Tuesday, October 9, 2012

The Price of Inequality - Stiglitz

As I mentioned in This Blog is Reanimated  I am currently reading "The Price of Inequality: How Today's Divided Society Endangers Our Future" by Joseph Stiglitz. Well I have finally just reached the last chapter "The Way Forward: Another World is Possible" so it seems time to post my initial impressions.

For those that don't know Stiglitz's work he is a Nobel prizewinning (2001) economist.  He was a member of Clinton's Council of Economic Advisers (1993-97) from 1995 he became Chairman of the Council and consequently a member of the Clinton cabinet.  In 1997 he moved on to become  senior vice-president and chief economist of the World Bank later being effectively fired in 2000 because of pressure from the US treasury after his critique of the policies of the IMF and the damage they had caused.

Stiglitz returned to academia with a professorship at Columbia,  and he has  been active over the past decade in international organizations including chairing  the Socialist International Commission on Global Financial Issues and the UN Commission of Experts on Reforms of the International Monetary and Financial System.  He has also published a number of popular books on economic topics and I have read a most of those published since  "Making Globalization Work,".  

Stiglitz's most important contribution to economic theory relates to information asymmetry and the the effect of this on markets. His work with mathematical rigour completely demolishes neo-classical economic theory and also the monetarist theory of the freshwater school of economics of Milton Friedman and the "Chicago Boys" which he derides as mere "ideology"

"The Price of Inequality: How Today's Divided Society Endangers Our Future" is his most recent popular book.  It may be the most important book published so far this century, it is also justly a very angry book. We will look at the book and its arguments in more detail in following posts.

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