Reading Group

Our group will discuss two books.  Applied Economics: Thinking Beyond Stage One by Thomas Sowell and The Price of Inequality by Joseph Stiglitz.

I concede a bias toward Stiglitz from the beginning and nothing I read changed that.  Sowell's book was easy to read and had me ticked off several times.  Stiglitz spends a lot of time telling you what he's told you and what he's going to tell you, but I found his argument thoughtful and information dense.  It's one of the most informative books I've read.

The books aren't really addressing the same topic.  Sowell covers a broader range of topics as demonstrations of  economic thinking--getting past "stage one" to see the long term consequences which are often unintended.  And I get it; it's a rather basic point to make.  In a functioning government, you want that kind of debate with one side or the other asking, "did you think about such and such?"  Our ideological opponents force us to think things through and ideally that produces better results.

What I found infuriating is that Sowell really has axes to grind.  Simple minded liberals can't get past stage one with their do-gooder intentions.  It takes deep thinking conservatives to foresee the true outcomes.  And so he cherry picks his evidence with few academic references.  Over and over I end up wondering, what is he not telling me?

Rather quickly into my reading of both books, I came to the conclusion that I couldn't care less about unintended consequences--mistakes get made, but in principle they can be corrected.  The real problem seems to be the deliberately intended consequences of policy.

Stiglitz addresses more recent events which have highlighted as well as worsened the problem of inequality in the United States.  Economics and politics are bound together and policies have been in place to deliberately enhance wealth at the top over the past 30 years.  Greater wealth translates into greater political power to the detriment of most of society.  Stiglitz goes into enormous detail on the various impacts of inequality with an abundance of evidence.

And solutions are sketched out, albeit solutions that will never see the light of day in our modern dysfunctional Congress.  Stiglitz paints a stark contrast between where we are headed and where we could be.  He acknowledges the Arab Spring last year and the Occupy Movement that followed in the US last fall. The future of that movement isn't clear and Stiglitz discusses how much effort goes into getting the 99% to believe that their interests are the same as those of the 1%.  Ultimately he seems to appeal to the 1% to do the right thing--in de Tocqueville's words, "self-interest properly understood".  Stiglitz concludes with the notion that it's not too late, but hope is flickering.

I'm not without my quibbles:  Stiglitz is a capitalist.  His focus is on restoring growth rather than on redistribution (he does refer to sustainable growth).  But there are serious questions about how much (if any) growth is possible in the coming years.

But finally, it pleases me to think that a couple conservative friends got the chance to read Stiglitz. I'm curious to find out just how persuasive he is.