Money = Power and 'The Price of Inequality'
Separate and Unequal
By THOMAS B. EDSALL, NYT
THE PRICE OF INEQUALITY
By Joseph E. Stiglitz
414 pp. W. W. Norton & Company. $27.95.
Joseph E. Stiglitz’s new book, “The Price of Inequality,” is the single most comprehensive counterargument to both Democratic neoliberalism and Republican laissez-faire theories. While credible economists running the gamut from center right to center left describe our bleak present as the result of seemingly unstoppable developments — globalization and automation, a self-replicating establishment built on “meritocratic” competition, the debt-driven collapse of 2008 — Stiglitz stands apart in his defiant rejection of such notions of inevitability. He seeks to shift the terms of the debate.
It is not uncontrollable technological and social change that has produced a two-tier society, Stiglitz argues, but the exercise of political power by moneyed interests over legislative and regulatory processes. “While there may be underlying economic forces at play,” he writes, “politics have shaped the market, and shaped it in ways that advantage the top at the expense of the rest.” But politics, he insists, is subject to change.
Stiglitz is a Nobel laureate and a professor of economics at Columbia (where I too teach, but we are not personally acquainted). He holds a commanding position in an intellectual insurgency challenging the dominant economic orthodoxy. Among his allies are Jacob S. Hacker and Paul Pierson (the authors of “Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class”); Lawrence Lessig (“Republic, Lost: How Money Corrupts Congress — and a Plan to Stop It”); Timothy Noah (“The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It”) and Paul Krugman (“End This Depression Now!”). The collective argument of these dissidents is not only that inequality violates moral values, but that it also interacts with a money-driven political system to grant excessive power to the most affluent. In short, those with power use it to insulate themselves from competitive forces by winning favorable tax treatment, government-protected market share and other forms of what economists call “rent seeking.”
Conservative advocates of pure free markets, in this view, fail to acknowledge how concentrated economic power converts into political power. The right, for example, has hailed the evisceration of the estate tax and the lifting of restrictions on campaign contributions, despite evidence that such policies work to restrict competition — by further concentrating wealth in the case of the estate tax, and by further empowering corporate America to control political decisions in the case of campaign finance.
(More here.)
THE PRICE OF INEQUALITY
By Joseph E. Stiglitz
414 pp. W. W. Norton & Company. $27.95.
Joseph E. Stiglitz’s new book, “The Price of Inequality,” is the single most comprehensive counterargument to both Democratic neoliberalism and Republican laissez-faire theories. While credible economists running the gamut from center right to center left describe our bleak present as the result of seemingly unstoppable developments — globalization and automation, a self-replicating establishment built on “meritocratic” competition, the debt-driven collapse of 2008 — Stiglitz stands apart in his defiant rejection of such notions of inevitability. He seeks to shift the terms of the debate.
It is not uncontrollable technological and social change that has produced a two-tier society, Stiglitz argues, but the exercise of political power by moneyed interests over legislative and regulatory processes. “While there may be underlying economic forces at play,” he writes, “politics have shaped the market, and shaped it in ways that advantage the top at the expense of the rest.” But politics, he insists, is subject to change.
Stiglitz is a Nobel laureate and a professor of economics at Columbia (where I too teach, but we are not personally acquainted). He holds a commanding position in an intellectual insurgency challenging the dominant economic orthodoxy. Among his allies are Jacob S. Hacker and Paul Pierson (the authors of “Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class”); Lawrence Lessig (“Republic, Lost: How Money Corrupts Congress — and a Plan to Stop It”); Timothy Noah (“The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It”) and Paul Krugman (“End This Depression Now!”). The collective argument of these dissidents is not only that inequality violates moral values, but that it also interacts with a money-driven political system to grant excessive power to the most affluent. In short, those with power use it to insulate themselves from competitive forces by winning favorable tax treatment, government-protected market share and other forms of what economists call “rent seeking.”
Conservative advocates of pure free markets, in this view, fail to acknowledge how concentrated economic power converts into political power. The right, for example, has hailed the evisceration of the estate tax and the lifting of restrictions on campaign contributions, despite evidence that such policies work to restrict competition — by further concentrating wealth in the case of the estate tax, and by further empowering corporate America to control political decisions in the case of campaign finance.
(More here.)
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