How Today's Divided Society Endangers Our Future - The Price of Inequality

Provocatively written with a rich reference of data and research, this book is a great example of a neo-Keynesian assessment and critique of the economy.

The central theme of The Price of Inequality: How Today’s Divided Society Engenders Our Future, written by Colombia professor, winner of the Nobel Prize of Economics, and overall economic wizard, is that political and economic forces have shaped and reinforced the extent to which concentration of income at the top is created and protected by certain institutions in which the richest members of society exert considerable influence in the creation and implementation of public policies. This book is a significant contribution to the policy debate on the real cost of inequality in income and opportunity.

One of the main arguments Stiglitz makes is that deregulations and the unrestrained powers of the market have given rise to an unjust and inefficient economic system. Throughout the book Stiglitz extends and enhances a political economy argument the essence of which is that government policies, instead of market forces alone, are responsible for the forming and perpetuating inequalities in income. In a neat outline format, the author identifies the underlying causes of the recent corrosion in income distribution to ideologically-driven measures of right wing politicians and economists to dismantle government programs and regulations that were instrumental in addressing the problems of excessive inequality in income and opportunity.

Amongst the well-cited material enclosed in the book, Stiglitz discusses the forces and policies that are largely responsible for concentration of income at the top of the distribution pyramid and the significant loss of opportunities for the middle and low income household incomes. These include inadequate financial sector regulations, weakening corporate governance, creation and protection of massive subsidies for the rich, tax loopholes, rents and monopoly profits, and elimination of government programs that aided poor and middle income people have a fair shake in life. As the data shows, most of these factors created huge rent for the rich but with limited economic opportunities for the rest of the population. Disappointingly, the economic rent for the rich was created and in fact protected by our own government and its polices as well as various political institutions that were constructed to sponsor the interests of the rich.

The book argues from a political economy perspective how government policies and deregulation measures marginalized the interests of middle and low income families. Rent seeking behaviors of the super-rich and their united effort to purchase influence in politics are driving forces of inequality where the rich use their economic prowess to shape politics and economic policies to their own economic interest. Market forces, the book describes, function within a socio-political environment and their outcome is influenced by the effectiveness or failure of government policies to bring about a rather robust and equitable economic system. The morale of the argument is that addressing the problems of inequality on a sustainable level requires the reformation of political forces and government policies that give rise and sustain them.
The issues of income distribution and inequality have been used by both the Left and Right aisles of the ideological schism as weapons: the Right considers inequality as an unintended consequence of a market system that rewards economic agents according to their respective contribution to the economy (which Stiglitz argues is rather hard to measure: a person’s contribution). The mantra is that so long as income inequality is the reflection of inequality in capability, there is nothing wrong about it except encouraging economic agents to improve their capabilities through their own efforts and investments. The Left, with which Professor Stiglitz identifies himself, rejects this notion and argues that market failure is pervasive and income concentration at the top hardly reflects the contribution of those economic agents involved in economic output and social outcome. Inequality instead, Stiglitz argues, deprives society of realizing its economic and social potentials and condemns those with limited opportunities to accept absolute poverty as a fact of life. Atta boy Stiglitz!

Government policies are necessary to correct market failures and mitigate excesses by powerful and rent-seeking portions of society.
Professor Stiglitz argues that the rich persuades the middle class to see the world in a distorted way that confuses their own interests with that of the rich (false consciousness/ideological control). This idea that the top one percent somehow made the non-one percenters share its perception and does not know its economic interest and choices is indeed fathomable. Perception and “intellectual capture” have strong influence and the rich have the incentive, resources and motivation to shape the perception of the masses to its advantage through the influence of the media, public institutions and other arenas.

The disenfranchisement of the middle class and it subsequent alienation from the political processes is an issue that would impact its present and future economic and social interests. The median voter is richer than the median income earner in the United States. The battle of ideas, should then sensibly focus solely on empowering the middle class to appreciate and exercise its political rights and social responsibilities.
The price of inequality is very closely related to the price of civilization that requires members of society to exercise their rights as well as responsibilities in line with certain social objectives. The American electorate seems to be almost equally divided, according to Stiglitz and he admits the failure of the political and electoral processes and suggests following the examples of Australia, Belgium and Luxembourg, where the electorate is accommodated to vote during elections.

Stiglitz concludes the book with an idea of reform agenda that covers both economic policy and political reforms that could make the current economic system more efficient, generate jobs, and addresses the problems of inequality.
Professor Stiglitz has managed to elevate the scope and depth of the discussion of inequality a step further and encourages readers to observe the challenges of inequality from a new and more informed perspective.

Way To Be Jo!

Everyone should read it. Better, everyone should grasp the data and change the selfish sight of this inequal society and the ways we can help to narrow the gap for an evolution towards everybody's happiness.

Written for non-economists, Stiglitz's editors have done a great job in encouraging this Nobel Prize winner to clearly explain just what has caused the greatest economic collapse since the Great Depression AND how to dig our way out of it. Yes, there is hope for America in this book.

Very refreshing to read a really sensible, level-headed look at our social & political culture in America today. The mystery remains as to why no one in power is listening! We are clearly heading in a dreadful direction in this country. The financial and business "moneyed special interests" are carefully spinning a tune, (i.e.: propaganda), that the public is deceived into following. How will we succeed in bringing about a direction for this country that benefits the vast middle-class? I am very grateful that Stiglitz is speaking clearly about the things that, astonishingly, others refuse to see. What is it going to take to wake people up to the deception perpetrated upon the masses? The scary thing is that ......... we have been here before, and obviously we did not learn important lessons from the failures of late 19th & early 20th Century Capitalism.

This book explains in detail just how sick our system is but sadly as long as people like Murdoch controls the minds and opinions of the dumbed down the ruling class can continue to have complete control over the wealth and assets

By putting the word inequality in the title,the author likely attracts those who already agree and alienates those believe everything is just fine the way it is. He uses plenty of supporting and makes a great case, in my opinion, to act with urgency to unwind our levels of inequality. But I'm not one who needs to be convinced. I'm not optimistic much changes in the near future.

A very good analysis of the inequality issue in today's America. Somewhat heavy on the the economics, but quite educational as to all the methods used to establish, then maintain special status in our society.

A good book overall. His prognosis is spot on, the rich have accumulated massive wealth, not only because of good businesses or inventions but mainly from working the system to their advantage. The spread between the haves and have nots is only getting worse and the policies of the government have made things worse. Where I disagree with him is with the treatment plan and how we got here.

Both the tea party and the occupy people agree, the government is not for the people anymore. The bank bailouts are socialist welfare in our time. It shows how capitalism has been corrupted by the rent seeking activities of large corporations and banks. But the movements differ in how to solve the problem. The tea partiers want less government and let the banks fail for making bad bets. The occupy guys want more intervention and regulation. Stiglitz errs when he puts the entire blame on corporations totally. He only barely mentions the policies of the federal reserve. Their cutting of interest rates in the early 2000s was the displacement that caused the housing bubble. He speaks so highly of Keynesian economics and this idea of "lack of demand" and "full employment" and that we could avoid depressions if we just inject excess demand and liquidity in the market. But how about QE 1,2,3? That is exactly what QE was, an attempt to spur consumerism and it didnt work. Greenspan, Bernanke, and Yellen are all Keynesians. Stiglitz seems to think there is no repercussions for endless debt and spending to spur the economy but totally ignores that we have tried ZIRP since 2009 and haven't raised interest rates once and have had 3 rounds of QE. And things are as bad as ever. So what flavor of Keynesianism he is advocating I'm not sure. He says,
"To stimulate investment, we must focus on stimulating demand. Getting more money into the pockets of those in the middle and bottom would do that."
So what is he saying, just give money to the poor, that is already done through 46 million on food stamps and 73 million on medicaid. Of course we can stimulate demand, but demand means spending money we don't have. It's already been exhausted.

I do like his idea of taxing the richest and spending it on infrastructure. Our infrastructure went from 7th in the world in 2009 to 14th in 2014. All the while we were doing QE instead of investing in our country. Now the FED holds 4 trillion in Treasury bonds and for what? ZIRP an QE have just played into the hands of investment banks and speculators. 50% of the country doesn't even invest in stocks and that is the only place you see a rate of return on your money. His ideas on global warming are crazy to me. Taxing carbon and investing in clean energy to me is just another side of the same coin as corporate welfare. Anytime the book is closed on science and the alarm bell ringers are asking for money you should be alarmed. He talks about jobs being the number one thing that will help the middle class and with our country awash in new found oil we could create many jobs. But instead he wants to subsidize very expensive energy sources to "save the planet".

The premise he uses to me is very un-American. He takes a populist tone that everyone deserves college education, a good paying job, and security for their children. Why? The country used to stand for each man/woman doing as they pleased and taking the rewards and punishments. If you couldn't afford kids you don't have them. He argues that BECAUSE poor people have kids they need good jobs. A pretty ridiculous argument. This country is spoiled and entitled. I'm in the military, if you want free college sign up for three years then use your GI bill.
He just needs to admit not everyone deserves to live in a home, bottom line. Restructuring mortgages for people is the ultimate moral hazard. They didn't deserve to live in a home in the first place. Live within your means.

His ideas about estate taxes are ridiculous. He basically says, "Well you were responsible and made good choices and you want to keep the money in your family but we need to tax that heavily to stop the accumulation of power." Before the welfare state we depended on families, friends, neighbors, and communities to get along. But with the advent of the welfare state the worthless scum in our society have been rewarded for breeding like rabbits out of wedlock and then expecting society to pay.

We only have ourselves to blame for the corporate state, 50% turn out for federal elections. We are just too busy hash tagging and updating facebook statuses to care.

A good book for sure, but I just disagree with his prescription for correcting what is wrong. Another good read that agrees with his premise is The Great Deformation by David Stockman.

This book really makes sense of what's been going on in America in terms of wealth, income, and the share of each going to the super wealthy over the last twenty years. It's full of evidence, but easy to read. I recommend it.

Stiglitz is right on about most things. Lots of good supporting data, but still too many conclusions given as facts. Not nearly as axiomatic as would be typical from the strict free market side of this debate, but enough to turn me off. Still prefer Krugman's data first, data last style... Stiglitz comes off as more preachy than I can read for more than an op-ed.

This is a well-organized look at why American riches are not producing a better country. It explains why even those who are skimming enormous amounts off the top are not well-served by the policies that peel the money off for them.

This book was required for a class and was sometimes hard to read more because of the content than the writing style. Stiglitz analyzes our US economy and where we are headed and it can be depressing! I wish politicians and lawmakers would read this informative book!

An inquisitve reader might find the content of this book useful. Some knowledge of finance, economics and HISTORY will make it a valuable tool. If I was not retired, this book would be required reading for my Economics Principles students.

The Price of Inequality is a broad and thorough analysis of problem of income inequality. I found the book thoroughly enjoyable and informative. In contrast to books by other authors (eg Krugman), the book is a very economics focused analysis.

The book provides good coverage of the issues of income inequality, and is a essential reading if you're looking for a broad understanding of the topic.

Very good explanation of what has created our current state of inequality and how we can go about reversing that. However, I don't see the 99% waking up to this reality and because most of us will remain duped and in a stupor, I don't feel any hope that any of these practical solutions will be implemented.

Got what I ordered, promptly as expected. Thanks! Never apply technology by itself. It must always include an analysis of the utility and the work processes to use technology as efficiently as possible.

When a reputable professional relies on repetition of message and a multitude of facts to make a compelling point, it alerts me that he/she is up against some formidable opponents or skeptics. I take that in stride and read on. The book exposes the highly imbalanced (1% vs. 99%) equity division in the U.S. and the associated, dangerously dysfunctional impact of the status quo national political policies on the financial affairs of society. Certainly, like doctors, economists and politicians disagree on diagnosis and prescription. However, when we as patients become aware at the significance of what is at stake, we would be wise to not only seek a different doctor, but also prudent to seek a different prescription whose purpose is to cure rather than sedate.

Stiglitz does a fantastic job describing just what is wrong with our modern society. At times he can be a little redundant about his past experiences, but that is little more than a personal qualm. He suggests some sollutions to America's issues, but realizes it would be difficult to get past the iron triangle.

What a wonderful book. I haven't finished it yet, but already have highlighted more of this book than any I've read before. The title says it all, that we are paying a price for the inequality in our economy and our politics. And today while reading about how disenfranchisement of voters is causing more inequality, the Conservative Supreme Court has struck down a key part of the Voting Rights Act of 1965. If you are one who thinks the conservative movement started by Ronald Reagan in the '80's was also the start of the increase of the inequality that we see today, then you should read this factual documented book. Mr. Stiglitz does point out that 100% equality is not the goal, but the U.S. is heading in the wrong direction and that doesn't look good for the future.

it raised some interesting points, which could be addressed with numbers and charts , but I've seen none. It's very repetitive and bland, I felt like it just kept repeating some arguments over and over

A vertible tome of what ails our country, and some advice to fix it.A vertible tome of what ails our country, and some advice to fix it. This is part book, and part reference. The author clearly describes this thesis, but also backs it up with research (and footnotes) on each paragraph. This is an indispensible book for the thinking voter, but is something that needs to be read slowly and carefully because of how much detail is included.

This is a fabulous dissertation on what is and has been happening to our economy and politics based on the greed of the financial too big to fail banks, the corrupt congress, regulators and our so called protectors and those in the faux news bubble taken in enough to go against their own self interests.

Their is so much insight here. It cannot be put down. Those of you thinking you would be agonizingly bored by the economic facets and illuminations provided by this are in for a huge surprise. Joseph, a Nobel prize winner, clearly demonstrates in this non-fiction work what an aware intellect he shares - written in a fashion for the 99% to easily grasp. It is bursting with Ah Ha moments. Read it, weep, get mad and then take your economy and politics back.

Glenn J. Melton

If you want to understand what is going to happen in our increasingly inequitable and divided society, this book is an essential read. As usual, Stiglitz outlines a major economic/social problem in a concise and readable fashion.

Stiglitz's book may be interpreted as an attack on the right, often his phrasing, which is his consistent view of the 1% that have such a large proportion of the wealth of the U.S.; however, his purpose is to explain the unfair advantages that corporations and the wealthy have in regards to favored tax status, low rates on Capitol gains, favoritism for financial institutions, and the FEDs preferred support of Wall Streest and banks over the public as a whole. Stiglitz points out the failure to properly assist those with imperiled mortgages or punish those financial institutions that took advantage with improper mortgage lending methods, in fact today, the Dodd-Frank bill today is only 1/3 in effect. Ironically, Jamie Diamon of JP Morgan complained of the new banking regulations; just before JP Morgan disclosed they lost billions on a high risk hedge fund. Stiglitz also points out that the FED is too concerned with inflation versus employment and he takes the FED task for being more concerned with Wall Street than the general population. Stiglitz is obviously more Keyes than Milton Friedman who he argues was off target in his theories. The author offers numerous solutions to create greater opportunities and sharing of wealth by closing corporate tax loop holes, taxing the affluent more fairly (higher taxes), increase infrastructure spending and on education, reward companies for job creation, tax corporations for over seas employment. The author offers a lot of ideas and does provide a valiant case for a fair economic playing field and elections not banked by corporations or the wealthy. The key point is that with a strong middle class and more assistance to the poor, the increased buying power is what would fuel economy, in contrast to corporate CEO's who derive huge bonuses in spite of failed financial practices that wrecked our economy. If this sounds like a basis for an economic revolution in the U.S,, then you may be right.

Excellent resource and analysis of our current economic situation with a multitude of referenced footnotes. I would recommend this book to anyone trying to gain an understanding of how government sets the rules within which the economy operates and the consequences of that government created environment. A must read.

Professor Stiglitz writes on behalf of the 99%; I am a mechanical engineer and one of the 99%. I hope the book will find a large following, particularly from the generation just graduating from university, and that collectively we will somehow move our society in the directions he proposes.

Excellent analysis by a Nobel-Prize winning economist.This book is not especially short,but it reads easily.Stiglitz breaks down some of the reasons for the decline of the middle class over the past three decades-And it can be infuriating.The fact that money controls so much of our country is not exactly a shock.But to see it laid out and impacting much of our political system,including both parties is almost stunning.Even the statistics help to illuminate the author's main points,for example that the US can hardly be considered the "land of opportunity" any longer.Many countries in Europe,including Great Britain,are unfortunately more deserving.Another myth described in some detail is the notion that the rich by and large became so through hard work.Still another is the notion that is what is good for the "one percent" is good for all of us.Pretty much dismissed as "propaganda".Enjoy and learn!

Mr. Stiglitz book "The Price of Inequality" is a MUST READ for anyone interested in truly understanding why our country will continue to be in decline as long as certain right-leaning politicians and economists run America into the lower echelon of countries with their outdated, self-serving and incorrect theories on the economy. I will be reading all of Mr. Stiglitz' publications. He is a revolutionary thinker with FACTS to back up his assertions. What a concept!The Price of Inequality: How Today's Divided Society Endangers Our Future

In The Price of Inequality, Joseph Stiglitz discusses the current economic crisis in terms of the unrestrained power and greed that are limiting the American Dream for the majority of society. All around the globe the 99% are starting to look closely at the pleonexia and greed of the1% and beginning to mobilize in hopes of bringing change. He writes that even though the movements of the 99% are young and undeveloped, Occupy Wall Street for one, they will play a major role in the future of the American economic-political system. He doesn't really propose revolution - although he tells the 1% that the time will come when the wishes of the 99% will force capitalism to be put to the service of the many, instead of just the few.

Stiglitz reminds us that during the 1970s the Chicago school of economics, led by Milton Friedman, developed an economic platform, neoliberalism, which is built on the principles of small government, deregulation, low taxation, and the privatization of public goods and services, and that this platform quickly became the basis of economic change in America, Great Britain, Mexico and Chile. One by one these countries began to see problems, the main issue being the failure of the proposed `trickle down' in wealth, bringing a growing inequality. Rather than wealth trickling down, it quickly moved to the hands of those who were already considered the wealthiest. Stiglitz explains that these policies were propagated by myths, like the myth that hard work pays off and those who work hard deserve their share of riches.

Stiglitz also writes of his theory of asymmetric information, stating that `when some individuals have access to privileged knowledge that others don't, free markets yield bad outcomes for wider society'. He ties the current economic crisis to the last few decades of neoliberal policies and their effect on the income and future of the 99%, pointing mainly to the destruction of fairness and the growing lack of civic responsibility of the elite 1% and the government they rule, which has caused a decrease in trust by the masses. With the wealth of the 1% growing exponentially during the last decade, most of which Stiglitz claims was "rent seeking", not actually creating new wealth but rather taking it from some and giving it to others - the others being the 1%. He points out that in the last thirty years, the bottom 90% of earners in America experienced wage growth of 15%, while the top 1% have seen their incomes increase by 150%. He writes of governments and the 1% turning citizen against citizen by demonizing those who call for greater wealth sharing through social programs and progressive taxation, all while rent-seeking through corporate welfare grows unhindered (he says more is spent here than on public programs). Stiglitz believes a government should ensure full employment, adequate investment in infrastructure and education, and limit inequality through more stringent regulation and accountability for government, banks and corporations.

In The Price of Inequality, Stiglitz calls for a new focus on not just one's own self-interest, but on the interest of society as a whole, an idea that those affected by pleonexia are untrained in, and unlikely to ever to practice.

I truly enjoy reading every sentence of Joseph Stiglitz latest work and I have recommended it to everyone I know that is interested in the state of the world and modern economics. It is written simply and is accessible to all readers, not just those that studied economics, because he explains princples and gives the reader a framework for understanding the new information he provides in this book. It is time to rethink traditional economic theory that has not worked for us since the dawn of the modern financial system. Joseph Stiglitz is doing just that. Read this book and support his work!

The book is an excelent description of the reasons for the increasing of inequality. The relation capital and labour in any capitalism economy is verifyied and addressed in a objective manner. The roots of inequality is and natural and inexorable consequence of the capitalism system.

"Moving money from the bottom (of the economy) to the top lowers consumption because higher-income individuals consume a smaller proportion of their income than do lower-income individuals (those at the top save 15% to 25% of their income, those at the bottom spend all of their income.)

The result: until and unless something else happens, such as an increase in investment or exports, total demand in the economy will be less than what the economy is capable of supplying - and that means that there will be unemployment.

In the 1990s that "something else" was the tech bubble; in the first decade of the twentieth-first century, it was the housing bubble. Now the only recourse is government spending." p.85

There seems to be no way to arouse public opinion regarding the growing inequality in The US. At least this book try's. Why truck drivers and day workers continue to defend the oligarchy of our country remains to me a profound mystery. I applaud anyone who tries to shed light on it. The rich have an ever expanding share of the national income through rigged rules that have basically turned the US in to the worlds greatest hedge fund with its greatest military as it's enforcement arm. Pathetic. The rich will end up with great bags of money in a society too poor attend to their needs.