Joseph Stiglitz has a Nobel Prize. Not in physics or chemistry or medicine or any of the hard sciences we generally think of when we think of the world’s top recognition for smart people. The award for the native of Gary, Ind., back in aught one, was for economics — technically the Nobel Memorial Prize in Economic Sciences — also known as “the dismal science.”
As Stiglitz explained to an audience at the University of Utah Thursday evening, a big difference between his science and a lot of those others is that the laws that govern physics and chemistry don’t change. You can’t repeal the law of gravity. You can’t — as one state legislature (not Utah) once considered doing — legislate a different numerical value for pi just to make doing geometry easier.
But the laws of economics do change, because people change. They stay put, travel, invent things, forget things, concentrate power and wealth, diffuse wealth and power, build things, blow things up, get rich, get poor, help each other, hurt each other, ignore each other and, depending on which of those human characteristics is ascendant in any age, the behavior of people, the flow of money, the concentration of wealth and other things change.
So the theories and equations and laws we use to explain and predict human behavior must change with them.
For example, Stiglitz explained, a school of thought that has been disproved by economic statistics but is still sadly adhered to by conservative politicians and judges is that there is no need for governments to intervene to break up monopolies in business. This discredited theory was the basis of a recent U.S. Supreme Court decision, authored by the once-again-sadly-in-the-news Justice Clarence Thomas, which held that American Express could engage in clearly anti-competitive business practices because, the highest court in the land says, there is no such thing as anti-competitive business practices.
In this laissez-faire Utopia, monopolies never last long because, no matter how big and powerful they get, they always wind up being the big lumbering dinosaurs who soon fall before the onslaught of small, wiry mammals.
Except the dinosaurs didn’t have lawyers or make giant campaign contributions to members of Congress to write laws and make regulations and wear down the Federal Trade Commission enough to have them ignore the fact that business schools and industrial gurus since Adam Smith have preached that the real way to succeed in business is to create, buy or inherit a monopoly and then spend the rest of your career making your company so immune to competitive forces that, in the words of bajillionaire Warren Buffett, your idiot nephew could run it.
Stiglitz presented a ever-more-depressing pile of charts and graphs and arrows that demonstrate that the people who make most of the rules in the United States clearly have no interest in furthering the kind of free market society they always say they are in favor of. What they support is a series of laws, court rulings and regulatory decisions designed to accelerate the concentration of wealth in the hands of the one percent, or the one-tenth of one percent.
A true free market would include not only real anti-trust laws and enforcement and a return to progressive taxation but also more democracy. Democracy in the workplace, that is, a revival of the power of labor unions to negotiate living wages and decent working conditions. And democracy in government, that is, an end to gerrymandering and other brazen voter suppression tactics that clearly have no purpose other than to dilute the power of the real majority — the majority that is in favor of universal health care and gun-safety laws and anti-trust laws and privacy regulations and affordable housing and good schools for everyone.
In this political environment, Stiglitz explained, real wages for everyone who works are down and wealth for everyone who just sits there and holds cash or land or capital gains is up. Chillingly, other raw statistics that sat out there for years without anyone bothering to analyze them show that in the United States — and, among advanced nations, only the United States — peoples lives are actually getting shorter.
Life expectancy among blacks and Hispanics has actually gone up, sometimes significantly. But among whites, especially whites who have no more than a high school education, it is sharply down. And the main driver of that sad stat is what its discoverers call “deaths of despair.” These are deaths due to suicide, alcoholism or drugs — mostly the opioid epidemic deliberately bought and paid for by Big Pharma.
The answer to all these economic woes is not economics, Stiglitz said, as honest economists have shown the way forward and been ignored. The answer is politics. Awareness. Voting. Mass mobilization.
Election Day is Nov. 6.
George Pyle, editorial page editor of The Salt Lake Tribune, arguably works in a dinosaur industry that really is getting pecked to death by red-in-tooth-and-claw mammals. firstname.lastname@example.org