Joseph Stiglitz on Inequality

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🗓️ 9 July 2012

⏱️ 67 minutes

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Summary

Nobel Laureate Joseph Stiglitz of Columbia University talks with EconTalk host Russ Roberts about the ideas in his recent book, The Price of Inequality. Stiglitz argues that the American economy is dysfunctional, benefitting only those at the very top while the bulk of the workforce sees little or no gain in their standard of living over recent decades. Stiglitz blames this result on deregulation and the political power of the financial sector and others at the top. He wants an increase in regulation and the role of government in the economy and a more transparent Federal Reserve Bank that he blames for coddling the financial sector. The conversation also includes a discussion of the Keynesian multiplier.

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts
0:13.9	of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org
0:21.2	where you can subscribe, find other episodes, comment on this podcast, and find links to
0:26.5	other information related to today's conversation. Our email address is mailadicontalk.org. We'd
0:33.6	love to hear from you. Today is June 18, 2012, and my guest is Joseph Stiglitz of Columbia
0:43.4	University. He won the Nobel Prize in 2001, and his latest book is The Price of Inequality,
0:50.8	how today's divided society endangers our future. Professor Stiglitz, welcome to Econ Talk.
0:55.4	Nice to be here. Now, you pay in a pretty bleak picture of the state of our economy, our
1:01.1	economic system, and our political system. And I hope well of a chance to talk about all three of
1:05.3	those. Let's start with inequality. Why is it so disturbing? How big is it? And why is it getting
1:10.8	worse? Well, United States has distinguished itself as having the highest level of
1:20.5	inequality of any of the advanced countries. But even perhaps more disturbing is that it
1:27.6	has become the country with the least equality of opportunity. That means is the chances of
1:34.4	somebody going from the bottom to the metal bottom to the top, or the top down, are lower
1:41.1	than in any of the other advanced countries. The one way, an implication of that, of course,
1:50.8	is that the child's life prospects are more dependent on the income and education of his
2:00.0	parents than in any of the other advanced countries. That should be disturbing for at least
2:06.8	two reasons. And this comes to the general theme of the book. One is that it means that we
2:19.0	are not using our most valuable resource, our talents of our young people, as well as we
2:24.1	should. If you're young and you're unfortunate enough to be born of a parent is not, it doesn't
2:33.3	have a good income. The chances are that you won't be able to get the education that would
2:38.7	lead you to go live up to your potential. And the second reason why it's so disturbing is that it's
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