''The Price of Inequality: How Today's Divided Society Endangers Our Future'' is a 2012 book by

Joseph Stiglitz Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the J ...

that deals with

income inequality in the United States Income inequality in the United States is the extent to which income is distributed in differing amounts among the American population. It has fluctuated considerably since measurements began around 1915, moving in an arc between peaks in t ...

. He attacks the growing wealth disparity and the effects it has on the economy at large.

Background

Stiglitz is a

Nobel Prize The Nobel Prizes ( ; sv, Nobelpriset ; no, Nobelprisen ) are five separate prizes that, according to Alfred Nobel's will of 1895, are awarded to "those who, during the preceding year, have conferred the greatest benefit to humankind." Alfr ...

–winning economist who teaches at

Columbia University Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...

. He wrote ''The Price of Inequality'' during uprisings in Tunisia, Libya, and Egypt and the height of the

Occupy movement The Occupy movement was an international populist socio-political movement that expressed opposition to social and economic inequality and to the perceived lack of "real democracy" around the world. It aimed primarily to advance social and econo ...

in the United States.

Synopsis

Stiglitz argues that inequality is self-perpetuating, that it is produced by the vast amount of political power the wealthy hold to control legislative and regulatory activity. He does not believe that globalization and technological changes are at the heart of differences in wealth in the U.S. "While there may be underlying economic forces at play,” he writes, “politics have shaped the market, and shaped it in ways that advantage the top at the expense of the rest.” Stiglitz blames

rent-seeking Rent-seeking is the act of growing one's existing wealth without creating new wealth by manipulating the social or political environment. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effic ...

for causing the inequality, with the wealthy using their power to shape monopolies, incur favorable treatment by the government, and pay low taxes. The end result is not only morally wrong but also hurts the productivity in the economy. Stiglitz criticizes many conservative commentators who believe free markets are the solution by pointing out that reducing the estate tax and deregulating campaign contributions act to restrict competition and give corporations undue power in politics. While he promotes the idea that a free market is good for society if it is competitive, he states that the government needs to regulate it to be beneficial. If that doesn't happen, the powerful corporations will use leverage to profit at the expense of the majority. According to Stiglitz, concentrating market power in too few hands is just as bad as excessive regulation.

Reception

Writing in the ''

New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...

'', journalism professor Thomas B. Edsall called the book "the single most comprehensive counterargument to both Democratic neoliberalism and Republican laissez-faire theories." Edsall added that "Stiglitz may prove most prescient when he warns of a society governed by 'rules of the game that weaken the bargaining strength of workers vis-à-vis capital.' A review in ''

The Economist ''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Eco ...

'' was mainly positive, noting that "Stiglitz is (mostly) skilled at making his argument." However, the reviewer wrote, "Mr Stiglitz's argument would benefit, however, from a better sense of history and geography," and criticized his reference to the low inequality of the 1950s to 1980s as an outlier in the broad sweep of American history. "Whether or not he has the right answers, Mr Stiglitz is surely right to focus on the issue, the reviewer concluded. Yvonne Roberts of ''

The Observer ''The Observer'' is a British newspaper published on Sundays. It is a sister paper to ''The Guardian'' and '' The Guardian Weekly'', whose parent company Guardian Media Group Limited acquired it in 1993. First published in 1791, it is the ...

'' called the book "a powerful plea for the implementation of what

Alexis de Tocqueville Alexis Charles Henri Clérel, comte de Tocqueville (; 29 July 180516 April 1859), colloquially known as Tocqueville (), was a French aristocrat, diplomat, political scientist, political philosopher and historian. He is best known for his wo ...

termed "self-interest properly understood"." The book received the

Robert F. Kennedy Center for Justice and Human Rights Robert F. Kennedy Human Rights (formerly the Robert F. Kennedy Center for Justice and Human Rights, or RFK Center) is an American 501(c)(3) nonprofit human rights advocacy organization. It was named after United States Senator Robert F. Kennedy ...

2013 Book Award.

References

{{DEFAULTSORT:Price of Inequality, The 2012 non-fiction books Books about economic inequality Books by Joseph Stiglitz Economic inequality in the United States Wealth concentration W. W. Norton & Company books