Economic Update with Richard D. Wolff

Episode: Why Capitalism Reproduces Inequality and a Solution

Date: February 18, 2021
Host: Richard D. Wolff
Podcast: Democracy at Work

Overview

In this episode, Richard D. Wolff tackles the pervasive and persistent problem of economic inequality under capitalism. He examines why—despite public desire and periodic political promises—inequality remains entrenched globally and in the United States. Drawing together history, economic structures, and proposed solutions, Wolff ultimately presents workplace democracy as the structural transformation necessary to overcome inequality.

Key Discussion Points & Insights

The Stark Reality of Inequality

[01:00-05:00]

• Wolff lays out staggering statistics on wealth distribution:
  • The 68 richest individuals in the world own more wealth than the bottom half of humanity (3.5 billion people).
  • Top 10% of adults own 86% of global household wealth; the bottom half own just 1%.
  • In the U.S., the top 20% own 86% of wealth; bottom 80% own 14%.
• These inequalities are not contested in public opinion; polls show most Americans want far less inequality.

“You could not be more starkly unequal.”
— Richard D. Wolff, [02:57]

Why Capitalism Reproduces Inequality

[05:00-14:00]

• Efforts to redistribute wealth—progressive taxation, minimum wage laws, welfare—are repeatedly undermined by those who hold power in capitalism.
• The wealthy, through their control of economic and political resources, resist or circumvent redistribution:
  • Wealthy avoid, evade, or neutralize redistributive policies (e.g., moving business to countries with lower wages, political lobbying, influence over legislation).
  • Minimum wage example: real value declines over time due to inflation and lack of policy adjustment.
  • Stock owners have seen 300%-400% increases in value over ten years, whereas median real wages have risen just 6% in that period.

“It is a system that reproduces inequality.”
— Richard D. Wolff, [09:40]

“The costs of a failure are borne by all the rest of us. The bulk of the benefits of a success are taken by the people who own and run the business.”
— Richard D. Wolff, [11:35]

Historical Perspective: Inequality Across Eras

[15:00-24:00]

• Inequality did not begin with capitalism; it was present under slavery and feudalism.
  • All systems share core structure: a minority exerting control over production, accumulating wealth while the majority work.
  • The pyramids (Egypt) and chateaux (France) were built through systems of extreme inequality.
  • In each system, those with control structure the system for their benefit.

“The structure of each of those societies positions a minority in such a way as it can accumulate wealth and keep that from being shared among the mass of people. That’s the clue.”
— Richard D. Wolff, [19:06]

• Capitalism replaced old systems but inherited this minority/majority, controller/worker divide—now framed as employers vs. employees.

Why So-Called Solutions Fail

[20:00-25:00]

• Redistribution efforts can temporarily reduce inequality but do not last because the system's structure remains.
• Historic example: The New Deal under FDR reduced inequality, but once political forces shifted, inequality rebounded.

“You’ve left in place a minority of folks who are able either to block redistribution efforts or to make sure they’re temporary.”
— Richard D. Wolff, [23:35]

The Real Solution: Democratizing the Workplace

[25:00-32:00]

• The key structural change: fundamentally change who runs enterprises.
• Proposes democratic organization of production—every worker having an equal vote (one person, one vote), regardless of role.
  • This breaks the class division of a minority owning and controlling versus a majority working.
• Democracy in the workplace, Wolff argues, would reshape decisions:
  • No more “five people getting spectacular pay packages while everyone else can’t put their kid through college.”
  • Less extremes; fairer income distribution; no structural avenue for persistent inequality.

“You have to change the organization of production. That’s the only way you’re going to end this inequality.”
— Richard D. Wolff, [25:28]

“Democratize the enterprise, make it a general discussion and a general democratic decision… We will never have the kinds of centuries long gross inequality that I described to you.”
— Richard D. Wolff, [30:33]

Inequality Has Dire Social Consequences

[28:00-32:00]

• Inequality reproduces not only economic misery but fatal social consequences (citing vaccine distribution during COVID-19 as an example).
• Social stability and the development of human potential require greater equality.

“If you want to have social conflict, tension and difficulty, then you give some people a great deal and everybody else way less. It’s a recipe for tension, conflict, difficulty and disorder.”
— Richard D. Wolff, [31:46]

Memorable Quotes

• “It turns out, to be blunt, that capitalism as a system is able to produce remarkable wealth. No question. Unfortunately, it is equally capable to produce and reproduce remarkable poverty.”
  — Richard D. Wolff, [09:23]

• “Employers, who are trying to amass capital to make their wealth grow, which is what capitalism means. And then a vast majority of people who are employees. Employer to employee replicates lord to serf and master to slave.”
  — Richard D. Wolff, [18:30]

• “Overcoming inequality is a systemic problem. Capitalism is the obstacle that we need to overcome to get to the kinds of levels of equality… that most Americans have shown us over and over… is what they would prefer.”
  — Richard D. Wolff, [32:10]

Key Timestamps

| Timestamp | Segment Summary | |-----------|------------------------------------------------------------------------| | 01:00 | Global and US wealth inequality facts and figures | | 05:00 | Redistribution under capitalism, minimum wage, and political resistance | | 09:30 | How businesses thwart redistribution and shape policy | | 15:00 | Historical roots: slavery, feudalism, and capitalism | | 19:00 | The common structural cause of persistent inequality | | 23:35 | Why redistribution efforts don’t last | | 25:28 | The call for democratizing the workplace | | 30:33 | How workplace democracy leads to equality | | 31:46 | The social costs of inequality | | 32:10 | Final summary and call for systemic change |

Conclusion

Richard D. Wolff’s analysis contends that as long as a minority controls production—be it under slavery, feudalism, or capitalism—inequality will persist. Real change, he says, requires a structural transformation: democratizing the workplace to ensure economic power is shared. The consistent lesson of history is that only by organizing the economy along democratic lines can we achieve the equality that people, in the U.S. and globally, deeply desire.