Joseph Stigliz talks economy on BBC Radio

[Drowsy Emperor]

Quite interesting:

 

http://www.bbc.co.uk/programmes/p01brr81

[Rostere]

He has some interesting points, aside from the Luddite garbage.

 

The constant problem regarding equality/inequality is that the richer and more powerful are automatically better at setting the balance. Barring powerful events (like crashes) and movements countries tend to drift, if ever so slowly, towards being more unequal.

 

High-risk loans coupled with "corporate socialism" like in the US is a recipe for (national) disaster. You should send Obama a documentary about the Swedish banking rescue, essentially IMO a perfect blueprint on how to handle a similar situation. Of course I don't mind at all the big bailouts from an egoistic perspective, but those who pay the taxes in the US should be up in fumes. But taxes have not increased in general (!), instead Obama has chosen to extend many of the Bush era tax cuts. So who foots the bill for all of this idiocy? Well, let's see. The US borrows money... From US institutions (banks) and foreign nations. So an increasing amount of American tax revenue goes directly into the pockets of the banks themselves again, to pay for their own bailout! So as long as people don't believe the US will go bankrupt, banks and foreign nations have a huge vested interest in the US taking on more debt. Already today the US pays astronomical sums, about a third of the military budget. I guess it's the curse of democracy - the things which are both too abstract for the common voter to worry about, and

 

Many tax systems today are also completely retarded and little attention is paid to this because 99% of all people don't understand the intricacies. Additionally, there is no real counterbalance to the financial sector lobby. There seems to have been more attention to tax havens recently though, and in a sense the US law of taxing any income is very modern, although ideally that would be arranged through an international agreement.

 

I think social mobility is actually a pretty good indicator of what is "fair" equality/inequality. You should really mostly disregard temporary indicators like disparity of income, or who holds the wealth. But of course, equality is not all in a society. "American Dream" - that a strange and funny thing to be associated with a place with one of the most dismal social mobility rates of the developed world.

 

Here, I'll tell you what's happening: internationalization. Those who are on top stay on top, while those who are not (ergo potential factory workers) suddenly compete with workforces from developing countries who can do the same job for a tenth of the pay. So it's actually pretty sensible that societies seem to get more unequal. But from an international perspective, the low-wage workers in Norway are in heaven compared to the low-wage workers in Indonesia. The high strata of Western societies are not only the upper class in those countries, but part of an international upper class of the entire world. The reason upper-class individuals are not equally exposed to competition is their superior education - as long as Bangladesh does not have a true equivalent to MIT, Harvard or you name it nothing is going to change. In fact the upper-class echelon from developing countries they would be competing against have in many cases studied at the same universities!

 

So the parts of the Left (because of the hypocrisy, but really any sensible person) who are in it out of pure self-interest should really argue for laws for better working conditions in developing countries, and aid for development to these countries.

 

What is the key to this from the perspective of the developed country? EDUCATION. You need to give your population the tools to compete, and to encourage innovation and entrepreneurship. Innovation is made possible by education in general but primarily by the natural sciences, that's really quite simple. Education is THE investment a country can make in itself to increase long-term competitiveness. This is also something that requires an altruistic perspective to realize - if you're a parent and you think education is important, you can see to it that your kids do things right. If you are young, you can see to your own education (in some countries you also need to afford this...). You need to go outside your personal sphere in order to understand that if government inaction and inefficiency creates a system where people routinely do not finish primary or secondary school, or where people learn nothing to build on during this education, you're destroying the most important foundation of a competitive economy.

[Walsingham]

Ros, I'm afraid I liked all of what you wrote except the solution. Education isn't he solution. Plenty of people I've been through education with are spend spend spend lefties.

 

It takes a lot of training and a heap of courage, and a deal of luck to get to the stage where you even think about complex problems, let alone understand the solution and follow through.

 

And even if you did, the majority of people - and hence the democratic government - aren't going to go the same way you do.

 

I'm genuinely beginning to think that the only way to prosper in a democracy is to set up an enclave inside one.