‘Capitalism in US runs dry’

There is no way the US can solve its tremendous financial problems within the settled economic system. America must go beyond capitalism, argues Richard Wolff, an economics professor at New School University, in an exclusive interview with RT.

­RT: Where do you think the US economy is right now?

Richard Wolff: The crisis that was bad in the US, then became bad somewhere else (in Europe), is heading back to America to give us as many problems now as we see the Europeans having, but we will have them a little bit later.

RT: You said it was WWII that drove the US out of a Depression. If so, were George W. Bush and his successor Barack Obama doing the right thing by pursuing wars and, in some cases, currently considering new ones?

RW: [Unlike WWII] today warfare for political and technological reasons does not require large numbers of people. It is both too politically dangerous to get large number of people involved and it is not necessary for the kind of high-tech warfare that we know specializing as a nation. So warfare is not going to do the job. The wars in Afghanistan and Iraq, and even the one threatened with Iran now are not the kinds of war that will soak up the unemployment in the US. So it does not represent itself as a solution. You’re going have to find some other way to take masses of people and give them work. And I don’t think the private sector is up to it.

[Despite the incentives given to the private sector by both Bush and Obama to hire people, the] private sector basically decided to keep the money, keep the incentives and do not hire the people.

RT: How much the global economic turmoil that the world is currently going through is a product of Wall Street?

RW: This is a problem of our economic system. It is not the fault of Wall Street more than it is of anybody else…There is a desire to find a scapegoat… People try to make a way for themselves in the system according to the way the system works. Bankers do what the banking system has them do. And the same applies to everybody else. When all the different people in a system act according to the rules of the system and the outcome is a bad arrangement, then it’s the system that is the problem.

RT: Occupy Wall Street arguably could give Barack Obama the political support to deal with the (rich) “1 per cent” if he wanted to. Why hasn’t he done so?

RW: If the OWS was stronger and was going on for several years rather than for several months, if it has gathered the kind of support that pushed President Roosevelt to change his policies in his time – Obama would listen to OWS… The OWS is not big enough yet… The sympathy is there but you’ve got to translate sympathy into mobilization that could go to Obama and say: You must do this.

RT: In the US and Europe bank bailouts coupled with austerity measures and at the end of the day it is the people that are being squeezed and suffering across the board. How much longer can this continue?

RW: It is the $64 trillion question and the answer is it will continue only so long as the mass of the people permit it. It is in essence the game of push… The situation in Greece is [America’s] future being played before us. They cannot pay their debts – we cannot either. The US is the most indebted country in the world. Our debts are in excess of our Gross National Product. That’s when problem got bad for Greece, when its total debt went above its output. We’re already there.

We have a very serious problem and we do not have a plan for solving it anymore than the Greeks did.

The hope of the rich and the corporations is that they can get enough time to kind of work it out, disperse the costs among the people and maybe slither through. The risk is that they maybe miscalculated.

Warren Buffett, one of the richest people in the US, is warning the rest of the rich people in America “pay more taxes, give the government the way with all, help people, or else the system that made us rich is going to collapse.”

For a long time in the US the ideology, the ruling way of thinking is: If you make the money – Lord knows how you do it – if you make it, it is yours and you are entitled to it. And this mythology, this notion that I have the right to hold on and to make as much as I can and to keep as much of it as I possibly can is making everyone who plays in this economic system loath to part with it: If I am not forced to, I’m not going to. Whatever gets done, don’t touch mine. With this mentality you don’t face the seriousness of the problem.

If you don’t, you will miss the chance to give up a little – and you pay the price of having to give it up altogether.

RT: Does capitalism have a future?

RW: I was great defender of capitalism as a professor of economics in the United States… But at some point the very system you gave praise when it delivered, has to be given criticism when it does not.

Maybe we are finally mature enough as a nation to ask the question: Can the United States do better than capitalism?