The Price of Inequality

Mon 16 January 2017 by Thejaswi Puthraya

One of the reasons for the Arab Spring protests in 2010 and the subsequent Occupy movement in the 2012 was the symptom of globalization, rampant inequality.

Joseph Stiglitz, a Nobel Prize awarded economist and the author of this book discusses the causes of inequality and the ways to fix it.

The reasons for the causes of inequality he lists are
  • Concentration of political power into the wealthy and how policies end up benefitting them
  • Rent-seeking and capital controls by the wealthy results in them having an unfair advantage
  • Monopolies in various sectors of businesses
  • Unfair taxation where the wealthy don't pay their fair share of taxes
A few of his suggestions to reduce inequality
  • Cracking down on the speculators by increasing capital gains tax
  • Reducing the information assymetry to make markets more open and competitive
  • Reduce rent-seeking by making incentivizing deployment of capital
  • Government regulations to prevent monopolies

On the whole, it's an eye-opener though I doubt any government in the world will heed to the advice and try to reduce inequality.