Cover image for People, power, and profits : progressive capitalism for an age of discontent
Title:
People, power, and profits : progressive capitalism for an age of discontent
ISBN:
9781324004219
Edition:
First edition.
Physical Description:
xxvii, 371 pages ; 25 cm
Summary:
We all have the sense that the American economy-and its government-tilts toward big business, but as Joseph E. Stiglitz explains in his new book, People, Power, and Profits, the situation is dire. A few corporations have come to dominate entire sectors of the economy, contributing to skyrocketing inequality and slow growth. This is how the financial industry has managed to write its own regulations, tech companies have accumulated reams of personal data with little oversight, and our government has negotiated trade deals that fail to represent the best interests of workers. Too many have made their wealth through exploitation of others rather than through wealth creation. If something isn't done, new technologies may make matters worse, increasing inequality and unemployment. Stiglitz identifies the true sources of wealth and of increases in standards of living, based on learning, advances in science and technology, and the rule of law. He shows that the assault on the judiciary, universities, and the media undermines the very institutions that have long been the foundation of America's economic might and its democracy. Helpless though we may feel today, we are far from powerless. In fact, the economic solutions are often quite clear. We need to exploit the benefits of markets while taming their excesses, making sure that markets work for us-the U.S. citizens-and not the other way around. If enough citizens rally behind the agenda for change outlined in this book, it may not be too late to create a progressive capitalism that will recreate a shared prosperity. Stiglitz shows how a middle-class life can once again be attainable by all. An authoritative account of the predictable dangers of free market fundamentalism and the foundations of progressive capitalism, People, Power, and Profits shows us an America in crisis, but also lights a path through this challenging time.
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Summary

We all have the sense that the American economy--and its government--tilts toward big business, but as Joseph E. Stiglitz explains in his new book, People, Power, and Profits, the situation is dire. A few corporations have come to dominate entire sectors of the economy, contributing to skyrocketing inequality and slow growth. This is how the financial industry has managed to write its own regulations, tech companies have accumulated reams of personal data with little oversight, and our government has negotiated trade deals that fail to represent the best interests of workers. Too many have made their wealth through exploitation of others rather than through wealth creation. If something isn't done, new technologies may make matters worse, increasing inequality and unemployment.Stiglitz identifies the true sources of wealth and of increases in standards of living, based on learning, advances in science and technology, and the rule of law. He shows that the assault on the judiciary, universities, and the media undermines the very institutions that have long been the foundation of America's economic might and its democracy.Helpless though we may feel today, we are far from powerless. In fact, the economic solutions are often quite clear. We need to exploit the benefits of markets while taming their excesses, making sure that markets work for us--the U.S. citizens--and not the other way around. If enough citizens rally behind the agenda for change outlined in this book, it may not be too late to create a progressive capitalism that will recreate a shared prosperity. Stiglitz shows how a middle-class life can once again be attainable by all.An authoritative account of the predictable dangers of free market fundamentalism and the foundations of progressive capitalism, People, Power, and Profits shows us an America in crisis, but also lights a path through this challenging time.


Author Notes

Joseph Stiglitz is professor of economics at Columbia University.

Influential economist and Columbia University professor Joseph Eugene Stiglitz was born in Gary, Indiana on February 9, 1943. He received his undergraduate degree from Amherst College and his Ph.D. from MIT in 1967. He was awarded the John Bates Clark Medal in 1979 and the Nobel Memorial Prize in Economic Sciences in 2001.

Stiglitz has taught at Yale University, Stanford University, Duke University, Oxford University, and Princeton University. In 2000, he founded the Initiative for Policy Dialogue. Stiglitz worked for the Clinton Administration beginning in 1993 and was the Chairman of the Council of Economic Advisers from 1995 to 1997. For the next three years he served as the World Bank's Senior Vice President and Chief Economist. Stiglitz chaired the Commission of Experts on Reforms of the International Monetary and Financial System in 2009.

He has written several hundred articles and many books, including Making Globalization Work and Freefall: America, Free Markets, and the Sinking of the World Economy. His title The Price of Inequality made The New York Times Best Seller List for 2012.

(Bowker Author Biography)


Reviews 3

Kirkus Review

The renowned economist builds on his already extensive writings in the hope that policymakers will see the wisdom of altering both political and financial practices to restore the middle class in the United States.Though Nobel Prize-winning economist Stiglitz (International and Public Affairs/Columbia Univ.; The Euro: How a Common Currency Threatens the Future of Europe, 2016, etc.) has unquestionably earned the prestige to be heard on nearly any issue related to the economy, he concedes that the cataclysmic changes he proposes would probably never derive from the current Republican Party and might never occur if the Democratic Party controls the White House and Congress. Regardless, the author rarely wallows in pessimism as he presents his extensive platform in language that will be accessible to most general readers. Stiglitz sets the stage for his approachable narrative by recalling his childhood in a healthy industrial city (Gary, Indiana) and how, when he returned to Gary for his 55th high school reunion, the healthy economy had been tainted by a combination of political and economic policies benefitting the ultrawealthy. Those conditions led to massive income inequality, one of the most significant issues facing the country today. Stiglitz pinpoints the causes as a toxic stew of too-big-to-fail banks placing greed above economic growth, government initiatives favoring globalization without protecting American laborers, lack of recognition by both government and the private sector that shifts from a manufacturing economy to a service economy require a new paradigm, and the lack of effective responses to obviously increasing income inequality. In the second part of the book, the author offers a massive platform for change that must be preceded by voters choosing candidates for Congress and the White House who are willing to cast aside the hegemony of the ultrawealthy. As he writes, "achieving greater equality is not just a matter of morals or good economics; it is a matter of the survival of our democracy."A lucid book grounded in vast knowledgeand equally vast idealism. Copyright Kirkus Reviews, used with permission.


New York Review of Books Review

A DIVERTING BELTWAY PASTIME during the heyday of the Washington Consensus was to gently mock Joseph E. Stiglitz. It was remarkably easy for pundits to wave away his prestigious awards (Nobel Prize in Economics) and positions (World Bank chief economist, chairman of Bill Clinton's Council of Economic Advisers) and dismiss his warnings about "market fundamentalism" as overripe hyperbole. In 2004 the financial columnist Sebastian Mailaby described Stiglitz as "like a boy who discovers a hole in the floor of an exquisite house and keeps shouting and pointing at it." Fifteen years later, the house that capitalism built looks rather shabby. Maybe, just maybe, more people should have taken Stiglitz seriously. This is certainly what Stiglitz, now a professor of economics at Columbia, is hoping for with his latest book, "People, Power, and Profits." He argues that the American system of capitalism has fallen down and needs government help to get back up again. "People, Power, and Profits" builds on Stiglitz's earlier work and adds some pretty big ambitions. In the preface, he writes: "This is a time for major changes. Incrementalism - minor tweaks to our political and economic system - are inadequate to the tasks at hand." In the introduction, he adds: "It is not just economics that has been failing but also our politics. Our economic divide has led to a political divide, and the political divide has reinforced the economic divide." Stiglitz's diagnosis of what ails the American economy will have a familiar ring to anyone who has followed these debates. The rules of the game have been stacked in favor of the haves over the havenots. This has widened economic inequality and increased the concentration of market power among leading firms in every sector, slowing down broad-based productivity growth. These firms and wealthy individuals are converting their riches into political power, further revising the rules to entrench their position at the top. They advocate for tax cuts and the deregulation of everything except intellectual property rights. Anyone who relies on countervailing institutions, like public education, labor unions or social safety nets, loses out. "People, Power, and Profits" goes beyond diagnosis to treatment. At the core of Stiglitz's plan is the strengthening of the state. "The view that government is the problem, not the solution, is simply wrong. To the contrary, many if not most of our society's problems, from the excesses of pollution to financial instability and economic inequality, have been created by markets." He proposes a whole host of reforms, including significant investments in public goods like basic research, more stringent regulation of firms and measures to preserve and protect the voting franchise. A cruel irony of "People, Power, and Profits" is that in arguing the free market has declined, Stiglitz is competing in an extremely crowded marketplace. The genre of "How has America gone wrong?" is overstuffed; we are living in a golden age of authors telling Americans that we no longer live in a golden age. Given the plethora of books on this topic, does Stiglitz's stand out? One of his book's comparative advantages is that while Stiglitz has impeccable economic credentials, he also recognizes some of his profession's blind spots. He observes, correctly, that standard textbook economics talks a lot about competition but little about economic power. He also excels at swatting away bromides about the miracles of markets and the failures of governments. He notes, for example, that the Social Security Administration is far more efficient at disbursing retirement benefits than private pensions. Stiglitz could have done much better, however, if he had narrowed his focus to the sharpest arguments in his policy quiver. For instance, he discusses the idea that taxes on carbon or financial transactions "can simultaneously increase economic performance and raise revenue." This sounds like the progressive doppelgänger of the Laffer Curve, that is, a concept that would be good policy and good politics. Stiglitz should be selling the hell out of it; instead, he breezes through it in one page. Some of his other ideas seem less thought out or more politically toxic. On antitrust, for example, he encourages a doctrine of pre-emption: "Regulation of mergers must take into account the likely future shape of markets." This would require considerable foresight, so it is a problem that 75 pages later Stiglitz allows that "often there is far from perfect information about where a market will be evolving, and the world turns out to be different from what we expected." He fails to explain how regulators would handle this conundrum. Another of Stiglitz's ideas - a public mortgage financing system that could access an individual's I.R.S. and Social Security data - sounds unpalatable in the current lowtrust political environment. Indeed, I wish Stiglitz had taken seriously his pledge to take politics seriously. At one point, "People, Power, and Profits" rules out the idea of a universal basic income because the necessary tax increases would be politically impractical. That was the only moment in the book in which Stiglitz seemed to think at all about how any progressive policy reform would be, to use the language of economics, "incentive compatible." There is no discussion whatsoever of polling data or other metrics to gauge public support for his ideas. The policy shop of every 2020 Democratic candidate for president would be wise to pore over "People, Power, and Profits" and cherry-pick its best ideas. Other readers should feel free to browse the genre a bit more widely. Stiglitz says America's political divide has reinforced its economic divide. Daniel w. drezner is a professor of international politics at the Fletcher School of Law and Diplomacy. His most recent book is "The Ideas Industry: How Pessimists, Partisans, and Plutocrats Are Transforming the Marketplace of Ideas."


Library Journal Review

Nobel Prize-winning economist Stiglitz (economics, Columbia; The Price of Inequality) draws a political and economic roadmap for the promotion of equitable prosperity in the United States. The author states that widespread prosperity cannot be achieved by unfettered capitalism or by the Trump Administration's current combination of tax cuts for the wealthy, environmental and financial deregulation, nativism, and protectionism. Many Trump supporters, he says, felt betrayed by the elites who touted economic growth through globalization and financial deregulation. Stiglitz presents evidence for declining American prosperity, growing anticompetitiveness, mismanaged globalization, a dysfunctional financial sector, and disruptive technology. Effective government, stresses Stiglitz, is crucial to promoting collective action and reining in contesting factions. He calls for voting and governmental reforms to restore majority rule and for the advancement of a national economic dynamism that would provide widespread opportunity with social protection of the environment, health care, housing, education, and retirement. VERDICT Outspoken in his antipathy toward corporate greed and the Republican Party's agenda, Stiglitz offers a comprehensive list of easy-to-understand progressive remedies that will find favor with many readers, especially those feeling disenfranchised at present.-Lawrence Maxted, Gannon Univ. Lib., Erie, PA © Copyright 2019. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.


Table of Contents

Prefacep. xi
Part I Losing the Way
1 Introductionp. 3
2 Toward a More Dismal Economyp. 32
3 Exploitation and Market Powerp. 47
4 America at War with Itself over Globalizationp. 79
5 Finance and the American Crisisp. 101
6 The Challenge of New Technologiesp. 117
7 Why Government?p. 138
Part II Reconstructing American Politics and Economics: The Way Forward
8 Restoring Democracyp. 159
9 Restoring a Dynamic Economy with Jobs and Opportunity for Allp. 179
10 A Decent Life for Allp. 209
11 Reclaiming Americap. 222
Acknowledgmentsp. 249
Notesp. 257
Indexp. 353