Book Review: Stiglitz The Price of

Inequality – Chapters 6-10
August 19, 2013 by Gavagai

Stiglitz, Joseph E. 2012 The Price of Inequality: How Today’s Divided Society
Endangers Our Future.New York: W.W. Norton & Co. QP: $16.95, pp523
This is Part II of a two-part review. You can read Part I here.

The second half of Stiglitz’s book expands upon the basic argument laid out
in the first. Each chapter delves deeper into the specific details of various
causes of the situation laid out in chapters one through five. Chapter six
focuses on the ways that the media uses and manipulates human
psychology of belief to frame the political and economic debates, and, in so
doing, distort public discourse. Chapter seven brings out problems with the
legal system and the ways that inequality leads to an erosion of the rule of
law. Chapter eight examines debates over the national budget, while chapter
nine analyzes macroeconomic policy. Chapter ten proposes a set of solutions
to address the problems examined in previous chapters.
Though Stiglitz develops more in-depth analyses of specific problems in
these chapters, the basic argument remains the same: those with money
and power have used them to acquire more money and power for
themselves at the growing expense of everyone else, while at the same time
undermining the shared democratic and human values that the United States
is supposed to be founded upon. Politics and economics, government and
markets, are inseparable. Real markets do not behave in the ways that the
ideal markers of economic theory are supposed to behave. These later
chapters simply lay out more of the details of our current situation.
Instead of rehashing the arguments, of which I give a brief overview in Part
I of this review, I would like to focus on a problem that I noticed early on in
the book, and which never really left me as I read.
The problem is that Stiglitz is not likely to engage, much less convince, those
who don’t already share his worldview. A major source of this problem is his

it seriously undermines the potential effectiveness of his work for convincing others of the value of both his analysis of the problems and his proposed solutions. but he essentially characterizes those he disagrees with as either corrupt or intellectually dishonest. this approach is not a problem for at least two . He does not offer the “other side(s)” a chance. That doesn’t make Stiglitz right or wrong. The author then points out that Stiglitz uses the same psychological tactics that he criticizes his intellectual opponents of using in Chapter 6. and provided accounts of both the positive and negative aspects of the economic arguments. Stiglitz constantly refers to his opponents as “the Right” and “the one percent”. For example. It is true that Stiglitz wrote the book in a way that makes use of what is known about human psychology to convince his reader of his conclusions and influence their beliefs. which is US mainstream liberal from the start. While he takes pains early on in the book to clarify who and what he means by these terms. on this point. which would be fine if the author at least hinted at valuable dissenting opinions. ultimately making Stiglitz a perpetrator of the same fraud he accuses his opponents of. and accuses Stiglitz of inconsistency. However. this level of nuance is likely to be forgotten by many readers by later chapters. Not only does Stiglitz not do this. I don’t think that this particular criticism is quite effective. While Stiglitz’s use of language is likely to be readily accepted by those who already agree with him. perhaps even hypocrisy. The quality of his logic and evidence will be of little use if the readers who do not agree with him to begin with write him off as “just another biased liberal academic” and do not take the book seriously. The author of this review criticizes Stiglitz for a clear lack of academic neutrality. it is just as likely to alienate those who do not come to the book already open to his position. Two other reviews I read point out this problem as well.use of biased language throughout his discussion. The first takes a balanced approach to the book as a whole. but given the importance he places on rebuilding a robust democratic society.

But what. are often far removed from any common definition of . whereas “the one percent” use them in favor of selfish self-promotion. In this respect. Again. is the difference between Stiglitz and his opponents. I am not convinced that this is a flaw in the book. The author of the review linked to above only focuses on Stiglitz’s economic arguments. The author states. Consequently. he seems to miss the underlying moral argument entirely. Stiglitz’s use of rhetoric is much in line with the view defended by Socrates in Plato’s Gorgias. It would be odd if Stiglitz defended their efficacy and at the same time declined their use in favor of less effective measures. and while he discusses those in detail. then. in the opinion of this reviewer. which I suggested in Part I is the central and most important argument. Rhetoric is a neutral tool – what matters is whether the conclusions that the rhetoric is used to convince you of are true and morally worthy (which for Plato were the same thing). First. and far less likely to be familiar with the academic debates. Anyone who wants to go further can follow up on the ample references in the lengthy notes section. Stiglitz has himself argues that the psychological techniques he uses are effective means of rhetoric and persuasion. we must look to the underlying moral argument of the book. Stiglitz wrote The Price of Inequality for a popular audience. if anything? Here. A second review of the book is in greater agreement with Stiglitz’s claims and arguments as a whole. the author of the above review criticizes Stiglitz for not engaging in the academic debates in this work. but his polemic does not concede some of the equally injurious consequences of the leftist equivalents (socialist states. all arguments are intended to influence the audience’s beliefs. Stiglitz responds the arguments his readers are likely to know and care about. [Stiglitz] apportions a great deal of ink to the gaping holes inherent to overtly rightleaning political and economic ideologies. Second. an audience that is far more likely to be familiar with and concerned about the popular arguments. so there is no problem in that respect.reasons. The difference between Stiglitz and “the one percent” is that Stiglitz is using his rhetoric to convince people of what he takes to be a viable moral position and shared values. Going further. and addressing only the weaker popular arguments more likely to be found on the internet and on cable news shows.

A more balanced critique. Unless those of us who want to change the social. might have rendered his rhetoric less susceptible to the inevitable cries of bias. To sum up so far. It is like giving a powerful computer to someone who hates using technology. Consequently. Words and ideas matter. hints of which can be found in past work. In the right hands. All of this discussion suggests that chapter six. as is the ability to engage those in effective discussion. The solutions that Stiglitz lays out in chapter ten face a similar problem. in the end. is the most important chapter of the book. However. and action changes the world. any appearance of bias is likely to have the effect of shutting out readers who are in most in need of engagement. it may not be in the right hands. Given the degree of social and political division in our country and the readiness with which people are willing to dismiss opposing political views as mere bias. Belief leads to action. this ability is essential to getting anything done. The reviewer then goes on to point out a couple of specific claims in Stiglitz that he finds factually incomplete or off-base. . they are also likely to prove a stumbling block for those who are not inclined to agree with his conclusions from the outset. it can be very effective – the problem is. In order to bring about the changes in policy and law that Stiglitz recommends. Consequently.utopia). and political landscape to one more in line with justice and the common good can create and disseminate a convincing moral narrative to counter that currently be propagated. much less effective. In a democratic society. economic. while Stiglitz’s tactics are potentially greatly effective for those who delve into the book. we will fail to be relevant. this problem is not minor. which focuses on how people come to believe what they do. those who can influence belief can influence how people act. and the key to addressing the problems that Stiglitz analyzes. this reviewer sees these problems as “relatively – and still admittedly – unsettled minor deficiencies.” I disagree with this reviewer – I think that the problem of bias (or apparent bias) is far more serious than he gives it credit for. I believe this for reasons that Stiglitz discusses at significant length in chapter six.

in another respect. However. I think that there is a third way – not as optimistic as Stiglitz is for changing the big picture. or they think we are past the point of no return. but it may help to bolster the political will of those singers. they take on a life of their own. These are massive forces that go beyond any one individual. or organization. While they are. Either they think it is not too late to turn back. Stiglitz spends most of the book explaining how these are the very things that the majority of citizens are losing. the sum result of choices and actions of individuals. I am influenced here by the Roman philosophy of Stoicism. negligible. the solutions are not likely to occur by focusing on that same big picture. The Price of Inequality may preach to the choice. The situation looks bleak – that which we need to bring about the solutions Stiglitz recommends is exactly what is lost in the context of growing inequality. which teaches that we . it is often oppression that inspires political action. and trends.we need political and financial power. Stiglitz focuses on the large context – national and international policies. My response: stop worrying about the big picture. most readers will either be optimists or pessimists. However. indeed. in one respect. but not as pessimistic as those who say that nothing can be done. if we choose to keep it. as well as the political will to work for the changes. and no individual controls them. However. Indeed. While Stiglitz is right to focus on the big picture in the analysis of the problems. there is still some reason to hope. These are the resources that allow things to get done. While large systematic problems may dampen the will. at least in some. Will can be created even in the most oppressive environments. and there is not much hope for correcting the system no matter how much political will we generate. whatever influence any particular individual can have will be vanishingly small. I suspect that with regard to this problem. group. and how feedback loops lead to greater and greater inequality of political power and financial resources in ways that sap people of their political will. laws. that will is the one resource that those with power and money can never completely take away. It’s a distraction.

currently. provided those people know us. focus on what is within your sphere of influence. those who stand to benefit the most from greater inequality. become better educated. start a video series. and resign ourselves to what is beyond our control. write a blog. small-scale changes aggregate into large-scale changes. and challenge and educate those around you. It is a slow process. That is also how the solutions will come about – not by a large-scale and drastic overhaul at the national level. Change your local government. Educate the people around you. However. at least in the short term. Given time. You can volunteer are local agencies and NGOs and not-for-profits. You cannot individually change national financial policy – so don’t try. And those actions and attitudes can influence only those with whom we come into contact. You can write to your local newspaper. Perhaps this is why I choose social work over politics. And our own actions and attitudes are all that is within our control.should focus only on what is within our control. but it is one where we actually can exercise a significant direct influence and build lasting change. . with small changes over time. but by myriad local adjustments. That is how these problems came about. As Stiglitz points out. respect us. many of them online. That means that we can’t look to major commercial media outlets to be a significant part of the solution. there are other options. Instead. You can change your own practices. those who control the major networks of media are also. and take us seriously. Make a difference in your own community and neighborhoods.