In his 2013 book, The Price of Inequality, Joseph Stiglitz, a Nobel Prize-winning author, economist, and CBS professor, laid bare the actual and potential consequences of a dramatically imbalanced distribution of wealth across America.
In a new book, The Great Polarization (Columbia University Press, 2022), Stiglitz and co-editor Rudiger L. von Arnim of the University of Utah pick up that thread, discussing growing inequality in stark terms and outlining potential ways forward.
Stiglitz discussed the topic of inequality and the future of capitalism with Glenn Hubbard, dean emeritus and the Russell L. Carson Professor of Finance and Economics at CBS, during the first installment of a new speaker series on the future of capitalism from The Hub, a new CBS think tank.
Since The Price of Inequality was released, much has changed in America: The Donald Trump presidency redefined the US’s role on the world stage; an opioid epidemic ravaged the country; the effects of climate change became more evident; and the global pandemic claimed millions of lives and livelihoods, making many of the great divides that Stiglitz once wrote about even harder to ignore.
At the heart of Stiglitz’s argument: Too many economists and business leaders still blindly subscribe to the free market ideas of economists Milton Friedman, Adam Smith, and Friedrich Hayek. Stiglitz said many leaders with influence have “propagated the idea that markets solve all problems. There is a core idea that we should just let the market rip, and that is simply not true.”
To make capitalism more equal, Stiglitz suggested that, like physicians, economists should take a Hippocratic Oath.
“Similarly, the first point of the economics profession should be to do no harm,” he said. That could mean understanding that while raising wages and investing in the workforce might be less advantageous to shareholders in the short term, the long-term benefits will certainly materialize, he said.
“I am optimistic for the next 30 years, if we get our policies right,” Stiglitz added. But we need stronger regulation and a better education system, he said, and we need to steer technological change in the right direction.
“There’s a real reconstruction of the economy that is needed. [But] if we get it right over the next 30 years, then we should be good for the next 30 years after that.
Watch a video of the discussion here: