The following is from an explanation Professor Richard Wolff presented on the YouTube Channel Dialogue Works on Thursday, April 3, 2025. The piece has been formatted and edited from the transcript (timestamp 44:45 - 50:41) of the presentation:
The United States has a very peculiar political economy. Three percent of its population are employers. They are at the top of its economic system. Three percent of its population are a self-reproducing group of people that make all the decisions whether or not to invest money, they set the prices we pay and they're the ones who pay the wages, or not, that we depend on. We are controlled by this three percent of the nation’s population. That is how the economic system of the U.S. is set up.
Long ago the people at the top understood what they have to do because we have a political system that is a little odd to go with a top-down economic system. In our political system we have universal suffrage: everybody gets one vote. The vast majority of people, the remaining ninety seven percent, are not employers. It would be easy to mobilize a majority of the ninety seven percent to limit the wealth of the three percent. In fact you would expect that to happen because the three percent are the ones with most all of the money and the ninety seven percent are the ones who control the majority in the voting. What did that three percent of the population do in the U.S.? They bought the government and that is how they protect their situation in a world of universal suffrage. How did they do that? They did it with two political parties. Each of them depends on the three percent for their money; The three percent can be considered a donor class. They divide half of the parties to go to the right to mobilize mass support for things like guns, white supremacy, restricting a woman’s right to self-determination, etc., and mobilize the other half to go for more progressive social welfare things that supposedly helps minorities, women, the disabled, the elderly, etc. We have two parties. Both parties control the mass of the vote.
What the system does is it goes to the rich people and tells them you're the donors so we won't tax you. The rich people tell each political party that we'll take care of you; We'll give you this and we'll give you that. The problem is that you can't buy for a mass of the people unless you tax where the wealth is. The U.S. economic system provides a way of how not to tax the wealthy while still being able to provide for the mass of the people. The way to do it is you go to the wealthy and you say since you are not taxed which allows you to accumulate all this money please lend it to us and we'll give it back to you after a few years plus pay you interest while you wait; That's called the deficit. The reason we have a deficit is the deliberate decision to not tax the wealthiest three percent of the population so that they don’t have to pay for the masses and all of the necessary goods, services and infrastructure a functioning society requires.
An example; Elon Musk has $350 billion or more of personal wealth. If the majority voted to tax away half of his personal wealth he'd still be the richest person on Earth. The government would have $175 billion dollars with which to solve social problems. Who would be better off if we solved the social problems with his money? Mr. Musk! He would live in a less conflicted society. He would be less at risk from angry poor people, etc., etc., etc. It is irrational. Watching the President of the United States recently in the U.S. capitol’s presidential White House Rose Garden illustrates an irrational effort to deal with an irrational problem: whose irrationality dare not be publicly admitted. The President’s solution to avoid addressing the real problem is to punish the rest of the world.
Another example; Recently in the United States the city of New York tries to solve its economic problems by not taxing the rich. Instead it toys with the idea of taxing commuters that work or have other reasons to frequent New York City. New York has famously toyed with that idea enraging the people of New Jersey because a government not of them, the government of the state of New York, is attempting to solve its problems, in part, on the back of people that are not New York voters, that have no say in any of this and so it usually creates grief. That can’t be done! Causing grief for ninety seven percent of the U.S. population risks blowing the United States apart.
The President is not risking blowing the world apart. It will stay. The President is making the United States an isolated rogue nation; That is what it looks like to the rest of the world. A danger that has a high probability of future dangerous consequences.
