Friday, September 7, 2012

Book club suggestion - The Price of Inequality

The Daily Show with Jon StewartMon - Thurs 11p / 10c
Joseph Stiglitz

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NPR interview - excellent - 19 minutes -

I have ordered this book and plan to read. While our ASET book club would resist this type of text for analysis it would be useful to read together. I lament the trend in libertarian circles in general and in my limited band of fellows to dismiss alternative analysis and views of society.  Russ Roberts shared this lament in his NPR interview of last month.  In talking about the current state of discourse in our country, Roberts said:

"It's not so much the partisanship, which has always been a part of our lives. It's the unwillingness to imagine that someone on the other side of the ideological fence might have an interesting idea, and I think that's a very dangerous situation for a democracy."

The 5 minute interview is well worth a listen and outlines why I think Stiglitz's book would be an important read.


The Price of Inequality is a powerful plea for the implementation of what Alexis de Tocqueville termed "self-interest properly understood". Stiglitz writes: "Paying attention to everyone else's self-interest – in other words to the common welfare – is in fact a precondition for one's own ultimate wellbeing… it isn't just good for the soul; it's good for business." Unfortunately, that's what those with hubris and pleonexia have never understood – and we are all paying the price.

Stiglitz describes the purpose of his book:

This book is about why our economic system is failing for most Americans, why inequality is growing to the extent it is, and what the consequences are. The underlying thesis is that we are paying a high price for our inequality - an economic system that is less stable and less efficient, with less growth, and a democracy that has been put into peril. But even more is at stake: as our economic system is seen to fail for most citizens, and as our political system seems to be captured by moneyed interests, confidence in our democracy and in our market economy will erode along with our global influence. As the reality sinks in that we are no longer a country of opportunity and that even our long-vaunted rule of law and system of justice have been compr
omised, even our sense of national identity may be put into jeopardy. The problem is global, not just a US phenomenon. In some countries the Occupy Wall Street movement has become closely allied with the antiglobalization movement. Stiglitz has long held that the problem is not that globalization is bad or wrong but that "...governments are managing it so poorly - largely for the benefit of special interests. The interconnectedness of peoples, countries, and economies around the globe is a development that can be used as effectively to promote prosperity as to spread greed and misery."

Stiglitz has the same basic attitude toward markets as globalization:

"...the power of markets is enormous, but they have no inherent moral character. We have to decide how to manage them. At their best, markets have played a central role in the stunning increases in productivity and standards of living in the past two hundred years - increases that far exceeded those of the previous two millennia."

I anticipate Stiglitz's support from the highlighted contention above, as I see markets embedded with a strong moral element.

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