welcome very much to conversations where it's a pleasure to welcome to the program dr edward wolfe and dr wolfe at the star school i believe is new york university and is a professor of economics at new york university and dr wolfe welcome very much is that correct the star or the star center star center but it's a part of the economics department and it also m b a and i saw on the internet that you've just been awarded one of the ten best in the whole united states it would give kudos to that we congratulate you on it and one of them being with the bomb we were just chatting he was here a few months ago when even walking very much the conversation thank you thank you so to be here we're going to be talking about you and that work did you study the particular area of interest that you have which is disparity of wealth or the kind of these a wealth in the society american world society and i want to show right at the outset if we could this this is a book that was published you can just see it on the screen this is called top heavy with published by the th century fun and it's subtitle a study of the increasing inequality of wealth in america and this is put out as we savor the th century fun recently and a great deal of work that's been teaching of this subject and we're going to want to talk about that with you but i wonder if maybe you could at the outset here maybe you could share some of your own background were you born and raised that sort of thing your education how you got into the konami field and then we want to go into depth because you are perhaps i would say the best that we have in the united states in terms of understanding how we can get a quantitative measurement of what the reality is in terms of the evolving wealth and wealth disparity that there really ready exists within the society that could share something yeah well  i was born in new jersey i'm far from here and i grew up in tarrytown new york again it's not far from here and when the suburbs in westchester and then i went to undergraduate school at harvard and there i and then the course of the war in vietnam and this created the great deal of interest in social and political issues and from there was the easy step into economics and so many of the problems emanate from economic factors be they did then they do not and they still do absolutely right that way to me too yeah and that was an amazing time with dylan used to say there's something blowing in the wind and the times they are after leaving harvard i actually floated around for a couple years i taught high school for a year and did some research work who worked for  scientific and not broad enough taking in anthropology in a more comprehensive understanding it was a plea that he had in the last chapter of the newest edition yes it is and i think he's exactly right in the discipline has become  very analytical a mathematical it's become overtaken by the physics model the only true science is kind of the analytical and mathematical  discipline that physics is and i think as a result it's lost a lot of its broader context and doesn't really lend itself that easily to again physics you have very distinct categories you have mass you have philosophy you have lights i have so on and you know these categories  way for billions of years right now then that kind of you can get real laws that are laws right exactly yeah but economics the categories themselves are very slippery and they change over time  production the various inputs to production in their ratios to that production might change with time brings technology more and more relevant than it was a ten thousand two hundred years ago yeah you know that's exactly correct y be although i think the steam engine sometimes invent i'm not sure maybe i'm the invention of the steam engine with a big bit of a big thing at that about that seven hundred but it's only a couple one hundred years in that we've had this discipline that now and we were just chatting before that it's become and i agree with you that the major questions in terms of the polity in the social organizing of the planet is really the economic yeah i still think it's really the underlying force behind much of the political and social change that we've that we've seen you know mark and so that was the dominant force in modern society i think he was he was quite greats in the field of economics to give us an understanding or yeah absolutely and i think you can go back and read marx today and still get a lot of insights about the workings of capitalism and so he's not he's not just there's a great deal of triumphalism about the defeat of the soviet union and the downfall of the markstein analysis you know they will say mr writes a book about the end of before him yeah ok this notion that technological change that's the rain main force behind economics and thereby social change that's really interesting because it is indeed that particularly now we were just talking about you commerce and eat and the technology is coming out it came to eat the way the internet and everything he just five years or something and it seems to be these things are coming almost at exponential speed the technological transformation and those technology the expressions of technology expressions extensions of consciousness marshall mcluhan on james joyce which is that there are extensions of consciousness and they have effect back on the the way we actually see and are working in the world and those technologies are the technological and scientific and technological advancement is moving at such an incredible almost exponential pace in its capability of bringing new power to whatever it is we collectively come to decided is we want to do with the the this planet earth yeah yeah yeah and it's still the primary force of change and i think you're right class struggle that was sort of pushed in capitalism that it wasn't just that there is technology and that by itself changed everything but that there was a working class some and workers didn't necessarily gain from this new technology and i think this was an idea that was very powerful at the time not off base or don't understand but he had this idea of the mark said this idea of you know that that this labor or his surplus value the surplus value of labor that everything comes from labor and that the capital is stolen labor they anything called it congealed labor there with all labor and that the capital owners are the ones who own the technology was in a certain sense part of the evil institution being private property because the private the few own technological instruments but all sorts of income all sorts of production or we call it now productivity and we're very linked to the idea of productivity the way of gauging the economy comes from labor and that the labor  is something that's been very very important in terms of trying to judge it or how do we do if i correct in that yeah and is that also apply over to classical thinking that in general they tend to do that are grounding policies dave in the united states is the employment act and forty six we're going to distribute income by labor criteria even though the technology may be much of a disembodied is increasingly responsible for adoption is owned by relatively few but we concentrate on the jobs jobs jobs and we're very happy now because the unemployment down  low unemployment rate but we've seen the share of income shifting away from labor and towards capital and now profit rates are almost at an all that washington was no longer going to be friendly to labor and if you so you see the shift towards supporting capital even at the expense of labor and this was a very major change in sort of the political economy of the country you know during during the preceding few decades  we saw a steady growth of wages we saw basically an even split between workers in capital in terms of the gains from from product of a t so there was a sharing of the fruits of technological change and you know that was the era when we had strong unions and remember i know i'm from detroit i remember yeah right yeah and the steel workers threatened to so you know labor was strong and there was kind of a a a modus vivendi worked out where i think the labor and capital side to split the capital and labor input to production you go back to say time jefferson let's go back seventy seven he said but if you go back to that a time if you were to try and grow draw a an understanding of how much of instead of saying productivity which we tend to use we were talking about productiveness are you going to create if you have a cobbler and he's going to make a pair of boots and there are no machines or anything much as a hammer and it takes him eight hours ten hours twelve hours to fashion the pair of boots great deal labor went into that labor was really responsible for what was being done it was the labor the cutting down all those trees and things to clear the force it was labor because the technology simply wasn't there but now if you so i don't i've seen some estimates were maybe ten percent of the actual production was the result of technology the hammer and ninety percent was labor you know in terms of what was being done and then if the projections were there when they say we may have just reversed those and that the actual production particulars we start looking at automated systems of what the actual production is maybe ninety percent something other than labor and only ten percent is the responsibility for that is labor and yet we distribute practically all income by labor criteria and the technology is owned by what five hundred and ten percent of the outsider in going to any kind of depth so the ownership of the technology is very very narrowly held but can we get at a measurement of how much of the production is technology or how much of it is something other than labor how much is labor do we have a clear understanding of that or not and what i'm getting at i guess is is it appropriate to have a labor theory of value of the way of distributing income or do we need something else to where it's in tune with the way things are actually being produced particularly if we look ahead these  to do things increasingly because these computer systems are becoming so incredibly productive yeah but on the other hand labor is still needed in certain industries like  united states the open university of british open universities governed where you take the best mind in any particular discipline and make it widely available and like you do it with all due respect and you should be widely available to hold national audience because they could get to the best you know in terms of that field but it all mr ball more mr highbrow yeah yeah but it's still curious that that by and probably true and i would try to think of the economy as a whole you know i've had people tell me and they tell me with i don't want to talk too much here but they tell me that it's really true honestly true that the airlines then it's just sort of a metaphor but the airline american airlines would fly around the ring they would be more efficient and cost effective and most of all safer if there was no pilot with a cripple redundancy system make them over the got to have the gray haired man and all but because we're you understand one thing but if that were true if that were true could be somehow measured presented you got human failure human error human emotions and things that get in the way it would be safer if they were there doing these things but we have no other way to distribute income because the ownership is all held by a handful of people that never concentrated on expanding the ownership but that's another issue perhaps and what and i heard you say that the disparity since one thousand nine hundred and two of income but entered people's capitalism yes that's the new catchword yeah that is true that higher higher percentage of households do own some stock today than they did let's say twenty years ago ok as many as forty nine percent of all households have some stock ownership is that also through pension plans  mutual fund yeah seven hundred narrow pretty well that's the point that a lot of these people have very small stock holdings you know five or ten thousand so it gives going great everybody can become an investor and they can repay that's not the case that's absolutely not the case would be what some people who try to argue that is the case for political or other reasons well i've met people will will will look at that forty nine percent number and say hey look everyone is becoming a capitalist little although it's the no longer a conflict now between labor and capital but you know the point is that while the average family middle income family owns on average about ten thousand dollars worth of stock in the upper income class that's people with one hundred thousand dollars or more and own on own as much wealth as proximately forty five percent of all americans not riff that really that yeah i had seen a figure maybe that set me straight was two hundred and forty eight incredible concentration of wealth and income yeah yeah absolutely true that the illusion that wealth is spreading out throughout well our society and then maybe throughout the world is really an illusion isn't of yeah yeah and in fact if anything it's becoming more and ninety seven it's it's leveled off the last few years it happens i income yeah but in terms of wealth it's still still rising and is it is important to how what we mean when we say wealth and how we define what we mean by wealth and that some wealth is really available that can be converted into let's say how do we define what wealth is some wealth is convertible immediately into into income or how do we define what w mean the assets that people own include housing you on your own home and broods other types of real estate clued bank accounts checking account money market is like a automobile could be something that you're not going to be able to get something for yeah that's a that's sort of one of those borderline issues do you and you know that important i mean it makes a little bit of a different ok yeah you get if you include automobiles in your and but on the whole we understand what we mean when we were talking about wealth and how we get that net that value in that and we we have an agreement bomb of the economist because there is some disagreement among economists who look at our economy our situation there is you who will say there's a problem of there being disparity between the well to do and it's growing in as you say the study of the increasing inequality inequality of the american economy and there are other economists who will look at the figures with a look at the facts of the presidential candidates in the what they're looking they say everything from now what is the jay laze citizen to bill to think and how do we we get at some sort of a quantitative thing to where we can get at what the reality is  some people who look at the numbers and say well you know there's not really an upward trend you know just because things do with go around a little bit over time that the greatest economy we've ever had  and everybody saying is the greatest economy we never had and let's share this process let's move build on this front really let's not change anything let's not talk about things there are some disaffected people but you understand one and know that that's absolutely true and  's true that that the last two or three years in the quality at least of income has moderated it hasn't really gone up but it's taken you know an incredibly lowering of the unemployment rate s bureau of labor of labor statistics these are you know government agencies but they're they're independent they're set up as independent agency they're not under the direct influence of the president or interest or some people say the government has an interest in moving inside in a certain way or yeah i mean you counting them if anything they would they would try to show the things are rosier than they are or that they got that right yeah sure to get flat you can pretty much believe that's the case also the way they measure unemployment some people would say they changed the standard by which we measure our employment so that if you have a four percent now in employment that in another time it would have been eight percent or would have been more fudging the figures are changing have the figures of measuring that stayed consistent with the certainly within a certain range that make them valid through time to get you know comparative reading so yeah yeah by a lot of yeah the employment rate  which is a sort of sad way to do it but then that's probably tied into the war on drugs and that sort of thing and yeah but but mr to see the point of view that's about two percentage points off the unemployment rate ride that if these people were on the streets they probably would be  weren't temporary they had benefits they had a whole lot of things that went along with them and they had a longer thing a longer term prospect in terms of holding a particular job that's i think things are moving very quickly now there's a lot of young people and they're brought in and hired they had a lot of downsizing in the eighty's with a lot of senior management people and that sort of thing and then they brought young people and a lot less own and they didn't give them they didn't give them benefits they didn't have a security they don't have collective security yet jobs that provided these good benefits health insurance pensions vacation time and they've substituted them with hourly jobs that don't carry any benefits with them and so you know we have a health insurance crisis in this country we have seventeen percent of the population without any kind of health coverage and this includes a lot hour and you work forty hours a week fifty weeks so that barely gives you ten thousand dollars and on a property rate poverty line for a family of four is sixteen thousand  right you know and you got that but that yeah that's a big change if you were at the minimum wage in one thousand nine hundred and sixty eight all right you would be above the poverty line and now if you are you would be well you know well oh well oh yeah so that's an indicator right there and usually back in the good old days the four thousand and fifty one guy would go out and work at chrysler factors i mean you'd raise a family of five with his wife taking care of all the good all right now they go out and then they want to have a career great but they go out and because they have to to meet the more we got two people working for what used to be handled by one yeah and that's that's that's the other side of the story with wages flat and actually wages have declined at the bottom bottom half of the distribution just take the bottom half of and we need him you know what i mean no is the thing to that but this is a thing that is not i'm trying to you you're right on that and in general you for your perception the inequalities that exist in the economy are paid i mean are obvious and are part of the thing are part of the trends are not good and it's something that we the citizenry and the policymakers should understand better than we do yeah or least bring attention to it don't know don't vote under the rug boom which is  or what it is yeah when what is it because it was at the supply side was it you know what caused this to happen and if this is the deleterious what should we do about how can we address it well  declined in importance they used to represent one rd of workers back in the fifty's and now they represent only twelve percent of the labor force then the question that would come from that is why  severely severely contract in this country and much is going on with much of it's been been outsourced to other countries you know so we've had a big decline in our core industries like the steel for sure rubber chemicals the bill some of them so we've lost a lot of the hard core manufacturing jobs which was for the heart of the union movement but part of it is is i think this shift in political ideology  very marginal to the union movement as as a whole so that you know unions have gotten a bad rap and part of it is political i think when when reagan said you know washington is no longer going to support labor have you know if there had been if they had fired them and then there was something absolutely vital and they couldn't do it but somehow they were able to get along you have to remember actually i remember flying during that time they know labor was no longer going to receive washington support and i think that there's a lot to harm the labor movement because when they tried to organize you know was really understanding and he said they stood on about harbor and what the labor unions would always ask for with an industrial policy and what they always go for each time was more they wanted more money they would get more money and so they do that but that this thing that we've talked about earlier is that the actual production is becoming more and more less and less the import that the labor is making to the productive process in a ratio with other things that could be own in a capital kind of capitalism kind of way own technology or what have you was it was less and less they were contributing less and less to the overall production of goods and services and he said that they should have but they never did they could have collectively bargain for having an ownership stake in the technology that was increasingly responsible production but all they could do was see a pattern by which they tried to get more and more for their labor which was in a race with the technological system that was destined to play to replace them and they didn't open there but alternative system for income be distributed other than labor and we're still in that fix now yeah we're still in the classic by relatively few people and the masses of people don't talk or aren't able to talk about having ownership for the mass democratizing ownership of the technology because we don't have an op a theoretical economic theoretical system that let that perhaps from her political or other you cannot like or intellectual leadership should have been thinking that this is going to be coming that the labor import is going to become less and less yeah well the it's true the unions in this country tended to be very conservative and not think think about the broader picture of the future they they were stuck in the classic capital labor of confrontational mode which characterizes labor relations in this country much different than the continental europe where there's there's much more of  a of a commonality between labor and capital they meet once a year in germany let's say or sweden then they you know work out the wage arrangements for much of the country's workers and much more of a cooperative mode yeah so i think labor has been confrontational but i think capital is also been confrontational that and that capital in this and the people that were in the disadvantaged position would be wanting to have a job where they could make money on the wages of gone down the things that they've been able to get now you've got everybody the young people getting jobs they get people are employed enough to where they're not discontented or anything but that that formed that process by which began with the steam engine and began with the whole process of the technology being more and more response in the tech and if you have a private property economy somebody can own  that you have a leftist critique you say the private property is evil institutions or rather than getting private property ownership to the mat democratizing ownership of that which is producing the wealth we're still saying that people should get their income by having a understood that can give advice to the political leadership and is there a need for a new one a vision thing or a new way of seeing this rendezvous we have with the with the economic system that might move beyond productivity analysis and begin to get some questions of the actual production of what's gone on and maybe spread some ownership of that which is actually producing the well not stressing so much the labor input the production well yeah but i think there has to be greater spread of asset ownership in that ownership as opposed to a right to a job yeah but still i think labor has to get its do and i mean look at this the minimum wage the minimum wage that it's not if it's good for bill gates or bad good for somebody who's very well off to own the technology and the tech and everything why isn't it good for everybody and why do we not somehow set up a thing rather than just you know increasing wages although that's probably something good to which is creating the web which agreeable time where we have a instead of a big very shallow thing that that the ownership of assets is very widespread everybody's on there in keeping with the way things are increasingly perhaps going to be produce be that the position of owning all those things that are producing everything are getting overwhelmingly wealthy and the owner there's no pattern for disseminating ownership or no patterns like look twenty years out twenty to one million one hundred and two thousand and thirty years out or patterns in are having a monitor of their kind of thing and we don't have a vision that's going to lead to equity no that's true but my problem is how you get from here to there how do you get to a situation where you can get to the ownership to spread and one yeah right how do you st of all is that a good thing is it appropriate thing or does it violate some idea of how things operate or that is it immoral well something like that you know that one is that a good thing is that appropriate way things are going and if so what is done in order what gets in the way that most people have no collateral put up or to go in a bank they can do it all of that there's some way that that could be dealt with collectively and in a political way mr bradley was yeah well i think one one mechanism that has been proposed and it's actually part of our law something called individual development accounts these are actually subsidized savings accounts for low income families ok and in fact clinton has proposed something similar cold usas universal savings accounts again these would provide some kind of subsidy to low income families in order for them to start accumulating assets now i mean you know the frightening thing is that there are still a  significant percentage of a family said don't even have a checking account i'd know it's what absolutely that's absolutely the truth that's the truth and that's what you that we've allowed this to happen and to get such a disparity in the trend of that there's nobody with it some people even feel happy in their immediate situation but the inequalities there in the trend are not good on a national scale and on a world scale and that something is going to have to be done to deal with it  seventy five going from fifteen percent of all families up to sixty five percent and there was and that was partly spurred by the g i bill yeah right woods gave subsidized mortgages you know we've seen virtually thank you and i do think graduate you enormously on the work you've done this better than anyone else that there is that i can see that is documented this year very recommended to go to your book to get a look just show at the very end top heavy and it's going with the title of it a study of the increasing inequality of wealth in america ok and you can easier new york city at the york university happen to bring you a reception thank you very much for coming in when conversations invite you to do that again they will come back to in time it will once again thank you very much for coming in and for all your work thank you for having me not at home until it's time starting up a project with the port foundation to actually try to