DAVID B. GRUSKY: Well, thanks for such a wonderful introduction. It's a real pleasure to be here today. As Kate noted, this place goes way back for me. It always has a very special place in my heart. So it's great to be here. And you have to be nice to me, so I continue to have fond memories of this place.
So this is one of these talks about the big forces that are in play affecting our lives. If you don't like that kind of talk, now would be a time to silently leave. But otherwise, I'm going to go forward. Of course, one of the huge forces in play-- one about which I presumably don't need to talk about much-- is the take-off in income inequality.
If you've been asleep for the last 20 years or so, I'll give you-- suffice it to say that it's now the case that the top 10% of the distribution controls about 50% of total income in the US. And that means that we're at a place now which is roughly the same as what prevailed during the first Gilded Age, some 50 years ago. No one would dispute how important that takeoff is.
But what I want to suggest-- and here's the key argument behind my talk today. What I want to suggest is that, in fact, what gives rising inequality its teeth-- what makes it so powerful and consequential-- is that it's joined up with rising commodification. That argument, which I'm going to elaborate for the balance of today's presentation-- that argument, of course, entails standing on the shoulders of giants, both normative giants and empirical ones.
And I want to make it clear that I'm fully availing myself of that foundational work of others. And I'll be talking about some of it. But I hope-- but of course, it's all about your judgment on this matter. But I hope that I'll be advancing that argument just a bit.
So I'm arguing that rising commodification is a second force-- a very consequential force-- that, when taken with rising income inequality, gives that rising income inequality its teeth-- makes it all the more powerful. So what do I mean by rising commodification? Well, there are two ways in which goods, services, and opportunities can be allocated.
One way is just a prerogative of group membership. You become a member of a group. And automatically, by virtue of that membership, you get access to particular goods or services. The second way is, of course, to allocate them on the basis of money. And the rising commodification argument is simply saying that money is increasingly important over time, in the allocation of goods, services, and opportunities.
Now, to make this argument work, I'm going to have a very generous understanding of how money is implicated in the allocation of goods, services, and opportunities. That's why I want to lay out the way in which I will be deploying this generous interpretation.
Well, the point here is that, sometimes, the purchase of a good or a service is quite direct. So think about, for example, the purchase of college schooling-- something that I worry about these days. That's just a matter of putting the money on the table, right? Give the money, as a parent usually, to the college and, sometimes, the student. And then the service is delivered, right? So that's a direct purchase.
But that's not the only way in which money is implicated in the allocation of goods and services. Let me give you a few other ways that I'll be talking about at length. First off, there's what I would call a "package deal purchase." So an example of this would be-- often, if you're a good liberal, you might say, I want to use public schooling. You have a commitment to public schooling or what's called public schooling.
And that means you don't want to buy-- you don't want to put money directly on the table to buy private schooling. You think you're a better liberal if you do it the indirect way, the package deal way. So you go to a fancy neighborhood. You buy a house there. You pay loads of money, because you're buying high-quality schooling as part of the package deal, right?
And now, you feel good. You're still supporting public schools. But of course, part of that price for that house in that fancy neighborhood is the price of having access to high-quality public schooling. And we call it public schooling. It's not. It's all about putting money, as part of a package deal, on the table. That's another way in which, to some extent, maybe, the role of money is concealed. We actually call them public schools.
There's also what I would call "the installment plan purchase." So here, marriage is a great example of this. And in effect, given that we don't have dowries, we don't have bride's pieces, you don't actually have to put the money on the table for a partner. But you do pay on the installment plan, right?
The expectation, when you enter into a marriage partnership, is that, over time, you will provide for a certain style of life. And if that implicit contract is violated, there will be consequences that might be the end of the partnership-- the marriage. So that's the installment plan purchase. You purchase over time. And there's a commitment to effect that purchase over time.
The third way I want to note-- and again, it's kind of the concealment of the role of money in the purchase of goods and services-- is what might be called laundering, through an indirect purchase. So here, an example might be parents doing what's necessary to position their children for an elite college. And then that, in turn, positioning that child for marrying someone who will make a lot of money.
So it takes money to make that happen. You have to first pay for the high-quality primary and secondary schooling, either directly, as we discussed, or indirectly, by buying your way into a high-quality neighborhood. You have to do that to position your children. And then, of course, you've got to put the money on the table, as a parent, to get into a place like this.
And then, by virtue of having done that-- putting the money on the table in all these indirect ways and, hence, laundering, as it were, your money-- then your child is finally in a position-- finally in a position to marry well. And by that, we mean, marry someone who makes a lot of money.
So we don't think of that as directly putting money on the table. But if you don't put the money on the table-- if you don't buy that high-quality primary and secondary schooling-- if you don't buy that college, your kid's not very likely going to marry a high-earnings partner. OK, so that's what I mean by the role of money. It's a wide-ranging understanding of the role of money. But I don't think it's a misleading one.
So now, how does commodification happen? It happens in lots of ways. But I'm going to focus here on the loss of zones that are protected havens from the market. And there are three key protected zones, I would argue-- the family, the community, and the state. These are zones that have been rich in public goods. And I'm going to be talking about how these zones are becoming less protected. And hence, we have commodification.
Three protected zones-- protected havens from the market-- family, community, and state. I'm going to talk about how those protections are withering away. So how then are these protections withering away? Three processes-- and I'm going to be talking about this at length. So worry not, if you don't get them instantly.
The first process is exclusion. That is, you need a certain amount of money to get into these protected zones. Some people will be so poor that they can't get their way in. They can't get into them at all. And insofar as the entry price is increasing over time, then you're having rising-- the rising role of money in precluding entrance into these protected zones. So that's exclusion.
Secondly, you might get in. You might have enough money to get into these protected zones. But you're going to get into a relatively poor version of these protected zones. So there's segmentation of these protected zones. There's better or worse ones. And you need a lot of money to get into the really high-quality ones.
And then third, there's erosion. This means that these protected zones are, over time, becoming ever less protected. So these are zones, remember, that are rich in public goods. Well, they're becoming ever less rich in public goods. So even getting into them, for anyone, becomes less consequential, in terms of protecting you from the market.
So I'm going to start with an illustration of these dynamics, an illustration that, in and of itself, doesn't matter one whit. But hopefully, it will be a vehicle with which to make these processes clearer. So we're going to talk about cruise ships and how these three processes play out in the context of cruise ships.
So exclusion would mean that the poor can't get into any cruise ship. They just don't have enough money to take a cruise. And so you're just excluded from that particular experience all together. Segmentation would be all about the poor perhaps being able to take a cruise. But they get pretty lousy cruises.
So for example, I think, one of the low-end cruises or cruise lines is Carnival. So maybe they can afford Carnival. But they couldn't afford the higher end lines. And as it turns out and as we'll discuss, the higher end lines happen to be the ones that are pretty de-commodified.
So this is what one travel agent said about Regent, which is a high-end line. Quote, when Regent says its cruise fare is all inclusive, it's not kidding. Accommodations, shipboard meals, alcohol, in-cabin mini-bars, room service, and on-board activities are all included. So the poor get a la carte lines. The rich get the de-commodified ones.
And then finally, there's erosion. I'm not saying erosion is happening in this particular context. But if it were, it would mean that all cruise ships are becoming more of the a la carte variety. Think-- say, airlines, where perhaps that is happening. So this very trivial example foreshadows two points that are going to play out, as this talk unfolds. The first point is what might be called the commodification of de-commodification.
That is, you buy money-- you pay for the privilege, often, of gaining access to a de-commodified zone. The most expensive cruise ships are the ones that are run in an all-inclusive way. And it costs money to get into them. So it suggests that people value de-commodification. The more important point is that it takes money, often, to get into these de-commodified zones. And I'll be talking about that at length.
The second point is that this is a largely within-country affair. So there are within-country differences in commodification that we often overlook. So in the past-- let's say, you're just born. In the past, you're just born. And the stork is taking you to your new home. And you might say, just drop me in Sweden. And I'll be fine.
If you're risk averse-- you've got the Rawlsian veil on. And you'd say, sweet. It's de-commodified. You're going to be fine, even if you're poor. That's the past. In the present, you might say to the stork, really, you know, I don't care what country you got me into. Just make sure it's a well-off family. Because the well-off family is going to gain you access into de-commodified zones that are in play within lots of different countries.
So what this means is that the two big trends of our time-- rising income inequality and rising commodification-- are playing out increasingly in a within-country way. And I'll talk a bit more about that as well. But now, I want to get to the heart of the talk. And so the game plan is to talk about each of these protected havens-- remember, it's families, communities, and states-- and then show how these processes in exclusion, segmentation, and erosion are playing out for each of those three protected havens.
That's the game plan. So that leads us to a 3-by-3 table. This is the cell that everyone talks about. This is the cell where you talk about the erosion of public goods provided by the state. Everyone talks about that. I'm not going to talk about that. I'm going to talk about these other eight cells that, I think, haven't been given their due attention. And I'm going to go row by row.
So I'm going to start, first, with exclusion and lay out how it has implications for the family, the community, and the state. OK, row one-- and here are the main arguments that's going to cut across these three protected zones-- is that the disadvantaged population is increasingly locked out of these nice benign havens that are protected from the market.
Let's start with families. Families are nice, right? When my kids are home, I do not charge them when they go to the refrigerator. I don't insist on rent for their room. It's a sharing zone, right? And one might say, the way-- an important way-- in contemporary society, is the way in which we express our love for one another is to share-- Is to say, we're going to have a zone that's rich in public goods. That's what families, to some extent, are, right?
The point here is that that zone-- that family zone-- that sharing zone-- that protected haven is increasingly a luxury good. And I'm presenting here work coming out of the Hamilton project. The main point of which is, first off, there's a decline in folks-- in women, in this case-- who are married, between the period of 1970 and 2011. It was about a 20% drop in the share of women who are married during that time period.
But more importantly, and more to the point, is that not everyone has borne the effects of that drop equally. The folks who are really at risk of not getting married anymore are those at the bottom of the earnings distribution, at the 45th percentile and below. You see a precipitous, like, about 26% drop in marriage in that bottom zone of the earnings distribution.
And then, as you move ever higher in the earnings distribution, you see that the decline has been less prominent. In fact, at the very top-- in the top percentile-- there's been a slight increase in the share of women married. The simple point-- the poor are increasingly likely to live outside of marriage and the traditional family. And that means they don't have access to that sharing zone.
So let's move to communities. This is another zone in which there's lots of public goods-- not as many, maybe, as a family, but still quite a few-- public safety, education, and so forth are public goods that are supplied to members who are in communities. And the simple point to be made here is that, if you're poor, as indicated here by being a high school dropout, you're increasingly at risk of being locked out of participating in traditional communities, because you're going to be incarcerated. You'll be in prison or jail.
So this is work coming out of the shop of Becky Pettit, Bryan Sykes, and Bruce Western. And you see, the gray bars pertain to the proportion who are in prisons or jails in 2008. The white bars are in 1980. And you see that, if you're Black and a high school dropout, you have a 35% chance of being in prison or jail. And that compares to a much lower number in 1980.
And the same holds-- the same increase in you're likely to being locked out of traditional communities by virtue of being in a prison or jail holds for whites and Latinos.
So what about exclusion from the US? A big development here is that, increasingly, if you want to get into the US, you've got to buy your way, either directly or indirectly, into the country. So the direct way is the EB-5 visa. If you promise to invest in an American business, you can just buy your way in. And that's increasingly prominent.
There's the indirect way too. If you're in a high-end occupation-- either a so-called NAFTA professional or an incumbent of a needed occupation-- then you pay indirectly, through taxes, by virtue of being in one of these high-end occupations. And you can get into the country that way too. So increasingly, you put the money either directly on the table or you do it, as it were, on the installment plan. And you can get in.
So now, let's turn to row two. So here, we're presupposing that you do get into these benign zones. Of course, some poor people do. But the question is, how good?-- what version of that benign zone can you access when you're poor? And the claim is that the most desirable havens are increasingly hard to access when you're poor.
So let's march through the same three protected havens-- families, communities, and states-- and see if I can convince you of this. Let's start with families. So now, we're conditioning on people getting married. But the question is, how much, in the way of public goods, are going to be available to you when you get married? Well, that depends on how much your partner is bringing into the marriage.
And with the rise of positive assorted mating, basically, that means you've got to have a lot of money in order to get a partner with a lot of money. If you don't have much money, you're not going to very likely-- as was possible in the past-- win the lottery and marry someone who makes a lot of money. That doesn't happen very much anymore. What happens instead is that you're likely to marry someone who also has very low earnings potential.
So this is work by Rob Mayor. And there's actually evidence of a bit of a U-turn, rather like the U-turn that you see with respect to income inequality. But the important point is, you're likely to be in a homogeneous marriage, where you have the same educational level and, hence, earnings potential, as your partner, is increasing over time. So again, this isn't the case where you literally have to pay for your partner. What you're offering up is earnings potential in the future and a future commitment to provide a certain style of life.
OK, let's talk about neighborhood lotteries next. So again, we're presupposing that you get in. You're not locked up, because you're poor. You're not warehousing the poor, which is our main poverty plan in the country. You're not locked in. You actually have access to traditional community. So let's ask what type of community, if you're poor, you're likely to find yourself in.
And it was once the case, not so long ago, in the past, that you might win the neighborhood lottery. Just like you could win the family lottery when you're poor and actually marry someone who's not so poor in the past, so too, in the past, you could win the neighborhood lottery. And even if you're poor, you might end up in a high-amenity neighborhood.
So for example, in Palo Alto or Stanford where I now live, it was once the case-- not Stanford, but in Palo Alto-- that if you were poor-- about 75 years ago, if you were poor, you could actually live in an apartment in Palo Alto and then, basically, win the lottery and-- most importantly-- your children win the lottery. They win the lottery, because now they're going to have access to those high-quality Palo Alto schools, even though they're parents are poor.
But what's happened now? There's rising economic segregation. The poor live with the poor. The rich live with the rich. So Palo Alto's just full of only rich people. There's no way, as a poor person, that you have access to Palo Alto anymore. And that's happening throughout the country.
And basically, that means that we have the disappearance of a lot of [INAUDIBLE] amenities-- of neighborhood amenities. If you're poor, you're going to very likely now live in a poor neighborhood. And that means that you don't have access to high-quality public goods.
OK, let's move to the state now. So to get into the US, what you now have is basically a two-class system. If you're undocumented, you get a low-quality state. And if you're documented, you get a high-quality state. If you're undocumented, you get very diminished access to public goods. If you're documented, you have a full complement of public goods available to you from the state.
How do you get into the documented side of the equation if you're undocumented? Well, it would help if you could marry someone who's a citizen. But how do you marry someone who's a citizen? Put the money on the table. Right? Well, you don't have money, because you're poor. So we have a two-class society, with respect to access to public goods, and increasingly so with the take off in an undocumented population.
OK-- row three. So now, we're talking about increasing internal commodification or the erosion of the provision of public goods within these protected zones. So the protected zones are becoming less protected. The havens aren't havens anymore. That's the argument I'm going to make. And I'm going to make it across these three types of protected zones.
Let's start with the family. So what's happening to the family over time? Well, basically, I would say, the big development is the sheering off of functions that were once born within the sharing economy and, now, throwing them out into the market, where you need money to get services that were once provided within the family. So think about child care.
In the past, when you were born, it was, like, your right to get loving care, typically from your mother, as part of your membership in the family, right? It was something that was provided by the family. It wasn't commodified. But now, as we have the rise of two-earner families or single-parent headed families, it's high. It's very difficult to provide child care within the family.
And so now, that's something that you increasingly buy on the market, which is fine for people who are well-off. They have the money to buy high-quality child care. But if you're poor, you don't have the money now to buy high-quality child care. And so that puts you at a disadvantage. So that particular function that was once part of the family has now been thrown out into the market, to the disadvantage of those who don't have the money to buy that particular service on the market.
So think about elder care-- same deal. So once something that you could count upon to be provided upon by the family. In the past, you get loving care by your children as you get old. Now, if you're well-off, it's just fine. You put the money on the table. And you get people who will pretend that they love you. And that works out really well.
But if you're poor-- if you're poor, you don't have the money to put on the table to have people pretend that they love you. So again, we have the sharing economy eroding within the family. And increasingly, if you want that same service that was once provided in the family, you have to put the money on the table.
What about financial risk sharing? That was, again, something that families did, right? They shared financial risks, so that, if you're not doing all that well in the labor market, for example, then you might turn to your partner and ask that partner to help you out. That's what the sharing economy is about within the context of the family.
Well, that's eroding away. What are prenuptials all about? It's saying, I'm not sharing. There are limits to the amount of sharing that I'll do. What is cohabitation about?-- same thing. There are limits to the amount of sharing I do. I might walk. So we're bracketing off assets. And that limits the reach of these within-family public goods.
And I would argue that this erosion of public goods within the family is perhaps every bit as important as the erosion of public goods within the state. It means that, increasingly, your capacity to afford some of the key goods and services rests on your capacity, again, to put the money on the table.
Let's talk about the community now and the erosion of the capacity of the community to provide public goods. The first point I'd make here is that communities are arguably less important when it comes to training children. So as the critical credential, in terms of getting you into the labor market-- becomes the college. Increasingly, the community is not delivering that service anymore.
It does to some extent through community colleges, of course. But insofar as you're talking about four-year colleges, they're not typically provided by the community. And so the community is not doing the kind of training that matters anymore. So it's thrown out into the market where you have to buy that college degree that matters so much for your labor market prospects.
The second point to be made here is that there's a growing divide between poor and rich communities. The poor communities-- think Detroit-- no longer have the capacity to provide basic public goods. Whereas, the rich communities do. So you have erosion of the capacity of the community to deliver what it once delivered. That, of course, means that if you want those goods or services, you're going to have to go out to the market and get them.
And then the final point that I'd make here, with respect to public goods within the community, is that, you have, in effect, the rise of income-homogeneous communities. That's what growing segregation means. It means that the rich are living with the rich. And the poor are living with the poor.
And that means that, insofar as the community is taxing and then delivering public goods on the basis of that taxation, it doesn't matter all that much, with respect to redistribution, because the people being taxed are all, roughly, in the same income class. So it's not a redistributive function in the way that it once was.
So we're finally at the 3, 3 cell. I'm not going there. Because so many people have gone into the 3, 3 cell, we know about what's happening with respect to provision of public goods in the state. OK, so my claim is that there are two master forces at work. It's not just that the poor have, by virtue of rising income, inequality ever less money relative to the well-off. It's also that money is increasingly needed to secure goods, services, and opportunities. And so that's rising commodification.
So you're doubly disadvantaged if you're poor. Of course, you have less money than the well-off. And you can't compete very successfully with the well-off when it comes to buying certain goods, because you have less money than them. And they're going to bid prices up in a way that means that you can't, then, afford those goods or services. So you're disadvantaged with respect to not having as much money.
But the second and very important complementary force at work is that money is increasingly needed to buy the goods and services in the first place. So if you have less of it, that's really consequential, because that's what you need if you want to get goods and services. So it's the combination, again, of those two forces that gives rising inequality it's teeth.
So if that's the case, then you'd expect that the poor would, over time, be less happy, even if you fixed on income, right? So there's two things that are bad about being poor again. Remember, one is that you have less income relative to the well-off. But the other is that, even at a given income level, you're going to have to use more of it for the purpose of buying goods and services. It goes not as far as it once did. And you're going to be more stressed.
So let's see if that's the case. Here's some data that Mike Hout recently produced. He's using the General Social Survey. This axis pertains to the year. It ranges from 1972 to 2012. He's measuring how happy people are.
AUDIENCE: Is that real [INAUDIBLE]? Or is it non-real [INAUDIBLE]?
DAVID B. GRUSKY: It's real-- yeah. Yeah. And so-- yeah, we have--
AUDIENCE: So 20K in 1972 was a big chunk for the population.
DAVID B. GRUSKY: That's right.
AUDIENCE: Just now-- but this.
DAVID B. GRUSKY: Sorry-- what?
AUDIENCE: $20,000 a year now is-- what? 5%, 10%--
DAVID B. GRUSKY: Oh, are you saying, is it corrected for inflation? Of course-- yeah.
AUDIENCE: So they adjusted for--
DAVID B. GRUSKY: Yeah.
AUDIENCE: [INAUDIBLE]. So then, in the past, it was, maybe, $5,000 [INAUDIBLE].
DAVID B. GRUSKY: Right.
AUDIENCE: Now-- $20,000.
DAVID B. GRUSKY: Yeah, good point. Yeah, so these are corrected for inflation. And so they're presumably representing the same capacity of control over resources over time. And the point is that, at the top, in the high-income categories-- so if you make $115,000 or more or $80,000 to $115,000 or $63,000 to $80,000, your happiness is roughly the same over time. But at the bottom, in these lower income categories, you're becoming less happy.
Now, of course, you might provide some evidence to suggest that the rising commodification might be behind this. But it's very suggestive. And so this is, perhaps, consistent with the argument. But it's consistent with lots of other forces at work as well. And you have to be explicit about that. But it does suggest that, at the bottom, it may well be that you're less happy, because the money is increasingly needed to buy all sorts of goods and services that, before, were directly covered but, now, have been thrown into the market.
AUDIENCE: But if it's real-- if that's a real calculation, then it's not just that people are [INAUDIBLE] poor and that's why they're less happy. It's that, at the lower end of the income distribution, people are falling in happiness even holding real income [INAUDIBLE].
DAVID B. GRUSKY: Exactly, that's the point.
AUDIENCE: That complaint about-- the wages are declining, in real terms, is [INAUDIBLE] to a point [INAUDIBLE].
DAVID B. GRUSKY: Exactly, that's the point. So yes. So the point is that $20K now has to be used to buy childcare. Whereas before, it was provided in the home. The $20K now has to be used to do after school things that before, perhaps, the community directly provided.
So as you have public goods taken away, you need these dollars to do what, before, was directly provided. And that then introduces more stress and less happiness. So that would be the argument. So the second point that I want to return to is that-- and this is, again, a claim that may or may not be true. But it's a claim that I think is provocative and worth putting on the table.
And that's that this is an increasingly within-country dynamic. That is, there's increasingly unequal access to de-commodified zones within countries. So again, when the stork is delivering you to your house, you should say to the stork, what I really care about is not what country you drop me into. What I care about is that you drop me into a family that's well-off. Because that's going to provide you access to these de-commodified zones.
So it's the case then that you have two of these within-country dynamics. We know, of course, there's rising income inequality within countries-- immensely consequential. But the other within-country dynamic that I'm suggesting is, likewise in play, is increasingly unequal access to these benign de-commodified zones.
You got to buy your way into them. That's what exclusion and segmentation is all about. You need money to get your way into them. And that's happening-- uh!-- within countries. So it used to be that all that mattered was if you're in Sweden or the US. If you're in Sweden, you're de-commodified. If you're in the US, you're not. But now, what I'm saying is that it matters where you are, increasingly, within the income distribution. Because income buys your way into de-commodified zones.
So now, I'm going to get even more aggressively speculative and ask the question, why is this happening? And this is-- and as I said-- even more in the realm of outright speculation. But let's just talk about it-- put it on the table. And we can discuss more, after I'm done, about whether or not these speculations might possibly on the market. So you might say, well, why is this happening?
AUDIENCE: Hi. Can you please explain what you mean by de-commodified zones? Because if you have to buy your way into [INAUDIBLE].
DAVID B. GRUSKY: Sorry--
AUDIENCE: Will you give an example of what a de-commodified zone is, please?
DAVID B. GRUSKY: Yes.
AUDIENCE: Thank you.
DAVID B. GRUSKY: So there are three zones that are protected from the market-- families, communities, and states. So in the family-- again, I don't ask my kids to pay for the food they take from the refrigerator and ask them to pay for rent on the room in which they're sleeping, right? So we don't run a little economy in the household, in the family, in which allocation of goods and services depends on your capacity to put money on the table, right?
I just say, because I love you, son and daughter, you can just take the food. And you can just sleep in the room. And that's that. We express our love through sharing. So that's a benign protected zone from the market.
And likewise-- perhaps to a lesser extent-- but likewise, communities are that too, right? They provide, to all people who are members of this community, certain basic public services. They don't ask you to pay for the delivery of a particular service-- like, sending your kid to the kindergarten. You don't have to put money on the table for that. It's just, by virtue of being in that neighborhood, you get to send your kid to the public school. So it's the same kind of provision of services that come automatically by virtue of being a member of that group.
And then the state, also, to some extent, provides those sorts of services automatically, just by virtue of being a member of that state. So those are the protected zones. So in so far as I'm right that everything is being commodified, you might ask, why? And one instinctive maneuver here is that it's just playing out of a neoliberal commitment to monetize everything.
So you could say, well, marriage markets-- of course we should monetize our future earnings power. We shouldn't just give it away. We should get full value for it, right? What kind of fool would just give it away, rather than making sure that the person to whom you marry pays for it in the form of earnings power on their end?
Or the same with states-- you might say, well, how stupid would it be, as a state, to just give away access to a very desirable commodity? You should make people-- if they want to come to your state, they should pay for it. You don't give it away. And neighborhoods-- likewise-- the high-amenity neighborhoods, the Palo Altos of the world-- you wouldn't just give it away. You should make sure that the amenities that are in that neighborhood are fully monetized.
And you can see all of these developments as being consistent with a commitment to monetization. But the question is whether or not you want to stop there and just say, OK. It's just the rise of a new-liberal commitment, at the cultural end of things. There's two reasons why you might not want to stop there.
First off, there's going to be lots of very domain-specific forces at work that explain some of the empirical results that I shared with you. It would be hard to re-use all of them just to a commitment to this type of cultural sensibility. But secondly and more important, that sensibility, in and of itself, probably is a bit epi-phenomenal, in the sense that it goes hand-in-hand with rising income inequality.
You wouldn't want to just say, it's an independent force unto itself. But it works especially well in the context of a system in which there's rising income inequality. And this is because, if you have a lot of money, then commodification works wonderfully for you. Because you have the money to buy the stuff that's increasingly being allocated to those who have money.
Why wouldn't you support that kind of system? You've got the money to command the goods and services. So of course, you want that kind of system. And moreover, as I've sought to point out, you can even use your money to buy access to a de-commodified zone. In fact, that's one of the most important things that you do with your money-- is to buy access to that very nice, benign, de-commodified zone.
So the world is wonderful with a neoliberal commitment, when you have a highly unequal regime. And I hate to be one of those sociologists who refer to old people. It's one of those labels in our discipline that's hard to shake. And I'm going to reinforce it.
But I just have to quote Max Weber-- "in periods of economic and technological transformation--" that would be the kind of period in which we're now in. "Only the families coming under the same tax class dance with one another." And that's what we're talking about.
OK, so where are we going? So if you buy my argument that we're in a period in which there's both rising income inequality and rising commodification-- if you buy that argument, then you might ask, well, what does the future hold? And most importantly-- is there any way that commodification and inequality can be pulled apart?
So if they go hand-in-hand, as I've argued, it's going to be hard to pull them apart, you might, ask, well, under what conditions might they be pulled apart? So one possibility-- maybe the most likely possibility-- is simply that rising inequality and rising commodification continue apace. So we'll have ever more income inequality. And the world will become ever more commodified.
And that will make it ever more difficult, of course, for the poor, in all the ways that I've already discussed. But there's also the possibility that these two forces will be pulled apart. One way in which they might be pulled apart is that you could have major redistributive reform. Now, there's an argument for major redistributive reform.
If everything is in the market-- if access to goods and services are increasingly in the market, well then, of course, if the poor are going to participate in any meaningful way in that kind of a system, they need more money, right? We've got to buy opportunity for your kids by getting access to neighborhoods that have decent schools. That takes money-- for example.
So if you're going to live in a world in which there's extreme income inequality, then you might say, well, that increases the rationale for-- and if you're going to live in a world in which there was extreme commodification, that that increases the rationale for some type of redistribution, right? Because we need money delivered to poor people, so they can buy-- say-- opportunity for their kids. But it doesn't seem like that's all that likely.
And that is major redistributive reform. There's all sorts of reasons why it's not all that likely. But think of the Great Recession. That was a major league disruption. And yet, it didn't, in the end, precipitate any substantial equalizing reform. There's no evidence in opinion polls that commitments to redistributive policies have changed in the US, despite the Great Recession. So it seems like major redistributive reform, in the US context-- in the context of neoliberal commitments-- is unlikely.
So the other way to go forward is to say, OK, rising income inequality continues apace. But it's going to be ameliorated through de-commodification. So you pull apart any other way. And I want to give you one example-- and this my last slide-- of how that might happen.
So as Kim mentioned, I direct the Center on Poverty and Inequality at Stanford. And we were asked, by a group of foundations, to try to build an evidence-based program in California that might reduce poverty. And so, in California, as in the rest of the country, we have both rising income inequality and rising commodification that harms the poor in all the ways that I've discussed. Namely, it's not just that you have less money relative to others, but also that you increasingly need money to, say, buy opportunities for your kids.
So what are you going to do? Well, there's two ways, as I've already discussed, to proceed in the context of California. You could acquiesce to commodification and transfer money directly to the poor. Again, poor need money to buy opportunities for their kids. So we just give them the money that they need in the context of a highly-commodified regime. That's option one.
But if you, say, focus group that, as we did, there is high resistance to that option of, say, aggressive cash transfers to the poor. So if you put that in the proposition, which is the game plan here-- the plan that we came up with is going to be, likely, on the 2018 ballot in California-- it's not going to pass if you just have aggressive transfers to the poor.
Even if you say, well, it's increasing commodification-- the poor need money, in order to participate in a highly-commodified world. So we had no alternative but to have more aggressive cash transfers to level the playing field and allow them to buy opportunity for their kids-- you could go through that song and dance. It's not going to work. Cash transfers are hated for all sorts of reasons.
So the other way to go, and the way that we've built an evidence-based plan in California, is to de-commodify-- to aggressively deliver services that provide opportunities for poor kids at every stage in the life course. So you don't do cash transfers. Rather, your de-commodify and directly provide the services. And I'll leave it at that. Thank you very much.
SPEAKER 1: OK, so David is going to call on people. But I do want to suggest something that those of you called on must do. It's very important for all of us to be able to hear you. That isn't easy in this auditorium. So would you please stand up and speak loudly and clearly. And then there could be a general conversation.
DAVID B. GRUSKY: Yeah?
AUDIENCE: Hey, good talk. I have a question about causality here. I'm actually going to wait until people in the back--
Can you hear me?
DAVID B. GRUSKY: Yes.
AUDIENCE: Cool. OK, so am I understanding the argument correctly, in that rising inequality is the root cause of increasing commodification? It seemed implicit, although you didn't say it explicitly. It seems like you could draw a causal lateral. Like, increasing inequality creates increasing social distance among members of society.
Maybe higher income people want to exclude lower income people from their communities. And a sort of legitimate way to do that is to commodify everything. Not that it's a master plan. It was part but, like, evolutionarily, over time, the way policy's evolved. So am I understanding that correctly? Would you say that?
And also, does the [INAUDIBLE] run the other way? From commodification to inequality? So given a level of inequality, if we increase the amount of commodification, should we expect to see a rise in the amount of inequality in our society?-- yeah.
DAVID B. GRUSKY: Well, I'm basically agnostic on this issue, because I don't feel like I have much, by way of evidence, to weigh in in any [INAUDIBLE] way on that question. I think it's an interesting question. It's an important question, but not one which I feel like I necessarily have any great capacity to provide a convincing argument one way or another.
But I did-- you're quite right-- speculate at the end that those who want simply to tell a story about neoliberalism and that particular cultural sensibility driving everything might want to at least consider the possibility that a neoliberal commitment is pretty easy to support when you're well-off. Because that kind of world does work well for you.
A world where everything is commodified does work well for you when you have the money-- when you have the money to buy the goods and services that are increasing on the market. It works all very, very nicely and wonderfully in that context. And so people at the top, who have lots of power, do have a natural sort of affinity for a neoliberal commitment that leads to commodification.
So I'm open to the possibility that the causal [INAUDIBLE], as you put it, runs in that direction. But I would not pretend for a moment that I have any evidence, aside from-- it sounds good and plausible-- any evidence beyond that. But I think it's a great question. Yeah?
AUDIENCE: All right-- so yeah. [INAUDIBLE]. I never thought about that. I guess, I wanted to ask you-- it seems that one lesson you can take from this is that, if you want to compare all the disposable income, in a sense, would be interesting. People as a whole [INAUDIBLE]. Or if you want to make, at the given time, international comparisons between disposable incomes for people, it's not enough to correct [INAUDIBLE] in the first case or correct-- make comparisons to the second case.
You have to take into account-- or even, it might be that in the [INAUDIBLE] just look at their disposable income and [INAUDIBLE] income. You have to also look at, possibly, the different extent to which commodification in these different groups.
And so I was wondering if anyone had tried to come up with a meter where you take income and you correct it not just for inflation, but for the extent of commodification to make those [INAUDIBLE] and may be difficult to do, like the [INAUDIBLE] income distribution [INAUDIBLE]-- which is real interesting-- versus [INAUDIBLE]-- whether this explains the recent happiness experience by [INAUDIBLE] you can correct [INAUDIBLE] with a necessary step and then correct the real income, not just for inflation [INAUDIBLE].
But also taking into account the extent of commodification now [INAUDIBLE]. Has someone done that? Tried to test the various hypotheses, using that as just [INAUDIBLE] for various [INAUDIBLE]?
DAVID B. GRUSKY: Yeah-- no, I think you've put your finger on a very key debate that's playing out among those who study, say, trends in income inequality. I presented the take-off is a foregone conclusion. I would say it is. But the extent to which there's been a take-off is under debate. In fact, there are folks here at Cornell who've been very important in putting forward some arguments about the extent to which there's a take-off in income inequality.
And part of the issue is in-kind transfers and how to value them and how to take them into account and how the distribution of those transfers is hardly uniform, right? And if you're really serious about it, you want to take into account all those goods and services that are being automatically provided, in some fashion, perhaps, cash them out, so you can make a real judgment about inequality.
Or you might, for example, say that what really matters is looking at consumption inequality, right?-- not income inequality, but consumption inequality, because that's one way of, as it were, cashing out all the various goods and services that you actually have available to you. But so you're absolutely right that it opens up some 40 questions about how to measure inequality.
And that's one way of trying to deal with issues-- I present it as, kind of, two forces. But you could try to integrate them into a single measure that specifies the extent to which people have equal or unequal control over goods and services. Yeah-- good point. Yeah?
AUDIENCE: Thanks for the talk. I found the overall argument very persuasive. But I wanted to maybe nit-pick about the--
AUDIENCE: Could you speak up?
AUDIENCE: Sorry, I have a sore throat.
AUDIENCE: Oh, that's OK.
AUDIENCE: I'll try. I wanted to nit-pick about your community-exclusive example.
DAVID B. GRUSKY: Yeah.
AUDIENCE: It didn't really seem to fit what it was supposed to be identifying. So for one, prison populations are communities. And two-- prison communities are incredibly de-commodified. So it just seems more like an example of community segregation.
DAVID B. GRUSKY: Yeah-- no, that's a good point. The first thing I'd mention is, never box yourself into a 3-by-3 table, because you feel obliged to play on each and every cell. And so there's a little bit-- and I think you were quite right to call me on it a little-- but kind of aggressive [INAUDIBLE].
You're absolutely right. You could consider being incarcerated as a lousy community. And hence, it's more about segmentation than exclusion. That would be one way to go-- a semantic difference. But then you make a very important point-- the very important point-- that this lousy zone is highly de-commodified.
And it gets even more complicated. Because there are other lousy but highly de-commodified zones. Like, for example-- well, military service might be seen as some such example, given it's increasingly the province of the poor. As we eliminate the draft, military service becomes a place where the poor go.
It's highly de-commodified. But lousy in the sense that it harms your subsequent life chances. It didn't always used to be that way. In the past, actually, military service would be good, in terms of providing access later to opportunities in the labor market once you exit. But increasingly, it has long-term damaging effects on your life chances. And so, in that sense, it's a lousy de-commodified zone.
So I think you're absolutely right. These zones-- they're lousy. But they're de-commodified. So it's definitely not the case-- and you're right to call me on this-- that all de-commodified zones are places that people like. Yeah, that's a good point. I just agreed with it. Yeah?
AUDIENCE: So most of the data and a lot of the analysis was intra-national. And There's. Nothing wrong with that. But one of your slides talked about nations or countries. And I was wondering if you would expect to be making the same argument about countries which historically have had a higher degree of economic [INAUDIBLE] than we have.
Or are we worse than everybody else? Is this an American story? Or it is a kind of story in which we start out from a different starting point, but the trends are international?
DAVID B. GRUSKY: Yeah, I shouldn't have made that argument, because it exposed me. And you just, laser-like, went to my exposure, like you did, and called me on it. Yeah, so I have difficulty-- I have to confess-- understanding the US case. Because I'm trying to survey huge literatures and pull it together in a synthetic way. And so from the get-go, I said, I'm just going to take on the US case and not try to consider the international context.
But we could speculate. You can help me. And so your question, as I understand it, is whether or not you might expect these sorts of processes that I've laid out for the US case to, perhaps, obtain even in countries that have historically been understood, at the state level, at least, as highly de-commodified. So take Sweden, right? That would be the kind of exemplar of that de-commodified state.
And I guess, all I'm going to say is, we typically restrict our attention, when we do these cross-national comparisons, to-- what does the state deliver? In what ways are public goods being provided by the state? And of course, you can look at Sweden. And some of that de-commodification is breaking down. So you get erosion at the state level. And people would end their analysis, typically, there.
But what I would say is, you really have to look at the other protected zones. You have to look at what's happening in the family in Sweden. You have to look at what's happening in the communities in Sweden and to what extent public goods that I think are increasingly not provided in those historic havens in the US are, likewise, undergoing the same evolution in Sweden.
I have no idea if, indeed, the family and the community in Sweden is facing an erosion, with respect to provision of public goods in the same way that is the case in the US. Now, I can point to some of those famous things that we all know about Sweden, like rising cohabitation, which I represented in the US case.
And I think probably so, as a decline in the sharing economy, because it means that I'm not going to guarantee that my assets will be shared over the course of our entire life. But rather, there will be points at which I will just say, no more sharing. I'm out of here. So I think that's happening. And that would be consistent with the kinds of dynamics that I laid out in the US.
But beyond that, I guess, I'd have to stop. Because I just don't know enough about Sweden. But I'm interested in your [INAUDIBLE]. Yeah?
AUDIENCE: Yeah, I have a question about how gender plays into your narrative. Because actually, picking out on the line of what's happened in Sweden-- looking at all your comments-- what's happening with the family-- that could be what several demographers have been [INAUDIBLE] as evidence or associations to increasing gender equality.
DAVID B. GRUSKY: Yes.
AUDIENCE: Especially, the [INAUDIBLE]. Increasing gender equality has been connected to the move from traditional families, cohabitation, et cetera. Increasing educational [INAUDIBLE] can be seen as a good thing, coming from increasing gender equality. And also, their commodification within families-- child care, elder care. Actually, to some extent, we see the gender equality.
So I'm thinking about this as a general narrative, but also as a US specific. And by the way, I'm [INAUDIBLE].
DAVID B. GRUSKY: Thank you-- anything that helps. But yeah, I think that's a great comment. And part of it is, I think-- perhaps-- something very special about what's happening in the US. That is, as historic gender inequalities are, to some extent, reduced in the US, we've done it in a way that is deeply commodifying.
Whereas, by contrast, say, in Sweden, I believe-- but correct me if I'm wrong. And look what you did. You made me-- oh, he's gone. Well, I don't want to talk about internationally [INAUDIBLE]. But you can correct me. In Sweden, when that particular function was stripped from the family, as women are increasingly entering the formal labor market-- when that function was stripped from the family-- the child care function-- well, you have public provision of that service, right?
And so it wasn't a commodifying maneuver, right? So you strip it from the family, where it was a public good. Now, you might say it's a deeply problematic public good, on gender terms, because women were doing that. And then we're in the formal economy. Of course, it was. But it was a public good. All kids would automatically get that. And you didn't have to put money on the table to get it.
And then, when women increasingly worked in Sweden, what did the state do? They said, OK. We'll provide that public good at the state level instead of the family level. No problem. It's not a commodified maneuver. But what happened in the US? We stripped that function from the family. And we put it into the market.
And so that's the problem. It's not a gender story. It's a gender story plus neoliberalism. And that combination is a deeply problematic one. Yeah?
AUDIENCE: Could you elaborate on what may be the decline of marriage among poor people?
DAVID B. GRUSKY: It seems like I can't. I am so not a demographer. Every demographer in the room-- this is what's going through my mind. Every demographer in the room knows the answer to that question. I'm desperately casting about. I don't know. Tell me. The demographers can tell me. I don't know what's behind that.
Yeah, I'm going to embarrassingly just say, I'm not going to wade into a zone in which I just don't know enough about. So this would be a case, by the way-- I'll dance around the question-- maybe buy me time. This is the case where you could just say, well, OK. It's the same sort of commodification process. But I think there are very specific forces at work in this zone that would account for it.
I'll toss out some of the usual suspects. I really don't know the literature well. So there's the declining marriageability of men who are poor, because the labor market's been very problematic for poor men. The decline in prime age employment has been more precipitous, recently, for men than for women. And the poor men and, particularly, African-American men have born the brunt of that.
And so they become less desirable married partners, because they're not bringing the money to the union. So that would be one conventionally-cited force. But I just don't know the literature well enough to know where it stands, as against many other forces that are in play. It's a great question. Yeah?
AUDIENCE: I had a question about a different thing one might mean by commodification-- namely that our very concept of what is valuable about certain goods and services and opportunities is understood as the sort of value that commodities have. The commodity has given us the very form of value, whether we assess the value of it.
And if you have that thought in the back of your mind, as I did during your talk, these two strategies-- those first you've outlined-- there are two ways of hearing the second one. Because on one understanding is the problem where the value of, say, child care really is the sort of value that is accurately captured by, say, its commodification-- the price that the market puts on that.
You just need to provide whatever that service that the private sector is currently offering in some other de-commodified way. But I'm wondering whether there is in another sense of de-commodification that seeks to recover an understanding of these goods and services by understanding their value, not in terms of something that one can buy at all.
And I'm wondering if that's part of your project. A different way of putting this question is, is there something specifically valuable about protecting de-commodified zones?-- apart from the fact that, when you don't protect them, we have to use our income to pay for even more stuff that we used to get anyway. Does that really exhaust the value of a de-commodified zone?
DAVID B. GRUSKY: So let me be sure that I understand this. It sounds like a fascinating question. But maybe, I don't quite have it. But if I understand the question correctly, it could be represented as follows, shouldn't we be indifferent to having, say, a parent provide child care in the home? Let's hope that, at least, it's not highly gendered, like it was the past.
Let's say, either the father or the mother or whomever the parent might be is providing that child care directly, in the family, as a public good. Should we be indifferent if we solve the problem that way? As opposed to, say, OK. We will provide cash transfers to poor families that allow them to buy that service on the market? Is there something deeply problematic about having to go in the market to buy that?
That is, do we solve the problem by just giving people the capacity to enter into the market and get what they need? That's the question. Should we be indifferent to those two? And that's definitely not a question that I asked. I think the premise was, I am indifferent. I don't care which way it comes, as long as poor people can get access to those sorts of goods and services that provide, say, opportunities to their children, I'm good. And then I'm indifferent to those two types.
I suppose, I would say that it was kind of like, we can't even get there either way. And to ask whether or not we might prefer one of those two for some reason is something that's beyond the purview of what I've even considered. But the idea is-- to answer your question-- you clearly have an answer to that. So-- no, you don't.
OK, well, it might be seen-- so I'll go there. I think this is the backdrop to that kind of question is that there's something that strips the good or service of its value when it's delivered impersonally, right? I think that would be the kind of argument that might conventionally be made. That is, to get high-quality child care from your father is much better than to get it from an impersonal purveyor, who's mechanically delivering the high-quality service but doesn't love you-- and that that love is lost.
I think that would be the kind of argument. And there's no way, in the context of a market economy, where you're buying the love-- have it be the same as the love in and of itself. I think that would be the argument that one might make. And it might be good. I might be convinced of that. But that seems like a luxury item to even get there-- yeah. Yeah?
AUDIENCE: So I have a two-part question. In terms of how to perceive [INAUDIBLE] that option 1 is very unlikely, because you mentioned why-- can you tell why that's not going to happen? That doesn't really--
DAVID B. GRUSKY: Yeah.
AUDIENCE: --answer the question.
DAVID B. GRUSKY: Yeah, yeah. So the problem is, I would say, that when you talk about directly transferring money to the poor, people understand that in liberty terms. That is, they presume that their money-- let's say, you're rich. And so that money is going to come from you. So you're going to be, say, taxed at a higher rate, in order to transfer money to the poor.
And you say, that is my money. That is the state forcibly using its powers to extract that money that I legitimately earned through my effort and initiative. And here, the state's taking it. And that's illegitimate. That's the sort of backdrop sentiment that makes this kind of reaction very difficult to sell in a neoliberal context, right?
AUDIENCE: Right, so my question is that-- so if you were a state [INAUDIBLE], then you're probably going to be [INAUDIBLE] and say you, by [INAUDIBLE] might be more [INAUDIBLE] maybe was raised poor and somehow ended up more [INAUDIBLE] circumstances. And so based on that, I sort of have a sense that you complete ignored the first option.
I do agree that-- I think-- the second option is probably more likely to implement as of now. But I would imagine-- and I'd like to hear your thoughts about this. Like, is it possible to start with option two, with option one on the table? Because I think it connects with the income inequality [INAUDIBLE] now that your chances of actually [INAUDIBLE], right?
Whereas, if you're sort of trying to curve that by doing some of option two that, maybe in the future, it might be likely-- it might be possible that you could also try something-- like, could you do, like, a combination of these two [INAUDIBLE]. So I'm just cautious about just doing one and ignoring the other one--
DAVID B. GRUSKY: Yeah.
AUDIENCE: --or if [INAUDIBLE].
DAVID B. GRUSKY: Yeah. Well, and I think you're right to wonder whether or not there's a way to make option one work. Let me just lay out one possible way in which option one could work. And it might be a way that becomes increasingly attractive over time.
So if, for example, you could make it clear that a lot of money at the top-- a lot of money that's held by the well-off was not a product of effort, initiative, hard work-- is not a function completely and entirely of their own merit but, in fact, that there's various types of sweetheart deals, corruption-- what might be called rent-- that lies behind their income-- if you can make that claim stick, then it becomes more legitimate for the state to skim off, as it were, that portion of their income that could be understood as illicit gains.
Now, it's very difficult to use the tax approach to just skim off rent, right? It's a blunt instrument with which to try to take rent. You might say, well, rather than using the tax method to try to strip off rent-- because it's going to strip off merit-based income as well, as non merit-based income. You might say, why not engage in institutional reform that actually eliminates the rent-generating capacity of the economy in the first place?
But in any event, that kind of ideological weapon could be used to try to legitimate option one. I'm absolutely in agreement that you cannot rule out the possibility of option one holding sway at some point. Yeah. Yeah?
AUDIENCE: Can you say a little bit more about what option two looks like? How you actually--
DAVID B. GRUSKY: Yeah.
DAVID B. GRUSKY: Yeah. So in the Californian case-- I'll talk about what we're actually-- what the plan is. You can check it out, I should say. If you look at "equal opportunity plan Stanford," it'll come up. And then there is a proposition that will, as I said, likely happen in 2018.
But the basic deal is to identify those critical junctures in the life course where it's not a level playing field, where poor parents need to put money on the table in order to afford opportunities for their children. So for example, you could start with a prenatal and postnatal period, where there's a huge discrepancy in the types of information that are available to poor parents as opposed to rich parents, as regards healthy parenting practices.
So you could just deliver, directly, the information intervention that gives poor parents the kinds of information that is needed in order to ensure that their children are raised as healthily as well-off parents. That's a direct provision of a service. You have to pay for it.
Or think about early child care. Right now, the State of California delivers some child care to poor parents for free. But there are many, many poor families that don't have access to high-quality early child care. So we would say, no, based on the work of, say, Jim [INAUDIBLE] and others, that having high-quality early child care has implications for your future life chances.
You can not run an equal opportunity society if it's not the case that all children, no matter how poor or rich their parents are, have access to early child care. So if you can't afford it, the state will directly pay for it. So that's step two, in which you directly provide services rather than using the market allocated. So the point is to identify all those moments in the life course in which opportunities are only available for those who can pay for them and directly deliver those opportunities to folks who can't pay for them.
AUDIENCE: So how does the state pay for it without option one? [INAUDIBLE]
DAVID B. GRUSKY: Yeah-- of course, you need to tax more. Yeah, absolutely-- you need to tax more. But the point is that you don't use those collections to then disperse cash to the poor. You use it to deliver the services directly. That's a consequential difference, in terms of how the focus groups act. It's a consequential difference. You might say, it shouldn't be. I'm with you. But it is. Yeah?
AUDIENCE: Can we just talk a little bit about-- [INAUDIBLE] example of de-commodification that [INAUDIBLE], but you will expect a [INAUDIBLE] would the de-commodification of secondary education, in a high school, [INAUDIBLE] '30s, '40s, into the '50s with universalized access to the secondary--
DAVID B. GRUSKY: Yeah, yeah, yeah.
AUDIENCE: --education. It [INAUDIBLE]. Part of that was to develop [INAUDIBLE]. And now, we have conversations today with a certain politician-- that's my bad-- I [INAUDIBLE]--
DAVID B. GRUSKY: Who's that?
AUDIENCE: I can't remember his name-- around making a de-commodifying [INAUDIBLE] at universities.
DAVID B. GRUSKY: Yeah.
AUDIENCE: But what are your thoughts on the historical the kind of mirroring we have? Do you really think we could do that? Or is that just [INAUDIBLE]?
DAVID B. GRUSKY: Well, I think, there are folks, like that unnamed politician, who appreciate what's in play and that we've basically been thrown into the market-- what's now the fundamental determinant of one's labor market chances. It used to be, secondary school education was the credential that carried the day in the labor market. Now, of course, that doesn't do what it once did. And you need college.
And he recognizes the next step in this de-commodification program would be to do the same for tertiary education that's already happened in the secondary. So if he's right, then he's reversed a fundamental force that's in play-- that of commodification. And as I say, I think that is the most likely way forward. And that he's doing pretty well suggests, maybe, I'm right-- that there's going to be more support for that kind of maneuver than there will be for deep redistribution. Yeah?
AUDIENCE: All right-- I want to raise a question about your preference for option two. Here, [INAUDIBLE]. And it's increased. And it's probably the utmost powerful [INAUDIBLE] reducing poverty in the United States. It really is a transfer program. They have to work to get it. And that's important to people.
Food stamps are important. And they're near-cash. And increasing the minimum wage is going to be important. Then politicians which are not named, as you have pointed out-- that the abolition of old-fashioned welfare is related to a shameful increase in abject poverty. So there seems to be lots of promises in option one.
As someone pointed out, option two is very expensive. And the reason it I ask this is not the [INAUDIBLE] in this country. And I think it's [INAUDIBLE] for systematic reasons. Because to make a big impact through de-commodifying-- yes, we're engaged in [INAUDIBLE] processes, [INAUDIBLE] apply. You're [INAUDIBLE] in college.
[INAUDIBLE] readiness is a point at which children then apply to college. And [INAUDIBLE], by itself, will do it, because it would equate [INAUDIBLE] K through 12. And those types of [INAUDIBLE] social and neighborhood and family difference which interlock [INAUDIBLE] part of your change. I guess I find [INAUDIBLE].
DAVID B. GRUSKY: How depressing is it?
AUDIENCE: --the primary way to go, which does mean sort of going Swedish I would argue because of tax and transfer. It's fundamentally important.
DAVID B. GRUSKY: Well, going Swedish means--
AUDIENCE: [INAUDIBLE] not just provision of the de-commodified [INAUDIBLE].
DAVID B. GRUSKY: Yeah. No, these are all good points. And I want to be clear that it's not like I have some intrinsic preference for two versus one. I'm rather indifferent. I care only about getting the job done and figuring out which pathway is likely to garner support in the context and sensibilities that the US has.
And like I said, with your ex-- I'm all for option one, if we can find a way to thread the needle on option one. And it's useful to look at how, say, EITC, which absolutely-- on the mark-- EITC is the most fundamental anti-poverty program we have. How did it thread the needle? And I think the reason EITC can thread the needle is twofold.
EITC threads the needle because it doesn't look like a cash transfer. It's just all embedded kind of seamlessly within the tax system. And so we understand that people get tax refunds. Well, they might get tax credits. What's the difference, really, at the end of the day? And so it does not seem like a cash disbursement, in the same way as other types of so-called welfare are and which attract much more opposition.
The other obvious point that's frequently made is that it's attached to work. And work is such a fundamental value that, as long as people are working, then all is good. And so you could imagine ramping up the EITC. The plan, in effect, for California does, of course, ramp up the EITC. Because it's a way to make option one more palatable.
And I think it's worth thinking about other ways to make option one more palatable to thread the needle, as it were. So I think-- yeah-- your comment was totally on the mark. Yeah?
AUDIENCE: So I'm not sure that I have the same [INAUDIBLE]. Option two would be [INAUDIBLE] to be like you were [INAUDIBLE] provide those [INAUDIBLE]. Option one would be more like something like a [INAUDIBLE].
DAVID B. GRUSKY: Yeah.
AUDIENCE: So did I understand that as incorrect that [INAUDIBLE], though it seems to be quite identical to the [INAUDIBLE] how to organize this [INAUDIBLE] and how to implement those practically, and when you have to adapt them. Because when the markets change, you either have to re-evaluate [INAUDIBLE] and also how [INAUDIBLE] to tax for that.
Or in the [INAUDIBLE], you really have to pay for more and increase in taxes. But you don't have to figure out, again, who to give what and all this money and so on.
DAVID B. GRUSKY: So yeah, I agree with your characterization. You could think of vouchers, though, as, again, a bit of a concealment that could be effective, because you aren't giving overt money. So that's kind of a hybrid form, if you will. The most extreme version of option one is you actually just deliver the money to poor people. It's just an overt transfer from the rich to the poor.
A voucher could be closer to the provision of a service, right? Although, you're still participating on the market. You just happen to have a voucher that can only cash in one way.
AUDIENCE: OK, so the bad problems are for-- it is equally capitalistic as option two and has the same practicality problems in, how much money does the voucher actually have in giving the people the money directly. way
DAVID B. GRUSKY: Yeah, I agree. That's it?
SPEAKER 1: Hi-- yes. I'm really sorry to have to stop when people's hands are up. And I'm sure David would be happy to stay and talk with you. Before we thank David, I wanted to tell you about our next talk in the Inequality Series. It's going to be two weeks from now on March 14.
It has to do with-- I think that what's truly heartbreaking of the inequalities that we're going to talk about-- those figures on the incarceration of Black males, they just make you weep. And the fact that African-American unemployment is twice white unemployment, that the income gap is not declined, and that the wealth gap is greater so many decades after the Civil Rights movement-- that's an inequality that we must talk about.
And we'll talk about it as part of this highly interdisciplinary conversation. My joke about economists and sociologists was, in fact, quite shameful, because economists and sociologists have been part of a super productive interchange in these matters, in which economists and sociologists at Cornell have played a leading role.
So we've heard from a political scientist, economist, and sociologist on the topic of racial inequality. We'll hear from Prudence Carter of the Department of Education at the University of California, Berkeley on racial inequality two weeks from now. Please come. And now, let's thank David for his [INAUDIBLE].
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David Grusky, director of the Stanford Center on Poverty and Inequality, spoke at Cornell Feb. 29, 2016 as part of a series of lectures on the topic of inequality, hosted by the College of Art and Sciences' Program on Ethics and Public Life (EPL).