Govt. of the 1%, by the 1%, for the 1%: a economist’s scathing view of the economic distortion of our society
Nobel Memorial Prize winner Joseph Stiglitz of Columbia University, one of the most famous economists in the world, gives an assessment of what the rapid shift in America’s wealth distribution to the top 1% means for the country at large. It is a dispiriting assessment.
“Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul. There are several reasons for this.
“First, growing inequality is the flip side of something else: shrinking opportunity. Whenever we diminish equality of opportunity, it means that we are not using some of our most valuable assets—our people—in the most productive way possible. Second, many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy…
“Third, and perhaps most important, a modern economy requires “collective action”—it needs government to invest in infrastructure, education, and technology. … America has long suffered from an under-investment in infrastructure …, in basic research, and in education at all levels. Further cutbacks in these areas lie ahead.
“None of this should come as a surprise—it is simply what happens when a society’s wealth distribution becomes lopsided. The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs.”
Worth a full read here:
vanityfair.com