will happen in the next four years is 90 percent determined by forces over which Mr. Trump has no control. That is not unique to him; it was also true for Mr. Biden, true for Mr. Trump the first time, for Bush, for Clinton, and for Obama. All of them.
We Americans have a deluded notion that the world revolves around us. For a while, it did, which made this delusion particularly bizarre. The second half of the 20th century was strange. We must know our own history. Every other competing power—Britain, France, Germany, Japan, Russia—was decimated in World War II. We were not. One day, bombs fell on Pearl Harbor in Hawaii. Other than that, no bombs fell here. We suffered fewer casualties than any of the other combatant countries. We emerged at the top of the hill with no competitors. The second half of the 20th century was a bizarre time—the time when the dollar was the global currency, and American military bases ringed the world. We had a level of dominance that was historically anomalous. That does not happen, and when it does, it never lasts. Never, never, never—for thousands of years. That would have been the first thing Americans should have understood. Instead, they made the classic, childish mistake of imagining it could last forever. Republicans and Democrats blame each other for the fact that neither of them could do what nobody ever could do and what is not doable. What we are living through is the denouement—the coming to terms with reality.
I just learned yesterday that they have already discussed an important meeting between Mr. Trump and Mr. Putin as a priority in the early weeks of his presidency. Okay, that is a small moment in a changing mentality because it is not working. I do not mean to upset people, but let us be honest: in Vietnam, the United States was defeated. It fought against the Communist Party of North and South Vietnam, and the emerging victor was the Communist Party of North and South Vietnam, which has governed that country ever since. The United States lost. In Afghanistan, the United States set out to destroy and defeat the Taliban. But Afghanistan is today ruled by the Taliban. The United States was defeated. In Iraq, it was defeated. In Ukraine, I mean, I understand Americans are in denial, but everywhere else in the world, it is crystal clear that the United States has been defeated.
You can have a few successes, but let me tell you, as a professor who goes around the United States giving talks—often to college students—when I lean across the podium and discuss the defeat of the United States, you should see their faces. This is the first time someone has said that to them. They do not think Americans lose wars. They have a level of self-delusion that will come back to haunt them because it will lead to terrible strategic mistakes. The idea in Washington that you could defeat Russia in Ukraine by a program of economic sanctions on top of military action was a terrible mistake. It did not take into account that Russia could turn to its BRICS allies, above all China and India, and sell the oil and gas to them that the Europeans will no longer buy. That plan hoped to cripple Russia. It failed. Russia's economic growth has been better than Europe's for the last two or three years.
THE CREATIVE PROCESS
You've discussed the strength of desires like wanting to be our own boss, for instance, but while these desires appear to be pro-capitalist, you also argue that they actually emerge from an underlying critique of capitalism itself. So, how has capitalism managed to repackage itself as the answer to the very desires that could undermine it?
WOLFF
If you organize a society such that a tiny group of people has a disorienting amount of power relative to the masses, such that a tiny group has an enormous amount of wealth compared to the masses—like Elon Musk, who has a personal wealth now of $400 billion, while the majority of Americans agonize over whether they can afford a college education for their kids—these levels of inequality of power and wealth have always led to an urgent need for the rich and powerful to control the unwealthy and the unpowerful. They understand better than anyone how vulnerable they are. A slight shift of votes could lead to a political movement in the United States that says we are going to tax everyone with a wealth of over a billion dollars. We will tax them. This could be done in ten minutes; there is no problem here.
They know that. So, they spend an enormous amount of effort—this is so important, folks—to persuade the masses of people that the current system is the best you can hope for, the only viable option and that anyone who is critical or oppositional is either crazy or evil or both. They work at it night and day.
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I can speak to you personally. I attended the most prestigious universities the United States has to offer. I went to Harvard, Stanford, and Yale. Those are the only universities I ever attended. Ten years of my life were spent going through those universities, and throughout my time, I was bombarded by professors—some good, some bad, some in the middle—but they all had one thing to tell me: this is the best system a human being can achieve. You are very lucky to be here. If you are critical, there is something wrong with you.
Oh, you can be critical of this detail or that one, but wow, we are the best. They really worked hard, and some of them were very good at it. I tried to be a good student, raised by parents who told me my job in school was to be successful, to do what would get me an A rather than a B. So, I was a docile kid, like everybody else. But they never persuaded me. They tried. I listened. I took notes. I was a dutiful student. But the realities I experienced clashed with what they told me. When I brought that up, they did not handle it well. They did not have good answers, and more than that, I could see in their eyes—some of them actually said it to me—“Don't bring up those questions; that will get you into trouble, and it will get me as the teacher into trouble. Don’t do it.” I am a sensitive person. I did not want to make life unpleasant. My teachers were perfectly reasonable people most of the time. So, I backed off and kept it inside. I am one of millions in this country. I can assure you that as I go around talking, I am constantly amazed by how many people understand what I have to say. One of the ways people like me have been kept down is by being told, “Nobody else thinks the way you do. You are odd, you are weird.” That is a game. Do not believe it. It has never been true.
Every system—capitalism—has had its critics. Karl Marx is not the only one. He depended on those who came before him, just as those of us who come later depend in part on him. That is the way this goes. Eventually, the clash, the contradiction, if you like, between the realities we live with and the ideological effort to maintain control will produce a change. The leader of the revolution in Russia is famous, perhaps more for the following quotation than for any other: Vladimir Lenin, the head of the Russian Revolution, approached by his colleagues in the revolutionary movement before 1917, heard them whine and complain, asking, in a way similar to your question, “Why is it taking so long? Why is it so hard for people to understand what we need to do? We need to get a better system.” Lenin's reply was, “For decades, nothing seems to happen, and then, in a few weeks, decades happen.” That is the answer. I know it is frustrating. Believe me. You, the younger of the two of you, are coming at a time when change will happen quickly. I had to live through a time when change was deferred and elongated.
I teach a course at the New School, a university here in New York City, where I am seated. I do that because I enjoy the act of teaching. Otherwise, I cannot justify it, as I have 20 or 30 students, and when I go on television, I have millions. I cannot justify having had no audience most of my life, beyond being a professor. Now, my public audience is overwhelming. People stop me on the street and are gracious, saying thank you. It is flattering and boosts your ego, but the wonderful thing about it is they are figuring it out. They like what I say because they have arrived at their understanding independently, without knowing me or having anything to do with me. They are gratified, in a sense, to hear it and see it. Maybe I can point out something they had not themselves figured out, but they are already there, and that is the best news of all. They do not need me.
THE CREATIVE PROCESS
On your platforms, Democracy at Work, Economic Update, and your books Understanding Capitalism and Understanding Socialism, you speak directly. You tell the truth. There's nothing exaggerated. It's all based on fact. And you speak with the voice of the people. This is something I didn't get growing up. There are certain basic things that we need going forward: an environmental education for an uncertain future and an economic education. A good grounding in finance to help us improve these systems. So if people can find their way to you through the classroom or through these other platforms, you really make it clear these things that can be really vague and hard for people to understand.
WOLFF
When I was a little kid, my mother and father asked me, “What do you want to be?” I went through phases: I want to be a cowboy, or I want to be a fireman. Ultimately, what I ended up wanting, and I was still very young, was to be a teacher. I wanted to give what was, by that time, the most exciting thing for me, which was having someone explain to me how it works. There was a sense of mastery, a sense of having at least a little bit of control over your life if you understand why things are happening. That will, unfortunately, also teach you that you cannot control everything. But that little bit of understanding is very valuable. If you want to give that to people, they will get it. They do not know me all that well. Why should they trust me? I think it is because I convey what the best of my teachers conveyed to me—that they understood. If I may use the word, they got a pleasure, a sense of joy when they could present something, and you could see the little light bulb go off in the student or whoever it was as they said, “I get it.”
I think that is a very revolutionary moment; it is what every revolution needed before it could happen.
THE CREATIVE PROCESS
Earlier you were discussing this relationship between time and change. Now we have with the rise of AI and more sophisticated technologies, they're accelerating the pace at which economic processes, but generally, everything happens. So, how should we think about time in relationship to economic change? Especially in light of Marx's dialectical materialism and Hegel?
WOLFF
Let me turn the question slightly this way. I, and I mean it, I loved reading Hegel. The language is very unique to that period of German culture. I should explain to you that my first language is German. My mother was born in Berlin and immigrated to the United States. By the way, some of my feelings about migration is I'm the product of two immigrants. I was born in the United States, but my parents, both of them, were European. My father was French, my mother was German.
Why did I love Hegel? Because he gave me an insight—an insight that was so radical, at least for me, at the time I encountered him. I had grown up in the American school system. I went to Harvard; I did well. My parents wanted me to get all As, and I did that. I played the violin in the orchestra, and I played quarterback on a football team. I mean, I did it all, but that was because my parents wanted me to succeed as they understood it. And so, I learned in the school system that things are either true or false. When I got a test score in arithmetic, I either got the right answer or the wrong answer.
Hegel is a study in the understanding that there is no such thing. To spend a lifetime trying to get the right answer misunderstands what thinking is and what it can do. To look for the right answer is like offering a course on the best way to capture elephants in the Berkshires—hills here in western Massachusetts. I offered a course, but no students showed up. You know why they did not show up? Because they know that there are no elephants in the Berkshires. Therefore, a course on how to catch them strikes them as a waste of time.
Hegel taught me that things can be true and false at the same time. In fact, to expect that, and therefore to understand something, you have to know the boundaries that separate it from what it isn’t. What it isn’t is part of understanding what it is. When you have that in your mind, then when you want to understand capitalism, you have to understand what separates it from everything else. The minute you have that, you have an 'else.' Now you can compare. That is what human beings do. When you see a cat and a dog, your brain begins to organize that these are different. Out of that might come a notion: I really like cats, or I really don’t care much for dogs, or vice versa. That is all bingo.
Part of my discussion revolves around a few people at the top running the enterprise versus a democratic collective of all the people in an enterprise. I am teaching people that it could be otherwise. It always could be. It can be now, and it can be in your lifetime. One thing you might want to consider is what it would be like to work in a job that was organized in a non-capitalist way, where you were as responsible for making decisions at the top as you were for doing whatever your particular task was—because you were part of the collective that owns and operates it. You would develop differently as a human being. You would develop capacities you do not currently develop.
If you are a drone who comes into work, sits at a desk, works with a computer, and does your job, you will be a very different person after five years than if you were involved in designing how this enterprise is going to evolve. This is not complicated. In my case, it took Hegel. Maybe, if the moment is right, it can happen in your case, too. We are communicating at a moment when this spark can find some dry ground.
