Stiglitz says the protest movement that has engulfed his institution and many others has “really hit home” and recalled his own history of civil rights protests in the 1960s. “It may seem hard to believe,” he says, “but I was there at the March on Washington in August 1963 with Martin Luther King. And I was there when he gaveI have a dream‘ speech.” He said it had an impact on his thinking as a young man and “a huge influence on the direction of our country, at least for a while.”
This mournful tone is consistent with much of Stiglitz’s career, as the left-wing economist and writer finds himself in increasingly lonely company: pro-capitalist progressives. Opinion polls widely indicate dissatisfaction with capitalism among some millennials and Gen Zers, as exemplified by the surprising electoral performances of so-called democratic socialists Alexandria Ocasio-Cortez and Bernie Sanders over the past decade. But Stiglitz argued all along that socialism was not the answer; rather, a well-regulated capitalism is urgently needed. At the same time, he denounced the far-right turn in American political and business culture to the point of questioning the influence of Reverend King’s famous speech.
“Neoliberal capitalism is eating itself,” says Stiglitz Luck, arguing that it rewards dishonest people and leads to a lack of trust. In his view, this is unsustainable because it puts personal interests above any sense of community and the wider interests of society. “Now we see the situation starting to ease,” he adds.
Countries everywhere have done too little to protect against the neoliberal turn, he argues, and those countries that have done too little to protect citizens from the market have seen the rise of populism and authoritarianism. Apparently he fears Trump’s return in November. “I think it will be terrible for the economy. And what’s worse, for our fundamental rights.” But he also says Americans are underestimating the international response. Overseas businessmen have expressed “sort of nervousness” about Trump’s re-election, he said. “And the closer we get to the election, the more nervous they say they feel.”
Freedom for the wolves
The title of Stiglitz’s book is an implicit reference to one of Regan’s favorite thinkers, the Austrian economist. Friedrich Hayekwho preached the efficiency of the free market primarily in his epoch-making work “The road to serfdom” As Stiglitz writes, freedom has more than one meaning, and in 21st century America there is “freedom for the wolves and death for the sheep.” (Stiglitz notes that this is a paraphrase Isaiah Berlinanti-communist, pro-capitalist liberal intellectual of the Cold War era.)
In the book, Stiglitz argues that the country’s neoliberal turn since Ronald Reagan has made the American Dream even more unattainable for everyone, especially Generation Z. He says Luck The media loves to tell “feel-good stories” in the spirit of 19th-century young adult novelists. Horatio Alger: Promotion is rewarded, reinforcing the idea that anyone can succeed if they work hard. “But from a social science perspective, the question is what is the probability, and it is very rare,” he adds, citing evidence that the United States performed worse than any other advanced economy. “I would say it’s a myth.”
But the American Dream is also about freedom, which includes freedom from harm and freedom to realize one’s potential. “Again, things are worse in America,” he says, specifically citing the epidemic of gun violence plaguing the country. “The important freedom is freedom from fear. And from a very young age we tell our children to be afraid.”
We must listen to our children, he adds: “The difference between what they were told and the reality is very big.” When they enter the job market, having been raised on the American Dream, he adds, “they know it’s going to be very difficult for them to own a home…they know that the average college graduate has about $30,000 to $40,000 in student debt, so it will be a noose around their neck for a long time.”
Stiglitz refuses to answer questions about excessive police brutality in cracking down on protests in Colombia, citing a long tradition of peaceful protests from Martin Luther King to Mahatma Gandhi, as well as tensions with civil disobedience that can be justified by a specific cause. . “I aware of the tension between different freedoms,” he says, adding that he generally wants civil dialogue that will lead to a peaceful solution.
Traffic light enforcement
In terms of solving the problem, Stiglitz uses the word “coercion” in his book, but offers a potentially illuminating metaphor: a traffic light. “You can’t drive through an intersection when it’s red. And if you do, you will see all sorts of consequences. You will be arrested. So this is definitely coercion. But in New York or London, if you didn’t have traffic lights, you couldn’t move at all. And you will have a dead end.”
When Luck Speaking about the biggest economic gridlock happening these days, the housing market, Stiglitz returns to his previous work.
While he cautioned that he hadn’t studied the current housing market closely, he looked at mortgage finance, a “peculiar system” in which the government bears roughly 90% of the risk through underwriting that hasn’t changed since the great crash of 2008. “It’s remarkable that for me, [is that] in the 16 years since then, we haven’t fixed the financial part.” We still have a system in which most of the profits go to the financial sector, but the government continues to bear most of the risks. In other words, if it were a traffic light, it might flash yellow without directing traffic effectively at all.