The Price of Inequality: How Today’s Divided Society Endangers Our Future by economist Joseph E. Stiglitz is in many ways a reaction to the Great Recession of 2008 and the US’s response to it.
I listened to this book on Audible, which likely impacts the way I feel about it. In short, I probably could have used the footnotes available in the print version.
Stiglitz analyzes the causes of the recession and how US policy tried to curtail its effects. He generally blames the 1%, and particularly “the bankers”, for the predatory lending policies which created the recession and then exacerbated its fallout by pressuring the government into bailing out the big financial firms.
Stiglitz’s argument is impassioned and uses some pretty convincing rhetoric, but I don’t think he does a very good job of boiling high-level economic principles down to layman’s terms.
I generally agree with what Stiglitz says in this book, that US economic policy is far too heavily influenced by moneyed interests rather than what is best for the populace at large. But I don’t think that’s too stark of a position to hold at this point.
That’s my main problem with The Price of Inequality. I do not feel as if I’ve come away from this book better equipped to debate someone who disagrees with Stiglitz’s economic theories.
For anyone who is not a trained economist, the end result is that this book is either…
a) Preaching to the proverbial choir,
or b) spouting off Liberal BS that is obviously incorrect because LIBERALS
Just read through this book’s reviews on Amazon to see this dichotomy. Neither outcome does anything to advance the conversation about the role of government in economic policy or how our current system is designed to maintain certain standards of inequality.
Maybe this is the wrong book to read for someone who has little experience in basic economic theory. Maybe I’m too far removed from the anger in the late 2000’s, when these issues were being hotly debated, and when Stiglitz’s rhetoric may have been a welcome message.
If anything, this book has shown me that I need to do some more in-depth reading on some of the specific points that Stiglitz raises.
So, enough of the criticisms. At a certain point, readers must take some responsibility for their reading choices. Thanks to Stiglitz’s work, I will pursue readings on some more specific areas of US economic policy.
Stiglitz offers six ways to level the economic playing and, in particular, curb rent-seeking (Chapter 10):
- Restrict too-big-to-fail and too-interconnected-to-fail banks and reduce their volatility
- Make banks more transparent in how they offer derivatives
- Make banks and credit card companies more competitive with each other, using newer technologies
- Reduce predatory lending practices and high interest rates
- Curb executive bonuses which lead to increased risk taking and shortsighted behaviors
- Close down offshore banking centers
Like I said, I don’t feel as if I got enough information on any of these subjects to really say whether I agree with them or not. They sound nice, but I’ll have to lean on Stiglitz’s bibliography to find other sources of this information.
That’s essentially what I’m taking away from this book.