J. Stiglitz, THE PRICE OF INEQUALITY

Joseph E. Stiglitz, The Price of Inequality: How Today's Divided Society Endangers Our Future (2013)

Not just in the United States but around the world as well, there is mounting concern about the increase in inequality and about the lack of opportunity, and how these twin trends are changing our economies, our democratic politics, and our societies.

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...the magnitude of the student loan crisis...

...their sense of disillusionment, of hopelessness, was sobering and sad...  Their bitterness ...

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Perhaps the statistics that most resonated as I met with groups from coast to coast...were those relating to lack of opportunity in America.  Both those in America and those abroad had simply assumed that America was the land of opportunity. ... But it was obvious that we weren't.

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 ...the incomes of ordinary Americans keep shrinking.

 ...the combined consequences of persistent inequality, of a deficient safety net, and of growing austerity are increasingly felt.

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These disturbing trends in income and wealth inequality were outdone by even more disturbing evidence about inequalities in health.  ...for the poorest group of Americans there has been no progress, and for poor women life expectancy has actually been declining.

Decreases in income and decline in standards of living are often accompanied by a multitude of social manifestations -- malnutrition, drug abuse, and deterioration in family life, all of which take a toll on health and life expectancy.

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The Inequality "Debate"

...increased economic insecurity.  It was equally hard to deny that the United States was no longer the land of opportunity portrayed by Horatio Alger stories of "rags to riches." 

 

...much of America's concentration of wealth at the top was the result of rent seeking -- including monopoly profits and the excessive compensation of some CEOs and, especially, that of the financial sector.

...markets don't exist in a vacuum.  They are shaped by our politics, often in ways that benefit those at the top.

Most heartening to me was the fact that even more conservative publications joined the discussion ... the Economist highlighted the extent of the increase in inequality and the reduction in opportunity, and agreed with most of our diagnosis and many of our prescriptions.  ...the Economist concluded, in particular, that "inequality has reached a stage where it can be inefficient and bad for growth."  Sharing our concern about the lack of opportunity in the United States, the report cites ... Not surprisingly, the Economist's recommendations began with an "attack on monopolies and vested interests" and then moved on to ways of improving economic mobility, where the "target should be pre-school education, as well as more retraining for the jobless."  It even recognized the need for more progressive taxation, including "Narrowing the gap between tax rates on wages and capital income....

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...the American economy has not been delivering for most Americans

Any economic agenda focusing on the middle class is, by its nature, an agenda centered on shared prosperity; and that means halting and reversing the trend of growing inequality.

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An efficient system of social protection is an important part of any modern society.  The market failed to provide adequate insurance, for instance, for unemployment or disability.  So the government stepped in.

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What [Cornel] West was hinting at, I think, is that the real solution to the inequality crisis lies in focusing on community rather than simply self-interest -- both community as a means to prosperity and as a goal in its own right. ... If our economic system leads to so many people without jobs, or with jobs that do not pay a livable wage, dependent on the government for food, it means that our economic system has not worked in the way it should, and then the government has to step in.

We do have a divided society.  But the division is not, as Romney has suggested, between freeloaders and the rest.  Rather it is between those (including many members of the 1 percent) who see America as a community and recognize that the only way to achieve sustained prosperity is to have shared prosperity....

Even if it were true that 47 percent of the population are freeloaders, it would mean that something is wrong with our society.  Every society will have some rotten apples, but most individuals intrinsically want to make a contribution to their communities, to have a meaningful job; they want "decent work."  But if a country doesn’t give a large proportion of the population the education that they need to earn a decent living, if employers don't pay workers a decent wage, if a society provides so little opportunity that many people become alienated and demotivated, then that society and its economy won't work well.


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