Some Reflections on Stiglitz's "Inequality Is Not Inevitable"

Some Reflections on Stiglitz's "Inequality Is Not Inevitable"

Thomas Riggins

In the June 27, 2014 New York Times Joseph E. Stiglitz published the above name article. It is an interesting take on the growing inequality in the United States but I think it is entirely too voluntaristic in tone and hence unscientific. He wants to know how the US, since at least 2007 (the Great Recession) has become the capitalist country "with the greatest level of inequality."

Stiglitz has moderated a series of articles in the NYT called "The Great Divide" which he says have presented examples "that undermine the notion that there are truly any fundamental laws of capitalism." Stiglitz is a mainline capitalist economist and the line  that "capitalism has no fundamental laws" is a tactic to head off socialist, and especially Marxist, studies on the nature of capitalism which appeal to certain "laws" or tendencies of capitalist development that are responsible for the exploitation of human labor power as well as the creation of crises  of over production, the determination of surplus value, the need to expand markets, the creation of monopolies, and other nasty features which produce human inequalities, the drive for war and other contributions responsible for the degradation of humanity and the ruination of the planet.

Stigilitz asserts that 19th century capitalism's "dynamics" need not apply to the [faux] democracies of the 21st. But that was already pointed out by Lenin in his work on Imperialism which shows how 19th Century capitalism morphed into monopoly capitalism controlled by finance and bank interests along with giant international corporations. This is the capitalism that still rules the roost in the 21st Century.

Stiglitz says we have "ersatz" [not real] capitalism because in the Great Recession "we socialized losses, even as we privatized gains" (whoever that "we'' is). It is not "ersatz" capitalism when the masses of the working people are stuck with the "losses'' and banksters and their allies end up with the "gains." That's how capitalism works.

Well since we have done away with "laws" of capitalism it can't be capitalism that is to blame for inequality (or war, pestilence and famine). So who is to blame. It is us. It is "our policies and politics."

Why has America "chosen" so much inequality? Partly because the "solidarity" we all felt in WWII has faded away, and victory in the Cold War meant "we no longer had to show our system could deliver for most of our citizens."  Well the "we" can't be "most of our citizens"  since they wouldn't say "Well the Cold War is over so we don't need the system to deliver for us anymore,"  Could the "we" be the capitalists, the banksters and the mainstream politicians and economists that work for them?

Stiglitz then goes on to describe the results of present inequality and the suffering in inflicts on millions of people. He certainly would like to get rid of it  and give everyone a good and decent living standard. What he portrays, however, is a state completely controlled by the capitalist class-- where money and wealth commands both the political machinery and the justice (legal)  system. A system where the masses of people are ignorant of how the system works and are manipulated and their values and welfare is ignored.

This is exactly the type of society produced by socialist and Marxist models of capitalism, how it works, and what its outcome is for working people and why it must be replaced by socialism. But Stiglitz does not, and perhaps cannot, go down that road. His is a voluntaristic solution. We must change the way we think about politics and poverty. The solution (LBJ's ghost is near) is "not just a new war on poverty but a war to protect the middle class." Now "war" is a very serious undertaking. Who must we make war against to protect the middle class? Well, its not the working class, its not the unemployed, its not immigrants and minorities. Who is left? "Our" own top capitalists and the politicians, news media, and educational institutions that they control. Is this going to be a bloody revolution?

No! The "war" will be a limited police action, if that. All we have to do is make the top wealthy people pay fair taxes, reverse a "politics of greed"  and seek "our children's access to food and the right to justice for all." This can be done by spending more on "education, health and infrastructure." For those of you who think such sweet, saccharine sentiments are the usual pie in the sky solutions to the social question, for shame: "Just because you've heard it before doesn't mean we shouldn't try again." And again, and again, and again, and….

Inequality Is Not Inevitable

Piketty, The Wall Street Journal, and Rational Conservatives

Piketty, The Wall Street Journal, and Rational Conservatives
Thomas Riggins

Thomas Piketty's book, Capital in the 21st Century, has almost had the effect of a tsunami on economic thinking here in the United States after its translation from French into English washed up on our monoglot shores. In France itself it has been treated as more or less just another economics book-- no big deal.

Its impact on the US is due to many factors, not least of which is the fact that our educational system is woefully inadequate by European standards as well as our lower cultural literacy compared to Europe. Piketty's work appears here as a revelation, but to the educated European he is only providing a fuller historical context for what most people already understand.

Marxists, especially, should have been under whelmed to learn that the capitalist system creates imbalances in wealth with a large pool of poor and exploited workers at one pole and a small group of capitalists hogging the social wealth at the other.

Piketty tells us this system is not sustainable and to prevent the "Marxist Apocalypse" the capitalists have to modify their behavior and moderate the social inequalities their system creates. The thought that capitalism might be replaced is indeed an apocalyptic nightmare for the bourgeoisie but for the working classes it might be more like a Marxist Epiphany come true.

The Wall Street Journal, no friend to the Left, has reviewed Piketty's book ("A Not-So-Radical French Thinker" by Pascal-Emmanuel Gobry, weekend edition May 24-25, 2014). Here we find, implicitly, that not only have some on the Left "lost it" over seeing Peketty as some sort of super progressive, but that many American "conservatives" have, explicitly, also gone completely off the deep end by referring to Piketty as a "soft Marxist."

The conservative movement is the U.S. is, however, overloaded with "thinkers" who are intellectually immature and dishonest, selling their brain power (such as it is) to the Koch brothers, the Murdochs, and their ilk. The WSJ review points out that Piketty is a professional academic economist and his book merits consideration. He is a neo-liberal economist who supports market capitalism and, like many other neo-liberals, he advocates "government redistribution to smooth out some of the market's excesses.".

The WSJ points out that in France you can find "honest-to-goodness actual Marxists [that] are still at large" and Piketty is not one of them. The fact that he has simply described how capitalism is actually functioning and this is enough to send so called conservative intellectuals into a nose dive (one from the American Enterprise Institute is especially mentioned) over "soft Marxism"  is evidence enough that many, I think most, conservatives have no regard at all for the facts or even rational discussion but are only mouth pieces for the corporate interests who support them as paid propagandists.

Piketty is worth reading. Marxists have a deeper understanding, I think, about the functioning of the capitalist system so there will be no surprises here, but readers will find a detailed history of wealth distribution and creation over the last three hundred years that will convince anyone with an open mind that this system is exploitative and is leading towards an implosion that could very well destroy it.

Marxists, of course, think the system must be replaced and is ultimately existentially unreformable. Neo-liberals such as Piketty do not agree and he proposes reforms in his book which he thinks will save the sinking ship (such as an international, or at least a European Union, wealth tax).

The WSJ review suggests that the right wing could benefit from reading Piketty. If the inequality he describes is not remedied "it could undermine the social order" and "for all the huffing and puffing about Mr. Piketty's supposedly revolutionary ideas, that conservative insight might be his most lasting contribution to the American debate." Indeed, it well might.