The Price of Inequality
By Joseph E. Stiglitz
There's a well-known psychological phenomenon where people tend to give more weight to arguments and evidence that supports their beliefs, and tend to discount or even forget information that contradicts those beliefs. This is called "confirmation bias." The reason I bring this up is because Joseph Stiglitz's book The Price of Inequality so strongly supports my beliefs about social and economic justice that I can't help but question whether my reaction to it might be the product of just such a bias.
Over the course of 360-some pages, Stiglitz—far as I can tell—completely dismantles the prevailing myths of both the inevitability of our current economic situation and the idea that supply-side policies are the answer. If I might be allowed to sum up his argument, it would go like so:
- The United States currently has an extremely high level of economic inequality, both in comparison with other contemporary developed countries and with its own history.
- The current level of inequality cannot be justified by any sort of meritocracy, nor can it be attributed to inevitable, natural events.
- Rather, the current level of inequality is largely the result of a massive transfer of wealth from the bottom of the economic ladder to the top, and that transfer is largely due to the manipulation of both market conditions and government policies by the wealthy elite.
- Furthermore, the current level of inequality is unsustainable because
- inequality lowers economic growth and efficiency,
- inequality undermines democratic government, and
- the conditions driving the current levels of inequality are damaging to the environment.
Not only does Stiglitz base his arguments on data (and he provides copious references to the studies he cites), but he also directly responds to just about every criticism of his position that I've ever encountered. Indeed, after finishing this book, I was so thoroughly convinced that I immediately became skeptical of myself. I spent an hour or so sifting through Google results to try to find a coherent rebuttal to Stiglitz's points, but everything I found boiled down to either name-calling or a flat insistence that he simply couldn't be right.
Rather than simply ending with an analysis of how we came to be where we are, or even an explanation of the results should we continue on this course, Stiglitz goes further and provides a number of concrete recommendations for how we could improve the situation. Granted, it's a long shot that a jaded (or forcibly disenfranchised) constituency and a captured government would be able to implement any of the policies Stiglitz describes, but things are not irreversibly bad.
In this country, the discourse around the proper role of government often seems to be preoccupied with the possibility of future tyranny, and the necessity of structuring government so as to protect the people from itself. But in my view—and I think that Stiglitz would likely agree—a government that does not also protect weaker individuals (which is to say, less wealthy individuals) from the rapacities of those who would take advantage of them, is merely subsituting one form of tyranny for another. We can do better. I don't know if we will, and often when contemplating that possibility my cynicism gets the better of me. But there is a way forward if we choose to take it, and Joseph Stiglitz might just be able to show it to us.
Started: 8/11/2015 | Finished: 8/27/2015