THE PRICE OF INEQUALITY by Joseph Stiglitz
Reviewed by William Moomaw, Tufts University
A forceful argument against America’s vicious circle of growing inequality by the Nobel Prize–winning economist.
The Price of Inequality: How Today’s Divided Society Endangers Our Future, by Joseph Stiglitz, W.W. Norton Company , 448pp
Joseph Stiglitz’s The Price of Inequality offers a remarkably insightful analysis of the economy that has major implications for sustainable development. One of the fundamental premises of sustainable development is equity, but Stiglitz demonstrates that the growing inequality of incomes in the United States is extracting a high cost not just from the economy, but also from the environment and society.
Using solid data, he lays bare the means by which the dramatic shift in income disparity has occurred. Wealth increases at the top have resulted from rent-seeking in the financial and other industries, changes in tax policy that favor the already wealthy and reductions in the negotiating capacity of labor. Stiglitz documents the financial instruments that lead to the transfer of wealth and ultimately caused the recent collapse of the global economy.
Of comparable importance are recently enacted governmental policies that externalize more of the environmental costs of doing business onto the public, and the destructive incentives that have flowed to resource-based industries. Subsidies include direct payments, but also enhanced profit from the very low prices paid to the government by extractive industries for leases on federal lands. This shift in governmental policies has been fuelled by the ability of top income earners to pay the “re-election costs” of politicians who will favor their economic interests. As Stiglitz notes, these anti-society and anti-environmental policies actually reduce the viability of the economy rather than enhance it. Not a strategy for a sustainable future.