Nobel Laureate Joseph Stiglitz’s opinion piece at NYT titled “Progressive Capitalism Is Not an Oxymoron” is a powerful and insightful analysis of the broken state of our economic system and how we can fix it. Stiglitz has spent a career railing against wealth concentration, ringing alarm bells about monopoly power and championing higher taxes. His words are definitely resonating among Democrats today and his new book, to be released tomorrow, will certainly light some more fires.
Here is a short summary of the main diagnosis and prescription points from the article; please take a look at the full article as Stiglitz lays out the historical background, the current state of affairs, the diagnosis of the malady and the prescriptions.
The Causes:
- Reagan, deregulation, GOP, Trump
- Attack on science, knowledge and expertise
- Greed, exploitation, wealth-grabbing vs wealth-creation
- Money driven politics
The Prescriptions:
- Progressive Capitalism, based on a new social contract between voters and elected officials, between workers and corporations, between rich and poor, and between those with jobs and those who are un- or underemployed
- Regulations — to ensure strong competition and to curb exploitation
- Blunt the power of oligopolies and strengthen the power of workers
- A new social contract with expanded public option for many programs now provided by private entities or not at all, such as healthcare, retirement and mortgages.
- Expanded government role in infrastructure, education, basic research and in providing insurance against unemployment and disability
Paul Krugman whole-heartily agrees -
Stiglitz’s New Book
Stiglitz’s new book is getting released on Tuesday Apr 23; I presume the recent opinion pieces and TV appearances are part of the promotion for this book, which probably contains lot more detail on this subject.
The book can also be ordered at Amazon.
Here is a clip from his appearance on GPS/CNN with Fareed Zakaria -
Stiglitz on The New Green Deal
Stiglitz also wrote a short opinion piece on CNN today titled Corporate greed is accelerating climate change. But we can still head off disaster. Here is a summary -
Diagnosis:
- Corporate power and greed with little regard for the impact on workers or the environment.
- Corporations have translated their economic power into political power, lobbying for policies that give them free rein to despoil the environment
- Trump and the GOP
- The economy is not only failing American citizens. It's failing the planet, and that means it's failing future generations.
The Prescriptions
- The green economy and renewable energy
- A mobilization of resources — the kind we saw during the New Deal and the Second World War. Government will have to take the lead, and it will require public investments — including in infrastructure and research — and regulations.
- Eliminate the huge subsidies for fossil fuels
- Tax corporations that inflict damage on our environment.
- Policies that reduce discrimination in the labor market
- Education policies that help all citizens live up to their potential
- Curbing the excesses of corporate power more generally would lead to a more efficient economy and to more equality.
Dealing effectively with climate change is well within our reach; in fact, I recently co‐chaired an international commission that showed that the global goals of limiting the increase in global temperatures to 1.5 to 2 degrees Celsius were clearly achievable.
It would make so much more sense to spend money retrofitting our economy to reduce the risk of disastrous climate change rather than spending money to deal with the enormous economic and human costs of coping with its consequences.
It is interesting and not entirely unexpected that the prescriptions to fix the economy and to fix the environment are pretty much the same.
Here is another interesting article on Stiglitz and the upcoming book -
More on Progressive Capitalism
Stiglitz is certainly not the first one to talk about Progressive Capitalism.
Lord Sainsbury (English politician, businessman and philanthropist) wrote and spoke in 2013 —
The cornerstone of the political economy of Progressive Capitalism is a belief in capitalism. But it also incorporates the three defining beliefs of progressive thinking. These are:
- the crucial role of institutions,
- the need for the state to be involved in their design to resolve conflicting interests, and
- the use of social justice as an important measure of a country's economic performance.
Epilogue
Of course, none of this will happen if we do not win elections. You can bet that the GOP will use all its media outlets and loud-mouths to keep labeling Democrats as socialists and communists, while the population remains confused and uninformed. We need to counter that and set the terms and talking points.
IMHO, instead of stigmatizing and abandoning the word Capitalism, we should co-opt the term; we should advocate the term Progressive Capitalism and label the GOP version as Vulture Capitalism. The debate should be between Progressive Capitalism vs Fascism, not Socialism vs Capitalism.
Let’s keep explaining to the electorate that Progressive Capitalism is not new; it is what brought prosperity and the rise of the middle class after WWII; this is a point emphasized by Stiglitz in both articles. Let’s keep explaining how Progressive Capitalism and a green economy will benefit all and how the GOP and its fossil-fueled donor class are on the wrong side of humanity.
What do you think?
Here are some additional books on the subject from well-renowned economists, which will help our cause -
- Joseph E. Stiglitz, People, Power, and Profits: Progressive Capitalism for an Age of Discontent, W.W. Norton, New York; Allen Lane, London, 2019.
- Paul Collier, The Future of Capitalism: Facing the New Anxieties, Harper, New York; Allen Lane, London, 2018.
- Branko Milanovic, Capitalism, Alone: The Future of the System That Rules the World, Belknap Press, Cambridge, 2019 (forthcoming).
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David Sainsbury, Progressive Capitalism: How to Achieve Economic Growth, Liberty and Social Justice, 2013.
Joseph E. Stiglitz is a university professor at Columbia, the 2001 recipient of the Nobel Memorial Prize in Economics, a former chairman of the Council of Economic Advisers, and a former chief economist of the World Bank.