Over the past several decades, the United States has witnessed a shift that threatens the very foundations of its democracy, according to Nobel-prize winning economist Joseph Stiglitz — and the downhill slide could become even more treacherous.
Ahead of his trip to Australia next week, where he will be honored with the 2018 Sydney peace prize for his work on economic inequality, Stiglitz issued a dire warning to the rest of the world.
“We were a very different country 40 years ago,” he says. “The downhill slide has been pretty fast. America, I think, should be an important warning to other countries not to take for granted their institutions. I worry that things in the United States could get much worse.”
Stiglitz is credited with pioneering the concept of the “1 per cent”, the idea that the upper 1% of Americans have accumulated so much political power and wealth in recent decades – through voter suppression, gerrymandering, and the corrupting influence of money – that the country’s economy has suffered, and its democracy has been undermined.
The Columbia University wrote on this topic in his 2012 book The Price of Inequality, which details how and why America has grown apart at a rapid rate, arguing that such extreme inequality is a direct result of the country’s leadership — “a consequence of their policies, laws and regulations.”
More recently, Stiglitz wrote in Scientific American that 40 years of growing inequality now threatens U.S. democracy.
“Whereas the income share of the top 0.1% has more than quadrupled and that of the top 1% has almost doubled, that of the bottom 90% has declined,” he wrote.
“Wages at the bottom, adjusted for inflation, are about the same as they were some 60 years ago. Wealth is even less equally distributed, with just three Americans having as much as the bottom 50%.”
“As more of our citizens come to understand why the fruits of economic progress have been so unequally shared, there is a real danger that they will become open to a demagogue blaming the country’s problems on others and making false promises of rectifying ‘a rigged system’.
“We are already experiencing a foretaste of what might happen. It could get much worse.”
Stiglitz told Guardian Australia that his motivation for writing The Price of Inequality was in part to warn other countries to take heed of what has transpired in the U.S.
“Some of the forces attacking what I would call the social order … those who are shortsighted and in the 1%, know that what they want is contrary to what would evolve in a functioning democracy.
“Most Americans want a higher minimum wage, they want gun control, they want access to healthcare, they want stronger financial regulation – the polling on some of these issues is, you know, 75% or more – and yet our democracy can’t deliver it.
“Those on the other side have to undermine democracy if they’re going to thwart the will of such a large majority, so they undermine it by disenfranchisement and disempowerment.”
The collective desire for greater equality that drove racial, social and gender justice in the 1960s is being eroded, Stiglitz said — a fact made all too evident by the election of President Donald Trump.
“Now we have Trump – a misogynist, a racist, a bigot – as president and openly espousing these things, and we have the majority of the Republican party voting for a tax bill that increases inequality and leads more people to have no insurance coverage. It’s further undermining the social contract and [the old] vision.”