Comments on Joseph Stiglitz’ Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity

Joseph Stiglitz’ Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity, published in 2016, updates and fills out the ideas for economic reform presented in Stiglitz’ 2012 book The Price of Inequality: How Today’s Divided Society Endangers Our Future. The earlier book explained some of the forces leading to our current economic and political inequality and described the effects of that inequality on our society and democracy. Stiglitz repeatedly made clear that the shift to greater inequality was not inevitable, but was a result of choices. The alternative choices that would lead to a more egalitarian society were also elucidated in that book. The earlier book does have a final chapter outlining another way forward, but that chapter is relatively brief, and many of the ideas that would fit in the chapter are scattered throughout the book.

The newer book has two parts, “The Current Rules” and “Rewriting the Rules”. What are these rules? Stiglitz dispels the myth of the free market, in making it clear that our markets certainly do have rules. The problem is that our current set of rules leads to inequality, in income, wealth, and political power, and because of the latter this situation is self-perpetuating. The section “Rewriting the Rules” brings Stiglitz’ agenda for reform into one place, still fairly compact, but fleshed out from the earlier book’s presentation, and also supplemented by additional items putting his reform agenda clearly in the progressive path. The “Rewriting the Rules” chapter has two parts, “Taming the Top” and “Growing the Middle”. There is not a lot here that is not already included in our Chapter 16 “Transforming Our Society” of We Can Have a Better Country: A Progressive Reader’s Guide, from Stiglitz and other writers, but it is nice to get it as an action agenda, with some additional details. Additions include proposals for a postal savings bank. Many countries have such a system, including Britain, Germany, Japan, and Brazil, and the U.S. had one as recently as 1966. In addition to savings banking, Stiglitz would have this new system create a “debit card available with minimum fees and high protections for consumers.” This card would bring competition to the commercial credit and debit card market. Stiglitz would also “create a public option for housing finance”. In the health care arena, as a counter-balance to that other Nobel laureate Paul Krugman’s position, thrust into the Democratic presidential primary, that a single payer system is ideal but cannot be reached at present, Stiglitz touts a Medicare for All program, a public option in the Affordable Care Act system. This is a reasonable start towards a single payer system.