Joseph Stiglitz on Why the Rich are Getting Richer and Why it Could Get Much Worse

[xchrom]

http://www.alternet.org/economy/joseph-stiglitz-why-rich-are-getting-richer-and-why-it-could-get-much-worse



Nobel laureate Joseph Stiglitz has been writing about America’s economically divided society since the 1960s. His recent book, The Price of Inequality , argues that this division is holding the country back, a topic he has also explored in recent research supported by the Institute for New Economic Thinking and others. On December 4, Stiglitz chaired the eighth INET Seminar Series at Columbia University, in which he presented a paper, "New Theoretical Perspectives on the Distribution of Income and Wealth Among Individuals.” In the interview that follows, he explores the themes of this paper, the work of Thomas Piketty, and the need for the field of economics — and the country — to come to terms with the growing gulf between haves and have-nots.

Lynn Parramore: You’ve mentioned that economic inequality was the subject of your Ph.D studies. How did you come to be interested in how income and wealth get divided up in society?

Joseph Stiglitz: First, when you grow up as I did in Gary, Indiana, it was sort of prototypical of a divided America. You had lot of people in poverty. We didn’t have the 1 percent, but we had the 5 percent. I had no idea what real inequality was like, but we had a lot of people at the bottom. And second, it goes back to the years I went to college and the Civil Rights Movement. You remember Martin Luther King’s march was a march for the end of discrimination and for economic empowerment. So I think a lot of us realized at that time that we weren’t going to fully address the problems of a divided America — of race discrimination — if we didn’t do something about the economic differentials.

LP: What’s new in your recent work on the distribution of income and wealth among individuals?

There are several things. There’s some debate about this, but I think most readers of Thomas Piketty’s book ( Capital in the Twenty-First Century) get the impression that the accumulation of wealth — savings —is responsible for the rise in inequality and that there is, therefore, in a way , a link between the growth of the economy — the accumulation of capital— on the one hand and inequality and wealth. My paper begins with the observation that in fact, you cannot explain what has happened to the wealth/income ratio by that analysis. A closer look at what has gone on suggests that a large fraction of the increase in wealth is an increase in the value of land, not in the amount of capital goods.

[rogerashton]

1. Thanks for the link -- bookmarked.

I will spend a little more time with it later. On the basis of a quick look:

The differences between Joe and Tom are not as great as Joe suggests. Tom never committed himself to interpret capital in a Marxist sense -- i.e. a social relation between people, which would include what Joe calls "rent" -- or a neoclassical sense, as an aggregate of durable producers' goods, possibly including immaterial formations often called "human capital." Joe, by contrast, is consistently committed to neoclassical language. Thus he distinguishes credit contracts and "rent" incomes, which are social relations among people, from "capital." Both perspectives can be helpful, but a little explicit Marxism would make both clearer and more consistent.

Edit: Corrected typo.

[JEFF9K]

2. Always good ...

to see an article by Stiglitz.

[marmar]

3. K/R

[2naSalit]

4. K&R!!

[Javaman]

5. not "could" but will. nt

[closeupready]

6. Yup. It's going to get a LOT worse over the next ten years.

[Javaman]

7. this is my very sad depressing prediction...

Last edited Mon Dec 22, 2014, 01:38 PM - Edit history (1)

repub wins prez next time around. And this same repub will pay lip service to the tea party halfwits.

I would love to say that hilarity ensues, but alas, it won't because they will destroy this nation.

and only after that will people finally wake the hell up.

we as a nation of people only react to things, not plan.

[Initech]

8. In World War 2, we had an indisputable and unimaginable evil that was a real threat to freedom.

And that united us. In 2014, we have a new indesputable and unimaginable evil that is a real threat to our freedom. And that enemy is the wealth addicted upper 1%. They are stealing everything and using it against us while sinking the rest of the world into a new dark age. It has to stop.