Notable Quotable: Inequality Has Been a Choice

Today's notable quotable comes from the book Rewriting the Rules of the American Economy, written by Joseph E. Stiglitz, winner of the Nobel Prize in Economics. The book's subtitle is “An agenda for growth and shared prosperity”.

"Inequality has been a choice. Beginning in the 1970s, a wave of deliberate ideological, institutional, and legal changes began to reconfigure the marketplace. At the vanguard was deregulation, which, according to adherents, would loosen the constraints on the economy and free it to thrive. Next were much lower tax rates on top incomes so that money could flow to private savings and investment instead of the government. Third were cuts in spending on social welfare, to spur people to work. Get government out of the way, it was argued, and the creativity of the marketplace—and the ingenuity of the financial sector—would revitalize society. 

“Things didn’t work out that way. First, tax revenues plummeted and deficits soared. Then we saw glimmers of the instability that would lie ahead—the financial crisis of 1989, which led to the economic recession in the early 1990s. Today, we can look back and see the toll of these “reforms”: the worst economic crisis in 80 years, slower growth than in the preceding 30 years, and an unbridled increase in inequality. We also now know that “deregulation” is, in fact, “reregulation”—that is, a new set of rules for governing the economy that favors a specific set of actors.”