Economic Update with Richard D. Wolff
Episode: Economic Change: Why and How
Date: June 20, 2016
Host: Richard D. Wolff
Guest: Alan Shulman
Episode Overview
This episode delves into the forces driving economic change, focusing on inequality, capitalism’s structural issues, and the necessity—not just the possibility—of systemic transformation. Wolff discusses recent data on income inequality, examines the cyclical nature of inequality in capitalism, and proposes worker cooperatives as democratic solutions. In the second half, guest Alan Shulman shares his long journey from public school educator to economic activist, now helping spearhead the Democracy at Work New York Center to educate and mobilize others for a post-capitalist future.
Key Discussion Points and Insights
1. CEO-Worker Pay Gap: Scope of Inequality
Timestamp: 00:50–08:00
- 2015 CEO Pay: CEOs of S&P 500 made 335 times what average US workers earned.
“Chief executive officers of the S&P 500...on average made 335 times more money than US rank and file workers during the last year.” — Richard D. Wolff (01:21)
- Historical Context: In 1980, the ratio was only 42 times.
- Trend: The pay gap has vastly widened, especially during an era touted for “globalization,” deregulation, lower corporate taxes, and free trade—policies sold as universally beneficial.
“Listening to or doing what large corporate executives say is wise is indeed stupid.” — (05:22)
- Critique: Wolff frames this as direct evidence that the promised benefits of corporate-friendly policies haven’t materialized for workers. Instead, these policies accompanied soaring executive compensation.
2. Capitalism, Globalization, and Cycles of Inequality
Timestamp: 08:10–19:54
- Book Review: Branko Milanovic’s Global Inequality is discussed.
- Milanovic argues that inequality rises in cycles: periodic “pushbacks” are led by social movements and policies that slow or reverse inequality, but eventually, wealthy interests “undo” reforms.
- Wolff’s Critique:
- The rich have both incentives and tools to “undo” redistributive policies.
- Real, enduring change requires changing the system, not just policies:
“Capitalism is a system that not only produces inequality, but gives to the people at the top the incentive and the resources to undo whatever it is the pushback of social movements ever achieves.” — Richard D. Wolff (13:25)
- Advocates for democratizing workplaces:
“...Enterprises...have to be democratized...reorganizing enterprises so that everybody democratically decides what to produce, how to produce, where to produce, and what to do with the profits.” — (15:47)
- Draws parallel to abolishing aristocracies: “...the same way we got rid of kings and emperors and queens and czars...” (16:48)
3. Estate and Inheritance Taxes: Making the Playing Field Less Unequal
Timestamp: 19:55–30:00
- Why Inheritance Taxes?
- Societies have long agreed that while personal wealth accumulation can be acceptable, passing vast fortunes to children entrenches inequality.
- Inheritance privileges “an accident of birth.”
- U.S. Reality:
- Federal estate tax only kicks in above $10 million per couple—so <1% affected.
- Only 18 states and DC impose estate/inheritance taxes; 32 states do not.
- Revenue raised from these taxes is meager compared to overall wealth transfer.
- Impact: The U.S. has chosen not to use inheritance taxes as a tool to level the playing field, perpetuating multi-generational privilege.
4. Listener Q&A: Worker Coops, Money, and Marxist Theory
Timestamp: 30:01–30:40
Question 1: Would money exist in a worker coop-based economy?
- Answer: Yes, but “money would function in a very different, much more reduced way.”
- Money would not be a means of business control as in capitalism.
- It would lose its current power dynamics and serve more communal functions.
Question 2: How are issues of underperformance managed in worker coops?
- Answer: There would be communal mechanisms (counseling, mentoring, retraining), not simply firing people as in capitalist firms.
“...taking away a person’s livelihood is not going to be the way a worker co op economy understands solving problems.” — (29:10)
Question 3: How does Marxist value theory apply to services?
- Answer: It’s not about tangible products but about human relations in production.
- The key critique is how capitalism structures relationships, not just output.
Interview: Alan Shulman on Activism, Education, and Democracy at Work
Timestamp: 31:00–57:06
Alan Shulman’s Background and Motivations
- 48 years as a public school teacher, Bronx-raised, son of Holocaust survivors.
- Entered activism accidentally:
“Getting a draft notice changed everything. And going to college changed everything.” — Alan Shulman (32:20)
- Early involvement in anti-racism and community control in NYC schools.
- Activism was mostly reactive: “Everything I did was against something. And I just got tired and then I retired.” (35:43)
Reengagement Through Occupy and Education
- Occupy Wall Street reignited his awareness of systemic failure.
- Noted education’s lack of vision for a post-capitalist future: curriculums reduced to “personal finance” or “the stock market game,” neglecting critical questions about the economy’s future.
Building the Democracy at Work New York Center
Space and Strategy
- Monthly meetings for five years at The Commons in Brooklyn—a sustained, community-building approach.
“We’ve adopted a slogan: We can do better than capitalism. That’s what we’re trying to do.” — Alan Shulman (43:30) Inclusion and Approach
- Mix of seasoned activists and newcomers, spanning issues from housing to media reform.
- Shulman stresses the need for an organizing space where people can “really internalize that they are the moving force of history.” (43:28)
- Focus on not alienating potential recruits:
“...the machine is also run by an awful lot of people who are in the 90% of the people who are totally destabilized...We need to ... convince the workers inside the machine that it’s in their best interest to also be part of the change process and not make enemies real early on.” (49:05)
Where Are People in the U.S. Now?
Timestamp: 44:40–46:13
- Shulman describes a sense of existential necessity driving people to activism—a lack of alternatives, a sense that the era of American capitalism is over for ordinary people.
- More see their own issues as linked to systemic change, and are open to anti-capitalist thinking.
Changes in Political Discourse
- Both note that critique of capitalism and even the word “socialist” are less stigmatized—catalyzed by Bernie Sanders’ campaign.
“...somebody who allows the word socialist to be attached to his name, doesn’t run away from it, doesn’t deny it, that this is just not a problem for the tens of millions of Americans that are voting for the guy.” — Richard D. Wolff (50:50)
- Young teachers now feel safer discussing socialism, anti-capitalist ideas, and real economic alternatives in their classrooms (in part thanks to new curriculum resources like those from the Zinn Foundation).
Democracy at Work Centers: Vision and Plans
- A national network already forming—seven groups at the time of recording.
- Tasks include educationals, supporting worker coops, community legislation, and providing spaces for organizing and mutual understanding.
Notable Quotes & Memorable Moments
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On How the System Perpetuates Inequality:
“We have to say, we don’t want to allow there to be a group of people... who respond to the way the world works in capitalism by becoming richer and richer, who then suffer a pushback... then use their wealth to undo the policy so we can go through this whole craziness again. That has to be changed.” — Richard D. Wolff (15:24)
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On Why Inheritance Privilege Is Unjust:
“It creates an unfair advantage to an accident of birth... That is inherently unjust.” — Richard D. Wolff (21:39)
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On Worker Coops and Community:
“There are a hundred other ways that a democratic, loving... community of co workers will work with a person who doesn’t understand what it means to be part of a community.” — Richard D. Wolff (29:50)
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On Organizing for Change:
“We can do better than capitalism.” — Alan Shulman (43:30)
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On the Broader Social Movement:
“It just feels so good to be part of something that’s making sense.” — Alan Shulman (56:19)
Important Timestamps
- 00:50 – CEO-Worker pay gap statistics, historical comparison and critique
- 08:10 – Book review: Branko Milanovic and cycles of inequality
- 13:25 – Why capitalist “pushbacks” against inequality fail
- 15:47 – Case for democratizing enterprises
- 19:55 – History and logic of estate/inheritance taxes
- 25:30 – U.S. estate/inheritance tax system analyzed
- 30:01–30:40 – Listener Q&A: Money and performance in worker coops, Marxist value theory
- 31:00 – Interview begins: Alan Shulman’s personal story and reflections
- 42:00 – Strategy and mission of Democracy at Work NY Center
- 44:40 – Shulman: Why people are joining now, sense of no alternative
- 50:50 – Discussion: Socialism and anti-capitalist language gaining legitimacy
- 56:19 – Shulman: Renewed sense of purpose, meeting details
Closing Reflections
Wolff and Shulman’s conversation reveals a moment where critique of capitalism has not only gone mainstream but inspired practical organizing efforts. The episode documents the depth of inequality and the limited capacity of reform within the system, making the case for democratizing the economy via worker coops and education centers. Listeners are left with both a sobering assessment of the present and a hopeful vision grounded in collective action and the growing willingness of diverse Americans to rethink—and reconstruct—their economic future.
Resources & Further Involvement
- Democracy at Work NY Center: Monthly at The Commons, 388 Atlantic Ave, Brooklyn (third Wednesday, 7pm)
- For national organizing, see democracyatwork.info and rdwolff.com
- Save the date: Two-day conference, October 15 (year not specified)
- Recommended readings: Branko Milanovic’s Global Inequality, Thomas Piketty’s Capital in the 21st Century, Zinn Foundation curriculum