People, Power, and Profits: Progressive Capitalism for an Age of Discontent

Joseph Stiglitz is a Nobel prize-winning economist and a professor at Columbia University. His ideas are similar to those proposed by Elizabeth Warren and Bernie Sanders. Stiglitz has argued for years that our economic and political systems are rigged against the middle class and in favor of the wealthy. He wants to reduce inequality. Stiglitz explains what has gone wrong and how to fix it. Essentially, he believes America has lost its way and it needs to become more like a European social democratic country, like Germany or Sweden. He hopes to “save capitalism from itself.” Stiglitz is a Keynesian who disapproves of market fundamentalism. He argues in favor of more government intervention and a fairer society, but he doesn’t want to sacrifice economic growth. The book is an enjoyable read.The first half of the book examines trends he believes that have caused the problems: monopoly power, mishandled globalization, and poor financial regulation. He argues that lobby groups control regulation and twist it for their own purposes and trade deals like NAFTA are stacked against workers. He believes that the way globalization has been managed has resulted in American workers competing with low-skilled and low-wage workers in developing countries. This has reduced their bargaining power. He argues that the media cannot be trusted and has encouraged ordinary people to vote for politicians who don’t represent their best interests. He believes that democracy risks becoming nothing more than a sham because of gerrymandering and the ability of the rich and powerful to buy the votes of politicians.Stiglitz recalls his childhood in the industrial city of Gary, Indiana. When he returned to Gary for his 55th high school reunion in 2015, he was dismayed by the decrepit state of his hometown and the hard times endured by many of his former classmates. He believes that the massive income inequality in the U.S. is a serious problem that must be addressed. He complains about too-big-to-fail banks placing greed above economic growth and government initiatives favoring globalization without protecting American laborers.The second part sets out what to do next. Stiglitz argues for “progressive capitalism.” He wants to exploit the benefits of markets while taming their excesses, making sure that markets work for the people, not the other way around. He wants tough antitrust action to force increased competition; much tougher financial regulation to reduce the scale and the power of big financial institutions; new carbon taxes to address climate change and taxes on land. He fears that workers are not being properly looked after and the majority are being exploited by the minority.Stiglitz argues that the U.S. could, and should, do better for its poorer citizens. He wants more government spending, a stronger welfare state, and universal healthcare. He believes in an employment guarantee or a universal basic income. He demands increased support for education. He wants greater investment in infrastructure, more action to combat climate change, anti-discrimination policies and fairer taxes.The decline of manufacturing in places like Gary has reduced the number of good jobs for people who lack a college degree. He argues that there has been a lack of recognition by both government and the private sector that shifts from a manufacturing economy to a service economy have caused economic hardship for many ordinary people. Manufacturing accounts for 24 percent of the German economy. In the U.S., it's only 11 percent. A recent McKinsey Global Institute report explains that one reason manufacturing matters is that manufacturing jobs have “historically offered opportunities for workers without college degrees to gain technical skills and climb the economic ladder,” and therefore manufacturing’s erosion has had “profound effects on the U.S. economy—and on the prospects of American workers in general.” The Economic Policy Institute reports that manufacturing jobs provide higher levels of pay and benefits than those in the service sector. In Germany, workers sit on company boards making it harder for management to close plants and outsource jobs. The average German worker probably enjoys a higher standard of living than the typical working-class American worker.In the 30 years before Reagan took office, the US economy grew at an annual rate of 3.7 percent. In the following 35 years, it grew at an average rate of 2.7 percent. However, he argues that the benefits of economic growth are not being passed onto ordinary workers. He claims that the incomes of 90% of American workers have stagnated since the late 1970s.Unfortunately, the European economies he admires have struggled since the Financial Crises of 2008, although this may have something to do with being part of the eurozone. Economic growth in Europe has been slower than the U.S. Despite its problems, the U.S. still leads the world in innovation. Europe has not been able to produce companies to rival Amazon, Apple or Google. There is no guarantee that social democracy will deliver faster growth, but it might make the U.S. a more equal society.Stiglitz says the inequality problems began with Ronald Reagan. Stiglitz believes that politically Donald Trump is his natural successor. It was Reagan who cut taxes and regulation and unleashed the forces that created the great divide that has opened in the past three decades. Trump, with his tax cuts and aggressively pro-business agenda, is merely following suit.Stiglitz’s prescriptions are now attractive to many in the Democratic party. There is a clear difference between Trump’s version of capitalism and the Stiglitz-Elizabeth Warren vision. Stiglitz believes voters need to elect candidates for Congress and the White House who are willing to challenge the rich and powerful. He argues: “achieving greater equality is not just a matter of morals or good economics; it is a matter of the survival of our democracy.”

A must read that provides clarity in an age of uncertainty and insecurity.May the political will be found to implement the policy recommendations set forth in this modern masterpiece.

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz“People, Power, and Profits” is an excellent diagnosis of what ails our economy but most importantly it provides a progressive prescription, on what we can do moving forward. Nobel prize winning author and professor of economics at Columbia University Joseph E. Stiglitz provides readers with a clear an informative assessment. This insightful 389-page book includes eleven chapters and is broken out into the following two parts: Part I. Losing the Way, and Part II. Reconstructing American Politics and Economics: The Way Forward.Positives:1. A well-written, well-researched book that is accessible to the masses.2. An excellent topic, what’s wrong with our economy and what can we do about it? Lucid writing style. “I present the outlines of a progressive agenda that represents the antithesis to the agenda of Trump and his supporters.”3. Provides a brief historical look at what brought us here.4. Summarizes the nine key points of why neoliberalism (ideas based on unfettered markets) has failed. “First, markets on their own will fail to achieve shared and sustainable prosperity.”5. The true sources of a nation’s wealth. “The true sources of wealth are the productivity, creativity, and vitality of our people; the advances of science and technology that have been so marked over the past two and a half centuries; and the advances in economic, political, and social organization that have occurred over the same period, including the rule of law, competitive, well-regulated markets, and democratic institutions with checks, balances, and a broad range of “truth-telling” institutions.” “The true wealth of a nation is measured by its capacity to deliver, in a sustainable way, high standards of living for all of its citizens.”6. The truth about Trump. “Rather than adapting his views to make them consonant with reality (say, about climate change), Trump would rather attack those who work to uncover the truth.”7. Clearly describes growing inequality. “THE REALITY IS that, using the Human Development Index, a broad-gauge measure of standard of living, the US ranks thirteenth, just above the United Kingdom. Once America’s inequality is taken into account, it slips to twenty-fourth.”8. The concept of market power. “Market power allows firms to exploit consumers by charging higher prices than they otherwise would and by taking advantage of consumers in a variety of other ways. Higher prices hurt workers just as much as lower wages.” “There is a further effect that has already been noted: innovation that should be directed at creating more efficient ways of producing better products is instead directed at better ways of creating and maintaining market power and exploiting consumers.”9. The need to constrain market power. “What is needed then is a renewed commitment to constraining excesses of market power, wherever they exist and however they arise, to try to restore competition in the economy. It should be a violation of antitrust laws to engage in the abuse of market power, no matter how acquired. Anticompetitive practices, whether arising from monopsony or monopoly power, should be outlawed, period.”10. Why globalization hasn’t lived up to its promises. “Globalization provided a way by which corporations could game countries against each other. Corporations persuaded governments that, unless they lower the corporate tax rate, they will relocate abroad.”11. Lessons learned. “If we are to achieve the necessary economic reforms, we need to reform our politics.”12. The reality of technology. “The lesson of this experience is that if innovation is not well managed, rather than bringing prosperity to all, it could have just the opposite effect.” “In short, the unemployment, decreasing wages, and increasing hardship for workers that result from advances in technology could easily be addressed, if there were only the political will to do so.”13. The issue of privacy. “We should be concerned about our loss of privacy. Privacy is about power. The Big Data companies understand this, but it’s not apparent that the same is true for those they prey upon.”14. The need for government. “We need regulation to make markets work like they’re supposed to—in a competitive way, with transactions between well-informed parties, where one party isn’t trying to take advantage of another.”15. Describes the Republican’s agenda for the nation. “It is becoming clearer that the objective of the Republican Party is a permanent rule of the minority over the majority.”16. The three critical areas to restoring democracy. “Ensuring fairness in voting, maintaining an effective system of checks and balances in government, and reducing the power of money in politics.”17. Many examples of abuse. “The pharmaceutical companies put a little provision in the law providing the elderly with drugs under Medicare: the government, the largest buyer of drugs in the world, was not allowed to bargain on price.”18. How to restore a dynamic economy. “No policy is more important for equality, growth, and efficiency than maintaining full employment. And the most important ingredient in a middle-class life style is having a decent job.”19. The core of a decent life. “There are just a few things that are at the core of a decent life: people care about jobs with fair pay and a modicum of security both before and after retirement, about education for their children, about owning a home, and about access to good health care.”20. The pillars to increase standard of living. “There are two pillars to the increases in our standards of living over the past 250 years: better understanding of how to organize society (checks and balances, rule of law); and better understanding of nature—the advances in science and technology.”21. Notes included.Negatives:1. Limited use of charts and illustrations.2. No formal bibliography.3. Lacks depth and done understandably so to reach out to a broader audience.4. Conservatives will probably pass on the book before even trying.5. The chapter on globalization needed more work or it may have been not as clear to me as I would have wished.In summary, a lucid and well-explained book on what is wrong with our economy and what we can do about it. I like the clarity of thought in this book and the fact that Stiglitz took the time to provide a comprehensive list on what we can do and describes how the economy and politics are intertwined. A worthwhile read, I recommend it!Further suggestions: “The Price of Inequality” and “The Great Divide” by the same author, “Aftershock” and “Saving Capitalism” by Robert B. Reich, “Winner-Take All Politics” by Jacob S. Hacker, “Screwed the Undeclared War Against the Middle Class” by Thom Hartmann, “Perfectly Legal…” by David Cay Johnston, “The Looting of America” by Les Leopold and “The Great American Stickup” by Robert Scheer.

We are facing global challenges - from migration to climate change, the flooding of coastal cities and the extinction of species. Challenges that require radical change in our society if humanity is to survive. We all know this, climate deniers notwithstanding. It's already too late to avoid the catastrophe, but with the right policies we can hope to contain the damage and save most of the planet for our children, what the UN calls "future generations".In fact, that is the right term and the future matters: That is what Stiglitz's latest book is all about. It's a diagnosis of our problems but more importantly, it proposes a solution: Progressive capitalism. A solution adapted to America, its culture and traditions.The point is not to turn the United States into Denmark. Stiglitz knows that would never work. So he has an alternative, better solution. There's not space here to go over what progressive capitalism is, do read the book, you'll see why it's key for our salvation. I can guarantee that you won't waste your time and it will give you hope that in fact, something concrete can be done to change the course of History - as it did for me.

Great analysis of the modern problems in our economy

El contenido del libro resulta necesario para el contexto actual. Además la calidad tanto de las hojas como de la tapa es muy buena.

Stiglitz es pura sensatez. Ojalá fuéramos capaces de articular lo que nos aconseja. Pero, mucho me temo, no ha de ser posible mientras nos acercamos inexorablemente al desastre climático y a las consecuencias sociales tremendas que le acompañaran

A vital, well-researched review. A good read prior to Trump's Impeachment.

... mica poco quando a scrivere è un premio Nobel per l'economia.Temevo si trattasse di un libro troppo tecnico, invece Stiglitz con serenità propone una serie di riforme per risolvere i crescenti problemi della società americana.Una lettura indispensabile per chi vuole approfondire il drammatico tema della diseguaglianza del reddito, del benessere, della salute e delle opportunità.L'unico problema è che qualsiasi riforma deve partire dall'azione politica, e pare davvero poco probabile che i leader politici riescano a fissare degli obiettivi di lungo periodo in un mondo in cui si governa via Twitter...