Street roots,
O ct. 12, 2012
-,
Ninety-
nine
percent
solution
Professor Joseph Stiglitz, author
and Nobel Prize winner in
economics, is pleased to see that
his latest book 'The Price o f
Inequality’ is already grabbing
the attention o f world leaders.
BY MIKE REILLY
C O N T R IB U T IN G C O L U M N IS T
he work of Joseph Stiglitz, a professor
In “The Price of Inequality,” Stiglitz
which it was founded” he writes. But, he
at Columbia University in New York
stacks
fact
after
fact,
study
after
study
and
cautions: “time is running out.”
and former chief economist for the
Some of Stiglitz’s past books, especially
World Bank, is recognized worldwide. He pages of footnotes in an unassailable
indictment of the governments and
on globalization, are worldwide teaching aids
has written a long string of books,
policymakers who have let this happen. And
today. Asked whether he believes his 2012
numerous papers and
he says this threatens destabilization of the
call for action by Americans on inequality is
a wide variety of
world’s
leading
economy,
with
an
having an effect, he replied: “I think I have
essays and articles,
S M Si TSE M li
ÏS S £ 3 8 S »
accompanying ripple effect. “As our
reached many audiences. Among the
many focusing on
economic system is seen to fail for most
foremost are those in economic policy
equilibrium in the
citizens, and as our political system seems
making, who are thinking about where the
world. In 2001, he
to
be
captured
by
moneyed
interests,
society is going. Then there are people who
shared a Nobel Prize
confidence in our democracy and in our
I would call the progressives in society and
in Economics for his
market economy will erode along with our
who want to know what solutions there may
work on the effect of
global influence.”
be. I think I have reached those two groups,
unbalanced
lit O B O
It
is
both
scary
and
sad
reading,
the
sort
particularly the second - rallying the ones
information amongst
of
fact-based
narrative
that
evokes
rage
and
who have a sense that the society is unfair
market players.
a sickening feeling in one’s belly. Stiglitz has
and unequal.”
Essentially, he showed
a gift for making
“A third group,
that in a transaction people with more
complex
economic
and I think I reach
information about something will benefit
matters
much
easier
that group, is the
over those with less.
to grasp than the
people who are
In his new book, he looks at wealthier
daily flow of
people and lays out a the case that they are
""The hope Is that people w ill uncommitted voters
information through
— not sure what is
wrong when they think they are protected
rise up, seeing that
social and traditional
wrong and what to
from the effects of inequality. Moreover,
media. Taking the
Inequality Is so strongly In
do. They are trying
they have are having an impact on society
30,000-foot view,
to assess the
that wrenches it from its moral moorings -
place. II you look at the
coupled with a
arguments. I think I
a move that threatens their world as much
h istorica l situation yon can
staggering
depth
of
reached that group.
as everyone else’s.
see
action
is
re
q
iilre
d
/F
statistical support, he
That is becoming
“The evidence from history and from
paints an image that
— J O S E F H S T IG L IT Z
much more the
around the modern world is unequivocal,”
E
C
O
N
O
M
IS
T
A
U
T
H
O
R
is already getting the
centrist position —
he writes. “There comes a point when
attention of policy
that inequality is bad
inequality spirals into economic dysfunction
makers just weeks
for society and bad,
for the whole society, and when it does,
after the book’s
too, for the
even the rich pay a steep price.”
publication.
economy.”
Inequality has been around for centuries.
Inequality has risen like a 1,000-year wave
“There comes a point when inequality
But the stark vision of the huge gap that
on everyone’s radar. Indeed, a special report spirals into economic dysfunction for the
exists today has shocked the world. In the
on it in New Scientist on July 30 echoes
whole society, and when it does, even the
United States, Stiglitz said in an interview in
Stiglitz’s timely concern, looking at some of
rich pay a steep price.”
July, “20 percent of all income has gone to
the science involved in inequality, even
Coming as it does in an election year for
the top 1 percent. Data for the U .S . showed
showing its effect on our health and well
the United States, Stiglitz’s warning about
dramatically that the wealth of the typical
being. “The policy implications seem
inequality and its erosive effect sets a
American was wiped out. For two decades
obvious, if politically contentious,” New
special focus for leading American
most Americans have seen no increase in
Scientist says. “A more even distribution of
politicians who have fired up both the
their well being — all the increase has gone
wealth would improve health on national and rightwing Tea Party and the Left - each of
to the top.”
global scales. But that appears unlikely to
which, for different reasons, criticize the
The Occupy Movement adopted the
happen without a radical shift in western
political lack of action on jobs, housing and
phrase “the 99 percent” to identify everyone
culture; in recent times governments of all
the out-sized wealth of the top 1 percent.
including the middle class as suffering while
political persuasions have presided over
But it does more than anger people.
the top one 1 percent grab more and more
growing inequality.”
“One of the things that disturb me is that
of the economic pie.
Just what Stiglitz points out in his book,
the disillusionment people have with the
“The argument in the book is helping the
which keeps a laser focus on what is
current situation leads to having a variety of
99 percent to find out what can be done at
happening in the United States: “I believe it
interpretations,” Stiglitz says. “Just like in
the same time that it helps the 1 percent
is still not too late for this country to change
Europe, there is movement to extreme
see that it won’t work for them,” Stiglitz
course, and to recover the fundamental
groups, both on the left and the right.”
says.”
principles of fairness and opportunity on
“The Tea Party movement is in some
T
EQUALITY
P H O T O : R E U T E R S /A R N D W I E G M A N N
sense a reaction to the failure of the
establishment. While the analysis is right,
they are wrong in the diagnosis: ‘The
government saved the bankers; therefore
the government can’t be trusted.’ But they
miss the point; it is an incoherent reaction
to the failures.” Government can and does
help people through national health
programs, infrastructure support and in
many other ways, he notes. What needs to
happen is that people must act to change
the way government operates, not try to
obliterate it.
“What we are seeing is a sense of anger
at the way the system works. Very large
sections of the populace feel it is unfair.
There is a real concern about the
disillusionment. There is a sense that
people are suffering disempowerment. They
think the system is rigged and they can’t
change it.”
That simply is not the case, says Stiglitz.
“The book tries to isolate what I would call
the ‘right corporatists.’ This is the
establishment’s right center, the bankers
and others, who don’t really believe they are
wrong, who are happy to get the bailouts
and tax preferences.” But, Stiglitz warns:
“There is a lot more in common between
right and left and progressives than they
realize.”
“One theme of the book is that there is a
nexus between politics and economics and
we have gone down the road to allow the 1
percent to gain more control. We have to
break into that vicious circle,” he continued.
It is still the case that the 99 percent are
the majority. There are two ways change will
occur. One, the 99 percent will realize they
have been sold a bill of goods, and two, the
1 percent will come to understand that their
argument is not true (that they deserve
what they get and that righting the
imbalance will have a negative impact on
society).
The hope is that people will rise up,
seeing that inequality is so strongly in
place, Stiglitz said. “There is no guarantee,
but I think if you look at the historical
situation you can see action is required.”
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