Economic Update: Beyond the Political Theater
Economist Richard Wolff says all the posturing and finger-pointing--from the NRA's anti-government fear mongering to Trump's Chinese tariffs--are really just an effort to distract from the real issue: 'It gets you focused on something other than the economic system that is screwing you'
Economist Richard Wolff says all the posturing and finger-pointing--from the NRA's anti-government fear mongering to Trump's Chinese tariffs--are really just an effort to distract from the real issue: 'It gets you focused on something other than the economic system that is screwing you'
RICHARD WOLFF: Welcome, friends, to another edition of Economic Update, the weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, the conditions of our jobs, our debts, those of our children, and those looming down the road. I’m your host, Richard Wolff. I’ve been a professor of economics all my adult life. And my hope is that I’ve learned as a teacher how to understand and present things in a way that makes sense and that holds your interest.
So let’s turn to some of the biggest events of the last week since I’ve been on this program. And of course the biggest one probably is what happened over the weekend, this last weekend, when literally hundreds of thousands of young Americans, high school students in the main, took to the streets, took to the parks of the United States to express their pain, their suffering, their anger, and their demands about the gun violence which is off the charts in this country. We have more shootings, more killings with guns, than any other country on the face of the earth, and none of the others is even close. And we all know what happened in Florida a few weeks ago.
I want to say something about the economics to contribute something beyond the powerful and the poetic that these high school students have articulated. But before I do I want to take my hat off. Those young people are acting in the way that a really democratic society can and should applaud. They feel strongly about an issue. They’re explaining themselves. They’re sharing their commitments and they’re acting collectively to make a difference. Bravo to them for exposing how many of us don’t get together with our fellow human beings to make this society better for all of us.
Now to the economics of the situation. The big pusher for guns in this country is not the gun companies that make the guns. Of course they want to sell more, because that’s how a capitalist enterprise works. They don’t worry about the secondary consequences. It’s so much collateral damage. They want to sell guns because therein lies the profit, which is why they are in business. So I understand that. I want to look at the NRA. You know, it could have been a typical association. You know, like the archery association. It would then be something that would interest hunters and that would interest people who are, who enjoyed target practice with guns, just like an archery society would have people who use bow and arrow for hunting and people who like to become proficient in using that particular item. And it would be no problem in this society virtually at all. It would be an association for hunters and sharp shooters, and people looking to do those things. No problem.
But the NRA long ago had ambitions to be much more, and those ambitions have been realized. What did the NRA choose to do? Number one, to become an ad agency for the gun makers. Whatever the gun makers decided to spend on advertisements in sports magazines, et cetera, the NRA took them to a whole new level. It explained to the gun makers, or maybe the gun makers explained it to them, we’ll never know, that there was a way to get many more guns sold than you could ever sell to hunters and sharp shooters. Could you get Americans to buy lots of guns, not for hunting, not even for target practice, just to have them? And the NRA’s answer was yeah, we can do that. How do we do that?
We latch on to an ideology here in America that is very useful for us. Here’s the ideology: Whenever something goes wrong with the economy, unemployment, bad jobs, low pay, poor benefits, insecure jobs, don’t blame the companies. They don’t want that. Blame the government. When you lose your home to foreclosure, don’t blame the bank that forced you out. Blame the government. Wow. That would be a wonderful ideology for capitalism, because it would allow the company to really screw you, and you don’t get angry at them, you’ll get angry at the government. You’ll paint the government as the ultimate evil. The government is behind it all. The government is what’s hurting you.
Not only does that help capitalism, but it gives the NRA a new idea. It can go to the mass of people and say, you know that evil government? Well, it wants to take away your gun. It wants to threaten you. It wants to hurt you even more than this economy has already hurt you. But here’s something you can do to protect yourself: Get a gun. Get two. Get one for every closet, every room. Protect yourself. It’s really all you have left here in America. You can buy a gun, and maybe that’ll help you.
This idea makes the NRA able to be a better ad agency for the gun companies than they could ever buy. It creates a market to buy the guns bigger than any one ever dreamed of. Americans have more guns per person than any other society on the face of this earth but it also makes the NRA a real friend of big business because they participate in demonizing the government, making the government the bad guy in all of our life’s problems. Not the economy, not the employer, not the store that charges us too much money or gives us bad service or takes away the benefits of our job. No, no, no. The government is the problem. Every capitalist’s dream is to make somebody else take the fall.
The second big news of this week had to do with tariffs. President Trump imposed a whole bunch of tariffs, mostly on China. Punishing China, he said, because it was hurting America by its economic power and growth and achievement. He was cashing in on an opportunity and on a campaign promise he had made. Let’s take a look at the tariffs.
First, let’s begin by being sure we all understand what a tariff is. It’s simply a tax with a particular name. Here’s how it works. Goods coming from China, let’s say something that cost $100, would now have to pay on top of the $100 that you would’ve had to pay if there weren’t a tariff, there is now a tariff. Meaning there’s a tax applied to this article as it enters the United States. Let’s suppose it’s 25 percent. That article that you used to be able to buy from China for $100 would now cost you $125. Why is that a good idea, says Mr. Trump? Well, he says, American companies who can’t make that good for $100, who can only make it at a profit if they charge $120, weren’t able to sell any before because we wouldn’t pay $120 when we could buy the Chinese item for $100 by slapping a tariff on the Chinese item. Its price goes up to $125. And now we Americans, confronted by having to pay $125 for the Chinese article, will instead buy the American one for $120. And that, we are told, will mean more jobs for Americans in American companies producing that now-$120 item we’re buying because we can’t buy the Chinese one at $100 anymore because it’s become $125. That’s the story.
Let’s take a look at the economics here, so we aren’t fooled. Number one, the Chinese aren’t stupid. And the Chinese aren’t impoverished, and the Chinese are not powerless. The first thing the Chinese can do, and they’ve already proposed it, is to do tariffs in return. To do the same thing to the United States that the United States has just done to China. And what that will do will be to persuade the Chinese people to buy from their own producers rather than to bring stuff in from the United States because the cost of bringing stuff in from the United States has just been raised by their Chinese tariff.
They’re particularly going to do that to agricultural goods and various other kinds of things that are going to hurt American farmers and American businesses. Whatever the extra jobs we get here from a tariff on Chinese goods will be offset by the lost jobs here because we can’t sell goods to China anymore. Anyone who’s ever learned any economics gets this. Mr. Trump and his supporters want us only to think about the jobs you get when you levy a tariff and never ask how it can play out and undo itself.
But that’s the least of it. Remember what I said about the price going up, we’re all going to now pay $120 for that item from China, or from the American substitute for it, and that means prices are going to go up. Let me say that again: Prices are going to go up. American people can’t afford to buy the things they need now, as we all know. If the prices go up because of the tariffs, which is what will happen and it always does, it’s going to mean Americans can buy less than they could afford before. It’s going to make economic conditions harder for Americans as a buying public. Where does that figure in to all of the discussion? It doesn’t. It’s left out. But it is childishly obvious.
This drives home the central point to keep in mind: This tariff is being discussed in mainstream media in terms of what its effects will be, what the Chinese will do. Stop. No one knows what all the effects, it’ll take years to figure out. We do know prices will go up. We do know that jobs may go up or down. But it won’t be a big difference. So what is all of this about? This is political theater. This is a president doing what Presidents so often do.
Our problem in the United States is an economic system that’s not working very well for most of us. Yes, it’s very good for those at the top. They are happy. The 1 percent to 5 percent at the top are doing great. The corporations just got the biggest tax cut they could dream of. They’re in fine shape. The rest of us, no. And this is political theater. We’re not supposed to look at this economic system and say it’s not working for us. We’re supposed to be mad at somebody else. And Mr. Trump has an endless list of somebody elses. We should be angry at immigrants. Ladies and gentlemen, this is a country of 325 million people, roughly. The number of undocumented immigrants in this country may be 10 or 11 million. Do the arithmetic. Our economic problems, we 325 million, are not dependent on what happens to 11 million poor immigrants. It’s silly. But he can get people very angry at those foreigners. That’s always easy. And tariffs on Chinese? Guess what? That’s slapping some more foreigners. At least, it sounds like that. It distracts you. It gets you focused on something other than the economic system that is screwing you.
That’s the key message. That’s what we need to understand. Don’t get lost in the weeds. Those are the basics of what has agitated our economy over the last week.
Now some more quick updates. I want to follow up on the stories we’ve been covering about the West Virginia teachers who won an extraordinary strike in their state, and got finally some decent wage increases, having been among the poorest-paid public schoolteachers in America.
So successful was the West Virginia movement that there are now three more states I want to bring to your attention. Actually, yeah, three that are following, that using what happened in West Virginia as a model: Oklahoma, Arizona, and Kentucky. I want to take my hat off again to the West Virginia teachers, and now to these others who, like the students on the gun issue, are beginning to understand the power of getting together to make economic changes that really matter.
Before going on, let me remind you: We maintain two websites. Make use of them. That’s why we prepare them and update them literally every day. The first one is democracyatwork.info. All one word, democracyatwork.info. The second one is rdwolff, with two F’s, dot com. You can follow us there on Facebook, Twitter, Instagram, and so on. You can communicate what you like and don’t like about the program. What you would like to see us do. I want to particularly also let you know that those websites are available to you 24/7, no charge whatsoever. I want to urge you, particularly if you’re a listener and would like to see the program as a television program, please go to patreon.com, P-A-T-R-E-O-N. Patreon.com/economicupdate. And there you can see the program as a television program. And I want to also announce that we have a new episode of Puerto Rico Forward. That is a special program. It’s on our website. And it is also available on patreon.com. Just go there. Again, patreon.com/puertoricoforward for the latest episode, and you can also get it as a podcast through iTunes and Google Play.
Next update. It’s the turn of BMW to get caught with emissions cheating devices. Last month BMW quietly recalled 11700 cars to, quote, fix an engine management software issue. Uh-oh. Then later last month, BMW admitted that prosecutors in Germany were looking into, quote, erroneously allocated software in about 11400 vehicles of the BMW 750D and the BMW 550D luxury models. And then last week the police, a hundred of them, raided BMW headquarters in Munich and the production site in Austria. They were one of the companies that hadn’t yet been caught cheating on emissions, polluting the world for profit. But they now have joined the others in showing that profit dominates over human health in a capitalist enterprise-based system.
Also in the news this last week, difficult negotiations continued between Britain and Europe. The British, as you know, voted a year or more ago to leave the European Union. The Brexit, it’s called. The angry British working people voting against their elite government. The Conservative Party, and even the Labour Party, supported it. The vote to stay said, the elite and the people said, we’re not voting the way you want us to. We don’t like what you’re doing in this society. We want out. They kind of fell for the idea that their problem was Europe and being part of Europe. It’s a little bit like Mr. Trump trying to have us believe that the economic problem in America has to do with immigrants or Chinese prices. All of these deflections away from the core economic problem of a system that doesn’t work for most people.
And the poor British are now locked in this sad debate and negotiation, British government, European government, on the terms of Britain’s departure. Here’s one thing that the British people have learned and that the rest of the world has to learn, too. In the hands of the business community that runs Europe, and in the hands of the business community that runs England, they’re working out the separation to make sure that the rich stay rich on both sides and the elites stay in power on both sides. The missing member at the negotiation are the mass of people. Leaving Europe had little to do with the real problems the British working class faces, and the same is true in Europe. And nothing these negotiators from the two elites work out will change that. It’ll have to be a bitter lesson learned that voting about a foreign policy issue doesn’t solve your problem.
ProPublica, a remarkable independent website that you might want to look at, ProPublica.org, did a remarkable study that came out last week about discrimination against older workers. In this case the target was the IBM Corporation. ProPublica did a big survey of former workers at IBM, particularly older ones. And that’s in a remarkable study about systematic discrimination against older people. Here are some of the results of that survey I thought would interest you if either you are an older worker or your parents might be. Pretty much includes all of us.
And here are the results: 183 respondents said the company recorded them as having retired by choice even though they had no desire to retire or flat-out objected to the idea. Forty-five people were told they’d have to uproot their lives and move thousands of miles from the communities where they had worked for years. Fifty-three said their jobs had been moved overseas. I could go on and on. You get the point. The remarkable thing is many workers are still siding with the company over having been dumped at various stages in their career.
You know, a bill was passed not that many years ago called the Age Discrimination in Employment Act, ADEA. Forbids doing this. And that may have something to do why, as ProPublica points out, in the year 2009 IBM stopped publishing its American employment total. In 2014 it stopped disclosing the number and ages of older employees that it was laying off, even though that’s a requirement of this bill. In other words, companies find ways to get rid of older workers and replace them with younger ones. The older workers have more experience. The older workers know how the company works. But the older workers cost more money than the young ones. And therein lies the story. The damage done to these older workers? Who cares. Profit rules and we live with the results so long as a system like this is allowed to continue.
Tennessee public employees did something interesting. They went against the governor there, a right-wing governor in Tennessee, spearheaded by the United Campus Union of the University of Tennessee. They refused to allow, in effect, what Governor Haslam there proposed, which was nothing short of the privatization of the university system, and indeed of much of the public sector.
It was a wonderful example not just of workers pushing back and winning. It’s an example that the movement of production from the private sector to the public sector is mostly about saving money for big and wealthy corporations and wealthy people who don’t want to pay taxes. We shouldn’t be debating so much about public versus private. It’s not the issue. The issue is what happens to the mass of people, public or private, in terms of running their own lives and job security. That’s the issue, not the relatively less important detail of whether it’s public or private.
One of the most interesting updates I want to bring to your attention is the publication by the Congressional Budget Office, CBO, its March report. It did an interesting study, the results of which I need to tell you about. They looked at inequality of income in the United States, but they did it in a new way. They didn’t just measure who gets how much income looking at it in terms of the poorest 20 percent the less poor 20 percent and all the way up to the richest 20 percent and even up to the richest 1 percent. That’s how it’s normally done. But here’s what was new and different. They took into account the taxes we have to pay. They took into account the inflation we all face. And they also looked at who got the benefit of social safety net programs, antipoverty programs, because they wanted to deal with the right wing argument that we should be looking just at the money people earn because some people, the poor, get in-kind of help in terms of food stamps and things like that.
So the CBO, responding to this criticism, took all of it into account. And here’s what it did in its report. It looked at the distribution of income, how did income change between 1979 and 2014. OK, so that’s 35 years, basically the last 35 years. And they looked at how did the different parts of our income distribution, how did they do when you take into account the taxes they pay, the inflation they face, and all the social welfare programs we have in this country? Here we go. You might be interested in this.
The poorest 20 percent went up over those 35 years 69 percent. That’s what they got over 35 years, 69. That works out to 2 percent a year. Not very bad, not very good. The next 20 percent, not the poorest 20 percent the next to poorest. They only went up 39 percent. They did 1 percent a year. They went nowhere. And that’s true for almost everybody else. Except the top. Let me give you the top 1 percent of Americans, when you take an all into account. Here’s how they did over the last 35 years. Their incomes, including the taxes they pay the inflation they face, and the social welfare programs that other people get, their income went up 227 percent. There is no way for me to exaggerate the horrendous ness of what I’ve just told you over the last 35 years. The rich got richer and everybody else didn’t. And that’s true whether you just look at the money or you adjust it for all the other social programs. The social programs in this country don’t undo our inequality. They don’t even come close. And inequality has become the overwhelming problem of society precisely because we have an economic system that works that way. And that’s the basic problem we have to face from which everything else is mostly a diversion that you shouldn’t be diverted by.
We’ve come to the end of the first half of today’s economic update. Thank you very much for staying with me, and do stay with me for the next half hour, because we will have a very, very interesting interview for you that I think will capture your attention as well.
Welcome back, friends, to the second half of economic update. Before introducing my guest for today I want to talk a little bit about the topic that we’re going to be discussing.
As I’ve mentioned, I’m a professor of economics. I’ve been doing that all my adult life. And I’ve had to face and struggle, as everybody else has in this profession, with a difficult, sad fact about economics education in colleges and universities in the United States for the last half century. Basically the story is this: Because of the Cold War, because of the long years of struggle between the United States and the Soviet Union that began in the late 1940s, the previous way of teaching economics, which included the presentation of alternative theories, of those theories that thought capitalism was a really good system and efficient and effective, and those who didn’t. Those who were critical, those who preferred alternative ways of thinking about economics, an alternative economic system, that kind of an economics that debated those questions was pushed aside. Instead, everything got narrowed to a very simple orthodoxy that excluded everything else.
And the orthodoxy was the following: Capitalism, the economists told us, was the greatest economic system since sliced bread. It couldn’t be improved upon. It couldn’t be bested. It had no alternative that was worth studying in a sympathetic way, from which lessons might be learned. None of that. Marxism, which is the most developed critique of economic orthodoxy that exists in the world, it’s the most developed critique of capitalism that exists in the world, was simply excluded from 99 percent of all economics curriculum as it is today. It’s an extraordinary narrow orthodoxy.
And the reason I’m telling you this is I’ve asked to come and join us today a professor of economics who is one of those brave souls growing in number across the United States, and there were always a few who doesn’t want this orthodoxy to go on, who wants to open things up. And the phrase he and his colleagues use is heterodox economics, opening economics up to alternative perspectives. Having students learn what’s good about capitalism and what isn’t. What the theories suggest might be a better system, and what the theories suggest can’t be improved on but to open the space up. And that’s a really important contribution to this country, particularly at this time when so many Americans understand all too well that capitalism, whatever its virtues, is not doing all that well by the majority of people.
So let me turn to my guest and introduce him to you. He is Professor Ian Seda-Irizarry. He is an assistant professor of economics at the John Jay College of the City University of New York. There he teaches Introduction to Economics and Global Capitalism, Political Economy, Economic Development of the Caribbean, and Economics in Historical Perspective. He got his Ph.D. in economics from the University of Massachusetts at Amherst, and his current work focuses on understanding the economic crisis of Puerto Rico, and his popular and academic writings have appeared in outlets inside and outside of the United States. So it really is with pleasure that I welcome to our program Professor Ian Seda-Irizarry. Thanks very much for joining me.
IAN SEDA-IRIZARRY: Thank you, Rick, for having me yet again in your space and for your viewers and listeners for tuning in.
RICHARD WOLFF: Good. So tell me what you understand by this term, heterodox economics. And I should preface my question by saying I’m going to be asking you about the fact that you’ve created at your college a master’s program in heterodox economics. So I’m going to explore that with you. But let’s begin by what is heterodox economics?
IAN SEDA-IRIZARRY: Well, as you mentioned in your introduction, heterodox economics is kind of an umbrella term for capturing alternative perspectives to the mainstream of the discipline, to the orthodoxy. So in that sense it refers to the outside of the discipline.
The concept itself also is kind of problematic because it doesn’t necessarily imply that it’s a critique of capitalism, it’s just that it might be a different way, for example, of celebrating the system that’s not on par with the mainstream. So in that sense it’s a very broad, umbrella term. So it’s not like what some people like to say, that it’s just like, you know, radical political economy with a new name, right. Like here in New York City people like to speak about, oh, salsa music is just mambo, you know? It’s a different thing. But we use that term to highlight the openness of alternatives to the orthodoxy.
RICHARD WOLFF: OK. So tell me, why is it necessary? Why did your colleagues and you choose to specifically designate your new master’s economics programs as heterodox? Why, why choose that name at this time?
IAN SEDA-IRIZARRY: Well, against all attempts to silence alternatives, there has always been a demand for alternative viewpoints concerning the explanations of how the system works. And usually this view, there’s demand for alternative viewpoints just explodes in moments of crisis of the system. So for example, in the 1970s this happened. New textbooks were created. Probably the most famous one which sought to be an alternative to the classic Paul Samuelson introductory textbook, which is the bible of the discipline, was a product by John Eatwell and John Robinson that didn’t get off the ground very well. Then you had at the turn of the century with that crisis that started around 97 and ended up in 2001 that caused countries like Russia, Argentina, Turkey, you had calls in countries like France from students in universities asking for changes in the curriculum. And with the latest downturn of the economy we had the case for example of students walking out of the classes of somebody like Greg Mankiw, who right now is the most renowned author of the basic textbook that most economics students are reading and are expected actually to tackle and learn from.
So in that sense we are kind of a product of the ups and downs of the crisis. And specifically our deppartment took the shape it took around 2008-2009, which is, you know, that critical years of, you know, the downturn, the most recent downturn of the system. So we basically tapped into that demand. And we had, thankfully, which is kind of lucky, the support of the institution to precisely provide these alternative views to our students.
RICHARD WOLFF: OK. Just for clarification, will your master’s program also teach the mainstream or the conventional economics that the vast majority of other programs teach and only teach? In other words, will you include what the others don’t include?
IAN SEDA-IRIZARRY: So in a sense, I have to be sincere, this is still a work in progress. There’s big important debates within the department, within heterodoxy, in terms of how to address mainstream economics. So just to give you a good example of this, students many times if you teach them the mainstream model and start criticizing it at the end, they wonder why did you teach me from the get go something that you think is wrong? Why lose my time that way? So we’re struggling with how to do it. Clearly our students will be exposed in one way or another to the mainstream. They have to. They have to be able to criticize not only those economic theories but also the political thought that emanates from those theories, that they see, you know, when they read a newspaper or see the television, see politicians speak about the state of, the health of the economy, et cetera.
So either directly or indirectly, our students are asked to precisely engage with the mainstream, or else we would be committing the same mistake that the orthodoxy commits in excluding us.
RICHARD WOLFF: So you’ll open it to everything and exclude nothing, basically, or you’ll try to be as open as you can.
IAN SEDA-IRIZARRY: Yeah, but we won’t lose our time in using the orthodoxy as the pillar from which then the classes are developed. On the contrary, it’s more like we expose our students to the theories that we think make more sense of the world, and in occasional topics, in occasional themes, yeah, we bring in the common sense that usually pervades analysis, which is usually tied to that particular theory. So we try to make those connections. And it’s a very difficult task, but we try to do it.
RICHARD WOLFF: OK. So you’re, in a sense, you’re remedying a defect in the educational system when it comes to economics in higher education. It is narrow and orthodox. You want to be open and heterodox. Why do you think the rest of economics education in the United States is so orthodox? What is the, what’s the reason for that? How would you explain to a person that you were describing this situation to why it’s that way?
IAN SEDA-IRIZARRY: Well, we know that through all the history of humanity when systems of social thought have been developed, usually what becomes the mainstream becomes an argument for the status quo. So if you look, for example, in political theory in the 17th century, those turbulent times of the English revolution, civil war, cultural revolution, you had of Thomas Hobbes making an argument for the English monarchy. If you look at it in something like philosophy, a couple of centuries later you have Hegel making a whole argument out of the virtues of the development of rational thought embedded, embodied, in the Prussian state, in the Prussian monarchy. And now in economics what we have is precisely mainstream orthodox neoclassical economics making an apologetic defense with no basic criticisms of how the system works in terms of this is the best we can have.
So in that sense we try to participate in undermining what becomes a mainstream that appeals to science and the processes of science in terms of why is it that they occupy that hegemonic role. They appealed to this, let’s use the term positivism, in terms that science advances on the basis, to quote Paul Samuelson, who quoted Max Planck, in terms of what was death by death economics makes progress, or something like that. As if, you know, everybody agrees that these theories have been refuted so we have to move on, and et cetera.
So we question those discourses that also, for example, appeal to methods such as extreme use of math and statistics. Because supposedly math and statistics imply some sort of rigor, consistency, and therefore they are equated with the truth. So we also have those sensibilities about method in connection to politics. And you know, the system of ideas prevalent in society. So to answer your question, it’s very, very difficult, but we do know that it’s not, the answer to that question is not that positivistic vision that is, you know, exposed to most students in terms of how the science, that social science has advanced, through time in societies that are populated by ideas that are consistently contending with each other.
RICHARD WOLFF: So it’s interesting to me to hear you say particularly that in every historical period there has, in fact, been contestation between points of view that affirm the inevitability, the superiority of the status quo, and theories that say no, we can do better as human beings than this system or this structure, and we have at least to discuss whether that’s the case, how it might be done and so on. The orthodoxy in the United States didn’t want to have that conversation, which is typical of orthodoxies, so there has to be a bit of a fight. So you are, or at least let me ask you to react to the notion, you are in a bit of a fight with the profession to open it up.
IAN SEDA-IRIZARRY: Yeah. We’re trying to just follow that those historical moments that I mentioned before in terms of opening up a discipline that has been very, very explicit in the way it demeanors and alternative perspectives, and how it basically has developed a self-referential framework in terms of institutions like universities, academic journals, systems of evaluating promotions within departments, and in the worst cases just making life impossible for alternatives.
So just to give you an example of one school within that orthodoxy that you mentioned, Marxism in the 1950s and ’60s, my understanding is that there was just one tenured professor in the United States, which turned out to be one of your professors, Paul Baran in Stanford, and my understanding is that they made his life impossible for him. You know, all types of trouble just to make his life hell, while at the same time celebrating like hey, we have a token Marxist here. What are you talking about. You know, we have alternative perspectives. So we’re trying to break open by not having a token heterodox or radical political economist, but having a whole institution based on it.
So if you look at the composition of our faculty you’ll see that many of them actually come from institutions that explicitly expose their students at undergraduate and graduate level to alternatives to the mainstream.
RICHARD WOLFF: So that brings me to my next question. Yours is not going to be the only place in America where a student can learn more than the orthodoxy. There are others. You are adding to them. Is that correct?
IAN SEDA-IRIZARRY: Yeah, we’re just part of a tradition of dissent. I guess that’s something that does separate us, is that in many heterodox departments, without mentioning names, that actually celebrate their heterodoxy at the graduate level, when it comes to undergraduate teaching they are more or less still pretty standard. So we, our starting point was heterodoxy from the undergraduate level. And now thanks again to the work of many of our colleagues and the support of the administration, now we’re offering the same alternative now at the more advanced graduate level of a master’s degree.
RICHARD WOLFF: What’s your argument for a student who might be considering where he or she is going to do master’s level economic studies? Why should such a student, in your judgment, choose a heterodox program? What are the advantages that make that a more desirable choice than going to the conventional, the more conventional route?
IAN SEDA-IRIZARRY: Well, just to use a concrete example of our own students at the undergraduate level, most of our students come from a working class background. I say that because in a sense, like in classes like political economy, where they are exposed to Karl Marx and his thought, in a sense we’re not teaching them anything new. They know and they feel and they understand that’s what’s written in that book written 150 years ago pretty much describes many of the things that they have to pass through in their everyday lives. What the book does is to organize those experiences that they have in a coherent way that also makes them feel empathy with others that are in the same workplace, outside of New York City, and around the world. To understand the system as a whole and the reality like that.
And our experience has been that students get very excited about it. They want to go into things like journalism. They want to encounter alternative viewpoints, be it in politics, culture, economics, with their grounding that they have theoretically in alternative economic theories. So they want to confront the world. Other students, for example, just want to be very sincere, they want to make a lot of money. And they understand that, you know, if I want to make money, I have to know how the system works. So it may sound like a paradox or a contradiction but many people who are into finance also benefit from reading Karl Marx. That’s something that, well, should be a topic for another program. We have in terms of the background of our graduate students we have not, only do they not come, half of them, from economics, they come from sociology, anthropology. So we also focus on the interdisciplinary aspect of a heterodox education which provides basically the tools to go out in the world and be a critical, well-rounded citizen that actively seeks to intervene in this world as it’s falling apart, which is part of our mission. Try to combat that, those tendencies right now.
So it’s, it’s an uphill struggle, but we benefit from the types of students that we have. And we have benefited from the students that have come from outside of John Jay College, outside of that system that are interested in this. And in terms of job prospects it goes all over the place, from continuing work and the Ph.D. level, working for government organizations, non-governmental organizations, journalism. We have a couple of journalists, one of them from our sister institution of Economic Update, the Left Out podcast , Dante Dallavalle. We have another journalist writing for the Intercept. Very good piece on the crisis in Puerto Rico. Her name is Kate Aronoff. We have an undergraduate student, his name is Nathan [Tankels], who has been cited by one of her guests here, Stephanie Kelton.
So we have a very interesting group and a rich environment to push the boundaries of the discipline in terms of alternatives within economics and outside the spectrum of the discipline itself.
RICHARD WOLFF: Let me ask you, because sometimes when I talk to people about heterodox economics I get the impression that they think if you’re interested in that it will bring you into tremendous conflict either with the administrations of universities, or make it difficult for your graduates to get jobs. Let me ask you then about this. Is there a problem in the CUNY system, City University of New York, with your going in this direction? Has that occasioned any difficulty? Or do they welcome this kind of opening?
IAN SEDA-IRIZARRY: Well, our immediate experience, not even on the graduate level, at the undergraduate level, is that we’ve graduated students, sent them to sister departments. They come back, work for the Bureau of Labor Statistics. Some of them come back and teach for us.
So the opportunities are there, and the employers are also interested in precisely a broader spectrum of analysis, not this, you know, mass production of the same. That’s what the education system usually, you know, pops out on a yearly basis. So even though there is, of course, the constraints of public education, the cuts in public spending, funding, and all of that which, of course, amounts to real constraints. We’re working through those things. So our students do have the opportunities. We have the anecdotal evidence that they will not be wasting their time either professionally in terms of, again making a buck, or contesting the system itself.
RICHARD WOLFF: So it hasn’t been a problem for your graduates. What about the university administration? Is this OK? Because sometimes professors who might want to go in that direction are frightened that they will encounter some sort of disapproval if they do that.
IAN SEDA-IRIZARRY: Well, our program in part has been a product of a turn at John Jay College towards more of a liberal arts education. So in that sense the economics department was more than welcome. And then within that context of the crisis this heterodox approach even, you know, open arms to us. So at least within the John Jay College that has not been a problem at all, it’s been very supportive. We have lots of fantastic colleagues from other departments that are very supportive, extremely supportive. So so far, no. No major stumbling blocks along the way.
RICHARD WOLFF: Tell me a little bit so that people understand about your students at John Jay. And I would guess they’re not all that different from the students that come to many of the campuses of the City University of New York. How how does your program, in a sense, at least in part, focus on what they, what they need and who they are?
IAN SEDA-IRIZARRY: So, the topics addressed in the department, topics like inequality, poverty, instability in the job, household dynamics, international dynamics, all of these things are part of the experiences of our students. Many of them are, for example, the first member of their family to go to college. Many of them are the main source of income of their family. So that’s very common throughout the CUNY system, very common at John Jay, which is also a Hispanic-serving institution. A substantial amount of students are, you know, from Hispanic background and all that. So they have to deal with things like immigration. In terms of the history of their families. So we deal with those things within the current context of the Trump administration and within the larger context of the historical development of the United States and the development of global capitalism.
So in that sense we’re directly connected with those experiences in terms of precisely providing theories that actually do explicitly address those problems. So if you take some, you know, versions of the mainstream they will tell you, you know, inequality doesn’t matter. What’s really important is poverty. So we tackle those problems. We show them what does it mean to make that, what consequences does it have in terms of the workings of the system at the economic level and the political level, et cetera. So in that sense we think that we’re very relevant to their daily experiences, both individually in relationship to their families, their neighborhoods, et cetera.
RICHARD WOLFF: You know, it strikes me listening to you that when I went to college I tried to take some economics courses because I was so interested in what was happening to the economy. But I found them utterly irrelevant. They were all mathematical, technical exercises. Since I had come from a background in the natural sciences and mathematics I was basically blown away by the fact that economics the way it was taught to me was more like an engineering course, and didn’t talk about the current problems that I was interested in. And so I tended to shy away, I had to come back. I studied economics despite the way it was taught, not because of it. I would have been enthralled by a program that began by saying the student has a whole raft of economic realities he and she have to wrestle with; a good economics education begins by dealing with those and facing those and drawing out different ways of explaining those so that people really can get a handle on their own situation. If that’s what you’re trying to do then it’s not just a disagreement with orthodoxy. It really is a different philosophy of education.
IAN SEDA-IRIZARRY: Yeah. I mean, that was my experience also, even though I came from business school background.
RICHARD WOLFF: Yourself.
IAN SEDA-IRIZARRY: Myself. Yeah. And you know, the class that hooked me up to economics was a course on business cycles. And then I went to do a master’s degree. And I got exposed to that fetishism, let’s call it, of the tools that economists are taught.
So just to give you a quick example of how this manifested, I was present in a master’s thesis dissertation where the topic was the socioeconomic determinants of crime in Puerto Rico. And you know, when you see that type of title usually it means that they’re going to use statistics, econometrics, identify certain variables, find the data through time, run a regression, check which the variables are statistically significant, and then make a story about it. The person presenting that topic found that the level of income was not statistically significant. So he proceeded to write his whole master’s thesis on the basis of that. When he presented his thesis, somebody raised his hand, actually that was taught in a heterodox department, is a dear colleague and professor that you know in Puerto Rico. And he asked the question that you’re saying that this, this variable, that level of income in relationship to how you’re defining crime is not important, but if you actually look at the people who are in jail for committing the crime as you describe that, they clearly are part of the profile of this strata of the income. How do you deal with that. That didn’t even pass through the head of the person, and the adviser who was a renowned economist, whose hero is somebody like Gary Becker trained at University of Chicago.
So it’s clear that they don’t have the sensibilities for asking the right questions, and they just let the theory, you know, vomit reality without questioning the method, the tools, or being even conscious that there are alternative ways and methods of doing stuff. So that consciousness is also very important for us in exposing our students to alternative viewpoints.
RICHARD WOLFF: You know, it makes you wonder when you hear stories like this whether the real function of economics, the orthodoxy, really wasn’t to understand what’s going on, but to justify it, to celebrate it, to make it all look terribly well organized beyond improvement.
It’s remarkable. Anyway, I want to thank you very much for introducing our audience to the heterodox idea and the heterodox program that you are developing, and I wish you every success in attracting students and then giving them the benefit of this kind of openness. So thank you very much, Ian, for coming.
IAN SEDA-IRIZARRY: Thank you so much, Rick. And to your audience, please tune in and search for our department, the John Jay College City University of New York economics department.
RICHARD WOLFF: Thank you, folks. I want to also thank all of you for participating, for listening, for watching. I want to thank you to be partners of us, to share what you get on this program with other people through all the mechanisms of social media and in your daily conversation with family members, co-workers, and so forth. I want to also thank Truthout.org, that remarkable independent source of news and analysis that’s been a partner with Economic Update for many many years. And I look forward to speaking with you again next week.