A Conversation with Joseph Stiglitz, Nobel Prize-Winning Economist

The following Q&A was taken from Time magazine (June 11, 2012).  Although Joseph Stiglitz is talking uniquely about America, his answers would appear to apply globally:

Nobel Prize-Winning Economist Joseph Stiglitz

Is America kidding itself when it calls itself the land of opportunity?

Yes, it is.  There are amazing stories of people who made it from the bottom to the top.  But what happens on average?  What is the chance of somebody from the bottom making it to the middle or top? . . .  In terms of basic statistics, the U.S. has become less a land of opportunity than other advanced industrial nations.

Is your book The Price of Inequality, a warning about class warfare?

I don’t like to use that term “class warfare.”  The word “warfare” suggests it’s a zero sum, with the top getting more at the expense of the bottom.  The problem is that by denying opportunities to people at the bottom, we are actually hurting our whole economy, because that means they’re not living up to their potential.

As I understand your book, you believe in capitalism, but you don’t believe in the free market?

The notion of the free market is a myth.  All markets are shaped by laws and regulations, and unfortunately our laws and regulations are shaped in order to create more inequality and less opportunity.

The comment that struck me the most was:  “by denying opportunities to people at the bottom, we are actually hurting our whole economy, because that means they’re not living up to their potential.”  I would say “whole global economy,” but this point rings very true to me.

When I see orphans and others with limited opportunities in Uganda, I wonder what they might become if they had been born under better circumstances?

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