Nobel Prize Winner Crystal Clear On Inequality


Posted by Bob Lord

Last night, I posted on the gibberish from Nobel Prize winner Robert Shiller on inequality. Essentially, Shiller believes inequality is the most important problem we face, but he thinks we should wait for it to get worse before taking action. 

Contrast that to Joe Stiglitz, also a Nobel Prize winner. In a NY Times op-ed, Inequality Is A Choice, Stiglitz is clear on how we arrived at where we are today:

American inequality began its upswing 30 years ago, along with tax decreases for the rich and the easing of regulations on the financial sector. That’s no coincidence. It has worsened as we have under-invested in our infrastructure, education and health care systems, and social safety nets. Rising inequality reinforces itself by corroding our political system and our democratic governance.

He outlines the devastating impact of inequality:

Inequality and poverty among children are a special moral disgrace. They flout right-wing suggestions that poverty is a result of laziness and poor choices; children can’t choose their parents. In America, nearly one in four children lives in poverty; in Spain and Greece, about one in six; in Australia, Britain and Canada, more than one in 10. None of this is inevitable. Some countries have made the choice to create more equitable economies: South Korea, where a half-century ago just one in 10 people attained a college degree, today has one of the world’s highest university completion rates.

Most importantly, he's clear minded about the implications of choosing not to address inequality:

For these reasons, I see us entering a world divided not just between the haves and have-nots, but also between those countries that do nothing about it, and those that do. Some countries will be successful in creating shared prosperity — the only kind of prosperity that I believe is truly sustainable. Others will let inequality run amok. In these divided societies, the rich will hunker in gated communities, almost completely separated from the poor, whose lives will be almost unfathomable to them, and vice versa. I’ve visited societies that seem to have chosen this path. They are not places in which most of us would want to live, whether in their cloistered enclaves or their desperate shantytowns.

In that one short paragraph, Stiglitz explains all we need to know as to why inequality is our most important challenge, and why we absolutely must be one of the countries that do something about it. Not surprising he won a Nobel Prize.