Five Things I Learned From Joseph Stiglitz’s ‘Price Of Inequality’ Talk
'Straya's fukt, unless we do something about it.
In a world where economists are rock stars and there’s a VIP section at a talk on ‘the price of inequality’, the mildest of statements about fairness can sound fairly revolutionary. Perhaps that’s why Nobel Laureate Joseph Stiglitz packed out Sydney Town Hall on Tuesday night, punctuated by the old socialist faithfuls spruiking Green Left Weekly out the front, a rousing stump speech by Lord Mayor Clover Moore inside, and host Adam “Science is Cool” Spencer quoting directly from 9 to 5.
The audience was even called to attention by John Lennon’s Imagine playing over the sound system, as though our collective imagination of social change stalled with Lennon’s death in 1980 – the same year, Stiglitz told us, that the kinds of social contracts which promoted the fair provision of wealth in countries like Australia started to unravel. For the pleasantly bearded Columbia professor, if we want to stop going down that road, we need politics and policies that support the poor and call the rich to account.
Outrageous, right? Who’d have thought that humans could actually shape the amount of wealth that is accumulated; that, together, we could make systems and rules for its equal distribution? J-Stig even had cool graphs to prove it! Here are some of the take-away points:
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The Concentration Of Wealth In The USA Is Out Of Control
The US is a country where the top one percent control forty percent of the wealth, and the average income for a full-time male worker is currently lower than it was forty years ago. This is not because workers are producing less things less well – productivity hasn’t stalled at all. It’s been increasing. More and more people have gone to school and university. But they’re poorer than their great-grandparents were, and the effects are devastating.
High inequality undermines all the good stuff about society: looking after each other, getting things done together, believing in each other. Even the International Monetary Fund, responsible for all sorts of grisly economic impositions, thinks so. Inequality, as Stiglitz showed us, means we trust each other less, makes justice too expensive, and actually weakens the economy.
Further, the one percent typically made their wealth through creating monopolies, tax evasion, and privatisation – using laws, policies, and politics that allowed them to do so. Take Bill Gates, Stiglitz said. We’re encouraged to think of Gates as an ambitious brainiac whose billions were naturally spawned from his innate genius. However, Gates’ real skill lay in monopolisation – using market and social structures to fix prices and abolish competition for the technologies that other people invented and made.
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Something’s Happened To The Unions
Their role has diminished and people don’t look to them for economic protection any more. They have been undermined by government policies and people’s support for privatisation and deregulation, and nothing has taken their place to protect workers on the same scale as in the last century. Interestingly, it is Australia’s trade union movement that, according to the Stigmeister, has been a deciding factor in holding off some of the worst social inequality when compared to the US.
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American-Style Inequality Is Starting To Happen In Australia
We need to reverse direction if we want to avoid the crises of inequality – poor health care, millions of households in poverty, high unemployment – that beleaguer the US. And we can — by forming collectives, electing leaders, making policies, and prosecuting laws that promote the fair distribution of wealth. Australia’s standing on the Gini coefficient – a well-established index measuring inequality in societies – is slipping. As a country blessed with rich supplies of natural resources – taxable, obedient resources that belong to the people – we should be doing much better. Instead, we’re headed for a Gina coefficient, if you will, especially since the recent announcement that Australia’s seven richest people have more money than 1.73 million Australian households.
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The Trickle-Down Effect Is Not Real
If it were, we’d all have a big-ass yacht each by now, having caught all the drips from the money harvest at the top of the rich list.
The Invisible Hand of the market is also not real. Obvs.
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Everything Is Better In Scandinavia, Especially Denmark
That country scores 47% on the Gini index, with Australia mooning about at 34%, edging closer to the US’ 23%. Our choices, you might say, lie between Borgen and House of Cards.
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Australia’s current political leaders use ideas like ‘economics’ and ‘the economy’ to baffle us: creating a gulf between our everyday experiences and ideas about saving, spending and sharing, and asking us to leave it in their expert Money Scientist hands. The works of men like Stiglitz, George Soros and Thomas Piketty attract controversy and celebrity because they remind us that economics is an idea; that it is humans who decide what fairness means and what it looks like, who develop theories about that and advocate them, who elect politicians and make policies to reflect those ideas.
Their suggestion that we can and do wilfully distribute wealth provides a starting point for looking at society as it really is: uneven, unequal, and changeable. They tell other rich middle-aged white men that they might have the world wrong. In an Australia led by people determined to have us believe that it is the poorest – asylum seekers, young people, people with disabilities, sole parents, Aboriginal people, even middle-income families – who don’t pull their weight enough in pursuing greater prosperity, this is as radical a notion as any we’ve heard in a long time.
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Feature image via City Of Sydney. You can watch the full talk on the City of Sydney webpage.
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Ann Deslandes is is a writer and social researcher in Sydney. She has degrees in sociology and gender studies, which makes her very annoying to watch TV with.