In a wide-ranging conversation on the Econoclasts podcast, the Marxist economist Richard Wolff laid out a sweeping account of where American capitalism stands today, why he believes the United States is past its peak as a global power, and why he sees a genuine, if still inchoate, socialist revival taking shape among a new generation of Americans. What follows is a summary of his argument, segment by segment.

Who is Richard Wolff?

Richard Wolff is a professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor at the New School in New York City, where he now lives. Over a long career he has also taught at Yale, the City University of New York, and the Sorbonne in Paris.

Wolff describes himself as having spent most of his life working on the margins of acceptable American discourse – Marxist economics was, for decades, treated in the United States as barely tolerable even inside universities. He recalls that as a student he had to pursue his interest in Marxism largely on his own, in part by choosing to study at Stanford specifically so he could work with the radical economist Paul Baran in the final year of Baran’s life.

Today, Wolff says, the ideas he has spent a career developing have moved from the fringes toward the center of American political conversation, a shift he attributes in part, ironically, to Donald Trump. In his view, Trump’s presidency has done more to organize a socialist revival in America than any organizer on the left could have managed alone.

What is his view on this stage of capitalism?

Wolff argues that capitalism suffers from three structural flaws it has never managed to overcome. The first is its built-in tendency toward extreme inequality of wealth and income – a tendency so severe that, historically, it has periodically triggered uprisings from below before reasserting itself once those uprisings subside.

He points to the contrast between the celebration of Elon Musk’s path toward becoming the world’s first trillionaire and the fact that roughly two-thirds of Americans live paycheck to paycheck. Because capitalism enriches only a minority, he argues, that minority is perpetually anxious that democratic majorities might use the ballot to undo the inequality – which is why, in his account, the wealthy are compelled to corrupt politics to protect their position, something he says was made visible when billionaires sat arrayed on the dais at Trump’s 2025 inauguration.

The second flaw is instability: the recurring cycle of booms and busts that the National Bureau of Economic Research clocks at roughly every four to seven years, and which Wolff says has struck on schedule in 2000, 2008, and 2020, despite decades of Keynesian efforts to tame it. The third flaw is ecological – the way the profit motive drives capitalism to neglect or postpone the collective needs of both human beings and the natural environment.

Taken together, Wolff frames these as reasons to conclude, as humanity once concluded about slavery and feudalism, that a better system is both necessary and achievable.

What is happening to America that is quickly failing as a leading nation?

According to Wolff, the United States has passed its peak and entered a period of imperial decline, and he points to several converging signs. Militarily, he argues the U.S. failed to achieve its goals in Vietnam, Afghanistan, and Iraq, and is faring no better against Iran, while the outcome in Ukraine remains uncertain.

Diplomatically, he says Washington has squandered the ‘soft power’ that once made allies eager to align with it – citing, as a striking example, a petition drive in Canada, a longstanding ally, with more than 250,000 signatures calling for the expulsion of the American ambassador.

Domestically, he sees a historic collapse of trust in both major parties. As evidence, he points to New York City’s 2025 mayoral election, in which Zoran Mamdani – a democratic socialist and member of the Democratic Socialists of America – defeated the establishment-backed Cuomo family by a wide margin, despite carrying two labels (socialist, Muslim) that Wolff says have traditionally been politically fatal in America.

Wolff also connects this domestic decline to the country’s chronic government debt, which – echoing the interviewer’s framing – he treats not as a side effect but as part of the very mechanism that has funded American global dominance since the 1970s, as trading partners recycle dollars earned from U.S. imports back into American debt.

Is socialism on the rise?

Wolff believes it is, though he is careful to describe it as an awakening rather than a mature movement. He notes that support for both Trump and for left figures like Bernie Sanders and Mamdani spring from the same underlying source: a widespread recognition, across the political spectrum, that ordinary Americans’ economic security has been stripped away since the rollback of the New Deal began after 1945.

Polling, he says, shows that the younger the American, the more favorably they view socialism – even though, as he readily admits, most young people who hold this view know relatively little about socialism’s history or internal debates. What they are expressing, in his reading, is not yet a worked-out ideology but a rejection: a conviction that the current system is unbearable and cannot be reformed from within.

What would real socialism look like?

Wolff is emphatic that the socialism he has in mind bears little resemblance to the popular image of Soviet-style shortages and bureaucratic stagnation. For him, the USSR and similar systems represented state-run capitalism, in which the state simply replaced private owners as the boss while workers still had no say over their own workplaces – not genuine socialism at all.

The alternative he has spent much of his recent career developing is what he calls the Worker Self-Directed Enterprise, or WSDE. In a WSDE, there are no outside shareholders and no board of directors separate from the people who do the work; instead, the employees who work in an enterprise collectively and democratically decide what to produce, how to produce it, and – critically – what to do with the profits, or surplus, the business generates. Rather than that surplus flowing to distant owners, it stays with the people who created it, to be allocated toward wages, reinvestment, or community needs as the worker-members themselves decide. Wolff points to Spain’s Mondragon Corporation, a federation of more than 85,000 worker-members operating on a one-worker, one-vote basis, as the clearest real-world proof that the model can function at scale.

Wolff does not propose abolishing markets or nationalizing the economy overnight. Instead, he envisions a gradual, legally supported transition: laws that make it easier to convert existing firms into WSDEs or to start new ones, school curricula that teach the model alongside conventional corporate structures, and political movements that represent the interests of a growing WSDE sector the way today’s parties represent capital and labor.

The underlying principle, as he puts it, is that economic democracy inside the workplace is the necessary foundation for real political democracy, because a society cannot be genuinely self-governing at the ballot box while most people spend eight hours a day answerable to bosses they had no part in choosing.

SOURCE:
America is quietly losing the world – Yanis Varoufakis & Richard D. Wolff | The Econoclasts