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Economics
Joseph Stiglitz ideas
Do you agree with Joseph Stiglitz that inequality is a threat to growth and stability?
Burgess COMMENTARY
Peter Burgess
Catarina's World Catarina Alexon is an International Businesswoman and Writer « Who’s the CEO of Twitter?Saudi women – a force to be reckoned with! » Do you agree with Joseph Stiglitz that inequality is a threat to growth and stability? China recognises the danger of inequality while in the West politicians are silently implementing policies that increase the gap between rich and poor. Watch Nobel Prize winning economist Joseph Stiglitz discuss the pheonomena with Vanity Fair Contributing editor, William Cohan:
Stiglitz: Inequality as a Threat to Growth and Stability
Published on Apr 10, 2013
NEW YORK, April 9, 2013 — Nobel Prize-winning economist Joseph Stiglitz discusses the threat rising inequality poses to stability and growth, and outlines how both China and the U.S. are responding (or not) to that threat, in a talk with Vanity Fair contributing editor William Cohan. Watch complete video: http://scty.asia/Zhpy92 Program Summary: http://scty.asia/ZhLvVs
Interesting video, isn’t it. Above all how China and the U.S. are responding to the threat rising inequality pose to economic growth and stability. And it is not only in the United States that politicians are actively and quietly making sure the gap between rich and poor is growing. Believe it or not, but even in Sweden the government is implementing policies that take from the poor and give to the rich. So it comes as no surprise that poverty is increasing. American approach to rising inequality Simply put; doing nothing and in fact making the gap increase. Median income is the same as forty years ago and medium wealth the same as it was twenty years ago. In other words the US economy is not delivering to a large section of Americans. For the Chinese it’s a top priority Whatever your feelings about China you have to give them credit for getting somewhere between 400 and 500 million people out of poverty. They know what problems inequality entails and reducing the gap between rich and poor is hence a top priority for their leadership. Why? Because they have seen first hand the detrimental impact inequality has on economic growth and stability. And in case you regard them as a communist country, don’t forget that Milton Friedman went to China and taught Deng Xiaoping how to implement neo liberal policies. And to this day the Chinese economy is run according to Milton Friedman’s gospel. Who’s on the right path? Sure, China is still much poorer that the US. Their per capita income is about a fifth of that of the United States. But don’t forget that they are growing on average 7-8% a year, while the US and Europe are hardly growing at all. In the not too distant future China will be the largest economy in the world and their voice in the global economy will carry much more impact. Do you agree with Stiglitz that inequality is a threat to economic growth and stability? Is China right to make reducing the gap between rich and poor a top priority? Or is the US and EU doing the smart thing by implementing policies that increase inequality? What can the West do to increase equality? Do you agree with Joseph Stiglitz that better education for all, investment in technology and infrastructure would have a positive impact? Is that likely to happen in a society where politics are as divided as in the United States? What’s your recipe for reducing inequality? Or maybe you think it’s a good idea for the gap between rich and poor to increase? Video: Asia Society – You Tube About Catarina Alexon När Europa och USA brottas med ekonomiska problem kan det gynna dig att fundera på nya marknader. Eller en omprioritering. Har ett stort nätverk världen över och är skicklig på att utveckla och genomföra marknads och kommunikationsstrategier för olika typer av organisationer, målgrupper, länder och syften. Tillsammans skapar och implementerar vi affärsstrategier som ger resultat
Comments (44) Sort by: Date Rating Last Activity +1 valerieremymilora's avatar - Go to profile valerieremymilora 2p · 4 days ago You raise many interesting and important question. The growing gap between rich and poor here in the US is rather alarming and frankly extremely destabilizing in every way.. Knowing that money talks, too many decisions that impact our society as a whole are made by those who stand to benefit the most from them... such as what is happening right now in Washington with i-522... this is just one example where policy is dictated by profit and not what is right for the good of our people... inequality breeds instability. The solution.. not easy to find but bridging the gap between rich and poor is essential. T Report Reply 1 reply · active 4 days ago patweber's avatar Follow patweber40p patweber has not yet written a personal description. View IntenseDebate profile +1 patweber's avatar - Go to profile patweber 39p · 6 days ago There is a lot in this video I do agree with, other things which I would have to further think about or research. I recently watched a documentary about the 41 billionaires in the USA who are calling the shots with our political system. It was a most dour picture of WHY there is the increasing and widening gap in income in the USA as Sitglitz led with. One of my take aways which ties into his points here is that unless we can somehow put the power back in the hands of the REST of the population, these 41 people will continue to get wealthy as they pay off the politicians (that is what happens behind the scenes) then the gap will continue to widen. If China has the same issues that are undermining the poor, maybe other countries just need to look beyond their own biases of China and admit, they might be onto something. My recent post Publisher and Author: Tribe, Timelines and Discipline Report Reply 1 reply · active 6 days ago 0 's avatar - Go to profile Cheryl · 1 week ago I am a bit pessimistic about America with regards to this subject. We have too many of the 'haves' who want to keep their tight grip on what they have no matter the cost. My recent post Pizza Triangles Report Reply 1 reply · active 1 week ago 0 's avatar - Go to profile Pamela Heady · 1 week ago I appreciate his comments on deficiencies in public education. I wonder how things would change if education on a collegiate level became more affordable? Changing rules of the game sounds like the right track but I agree that in a society with diverse political agendas, it would be a difficult task to even begin. Those at the top don’t want to lose their place and without some give to even things out, I believe there will always be a substantial gap financial inequality. Report Reply 1 reply · active 1 week ago +1 jacquiegum's avatar - Go to profile jacquiegum 6p · 1 week ago Ok, so I seem to be the outlier here. Part of the problem is that we have no manufacturing in the US due to increased labor costs that include pensions and Cadillac healthcare plans that sent manufacturers overseas to produce goods. Just as an aside, the unions have now asked for a waiver from The Affordable Health Care Act. Seems they have better insurance. Tax revenues both on the state on national level are at an all time high, yet our deficient is decreasing at an appalling low speed. Welfare is off the charts and the government has people on the street soliciting for new subscribers. Obama has waived the welfare to work programs instituted by Bill Clinton. It's not surprising that our working poor numbers have increased being as low skill jobs are at an all time low, and part-time work is now becoming the norm. I fret for college student graduating that may have to take 2 or 3 part-time jobs in order to pay the rent. We could have taken every single un-insured person in the US and put them on Medicaid for a fraction of the cost (both economically and politically) that this bill will cost us. My belief is that we need to tackle the income inequality problem with a robust economy and job growth. My recent post Have We Lost That Personal Touch?… Where’s The Justice? Report Reply 3 replies · active 1 week ago +1 JeriWB's avatar - Go to profile JeriWB 67p · 1 week ago Inequality in America will only be successfully addressed when those who oppose closing the inequality gap learn how to better see the whole picture of cause and effect. Conservatives here love to bash Obamacare, and yet don't realize the insured-half of the population are the ones who are paying for emergency room visits anyway. People shop at Walmart because the prices are low, but don't realize how many of the workers receive welfare just to be able to survive. It's easy to bash what you don't fully understand, and Americans love to engage in such futile arguments that ignore core causes. My recent post New Release: A Menu of Death Report Reply 1 reply · active 1 week ago +1 Susan P Cooper's avatar - Go to profile Susan P Cooper 70p · 1 week ago Living in America, I know the gap between the wealthy and the rest of the world very well. I applaud China for trying to empower their people. It will only help the society as a hold in the future. :-) My recent post Stefano Lubiana Wines By Kathy Clubb Report Reply 1 reply · active 1 week ago 0 's avatar - Go to profile Susan Oakes · 1 week ago Unfortunately I think there will always be inequality although I don't agree with it. One reason why governments get away with it is the poor do not have the voice to do something in most western countries. I didn't know about China and what they are doing but agree with you about their growing importance. My recent post Is Your Communication Hitting Right Spot? Report Reply 1 reply · active 1 week ago 0 's avatar - Go to profile Mark Brody · 1 week ago Interesting post Catarina. I am not a fan of 'everyone gets a trophy', however, the last comment Stiglitz says in the video is alludes to the fact that politics interferes with progress. This is very true. Agenda's over shadow prudent policy, which at the end of the day hurts everyone. It is frustrating to see people thinking they can start their own business, who struggle with common sense, and then they wonder why? Public education in the US, in my opinion, has been watered down to more of a focus on test scores, and as a result, the next generation struggles with critical thinking. Decisions are made at the point of decision with very little forethought as to the ramificaitons of those decisions. Ok... Off my soap box! I really enjoyed this post! Thank you for sharing! My recent post A Leadership Experience Report Reply 1 reply · active 1 week ago +1 ianmillerblog's avatar - Go to profile ianmillerblog 1p · 1 week ago As I see it, the problem with inequality is the concentration of activity into fewer and fewer hands, which has a strange leveraging effect. There is a very strict limit to the growth from good decisions from the few whose decisions count because the masses do not have the resources to benefit, however there seems to be no limit on the destructiveness of stupid decisions, c.f. the effects of the last 'banking crisis'. The 'invisible hand of the market' only really operates when players can come and go from an activity as they see fit and what they do does not perturb the market. Now we have the situation where only too few people can cause considerable economic harm just by being greedy. Report Reply 3 replies · active 1 week ago +1 TheGirl's avatar - Go to profile TheGirl 14p · 1 week ago I love Stiglitz, and have read his book too. Yes, I can see why inequality can lead to destabilization. In the U.S, in history it was the middle-class that built the economy especially with purchasing power, it was that same lack of purchasing power that brought down the economy in the Great Depression. The thing is, with neo-liberal and Capitalist principles we need poverty. I don't think Capitalism (in its purest form) can survive without having a poor demographic to exploit. But obviously, like many third world countries, once a significant amount of the 'needs' are not being met, then protests start to rise-- and this can lead to social/political destabilization (coup d'etat, military rules...etc) and investors, worried, will take out their capital. I think with the Occupy Wall Street protests, the police had to jump on that very quickly to make sure it didn't turn into some 'American Spring' because it was the hugest protest/political dissent we had in decades and it spread from east coast to west coast...but now what do we hear of it? A bunch of hippies in the park that were too lazy to work. Yep, Capitalism at work... Report Reply 7 replies · active 1 week ago +1 yearwoodcom's avatar - Go to profile yearwoodcom 39p · 1 week ago Catarina, I must have missed the memo, how do we sit in a democratic country and argue for inequality rationally? I can only assume that we have allowed those old and outdated perspectives on the causes of poverty to permeate our societies to the point that most people believe that poverty is the fault of the poor, or perhaps like Yippy, we think it's ok because it's 'normal'. While we’re embracing that old ideology we are clearly not looking at the consequence of our actions. I say we, because we collectively keep electing governments that reinforce inequality. Over the long term, I have to wonder what kind of strange growth or stability we think we’ll gain? Do we think stability is minimal movement in our per capita income? I could have sworn that was stagnation. I normally say thank you for your thought provoking posts, and this one was definitely that, but it also leaves me feeling frustrated. I was having this conversation about poverty when I was in my 20's....yes, that long ago. :) I can't believe we've learned so little. My recent post We Are Built For Change Report Reply 1 reply · active 1 week ago +1 Jeannette Paladino's avatar - Go to profile Jeannette Paladino 51p · 1 week ago Unfortunately, as you know from following politics in the U.S., the government will probably shut down in a day or two because the Republicans in Congress want to delay/defund the Affordable Health Care Act -- known as Obamacare -- which will enable millions of Americans who are without health insurance to buy it on insurance exchanges and get the health care treatment they deserve. We need to decide what kind of country we want to be -- providing healthcare, housing and a decent life for everyone or a country where the rich thrive and the poor fall through the cracks. My recent post Selling Something? 78% of Shoppers Research and Buy Online Report Reply 1 reply · active 1 week ago +1 becc03's avatar - Go to profile becc03 48p · 1 week ago I knew nothing of what China was doing, but it makes perfect sense. Why on earth would the west be sitting on their hands when the proof is right there? My recent post Sickness or Sensational? Report Reply 1 reply · active 1 week ago 0 yippy's avatar yippy · 1 week ago inequality is a normal outcome, that rattles the guilt ridden leftoids and chardonnay socialists. There is no such thing as a gap, it's a distribution, specifically a pareto distribution, occurs with mathematical certainty just as it does with city sizes, blog links and other networked structures. Report Reply 1 reply · active 1 week ago +1 Guy's avatar - Go to profile Guy 24p · 1 week ago This is a very complex topic, Catarina. I think it has more to do with societal norms and pressures than the size of the gap - look at India, for example, which has on of the largest gaps between rich and poor, and yet the poor are generally less fractious there than in many countries with much smaller gaps. The biggest danger is too much government - after all, governments do not inherently have money (democratic ones, that is), but take money from some people/companies and give to others - a modern-day Robin Hood, if you like. The danger is that the size of government keeps increasing, costing more while delivering less. I saw something a while back that suggested that Whitehall today had more than 100 times the number of civil servants that it had when England had an empire covering 1/4 of the world. There certainly isn't 100x the workload! People need to feel that if they work hard and take (business) risks, they can reap the rewards. The less fortunate needing a helping hand, but it should be a helping hand onto the ladder, helping them to be able to succeed - the old story about teaching a man to fish rather than just giving him one. This is where Western governments should be focusing their efforts, and reducing the cost of government, too... Report Reply 1 reply · active 1 week ago 0 Maria 's avatar Maria · 1 week ago I think here is where you'll find two different answers: one coming from the people 'down in the gap' and another from the people 'uphill'. Personally, however, I think the phrase in your text 'doing nothing, in fact, increases the gap' says it all. Long time ago, an economist explained to me how a, say a one dollar bill, had to pass by every person in the society, rich AND poor, in order for the society to be financially well. It had to 'flow' like the former logotype of coop in Sweden, (or rather, Domus) the infinity symbol, otherwise the society would come to a financial halt in the end, after it started forming two sides, and thus that famous gap - and look, what happened: Exactly that is what is now going on, across the world.. Report Reply 1 reply · active 1 week ago