Inequality and its consequences for the economy, democracy and society have become Nobel economic laureate Joseph Stiglitz’s leitmotif. The Columbia University professor intends to take the issue to the top of global policymakers’ agenda, and spreads the word wherever he goes.
If those in power sometimes turn a deaf ear to his message, this time they had no escape. Cocooned in what becomes the heart of global capitalism for a week, the World Economic Forum in Davos, Switzerland, political and business leaders were exposed to his ideas in a one-on-one session on Thursday with the BBC’s economics editor, Stephanie Flanders.
His thesis, also outlined in his recent book, The Price of Inequality, is that America is becoming increasingly a country of economic segregation. “The richest 1% of Americans hold 25% of the country’s wealth,” he told his Davos audience, more than a few of them one-percenters, no doubt. “The share of the top 1% has doubled since 1980,” he added, noting also that U.S. medium income has not changed since the early 1990s. Overall, he says, inequality in America is at its highest level since before the Great Depression.
Stiglitz, as he does in his book, disputes a notion fundamental to Americans’ essence: the American dream. He says that the land of opportunity, where anybody can find success with hard work, is disappearing. “The chances of somebody moving from the bottom to the top, or the middle, are much lower [in the U.S.] than in Scandinavia.”
The reason for this, he says, is that in the U.S. “a child’s lifetime prospects are more dependent on the education and income of its parents than in any of the advanced industrial countries.” He says that the magnitude of inequality in the U.S. isn’t fully appreciated, and that nobody yet knows the consequences.
Stiglitz does believe that inequality is reversible. He points to Brazil as an admittedly rare example. There, politically bipartisan agreement to invest in education, health care and nutrition for all, and particularly for all children, has reduced it in less than 20 years.
The interview is available on the World Economic Forum website.