Global Capitalism Capitalist Decline in Historical Perspective

Welcome friends to another edition of Global Capitalism, monthly presentation or actually every other month that we offer as way to keep up with current events in the global capitalist situation, but also from particular critical perspective that know many of you have come to recognize and to expect from us and that we want to deliver. We're going to be talking today about the last 80 years, the whole long period of ongoing American empire building and now American empire declining 80 years because our starting point is 1945, the end of World War II. But before jump in and show you how the empire was built and how it is in process of declining in historical perspective, want to make quick announcement. This is brought to you all of these presentations by Democracy at Work and the Left Forum. And these institutions also sponsor classes. If you're interested in the classes that democracyatwork organizes with the left forum, just go to our website, democracyatwork.info, for more information. One of the most recent classes we taught, in fact, taught with my colleague Shaham Azar, professor of economics at Bucknell University, has been completed. But on the 16th of May, we will be doing live Q&A for people interested in pursuing their own questions about the applicability of Marxian economics to the urgent issues of our time, the institutions of modern capitalism, and so on. And if you're interested in participating in that live Q&A session, it will take place again May 16th, 12 noon. just go again to democracywork.info for all the information and to register that you can participate as well if that would interest you. Okay. Many of you have questioned the argument about the decline of the American empire as well. You should. It is controversial topic. It is particular way of understanding what is going on as we live through it. And that kind of an effort is always fraught with the possibility that you've misunderstood something or overestimated one dimension and underestimated another. So do want to say that we have been working at this for quite while and feel quite confident that we have our finger on what is in fact going on. But one of the ways to test it is to see whether you can tell an appropriate historical story. Can you show how what you're interested in was born, how it evolved over time and reached the present situation? So that's what today is about. I've divided the period since 1945 into number of sections and I'm going to take you through them. do promise you in advance that if you're interested in how we got to the present dilemma and by that mean the war on Iran, the crisis in Ukraine, the evolving tensions of American politics. If you're interested in those issues, the history will teach you lot about them. Okay, we begin the first part, the legacy of World War II. And here I'm looking particularly at the 30 years from 1945 to roughly 1975, right? Those first 30 years after the end of World War II. And here's what's crucial about them. Those were the years in which the United States, which had moved across the first half of the 20th century in the direction of becoming more and more important, larger and larger part of the world economy, accounting for an increasing share of global exports, global imports, global capital movements and so on. But after 1945, this process exploded. Not so much because the United States grew faster, although it did. Remember, is at the end of World War II. And World War II solved the greatest crisis American capitalism had ever experienced, the so-called Great Depression from 1929 to 194041. That was the worst experience American capitalism had ever had. 25% unemployment, cut back in production, you know, the grapes of wrath of mice and men, the the catastrophe of American capitalism. That catastrophe had only finally been overcome by the war. The war worked to solve the problem of great depression that all the other efforts which were important and which helped people did not suffice to solve. The war did to be crude about it. The war took half the people who were still unemployed, counted in the millions, and stuck them in uniform. And they took other millions of unemployed people, and put them to work making the uniform and the guns and the bullets and all the rest of it. It was an incredible example of war solving economic problems. Ironically, the growth of the economy by virtue of putting people back to work helped pay the cost of the war. And by the way, that's not so unusual. That happens in other societies. An example, the Ukraine war right now, the Russian economy is doing better in the war and because of the war than it was doing before. The war has paid for the cost of the excuse me the pursuit of the war and rebuilding the economy has paid the cost of fighting the war. So in 1945 the American economy is feeling good. It has overcome the Great Depression and more important all of the other major countries in the world, Britain, France, Germany, Japan, Russia, China were destroyed. Bombs had wrecked their transportation system, their manufacturing system, their harbors, their ports. mean, you name it. Wrecked, destroyed. In fact, World Wars one and two you might think of as the peak of the old capitalism. The capitalism born in Britain and spread to Western Europe and then the whole world reached peak in which the major capitalist countries destroyed each other. The capitalism that had made them rich now made them poor by war. One exception, the United States. We, excuse me, we were the beneficiaries of two oceans, Pacific and Atlantic. Too much distance, too much expense, limited possibilities of coping with that distance. So yes, bomb did fall quite few in Pearl Harbor, which is the most distant from the mainland of America, proper speaking. And so yes, it had bombs, but after Pearl Harbor, no bombs. Our railroads were not touched. Our factories were not touched. Our ports were not touched. Remarkable. America, the US stands in 1945 alone. If the rest of the world wants to rebuild from the war, and of course they do, they have to come to the United States to buy the machines with which to recover to borrow the money with which to recover. The United States becomes the model of what you have to do. You have to produce whatever the Americans produce either better or cheaper or else the Americans will capture the market. The US dollar becomes global currency in the way that the British Empire had made the pound sterling the global currency before. Now, of course, looking back, you can understand, as we should have understood here in the United States, but we didn't, that this was an odd, exceptional, and therefore temporary situation. The United States was the center of the economic universe. We had the atomic bomb which meant we weren't just economically above everybody else but militarily too. And politically we were the only ones in position to tell other folks kind of what to do to help them recover from the war. We who didn't have the war destroy us. It was heady time. It led Americans in the second half of the 20th century, but particularly in this early period, 45 to 75, to think of the United States as absolutely exceptional, which as I've tried to show you, it was it was for those 30 years, it was ahead of everybody because everybody else who could have competed for that situation had been destroyed. in the catastrophic mutual destruction of the capitalist world. Okay, very important. It should have been understood that this couldn't last, but it wasn't. You had celebrations of American exceptionalism, celebrations of the unique ability of the United States to raise the wages of its working class. All the more impressive because we had just come out of the Great Depression when workingass standards of living had crashed down, when people had really had hard time. Now they were part of an economy that wasn't just roaring along for itself. But because the whole rest of the world came to America to buy the equipment and to borrow the money to rebuild themselves, we had all the jobs of providing to them what they had to buy from us because nobody else could do it. It was heady time. rapid economic growth in this country, ability of the capitalists to make lot of profit even by giving workers higher wages. So we had labor peace. The capitalists could tell the working class, "You don't have to strike. You don't even have to have union. We're going to give you higher wages, four, five% year, year in and year." Why? because we're making so much money being the center of the world economy now that we can afford it. If we can't afford it, be sure you will get it. Capitalists have been very clear about that as they are today. Okay? For 30 years, it booms. By the 1970s, this part of our history is over. What do mean? Well, mean, first of all, that all the destroyed economies have recovered. Took them generation, 30 years, 45 to 75. But by the 1970s, Germany and Japan, for example, the most destroyed because they were the losers in World War II. Germany and Japan had roared back. You know, Americans knew it. somewhere they noticed that the the new cars that were breaking into the American market weren't made by Ford, General Motors or Chrysler. They were made by Volkvag and Toyota. The very words German, Japanese. The car industry, the number one industry of the country, was being invaded by companies that weren't American, that were what? German and Japanese. And the Germans and Japanese did what capitalism always does. The capitalists in Germany and Japan understood that if you're going to come back and you're going to compete and grow and be rich and wealthy, which is what capitalism is about, you have to do better than the leader. You have to produce car that is better or car that is cheaper or both. And in those days, the United States was so dominant that it was in favor of free trade. No tariffs, no. They tried to get rid of as much of that as possible. Why? They didn't want other countries to protect themselves. So, we offered as nation not to protect ourselves. We didn't have to because we were the king of the hill. We were the most effective. We dominated. But in that situation, every capitalist in Germany, Japan, France, Italy, you name it, understands what they have to do. They have to out compete the United States or else they're not going to have chance to grow and be successful. So that's what they do. They go to work. And guess what? If you concentrate your efforts and go to work like that, sooner or later one or the other of them figures out how to do it. VW did it and Toyota did it. That's why they became what we now know. Toyota is the biggest car company, not an American company. The American companies have gone to China to participate in that economy much more than the other way around. And I'll come back to that later. By the 1970s, then the United States is not in the dominant position anymore. This is tremendous challenge. It frightens Americans. They're beginning to notice they are not alone. That the capitalist competition is beginning to hurt. And one of the ways they notice it is that as other countries begin to feel their oats, they don't want to keep their wealth, their gold in the United States anymore. They had all put it here during World War II to keep it safe. led by the French. Charles de Gaulle, their great leader coming out of World War II, the French had started pulling their gold out of the United States, cashing in their dollars as they sold more and more goods into the American economy and pulling their gold out until Richard Nixon, August 1971, said, "Uh-uh, no more of that. We're not giving you any more gold. We're leaving the gold standard. We're not backing the US dollar with gold anymore. If you bring us dollar and say you don't want to hold it anymore, you know what? You're going to get another dollar. Another piece of paper looks quite like the one you're giving us. End of the gold standard. That could have been great moment of crisis for the United States because people around the world could have said, "We don't want to deal with dollars because we thought we could cash them in for gold, which used to be the way it was done." But the United States, King of the Hill, won't accept dollars anymore. We're not going to accept them either for gold anyway. So, what had to happen? something had to happen to make dollars still an attractive thing for the whole world to use and that in turn would make the United States able to do business around the world. So deal was worked out led by people like Nixon and Kissinger and the others and the deal was made with the number one oil producer in the in the world at that time. Saudi Arabia. It's the second phase of the history of the rise and fall of the American Empire. In this second phase running roughly from 1975 to around 2015, 2020 until recently. In other words, here was the deal. And by the way, the deal is known as the petro dollar system. Starting in the 1970s, Saudi Arabia, the world's number one oil producer, made an agreement with the United States, which they enforced, the two countries together, that the entire oil business in the world, wherever oil was bought and sold, it would be done in dollars. If you lived in Nigeria and you wanted to buy it, oil because you had to use it for energy generation, you paid in dollars. If you were in Malaysia, you paid in dollars. If you were in Brazil, you paid in dollar. The whole world needed dollars. Not because the United States was dominant in the way it had been earlier, but because oil had become the number one producer of energy in world that was consuming energy more and more, literally every month. And then there was the discoveries that oil could be transformed into plastic into fertilizer and all the and oil became even more and more and more important even to the point it still is today. How do we know it? Because the war in Iran is hangs on the straight of Horbuz as you've all learned. And the straight of Hormuz is important. Why? because boats go through it mostly carrying oil. That's how important we have on the edge of global war. It's that important. Well, back in the 70s, it was getting to that point. And the United States hooked the dollar to oil. Very smart. Made the dollar very valuable. That helped the United States 20 different ways. And so the empire could grow. And what do mean by empire? The dollar being valuable and important was used to buy up industries around the world. American companies in the 1970s found the whole world available to the dollar because everybody used it. Everybody needed it. Every country accepted it. The the empire could expand. But under the surface, something else was going on. And this is crucial, not just for the history of the world and for the American Empire, but for the history inside the United States as well. By the 1970s, capitalism, the capitalist system, had developed technology in two important ways that were going to revolutionize everything. Number one, the jet engine, the ability to move across the globe in matter of hours. And number two, the internet, the computer and the internet. Why were these important? Because it suddenly meant, even though no one understood it at the beginning, it suddenly meant that the production of goods and services did not have to happen in any particular place because you could get anywhere on the surface of this planet in few hours. And you could supervise production with cameras and electronic equipment anywhere from anywhere. The executive sitting in an office in New York City through the internet, the computer could see what was going on in the factory floor in Shanghai or in Nairobi or in Sao Paulo. Didn't matter. If they had to be there, they could get there in few hours. Why is this important? Well, because in the development of the United States, particularly in that first phase at the end of World War II, 4575, when America was so dominant, the capitalists had raised the standard of living of the workers. sure, the workers had to fight for it. They had to fight with their unions. They had to fight with strikes. Capitalists give nothing without fight. the workers fought, but they could get they got and their wages kept going up. Part of why the labor movement declined. Part of why socialism and communism declined from their heights in the 1930s when the depression made those very important institutions. But by the 1970s, the wage level in the United States was much higher than wages of working people in virtually every other part of the world. And the jet engine and the computer and the internet made here we go now from the capitalist point of view cheap workers elsewhere become relevant. And the most dramatic examples, India and China, where wages were fifth or tenth of what they were in the United States. The capitalists saw an opportunity they had never imagined before they could tap. they could move production from the United States where they paid high wages because of the struggle of the American labor movement and because of capitalism having such good time in the US. So capitalists in the US could do for their workers what they wouldn't do and didn't do for their workers anywhere else. So, American workers could be told, "You have higher standard of living than elsewhere." And it was largely true. But now the capitalists realize, "Uh-oh, we got problem. We have been paying high wages but there are all these workers in Asia, China, India, in Latin America, Brazil and so who are willing to work for much much less money and we are being competed against by companies based in China, in India, in Brazil who can compete with us because their labor costs are small fraction of what ours are. We can't survive in that kind of competitive situation. Suddenly free trade around the world where everybody can move goods from one country to another without hindrance, without tariffs, without any of that didn't look so good because the cheap labor made other people more competitive. What did American capitalists do in this second phase of the post-war history? They did something which were still coping with. They left the United States on mass. They left. They moved production out of the United States where they pay high wages to those other places India, China, Brazil and many more where they pay low wages. This is extraordinary. It has decimated large parts of the American countryside, cities and towns, dependent for years on wellrun factory providing good jobs to parents to children. Gone. Gone. Parents who had promised their children, you will live better than we do, the way we live better than our grandparents did. But they couldn't deliver on those promises because the jobs were going. In 1975, the population of Detroit was nearly 2 million people. The jobs of the auto industry. Today in Detroit, the population is 6 or 700,000. The majority of the people of Detroit are not there anymore because their jobs in car manufacturing aren't there anymore. And you can repeat that for Cleveland and for St. Louis and for Wilmington and for fill in the blanks. Lots of blanks. Lots of cities. We're not done with that yet. And now you're beginning to get sense of what happened to the empire. Now, no one held gun to the heads of the capitalists who decided to close their factories in Cincinnati or Syracuse or New Jersey and move to India or China. No one forced them. The Chinese couldn't and the Americans didn't. They went because it was profitable to go there. That's how capitalism works. If the profit goes down in one place, you move to where it isn't going down or where hopefully it's going up. Capitalism built the rising empire and capitalism is pulling it down and all for the same profitdriven reasons. Now, while all this is going on, while all this is going on, other phenomena are happening. And these are happening in some cases all the way back to 1945 and then all the way up to the present. But you have to bring them into the picture so we get picture of where we are and particularly where the American Empire is. The whole period, the whole last 80 years can be considered the rise of the global south. What do mean? Well, mostly mean what used to be called the third world or what sometimes called the underdeveloped world or sometimes referred to as Asia, Africa and Latin America. lots of names, but we kind of all know not Europe, not North America, not Japan, and now not the countries of recent colonization by Europeans like Australia, New Zealand, and so on. That's where the majority of the people live in the global south. Asia, Africa, Latin America, roughly these people over the last 80 years have been engaged in process we all have to understand way better than we do. It's called the process of decolonization. All of these countries were under the control the domination of Western Europe or North America or Japan. They were they were either formal colonies owned and operated by British or French or German or Italian or Spanish and so forth. Or they were informal colonies, Latin America relative to the United States. We didn't grab countries and run them with few exceptions like Puerto Rico. We had informal empostly we governed through local folks who couldn't do anything if we didn't approve it as nation. Well, the last 80 years have been the efforts of that part of the world. Asia, Africa, Latin America to get out from under to do for themselves what the colonists of North America did when they fought two wars against Britain to acquire independence. That's what they wanted and they got it. They fought long and hard particularly after World War II. Why? Because the major capitalist countries accepting the United States had destroyed each other. They were very weak. The British were weak by that time. The French were weak. The Japanese were weak. Yet the picture this was the time for the global south to move. And they did. Mahatma Gandhi led the people of India to break finally from centuries of being colony of Great Britain. The Vietnamese did it relative to the French and on and on and on. No sooner did these people get independence than they discovered what the Latin Americans had always known. You can get political independence. You're your own country. But you also have to achieve economic independence. And that's much harder in world that is dominated by Western Europe, North America, and Japan, and ultimately dominated by the United States Empire, which was booming in the second half of the 20th century, as I've tried to show you. So what we saw for most of the 80 years is the fight against colonialism. The fight not to be controlled or dominated neither by Europeans living in your country something called settler colonialism or by distant colonialism. They don't settle there but their army and their politics controls you. that has been going on for all of these years. The difference is finally after 70 80 years the global south has come into its own. The global south is not as rich as the old European, Japanese, America. Not yet. They're not there yet. No question. But they are on the way. They have learned how to develop their own industries, their own shipping, their own infrastructure. They're working and they're working hard and they are catching up. In some cases, I'm going to come to them in minute. They have virtually caught up to the United States. So we now have the tension between the United States and the countries that recovered Europe, Japan and so on on the one hand and the global south coming up and being committed to undercutting the force and the power of Western Europe, Japan and the United States. That's going to be force undermining the empire. As is the recovery of Western Europe after World War II, as is the movement of capitalists, American capitalists out of the country. All of those things are undermining the American empire. But none of them yet in position where we can see that and talk about it. Which is why the decline that I'm about to tell you about has been largely invisible to Americans and still is. It's even invisible to people outside the United States. And part of my talk is to make what's invisible visible. So let me turn to the next part. One country, one in the global south outdid all the others in roaring back from subordinate colonized position to be the number two economy in the world, rapidly catching up to the United States and therefore challenging the American empire in very obvious kind of way. Even though these other forces that I've told you about are just as important in their way. Let's look at China. China is unique because at the start of this story 1945 it's the largest country by population in the world and it has been for the entire 80 years until year or two ago when India almost as big caught up and is now believe slightly larger by population than China. China was unlike India place where successful communistled revolution took place also peaking right after World War II finally succeeding in taking over in 1949 very close to that time. Now China got no help to recover it was damaged in the war. China had never been colony in the way India had, but China had had parts of it taken over by Europeans in various ways. You might call it sort of half colony, but it still retained an independence little bit like Latin America, more formal than real, but there was something. But it was the communist revolution that we really have to look to. They understood that if they were the communist leaders, if they were going to survive the enmity of the west, the United States hated the communist government there from the beginning. The United States helped the anti-communist struggle in the civil war. China had civil war from the end of World War II, 1945, until the victory of the revolutionary forces in 1949. four-year civil war. The United States supported the side that lost. All right. Mount Saton and the others won. The communists won. But they got the enmity of the United States. No help. You want to recover? You're on your own. They got some help from the Soviet Union because that was communist country led by communist party at that time. What China did is something that the Soviet Union didn't do. China achieved on its own level of economic development that has no parallel in the history of the world. They accomplished going from being one of the poorest countries on earth in to challenging the United States today. And they did it all in 70 or 80 years. The comparable economic development in Western Europe took centuries, not 70 years, and didn't come from as poor base as China did, and didn't achieve it with the enmity of an empire the way China did. This is not an endorsement of China. This is not an argument that China doesn't have economic problems. It does. But you cannot undo and you shouldn't what the Chinese achieved. They have shown the global south where most of the people on this planet live and work how you get out of poverty quickly. And that's the most important issue in many many of the countries and people of this planet that we live on. This Chinese combination partly private capitalist enterprises both Chinese and foreign and partly government-owned and operated Chinese enterprises managed by powerful government which in turn is managed by communist party. This formula, this hybrid if you like of state and private has turned out to be the way to get this extraordinary economic development going and it challenges what the American empire. The Chinese, for example, competed with the United States starting about 15 years ago to produce electric vehicles. The Chinese won that competition. The BYD company and other Chinese auto companies now produce the best quality, lowest priced electric cars and trucks in the world. They've shown their ability to match the highest levels of technological development coming out of Silicon Valley and California. The Chinese have shown that they can do or outdo anything and virtually everything the American Empire has been able to produce. And what they haven't yet outco competed they are working to do. The United States as they will point out to you is place where over the last few years hundreds of colleges and universities have been closed during which time in China that many have been opened. It's very obvious what's going on. And now let me bring this to to close. And want to do that by explaining how the American empire is in trouble and what that means not just for the world economy in general, but for an issue that is lurking in the background and that is going to come to the four and want to be telling you about it beforehand, which is the old capitalism versus socialism issue. But now let's put it together. the rise of the global south, the renewed competition of the developed parts of the world, Europe, Japan, Canada and so on and the rise of the global south and the leadership in that rise given by China. It's too many things. The American empire is not able given that we have sent our manufacturing to places where it's more profitable. GM sells more cars in China than it does in the United States. It's over. It's over the American empire. It is declining. That's why we have the bitterness of our politics. That's why person who says, can bring it all back. can make America great again." That's recognition that we're declining. Not explicitly, not honestly, but indirectly because it's something the American working class knows. They're the ones suffering. Bad jobs, not enough jobs, poor job, badly paid job. Those are all signs, friends. The war on Iran is sign. Look, the war in Vietnam back in 1970s should have told us something. Vietnam was one of the poorer countries on this planet. fighting war against the United States, the American Empire at its peak in the 1970s, fighting against poor country led by the Communist Party of North Vietnam. Okay. Who has been running Vietnam, North and South over the last 50 years? The answer is the Communist Party of North Vietnam. They won. We lost. It could have been, it should have been wakeup call. Whoa, wait minute. But no, we fought again in Afghanistan. Who was the enemy then? The Taliban. Who runs Afghanistan today? The Taliban. Day one, we lost. And now in Iran, country of 90 million people, we're nation of 335 million people. We are one of the richest in the world. Iran nowhere close. We are highly industrially developed. Iran nowhere close. Are we winning? No. We are basically losing. We can't admit it any more than we could admit Vietnam or Afghanistan. That too, that refusal to admit, that insistence on denying, that too is sign of declining empire. Even in Britain, there are still people who can't quite wrap their heads around the idea that Britain is still is not still an empire, that Britain is now small wet offshore island of the mainland of Europe. it's too hard. And look, understand our empire is in decline and there is no sign that that's going to stop and there are lot of signs that it's going to continue. Tariff wars. We're protecting our economy because the other part of the world is out competing us. That's what tariffs are for. And that's why Mr. Trump champions them. He's trying to protect. Yeah. he plays Mr. Tough. I'm going to take Canada. I'm going take Panama. Yeah. Yeah. Yeah. Yeah. Yeah. These are the performances of people who want to deny what the reality is by posturing as if they had all that power. He is going to bomb Iran into the stone age. Yeah. But he can't because he's too vulnerable. because the price of oil is out of control if he does anything like that. And that is going to hurt the American working class and the world working class. And that's going to reverberate on him because it's understood that before Israel and America attacked Iran, the great the straight of Hormuz was open and free and now it isn't. And so you can kind of figure out where the problem lies. It is hard to understand but we are at the end of process of history which would describe as the peaking and the beginning of the decline. The United States dollar is still an important currency in the world. Not the way it was but still important. The United States is rich country. Not as rich as it once was. But the United States is exhibiting the classic sign of declining empire. What's the classic sign in declining empires? The Greek, the Roman, the the ancient Ottoman, all of them, the rich and the powerful. In each empire as it declines, it's the rich and powerful who have the position and the ability to hold on to the wealth they acquired as the empire grew. Which means as the empire goes down, it's the middle and lower classes who have to bear all the bad news, all the costs because the people at the top hold on. As our econ economy declines, our stock market keeps doing lovely. Why? The 10% richest Americans own 80% of the shares. They're holding on. They have the position in the stock market in the economy to hold on when the situation turns bad. The worker whose job has been moved, he loses or she loses her job. But the capitalist who moved the job to get the ability to hire cheap workers will make more profit because the workers are cheap. The capitalist will do well by moving production abroad. The worker who loses his job pays the price. The working class pays the price of declining empire. And if the American working class doesn't do something about this situation, it will continue to bear the costs of this declining empire. Well, what about socialism? Well, let me deal with that issue head on. Socialism in the 19th and 20th century focused itself on leading the working class to win political power to control the government. Some did it by revolution, Russia, China. Some did it by organizing political parties and winning elections. For example, the currently most successful economy in Europe is an is the economy of the country Spain. And the leader of mi of Spain, Mr. Sanchez, is lifelong socialist. And he has socialist government in Spain. And they're doing quite nicely. Thank you. But it's all about the government. If you listen to Bernie and Okaziocortez, they're talking about the things governments can do for working people, and they're quite right about that. Scandinavians have shown that. Germans and French have shown that working people get government benefits in those countries far better than those that American workers get from their government. But socialism always meant more than that. Not just government adding to whatever it is you get out of private enterprise, not government even regulating private enterprise. So it gives workers better deal than if the government didn't come in, for example, minimum wage, for example, not allowing worker to be fired without good cause and so forth. Socialism always meant more. And believe the leaders of China and of other socialist countries are quite aware of what I'm about to tell you. That more remains to be done. And in the time have left in this presentation, I'm going to tell you what that is. Socialism, especially if you go back to Karl Marx, who by the way had birthday on the 5th of May. If you go back to Karl Marx, his focus was on the enterprise, the workplace, where the employer and the employee come together to make the capitalist enterprise succeed. The employer hires the employee to work with the goods and services, the tools, equipment, and raw materials that have to be worked up into whatever the finished product is that the enterprise sells. That's capitalism. That's how it works. It's not like slavery because there no master and there's no slave. It's not like feudalism because there's no lord and there's no surf. There's an employer and an employee. And then Markx goes on in his mature work to show that that arrangement is the problem. That arrangement means what's useful and valuable. The profit that comes out of it is grabbed by the employer, not the work. The workers get wage, the profit, the employer. And what governs the decisions of the enterprise? Profit. That's what we teach in economics universities where spent my entire life. Profit maximization is the appropriate target for capitalist enterprises. Quite true. They focus on what the employer gets. They don't focus on what the worker lives off of. So Markx concluded, if you want an economic system that puts the workers first because they are the democratic majority, then you can't have capitalism. Because in the enterprise of capitalist, it's the profit that is the number one priority. profit. The bottom line, profit, the point and purpose of the enterprise. We're in the business to make money. And that's what they do. Make money for the capitalists. If that's good for the workers, nice. If it isn't good for the workers, tough. Mark said if you want democratic system you have to overcome the employer employee relationship. Notice Markx didn't write you have to get rid of private enterprise to have government enterprise. You won't find that in Mr. Marx. You will find that idea in many of the Marxists who come later because their struggles were focused on grabbing the state and it made lot of sense if you understood that once the workers have the government they still haven't before them the next part of the task which is to change the organization of production inside the factory inside the office inside the school inside the store from one in which few people run the show to democratic arrangement. Look, we got rid of the kings because we didn't want monarchies. But the kings came inside the enterprise where they are the CEO and they shouldn't have that kind of power inside the enterprise any more than their counterpart, the king should have it in the political realm. Socialism remains on the agenda as much in China as anywhere else. The real question which the Chinese working people will and already are presenting to their leaders is will you take us to the next stage? Will you lead us in that way or won't you? Here in the United States, of course, we're in more primitive stage. Will the workers understand that they are being tethered to declining capitalism and that if they don't break the hold of that tether then the declining capitalism will take them down with it. That's the real issue of our time for the working classes everywhere in capitalism and in the countries that call themselves socialist like China. I'm not quarreling with their use of that term. They have every right to use it and to define it as they see fit. and they have made enormous strides in what the government can do for its working class. But it leaves the question, the old socialist question, as old as capitalism has been the understanding that capitalism is not the end of the story. History isn't over. And it's important to understand where the next system will be, where we are going, whether we are conscious of it or whether we're busy denying it. Where it's going, well, we know what happened to the kings of monarchy. They're gone. The few kings that are left are figureheads. They're symbolic. They're people who are important when they are born and when they die and when they get inaugurated. The rest of the time they are puppets being controlled by the secular leaders of the country. Well, we survived the end of the kings. The world didn't come to the end. We will survive the end of the capitalists. The world will not come to an end. And all of us, the working people of the world, as we inherit the ownership and the running of the enterprises where we work, will be the better off for it, will grow up to our potential in way we could not before when we weren't allowed to be our own bosses. That's why the history of the rise and the fall of the American Empire is important to think about, to learn about, and to apply to figuring out where we go next. That's it for today. want to thank you all and remind you if you'd like to join the Q&A, the question and answer period about the applicability of Marxian economics, join us on the 16th of May. And you can find out all the details noon on that day Eastern time United States by going to our website democracyatwork.info and following the prompts there. look forward to speaking with you again in two months.