The Price of Inequality

"Stiglitz I chose for two reasons, firstly because it gives me the link between history and economics, and also because it makes the bridge to my new project of research on inequality. I’m working now on a history of inequality, because while I was working on racism I was bumping into this issue all the time. Inequality is also a complex issue and Stiglitz wrote this interesting book, The Price of Inequality . He updates the recent discussion and gives a new vision of this trend of divergence between those who earn more and more — the 0.1% of the population in the Western and other parts of the world — and the vast majority of the population. Until the 1980s, for almost one century we had, in the Western world, a convergence. You had the increase of the middle class, you had a significant reduction of poverty. So there was a quite interesting trend improving the conditions of life of most parts of the population. After the 1980s you have this counter-trend in which the middle class becomes more precarious. The growing consolidation of the middle class stopped. You have more temporary jobs, you don’t have the same rates of improvement concerning financial conditions. This situation is quite complicated and Stiglitz analyzes it as having a price. It is inefficient, this inequality, it is a threat for the economic future, and it is spreading to other parts of the world. The problem of this accumulation of capital by the top layer is that the money is not invested, this money does not trickle down. That is one of the main outcomes of recent research, the money is accumulated for consumption and it doesn’t go back into economic investment. The challenge is how to put this money back to work. So there is this huge weight on the economy, on society, and it’s threatening our future. It’s still experimental, but in my new project I am interested in addressing the issue of inequality on a world scale, if possible over the long-term, so this reflection on current problems is very inspiring. It is indeed a political problem. Nowadays we are more and more cautious of these connections between economy and politics and how this top layer manages in a certain way to capture the political system. It’s happened in the past, it’s not the first time. That’s why this is very inspiring for my historical research…"