The specter of massive inequality is haunting modern capitalism, with a small elite – the 1%, 0.01%, 0.001% of billionaires and financiers and the like – gaining the bulk of the benefits of modern economic growth and using their wealth to dominate economies and politics. In virtually every country, labor's share of income has fallen and inequality has increased massively. What, if anything, can we do to restore a more egalitarian distribution of income, with a strong middle class, and restore the historic link between growth of productivity and real wages? This talk argues that the answer lies in wider ownership of capital and worker participation in decisions at their workplace and firm. It gives the evidence that this solution works and lays out ways to get from here to there.

Richard B. Freeman holds the Herbert Ascherman Chair in Economics at Harvard University and is currently Faculty co-Director of the Labor and Worklife Program at the Harvard Law School. He directs the National Bureau of Economic Research / Sloan Science Engineering Workforce Projects, and is Senior Research Fellow in Labour Markets at the London School of Economics' Centre for Economic Performance.