Interview with Joseph Stiglitz: Columbia economics professor and Nobel laureate

Stiglitz said that the protest movement engulfing his organization and many others “has hit home” and he recalled his own history as a civil rights protester in the 1960s “This may sound unbelievable,” he said, “but I was there at the march on Washington in August 1963, with Martin Luther King. And I was there when he gave out’I have a dream‘ words.” This, he said, influenced his thinking as a young man, and “had a tremendous impact on the direction of our country, at least for a time.”

This somber tone is consistent with much of Stiglitz’s career, as the left-leaning economist and author found himself in an increasingly lonely community: support progressive capitalism. Poll widely pointed out One dissatisfied with capitalism among some Millennials and older members of Generation Z, as evidenced by the surprising electoral successes over the past decade of the so-called Democratic Socialists, Alexandria Ocasio-Cortez and Bernie Sanders. But Stiglitz has long maintained that socialism is not the answer; rather, a well-managed capitalism is absolutely necessary. At the same time, he criticized the far-right turn in American political and business culture, to the point where he doubted the impact of Reverend King’s famous speech.

“Neoliberal capitalism destroys itself,” Stiglitz said Luck, arguing that it rewards dishonesty and leads to a lack of trust. In his view, it is unsustainable because it puts personal gain above any sense of community and the wider interests of society. “We are seeing it start to fray,” he added.

He argues that everywhere, countries have done too little to protect against neoliberal trends, and these countries have done too little to protect citizens from markets that have seen the rise of populism and authoritarianism. Clearly, he fears a Trump return in November. “I think it will be very bad for the economy. And even worse, for our fundamental rights.” But he also said that Americans are underestimating the international response. Businessmen abroad have expressed “concern” about Trump’s re-election, he said. “And the closer they get to the election, the more nervous they feel.”

Freedom for wolves

The title of Stiglitz’s book is an implicit reference to one of Regan’s favorite thought leaders, the Austrian economist. Friedrich Hayekwho preached efficiency of the free market above all in his landmark work “The road to slavery.” As Stiglitz writes, freedom has more than one meaning, and in 21st-century America, there is “liberty for the wolves and death for the sheep.” (Stiglitz notes this is an interpretation of Isaiah Berlinan anti-Communist, pro-capitalist liberal intellectual since the Cold War.)

In Stiglitz’s book, he argues that the country’s neoliberal turn since Ronald Reagan has pushed the American Dream further out of reach for everyone, especially Generation Z. Luck The media likes to tell “good stories” like the 19th century young novelist Horatio Alger: upward mobility is rewarded, reinforcing the idea that anyone can get there if they work hard. “But from a social science perspective, the question is what is the likelihood and it is very rare,” he added, citing data of worse outcomes for the United States than any other. any other advanced economy. “I would say it’s a legend.”

But the American Dream is also about freedom, including freedom from harm and freedom to reach one’s full potential. “And once again, America has done worse,” he said, specifically citing the gun violence epidemic plaguing the country. “An important freedom is freedom from fear. And from a young age, we teach our children to be afraid.”

We should listen to our children: “The difference between what they hear and reality is huge,” he added. As they enter the job market, buoyed by notions of the American Dream, he added, “they know that it will be difficult to own a home…they know that a college graduate The average has about $30,000, $40,000 in student debt, so it’s going to be a noose around their neck for a long time.”

Stiglitz declined to answer questions about excessive police brutality in dispersing protests in Columbia, citing a long tradition of peaceful protests from Martin Luther King back to Mahatma Gandhi, but also the tension with civil disobedience that may be warranted by a particular cause. . “I aware of the tensions between different freedoms,” he said, adding that he generally wished for a civil dialogue to reach a peaceful solution.

Traffic light enforcement

As for the fix, Stiglitz uses the word “coercion” in his book, but he offers a potentially illuminating metaphor: the traffic light. “You can’t go through the intersection when the light is red. And if you do, you will see all kinds of consequences. You will be arrested. So it’s clear coercion. But in New York or London, if there are no traffic lights, you won’t be able to move. And you will get stuck.”

When Luck Addressing today’s biggest economic impasse, the housing market, Stiglitz referred back to his previous work.

While he cautioned that he had not thoroughly researched the current housing market, he did research mortgage financing, a “special system” in which the government takes on about 90% of the risk through underwriting , unchanged since the great crisis of 2008. “It is noteworthy that for me, [is that] In the 16 years since then, we still haven’t really fixed the financial part.” We still have a system where most of the profits go to the financial sector, but the government continues to bear most of the risk. In other words, if this were a stop light, it might flash yellow without effectively controlling traffic.

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