Ask Prof. Wolff

Have a question for Professor Wolff? Want to suggest a topic or article? UPVOTE your favorite questions or submit your own. Top suggestions will be given a video answer on YouTube.
Professor Wolff receives hundreds of questions per week covering a wide array of topics, from economics and politics, to historical movements and current events. While Professor Wolff does his best to reply to some questions on Economic Update with Richard D. Wolff, he's received more questions than can be answered individually. Prof. Wolff will now provide video answers to his favorite questions on this page.
Select "upvote" or "downvote" to promote certain questions. You must be logged in to vote or submit your own.
Please check your e-mail for a link to activate your account.

Alternate funding of UBI

I've heard you discuss UBI in the past and one of your major concerns with it as a concept is wage earner resentment. I was thinking on another subject recently and inadvertently came up with a funding model which would potentially resolve this problem and wanted to know what you thought of the concept and its viability.

The model is premised on major actions and everything else seems to logically flow from these.

1. Do away with minimum wage but set an executive pay cap of 100 times average worker pay.

2. The creation of "community interest" shares within companies which make up a fixed proportion of shares, if new shares are offered or created a proportional number must be allocated for community interest. All municipalities a business operates receive an equal portion of these shares which are used to fund a Universal Basic Income.

My thoughts are that this mechanisms would improve worker wages due to the first change and provide the economic groundwork necessary to establish cooperatives with the second. Attempts by businesses to manipulate governments to improve their profits simply feed back into the UBI and it encourages citizens to focus their purchasing and business activity into local and regional businesses who will tend to divide their community interest pool amongst fewer municipalities. This tendency would encourage shareholder flight from larger national/multi-national companies toward smaller regional ones and likewise cooperatives. I'd love to hear what you think

3 comments Share

Your example of a boss acquiring a new technology.

If a boss lets everyone work 20% less when a new tech is acquired, do the workers also earn 20% less? Thank you. I guess they could get a part time job if they needed one.

posted an official response

No, the point of the example was this: if a new machine enabled the same output with 20% less labor, the typical capitalist would fire 20% of workers, sell the same output as before the net machine at the same price yielding the same total revenue. But instead of paying the 20% fired workers' wages, he would now pocket that part of the total revenue for himself as expanded profits. The profits of the capitalist thus come NOT from the technology but rather from how the technology is used in the business. Now consider the alternative: no one is fired; instead the new machine enables all workers to do 20% less work (Fridays are now made par of the weekend) while getting the same pay. The capitalist gets the same revenue and the same profit as before the machine was installed. The winners in this alternative are the workers who all get a 20% reduction in labor. If worker coops replaced capitalist enterprises, the alternative would be far more likely how technology is used than the typical capitalist way.

6 comments Share

Re: Marxian Economics: An Intensive Introduction - Session 1

I have 2 mention a reading list that was on this site ( but I can't find it. Can you point me to it? Also, it seems that you are oversimplifying the beginnings of the Soviet Union and workers control...I believe your point was the workers never had control of their factories from the beginning. From my reading, that is not correct...the soviets were started by workers and they actually ran the may be fair to say that the Bolsheviks took over and the workers lost is also fair to say that the militant workers were brought into the is also fair to say that many of the militant class conscious workers died defending the nascent workers state from the capitalist invaders. It also seems that they were having problems keeping the production up to get the supplies needed to the front for the fighters. They opted to use managers to run the factories to keep things going. Getting from "here" to "there" even if you have the best marxist analysis is not simple... I am looking forward to the other "episodes" in the lecture series. I am sure you cover this more in your book: Class Theory and History: Capitalism and Communism in the USSR but it is about $40 ...looking forward to your comments.

6 comments Share

Co-operatives moving production overseas.

As a man who has worked as a factory supervisor, I have seen men at work first hand and managed them and their environment to keep the factory running smoothly. I tend to agree with you that a co-operative way of organising and running a factory could produce some benefits both to the company and the workers, but I disagree that the workers would not agree to moving production off shore if they had the chance. It is my experience that men come to work to have the easiest and most pleasant eight hours possible, and will shove the work onto someone else if the opportunity arises and they think they can get away with it. Consequently, if a factory staffed and run as a co-operative decides that the product they make can be made cheaper overseas, what would then stop the co-operative from doing this? Nothing seems to stop the capitalists from doing it, and I can’t see anything that would stop the co-operatives from doing it either. Itis mu opinion that they would have few qualms about doing it, if none of them lost their jobs as a consequence and their profit levels remained at least the same. They would then come to the workplace merely to distribute the imported goods, and to collect the money. If it is profitable for a commercial enterprise to do this, then it would be profitable for the co-operative to do this as well. Am I missing something here or is there something in the model you are using to set up the co-operative in such a way as to prevent this from happening?

posted an official response

Capitalists can and do move production overseas if and when profit opportunities can thereby be exploited (due to lower wages overseas usually). But notice that the capitalists stay at home and usually bring the profits back home too. In the case of a worker coop, that would not likely happen. When production moves overseas, so do the jobs involved and thus too the individuals in those jobs. Their lives would be disrupted and changed in ways utterly different from a group of capitalists making the comparable decision. Moving production is moving jobs. A worker coop move abroad would displace the worker and his/her family, etc., disrupting the lives of children, relatives, etc. And all that would be taken into account when the workers in a worker coop are making the decision as to whether to move production overseas or not. Capitalists making that decision are under no such constraints.

4 comments Share

Is Renewable Energy acually good for society?

Professor Wolff; Thank you for the information you impart each week. On the 02Feb2017 podcast I learned more about the Vermont brewery and the thoughts of Hegel. The latter is important as he seems to be a favorite of my son's, who is currently in grad school studying philosophy. I understand very little of what my boy says these days. As with many who write you, I do disagree in one area. Renewable Energy. While climate change is certainly a serious issue, and I'm glad that many of the aspects of climate change are entering popular discussions, the proposed solutions are invariably non-solutions designed merely to make the populace feel good about doing something. If I might explain. RE is mostly large hydro power with some geothermal, wind, solar, and maybe tidal. Most people focus on wind & solar, and there is lots of installed capacity, but W&S tend to greatly under-produce energy capacity. This is not mentioned often enough. Wind produces about 30% of potential capacity and solar even less. Yes there is lots of wind and sun energy available, but we shouldn't have to eliminate most of the natural environment for the sake of using lots of W&S – that's backwards thinking! I would also mention that many of the best spots for wind are already taken (or protected), so future builds will be in less efficient locations. W&S can be useful, but not as a primary energy source. The major issue with W&S as currently used is that it supports the top 1% more than it assists the general population. This is your area of expertise, Prof. Wolff. Federal subsidies for RE takes many forms. There's the Renewable Portfolio Standard (RPS), which requires utilities to take energy from W&S – regardless of whether the grid can actually use that power. Then there are more subsidies for manufacturing or installation. Every few years I have heard that “we must pass legislation to support solar/wind or the industry will grind to a standstill”. Good riddance to welfare industries is my response, but the legislation invariably passes. One other type of subsidy is the Production Tax Credit (PTC) – this is perhaps the most heinous. W&S producers connect to the grid and get paid directly by the govt for what they produce, then the grid also pays them for what it must take from the producer (remember the RPS?), ...and so it goes. Do you know many who are both rate-payers & tax-payers? However when there is an abundance of sun and wind, things get interesting! The grid doesn't need the energy, but W&S producers want that PTC payment... so they begin to pay the grid to take the energy is doesn't need – like a bribe! This invariably leads to negative wholesale prices (there are 5 minute auctions between utilities and power producers throughout the day & night). Yes, the owners of wind and solar farms get so much in subsidies that they pay the utilities to take energy that isn't needed! Otherwise they would have to curtail production and the govt would not pay out the lucrative PTC. Now if these installations were owned by common people this would be a slightly different story. But these are generally owned by the richest in our society – so this whole issue of RE energy (IMHO) has become a smokescreen for welfare to the wealthy. And the common people, led by green environmental groups (who do take money from fossil-fuel interests), cheer on. “Intermittent renewables get much of their money from subsidies of various types, not from the grid. Therefore, they can bid into the grid at artificially low costs for their power, even bid in at negative numbers (we will PAY you to take our power!).   This lowers the power price on the grid, and particularly hurts plants that make a lot of power, like base load plants.  As base load plants retire because they can't make enough money to keep operating, the amount of capacity available diminishes, capacity payments go up, and peaker plants get proportionately more money.  Peaker plants always get a higher percentage of their money from capacity payments, but when base load plants retire, they get even more money from capacity payments.” If you wish to pursue this further you might contact a fellow Stanford alum, Dr. Alex Cannara. He has left his office address & phone number littered around the internet. One other talk given at an energy conference was by Andrew Dodson, I do realize that RE is something pushed by your partner-in-media, Truth-Out. Many of their articles are quite good on social issues. The same can be said for most media outlets. A phrase I've used in the past couple years is “Truth-Out is out of truth”, at least for STEM issues. I'm merely asking you to look a little further into the issue, and perhaps be a bit more cautious about hyping RE in the future. Yes it has it's place, but connecting large-scale RE to the grid is proving disastrous for our society. I hope you can understand my concerns. Please, have yourself a wonderful week – in spite of headlines and such! Respectfully; Christopher Bergan Iowa City

8 comments Share

Soviet Union and North Korea

Why did the Soviet Union fall? Why in satellite photos are there no lights in North Korea, yet South Korea is full of lights?

6 comments Share

high tax on 99% to deal with the great Depression and Recession.

any paper or books on the issue. I am concerned with the idea that the rich will leave the country to evade the higher tax for lower tax. how to stop or any better way to deal with that issue/?

4 comments Share