MUST READ Student To Pelosi: Young People Do Not Believe In Capitalism, Can We Fight Against “Right-Wing Economics?
TREVOR HILL, NYU STUDENT: I was originally slated to give a pretty soft question, but given the dire circumstances — I’m so sorry Mr. [Jake] Tapper — given the dire circumstances our country is in, I wonder if you’d indulge me in a little bit more of a serious question about the future of the Democratic Party.
What I’ve seen on NYU’s campus and what I’ve seen in polls all over — I mean, CNN even, a Harvard University poll last May showed that people between the ages of 18 and 29, not just Democrats, not just leftists, 51 percent of people between 18 and 29 no longer support the system of capitalism.
Now, that’s not me asking you to make a radical statement about capitalism, but I’m just telling you that my experience is that the younger generation is moving left on economic issues and I’ve been so excited to see how Democrats have moved left on social issues. As a gay man, I’ve been very proud to see you fighting for our rights and for — many Democratic leaders fighting for our rights.
But I wonder if there’s anywhere you feel that the Democrats could move farther left to a more populist message, the way the alt-right has sort of captured this populist strain on the right wing, if you think we could make a more stark contrast to right-wing economics?
PELOSI: Well, I thank you for your question. But I have to say, we’re capitalist. That’s just the way it is. However, we do think that capitalism is not necessarily meeting the needs with the income inequality that we have in our country.
And let me just tell you this. I don’t know how much time we have. About 40 years ago, a little bit more now, no less a person in terms of capitalism than the chairman of the Standard Oil of New Jersey said — he talked about stakeholder capitalism, capitalism that said when we make decisions as managements and CEOs of the country, we take into consideration our shareholders, our management, our workers, our customers, and the community at large.
At that time, at that time, the disparity between the CEO and the worker was about 40 times, 40 times more for the ceo than the worker. As productivity rose, the pay of the worker rose and the pay of the CEO rose. Everything rose together.
Around 20 years ago, it started to turn into — maybe 15, 20 years ago, it started to turn into shareholder capitalism, where we’re strictly talking about the quarterly report. So a CEO would make much more money by keeping pay low, even though productivity is rising, the worker is not getting any more pay, and the CEO is getting a big pay because he’s kept costs lows by depriving workers of their share of the productivity that they created. And as I call it, a right angle going in the right direction.
But disparity between the CEO and the worker in the shareholder capitalism is more like 350 to 400 to 1. From 40 to 1 to 350 to 400 to 1. That income inequality is an immorality. And it is not even smart from an economic standpoint, because it doesn’t grow the economy. The more money you put in the pocket of the worker for the productivity he or she has produced, the more money they will spend, consume with confidence, inject into the economy and grow the economy.
So what you talked about and what you’ve talked about, the same thing, the stagnation of wages and the financial instability that families are feeling, tied with seeing priorities that are not necessarily ones that they have as — well, they care about it, but it’s not a job and being able to have a home and send your children to school and have a dignified retirement, or what we want for all Americans, and capitalism should serve that purpose.
The capitalist system has been well-served by the so-called safety net. It’s not just a safety net for individual workers. It’s a safety net for capitalism, because they can go through their cycles, and when they don’t need as many employees, they — we have unemployment insurance or all kinds of benefits as a safety net that enable them to go through cycles.
But instead — and there are some enlightened corporations which say I’m keeping my whole staff through thick and thin, at the end of the day, I have a productive, trained, loyal workforce. So we have to change the thinking of people. I don’t think we have to change from capitalism. We’re a capitalist system. The free market is — is a place that can do good things.
Actually, Adam Smith, “Wealth of Nations,” the invisible hand, he was more compassionate. He wrote two books. His other book was about our responsibilities to each another, as well as “Wealth of Nations.” I wish he had written one book where he incorporated all of it together.
So I hear what you’re saying about young people. And may I say, we have our — Eric Swalwell heads up something called our Future Forum, where young members of Congress in their 30s, late 20s, I think they’re all — some of them graduated to 30s now — go around the country and listen to young people. Perhaps he can visit you at school, as well. But thank you for sharing.