Joseph Stiglitz. People, Power and Profits: Progressive Capitalism for an Age of Discontent, New York / London, W.W. Norton and Co., 2020, 371p. (LCCN-2019014726; ISBN-9781324004219)[Record]

  • James Thwaites

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  • James Thwaites
    Associate Professor, Département des relations industrielles, Université Laval

Joseph Stiglitz’s People, Power and Profits is a powerful plea for reforming present problems, a plea aimed directly at the situation in his own country, the USA. However, it also has implications for many other countries during this present age of political and social polarization and constant challenging of facts and truth through reference to a collection of conspiracy theories. The book is developed step-by-step by the author, on a variety of interrelated subjects around the theme of reform, and is subdivided into two parts: identification of problems (the first half); and elaboration of appropriate solutions (the last half). The approach is also very pedagogical. Various concepts are first presented and then carefully defined and explained, as if the author were talking to a group of undergraduates in an introductory course in political science or economics. Regarding economics itself, there is also a concerted effort to define or, more accurately, redefine the discipline. This effort comes with a sprinkling of criticism about certain established concepts in economics and their supposed importance, particularly those that have a tendency to interpret human decision-making as automatic in given contexts. This view is seen by the author as dehumanizing human beings and, as a result, as suspect and misleading. Stiglitz pays a great deal of attention to the growing problem of inequality, which has become particularly noticeable, according to him, since the 1970s. This trend began with the abandonment of the gold standard and the ensuing extremely high rate of inflation in the USA and elsewhere during the 1970s. (Anyone who had a mortgage or other type of loan at that time will know exactly what that surge of inflation meant, as general interest rates rose steadily and substantially, peaking out at an astonishing 21%.) On the wrong side of the ledger, according to Stiglitz, sit the “1%,”—the bankers and the financiers, the last two working in the interests of the 1% both at home and abroad and, in turn, profiting from their own position as well. All three are accused of taking advantage of everything imaginable without remorse. On the other side is the vast majority of the population struggling to achieve or maintain a decent standard of living. That struggle, moreover, is overwhelming according to the author. Very specifically, government policy has created a great deal of unnecessary suffering for working people through wrong-headed thinking, improper organization, and erroneous application of programs. Here, he puts the emphasis above all on discrepancies observed in employment, health care and education. These areas, Stiglitz argues, can be crucial sources of social improvement and development, and he regrets their distortion and even inaccessibility in many cases under the current and recent regimes in the USA. As has already been pointed out, Stiglitz describes what has gone wrong in the first half of the book: a sort of paradise lost, and a slow and constant descent into hell. The subtitles of the introductory chapter provide a good idea of the direction of his thought at the very outset: Chapter 2 sets out in the same direction under the general title “Toward a More Dismal Economy,” and its subsections highlight: Special criticism is reserved for the financial and banking sectors in Chapter 5. In this regard, the conclusion of the financial crisis of 2007-2009, with the government’s financial bailouts of the very institutions and people who had caused it in the first place, comes in for heavy criticism. Moreover, this largesse is given as an excellent example of what is wrong with the USA today. Stiglitz argues: This puts Alan Greenspan’s comments, in his often-quoted Foreign Affairs article …