Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity

Thursday, April 13, 2017 - 10:30am

By Joseph E. Stiglitz (W.W. Norton 2016, 237 Pages, 185 of text)

green book cover with white text


Measures of inequality in the U.S. have shown serious and growing problems for years.  Wages have been mostly stagnant for decades, a disproportionate amount of prosperity from economic growth goes into the pockets of those who already have the most, and many sectors of U.S. society have little hope of upward mobility.  Many have offered visions of how to rectify the situation, especially during the 2016 Presidential primaries, but few have offered a holistic program to address the underlying structural problems in the U.S. economy that have led us to this point.

Joseph Stiglitz’s work attempts to do just that.  The first half of his book is dedicated to describing the problem of inequality in the U.S. and diagnosing the structural issues to blame.  The second half proposes solutions.  Stiglitz does his analysis through traditional economic thinking and structures.  There are modifications to what you’ve learned in classes, but this is not a case for blowing up the entire system.  Rather, Stiglitz makes a strong argument that the government’s power to set economic rules should be used as it was in the past: to help those farther down the economic ladder rather than those at the top.

Stiglitz offers up a number of center-left reforms to do just that.  He clearly supports letting U.S. businesses run themselves, but through crafting government rules.  For example, an overhaul of worker rights in U.S. law would empower citizens to be able to fight effectively for their slice of the U.S. economic pie.  Stiglitz does not restrict himself to strictly economic themes either.  While his logic may be rooted in traditional economics, he addresses a wide-range of societal ills like structural racism, educational access, immigration law, and gender pay gaps.  This wide range of overarching concepts is what makes this book unique.  Few thinkers examining economic problems attempt to integrate solutions to so many problems into their proposals.

Despite quality material throughout the book, there are some issues.  Accessibility is a bit of a problem if you aren’t somewhat well-versed in economic policies.  Stiglitz provides some explanation of the concepts and structures he explores, but be ready for a few google searches if you don’t read the Economist.  Stiglitz’s proposals can also be hit-and-miss, but that depends on where you stand politically.  I personally thought he misunderstood a few things related to international trade treaties among other items, but overall his ideas are still worth examination.

Why is this relevant? 

Stiglitz offers a nuanced centrist view of the system and its structures, and offers an economic platform on how to fix them.  In fact, I was struck by how similar Stiglitz’s proposals were to what Hillary Clinton had advocated.  In a time of political extremes, this book provides a different basis for thinking about today’s economy: it needs something between a pile of dynamite and the status quo, not one or the other.

Who should be reading this?

If you’re interested in domestic and global economic policy, I would definitely suggest picking this up.  The first half of the book that deals with the current inequality landscape is on point and worth reading for everyone, even if some of the proposals are hit and miss.  The book does get down in the weeds regarding economic policies, so if you’re willing to learn (or relearn) some dense economic material, give it a read.