Stiglitz on economic inequality

June 30, 2012

The issue of economic inequality has been receiving quite a lot of attention in the past few months–at least in the progressive media. This is no doubt due in part to the Occupy movement and to the anti-austerity protests in Europe, which have really thrust the issues of inequality and economic justice into the spotlight. More so than at any point in the last several decades, there is a real public thirst for understanding the causes and consequences of economic inequality and what can be done to reverse it. The Nobel-prize winning economist Joseph Stiglitz is one of several academics who have stepped up to satisfy this public thirst. What began with an insightful article in Vanity Fair (Of the 1%, by the 1%, for the 1%) has since turned into a book (The Price of Inequality) about which he has given several interviews in recent months. In this most recent interview in Truthout, Stiglitz nicely debunks the myths and illusions that sustain the current economic system in the US. See, for instance, this first exchange in the interview:

Lynn Parramore: An argument has been made, particularly since the end of the Cold War, that capitalism is great at producing things that can improve our lives, and so we ought to therefore tolerate some unfairness. What’s wrong with that narrative?

Joseph Stiglitz: Well, capitalism does have a lot of strengths, including producing things that are very innovative. But what drives capitalism is the profit motive. You can profit not only by making good things, but also by exploiting people, by exploiting the environment, by doing things that are not so good. The narrative that you describe ignores the extent to which a lot of the inequalities in the United States are not the result of creative activity but of exploitive activity. And if you look at the people at the top, what is so striking is that the people who’ve made the most important creative contributions are not there.

By that I mean the really foundational things like the computer, the transistor, the laser. And how many people at the top are people who made their money out of monopoly — exercising monopoly power? Like bankers who exploited through predatory lending practices and abusive credit card practices. Or CEOs who took advantage of deficiencies in corporate governance to get a larger share of the corporate revenues for themselves without any regard to the extent to which they have actually contributed to increasing the sustainable well-being of the firm. 

The following two-part Democracy Now interview with Stiglitz is also well worth watching. 

Tags: , ,

Leave a Reply

Your email address will not be published. Required fields are marked *


Democracy Now