Spectator Books: Joseph Stiglitz - the invisible hand doesn't exist

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🗓️ 5 July 2019

⏱️ 40 minutes

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Summary

Sam speaks to the Nobel prize-winning economist Joseph Stiglitz, architect of Bill Clinton’s “Third Way” and former chief economist at the World Bank.

His new book People, Power and Profits: Progressive Capitalism for an Age of Discontent argues Trump’s economic boom is a “sugar-high”, and that the US economy is in a far, far worse state than anybody thinks. As a result, he says, we need to reevaluate our whole faith in free markets. The reason the "invisible hand" is invisible, he says, is because it isn’t there. He talks about why thinks that, and what we need to do about it.

Spectator Books is a series of literary interviews and discussions on the latest releases in the world of publishing, from poetry through to physics. Presented by Sam Leith, The Spectator's Literary Editor. Hear past episodes of Spectator Books here.

Transcript

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0:00.0	This is Spectator Radio. If you'd like to subscribe to The Spectator, you can get 12 issues for £12
0:05.2	pounds as well as a £20 pound Amazon voucher. Just go to spectator.com.uk forward slash voucher.
0:16.1	Hello and welcome to The Spectator's Books podcast. I'm Sam Leith, the literary editor of The Spectator.
0:24.2	And this week I'm very pleased to be joined by Professor Joseph Stiglitz. He's a Nobel Prize winner,
0:29.4	former senior economic advisor to President Clinton, former chief economist for the World Bank,
0:33.7	and very much else besides. And his new book is called People, Power and Profits,
0:39.7	Progressive Capitalism for an Age of Discontent. Welcome Professor Stiglitz.
0:44.1	Nice to be here. Now, can I start? The basic thesis of your book, as I understand it,
0:49.3	is that particularly in the American economy, things are very, very wrong.
0:56.2	Can you explain just how wrong and why?
0:58.8	Because I know that a lot of President Trump, who you're not keen on, his defenders,
1:02.7	will say, well, look, you know, we've got a lot of growth,
1:05.8	we've got the footsie bouncing around very happily.
1:08.9	You know, everything in the garden's rosy.
1:10.7	Why do you
1:11.3	disagree with that position? Well, let me first take the longer term view and then come in to
1:17.4	focus more narrowly on, on President Trump's assertions. Over the longer term, what has been
1:24.4	happening in the United States really has been dismal. At the bottom, real wages,
1:30.1	that is wages, suggestive for inflation, are roughly at the same level that they were 60 years ago.
1:37.5	If you look at one of the parts of our society that are most discontent males, the median income of a full-time male worker,
1:49.0	and the full-time workers are the lucky ones, is the same as it was roughly 42 years ago.
1:57.0	Life expectancy in the United States is in decline. And this in the country where there's more research going on in extending life expectancy
	...

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