One conservative message on inequality is to say that it doesn't matter, and we should accept rises in both pre-tax and post-tax inequality. This is the implication of studies periodically put out by the Heritage Foundation, arguing that poor people aren't really poor if they have microwave ovens. This isn't an appealing argument.
The problem with rising inequality is not that lower-income families can't afford ever-cheaper electronics; it's that they can't keep pace with the rising costs of health care, education and (in certain parts of the country) housing. There's also no reason to think that, whatever standard of living we start from, an economy where nearly all the improvements accrue to a small fraction of families is either politically sustainable or morally acceptable.
Excatly. In a nutshell, that is the foundation that is laid in the four chapters of his book. The cost of inequality is no health care, no education (past high school), and inadequate housing. Millions are affected by one, two or all three of these issues in an adverse way. So what's the result?
A Democracy in Peril-the title of Chapter 5 in "The Price of Inequality."
Stiglitz starts off in this chapter talking about the disillusionment, lower trust, and general loss of perceived fairness that has mounted due to inequality. This leads to an erosion of civic virtue.
Such civic virtue should not be taken for granted. If the belief takes hold that the political system is stacked, that it's unfair, individuals will feel released from the obligations of civic virtue. When the social contract is abrogated, when trust between government and its citizens fails, disillusionment, disengagement, or worse follows. In the United States today and in many other democracies around the world mistrust is ascendent.
No doubt, this is a chief reason why we see less than 60 percent voter turnout. It gets worse.
Social capital is the glue that holds societies together. If individuals believe the economic and political system is unfair, the glue doesn't work and societies don't function well. As I've traveled around the world, particularly in my job as chief economist of the World Bank, I've seen instances where social capital has been strong and societies have worked together. I've also seen instances where social cohesion has been destroyed and societies have become dysfunctional.
Well, that's where we are headed and what makes matters worse are the policies aimed to further this disenfranchisement, most of which are aimed at the poor. Photo ID laws and resistance against extended voting hours and times add to this feeling of disillusionment (which works in the favor of those who support these endeavors) resulting in continued low turnout at the polls.
Stiglitz goes on to talk about how Citizen's United makes matters worse and it is there that he and I part ways in agreement (in fact, this is my least favorite chapter in the book). His book was written before the election this year so he couldn't know that his predictions in this chapter regarding this case were going to be wrong.
Hundreds of millions of dollars were poured at President Obama in the hopes of defeating him and all of it failed. Certainly, the president had a lot of money behind him. Yet he also had a massive network of people that not only contributed small amounts of money but also formed a very solid foundation of motivated people that got out the vote. So, Stiglitz was wrong. In this case, people triumphed over money.
His analysis of Citizen's United wasn't the only point he made with which I disagreed. The rest of the chapter has to do with globalization and he's far too vague in his criticism of it. He somewhat wrongly assumes that the lack of voter enthusiasm can be entirely attributed to civic disillusionment
and not mere laziness (see: The Michael Jordan Generation). He also leaves out the raised prosperity around the world as a result of the spread of free markets and capitalism. He seems to call of return to protectionism which, in my view, would be a giant mistake. And this chapter is generally far too repetitive regarding disillusionment with our democracy.
He does have two good points that round out the chapter in regards to financial markets and American's place in the global economy. If America is going to lecture countries around the world about economic stability, then it should practice what it preaches. We have indeed lost credibility around the world because of our financial markets.
Proponents of the financial markets like to claim that one of the virtues of open capital market is that they provide "discipline." But the markets are a fickle disciplinarian, giving an A rating one moment and turning around with an F rating the next. Even worse, financial markets' interests frequently do not coincide with those of the country. The markets are shortsighted and have a political and economic agenda that seeks the advancement of the well being of financiers rather than that of the country as a whole.
Right. Until we chuck the "Wall Street Government," we aren't going to have as much respect around the world and voter disillusionment is going to continue at home. This point also serves to put an end, once and for all, to the notion that a successful business leader would make a successful civic leader (and that a rating from S&P means nothing).
The title of Stiglitz's next chapter is "1984 is Upon Us" and it details how perception is manipulated to continue inequality.
11 comments:
This leads to an erosion of civic virtue.
That is quite a claim. What evidence does he offer to back it up? Why does he posit a failure in the relationship of citizen to government and not citizen to citizen? Why is the government central to the question of inequality?
...he couldn't know that his predictions in this chapter regarding this case were going to be wrong.
Oh my! What else might he be wrong about?
Certainly, the president had a lot of money behind him.
There are times when you have quite a gift for understatement.
...globalization and he's far too vague in his criticism of it.
Rather like Mark Twain's observation that most people complain about the weather and none seem to ever do anything about it.
If America is going to lecture countries...
Wow - it just doesn't occur to you that perhaps that isn't our role in the world, does it? No, by God we are AMURIKANS and we have a divine right to tell all them ignurant motherfuckas what is what!
I guess since you read it in a book, you don't need to discuss whether the argument has evidence or not. That explains a lot about how you interpret the Bible.
As I have mentioned previously, his book is very heavily sourced. I'm not to recopy all 100 pages of his source material. You should get the book and see for yourself.
The government is central to inequality for a number of reasons but the primary one that Stiglitz harps on is that it is the creator of most of it.
I don't need you to copy all of the sources, just provide the one or two that he cites in support of [t]his leads to an erosion of civic virtue..
Is that really too much to ask? Or you could tell me that he does not in fact have any sources/evidence in support of that contention. That it is nothing more than a figment of his imagination that you happen to agree with. Perhaps you have some evidence that you believe corroborates the claim, so that it isn't just a matter of Stiglitz says (i.e. appeal to authority).
So, no evidence on the point about erosion of civic virtue - how typical both for you and for the average progressive intellectual.
You realize you are demonstrating that you are either a hypocrite or a liar by actively engaging in other threads (with emotional twaddle) rather than have a calm, serious discussion here.
But I can't have a reasonable discussion here because you refuse to go get this book and judge for yourself. This is very typical of how you guys argue. You simply critique me but never offer your own views. These latest comments are a great example that has an easy solution.
Go get the book. Turn to page 344 and read all 59 footnotes on his assertions here.
You could have a reasonable discussion if you would just present the material honestly. Instead you insist on preaching about it and you won't entertain a single question - not one. I asked a very specific question, not about all of the source material. I have to suspect that there is no elaboration on the erosion of civic virtue. You quoted it just expecting heads to nod, like people listening to whatever nonsense comes from the pulpit. If there is no footnote for it, say so and I will be more than happy to drop it (as it will be nothing but an unsubstantiated hunk of rhetoric intended to draw in the gullible).
There are several footnotes for it, juris, in the page that I mentioned. Go get the book and read them.
How childish M that you can't simply give me the citations. You better hope I don't borrow that book from the library and come here and demolish your shabby treatment of it.
I hope you do. Page 344.
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