Joseph Stiglitz (Nobel economist) on Moral Bankruptcy and Flaws in the Prevailing Economic Model
Morals are at the heart of Transpartisanship. Examining the matter of morals at all levels, from personal to the socio-macro-economic, is a core conversation we need to encourage and engage in fully. Walt.
“The global economy has just escaped a near-death experience. The crisis exposed the flaws in the prevailing economic model, but it also exposed flaws in our society. Much has been written about the foolishness of the risks that the financial sector undertook, the devastation that its institutions have brought to the economy, and the fiscal deficits that have resulted. Too little has been written about the underlying moral deficit that has been exposed—a deficit that is larger, and harder to correct.” Joseph Stiglitz
………. The failures in our financial system are emblematic of broader failures in our economic system and our society. That there will be changes as a result of the crisis is certain. The question is, will they be in the right direction? Over the past decade, we have altered not only our institutions—encouraging ever more bigness in finance—but the very rules of capitalism. We have announced that for favored institutions there is to be little or no market discipline. We have created an ersatz capitalism, socializing losses as we privatize gains, a system with unclear rules, but with a predictable outcome: future crises, undue risk-taking at the public expense, and greater inefficiency.
It has become a cliché to observe that the Chinese characters for crisis reflect “danger” and “opportunity.” We have seen the danger. Will we seize the opportunity?
Nobel Prize-winning economist Joseph E. Stiglitz is the coauthor of The Three Trillion Dollar War.